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Exxon’s Pioneer Purchase Approved, Former CEO Barred from Board

 |  May 2, 2024

Exxon Mobil’s $60 billion acquisition of Pioneer Natural Resources has received the green light from the FTC, allowing the deal to move forward. However, former Pioneer CEO Scott Sheffield has been barred from Exxon’s board amidst allegations of attempting to collude with OPEC to manipulate oil prices.

The U.S. Federal Trade Commission (FTC) alleged that Sheffield coordinated with U.S. shale oil producers to restrict output and inflate energy prices. According to Reuters, the FTC claimed Sheffield utilized his position to align oil production across the Permian Basin with OPEC+.

Despite the controversy surrounding Sheffield, the approval of the acquisition allows Exxon to finalize the deal on Friday, enabling the company to shift its focus to a dispute with Chevron over its proposed acquisition of Hess Corp. Exxon’s shares saw a 1% increase in morning trading, reaching $117.26.

Related: FTC to Approve Exxon’s $64 Billion Deal with Pioneer Resources

Kyle Mach, Deputy Director of the FTC’s Bureau of Competition, emphasized the inappropriateness of Sheffield’s past conduct for a position on Exxon’s board. However, when questioned about potential criminal implications, the FTC refrained from commenting, stating their obligation to refer such matters to the U.S. Department of Justice.

The approval of Exxon’s acquisition sets a positive precedent for other energy merger reviews, including those involving Chevron, Diamondback Energy, Occidental Petroleum, and Chesapeake Energy, all of which have faced scrutiny from the FTC.

Pioneer expressed surprise at the FTC’s complaint against Sheffield but affirmed its commitment to the deal’s closure. The company argued that Sheffield’s industry commentary, although outspoken, should not disqualify him from a board seat, citing its relevance to public interest.

Source: Reuters