FTC Bars Hess CEO from Chevron Board Seat in $53 Billion Deal, Sources Say
(Reuters) — U.S. antitrust regulators will bar Hess CEO John Hess from taking a board seat as a condition of its go-ahead of oil producer Chevron's $53 billion purchase of Hess, people close to the matter said.
The Federal Trade Commission's consent for the deal will not allow Hess to become a board member, the people said, without explaining why the ban was imposed.
Chevron's proposed all-stock acquisition of Hess, first announced in October, was one of a string of multibillion-dollar U.S. oil and gas industry deals that began with Exxon Mobil's purchase of Pioneer.
In a crackdown on the megamergers, the FTC similarly barred Pioneer Natural Resources CEO Scott Sheffield from taking a seat on Exxon board as a condition of its approval earlier this year of their $60 billion merger.
It was not immediately clear if Hess would be allowed to take another position at Chevron. He recently joined the board of financial firm Goldman Sachs GS.N.
Neither Hess nor Chevron immediately replied to requests for comment. The FTC declined to comment.
Hess and Chevron shares each fell 1% in midday trading.
The expected go-ahead would leave Exxon's challenge to the Chevron-Hess deal as its final hurdle. Exxon and China's CNOOC Ltd. have filed an arbitration case that could block the deal, claiming the merger is a ploy to gain Hess's lucrative Guyana assets.
Hess owns 30% of Guyana's giant Stabroek offshore block, which has been the site of more than 30 oil and gas discoveries since 2015. Exxon, which is the operator of the block owns 45% and CNOOC owns 25%.
Bloomberg News earlier reported the FTC would block Hess from taking a board seat on the combined company.
In the Exxon merger, the FTC alleged that Sheffield had colluded with other U.S. oil firms and with the Organization of the Petroleum Exporting Countries "to keep production artificially low" and increase oil companies' profits.
The FTC had pointed to meetings that shale and OPEC officials held over several years, including a series of private dinners at a Houston energy conference.
Related News
- Boardwalk Approves 110-Mile, 1.16 Bcf/d Mississippi Kosci Junction Pipeline Project
- PGJ Exclusive (sponsored): How Southern Star revolutionized operations with a one-stop shop asset management upgrade
- Texas Oil Company Challenges $250 Million Insurance Collateral Demand for Pipeline, Offshore Operations
Related News
- Trump Aims to Revive 1,200-Mile Keystone XL Pipeline Despite Major Challenges
- Phillips 66 to Shut LA Oil Refinery, Ending Major Gasoline Output Amid Supply Concerns
- Valero Considers All Options, Including Sale, for California Refineries Amid Regulatory Pressure
- ConocoPhillips Eyes Sale of $1 Billion Permian Assets Amid Marathon Acquisition
- ONEOK Agrees to Sell Interstate Gas Pipelines to DT Midstream for $1.2 Billion
- U.S. LNG Export Growth Faces Uncertainty as Trump’s Tariff Proposal Looms, Analysts Say
- Tullow Oil on Track to Deliver $600 Million Free Cash Flow Over Next 2 Years
- Energy Transfer Reaches FID on $2.7 Billion, 2.2 Bcf/d Permian Pipeline
- GOP Lawmakers Slam New York for Blocking $500 Million Pipeline Project
- Polish Pipeline Operator Offers Firm Capacity to Transport Gas to Ukraine in 2025
Comments