Lambert says: Prices go up because companies raise their prices. –Richard Wolfe
Author Sharon Kelly is a lawyer and investigative reporter living in Pennsylvania. She previously served as a senior correspondent at Capitol Forum, and before that was a reporter at The New York Times, The Guardian, The Nation, and Earth Island Journal. Originally published on DeSmog.
Hess Corporation CEO John Hess is accused of closing a $53 billion deal that is currently mired in arbitration between the two companies under a Federal Trade Commission (FTC) consent order. He is also not expected to join Chevron’s 12-member board of directors. Published today.
For many years, Hess communicated About oil production The company’s public and private contacts with OPEC and Saudi Arabian officials were revealed by the FTC during its investigation of the proposed merger.
“Today’s complaint identifies statements by Hess Corporation CEO John Hess indicating support for OPEC+’s production stabilization efforts,” said FTC Chair Lina Khan. statement Two other FTC commissioners also participated. “This may increase profits for companies, but it means Americans will pay a higher price.”
The FTC’s complaint is the second major deal this year in which antitrust regulators have found evidence of collusion with oil companies legally required to compete with top shale producers.
“The European Commission’s actions are chevron hess and exxon pioneer This is an important step toward ensuring that U.S. oil producers act as a competitiveness check against OPEC+, rather than subordinating their autonomous decision-making to goals set by the cartel.” Mr. Ng added.
Ending the price war between shale and OPEC>
The FTC complaint about the Chevron-Hess deal describes an oil price war between shale producers and OPEC that began a decade ago, spurred by a sudden glut of U.S. crude oil caused by hydraulic fracturing. It starts from. “OPEC is adding member countries (known as “OPEC+” countries) to its organization, joining a price war that has contributed to sustained price declines in new competition with U.S. shale oil producers. The FTC said: I wrote.
However, by the end of 2016, then-OPEC Secretary General Mohammed Barkindo changed tactics and instead aimed to “persuade U.S. producers to coordinate oil production and stockpiling” with the global oil cartel.
Hess, along with Scott Sheffield of Pioneer Natural Resources and other shale executives, “attended public meetings and maintained informal communications with OPEC representatives,” the FTC found.
Although Mr. Hess’s private communications with OPEC and Saudi officials are redacted in the FTC complaint, the FTC says that Mr. Hess “repeated themes of his private communications” in a July 2021 earnings call. I wrote it down. In that call, Mr. Hess called OPEC the “Federal Reserve Board of oil prices” and said OPEC was “very disciplined, very prudent, very determined in bringing back (sic) spare capacity.” He added that he believes that
It is clear from the heavily redacted complaint that Hess’ contacts with OPEC continued through at least last year, with the FTC meeting in Vienna in July 2023, just months before the Chevron deal was announced. Hess’ attendance at the OPEC summit was mentioned.
“Mr. Hess’s supportive message towards OPEC encourages OPEC’s production stabilization policies and may also indicate how OPEC’s decisions will be perceived by other market participants. ” writes the FTC. “Since Chevron is substantially larger than Mr. Hess, Mr. Hess’ elevation to Chevron’s board will likely amplify the importance and impact of public and private communications on these issues. .”
Meanwhile, the acquisition of Chevron was going through difficulties. conflict Despite a dispute with ExxonMobil over Hess’ assets in Guyana, Mr. Hess remains on the Hess management team. Mr. Hess serves as CEO of Hess Corporation,” the company said in a statement. statement Announced a consent agreement with the FTC.
company expect That arbitration is expected to be completed by August or September 2025.
“We are very pleased to have cleared this significant regulatory hurdle by merging with Chevron,” said Mr. Hess. said. “This transaction continues to be a great deal for Hess and Chevron shareholders, creating a premier integrated energy company that is ideally positioned for the energy transition.”
However, an outside observer tended to see Chevron’s $53 billion acquisition of Hess is specifically about doubling down on oil in Guyana and has little to do with the energy transition. in progress. “Large companies, non-governmental companies, don’t think oil demand is going to end anytime soon. That’s one of the messages we have to take from this,” said Larry, former president of the Petroleum Industry Research Foundation.・J. Goldstein said. told CNBC Last year, when the deal was announced. “They are passionate about the industry, production, reserves and spending.”
Many of these producers and their peers are currently facing numerous Congressional investigations and investigations, based in part on evidence the FTC uncovered when reviewing these transactions and on contemporaneous public comments made by shale company executives. It is facing a class action civil lawsuit. frame.
Over the weekend, rumors swirled that John Hess might be banned from Chevron’s board of directors, and the Senate Budget Committee Posted remind me that I’m still waiting Answer from Hess As part of the commission’s investigation into coordination between U.S. producers and OPEC member countries.
In May, after the FTC’s findings on former Pioneer Natural Resources Sheffield’s interactions with other oil executives were made public, about two dozen Democratic senators spoke out. I wrote In a letter to the Justice Department, it called on the department to “criminally investigate the oil industry, hold responsible parties accountable, and halt all illegal activities.”
