* Britain says would be deeply worrying if prices weredriven up
* Follows EC probe, searches of BP, Shell, Statoil offices
* Eni says was also asked to provide information
* Trading houses had no inspections, information requests sofar
By William James and Dmitry Zhdannikov
LONDON, May 15 (Reuters) - Oil companies will face the fullforce of the law if they manipulated prices, Britain's energyminister said on Wednesday as a rating agency warned of massivefines if a European Commission's probe into oil pricing foundany wrongdoing.
Oil firm Eni said the European Commission had askedit to provide information, although it was not being probed.
The Italian company's statement came a day after the officesof Shell, BP and Statoil were raided byinvestigators over suspected oil price manipulation.
The surprise searches of major oil companies, but not theircompetitors the powerful privately-owned trading companies, wereone of the biggest cross-border probes since the Libor scandaland sent shock waves through the secretive industry.
Authorities have sharpened scrutiny of financial benchmarksaround the world since slapping large fines on some of theworld's biggest banks for rigging interest rate benchmarks.
"If it turns out to be the case that hard-pressed motoristsand consumers have been hit in the pocket by manipulation in themarket, the full force of the law should be down upon them.There is no doubt about that," Britain's Energy Secretary EdDavey told parliament.
A spokesman for Britain's Prime Minister David Cameron saidhe expected companies to fully comply with the investigation.
London is home to some of the biggest trading desks in theoil business. Following the Libor scandal, Britain approvedlegislation making a criminal offence of false or misleadingstatements in relation to the setting of financial benchmarks.
"The investigation's focus on potential collusion over pricereporting draws parallels with the investigations by Europeanand U.S. regulators into Libor rates," Fitch ratings said.
The Commission has said it had concerns that companies mayhave colluded in reporting distorted prices to a price reportingagency to manipulate prices for oil and biofuel products.
It also said companies may have prevented others fromparticipating in the price assessment process of a pricingagency, which it did not name.
Platts, the world's largest pricing agency and a unit ofU.S. McGraw Hill, is cooperating with the probe. OnWednesday, Antoine Colombani, the Commission's spokesman oncompetition policy, said only one pricing agency was involved inthe probe.
"Even small distortions of assessed prices can have animpact on final prices, potentially harming consumers," he said.
FINES AND REPUTATION
Fitch said that in the event of large fines, oil companybalance sheets would likely absorb the blow thanks to big cashreserves.
The biggest settlement so far over Libor was the 1.4 billionSwiss francs that UBS agreed to pay to U.S., British and Swissregulators.
"Other than fines, if an oil company is found to havedistorted prices, it could face longer-term risks from damage toreputation," said Fitch, noting that BP was excluded from somebusiness in the Gulf of Mexico following the Macondo spill.
Sources and officials at major trading houses Glencore, Vitol, Trafigura, Gunvor and Mercuria said they havenot been asked so far to cooperate with the probe.
Swiss antitrust authority Weko said there were noproceedings underway as part of the EU prove. Switzerland ishome to most global oil trading houses.
French oil major Total also said there had been noinspections at its offices. Last year it wrote to regulators toquestion the way oil prices were determined, bringing into thespotlight the pricing mechanisms of price reporting agencies.
The methodology designed by Platts for daily assessments onthe physical oil markets is used to close deals worth at least$2.5 trillion a year.
Critics say the system is only a snapshot of the market andexcludes most deals, making it vulnerable to manipulations.
Supporters say it is the best mechanism so far devised toassess huge but often opaque markets.
Olivier Jakob from energy consultancy Petromatrix said hebelieved the current pricing system was far from perfect butPlatts still remained the main reference for the entire market.
"They are essential... So if you were to close Plattstomorrow, you would have a very big problem," he said.
Leen Broekhuizen, partner at energy consultancy SunGard,said the probe could result in the EU regulating oil tradingmore strictly after having already put in place measure toprevent market abuse in the physical gas and power markets.
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