Senate Launches Investigation Into Big Oil on OPEC Collusion Claims

The U.S. Senate budget committee has initiated an investigation into close to 20 large oil and gas producers following allegations about collusion between the industry and OPEC to push oil prices higher by constraining production.

The claims were made by Sen. Sheldon Whitehouse, echoing allegations made by the Federal Trade Commission against the former chief executive of Pioneer Natural Resources, Scott Sheffield earlier this year.

The FTC alleged that Sheffield had colluded with OPEC and OPEC+ members to limit production and increase oil prices amid the acquisition of Pioneer by Exxon. The allegations shook the shale oil world, where several large consolidation deals were awaiting the trade watchdog’s approval.

“Through public statements and private communications, Pioneer founder and former CEO Scott D. Sheffield has campaigned to organize anticompetitive coordinated output reductions between and among U.S. crude oil producers, and others, including the Organization of Petroleum Exporting Countries (“OPEC”), and a related cartel of other oil-producing countries known as OPEC+,” the FTC said in a formal complaint in May.

Now, the Senate has picked up the fight, calling the FTC’s allegation against Sheffield—which he promptly denied—“revelations” and saying it would demand answers from 18 companies about any attempts to coordinate production policy with OPEC members.

The companies facing questions include, besides Exxon, also BP, Shell, Chesapeake Energy, ConocoPhillips, Continental Resources, EOG Resources, Hess, Marathon, Occidental, Ovintiv, and APA Corp, among others. Half a dozen of the companies covered by the probe are in the midst of mergers or acquisitions.

The Senate budget committee has requested the companies to provide communications between any employees and representatives of OPEC “concerning oil production output, crude oil prices, and the relationship between the production and pricing of oil products, dating from January 1, 2020 through the present.” The committee has also requested information on any communications with OPEC+ producers.

By Irina Slav for Oilprice.com

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