The Federal Trade Commission (FTC) has approved a proposed consent order to address antitrust concerns related to Chevron Corporation's acquisition of Hess Corporation. The order prohibits Chevron from appointing Hess CEO John B. Hess to its Board of Directors.
The FTC's complaint alleges that Mr. Hess communicated with past and current Secretaries General of the Organization of Petroleum Exporting Countries (OPEC) and an official from Saudi Arabia. In these communications, Mr. Hess emphasized the importance of oil market stability and inventory management, encouraging actions on these issues.
According to the complaint, Mr. Hess urged his OPEC competitors to stabilize production and reduce inventories, noting a direct correlation between inventory levels and oil prices. Reductions in crude oil exploration and production generally lead to higher oil prices and increased costs for products derived from oil, including transportation fuels such as gasoline, diesel, jet fuel, and heating oil.
"Mr. Hess’s communications with competitors about global oil output and other dimensions of crude oil market competition disqualify him from serving on Chevron’s Board of Directors," said Henry Liu, Director of the FTC’s Bureau of Competition. "The FTC will use all its available enforcement tools to protect competition in this vital market and help ensure American consumers benefit from lower prices at the pump."
The merger agreement between Chevron and Hess Corporation requires Chevron to take all necessary actions to appoint Mr. Hess to its Board of Directors. The FTC's complaint suggests that as a board member, Mr. Hess would have a larger platform to support OPEC's market stability goals, potentially aligning Chevron's production with OPEC's decisions to maintain higher oil prices.
The proposed consent order would prohibit Chevron from nominating or appointing Mr. Hess to its Board or allowing him any advisory or consulting role related directly to Chevron or its Board activities. However, it permits consultations with Mr. Hess solely concerning interactions with Guyanese government officials about specific activities in Guyana and discussions related to the Salk Institute’s Harnessing Plants Initiative.
Further details about the order are available in the analysis provided for public comment.
The Commission voted 3-2 in favor of accepting the consent agreement for public comment. Chair Lina M. Khan issued a statement joined by Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya; Commissioners Melissa Holyoak and Andrew N. Ferguson each issued dissenting statements.
The FTC will publish the consent agreement package in the Federal Register soon, inviting public comments within 30 days after publication on Regulations.gov.
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