US antitrust authorities cleared ExxonMobil's acquisition of Pioneer Natural Resources under the condition that the shale producer's former CEO be barred from the company's board, regulators announced Thursday.
A proposed consent order barred longtime Pioneer CEO Scott Sheffield from the ExxonMobil board of directors, citing his "collusive" activity with crude exporters from the OPEC+ group of countries, a Federal Trade Commission (FTC) press release said.
The FTC, which has ramped up action against corporate mergers in recent years under chair Lina Khan, said Sheffield's installation on the board of ExxonMobil posed a risk to US consumers.
"Mr. Sheffield's past conduct makes it crystal clear that he should be nowhere near Exxon's boardroom," said Kyle Mach, deputy director of the FTC's board of competition.
"American consumers shouldn't pay unfair prices at the pump simply to pad a corporate executive's pocketbook."
In October, ExxonMobil announced the acquisition of the fellow Texas-based Pioneer for about $60 billion in a big bet on the Permian Basin, a key US shale region.
The company will close the merger on May 3, an ExxonMobil spokeswoman said Thursday, after officials last week expressed confidence the deal would proceed in the second quarter.
The FTC pointed to "hundreds of text messages" from Sheffield exchanged with OPEC representatives and others involved in crude oil market dynamics in an effort to coordinate policy and defend higher prices.
"If Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi and Russia will follow. That was our plan," Sheffield said in one message cited by the FTC. "I was using the tactics of OPEC+ to get a bigger OPEC+ done."
Pioneer said that while the FTC's complaint reflects a "fundamental misunderstanding of the US and global oil markets and misreads the nature and intent of Mr. Sheffield's actions," neither it nor Sheffield would take steps to prevent the deal from closing.
Sheffield was motivated by strengthening the position of domestic energy producers to enhance US energy security, Pioneer said.
"During Mr. Sheffield's career, it was neither the intent nor an effect of Mr. Sheffield's communications to circumvent the laws and principles protecting market competition," Pioneer said.
It pointed to Sheffield's experience of living through six industry downturns in which "OPEC and OPEC+ have oversupplied the market, causing substantial turmoil for Us independents, including Pioneer."
ExxonMobil said it learned of the allegations from the FTC.
"They are entirely inconsistent with how we do business," an ExxonMobil spokeswoman said, adding that after a lengthy review, "the Commission raised no concerns with our business practices."
The FTC has set a 30-day public comment period after which it will decide whether to modify, withdraw or finalize the proposed order, an agency spokeswoman said.
