FTC’s Surprise Attack on US Oil Icon Rattles Shale Sector

Bloomberg05-03

(Bloomberg) -- The Federal Trade Commission’s allegations that shale trailblazer Scott Sheffield tried to collude with OPEC to prop up crude prices is unnerving US oil executives pursuing more than $...

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Turkey Confirms All Trade Halt With Israel Over War in Gaza. Huawei Secretly Backs US Research, Awarding Millions in Prizes. Biden Calls Ally Japan ‘Xenophobic’ Along With China, Russia. US and Saudis Near Defense Pact Meant to Reshape Middle East. Sheffield, Pioneer’s founder and a high-profile figure in the shale industry, has been barred from joining Exxon’s board, according to the agreement reached between the companies and the FTC. That represents a step-change for the US antitrust agency, which in the past usually sought asset sales before assenting to deals, legal observers say.“Until today, the FTC has taken non-adversarial stances against oil industry mergers,” Jim Lucier, managing director at Capital Alpha P","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0300736062.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) ACC","LU1074936037.SGD":"JPMorgan Funds - US Value A (acc) SGD","LU2602419157.SGD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"AC\" (SGD) ACC","LU0122376428.USD":"贝莱德世界能源基金A2","LU2133065610.SGD":"JPMorgan Investment Funds - Global Dividend A (mth) SGD","SG9999001440.SGD":"United Global Dividend Equity Fund A SGD Dist","LU0795875169.SGD":"JPMorgan Investment Funds - Global Income A (div) SGD-H","LU1732799900.SGD":"JPMorgan Investment Funds - Global Income A (irc) SGD-H","LU0889566641.SGD":"FTSF - Templeton Shariah Global Equity A Acc SGD","SG9999014575.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USDHDG) INC","LU0068578508.USD":"First Eagle Amundi International Cl AU-C USD","LU1839511570.USD":"WELLS FARGO GLOBAL FACTOR ENHANCED EQUITY \"I\" (USD) ACC","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","BK4213":"石油与天然气的勘探与生产","BK4201":"综合性石油与天然气企业","BK4516":"特朗普概念","FTC":"First Trust Large Cap Growth Opp","BK4592":"伊斯兰概念","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","PXD":"先锋自然资源","IE00B1XK9C88.USD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A\" (USD) ACC","BK4570":"地缘局势概念股","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","IE00BKDWB100.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5H\" (SGDHDG) ACC","LU1169590202.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"I\" (USD) ACC","XOM":"埃克森美孚","SG9999002232.USD":"Allianz Global High Payout USD","BK4585":"ETF&股票定投概念","LU0456854461.SGD":"JPMorgan Funds - Global Natural Resources A (acc) SGD","LU1169589451.USD":"ALLSPRING (LUX)  U.S. SELECT EQUITY \"A\" (USD) ACC","SG9999002224.SGD":"Allianz Global High Payout SGD","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","SG9999014559.SGD":"United Income Focus Trust Dis SGD","LU1150488218.USD":"First Eagle Amundi Income Builder AU2-MD USD","LU1489326972.SGD":"First Eagle Amundi International AHS-MD SGD-H","LU2347655156.SGD":"JPMorgan Investment Funds - Global Income A (icdiv) SGD-H","LU0795875086.SGD":"JPMorgan Investment Funds - Global Income A (div) SGD","SG9999002521.SGD":"United Global Resources A Acc SGD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","LU1066053197.SGD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM3\" (SGDHDG) INC","SG9999014567.USD":"UOB UNITED INCOME FOCUS TRUST FUND (USD) ACC","LU0300736492.USD":"FRANKLIN NATURAL RESOURCES \"A\" (USD) INC","LU1150488135.SGD":"First Eagle Amundi Income Builder AHS-MD SGD-H","BK4550":"红杉资本持仓","BK4588":"碎股","SG9999015358.SGD":"United Income Focus Trust Dis SGD-H","SG9999015341.SGD":"United Income Focus Trust Acc SGD-H"},"translate_title":"联邦贸易委员会突然袭击美国石油偶像扰乱页岩行业","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FTC":1,"PXD":0.9,"XOM":0.89},"content_text":"(Bloomberg) -- The Federal Trade Commission’s allegations that shale trailblazer Scott Sheffield tried to collude with OPEC to prop up crude prices is unnerving US oil executives pursuing more than $100 billion in deals.\nMost Read from Bloomberg\n\nSaudi Arabia Steps Up Arrests Of Those Attacking Israel Online\nTurkey Confirms All Trade Halt With Israel Over War in Gaza\nHuawei Secretly Backs US Research, Awarding Millions in Prizes\nBiden Calls Ally Japan ‘Xenophobic’ Along With China, Russia\nUS and Saudis Near Defense Pact Meant to Reshape Middle East\n\nWhile Thursday’s green light from the FTC for Exxon Mobil Corp.’s $60 billion takeover of Pioneer Natural Resources Co. provided some relief to an industry undergoing unprecedented consolidation, a key condition of the approval is triggering shockwaves.\nSheffield, Pioneer’s founder and a high-profile figure in the shale industry, has been barred from joining Exxon’s board, according to the agreement reached between the companies and the FTC. That represents a step-change for the US antitrust agency, which in the past usually sought asset sales before assenting to deals, legal observers say.\n“It’s definitely avant garde antitrust,” said Jeffrey Oliver, a partner at law firm Baker Botts LLP and former FTC official. “It’s way for them to appear tough on a deal that they couldn’t find a route to try and block on any other grounds.”\nChevron Corp., Occidental Petroleum Corp., Diamondback Energy Inc. and Chesapeake Energy Corp. are among the companies with pending transactions currently under FTC review. \nThe notion of the FTC scrutinizing individual executives has some companies with pending deals reviewing their regulatory-review strategies, as they are uncertain what the agency could throw at them next, according to people familiar with current deals.\nThe FTC hasn’t sought to block an oil or gas deal outright in recent memory, preferring to reach settlements. Last year, the agency required a Quantum Energy Partners founder to give up a board seat on shale-gas driller EQT Corp. before it could proceed with an acquisition.\nThe FTC cited “voluminous evidence” that Sheffield, 71, sought to co-ordinate production levels across the US shale sector and align the industry with the Organization of Petroleum Exporting Countries, with whom he communicated extensively in private messages and dinners. The agency also cited public comments in which Sheffield advocated production discipline among American peers. \n‘Predatory Practices’\nIn an 850-word rebuttal of the FTC allegations, Pioneer defended its co-founder, citing his role in driving US crude-production growth. His efforts to encourage discipline among drillers was aimed at improving investor returns and steeling the shale sector against OPEC’s “predatory practices,” the company said. \n“Until today, the FTC has taken non-adversarial stances against oil industry mergers,” Jim Lucier, managing director at Capital Alpha Partners, wrote in a note to clients. “Now that stance is different. We will be on the lookout for other consent decrees, based on dubious legal theories, to be applied to oil industry mergers.”\nThe FTC’s decision comes agains a backdrop of hostility from Democratic lawmakers that accused oil executives of “deception and doublespeak” over climate change in an investigation in the House of Representatives this week. Liberal advocacy group Climate Power seized on the FTC move as evidence that Big Oil is “price gouging consumers so that Americans pay more at the pump even after years of record profits.”\n13.1 Million Barrels\nA positive note for the industry from the FTC ruling was its decision to define the oil market globally rather than a narrow, localized one that could have competition concerns. And on the whole, the agency hasn’t been seeking to outright block oil and gas transactions.\n“The good news is, they’re not hamstringing these deals, not forcing divestments of assets, not doing anything that makes either party want to walk from a deal,” said Dan Pickering, founder of Pickering Energy Partners. “Ultimately, the deals are moving ahead pretty much as the two parties envisioned when they struck the deals.”\nUS oil production is currently about 13.1 million barrels a day, close to record levels and 40% higher than OPEC leader Saudi Arabia. US crude output more than doubled in the past 15 years, a result of the shale-oil revolution that Sheffield helped champion. \n“This is the government trying to save some face — it’s irrelevant to the whole issue of antitrust,” said Leo Mariani, managing director at Roth MKM. Through Sheffield’s 50 years in the industry, “he’s never really had issues where people thought he was engaging in anti-competitive behaviors,” Mariani said. \n“So it’s silly,” he added. “This whole thing is just politics ultimately. In an election year it helps to be tough on Big Oil.”\n--With assistance from Mitchell Ferman and Leah Nylen.\nMost Read from Bloomberg Businessweek\n\nWill GM Regret Kicking Apple CarPlay off the Dashboard?\nAI Is Helping Automate One of the World’s Most Gruesome Jobs\nChina Launches Rockets From Sea in Bid to Win the Space Race\nThe State of Crypto Is Anything But Strong\nWhy Banks These Days Are So Excited About Being Boring\n\n©2024 Bloomberg L.P.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2432966725"}