May 2, 2024 - Energy & Environment

FTC will allow Exxon's megadeal with Pioneer in major oil consolidation move

Illustration collage of a worker in front of an oil rig pump, next to graphic shapes

Illustration: Annelise Capossela/Axios

The Federal Trade Commission won't seek to block Exxon's $60 billion deal for Pioneer Natural Resources after securing agreement that ex-Pioneer CEO Scott Sheffield won't serve on the board.

Why it matters: The merger is the biggest step in a wave of consolidation sweeping the U.S. oil patch, and Exxon's largest acquisition in 25 years.

State of play: The FTC on Thursday morning said it took action to "resolve antitrust concerns" around the deal and announced a consent decree with Exxon, which the company confirmed in a separate statement.

Friction point: The regulators said they're acting to prevent "collusive activity" that could raise oil prices. They allege that in the past, Sheffield had attempted to collude with OPEC+ reps to reduce output.

  • Sheffield "exchanged hundreds of text messages with OPEC representatives and officials discussing crude oil market dynamics, pricing and output," the commission said.

What they're saying: Exxon said it learned about the allegations from the FTC and that they're "inconsistent with how we do business," adding the FTC "raised no concerns with our business practices" in its review.

Pioneer criticized the FTC allegations but said it would not contest them.

  • "We disagree and are surprised by the FTC's complaint saying that Mr. Sheffield's record and statements on matters of public interest should disqualify him from serving on the ExxonMobil Board of Directors," the company said.
  • The FTC's finding "reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield's actions," Pioneer said.

What's next: "We will close on May 3 and look forward to implementing the integration plans we've jointly developed with Pioneer over the past six months," Exxon said.

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