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Bloomberg: Repsol, Oil Firms Fined by EU for Asphalt Cartel (Update2)

By Matthew Newman

Oct. 3 (Bloomberg) — European Union regulators fined Repsol YPF SA, Spain’s largest oil producer, and three other oil companies 183.7 million euros ($260 million) for fixing domestic prices for bitumen, used to make asphalt.

The European Commission in Brussels fined Repsol 80.5 million euros, Compania Espanola de Petroleos SA 83.9 million euros, Sweden’s Nynas Group 10.6 million euros and Galp Energia SGPS SA 8.7 million euros. BP Plc, Europe’s second-largest oil company, received immunity for tipping off inspectors.

“It is unacceptable that these companies cheated customers, public authorities and taxpayers in Spain for almost 12 years,” EU Competition Commissioner Neelie Kroes said in a statement today. “The commission will not tolerate such illegal activity by companies to swindle clients and we will continue to impose stiff penalties on offenders.”

Kroes has stepped up efforts to crack down on price fixing, levying more than 2 billion euros in penalties this year. In September 2006, the commission fined Royal Dutch Shell Plc, Total SA and 11 other oil companies and road builders 267 million euros for running a cartel in the Netherlands. A unit of Repsol was charged in December 2005 with fixing the price of rubber chemicals.

Wider Probe

The Spanish case was part of a wider investigation of Europe’s asphalt markets. EU officials raided companies in the Netherlands, Belgium, Germany, Portugal and Spain in October 2002. Kroes, speaking to journalists in Brussels today, said the commission dropped the probe in Belgium.

A Repsol spokesman, who declined to be identified, said the company cooperated with the commission and that the practices stopped in 2002. Compania Espanola de Petroleos, known as Cepsa, didn’t immediately respond to a request for comment. No one was immediately available to comment at Galp’s press office.

The commission reduces fines when companies cooperate with probes. Repsol got a 40 percent cut and Cepsa’s penalty was reduced by 25 percent, the regulator said.

Nynas, which is based in Stockholm, said it has made changes to its business practices and employee training to avoid future violations of competition law.

“Our own investigation also shows that some mistakes were made in Spain, which we have admitted to the commission,” Nynas President Staffan Lennstroem said in a statement. “I regret that our systems then in place had deficiencies that allowed us to get involved in the business culture that then prevailed in the Spanish bitumen market.”

Secret Meetings

The commission said the cartel lasted from at least 1991 to 2002. The conspiracy involved setting market quotas, allocating sales volumes and customers and monitoring the cartel’s market- sharing accord by exchanging sensitive information, the regulator said.

Secret meetings were held in hotel rooms and companies’ offices. Market-sharing talks were held around a so-called “asphalt table.” Cartel members were given the coded title “Petete” or “PTT,” which came from a children’s television show. The commission said these practices are “very serious infringements” of EU antitrust rules.

Bitumen is used primarily for surfacing roads and waterproofing. More than 10,000 European companies make or lay asphalt.

To contact the reporter on this story: Matthew Newman in Brussels at [email protected] .

Last Updated: October 3, 2007 07:31 EDT

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