Houston, Texas – The former CEO of Pioneer Natural Resources, Scott Sheffield, has been accused by federal regulators of attempting to collude with OPEC and its allies to manipulate oil prices.
The Federal Trade Commission alleged that Sheffield engaged in discussions with OPEC officials regarding pricing, production, and oil market dynamics. These communications reportedly aimed to synchronize oil production in the Permian Basin with that of OPEC and OPEC+, the broader group that includes Russia.
According to the FTC, Sheffield’s actions were intended to benefit Pioneer’s financial interests, as well as those of oil companies in OPEC and OPEC+ member states, potentially harming US households and businesses. Unlike OPEC nations, US oil production is expected to be determined by the free market rather than coordinated efforts among major players.
Sheffield retired as CEO of Pioneer in December 2023, but the controversy surrounding his alleged collusion with OPEC continues. The FTC has approved the sale of Pioneer to ExxonMobil for $60 billion, under the condition that Sheffield is prohibited from joining Exxon’s board or serving as an advisor.
The FTC alleges that Sheffield advocated for anticompetitive coordinated output reductions between US oil producers and OPEC and OPEC+, even lobbying the Railroad Commission of Texas to enact output restrictions during the Covid-19 pandemic.
Despite Pioneer releasing a statement defending Sheffield and claiming that his actions were not intended to circumvent market competition laws, the company has indicated that they will not contest the FTC’s findings. Exxon, on the other hand, stated that the allegations are inconsistent with their business practices and that they do not intend to add Sheffield to their board.
As the deal to acquire Pioneer by Exxon is expected to close soon, the implications of Sheffield’s alleged collusion with OPEC raise concerns about the integrity of the oil market and the impact on consumers and businesses in the US. The FTC’s investigation underscores the importance of fair competition and transparency in the energy sector to protect the interests of all stakeholders.