The Federal Trade Commission said on Monday that it would let the oil giant Chevron acquire Hess but that the chief executive of Hess would not be allowed to join Chevron’s board because of how he communicated with leaders of OPEC.
The agency’s decision brings Chevron and Hess one step closer to completing a $53 billion tie-up announced last fall.
It is also the latest example of the F.T.C. taking issue with the conduct of U.S. oil and gas executives in recent years.
After oil prices rose in 2022, many independent oil producers agreed to join forces or sell themselves to larger rivals. That deal making has transformed the American shale patch, which once was the province of smaller companies. Increasingly, it is being dominated by the likes of Exxon Mobil and Chevron.
The F.T.C. has expressed growing concern about comments U.S. oil and gas executives have made in the years leading up to that boom, when prices weren’t as high, and profits weren’t as robust.
In this case, the F.T.C. called out the chief executive of Hess, John B. Hess, for praising the Organization of the Petroleum Exporting Countries, a foreign cartel that coordinates oil output in ways that would be illegal in the United States.
If Mr. Hess were to join Chevron’s board, it would meaningfully increase “the likelihood that Chevron would align its production with OPEC’s output decisions to maintain higher prices,” the F.T.C. said in a legal complaint.
The agency took a similar stance in May, saying Exxon Mobil could buy Pioneer Natural Resources if the smaller company’s chief executive, Scott D. Sheffield, did not join Exxon’s board.
Chevron and Hess agreed to the F.T.C.’s stipulation. Instead of joining Chevron’s board, Mr. Hess will advise the company on certain matters, including Guyana, a South American country where Hess has a stake in a lucrative oil project that Exxon leads.
Hess said its board of directors viewed the F.T.C.’s concerns as meritless and described Mr. Hess’s communications with OPEC representatives as consistent with comments he made to U.S. government officials and others.
“For more than 10 years, I have advocated for a significant increase in global investment, both in oil and gas and renewable energy, to have the necessary supply to keep energy affordable and secure for American consumers in the future,” Mr. Hess said in a statement.
Chevron’s chief executive, Mike Wirth, said it was unfortunate that Chevron’s board would not be able to benefit from Mr. Hess’s expertise.
Even with the F.T.C.’s approval in hand, Chevron will most likely have to wait months before it can complete this acquisition.
The fate of the deal now rests with a panel of arbitrators that have been asked to resolve a dispute between Chevron and Exxon over Hess’s stake in the Guyana oil discovery, which is widely seen as the most valuable part of Hess.
Exxon has argued it should have the opportunity to buy Hess’s stake under the terms of its partnership with Hess. Chevron and Hess have said they disagree with Exxon’s interpretation.
Chevron on Monday said it “remains confident” arbitrators will allow the deal to close. A hearing in the case is scheduled for May 2025.
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