EU regulator raids oil giants over price manipulation
15 May 2013
The European regulator yesterday raided the offices of oil giants including Royal Dutch Shell, BP and Statoil over concerns that they colluded in manipulating the oil price benchmark for over a decade in the over $3 trillion-a-year global oil market.
Brussels-based European Commission (EC) said in a statement that it had raided the offices of ''several companies'' in two EU countries and another country.
Although the European Commission (EC) did not reveal the name of the companies, Shell, BP, Statoil and pricing agency Platts confirmed that they were working with the the EC investigation.
Platts, a unit of New York-listed McGraw-Hill, said in a statement, "The European Commission has undertaken a review at its premises in London this morning in relation to the Platts price-assessment process. Platts is co-operating fully with the European Commission's review."
London-based BP said that it is one of the companies being investigated by the EC and added, "We are co-operating fully with the investigation and are unable to comment further at this time," while Norway's Statoil said the suspected violations ''related to the Platts' Market-On-Close (MOC) price assessment process.''
The investigation into oil benchmarks comes after one of Europe's largest energy trading company Total Oil Trading SA, the trading arm of French oil giant Total, had complained last year to regulators on inaccurate pricing on several occasions in the benchmarks for crude and oil products.
The EC said that the prices assessed and published by Price Reporting Agencies serve as benchmarks for trade in the physical and financial derivative markets for a number of commodity products in Europe and globally.
Even small distortions of assessed prices may have a huge impact on the prices of crude oil, refined oil products and biofuels purchases and sales, potentially harming final consumers.
''The Commission has concerns that the companies may have colluded in reporting distorted prices to a Price Reporting Agency to manipulate the published prices for a number of oil and biofuel products,'' the EC said in the statement.
''Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices,'' it added.
''Any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position.''