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U.S. regulators are poised to approve ExxonMobil’s $60 billion takeover of Pioneer Natural Resources on the condition that the smaller oil company’s former chief executive does not join the supermajor’s board.
The Federal Trade Commission has raised concerns about possible anticompetitive behavior if Scott Sheffield were to join Exxon’s board, according to a person with knowledge of an agreement between regulators and the companies to approve the acquisition.
The FTC is expected to allege that Sheffield has in the past engaged in collusive activities aimed at reducing oil production and increasing prices by exchanging messages with senior officials of the oil cartel Opec and its broader producer alliance Opec+, said the person.
A formal announcement from the FTC approving the acquisition is expected later this week.
Exxon’s deal to buy Pioneer, announced in October, is the largest by the largest U.S. oil company since its creation through the merger of Exxon and Mobil in 1999. It is also the first of significant size under CEO Darren Woods, who has led Exxon since 2017.
It was initially expected that Sheffield would join Exxon’s board as a director following the completion of the transaction.
By combining the two companies’ shale assets, Exxon will gain a dominant position in the Permian Basin, the vast field in western Texas and New Mexico that has helped the U.S. become the world’s largest oil and gas producer.
The deal with the FTC that bars Sheffield from joining Exxon’s board raises questions about the actions of an executive who played a crucial role in reviving the fortunes of the U.S. oil industry in recent decades. The dates of his alleged messages with OPEC could not immediately be determined.
Sheffield was a major figure in the shale revolution that unfolded as enterprising wildcats used hydraulic fracturing and horizontal drilling techniques to blast previously uneconomic oil and gas reserves.
Sheffield, 71, retired as CEO at the end of 2023. It was his second departure from the company he founded: he previously resigned in 2016 before returning to Pioneer three years later
Sheffield has long publicly expressed his views on the oil market – and OPEC. In early April 2020, as global oil demand collapsed at the start of the pandemic, he was among U.S. oil executives who publicly called on the cartel and Russia to curb supply.
After oil prices recovered three years later, thanks in part to OPEC production cuts, he told the Financial Times that Saudi Arabia, the United Arab Emirates and Kuwait would rule the oil market “for the next 25 years.”
The FTC declined to comment. Exxon, Pioneer and Sheffield did not immediately respond to requests for comment.
Additional reporting by Myles McCormick in Houston
This article has been amended to reflect Scott Sheffield’s retirement at the end of 2023