The U.S. FTC conditionally approved Chevron's (CVX.US) $53B acquisition of Hess (HES.US)
1min read The US Federal Trade Commission (FTC) has barred Hess Corporation's CEO John Hess from joining Chevron Corporation's board as a condition of the two oil companies' push to complete a $53bn merger.
The FTC said on Monday that Hess had been in contact with OPEC representatives for years to encourage them to take actions that would support higher oil prices.
The FTC also noted that Hess had praised OPEC's policies in public statements. Hess said in a statement that Saudi Arabia had "excellently led OPEC+" through "not over-supplying the market."
The FTC said that Hess joining Chevron's board would significantly increase the "likelihood that Chevron would align its production with OPEC's production decisions to maintain higher prices."
Hess said in a statement on Monday that the FTC's concerns were unfounded and that Hess' communications with OPEC were consistent with his statements to the US government.
However, Hess and Chevron said they would not appoint Hess to the board to facilitate the merger. Hess will instead serve as Chevron's adviser on government relations and "social investments" in Guyana.
Mike Wirth, Chevron's chief executive, said the FTC's decision was "an important step in completing the merger." Wirth said it was "regrettable" that Hess would not be able to join Chevron's board.
The FTC's decision to approve the deal clears the way for the companies to complete the merger, which has been held up by a dispute with Exxon Mobil, which claims it has a right of first refusal on Hess's oil assets in Guyana.
The FTC also issued a similar order in its review of Exxon Mobil's acquisition of Pioneer Natural Resources, barring Pioneer's former chief executive Scott Sheffield from joining Exxon Mobil's board, alleging that he conspired with OPEC to raise oil prices.