Drivers sue US shale oil producers over alleged price-fixing scheme
16/01/2024 16:59
By Mike Scarcella
Jan 16 (Reuters) - Hess HES.N , Pioneer Natural
Resources PXD.N and other oil and gas producers have been hit
with a class action in U.S. court accusing them of conspiring to
curb output of shale oil, raising consumer fuel prices.
Three residents of Nevada, Hawaii and Maine sued Hess and
seven other companies on Friday in federal court in Las Vegas,
alleging they have constrained the production of shale oil,
which is sold to refineries and can be made into gasoline,
diesel and other commercial products.
The lawsuit said Hess, Occidental Petroleum OXY.N , Pioneer
Natural Resources and other oil and gas producers for several
years “have collectively coordinated their production decisions,
leading to production growth rates lower than would be seen in a
competitive market.”
The other defendants are Permian Resources PR.N ,
Chesapeake Energy CHK.O , Continental Resources, Diamondback
Energy FANG.O and EOG Resources EOG.N .
Representatives from the defendants on Tuesday did not
immediately respond to requests for comment.
Plaintiffs' attorney Patrick Coughlin, representing the
drivers who filed the lawsuit, in a statement on Tuesday said
the shale oil defendants in the face of record oil prices over
the last three years "all exercised production ‘discipline,’
ensuring Americans paid more for gas at the pump.”
Hydraulic fracturing, widely known as fracking, is used to
produce domestic shale oil from some rock formations in the
United States. The defendants are “independent” shale producers
that are distinct from energy companies such as Chevron and
Exxon, the lawsuit said.
Formations in Texas, North Dakota and New Mexico include the
three top geographic areas for shale oil extraction in the
United States, the lawsuit said.
The lawsuit seeks nationwide class-action status and a court
order against alleged anti-competitive business practices on
behalf of all purchasers of retail gasoline from stations in the
United States since January 2021.
The complaint separately seeks unspecified triple monetary
damages for a class of gas purchasers in more than two dozen
states, including California, Colorado, Michigan and New York.
The plaintiffs’ lawyers estimated “at least millions of members
of both Classes in the United States.”
“Defendants’ production restraint agreement worked,” the
lawsuit said. “Defendants are reaping the rewards in the form of
massive revenue increases, while not reinvesting that additional
revenue into new production.”
The case is Daniel Rosenbaum et al v. Permian Resources Corp
et al, U.S. District Court, District of Nevada, No.
2:24-cv-00103.
For plaintiffs: Patrick Coughlin and Carmen Medici of Scott
+ Scott Attorneys at Law; Christopher Turtzo of Morris, Sullivan
& Lemkul
For defendants: No appearances yet
(Reporting by Mike Scarcella)
((Mike.Scarcella@thomsonreuters.com;))