EU Said to Ramp Up Oil-Benchmarks Probe With Evidence Request

  • Regulators may be moving toward sending antitrust complaint
  • Probe began two years ago with raids on BP, Shell and Statoil

Major oil companies including Royal Dutch Shell Plc and price publisher Platts were told by regulators to redact business secrets from documents obtained during antitrust raids in a sign the European Union may be moving ahead with a two-year-old probe, according to four people familiar with the investigation.

The redaction request could be a precursor to the European Commission sending a formal complaint, or statement of objections, to some of the firms, said the people who asked not to be named because the investigation into fuel-benchmark rigging isn’t public.

“Typically, the commission makes confidentiality requests when it has a statement of objections in the pipeline,” said Nicolas Petit, an antitrust law professor at the University of Liege in Belgium.

Amid a climate of distrust toward global price benchmarks, EU antitrust officials turned their attention to market data for crude oil and biofuels in May 2013. They raided Shell, Statoil ASA and Abengoa SA alongside BP Plc and Platts, warning of “huge” damage to consumers if manipulation was confirmed. Since then, the probe has continued in virtual silence, as investigators turned their public attention to banks ensnared in Libor-manipulation cases and the likes of Google Inc. and Gazprom PJSC.

Dated Brent, Ethanol

Regulators sent the confidentiality request to companies including Shell, Platts and Statoil over the summer, the people said. The EU must share all evidence collected in a case with any company that gets a formal complaint -- which is usually a precursor to antitrust fines.

But first, the file must be redacted to avoid giving away business secrets to competitors. If a company gets such a request, it doesn’t necessarily mean it will be targeted by an antitrust complaint.

Initially, the EU was only examining the possible manipulation of Platts benchmarks. The case centered on the price reporting agency’s assessment of Dated Brent and ethanol, two of the people said.

After 1 1/2 years, the EU rekindled its investigation with two waves of raids focusing on ethanol and bioethanol traders in October last year and earlier this year.

While the removal of business secrets is a signal that the benchmarks probe is moving ahead, it’s not clear what the focus of any statement of objections would be, said the people.

Industry Feedback

Alternatively, Petit said EU officials may be planning to share documents with plaintiffs or industry participants to get feedback that could bolster its case.

A Shell spokesman said in an e-mail the company has fully cooperated with the investigation and didn’t have any additional comments. 

BP, Abengoa and the commission in Brussels all declined to comment. Statoil representatives weren’t immediately able to comment.

Platts “has not been charged with any wrongdoing and we will continue to cooperate” with the commission, spokeswoman Kathleen Tanzy said in an e-mailed statement. Platts “cannot comment on any specific interactions” with the regulator, she said.

In its high-profile case involving Google, the blacking out of business secrets in case documents was followed weeks after with a formal antitrust complaint against the search-engine company. In that case, complainants were asked to declassify some of their documents.

Crude Oil

When they get a statement of objections laying out the case against them, companies are allowed to immediately request access to the EU’s file. Sifting through evidence allows them to see what’s in the regulator’s hand and prepare their reply before the commission comes to a final decision.

Platts, which is a unit of New York-based McGraw Hill Financial Inc., has assessed prices for crude oil, petroleum products and related swaps using its so-called market on close process since 2002 in Europe. To participate, traders voluntarily report some of their bids, offers and trades to Platts’s defined window period each day, which are then used to create end-of-day price assessments for various commodities.

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