U.S. regulators on Monday accused Hess Corp. CEO John Hess of encouraging OPEC to raise oil prices, banning him from joining Chevron's board of directors as a condition of approving the companies' $53 billion merger.
The Federal Trade Commission said Hess, 70, "communicated publicly and privately with OPEC representatives and oil ministers of OPEC member states," including the cartel's current and former secretaries-general.
Examples of the alleged private communications are blacked out in a 10-page FTC complaint against Hess made public Monday but the agency said Hess "repeated themes" from them during a July 2021 earnings call.
During investor conferences from 2020 to 2022, Hess also "praised OPEC as being 'very, very clever, intelligent, wise in how they brought their oil back,' " the FTC said.
"Mr. Hess's history of communications with OPEC heightens the risk of harm to competition if Mr. Hess assumes a seat on Chevron's Board of Directors," according to the complaint.
"Mr. Hess's participation on Chevron's Board of Directors would amplify Mr. Hess's supportive messaging to OPEC and others, thereby meaningfully increasing the likelihood that Chevron would align its production with OPEC's output decisions to maintain higher prices."
The FTC said it voted 3-2 to adopt a consent agreement between Chevron and Hess Corp. that bars Hess from serving on Chevron's board once the company closes on a deal to buy the company founded by his father, Leon Hess, who died in 1999.
The Hess family, which dropped off Forbes' list of billionaires in 2016, is slated to get $5 billion worth of Chevron stock from the deal, Bloomberg reported last year.
Hess Corp. said the FTC's concerns about Hess were without merit and described his communications with OPEC as consistent with statements he's made to the U.S. government, CNBC reported.
Chevron CEO Mike Wirth called the FTC's decision "an important step toward completing the merger" and said it was "unfortunate" that Hess wouldn't be able to join the company's board, CNBC said.
Monday's action left a dispute with Exxon Mobil that's pending before a three-member arbitration panel as the final hurdle facing Chevron's purchase of Hess Corp.
Exxon claims Hess Corp. gave it the right of first refusal to buy the company's 30% stake in an 6.6 million-acre, underwater oil field discovered off the coast of Guyana in 2015.
The petroleum reservoir, known as the Stabroek block, is estimated to hold 8 billion barrels of oil.
Shares of Hess Corp. closed Monday at $135.80, up more than 1.6%, while Chevron's stock closed at $147.27, up just over 1.2%.
