By Benoît Morenne and Dave Michaels
When Scott Sheffield agreed to sell his company, Pioneer Natural Resources, to Exxon Mobil for $60 billion, he expected to retire with a windfall -- and a cushy seat on Exxon's board.
Instead, Exxon last year negotiated an agreement with Democratic antitrust enforcers at the Federal Trade Commission that barred the oil boss from that role, in exchange for getting the merger approved.
Now, the FTC's new Republican majority has reversed that decision.
Sheffield, though, says he is no longer interested in serving as a director of Exxon. He accuses the company of signing a "rushed, baseless and illegal order" and of effectively breaking the commitment it made to him in the merger agreement with Pioneer.
His fortunes stand in stark contrast to those of John Hess, the CEO who agreed to sell his eponymous oil company to Chevron for $53 billion. The FTC similarly barred him from joining the board of the larger company. But now that an arbitration panel cleared the way for the deal, the oilman is poised to serve as a director.
Despite the diverging outcomes, the FTC turnaround amounts to a legacy-saving move for both Sheffield and John Hess and is sure to please oil-and-gas CEOs, who said at the time that the agency had embarked on a political witch hunt. On the campaign trail, energy executives complained to now-President Trump about what they saw as FTC overreach.
"I appreciate the current commissioners for their willingness to review this case, and I'm obviously pleased that common sense has carried the day in their decision to vacate the prior order," Sheffield said in a statement.
Exxon declined to comment.
In orders last year, the FTC alleged that Sheffield and John Hess held improper talks with the Organization of the Petroleum Exporting Countries, the cartel that controls much of global oil output. Joining the boards, it said, risked giving the men platforms to align with OPEC to raise oil prices. The orders were part of the FTC's investigations of Exxon's bid for Pioneer and Chevron's acquisition of Hess.
Then, on Thursday, the agency's three Republican commissioners reversed the orders and blasted their Democratic predecessors' argument. They said Democrats abused the merger-review process to nitpick the executives' statements. There was no basis under antitrust law to block Sheffield and Hess from board roles, they said.
Although it was expected, the reversal shows antitrust enforcers under the Trump administration are taking a more business-friendly approach to overseeing competition laws. It suggests the FTC might take a more favorable view of oil-and-gas deals than it did under former Joe Biden, who at times had a frigid relationship with the industry.
In its decisions this week, the FTC said the oil market is global, and that individual companies have "minuscule market shares," meaning any mergers are unlikely to harm competition. Republican Commissioner Mark Meador supported overriding the earlier orders, but added that he thinks the global oil market is highly concentrated because OPEC controls so much output.
"Where the evidence supports it, the FTC should not hesitate to bring enforcement actions against actual collusion as well as invitations to collude," Meador said in a statement.
Joseph Ostoyich, an antitrust partner at law firm Clifford Chance, said he saw the reversals as an effort to correct what was political overreach by the prior administration. "What it signals is a more faithful adherence to the rule of law," he said.
For Sheffield and John Hess, the turn of events has immediate redeeming qualities.
The FTC had said John Hess discussed oil-price trends with OPEC officials over the years and sometimes praised the cartel's management of prices at conferences and other venues.
In a petition to vacate the order that Hess and Chevron filed earlier this year, the companies countered that the CEO has spent his career advocating for an increase in investment to grow oil and gas supply, for the benefit of consumers, workers, and U.S. energy security.
It is Sheffield that the FTC hit with the most serious allegations. The agency said he attempted to collude oil production across the Permian Basin in West Texas and New Mexico with OPEC to raise oil prices, which would have benefited Pioneer. FTC officials said Sheffield had regular private back-and-forth communications with senior OPEC representatives over a period of years, and that he should be "nowhere near Exxon's boardroom."
Sheffield has said the FTC smeared him, and that he never exchanged competitively sensitive information with OPEC officials. The FTC built its case against him on a false narrative about his statements and a dubious interpretation of the law, he claimed.
Sheffield sued the FTC to vacate the order, and in March petitioned the agency seeking the same result. In an interview that month, he criticized Exxon's agreement with the agency, saying that "they participated with the FTC." He said he was thinking of his legacy, and of his grandkids.
It is unclear whether Exxon would have let Sheffield serve on its board had he wanted to. The CEO is missing out on a hefty pay package: Total compensation for Exxon's nonemployee directors averaged roughly $460,000 last year.
Sheffield noted that he remains one of Exxon's largest individual shareholders and "as such will consider other options."
Write to Benoît Morenne at benoit.morenne@wsj.com and Dave Michaels at dave.michaels@wsj.com
(END) Dow Jones Newswires
July 18, 2025 14:11 ET (18:11 GMT)
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