Former Pioneer CEO says he was ‘scapegoated’ in OPEC collusion case

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Scott Sheffield, the former chief executive of Pioneer Natural Resources accused of colluding with OPEC to restrict oil production, hit out at the US Federal Trade Commission on Tuesday and said he had been “unfairly maligned”.

Pioneer, Texas’ largest oil producer, was acquired by ExxonMobil in a $60 billion deal completed this month. But in greenlighting the deal, the antitrust regulator took the unusual step of barring Sheffield from the supermajor’s board, arguing it would give him a platform to engage in “collusive activity”.

Sheffield has not commented publicly since the FTC’s administrative complaint against him earlier this month. But in a lengthy submission to the regulator on Tuesday, his lawyers asked the commission to withdraw its allegations and drop what they described as a “baseless personal attack” that undermined First Amendment freedoms.

“The FTC is wrong to suggest that I have engaged in, promoted or even suggested any form of anti-competitive conduct,” Sheffield said.

“Publicly and unjustifiably defaming me will have a chilling effect on the ability of business leaders in every sector of our economy to respond to shareholder demands and exercise their constitutionally protected right to support their industries.”

In an interview with the Financial Times on Tuesday night after the filing, Sheffield said: “They couldn’t find anything wrong with the merger – because the merger is only 11% of the oil in the Permian Basin – so they scapegoated it. me.”

The FTC’s bombshell decision has been widely criticized by the industry, with many rejecting what they see as an unfair and misdirected attack on one of the industry’s longest-standing leaders and most vocal advocates. Amid a flurry of merger and acquisition activity, it also raised concerns about how communications uncovered in antitrust probes might be analyzed and stoked fears of a broader industry crackdown ahead of November’s presidential election.

In its complaint earlier this month, the FTC cited communications between Sheffield and other industry leaders, as well as public comments made by the oil chief, to allege that he tried to collude with the OPEC cartel and other domestic producers to reduce production and sustain. prices.

The allegations centered around Sheffield’s comments during the Covid-19 crash in crude oil prices in 2020, when he called for lower output to stabilize prices and urged Texas oil regulators to limit production .

Sheffield’s lawyers said the FTC mischaracterized its communications to support its “unprecedented and ridiculous theory” of collusion. They added that the idea that his presence on the Exxon board would reduce competition in the market was “unmerited”.

“In trying to find a reason to criticize the merger between Exxon and Pioneer, the FTC went far beyond its mandate and unfairly defamed Mr. Sheffield,” they wrote.

“The FTC supports our allegations,” the regulator said Tuesday. “There is no doubt that Mr. Sheffield has publicly urged Texas oil producers to cut production, all while having regular, private, back-and-forth communications with senior OPEC officials over a period of years.”

Sheffield’s lawyers also reached out to Exxon, which they said had “easily agreed, without any admission of liability or findings of fact, to a proposed consent order that would keep Mr. Sheffield off its board and allow the transaction to be completed’.

Exxon declined to comment. In a statement after the FTC’s announcement, the company said Sheffield’s alleged conduct was “completely inconsistent with the way we do business.”