US regulators accuse Total of natural gas price fixing
American regulators have accused French oil company Total of manipulating the price of natural gas in the US southwest, the latest move in a widening crackdown on energy market machinations.
From 2009 to 2012, the French company’s Houston-based subsidiary made money-losing gas purchases intended to move prices in a way that helped it make money on other trading positions on at least 38 occasions, the Federal Energy Regulatory Commission said.
According to the regulators, the alleged scheme was conducted by traders on the Total Gas & Power North America West Desk, led by supervisors Therese Nguyen and Aaron Hall.
FERC didn’t reveal how much money it believed Total made from the trades, or whether consumer bills were affected.
The French oil company, led by chief executive Patrick Pouyanne, issued a written denial, saying it was convinced that no Total employee “committed any of the FERC’s allegations”.
Total said it was “fully co-operating with the US regulator and has provided all the documents requested”.
Total is among the world’s largest oil producers but also has a sizeable trading arm that buys and sells everything from crude to refined products and petrochemicals. In the US, it has been a player in physical and financial natural gas markets for 25 years.
The allegations are the latest in a series of crackdowns by FERC against manipulation in the gas and power markets. In recent years, the regulator has pursued high-profile cases against JP Morgan Chase, Barclays and Deutsche Bank.
Last month, an administrative law judge for the regulator found BP guilty of a similar scheme conducted in 2008. Enforcement lawyers from FERC have sought fines of nearly $US50 million ($71m) for the market abuse, though the government’s evidence showed the activity netted the company less than $US250,000 in profit. BP denies wrongdoing and is appealing against the ruling.
Total has been accused of price manipulation before. Last week, the European Court of Justice upheld a €125m ($198m) fine on Total for participating, between 1992 and 2005, with eight other oil companies in a cartel to fix the price of paraffin waxes, which are made from crude oil and used in a wide range of products from candles to tyres. The company denied the charges but was found guilty in 2008. Its appeals have been rejected.