FTC allows ExxonMobil to acquire Pioneer Natural Resources

The Federal Trade Commission on Thursday approved Exxon Mobil’s acquisition of Pioneer Natural Resources as long as Exxon removes Pioneer’s chief executive from its board of directors.

A $60 billion deal between two Texas companies could be finalized as early as this week, with the country’s largest oil field, the Permian Basin, which straddles Texas and New Mexico. It will produce gas producers. Exxon’s acquisition of Pioneer is one of several large-scale mergers and acquisitions in the oil and gas industry in recent years.

The FTC accused Pioneer CEO Scott Sheffield of conspiring with executives from the Organization of the Petroleum Exporting Countries and its allies to control global oil production and prices.

“Mr. Sheffield’s past conduct makes it clear that he should not be near Exxon’s boardroom,” Kyle Mach, deputy director of the commission’s competition bureau, said in a statement. “American consumers should not pay unfair prices just to line the pockets of corporate executives.”

The FTC said Mr. Sheffield “sought to coordinate oil production throughout the Permian Basin” with OPEC and its allies through public statements, messages to other oil executives, and private meetings. The commission said he exchanged “hundreds of text messages” with cartel representatives and associates discussing oil markets, prices and production.

Mr. Sheffield was a longtime leader in the U.S. oil industry as an early explorer of shale deposits in Texas. He also called on federal lawmakers to end the oil embargo that was successful during the Obama administration.

Exxon announced that it had agreed not to add Sheffield to its board of directors. Exxon said the FTC’s allegations against Sheffield are “completely inconsistent with the way we do business.”

Pioneer Natural Resources disputed the commission’s accusations, saying Mr. Sheffield never attempted to collude with other oil producers.

“We disagree and are surprised,” Pioneer said in a statement. “During Mr. Sheffield’s career, it was never the intent or effect of his communications to circumvent the laws and principles that protect market competition.”

The company noted that Pioneer more than doubled the amount of oil it produces in the United States from 2019 to 2023, contributing to lower energy prices.

Mr. Sheffield declined to comment beyond Pioneer’s statement.

Exxon and Pioneer stock rose about 1% Thursday morning.

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