US Senate Majority Leader Chuck Schumer is calling on the Federal Trade Commission (FTC) to halt Chevron’s proposed acquisition of Hess
Schumer voiced his concern over Chevron’s acquisition of its smaller rival Hess on X, the social media platform formerly known as Twitter. In his remarks on the platform Schumer posited that, “I’m sounding the alarm against yet another proposed Big Oil merger—a $53B deal between Chevron and Hess”. He further stated that the merger “would give Big Oil more fuel to raise gas prices”.
The merger of major players in the energy sector has raised eyebrows among US lawmakers, many of whom contend that such moves will result in BIG Oil gaining an unfair competitive advantage over smaller rivals.
Schumer is not the only lawmaker perturbed over what is being described as mega oil mergers. Democratic senators late last year, wrote to the FTC about “multi-billion-dollar acquisitions by oil giants Exxon and Chevron”. According to the senators, these acquisitions can lead to consumers being faced with higher prices.
The FTC, a US regulatory body tasked with protecting the public from unfair business practices and competition, has been facing mounting pressure to block the deal as there are fears that Chevron’s acquisition of Hess will not only impact pricing dynamics but also result in heightened market concentration.
The proposed merger between Chevron and Hess Corp is also facing legal challenges, with Exxon Mobil and China National Offshore Oil Corp (CNOOC) initiating arbitration proceedings over Hess’ divestment of Guyana’s Stabroek block.
Guyana’s Stabroek Block represents a strategic footprint for major oil players and the dispute over ownership rights highlights the competitive dynamics manifested by key players in the energy industry
Exxon Mobil’s assertion of pre-emption rights over Hess’ stake in the Stabroek block adds another layer of complexity to the unfolding legal battle. The disagreement hinges on interpretations of joint operating agreements governing the consortium, highlighting the intricate web of contractual obligations and competing interests at play.