Gas Agencies Face Boycott on Pricing Information

Major players in the energy and financial sectors are refusing to submit European natural gas quotes to price-reporting agencies (PRAs). They complain that the standards underpinning billions of dollars in trading and household energy bills are unclear.

Britain's Guardian newspaper says the trend is a reaction to its investigation into alleged manipulation of energy trading, which has led to an inquiry by the City of London and energy regulators.

Well-known PRAs include Platts, Argus and ICIS Heren. Late last year a former employee of ICIS Heren, Seth Freedman, blew the whistle on activities which suggested that traders with their own agenda could submit false data to the PRAs.

Norwegian oil and gas major Statoil is one of those not co-operating with the PRAs, according to media reports, as well as banks and commodity trading houses. Statoil instructed traders to stop providing quotes to Platts, Argus and Heren shortly after the allegations of NBP manipulation surfaced last November, British media reports.

Michel Myhre-Nielsen, a senior member of Statoil’s gas business, said the company did not want its traders to be involved in a “subjective” process.

The over-the-counter (OTC) gas market is estimated to be worth around €355 billion annually, and to date has not been heavily regulated.

 The Financial Times says that lack of co-operation from leading companies, involved in a large volume of trading, is causing anxiety in an industry where most transactions, including long-term supply contracts, are priced against benchmarks.