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Former Pioneer CEO Facing Potential Criminal Charges For Colluding With OPEC

 |  May 2, 2024

The Federal Trade Commission (FTC) has accused former Pioneer Natural Resources CEO, Scott Sheffield, of allegedly colluding with OPEC officials to manipulate oil output and inflate prices. The accusations surfaced in a complaint filed by the FTC on Thursday, prompting a referral to the Justice Department for a potential criminal investigation, as reported by The Wall Street Journal.

The FTC claims Sheffield engaged in private conversations with OPEC representatives, reassuring them that Pioneer and other players in the Permian Basin were committed to maintaining artificially low oil output. This, the commission alleges, was part of a concerted effort to drive up prices and bolster Pioneer’s profits.

In response to the allegations, Exxon Mobil, poised to acquire Pioneer in a $65 billion deal, announced that Sheffield would be barred from serving on its board once the transaction concludes, which is expected to happen on Friday.

FTC Chair Lina Khan and other commissioners have argued that Sheffield’s actions were not isolated incidents but part of a sustained strategy to coordinate output reductions. The gravity of the situation led the FTC to escalate the matter to the Justice Department, signaling potential legal ramifications for Sheffield.

However, Pioneer Natural Resources pushed back against the allegations, stating that the FTC’s complaint demonstrates a “fundamental misunderstanding” of both U.S. and global oil markets. The company maintained that Sheffield never intended to breach competition laws or undermine market principles, and dismissed the idea that the controversy would represent an obstacle for the Exxon Mobil merger.

Source: WSJ