Securities documents reveal that ExxonMobil is under investigation by federal regulators for its $60 billion acquisition of a Texas oil business, which would make it one of the biggest mergers in the energy sector in twenty years.
The businesses have been requested to provide more details regarding Exxon’s proposed acquisition of Pioneer Natural Resources by the Federal Trade Commission, which is in charge of enforcing federal antitrust law. The agency requests to investigate whether the combination would violate US antitrust laws. Pioneer made the request public in a filing on Tuesday.
Senate Majority Leader Charles Schumer, along with 22 other Democratic senators, requested that the Federal Trade Commission (FTC) look into the Exxon-Pioneer merger as well as a different acquisition by the oil giant Chevron, which is a proposed $53 billion acquisition of Hess Corporation. The Democrats claimed that both agreements could violate antitrust laws and rank among the biggest petroleum deals in American history. There isn’t any official word on a federal investigation into the Chevron acquisition.
The FTC was tasked by Schumer on Tuesday to “take a hard look at Exxon’s blockbuster merger and block it if it would lead to higher prices, hurt competition, or force families to pay more at the pump,” . I applaud the FTC for taking this action.
The FTC, which has joint antitrust jurisdiction with the Justice Department, has the legal power to file a lawsuit to halt a merger or to take no action at all, therefore approving the transaction. On Tuesday, a commission representative declined to comment.
Following Russia’s invasion of Ukraine in February 2022, Chevron, Exxon, and other oil firms have reported generating enormous profits due to increasing energy prices and demand. For the quarter that concluded on September 30, Exxon declared earnings of $9.1 billion and Chevron $6.5 billion.
According to Exxon, the planned agreement between Pioneer Resources, a Texas-based company, and the United States would improve energy security and help the country’s consumers and economy.
In addition to “delivering higher returns and lower carbon” dioxide emissions that contribute to global warming, Chevron said that its proposed agreement with Hess, a company based in New York, would boost long-term performance.
Federal officials have to approve both mergers.
Environmental organizations have expressed disapproval of the oil industry’s perceived “merger mania,” which they claim endangers competition.
“Alex Witt of Climate Power, a left-leaning advocacy group founded by the Centre for American Progress Action Fund, League of Conservation Voters, and Sierra Club, said that Exxon doubled down on their commitment to oil and gas and put profits over people, despite their public promise to reduce emissions.”
According to Witt, “the FTC is right to look into Exxon’s acquisition of Pioneer, which could raise prices at the pump and is intended to keep the U.S. reliant on fossil fuels.”
