By Sabrina Valle
HOUSTON (Reuters) – A U.S. regulator’s censure of a high U.S. oil govt over non-public conferences with the Organization of the Petroleum Exporting Countries (OPEC) group of oil producers has put a highlight on dinners attended by dozens of shale executives.
The U.S. Federal Trade Commission (FTC) on Thursday barred former Pioneer Natural Resources (NYSE:) CEO Scott Sheffield from becoming a member of the board of Exxon Mobil (NYSE:), which is buying Pioneer for $60 billion in inventory.
The FTC accused the 72-year-old govt of main a coordinated effort with different U.S. oil companies and with OPEC “to keep production artificially low” and improve oil corporations’ income.
In its criticism, the FTC pointed to conferences that shale and OPEC officers held over a number of years, together with a collection of personal dinners at a Houston vitality convention.
Executives who attended beforehand had described to Reuters the conferences as discussing oil demand, spare manufacturing capability and shareholder necessities.
Pioneer mentioned Sheffield had acted in the most effective pursuits of the oil business, its traders, and mentioned his actions helped carry U.S. oil manufacturing and exports.
“The FTC’s complaint reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield’s actions,” the corporate mentioned, defending its former chief as “a leading and internationally respected industry authority.”
The first shale-OPEC dinner, in March 2017, was organized by then-OPEC Secretary General Mohammed Barkindo after OPEC had failed in a worth warfare to halt U.S. shale’s speedy market share good points and needed to grasp how the business operated, the FTC mentioned.
take away adverts
.
Subsequent dinners on the CERAWeek vitality convention in Houston introduced OPEC along with shale executives together with Hess (NYSE:) CEO John Hess, Occidental Petroleum (NYSE:) CEO Vicki Hollub, Devon Energy (NYSE:) CEO Rick Muncrief, and Chesapeake Energy (NYSE:) chief Domenic Dell (NYSE:)’Osso, amongst others.
Spokespeople for the businesses didn’t reply to requests for remark.
“I’m seeing a series of meetings where OPEC is reaching out and spending more time with US independents than I have seen over my entire career,” Sheffield said in 2017, according to the FTC complaint.
OPEC members had been perplexed by how quickly U.S. companies had recovered from losses during an OPEC-initiated price war between 2014 through 2016 that had led to dozens of U.S. energy bankruptcies.
But the shale industry quickly bounced back with heavy investments and led the U.S. to become the world’s largest oil producer in a few years. It produced a record 12.9 million barrels per day last year.
In 2017, OPEC cut its production, reducing a market glut that reduced global prices, and handed a victory to U.S. producers. The glut returned in 2020 after demand plummeted on COVID-19 shutdowns.
Sheffield was vocal about his desire to move away from the boom-bust cycles that plagued the U.S. oil business, and became an outspoken advocate for prioritizing shareholder returns over production gains.
He spoke about his contacts with Saudi Aramco (TADAWUL:) officials and other members of the shale dinners attended OPEC meetings in Vienna. In a March 2023 Reuters interview, Sheffield said Pioneer had twice hosted Saudi officials and explained the company’s operations and business practices to them.
take away adverts
.
“They can get the same information from most service companies,” he mentioned. “But they like to talk to producers… we have so much data.”