FTC blocks Hess CEO from joining Chevron board in merger

The Federal Trade Commission said the CEO of Hess Corp does not have to join Chevron’s board if it wants to greenlight a merger between the two.

Reuters reported that the regulator did not give reasons for its request.

Earlier in the week, media reported, citing unnamed sources, that the FTC was expected to approve the deal, although its completion depends on the outcome of an arbitration case brought against Chevron and Hess by the latter’s partner in Guyana, Exxon.

Chevron announced its plan to acquire Hess Corp last year. for 53 billion dollars. Exxon, however, said it has the right of first refusal on the 30 percent stake held by Hess Corp. in Guyana’s Stabroek Block, where companies have made a series of major discoveries that could turn the tiny South American nation into an oil major. producer.

Chevron and Hess have argued that the first-refusal clause has no relevance to the deal because the supermajor is acquiring all of Hess Corp. and not just its Guyanese assets. The US duo’s third partner in Guyana, CNOOC, joined Exxon.

The FTC’s move against John Hess echoes an identical request filed against Exxon earlier this year regarding former Pioneer Natural Resources chief executive Scott Sheffield, who was barred from joining the larger new company’s board after Exxon completed the sum of 60 dollars. business of billions.

For that decision, the FTC cited allegations that Sheffield “colluded” with OPEC to restrict oil supplies to push international prices higher.

“Through public statements and private communications, Pioneer founder and former CEO Scott D. Sheffield campaigned to orchestrate coordinated anticompetitive production cuts between and among U.S. crude oil producers and others, including the Organization of the Petroleum Exporting Countries (“OPEC”) and a related cartel of other oil-producing countries known as OPEC+,” the Commission said in a formal complaint in May.

The allegations prompted a congressional investigation of several major oil companies. The allegations have rocked the shale oil world, where several large consolidation deals await trade watchdog approval.

By Irina Slav for Oilprice.com

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