Former Oil Ceo Blasts Ftc Over Collusion Allegations

The former CEO of one of the United States’ top oil companies fired back Tuesday on the Federal Trade Commission’s allegations that he had colluded with OPEC to boost fuel prices — contending the agency “unjustly smeared” him.

Lawyers for Scott Sheffield, the former chief executive of Texas-based Pioneer Natural Resources, filed paperwork demanding that the FTC drop a recent settlement agreement in which the agency had aired the accusations. In the settlement, the FTC allowed Exxon Mobil to buy Pioneer, but on the condition that Sheffield not be allowed to serve on Exxon’s board.

The former oil executive’s rebuttal comes as oil and gasoline prices look likely to play an increasingly prominent role in the presidential race amid stubborn inflation fueled partly by high energy costs.

The 23-page response filed with the FTCcontends that the collusion allegations are false, saying the agency misrepresented his communications with competitors and afforded him no due process to defend himself. The commission alleged last month that Sheffield had exchanged text messages, phone calls and emails with OPEC officials and other U.S. oil executives to fix oil production levels in a bid to inflate crude prices — including during a period when U.S. gasoline prices hit an all-time high.

The FTC referred the allegations to the Justice Department for investigation, according to Sheffield’s letter.

Pioneer is the biggest oil producer in West Texas’ Permian Basin, the largest single onshore source of U.S. oil production.

“In straining to find a reason to criticize the merger of Exxon and Pioneer, the FTC stepped well beyond its proper mandate and unjustly smeared Mr. Sheffield,” lawyers for the former CEO said in a rebuttal to the commission’s allegations. “Its case is built on a false narrative about these statements and a farfetched interpretation of the applicable statutes.”

Sheffield maintains that comments he had made at conferences and in media reports about cutting back production came in response to investors’ demands. Shareholders were pushing for higher returns, not increased expenditures on growth, he said in the letter Tuesday.

Sheffield’s lawyers’ comments also says the commission didn’t even ask Sheffield about his communications with business rivals when it questioned him a month before it made its complaint public.

Sheffield’s lawyers write that the FTC examined the former executive under oath for four hours in early April “but did not ask questions about his communications and gave him no opportunity to explain them.”

The FTC is not obligated to take any action responding to Sheffield’s filing. Exxon is the only party to the settlement with the FTC and waived its rights to later contest it, giving Sheffield little leeway to force the agency’s hand.

FTC spokesperson Douglas Farrar said the agency stands by the allegations.

“There is no question that Mr. Sheffield publicly urged Texas oil producers to limit production, all while having regular, private back-and-forth communications with senior OPEC representatives over a period of years," Farrar said.

A person close to Sheffield, granted anonymity to discuss a confidential matter, said he is considering all other options to clear his name including potential challenges on due process grounds.

An Exxon spokesperson declined to comment.

A DOJ spokesperson declined to comment.

Congressional Democrats have taken up the FTC’s complaint as a political weapon to wield against Republicans who have alleged that Biden’s energy and environmental policies are to blame for elevated fuel prices. House Commerce and Energy Committee ranking member Frank Pallone (D-N.J.) last week asked Exxon, Chevron and other companies for communications they had with OPEC.

The collusion allegations are also at the heart of a class action lawsuit filed in January in which lawyers representing gasoline consumers across the United States alleges that Pioneer and six other U.S. oil producers engaged in price fixing with the cartel to coordinate their oil production — a practice the lawsuit alleges continued even as oil prices surged in 2022.

Sheffield’s lawyers in their written response said the communications the former executive received from OPEC were mostly email blasts sent to multiple recipients and contained public information like news stories. The only time Sheffield personally communicated with an OPEC official was to offer contact information to the Texas Railroad Commission in regards to a public proceeding before that agency, which regulates the oil industry in the state, the lawyers’ filing said.

In the Texas Railroad Commission matter, Sheffield was seeking supply constraints, and any conduct involved in petitioning the government is typically immune from federal antitrust law.

Sheffield’s lawyers also said that messages the FTC described as communications with contacts inside OPEC and Saudi Arabia were actually to “a U.S. analyst who studied the industry.”

“At no point did Mr. Sheffield attempt to coordinate production with the [Saudi] government minister or share confidential information,” Sheffield’s response says, referring to an identified official cited in the FTC documents. “These messages were entirely innocuous.”

“We urge all of the Commissioners to take this opportunity to assess the facts of this matter because, as described above, the Complaint is based on falsehoods and a woefully incomplete investigative record,” the response reads. It asks the FTC to vacate its former consent order barring Sheffield from joining the Exxon board and dismiss any further proceedings on its collusion complaint.