Commodities and Futures News

US oil executive censure puts spotlight on shale-OPEC meetings

2024.05.02 15:50

US oil executive censure puts spotlight on shale-OPEC meetings

By Sabrina Valle

HOUSTON (Reuters) – A U.S. regulator’s censure of a top U.S. oil executive over private meetings with the Organization of the Petroleum Exporting Countries (OPEC) group of oil producers has put a spotlight on dinners attended by dozens of shale executives.

The U.S. Federal Trade Commission (FTC) on Thursday barred former Pioneer Natural Resources (NYSE:) CEO Scott Sheffield from joining the board of Exxon Mobil (NYSE:), which is acquiring Pioneer for $60 billion in stock.

The FTC accused the 72-year-old executive of leading a coordinated effort with other U.S. oil firms and with OPEC “to keep production artificially low” and increase oil companies’ profits.

In its complaint, the FTC pointed to meetings that shale and OPEC officials held over several years, including a series of private dinners at a Houston energy conference.

Executives who attended previously had described to Reuters the meetings as discussing oil demand, spare production capacity and shareholder requirements.

Pioneer said Sheffield had acted in the best interests of the oil industry, its investors, and said his actions helped lift U.S. oil production and exports.

“The FTC’s complaint reflects a fundamental misunderstanding of the U.S. and global oil markets and misreads the nature and intent of Mr. Sheffield’s actions,” the company said, defending its former chief as “a leading and internationally respected industry authority.”

The first shale-OPEC dinner, in March 2017, was organized by then-OPEC Secretary General Mohammed Barkindo after OPEC had failed in a price war to halt U.S. shale’s rapid market share gains and wanted to understand how the industry operated, the FTC said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.

Subsequent dinners at the CERAWeek energy conference in Houston brought OPEC together with shale executives including Hess (NYSE:) CEO John Hess, Occidental Petroleum (NYSE:) CEO Vicki Hollub, Devon Energy (NYSE:) CEO Rick Muncrief, and Chesapeake Energy (NYSE:) chief Domenic Dell (NYSE:)’Osso, among others.

Spokespeople for the companies did not respond to requests for comment.

“I’m seeing a series of meetings where OPEC is reaching out and spending more time with US independents than I have seen over my entire career,” Sheffield said in 2017, according to the FTC complaint.

OPEC members had been perplexed by how quickly U.S. companies had recovered from losses during an OPEC-initiated price war between 2014 through 2016 that had led to dozens of U.S. energy bankruptcies.

But the shale industry quickly bounced back with heavy investments and led the U.S. to become the world’s largest oil producer in a few years. It produced a record 12.9 million barrels per day last year.

In 2017, OPEC cut its production, reducing a market glut that reduced global prices, and handed a victory to U.S. producers. The glut returned in 2020 after demand plummeted on COVID-19 shutdowns.

Sheffield was vocal about his desire to move away from the boom-bust cycles that plagued the U.S. oil business, and became an outspoken advocate for prioritizing shareholder returns over production gains.

He spoke about his contacts with Saudi Aramco (TADAWUL:) officials and other members of the shale dinners attended OPEC meetings in Vienna. In a March 2023 Reuters interview, Sheffield said Pioneer had twice hosted Saudi officials and explained the company’s operations and business practices to them.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.

“They can get the same information from most service companies,” he said. “But they like to talk to producers… we have so much data.”



Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 76,539.51 1.93%
vested-xor
Vested XOR (VXOR) $ 3,405.08 99,999.99%
ethereum
Ethereum (ETH) $ 2,869.76 7.23%
tether
Tether (USDT) $ 1.00 0.12%
solana
Solana (SOL) $ 196.40 4.99%
bnb
BNB (BNB) $ 600.49 2.35%
usd-coin
USDC (USDC) $ 0.999847 0.08%
xrp
XRP (XRP) $ 0.553923 3.37%
dogecoin
Dogecoin (DOGE) $ 0.195985 1.09%
staked-ether
Lido Staked Ether (STETH) $ 2,869.79 7.24%
cardano
Cardano (ADA) $ 0.392853 10.11%
tron
TRON (TRX) $ 0.160785 1.92%
the-open-network
Toncoin (TON) $ 4.91 3.63%
wrapped-steth
Wrapped stETH (WSTETH) $ 3,398.81 7.99%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 76,410.47 2.02%
shiba-inu
Shiba Inu (SHIB) $ 0.000019 1.78%
avalanche-2
Avalanche (AVAX) $ 27.50 3.60%
weth
WETH (WETH) $ 2,867.25 7.10%
chainlink
Chainlink (LINK) $ 12.49 5.20%
bitcoin-cash
Bitcoin Cash (BCH) $ 384.64 3.34%
sui
Sui (SUI) $ 2.35 3.78%
polkadot
Polkadot (DOT) $ 4.14 1.52%
leo-token
LEO Token (LEO) $ 6.25 0.18%
usds
USDS (USDS) $ 1.00 0.07%
uniswap
Uniswap (UNI) $ 9.09 1.08%
litecoin
Litecoin (LTC) $ 71.90 3.16%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,018.79 7.25%
near
NEAR Protocol (NEAR) $ 4.23 2.10%
aptos
Aptos (APT) $ 9.77 4.54%
pepe
Pepe (PEPE) $ 0.000011 11.01%
bittensor
Bittensor (TAO) $ 515.91 1.33%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.41 0.48%
internet-computer
Internet Computer (ICP) $ 7.73 1.06%
dai
Dai (DAI) $ 0.999758 0.09%
monero
Monero (XMR) $ 166.67 1.87%
ethereum-classic
Ethereum Classic (ETC) $ 20.10 4.45%
kaspa
Kaspa (KAS) $ 0.118578 0.25%
stellar
Stellar (XLM) $ 0.100222 3.95%
ethena-usde
Ethena USDe (USDE) $ 1.00 0.16%
whitebit
WhiteBIT Coin (WBT) $ 19.47 0.77%
aave
Aave (AAVE) $ 186.00 9.38%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.344929 4.46%
blockstack
Stacks (STX) $ 1.68 0.16%
crypto-com-chain
Cronos (CRO) $ 0.092328 9.60%
okb
OKB (OKB) $ 40.34 3.26%
dogwifcoin
dogwifhat (WIF) $ 2.38 0.97%
first-digital-usd
First Digital USD (FDUSD) $ 1.00 0.08%
arbitrum
Arbitrum (ARB) $ 0.579885 9.38%
mantle
Mantle (MNT) $ 0.672365 13.61%
filecoin
Filecoin (FIL) $ 3.75 2.98%