Total Accused of Manipulating U.S. Natural-Gas Market
DOW JONES & COMPANY, INC. 2:25 PM ET 9/22/2015
American regulators have accused French oil company Total SA(TOT) of manipulating the price of natural gas in the U.S. 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 issued a written denial, saying it was convinced that no Total employee "committed any of the FERC's allegations."
Total said it is "fully cooperating with the U.S. regulator and has provided all the documents requested."
Ms. Nguyen and Mr. Hall didn't respond to messages seeking comment.
Total is among the world's largest oil producers but also has a sizable trading arm that buys and sells everything from crude to refined products and petrochemicals. In the U.S., 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 J.P. Morgan Chase & Co., Barclays PLC(BCS) and Deutsche Bank(DB). J.P. Morgan and Deutsche Bank(DB) both settled their cases, but Barclays(BCS) is challenging its case in court.
Last month, an administrative law judge for the regulator found BP PLC(BP) guilty of a similar scheme conducted in 2008. Enforcement lawyers from FERC have sought fines of nearly $50 million for the market abuse, though the government's evidence showed the activity netted the company less than $250,000 in profits. BP denies wrongdoing and is appealing the ruling.
FERC didn't outline how much it would seek in penalties from Total or what the next step in the legal process would be.
Total has been accused of price manipulation before.
Last week, the European Court of Justice upheld a €125 million ($140 million) 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 tires. The company denied the charges but was found guilty in 2008. Its appeals have been rejected. |
