Pioneer, a key player in the shale oil boom in the US, will not be able to join Exxon’s board or provide advisory services once the oil giant finalizes its acquisition of Pioneer. The Federal Trade Commission (FTC) has accused Scott Sheffield, founder and former CEO of Pioneer, of trying to coordinate with OPEC and OPEC+ to reduce oil production through public statements and private communications. This alleged coordination could have resulted in higher prices for American consumers and increased profits for companies.
Pioneer denies the accusations but will not stop the merger due to Sheffield’s veto. Despite their disagreement with the accusations, they will not prevent the merger from going through. The company believes that Sheffield’s actions were intended to raise awareness of issues facing the energy industry during the pandemic rather than engage in collusion.
One of the conditions set by the FTC for closing the deal is prohibiting Sheffield from engaging in collusive activities that could raise oil prices. The FTC accuses Sheffield of violating antitrust laws by attempting to align oil production in the Permian Basin with OPEC+ through various communication channels. However, despite his role as an advocate for the industry, Sheffield’s actions are seen as an attempt to engage in collusion rather than promote competition in the marketplace.
Exxon agreed to purchase Pioneer for around $60 billion last October, with regulatory approval required. Once completed, Pioneer will become part of ExxonMobil and provide access to prime drilling locations for decades to come. Despite this significant investment, ExxonMobil will still face challenges related to supply chain disruptions caused by global events such as pandemics and geopolitical tensions.
In conclusion, while Scott Sheffield may no longer be able to join Exxon’s board or provide advisory services due to concerns about anticompetitive behavior, Pioneer will continue its operations within ExxonMobil while advocating for sustainable practices within its industry.