Exxon Mobil’s (NYSE:XOM) $60 billion acquisition of Pioneer Natural Resources (NYSE:PXD) received approval from the Federal Trade Commission (FTC) on Thursday, although the former CEO of Pioneer, Scott Sheffield, has been barred from joining the new company’s board of directors.
The FTC stated on Thursday that Scott Sheffield, who founded Pioneer in 1997, allegedly colluded with OPEC and OPEC+ to potentially manipulate crude oil prices. Despite retiring from the company in 2016, Sheffield returned as president and CEO in 2019, serving as CEO from 2021 to 2023, and maintaining a position on the board. Since January 1st, he has been a special adviser to the company’s chief executive.
According to the FTC, Sheffield attempted to coordinate oil production across the Permian Basin in West Texas and New Mexico with OPEC+, utilizing various means of communication such as public statements, text messages, in-person meetings, and WhatsApp conversations. As part of the FTC’s proposed consent order, Exxon is prohibited from appointing any Pioneer employee, except for a few exceptions, to its board.
In response, Dallas-based Pioneer expressed disagreement with the allegations but stated it would not obstruct the merger’s closing, which was initially announced in October 2023.
The company stated that Sheffield and Pioneer disagreed with the FTC’s complaint, asserting that it demonstrates a lack of comprehension regarding the U.S. and global oil markets, as well as misinterpreting the nature and purpose of Mr. Sheffield’s actions.
The deal significantly expands Exxon’s presence in the Permian Basin, combining Pioneer’s over 850,000 net acres in the Midland Basin with Exxon’s 570,000 net acres in the Delaware and Midland Basin. This consolidation of nearly contiguous fields is expected to result in cost savings for the combined company.
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