Scott Sheffield, CEO of Pioneer Resources, speaks during the IHS CERAWeek 2015 energy conference in Houston, Texas April 21, 2015.
HOUSTON--U.S. regulators gave the go-ahead on Thursday to Exxon Mobil's $60 billion purchase of Pioneer Natural Resources, but barred Pioneer's former CEO from Exxon's board on allegations he attempted to collude with OPEC to raise oil prices. Former Pioneer CEO Scott Sheffield coordinated efforts with U.S. shale oil producers to constrain their output and raise energy prices, the Federal Trade Commission said. Widely considered the dean of U.S. shale because of his long tenure and blunt comments on industry output and spending, Sheffield used his influence "to align oil production across the Permian Basin in West Texas and New Mexico with OPEC+," the FTC claimed. “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 Bureau of Competition. When asked if the FTC would refer the collusion allegations to the U.S. Department of Justice for further investigation, a FTC spokesperson said: “The FTC has a responsibility to refer potentially criminal behaviour and takes that obligation very seriously.” The DOJ did not reply to a request for comment. Pioneer said Sheffield had "neither the intent nor an effect of his communications to circumvent the laws and principles protecting market competition." The FTC's consent for the deal will come as a relief to other energy companies with mergers under antitrust reviews. But it drew criticism from lawmakers over the industry's concentration. Multibillion-dollar deals involving Chevron, Diamondback Energy, Occidental Petroleum, and Chesapeake Energy are before the FTC. "The American Big Oil oligopoly has for decades followed the lead of a foreign oil cartel to set high prices for consumers and reap mega-profits while destroying the planet," said Sen. Sheldon Whitehouse. "It is disappointing that FTC is making the same mistake they made 25 years ago when I warned about the Exxon and Mobil merger in 1999," added U.S. Senate Majority Leader Chuck Schumer. Exxon plans to close the Pioneer purchase on Friday. The deal will make it the largest oil producer in the Permian Basin with more than 1.3 million barrels of oil equivalent per day (boepd). The oil giant said it will not add Sheffield to its board. It learned of the collusion allegations during the antitrust review, but the FTC investigation "raised no concerns with our business practices," a spokesperson said.
