July 12 (Reuters) - U.S. federal energy regulators affirmedan administrative law judge's decision against oil major BP Plc and ordered the company to pay a civil penalty of$20,160,000 for allegedly manipulating the natural gas market inTexas in 2008.
The U.S. Federal Energy Regulatory Commission (FERC) alsoordered BP to disgorge $207,169 in unjust profits received as aresult of its alleged manipulation, according to an order issuedlate Monday.
BP said in a statement it will seek a rehearing before theFERC and ultimately appeal to the U.S. Court of Appeals ifnecessary.
"This decision should be reversed both because there is nocredible evidence that BP's natural gas traders engaged in anymarket manipulation and because the FERC does not havejurisdiction over the trading at issue," BP spokesman GeoffMorrell said in the statement.
See:file:///C:/Users/U8017559/Downloads/20160711-3035(31574081)%20(1).pdf
For a timeline on FERC's BP case and the events leading upto it, see below.
July 2016 - FERC denies BP's appeal of administrative lawjudge's decision in August 2015, assesses civil penalty of$20,160,000 and required the company to disgorge $207,169 ofallegedly unjust profits. BP said it would appeal.
September 2015 - BP appeals administrative law judge's decisionin August 2015.August 2015 - Administrative law judge finds BP tradersmanipulated natural gas market as alleged by FERC enforcement.BP said it would appeal to commission.
FERC said the commission would decide at a later timewhether civil penalties should be imposed for any BP violationsand whether BP should disgorge any unjust profits. There is,however, no statutory deadline for FERC to act.October 2014 - U.S. FTC tells BP it closed its probe intoanticompetitive practices in oil price reporting, but otherregulators were still investigating. June-August 2014 - FERC seeks data on Houston Ship Channel andother gas sales from several companies, including units ofMcGraw Hill, IntercontinentalExchange, BP, Energy TransferPartners, Enbridge, Enterprise Products, Kinder Morgan, AtmosEnergy, Castleton Commodities, Tenaska, Integrys, Encana,Exelon, Chesapeake Energy, Chevron, Enable Energy, Barclays andTotal.May 2014 - FERC issues order establishing a hearing in July todetermine whether BP violated the Natural Gas Act. October 2013 - BP denies wrongdoing in answer to FERC.August 2013 - FERC issues order to BP to show cause why thecompany should not be found to have violated the Natural Gas Actand pay a civil penalty of $28 million and disgorge $800,000plus interest.
May 2013 - In an unrelated case, European Commission officialsraid the offices of oil majors BP, Shell and Statoil as part ofa probe into suspected manipulation of oil and biofuel prices.
Other regulators, including the U.S. Federal TradeCommission (FTC), the U.S. CFTC, Japanese Fair Trade Commissionand the Korean Fair Trade Commission also opened investigations.
September-November 2008 - FERC alleges BP violated the NaturalGas Act by manipulating the next-day gas market at Houston ShipChannel from mid-September through Nov. 30, 2008.
FERC's Office of Enforcement said BP traders made uneconomicphysical gas sales to suppress the Houston Ship Channel GasDaily index and boost the value of BP's financial position.
September 2008 - FERC says BP had a pre-existing Houston ShipChannel-Henry Hub spread position that included short indexswaps at Houston Ship Channel and long index swaps at Henry Hub.The position made money whenever the spread widened betweendaily physical gas prices at Houston Ship Channel and Henry Hub.
When Hurricane Ike caused Houston Ship Channel gas prices toplummet, BP's spread position had the potential to be worthmillions of dollars if the daily spread between Houston ShipChannel and Henry Hub remained wide enough through the end ofSeptember, FERC said.October 2007 - BP agrees to pay $303 million to settle propanemanipulation allegations with CFTC and U.S. Department ofJustice.July 2005 - U.S. Congress passes Energy Policy Act of 2005,ratcheting up penalties FERC can impose for market manipulationand reliability violations to $1 million per day per violationfrom the prior cap of $10,000 a day.August 2003 - Blackout leaves 55 million people in the dark ineight U.S. Northeast and Midwest states and Ontario in Canada.
April 2003 - U.S. Commodities Futures Trading Commission (CFTC)alleges BP manipulated the propane market in April 2003 andFebruary 2004.2001-2003 - Numerous energy marketers, such as the former Enron,Mirant, El Paso and Dynegy, exit U.S. power and gas markets dueto credit concerns and allegations of market manipulation.
December 2001 - Enron enters bankruptcy amid an accountingscandal and accusations of power and gas market manipulation.2000-2001 - A power crisis hits California and other westernU.S. states, costing customers up to $45 billion, along withlost economic activity, due in part to power and gas marketmanipulation. (Reporting by Scott DiSavino)