FTC Lifts Boardroom Bans in Exxon and Chevron Takeover Cases

The U.S. Federal Trade Commission (FTC) has reversed restrictions that previously blocked former CEOs of acquired oil companies from joining the boards of energy giants Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX). The decision, announced Thursday, marks a significant policy shift under FTC Chairman Andrew Ferguson, rolling back conditions imposed during the Biden administration.

The FTC cleared ExxonMobil to appoint former Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield to its board. Sheffield had been restricted following Exxon’s $59.5 billion acquisition of Pioneer in 2023. Similarly, Chevron was released from an order that had barred Hess (NYSE:HES) CEO John Hess from joining its board after its $53 billion acquisition announcement.

These restrictions were initially imposed over concerns about potential collusion with OPEC and OPEC+, as both Sheffield and Hess had deep ties to the global oil sector. Former FTC Chair Lina Khan argued such appointments could facilitate anti-competitive coordination. Ferguson, then a dissenting voice, contended the orders overstepped the FTC’s legal authority. The decision to reverse was supported unanimously by the FTC’s three Republican commissioners.

Commissioner Mark Meador acknowledged that OPEC+ behaves like a "de facto cartel" and emphasized the FTC’s responsibility to act against collusion, but noted the original restrictions lacked legal standing.

Chevron welcomed the reversal, calling it “a very pleasing decision.” Exxon and Hess declined to comment. Meanwhile, Chevron’s acquisition of Hess still faces uncertainty due to an ongoing arbitration with Exxon over rights to the lucrative Stabroek Block in Guyana.

The FTC’s reversal could signal a more relaxed regulatory stance on board appointments in mergers, especially in concentrated industries like oil and gas, where global coordination and market power remain hot-button issues.