US probing Total over market trades

September 24, 2015 09:20
Total chief executive Patrick Pouyanne says the company has been transparent and fully cooperated with regulators. Photo: Reuters

French oil company Total is facing an investigation by US regulators over its market trading practices.

The company is in talks with the Commodity Futures Trading Commission (CFTC) to settle the matter, the Wall Street Journal reports, citing company officials.

The investigation came to light a day after the Federal Energy Regulatory Commission (FERC) accused a Total subsidiary of making money-losing gas purchases intended to move prices in a way that helped it make profits on other trading positions on at least 38 occasions in the southwestern US.

Total chief executive Patrick Pouyanne dismissed the allegations, saying the company was settling similar allegations by the CFTC “for a few million dollars”.

“There was no wrongdoing,” Pouyanne said.

The CFTC regulates the trading of financial securities tied to commodities while the FERC oversees the marketplace of physical gas and power products.

They often investigate similar allegations.

It is not clear when the CFTC began its investigation. The trades were made between 2009 and 2012, according to the FERC.

The company has been transparent and fully cooperated with both regulators and would be ready to discuss a settlement with FERC,  Pouyanne said.

“Either we can settle for the right level of settlement and if not we can go to court,” he said.

In a statement, Total said the company “is fully cooperating with the authorities and has provided all documents requested. In light of these documents, Total is convinced none of the allegations has been committed”.

Total is among the world’s largest oil producers but also has a sizable trading arm that buys and sells everything from crude to refined products and petrochemicals.

In the US, it has been a player in physical and financial natural-gas markets for 25 years.

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