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Scott Sheffield, the former chief executive of Pioneer Natural Resources accused of colluding with Opec to restrict oil production, hit out at the US Federal Trade Commission on Tuesday and said he had been “unjustly smeared”.
Pioneer, the biggest oil producer in Texas, was acquired by ExxonMobil in a $60bn deal that closed this month. But in giving the green light to the transaction, the antitrust regulator took the unusual step of banning Sheffield from serving on the supermajor’s board, arguing it would give him a platform to engage in “collusive activity”.
Sheffield has not commented publicly since the FTC’s administrative complaint against him earlier this month. But in a lengthy submission to the regulator on Tuesday his lawyers called on the commission to withdraw its charges and hit out at what they described as a “baseless personal attack” that undermined First Amendment freedoms.
“The FTC is wrong to imply that I ever engaged in, promoted or even suggested any form of anti-competitive behaviour,” Sheffield said.
“Publicly and unjustifiably vilifying me will have a chilling effect on the ability of business leaders in any sector of our economy to address shareholder demands and to exercise their constitutionally protected right to advocate for their industries.”
The bombshell decision by the FTC has been broadly criticised by the industry, with many dismissing what they see as an unfair and misdirected attack on one of the sector’s longest-standing leaders and most vocal advocates. Amid a wave of M&A activity, it has also sparked concern over how communications unearthed in antitrust probes could be scrutinised, and fanned fears of a broader industry crackdown ahead of November’s presidential election.
In its complaint earlier this month the FTC cited communications between Sheffield and other industry leaders, as well as public comments made by the oil boss, to assert that he had attempted to collude with the Opec cartel and other domestic producers to curtail production and prop up prices.
The allegations centred around Sheffield’s comments during the Covid-19 driven crash in crude prices of 2020 when he called for lower production to stabilise prices and urged the Texas oil regulator to cap output.
Sheffield’s lawyers asserted the FTC mischaracterised his communications to support its “unprecedented and ludicrous theory” of collusion. They added that the idea that his presence on the Exxon board would curb competition in the market was “meritless”.
“In straining to find a reason to criticise the merger of Exxon and Pioneer, the FTC stepped well beyond its proper mandate and unjustly smeared Mr Sheffield,” they wrote.
“The FTC stands by our allegations,” the regulator said on Tuesday. “There is no question that Mr Sheffield publicly urged Texas oil producers to limit production, all while having regular, private back-and-forth communications with senior OPEC representatives over a period of years.”
Sheffield’s lawyers also hit out at Exxon, which they said had “readily agreed, without any admission of liability or findings of fact, to a proposed consent order that would keep Mr Sheffield off its board and allow the transaction to close”.
Exxon did not immediately respond to a request for comment. In a statement following the FTC announcement, the company said Sheffield’s alleged conduct was “entirely inconsistent with how we do business”.
