The Wall Street Journal has reported allegations against Scott Sheffield, the former chief executive of Pioneer Natural Resources, suggesting collusion with other shale oil producers and OPEC members to coordinate production cuts aimed at boosting oil prices. According to unnamed sources cited in the report, Sheffield allegedly reached out to various shale oil producers and OPEC representatives in an effort to influence production policies, with the goal of benefiting Pioneer by driving up oil prices. The report highlights that Sheffield exchanged “hundreds of messages” with OPEC representatives regarding market dynamics, including pricing and production levels.
The sources mentioned in the report suggest that formal allegations by the Federal Trade Commission (FTC) could be announced by the end of the week. As a precautionary measure, Sheffield has been barred from joining the board of Exxon following its proposed acquisition of Pioneer, as mandated by the FTC as a condition for approving the $60-billion deal.
Exxon’s plan to acquire Pioneer Natural Resources was initially announced in October, with Exxon proposing an all-stock transaction valued at approximately $58 billion. Exxon emphasized that the acquisition would significantly enhance its upstream portfolio, particularly in the Permian Basin, and would establish a leading position in terms of undeveloped U.S. unconventional resources.
However, the FTC has closely monitored the proposed deal, along with other mergers in the oil sector, following concerns raised by nearly 50 Democratic Senators and Representatives. These concerns centered on potential anticompetitive effects and their impact on consumers. Despite scrutiny, some legal experts have argued that mergers within the oil industry, including those involving major players like Exxon, Pioneer, Chevron, and Hess Corp., may not necessarily raise antitrust concerns due to the global nature and scale of the oil market.
