US Senator Schumer, other senators urge FTC to probe Exxon, Chevron mega-deals (updated)
01/11/2023 15:11
(Rewrites throughout to add discussion of higher prices, adds
quote and other signatories in paragraphs 3-4, Exxon comment in
paragraphs 8-9)
Nov 1 (Reuters) - U.S. Senate Majority Leader Charles
Schumer and 22 other Democratic senators wrote to the U.S.
Federal Trade Commission on Wednesday, saying multi-billion
dollar acquisitions by oil and gas giants Exxon Mobil XOM.N
and Chevron CVX.N could lead to higher prices for consumers.
Earlier this month, Exxon proposed buying Pioneer Natural
Resources PXD.N for $60 billion and Chevron agreed to acquire
Hess HES.N for $53 billion.
The deals would hurt Exxon's and Chevron's midstream
competitors, said the signatories of the letter, who included
Senators Amy Klobuchar, chair of the Judiciary Committee's
antitrust panel, and Elizabeth Warren, an antitrust hawk.
"These new market dynamics could result in price hikes
for midstream customers, and such added costs are often passed
downstream to retail customers, including drivers at gas
stations," the senators wrote.
The recent oil deals show the biggest U.S. oil and gas
companies have kept investing in fossil fuels as European rivals
turn their attention to renewable fuels.
Chevron and Exxon have accumulated huge profits from strong
energy prices and demand since Russia's invasion of Ukraine.
"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," Schumer
and the senators said in the letter.
In response to a request for comment, Exxon said that it and
Pioneer produced about 5% of U.S. oil.
"For all those who seek even greater U.S. energy
independence and far lower emissions, this merger represents
nothing but upside for our economy," the company said in a
statement.
Chevron did not immediately respond to a request for
comment.
The oil industry last went through an era of major
consolidation in the late 1990s when Exxon, Shell SHEL.L , BP
BP.L and France's TotalEnergies TTEF.PA merged with rivals
to create huge integrated companies. The acquisitions followed a
collapse in oil prices that weakened many companies.
"If anything, the FTC (Federal Trade Commission) should be
investigating the past anti-competitive mergers of Big Oil
conglomerates like Exxon Mobil and Chevron to determine whether
these energy giants should be broken up once again," Schumer and
the lawmakers wrote.
(Reporting by Diane Bartz in Washington, Tanay Dhumal and
Arunima Kumar in Bengaluru
Editing by Marguerita Choy)
((Tanay.Dhumal@thomsonreuters.com; Twitter: https://twitter.com/TanayDhumal;))