FTC Reconsiders Boardroom Bans Tied to Exxon, Chevron Oil Mergers

The U.S. Federal Trade Commission (FTC) is reevaluating restrictions placed on two high-profile oil mergers, potentially paving the way for prominent energy executives to join the boards of Exxon Mobil and Chevron. These conditions, initially imposed to curb potential coordination with OPEC, were central to the Biden administration’s approval of the multibillion-dollar deals.

According to Reuters, the FTC on Friday announced it is soliciting public comment on petitions submitted by former Pioneer Natural Resources CEO Scott Sheffield, Chevron, and Hess Corp. These petitions request the reversal of boardroom bans that were attached to the mergers involving Exxon and Chevron.

In 2023, Exxon acquired Pioneer Natural Resources in a $59.5 billion deal, agreeing as part of the FTC’s approval process to bar Sheffield from joining its board. Similarly, Chevron’s $53 billion agreement to purchase Hess included a provision preventing Hess CEO John Hess from board participation. These measures were put in place amid concerns about potential collusion with members of the Organization of the Petroleum Exporting Countries (OPEC), per Reuters.

Related: Regulators Approve Conditions for Multibillion-Dollar Oil Mergers

A Chevron spokesperson expressed support for reversing the restriction, stating, “Mr. Hess is a highly respected industry leader, and our board would benefit from his global experience, relationships and expertise.”

Despite the FTC’s initial concerns, both Sheffield and Hess denied any wrongdoing. A Hess Corp spokesperson asserted that the FTC’s allegations were “entirely without merit.”

At the time of the original approvals, the FTC—then chaired by Lina Khan—mandated the bans as safeguards against anti-competitive behavior. However, the decisions were not without controversy. Republican Commissioners Andrew Ferguson and Melissa Holyoak opposed the orders, arguing that the agency had exceeded its legal authority in enforcing them, according to Reuters.

Chevron’s acquisition of Hess remains under scrutiny as arbitration continues regarding possible preemptive rights to Hess’s interest in Guyana’s oil-rich Stabroek block. Meanwhile, Exxon has finalized its merger with Pioneer, solidifying its position as the leading U.S. oil producer.

Source: Reuters