The Federal Trade Commission (FTC) has moved to prevent potential antitrust issues arising from Exxon Mobil’s $64.5 billion acquisition of Pioneer Natural Resources, focusing specifically on Scott Sheffield Pioneer, the founder and former CEO of Pioneer. To address these concerns, the FTC has approved a consent order that prohibits Sheffield from joining Exxon’s board or acting in any advisory role for the company after the acquisition is finalized.
This proposed consent order is a direct response to the FTC’s apprehension that Scott Sheffield Pioneer might engage in activities that could illegally inflate crude oil prices. The FTC fears this could lead to increased costs for American consumers and businesses across various sectors, from gasoline and diesel to heating oil and jet fuel.
In its complaint, the FTC alleges that Scott Sheffield Pioneer has a history of attempting to collude with OPEC (Organization of the Petroleum Exporting Countries) and OPEC+ – a broader cartel of oil-producing nations. These alleged attempts, through both public statements and private communications, aimed to reduce oil and gas output, thereby artificially driving up prices and boosting profits for Pioneer.
Kyle Mach, Deputy Director of the FTC’s Bureau of Competition, stated, “Mr. Sheffield’s past conduct makes it unequivocally clear that he should not be anywhere near Exxon’s boardroom. American consumers should not be forced to pay inflated prices at the pump simply to enrich corporate executives. The FTC is committed to vigorously enforcing competition laws to protect these critical markets.”
While leading Pioneer, Scott Sheffield Pioneer allegedly worked to coordinate oil production in the Permian Basin – a significant oil-producing region in West Texas and New Mexico – with OPEC+. Evidence cited includes hundreds of text messages between Sheffield and OPEC representatives discussing crucial market factors like crude oil dynamics, pricing strategies, and production levels.
Sheffield himself reportedly boasted about using “OPEC+ tactics” to influence broader production cuts, even referencing efforts to coordinate with Texas producers under Railroad Commission mandates. He stated, “If Texas leads the way, maybe we can get OPEC to cut production. Maybe Saudi and Russia will follow. That was our plan,” and further added, “I was using the tactics of OPEC+ to get a bigger OPEC+ done.”
Beyond collusion concerns related to oil prices, the FTC also highlighted a separate anticompetitive issue. Scott Sheffield Pioneer currently serves on the board of The Williams Companies, Inc., a major operator of natural gas pipelines and related infrastructure. This creates a direct overlap with Exxon’s extensive operations in the natural gas sector. The FTC argues that Sheffield’s presence on Exxon’s board would create an illegal “board interlock” between competitors, violating Section 5 of the FTC Act.
To remedy these concerns, the FTC’s proposed consent order not only blocks Scott Sheffield Pioneer from Exxon’s board and advisory roles but also includes further restrictions. For five years, Exxon is prohibited from appointing most Pioneer employees or directors to its board. Additionally, for a decade, Exxon must adhere to specific attestation and reporting requirements under Section 8 of the Clayton Act, ensuring continued compliance and transparency.
More details about the FTC’s decision and the consent order are available in the analysis to aid public comment document released by the FTC.
The Commission’s vote to accept the consent agreement and open it for public comment was 3-2. Chair Lina M. Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya issued individual statements supporting the decision, while Commissioners Melissa Holyoak and Andrew N. Ferguson dissented, releasing a joint statement outlining their opposing views.
The FTC has officially published the consent agreement package in the Federal Register. Public comments can be submitted for 30 days following the publication date, as detailed in the Federal Register notice. Once processed, these comments will be accessible on Regulations.gov.
It is important to note that an FTC administrative complaint is issued when the Commission has “reason to believe” a law has been violated and deems a proceeding to be in the public interest. A consent order, once finalized by the Commission, carries the full force of law for future actions.
