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More details on BP price fixing

Stephen Beard Jun 29, 2006

TEXT OF INTERVIEW

SCOTT JAGOW: Oil companies swear up and down they have no control over the price of energy. But then, this happens: Federal investigators accuse BP traders of manipulating the price of propane two years ago. Yesterday, one former trader pled guilty to being involved and there is evidence on tape that traders were thinking big.Take a listen.

TRADER: What we stand to gain is not just that we’d make money out of it. But we would know from thereafter that we could control the market at will. If we never break the threshold, we’ll never know what the answer is, do you know what I mean?

SCOTT JAGOW: This is yet another black mark for BP. Our European correspondent Stephen Beard joins us from London. Stephen, this is at least strike number three for that company.

STEPHEN BEARD: Yes indeed, I mean it really is beginning to look very accident-prone in its US operations. It’s already been fined very heavily after that fatal blaze at one of its refineries in Texas last year. There have been one or two other alleged regulatory health and safety lapses and it’s currently under investigation after an oil spill in Alaska. So yes it’s taken quite a beating in the US.

SCOTT JAGOW: And specifically how bad does this case sound?

STEPHEN BEARD: If this is a case of rogue traders at work, this won’t be too serious. But if this goes right up the food chain, if this does reach senior executive level, then the company’s going to be in very, very serious trouble. We could be talking about fines and penalties that run into the tens perhaps hundreds of millions of dollars.

SCOTT JAGOW: Is there a possibility that this is happening in other markets besides propane for example?

STEPHEN BEARD: It’s quite clear that in markets like energy markets, as they have been in recent years very volatile, gyrating, there is scope for the rigging of these markets. BP for its part says it has fired seven employees implicated in this case but denies vehemently that the company as a whole has been involved in manipulating the price of propane.

SCOTT JAGOW: OK Stephen thanks.

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