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

Sep 27, 2024 News

John Hess, CEO of Hess Corporation, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson

Kaieteur News – (Reuters) U.S. antitrust regulators will bar Hess Corp. CEO John Hess from taking a board seat as a condition of its go-ahead of oil producer Chevron Corp.‘s US$53 billion purchase of Hess, people close to the matter said.

The Federal Trade Commission’s (FTC) 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 purchase of Pioneer.

In a crackdown on mega-mergers, 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. 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.

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Chevron Corp, Goldman Sachs, Hess Corp, Pioneer Natural Resources

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