Scott Sheffield, CEO of Pioneer Natural Resources.
Adam Jeffery | CNBC
The Federal Trade Commission on Thursday charged the former Pioneering natural resources CEO of colluding with OPEC to raise prices and banned him from serving on the board Exxon Mobile board of directors once the planned $65 billion acquisition of Pioneer is finalized.
The FTC filed a complaint alleging that Scott Sheffield attempted to collude with OPEC officials to cut oil and gas production in an effort to raise pump prices and inflate Pioneer’s profits .
The federal regulator decided to refer the allegations to the Justice Department for a possible criminal investigation, people familiar with the matter told the Wall Street Journal. “The FTC has a responsibility to expose potentially criminal behavior and takes that obligation very seriously,” spokesperson Doug Farrar told CNBC.
In response, Exxon agreed to keep Sheffield off its board and expects the deal with Pioneer to close on Friday, the oil major said in a statement on Thursday.
The FTC alleged that Sheffield repeatedly had private conversations with high-ranking OPEC officials to assure them that Pioneer and its competitors in the Permian Basin were working to keep oil production artificially low.
“This was not a one-off event but rather part of Mr. Sheffield’s sustained, long-term strategy to coordinate production reductions,” say FTC Chair Lisa Khan and the other commissioners in the complaint.
Pioneer rejected the allegations in a statement released Thursday, saying the FTC’s complaint reflected “a fundamental misunderstanding of the U.S. and global oil markets.” Sheffield never intended to circumvent the laws and principles that protect market competition, according to Pioneer.
“Nevertheless, Pioneer and Mr. Sheffield are not taking any action to prevent the merger,” the company said in the statement.
— CNBC’s Pippa Stevens and Mary Catherine Wellons contributed to this report.
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