FTC bars Hess CEO from Chevron board seat as condition of deal, say sources

FTC bars Hess CEO from Chevron board seat as condition of deal, say sources/Reuters

Reuters | September 26, 2024 | 10:46 PM IST | World | Follow on Google News

FTC bars Hess CEO from Chevron board seat as condition of deal, say sources

FTC bars Hess CEO from Chevron board seat as condition of deal, say sources

HOUSTON, Sept 26 (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 (CVX.N), opens new tab $53 billion purchase of Hess (HES.N), opens new tab, 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 multi-billion-dollar U.S. oil and gas industry deals that began with Exxon Mobil’s (XOM.N), opens new tab 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), opens new tab.

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 (0883.HK), opens new tab 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.

Reuters