The proposed consent order seeks to prevent Pioneer’s Sheffield from engaging in collusive activity that would potentially raise crude oil prices, leading American consumers and businesses to pay higher prices for gasoline, diesel fuel, heating oil and jet fuel.
The FTC alleges in a complaint that Sheffield has, through public statements and private communications, attempted to collude with the representatives of the Organization of Petroleum Exporting Countries (OPEC) and a related cartel of other oil-producing countries known as OPEC+ to reduce output of oil and gas, which would result in Americans paying higher prices at the pump, to inflate profits for his company.
Through public statements, text messages, in-person meetings, WhatsApp conversations and other communications while at Pioneer, Sheffield sought to align oil production across the Permian Basin in West Texas and New Mexico with OPEC+.
Sheffield’s appointment to Exxon’s board also would be anticompetitive as he currently serves on the board of The Williams Companies, Inc., which operates a host of natural gas pipelines; natural gas gathering, processing, and treating assets; and other businesses that directly overlap with Exxon’s operations. Sheffield’s appointment would facilitate a board interlock among competitors, in violation of Section 5 of the FTC Act.
The FTC’s proposed consent order would prohibit Exxon from nominating, designating, or appointing Sheffield to the Exxon board or from serving in an advisory capacity in any way to the Exxon board or Exxon’s management.
The proposed consent order also requires that:
- For a period of five years, Exxon shall not nominate, designate, or appoint any Pioneer employee or director, other than certain named individuals, to the Exxon board; and
- For a period of 10 years, Exxon will agree to certain Clayton Act Section 8 attestation and reporting obligations.
Further details about the order can be found in the analysis to aid public comment.
The Commission vote to accept the consent agreement and place the complaint and order on the record for public comment was 3-2, with Chair Lina M. Khan and Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya issuing separate statements. Commissioners Melissa Holyoak and Andrew N. Ferguson voted no and issued a joint dissenting statement.
The FTC will publish the consent agreement package in the Federal Register shortly. Instructions for filing comments appear in the published notice. Comments must be received 30 days after publication in the Federal Register.