Federal Lawmakers Call for Probe of Recent Oil & Gas Deals

WASHINGTON, D.C. — Senate lawmakers sent a letter to the U.S. Federal Trade Commission (FTC) raising concerns about two recent deals announced by Chevron Corp. and Exxon Mobil Corp. 

In October, ExxonMobil announced that it would be acquiring Pioneer Natural Resources in an all-stock transaction valued at $59.5 billion. The merger would effectively combine Pioneer’s more than 850,000 net acres in the Midland Basin in the U.S. with ExxonMobil's 570,000 net acres in the Delaware and Midland Basins, creating an estimated 16 billion barrels of oil equivalent resource in the Permian, according to the company.

Chevron, meanwhile, plans to acquire Hess Corp. for $53 billion, with both boards of directors already approving the transaction. The purchase would give Chevron a major foothold in the Stabroek block in Guyana, while Hess' Bakken assets add another leading U.S. shale position to Chevron's DJ and Permian basin operations.

The breadth of the two deals, especially in regard to the potential monopoly in the U.S. Permian basin, has alarmed some on Capitol Hill, Bloomberg reported. According to the news outlet, Senate Majority Leader Chuck Schumer (D-N.Y.), along with 22 other Democratic senators, are urging the FTC to look into whether the acquisitions could violate antitrust laws.

The letter expressed concerns especially about the ability for other companies to compete. There also appeared to be some concern over the ways major American energy companies may be using increased profits not to diversify into renewable resources as many of their European counterparts are, but to further consolidate their fossil fuel production, according to Reuters.

"By allowing Exxon and Chevron to further integrate their extensive operations into important oil and gas fields, these deals are likely to harm competition, risking increased consumer prices and reduced output throughout the United States," the letter read.

In prepared statements to various outlets, ExxonMobil denied that its proposed merger would present any danger of depressed competition.

"This merger represents nothing but upside for our economy and our environment given that ExxonMobil has the resources to get more out of the ground and do it at vastly improved emissions levels," the company said.

According to Bloomberg, the renewed scrutiny on such acquisitions follow a 2021 White House directive, which urged the FTC to more closely examine deals in the oil and gas sector. The rate of approval of smaller mergers has since slowed down, however an acquisition hasn't been blocked in years.