Scott Sheffield, the founder and longtime CEO of a major American oil producer, is facing allegations from federal regulators of attempting to collude with OPEC and its allies to manipulate oil prices.
According to the Federal Trade Commission (FTC), Sheffield, who was then the CEO of Pioneer Natural Resources, engaged in hundreds of text message exchanges discussing pricing, production, and oil market dynamics with officials from OPEC, the oil cartel led by Saudi Arabia.
The FTC claims that Sheffield utilized various means, including WhatsApp conversations, in-person meetings, and public statements, to coordinate oil production in the Permian Basin in Texas with that of OPEC and OPEC+, a broader group that includes Russia.
The complaint alleges that Sheffield’s communications aimed to boost Pioneer’s profits, as well as those of oil companies in OPEC and OPEC+ member states, at the expense of U.S. households and businesses. Unlike OPEC nations, where oil production decisions are typically coordinated, U.S. oil production is supposed to be driven by the free market.
Sheffield retired as CEO of Pioneer in December 2023. The company, which he founded, is the largest producer in the Permian Basin, a significant oil field contributing to the U.S.’s status as the world’s leading oil and gas producer.
The FTC has approved the sale of Pioneer to ExxonMobil for $60 billion, but with a condition preventing Sheffield from joining Exxon’s board or serving as an advisor.
The FTC’s allegations have raised concerns about potential criminal charges against Sheffield. While the FTC has a responsibility to refer potentially criminal behavior, it takes this obligation seriously.
Pioneer has defended Sheffield, stating that his communications were not intended to circumvent competition laws and market principles. However, the company has indicated it won’t contest the FTC’s findings.
ExxonMobil, upon learning of the allegations, emphasized that they are inconsistent with its business practices. In response to the FTC’s concerns, Exxon will not add Sheffield to its board. The company expects the acquisition of Pioneer to proceed as planned.
