We’re jumping into Monday with a lot of news to digest. Last week Exxon Mobil closed on its $60 billion acquisition of independent U.S. shale producer Pioneer Natural Resources following a review by the Federal Trade Commission.
But it came with a surprising catch: Pioneer founder and CEO Scott Sheffield would be barred from serving on the board following allegations that he colluded with OPEC members and others to keep oil prices high.
Pioneer said the complaint reflects a “fundamental misunderstanding” of U.S. and global oil markets and “misreads” the nature of Sheffield’s actions. And parts of the complaint levied against Sheffield do reference things he said publicly. For example, the FTC points to his push for publicly traded shale companies to remain “disciplined” about capacity and growth and “stay in line.”
Sheffield has always been an outspoken advocate for the industry, and in recent years has worked to bridge rifts between OPEC and shale producers. He’s participated in dinners with OPEC members and fellow shale CEOs, and even hosted Saudi officials to exchange learnings on the shale industry and technology.
He has certainly espoused the mantra of “discipline” publicly, as did many other CEOs of publicly traded oil and gas companies.
The FTC is looking at several other oil and gas mergers in the works, including Chesapeake and Southwestern, Chevron and Hess, and Occidental and CrownRock.
You can read the FTC complaint against Scott Sheffield here.
Meanwhile to start the week, in the Middle East, hopes for a ceasefire slimmed as Israel appeared prepared to launch a long-threatened assault on Rafah in the southern Gaza Strip.
Oil was up on Monday on the news, after ending last week down nearly 7%. Saudi Arabia also hiked June crude prices for most selling regions in a signal that it expected stronger demand, pushing futures higher during the day.
Finally in Houston, the Offshore Technology Conference gets underway this week. Spending on new deepwater drilling is poised to hit a 12-year high next year, according to consultancy Rystad. New fields in places like Namibia, which is forecast to hold some 10 billion barrels of oil, and growth in Guyana will be in the spotlight for this conference.
