The Federal Trade Commission (FTC) is investigating ExxonMobil’s nearly $60 billion proposal to acquire U.S. shale oil producer Pioneer Natural Resources.
Pioneer and ExxonMobil “each received a request for additional information and documentary materials from the Federal Trade Commission in connection with the FTC’s review of the merger,” Irving, Texas-based Pioneer stated in a Dec. 5 securities filing.
The FTC typically requests additional information from such companies regarding deals to ensure that they comply with anti-competition laws.
“Pioneer and ExxonMobil continue to work constructively with the FTC in its review of the merger and continue to expect that the merger will be completed in the first half of 2024, subject to the fulfillment of the closing conditions, including receipt of required regulatory approvals and approval of Pioneer’s stockholders,” the company said in the filing.
The request for additional information by the FTC is “a part of the U.S. government’s regulatory review process” regarding the planned acquisition, Pioneer President and Chief Operating Officer Rich Dealy said in a separate filing.
“We will continue to work diligently to provide the information that the regulators have requested in a timely fashion. While we don’t know the exact timing, we anticipate that this process could take several months, with closing still expected to occur by the end of June 2024,” he said.
ExxonMobil Announces Acquisition Plans
ExxonMobil announced in October that it would buy shale driller Pioneer in an all-stock transaction valued at $59.5 billion, or $253 per share; the proposed deal rises to $64.5 billion if debt is taken into account.The takeover would make ExxonMobil the largest oil producer in the Permian Basin, a massive oilfield located along the border of Texas and New Mexico that’s also the most active U.S. oil field.
The acquisition also would be Exxon’s biggest since its $81 billion purchase of Mobil Oil in 1998.
At the time the deal was announced, ExxonMobil CEO Darren Woods said the two companies would use their combined capabilities to lower carbon dioxide emissions by producing lower carbon-intensity oil and gas.
The takeover would also slash costs, according to Mr. Woods, as Pioneer’s more than 850,000 net acres in the Midland Basin will merge with Exxon’s 570,000 net acres in the Delaware and Midland Basin.
Together, the companies would have an estimated 16 billion barrels of oil equivalent resources in the Permian and would pump put 2 million barrels of oil a day in the Permian by 2027, company officials said.
Concerns Over Higher Energy Prices
The deal would also bolster domestic energy security and benefit the U.S. economy and its consumers, company officials said.In November, 23 Democrats led by Senate Majority Leader Chuck Schumer of New York called for an investigation into the multibillion-dollar deal—in addition to Chevron’s proposed $53 billion purchase of Hess Corp.—amid concerns they could violate antitrust laws.
In a statement on Dec. 5, Sen. Schumer also raised concerns that the ExxonMobil/Pioneer merger could boost gas prices across the country at a time when they have already soared.
“Americans care a great deal about gas prices, and if this merger were to go through, it would most certainly raise gas prices for families across the country,” the senator said. “This merger has all the hallmarks of harmful, anticompetitive effects. The FTC is right to investigate this merger to see if it would lead to higher gas prices or less competition.”
“I look forward to following this investigation closely, and will encourage the FTC to block the deal if they find any antitrust laws are being violated,” Mr. Schumer added.
There is currently no public indication of a federal inquiry into the Chevron/Hess merger.
Both the FTC and the Department of Justice’s Antitrust Division enforce federal antitrust laws, meaning the agency can file a lawsuit in court to block a merger or decline to take action, effectively clearing the deal.
A spokesman for the FTC declined to comment to The Epoch Times.
