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HOUSTON -- Although published reports earlier this week stated BP is preparing to settle a legal case with the government that alleged the company manipulated propane prices in 2004, prosecutors in Chicago are continuing to pursue criminal charges against up to four former BP energy traders here, sources familiar with the case told the Houston Chronicle.
In addition, a federal grand jury was scheduled to meet yesterday to hear testimony in the case, the report stated. Indictments could have been issued yesterday as well, sources told the Chronicle. The four former BP employees who may be charged range in title from low-level workers to vice president, the paper reported.
Meanwhile, the company and government officials were expected yesterday to announce a $373 million settlement related to the allegations, the Associated Press reported.
As part of the settlement, BP will pay a civil fine of $125 million to the U.S. Commodity Futures Trading Commission, $100 million to the Justice Department, $53.3 million to a restitution fund meant for purchasers of BP's propane, and $25 million to a U.S. Postal Service consumer fraud education fund, according to the Houston Chronicle report.
The settlement came at the same time with another expected settlement, which spawned from criminal investigations into an explosion at BP's Texas City refinery in March 2005 and oil spills from a BP-operated pipeline system in Alaska's North Slope in 2006, according to the report.
Those settlements -- totaling $50 million for the refinery explosion and $12 million for the Alaska spills -- came with BP's guilty plea for violating environmental laws, the Financial Times reported.
"These agreements are an admission that, in these instances, our operations failed to meet our own standards and the requirements of the law. For that, we apologize," BP America chairman and president Bob Malone, said in a statement. "They represent an absolute commitment to work with the government as we continue our efforts to prevent another tragedy like Texas City, to make our Prudhoe Bay pipeline corrosion program more responsive to changing operating conditions and to ensure that our participation in the nation's energy markets is always appropriate.
"In the months and years since these violations occurred, we have made real progress in the areas of process safety performance and risk management. Oversight of our trading operations has also been greatly enhanced. However, there is more to do, and we are committed to doing it," Malone added.
Experts and government records told the Chronicle the commodity market settlement for price manipulation is the largest of its kind ever in the U.S., according to the report.
Additionally, the price manipulation settlement may have wider implications for the company's trading operations, a source told the Chronicle. Such implications include the shelving of other potential charges against the company's possible manipulation of U.S. oil and gas markets, as long as its trading operations steer clear of trouble for the next three years, as it will be under the oversight of a court-appointed monitor required in the settlement, the paper stated.