Billionaire shipping tycoon John Fredriksen said a U.S. lawsuit against his oil trading companies may be a bid to extract revenge for BP's oil spill last year by targeting former BP traders who now work for him.

Fredriksen, a self-made magnate whose nickname is Big Wolf, said he was shocked by the lawsuits and insisted his oil trading firms did nothing illegal in 2008, a period when U.S. regulators allege they manipulated world oil markets to pocket $50 million in illicit profits.

Instead, Fredriksen said a civil suit brought by the U.S. Commodity Futures Trading Commission this week may be targeting crude traders James Dyer and Nicholas Wildgoose because they once worked for British oil giant BP Plc , the company behind the worst oilspill in U.S. history last year.

Maybe the problem is that these guys (the traders) worked for BP and they made a lot of money for BP before, Fredriksen, looking relaxed but perplexed by the media attention directed at him in the past two days, told Reuters in an interview.

Maybe they (U.S. authorities) are trying to get some revenge, he added, referring to BP's deepwater spill in the U.S. Gulf of Mexico last year.

In one of the biggest ever crackdowns on oil price manipulation, U.S. regulators on Tuesday sued the traders at two of Fredriksen's firms, Arcadia Energy and Parnon, for allegedly squeezing markets in early 2008.

Fredriksen said the activity was a normal practice for oil traders. Arcadia has also rejected the suit, saying it never held enough oil to influence the global oil benchmark.

HIGH FLYING TRADERS

While there seems no clear link between the former BP traders and U.S. anger over BP's current production and exploration practices, the strategy laid out in the lawsuit rang bells for industry veterans who recall the kind of leveraged trading plays that proliferated earlier this decade.

Dyer and Wildgoose were both high-flying traders on the company's coveted Cushing book in Chicago in the early 2000s, known for making profits of more than $100 million a year for the firm and receiving multi-million dollar annual bonuses.

Other traders said that BP had a built-in advantage because it owned a large share of the storage tanks in Cushing, even after regulators forced it to sell off some holdings following its purchases of Arco and Amoco in the late 1990s.

It was also a time when BP's aggressive trading practices were beginning to land it in hot water with authorities.

BP paid a record $2.5 million fine to the New York Mercantile Exchange in 2003 for alleged violations of oil trading rules; that case did not include any allegations of misconduct by Dyer or Wildgoose. In 2007 it paid a record $303 million fine to the CFTC to settle charges it had manipulated propane markets in early 2004.

None of the traders were reachable for comment. Dyer has worked for Arcadia since at least 2005; he traveled to the United States to recruit Wildgoose, who had run BP's Cushing oil trading book, in 2007, according to the CFTC lawsuit.

A third member of that BP trading team in Chicago, Paul Adams, is another current executive at Fredriksen's oil trading firms, and is listed as Parnon's acting CEO. Adams is not cited in the CFTC lawsuit.

In recent years, BP has pared back its global oil trading activities, and many of its former star traders have left for competing firms, including those run by Fredriksen. BP has also sold off all of its Cushing storage tanks.

The CFTC said Dyer and Wildgoose amassed large physical positions at Cushing, Oklahoma oil storage hub -- the delivery point for the U.S. oil futures contract -- to create the impression of tight supplies that would boost crude spreads, or the difference in prices between one month and the next.

Later, they dumped those barrels back onto the market, causing prices to crash and racking up profits from short positions they had accrued in futures markets, the suit said.

NOT AN EXPERT ON OIL TRADING

Fredriksen told Reuters that, while he is no expert on oil trading, he is confident Arcadia and Parnon traders followed standard practices in 2008.

It is quite normal. It is the same for Glencore, and Vitol, and these other guys... It is nothing, he said, referring to other major global oil trading firms. Fredriksen was shocked to learn about the CFTC investigation, he added.

I did not know a thing about it -- I have about 50 companies, how can I follow everything?, said Fredriksen, whose wealth is estimated at $10.7 billion by Forbes.

Oil traders, they are supposed to buy and sell, Fredriksen said. I don't think it is illegal but I am not an expert on oil trading, so I don't see the problem.

The trading firms on Wednesday denied any wrongdoing.

Also on Thursday, a derivatives trader filed a case in New York federal court against the two companies.

The lawsuit seeks class-action status on behalf of other investors he says were also harmed by the alleged market manipulation in 2008.

(Reporting by Gwladys Fouche and Joshua Schneyer, writing by Joshua Schneyer, Victoria Klesty and Dmitry Zhdannikov, editing by Anthony Barker and Jonathan Leff)