US FTC allows Chevron-Hess deal, bans John Hess on board By Reuters

By Jody Godoy

NEW YORK (Reuters) – The U.S. Federal Trade Commission has allowed Chevron (NYSE: ) $53 billion acquisition Hess Corp (NYSE: ) on Monday in an order removing Hess CEO John Hess from Chevron’s board.

FTC order goes away ExxonMobil (NYSE: ) challenging the deal, which is expected to stretch into next year, as the final hurdle.

The proposed merger included a Chevron board seat for Hess when it was first announced last October, and the FTC sent a second request for information to Chevron two months later.

Chevron Chairman and CEO Mike Wirth welcomed the completion of the FTC review on Monday, but said it was unfortunate that John Hess would not be allowed to join the board.

“I have the utmost respect for John, the company he has built and the contributions he has made to our industry,” he said.

The FTC alleged that Hess — the son of Hess Corp founder Leon Hess — communicated publicly and privately with members of the Organization of the Petroleum Exporting Countries (OPEC) group of oil producers and encouraged the group’s high-level representatives. their stated mission to stabilize global oil markets”.

Allowing him to join Chevron’s board “would amplify Mr. Hess’ messages of support to OPEC and others, thereby significantly increasing the likelihood that Chevron will align its production with OPEC’s production decisions to maintain higher prices,” the FTC said.

Hess’ board believes the claims are without merit, the company said in a statement.

“Mr. Hess’s public and private communications with OPEC officials have been consistent with his communications with US government officials, the International Energy Agency and global business leaders about what will be needed to ensure an affordable and sustainable energy transition. orderly,” the company said.

The allegations are similar to the FTC’s claims against the former Pioneer Natural Resources (NYSE: ) CEO Scott Sheffield, who was barred from joining Exxon Mobil’s board when the FTC reviewed its $60 billion acquisition of Pioneer.

Sheffield sought to have the claims withdrawn.

The two cases represent “an important step toward ensuring that U.S. oil producers serve as a competitive check on OPEC+, rather than subordinating their independent decision-making to the goals set by a cartel,” FTC Chairwoman Lina Khan said. and two other Democratic members of the Commission. said Monday.

The FTC’s two Republican commissioners voted against the Chevron-Hess action, calling it politically motivated and lacking in antitrust law.

“The suggestion that Mr Hess’s comments could move global oil markets is laughable,” said Commissioner Andrew Ferguson.

The deal will still have to resolve a challenge from Exxon Mobil and CNOOC (NYSE:) Ltd, Hess’ partners in a joint venture in Guyana, who are claiming a right of first refusal on any sale of Hess assets in Guyana, the award in the merger proposed.

A three-judge arbitration panel is due to hear the case in May. Chevron and Hess say a decision is expected by August, while Exxon Mobil is waiting until September 2025.

John Hess will be allowed to advise Chevron on discussions with Guyanese government officials, according to the FTC order.

The proposed stock purchase is one of the largest in a consolidating U.S. oil and gas industry, where several billion-dollar deals have been disclosed.