Environment

FTC clears Chevron-Hess deal, bans John Hess from board

In this article

John Hess, chief executive officer of Hess Corp., speaks at the 2024 CERAWeek by S&P Global conference in Houston, Texas, US, on Tuesday, March 19, 2024. 
F. Carter Smith | Bloomberg | Getty Images

The Federal Trade Commission has banned Hess Corp. CEO John Hess from Chevron‘s board as a condition for the oil companies’ $53 billion merger to move forward.

The FTC on Monday alleged that Hess encouraged OPEC representatives to draw down inventories, which would result in higher oil prices.

“Mr. Hess’s communications with competitors about global oil output and other dimensions of crude oil market competition disqualify him from serving on Chevron’s Board of Directors,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement Monday.

Hess Corp. said the FTC concerns are without merit, describing the CEO’s communications with OPEC as consistent with statements he has made to the U.S. government.

Hess Corp. and Chevron, however, have agreed that they will not appoint Hess to the board in order to facilitate the completion of the merger, according to the companies. Hess will serve as an advisor to Chevron on government relations and “social investments” in Guyana.

The FTC’s decision to allow the deal leaves the companies’ dispute with Exxon Mobil as the final hurdle for the transaction to close. Exxon has filed claims with an arbitration panel claiming a right of first refusal over Hess’ lucrative oil assets in Guyana.

If the arbitration panel rules in Exxon’s favor, the Chevron-Hess deal will not close. Chevron and Hess have said they are confident that panel will rule in their favor.

The FTC voted 3 to 2 in favor of the order banning Hess from Chevron’s board. FTC Chair Lina Khan said U.S. oil executives communications with high-level OPEC representatives threaten competition and result in higher energy prices for Americans.

FTC Commissioner Andrew Ferguson, in his dissent, said the commission majority was bending to political pressure from Democratic politicians.

The FTC issued a similar order for Exxon Mobil’s acquisition of Pioneer Natural Resources. The commission banned former Pioneer CEO Scott Sheffield from Exxon’s board, accusing him of colluding with OPEC to raise oil prices.

Articles You May Like

How UNLV became the unlikely center of the college football universe
Noel Gallagher surprises ‘dear friend’ with icon prize at Music Photography Awards
BYD is recalling nearly 100,000 Dolphin and Yuan Plus models, two top-selling EVs in China
How to See Rare Comet C/2023 A3 Over Bengaluru in October 2024?
Thousands of low-paid NHS staff miss out on COVID bonuses