FTC Probes ExxonMobil’s $60 Billion Acquisition of Pioneer

U.S. regulators are looking into ExxonMobil’s $60 billion acquisition of shale oil and natural gas producer Pioneer Natural Resources.

The Federal Trade Commission on Monday sent requests to both ExxonMobil and Pioneer requesting “additional information and documentary materials” connected with the October merger, Pioneer disclosed in regulatory filings on Tuesday.

The merger is expected to more than double ExxonMobil’s production volume in the Permian Basin to 1.3 million barrels of oil equivalent per day, based on 2023 volumes. Together, the companies will have an estimated 16 billion barrels of oil equivalent resources in the Permian Basin of West Texas and New Mexico, a region that has long been a source of interest for oil companies due to the low cost of extracting oil.

At the time of the merger, Pioneer chief executive Scott Sheffield noted that the acquisition will create “the largest footprint of high-return wells” in the Permian.

The FTC, led by Chair Lina Khan, has launched a crackdown on proposed mergers between industry-leading companies in an attempt to thwart anti-competitive practices across sectors, particularly in tech. The Biden administration has also taken a tougher stance on antitrust issues, establishing the White House Competition Council in 2021.

Khan said at the New York Times DealBook summit last week that the FTC has filed 11 lawsuits against mergers since she became chair in 2021, and that on five occasions the companies dropped their plans after the agency filed the actions, CNBC reported.

According to the filing, Pioneer and Exxon are working “constructively” with the regulator in its review and continue to expect that the merger will be completed in the first half of 2024, once closing conditions and regulator approvals have been completed.