Oil And Gas Giant BP Settles Price-Fixing And Environment Charges
Thursday, October 25th 2007, 11:40 am
By: News On 6
WASHINGTON (AP) _ Oil and gas giant BP PLC will pay $373 million in fines and restitution in an agreement to be announced Thursday to end an investigation into whether it manipulated energy markets in 2004, federal officials said.
Additionally, four former BP employees are expected to be indicted by a grand jury in Chicago on mail and wire fraud charges, a law enforcement official said.
The officials spoke on condition of anonymity because neither the settlement nor the indictments had been announced. The Justice Department was expected to announce the charges at a 1 p.m. EDT news conference in Washington.
Federal investigators have been looking at whether BP traders tried to pump up profits by cornering the propane market, driving spot prices in February 2004 as high as 94 cents a gallon in places like New York, Pennsylvania and Illinois.
Investigators alleged that traders at BP Products North America Inc. bought massive quantities of propane to be delivered over a pipeline that starts in Texas and then withheld supplies, forcing other buyers in the wholesale market to pay an unnaturally high premium.
The over-the-counter market includes trades conducted on the phone or electronically in products not listed on exchanges. In the end, BP did not profit because the financial benefits of the scheme were outweighed by the unexpectedly huge costs associated with carrying it out.
BP, which is Europe's second-largest energy company, also is grappling with fallout of earlier problems, such as an Alaskan oil spill and a fatal 2005 blast at its refinery in Texas City, Texas. Both have resulted in ongoing higher maintenance costs.
Part of the fines that BP has agreed to pay will settle a related investigation into the deadly Texas City refinery blast that killed 15 people and injured more than 170, the officials said.
BP told The Associated Press the company has cooperated with authorities and will continue to do so. It declined further comment.