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Scott Sheffield, the previous chief government of Pioneer Pure Sources accused of colluding with Opec to limit oil manufacturing, hit out on the US Federal Commerce Fee on Tuesday and mentioned he had been “unjustly smeared”.
Pioneer, the most important oil producer in Texas, was acquired by ExxonMobil in a $60bn deal that closed this month. However in giving the inexperienced gentle to the transaction, the antitrust regulator took the bizarre step of banning Sheffield from serving on the supermajor’s board, arguing it might give him a platform to have interaction in “collusive exercise”.
Sheffield has not commented publicly for the reason that FTC’s administrative grievance in opposition to him earlier this month. However in a prolonged submission to the regulator on Tuesday his attorneys referred to as on the fee to withdraw its costs and hit out at what they described as a “baseless private assault” that undermined First Modification freedoms.
“The FTC is mistaken to suggest that I ever engaged in, promoted and even recommended any type of anti-competitive behaviour,” Sheffield mentioned.
“Publicly and unjustifiably vilifying me could have a chilling impact on the power of enterprise leaders in any sector of our financial system to deal with shareholder calls for and to train their constitutionally protected proper to advocate for his or her industries.”
In an interview with the Monetary Instances late on Tuesday after the submitting was submitted, Sheffield mentioned: “They couldn’t discover something mistaken with the merger — as a result of the merger solely represents 11 per cent of the oil within the Permian Basin — so that they scapegoated me.”
The bombshell determination by the FTC has been broadly criticised by the trade, with many dismissing what they see as an unfair and misdirected assault on one of many sector’s longest-standing leaders and most vocal advocates. Amid a wave of M&A exercise, it has additionally sparked concern over how communications unearthed in antitrust probes might be scrutinised, and fanned fears of a broader trade crackdown forward of November’s presidential election.
In its grievance earlier this month the FTC cited communications between Sheffield and different trade leaders, in addition to public feedback made by the oil boss, to say that he had tried to collude with the Opec cartel and different home producers to curtail manufacturing and prop up costs.
The allegations centred round Sheffield’s feedback in the course of the Covid-19 pushed crash in crude costs of 2020 when he referred to as for decrease manufacturing to stabilise costs and urged the Texas oil regulator to cap output.
Sheffield’s attorneys asserted the FTC mischaracterised his communications to help its “unprecedented and ludicrous concept” of collusion. They added that the concept his presence on the Exxon board would curb competitors available in the market was “meritless”.
“In straining to discover a motive to criticise the merger of Exxon and Pioneer, the FTC stepped nicely past its correct mandate and unjustly smeared Mr Sheffield,” they wrote.
“The FTC stands by our allegations,” the regulator mentioned on Tuesday. “There isn’t any query that Mr Sheffield publicly urged Texas oil producers to restrict manufacturing, all whereas having common, non-public back-and-forth communications with senior Opec representatives over a interval of years.”
Sheffield’s attorneys additionally hit out at Exxon, which they mentioned had “readily agreed, with none admission of legal responsibility or findings of truth, to a proposed consent order that will hold Mr Sheffield off its board and permit the transaction to shut”.
Exxon declined to remark. In a press release following the FTC announcement, the corporate mentioned Sheffield’s alleged conduct was “completely inconsistent with how we do enterprise”.
