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The New York Times: Big Oil CEOs Mull Response to Subpoenas: "Chevron, ConocoPhillips, Exxon Mobil and the U.S. units of BP and Royal Dutch Shell Plc. were subpoenaed.": Posted Thursday 24 Nov 05

Published: November 23, 2005
Filed at 12:42 p.m. ET

NEW YORK (Reuters) - None of the five major oil companies subpoenaed to testify about record profits and high consumer energy prices at a hearing December 1 in Wisconsin would say this week whether their officers would attend.

The hearing was called for by Wisconsin Governor Jim Doyle, a Democrat, who said similar hearings in the U.S. Senate earlier this month failed to get a sufficient explanation about how the companies ``made a fortune unprecedented at a time of national crisis,'' a spokesman for the governor said.

``We can confirm that an agent for Chevron USA Inc. received documents and we are assessing them,'' said a Chevron spokesman, in a response typical of those from other oil majors.

Chevron, ConocoPhillips, Exxon Mobil and the U.S. units of BP and Royal Dutch Shell Plc. were subpoenaed.

All five firms acknowledged receiving subpoenas from the state of Wisconsin, but none would say whether their officers would appear at the hearing in Milwaukee, which will be convened by the state's Department of Agriculture, Trade and Consumer Protection.

Shell Oil told Reuters it had received the subpoena and ``is following up with them to clarify their interest. We fully intend to cooperate with their inquiries as appropriate.''

But Shell was not willing to say that cooperation meant their president, John Hofmeister, would testify.

``We've issued subpoenas and we expect the companies to obey subpoenas,'' said Dan Leistikow, spokesman for the governor. He said the executives would be under oath for their testimony.

``We are talking to them. There are legal courses of action the state can take, but we hope it doesn't come to that,'' said Leistikow.

``The goal is to hold these companies accountable for the profiteering they did in the wake of Hurricane Katrina,'' said Leistikow.

The companies earned a collective $30 billion in the third quarter and senators questioned them on those profits, energy issues facing the United States and the record retail gasoline price of $3.07 a gallon reached in September.

Crude futures prices hit a record $70.85 a barrel after Hurricane Katrina struck the Gulf Coast in late August, though the price has since retreated below $60 a barrel.

Wisconsin's proceedings will follow early November U.S. Senate hearings that questioned CEOs from the same five firms.

Wisconsin's hearings will focus more on home heating oil costs, a subject ``largely ignored in congressional hearings,'' said Leistikow.

``Our strategy is to get answers. The goal here is to get some answers and to bring pressure on the federal government to take some action,'' he said.

The U.S. Senate last Thursday rejected by a wide margin a Democrat proposal to impose a windfall profits tax on the oil companies' record earnings and give the proceeds to American consumers.

The Wisconsin subpoenas require companies to provide records and other information about refinery capacity in the wake of the series of late-summer hurricanes that affected production, plus specific pricing and profit information about gasoline and natural gas.

``Did the people get the answers they were hoping for from the congressional hearings?'' asked Kevin Book, senior analyst at Friedman, Billings, Ramsey & Co., Inc. ``Republicans were looking for political cover and Wisconsin is saying the state did not get a satisfactory answer.''

Book noted that the federal government doesn't have any price gouging laws, only states, and that federal law would only come into play if there was ``a collusive effort to deliberately restrain production.''

As for the larger question of huge profits and high futures prices, ``no company has pricing power over global supply,'' said Book. ``OPEC and state-run companies have the lion's share of upstream production and that's where the pricing power is.''

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