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California Joins Natural Gas Lawsuit Against BP

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Published: November 14, 2014 at 8:52 am EST

By: Micheal Kaufman

BP plc (ADR) (NYSE:BP) along with its trading partners was accused of charging higher natural gas price in California. BP and the state of California had signed a contract earlier according to which the company will provide natural gas to the state and charge $250 million in annual payments. However, a lawsuit was passed against the company by a former employee, Christopher Schroen, who claimed that BP will be over-charging the state by $300 million over a period of eight years.

Mr. Schroen used to work on the state program’s accounts and was fired in 2012 by BP on account of criminal charges and accusations of managing the accounts dishonestly. Mr. Schroen denied these charges, claiming the accusations to be false. He pointed out that he had refused to co-operate with BP’s management when he learnt that California was being overcharged for natural gas.

The lawsuit against BP was originally filed by Mr. Schroen, who worked at BP’s Houston-based subsidiary. He was a member of the BP team that had worked to administer natural gas contracts between BP and the California Department of General Services. He administered BP’s natural gas contracts worth $2 billion with the Californian State.

Recently, the Californian Attorney General’s office has joined the former employee on the case against BP. The state believes that BP has violated the California False Claims Act.

BP has called these charges to be “meritless” and has indicated that it will respond to these charges through legal filings at an appropriate time and did not disclose the exact date. If BP is charged guilty, it would be liable to severe punishment. Currently, there are many charges pressed against the oil giant, including retaliation, defamation of character, and the immoral termination of Mr. Schroen. The lawsuit seeks triple damages from the company. BP stock fell 1.2% to $40.67 today during pre-market trading.



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