FTC Approves Exxon’s $64.5 Billion Pioneer Buy, Blocks Pioneer CEO from Exxon Board

Government says Sheffield colluded with competitors and cartels to keep prices and profits high.

The Federal Trade Commission (FTC) approved Exxon’s $64.5 billion purchase of Pioneer Natural Resources, but barred Pioneer founder and CEO Scott D. Sheffield – who is also a former Exxon CEO – from Exxon’s board due to antitrust concerns raised by his efforts to control oil prices in collaboration with competitors and OPEC. The Commission approved a consent order that prevents Sheffield from gaining a seat on Exxon’s board of directors or serving in an advisory capacity at Exxon once it acquires Pioneer.

oil well at sunset

The OPEC and OPEC+ cartels control global crude oil production and reserves. One countermeasure the U.S. can employ to weaken the cartels’ chokehold on pricing is to increase domestic production. The Permian Basin in West Texas and New Mexico is rich with crude oil. Pioneer is the largest producer there.

Sheffield has “campaigned to organize anticompetitive coordinated output reductions between and among U.S. crude oil producers” and others, including OPEC and OPEC+, the FTC maintains. “Mr. Sheffield’s communications were designed to pad Pioneer’s bottom line—as well as those of oil companies in OPEC and OPEC+ member states—at the expense of U.S. households and businesses.”

Sheffield’s action to align U.S. oil production with OPEC and OPEC+ — rather than competing with these cartels – has only served to “[cement] the cartel’s position and [share] in the spoils of its market power. Further, the FTC charges, Sheffield has stated publicly that competitors should be “disciplined” about capacity growth and “stay[] in line.”

“’All the shareholders that I’ve talked to said that if anybody goes back to growth, they will punish those companies,’” the FTC quotes Sheffield as saying. “But Mr. Sheffield did not limit himself to public signaling to U.S. counterparts — he has also held repeated, private conversations with high-ranking OPEC representatives assuring them that Pioneer and its Permian Basin rivals were working hard to keep oil output artificially low.”

Sheffield retired from Exxon in 2016, but came back as president and CEO in 2019, then served as CEO from 2021 to 2023.

Photo by Zbynek Burival on Unsplash


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