The US Federal Trade Commission (FTC) has given conditional approval to ExxonMobil’s nearly $60bn acquisition of Pioneer Natural Resources.  

As per the terms of the approval, Pioneer’s co-founder and former CEO Scott Sheffield will be barred from joining Exxon’s board due to allegations of attempted collusion with the Organization of Petroleum Exporting Countries (OPEC). 

The FTC has accused Sheffield of seeking to collude with the OPEC and OPEC+ alliance to reduce oil and gas output, potentially leading to higher prices for US consumers.  

The antitrust regulator’s complaint details Sheffield’s alleged efforts to coordinate production cuts through various communications, including public statements, text messages and in-person meetings. 

FTC deputy director of the bureau of competition Kyle Mach said: “Sheffield’s past conduct makes it crystal clear that he should be nowhere near Exxon’s boardroom. American consumers should not pay unfair prices at the pump simply to pad a corporate executive’s pocketbook. The FTC will remain vigilant in its enforcement efforts to protect competition in these vital markets.” 

The all-stock transaction, first announced in October 2023, is set to make Exxon one of the dominant players in the Permian Basin, North America’s most prolific oilfield.  

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In response to the FTC’s stance, Pioneer has expressed disagreement with the complaint, defending Sheffield’s public statements and arguing against his disqualification from Exxon’s board.  

Nonetheless, Pioneer and Sheffield have indicated they will not impede the merger’s completion. 

In a statement, Pioneer said: “During Sheffield’s career, it was neither the intent nor an effect of Sheffield’s communications to circumvent the laws and principles protecting market competition.” 

According to Reuters, Exxon is poised to finalise the acquisition of Pioneer on 3 May 2024.  

This development comes amidst a surge of consolidation in the oil and gas industry, with transactions totalling $230bn drawing the attention of more than 50 lawmakers, who have called for increased regulatory oversight. 

The FTC, led by Chair Lina Khan, has been closely monitoring the sector, casting a watchful eye over several major deals including Diamondback Energy‘s $26bn proposal to acquire Endeavor Energy Resources.