The Federal Trade Commission (FTC) in the United States filed a lawsuit on Monday, September 30th, against the CEO of a major oil company, accusing him of colluding with foreign governments to maintain high prices of oil and natural gas.
According to the complaint submitted by the FTC on Monday, John B. Hess, the CEO of Hess Corporation, has been allegedly conspiring with the Organization of Petroleum Exporting Countries (OPEC) over the years to encourage actions that would push oil prices higher.
The trade regulatory agency alleges that Hess engaged in public and private communications with former and current secretaries-general of OPEC, as well as an official from Saudi Arabia, to encourage the organization to stabilize production and reduce inventory.
As a condition for allowing the $53 billion merger deal between Hess and Chevron Corp. to proceed, the FTC has prohibited Hess from joining Chevron’s board of directors.
Henry Liu, the Director of the Bureau of Competition at the Federal Trade Commission, stated in a press release on Monday that Hess’s actions “disqualify him from serving on the Chevron board” and emphasized that “the FTC will use all available enforcement tools to protect competition in this vital market and help ensure that American consumers benefit from lower oil prices.”
In a statement, Hess expressed his satisfaction that the merger with Chevron has cleared this significant regulatory hurdle, considering it an outstanding deal for shareholders of both companies and positioning the newly merged entity as a leading integrated energy company poised for the energy transition.
Hess will continue to serve as an advisor to Chevron, providing guidance on the company’s operations in Guyana, but will not hold a position on the board of directors.
A representative of Hess Corporation rebutted the FTC’s complaint as being “groundless” in a statement.
Mike Wirth, CEO of Chevron, lamented in a statement about the decision to bar Hess from the board, stating, “Unfortunately, our board will not be able to benefit from his decades of global experience.”
Hess becomes the second CEO of a major U.S. oil company this year to be accused of unlawful collusion with OPEC, following similar charges brought in May against Scott Sheffield, former CEO of Pioneer Natural Resources, by the Federal Trade Commission.