RTL Today – Longtime CEO banned: US approves ExxonMobil deal, kicks ex-Pioneer boss off board

U.S. antitrust authorities have cleared ExxonMobil’s acquisition of Pioneer Natural Resources on the condition that the shale producer’s former chief executive be removed from the company’s board, regulators said Thursday.

A proposed consent order barred Pioneer CEO Scott Sheffield from ExxonMobil’s board, citing his “collusive” activity with OPEC+ crude oil exporters, the Commission said in a news release Federal Trade Commission (FTC).

The FTC, which has stepped up its crackdown on corporate mergers in recent years under Chairman Lina Khan, said Sheffield’s installation on ExxonMobil’s board posed a risk to American consumers.

“Mr. Sheffield’s past behavior makes it abundantly clear that he should not be anywhere near Exxon’s boardroom,” said Kyle Mach, deputy director of the FTC’s competition counsel.

“American consumers should not have to pay unfair prices at the pump simply to line the pocket of a corporate executive.”

In October, ExxonMobil announced the purchase of Texas-based peer Pioneer for about $60 billion in a major bet on the Permian Basin, a key U.S. shale region.

The company will close the merger on May 3, an ExxonMobil spokesman said Thursday, after officials expressed confidence last week that the deal would go through in the second quarter.

The FTC pointed to “hundreds of text messages” Sheffield exchanged with OPEC officials and others involved in crude market dynamics in an effort to coordinate policy and defend higher prices.

“If Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi Arabia and Russia will follow. That was our plan,” Sheffield said in a message cited by the FTC. “We were using the OPEC+ tactic to achieve a bigger OPEC+.”

Pioneer said that while the FTC’s complaint reflects a “fundamental misunderstanding of the US and global oil markets and misconstrues the nature and intent of Mr. Sheffield’s actions,” neither it nor Sheffield will take steps to prevent the deal from closing.

Sheffield was motivated by strengthening the position of domestic power producers to enhance US energy security, Pioneer said.

“During Mr. Sheffield’s career, it was neither the intent nor the effect of Mr. Sheffield’s communications to circumvent the laws and principles protecting competition in the marketplace,” Pioneer said.

It pointed to Sheffield’s experience of living through six industry downturns where “OPEC and OPEC+ oversupplied the market, causing substantial disruption for US independents, including Pioneer.”

ExxonMobil said it learned of the allegations from the FTC.

“They are completely inconsistent with the way we do business,” an ExxonMobil spokesman said, adding that after a lengthy review, “The Commission has not raised any concerns about our business practices.”

The FTC has set a 30-day period for public comment, after which it will decide whether to modify, withdraw or finalize the proposed order, an agency spokeswoman said.