The US Federal Trade Commission has made a controversial decision regarding Exxon Mobil Corp.’s $60 billion purchase of Pioneer Natural Resources Co. The FTC has declined to challenge the acquisition, but with a condition – Pioneer co-founder Scott Sheffield must be excluded from Exxon’s board.
The decision, announced in a filing on Thursday, comes after the FTC found evidence that Sheffield had been in communication with OPEC and US peers about oil pricing and output. This raised concerns that Sheffield’s involvement in Exxon’s board could potentially drive up costs for consumers.
Deputy Director of the FTC’s Bureau of Competition, Kyle Mach, stated, “Mr. Sheffield’s past conduct makes it crystal clear that he should be nowhere near Exxon’s boardroom. American consumers shouldn’t pay unfair prices at the pump simply to pad a corporate executive’s pocketbook.”
The FTC order will prevent Sheffield from engaging in any collusive activity that could drive up pump prices for US consumers. The agency plans to refer the matter for a potential criminal investigation into Sheffield, according to reports.
Exxon shares remained unchanged following the news, while Pioneer shares rose slightly. The proposed consent order also prohibits Exxon from appointing any Pioneer employee or director to its board for five years.
Both Exxon and Pioneer have responded to the FTC’s allegations, with Exxon stating that they are “entirely inconsistent with how we do business,” and Pioneer expressing surprise and disagreement with the agency’s conclusions.
The controversy surrounding Sheffield’s exclusion from Exxon’s board highlights the complexities of mega-mergers in the oil and gas industry, as well as the potential impact on consumers and competition in the market.