Senate launches investigation into oil companies over OPEC collusion allegations

The US Senate Budget Committee has launched an investigation into nearly 20 major oil and gas producers following allegations of collusion between the industry and OPEC to drive up oil prices by restricting production.

The allegations were made by Senator Sheldon Whitehouse and are similar to allegations made by the Federal Trade Commission earlier this year against former Pioneer Natural Resources CEO Scott Sheffield.

The FTC alleged that Sheffield colluded with OPEC and OPEC+ members to limit production and raise oil prices in Exxon’s acquisition of Pioneer. The allegations rocked the shale world, where several major consolidation deals were awaiting trade regulator approval.

“Through public statements and private communications, Pioneer founder and former CEO Scott D. Sheffield worked to orchestrate anti-competitive, coordinated production cuts between U.S. crude oil producers and others, including the Organization of the Petroleum Exporting Countries (“OPEC”) and an affiliated cartel of other oil producing countries known as OPEC+,” the FTC said in a formal complaint in May.

Now the Senate has taken up the fight and described the FTC’s allegations against Sheffield – which he immediately rejected – as “revelations”. It also announced that it would demand information from 18 companies about any attempts to coordinate their production policies with OPEC members.

In addition to Exxon, the companies examined include BP, Shell, Chesapeake Energy, ConocoPhillips, Continental Resources, EOG Resources, Hess, Marathon, Occidental, Ovintiv and APA Corp. Half a dozen of the companies examined are in the middle of mergers or acquisitions.

The Senate Budget Committee has asked the companies to provide communications between employees and OPEC officials “regarding oil production performance, crude oil prices, and the relationship between production and oil product pricing from January 1, 2020, to the present.” The committee has also requested information on any communications with OPEC+ producers.

By Irina Slav for Oilprice.com

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