Petition of Chevron Corporation and Hess Corporation To Reopen and Set Aside Order, 16130-16134 [2025-06564]
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Federal Register / Vol. 90, No. 73 / Thursday, April 17, 2025 / Notices
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[FR Doc. 2025–06551 Filed 4–16–25; 8:45 am]
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[FR Doc. 2025–06581 Filed 4–16–25; 8:45 am]
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FEDERAL TRADE COMMISSION
[Docket No. C–4814]
Petition of Chevron Corporation and
Hess Corporation To Reopen and Set
Aside Order
Federal Trade Commission.
Announcement of petition;
request for comment.
AGENCY:
ACTION:
Chevron Corporation and
Hess Corporation (collectively, the
‘‘Respondents’’), have asked the Federal
Trade Commission (‘‘FTC’’ or
‘‘Commission’’) to reopen and set aside
the Commission’s Decision and Order
entered on January 17, 2025, concerning
Chevron’s acquisition of Hess.
Publication of Respondents’ petition is
not intended to affect its legal status or
its final disposition.
DATES: Comments must be received on
or before May 12, 2025.
ADDRESSES: Interested parties may file
comments online or on paper, by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section
below. Please write: ‘‘Chevron/Hess
Petition to Reopen; Docket No. C–4814’’
on your comment and file your
comment online at https://
www.regulations.gov/docket/FTC-20250029/document by following the
instructions on the web-based form. If
you prefer to file your comment on
paper, please mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail
Stop H–144 (Annex O), Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT:
Peter Richman (202–326–2563), Bureau
of Competition, Federal Trade
Commission, 600 Pennsylvania Avenue
NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to section 6(g) of the Federal Trade
Commission Act, 15 U.S.C. 46(g), and
FTC Rule 2.51, 16 CFR 2.51, notice is
hereby given that the above-captioned
petition has been filed with the
Secretary of the Commission and is
being placed on the public record for a
period of 30 days. After the period for
public comments has expired and no
later than 120 days after the date of the
filing of the request, the Commission
shall determine whether to reopen the
proceeding and modify the Order as
requested. In making its determination,
the Commission will consider, among
other information, all timely and
responsive comments submitted in
connection with this notification.
SUMMARY:
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Federal Register / Vol. 90, No. 73 / Thursday, April 17, 2025 / Notices
The text of the petition is provided
below. An electronic copy of the filed
petition and any public exhibits
attached to it can be obtained from the
FTC website at this URL: https://
www.ftc.gov/legal-library/browse/casesproceedings/241-0008-chevronhessmatter.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before May 12, 2025. Write ‘‘Chevron/
Hess Petition to Reopen; Docket No. C–
4814’’ on your comment. Your
comment—including your name and
your State—will be placed on the public
record of this proceeding, including, to
the extent practicable, on the
www.regulations.gov website.
Because of the agency’s heightened
security screening, postal mail
addressed to the Commission will be
subject to delay. We strongly encourage
you to submit your comments online
through the www.regulations.gov
website. If you prefer to file your
comment on paper, write ‘‘Chevron/
Hess Petition to Reopen; Docket No. C–
4814’’ on your comment and on the
envelope, and mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail
Stop H–144 (Annex O), Washington, DC
20580. If possible, submit your paper
comment to the Commission by
overnight service.
Because your comment will be placed
on the publicly accessible website at
www.regulations.gov, you are solely
responsible for making sure that your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
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birth; driver’s license number or other
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financial account number; or credit or
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comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘trade secret or any
commercial or financial information
which . . . is privileged or
confidential’’—as provided by section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including in particular competitively
sensitive information such as costs,
sales statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
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Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c).
In particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request and must
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requirements for such treatment under
FTC Rule 4.9(c), and the General
Counsel grants that request.
Visit the FTC website at https://
www.ftc.gov to read this document and
the news release describing this matter.
The FTC Act and other laws that the
Commission administers permit the
collection of public comments to
consider and use in this proceeding, as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives on or
before May 12, 2025. For information on
the Commission’s privacy policy,
including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/
site-information/privacy-policy.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition by Chevron Corporation
and Hess Corporation To Reopen and
Set Aside the Order
Pursuant to section 5(b) of the Federal
Trade Commission Act, 15 U.S.C. 45(b),
and section 2.51 of the Federal Trade
Commission Rules of Practice, 16 CFR
2.51, Respondents Chevron Corporation
(‘‘Chevron’’) and Hess Corporation
(‘‘Hess’’) (collectively, the
‘‘Respondents’’) respectfully request
that the Commission reopen and set
aside the Commission’s Decision and
Order entered on January 17, 2025,1 in
Docket No. C–4814 (the ‘‘Order’’).
The Order bars Chevron from
nominating, designating or appointing
Hess CEO John B. Hess from joining
Chevron’s Board of Directors, as is
required by the Respondents’ merger
1 The Order was issued on January 16, 2025, and
final when received by the Respondents on January
17, 2025. See 16 CFR 2.34(c).
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16131
agreement.2 A divided Commission
voted to issue a Complaint alleging that
Mr. Hess’s appointment to the Chevron
Board ‘‘would heighten the risk of harm
to competition, including meaningfully
increasing the risk of industry
coordination’’ in the global market for
the development, production, and sale
of crude oil.3 As set forth below, and as
made clear in Chairman Ferguson’s and
Commissioner Holyoak’s September 30,
2024 dissenting statements, the
Commission’s Complaint failed to state
a cognizable theory of competitive harm
under section 7 of the Clayton Act, as
amended, 15 U.S.C. 18, or section 5 of
the Federal Trade Commission Act, 15
U.S.C. 45, under which to challenge the
Chevron/Hess merger.4 The
Respondents hereby respectfully
petition the Commission to reopen and
set aside the Order in the public
interest.
I. Background
A. Merger Transaction
On October 22, 2023, the Respondents
entered into an Agreement and Plan of
Merger (the ‘‘Merger Agreement’’)
pursuant to which Chevron will acquire
Hess. As consideration for the merger,
Hess shareholders will receive shares of
Chevron voting securities with an
aggregate value of approximately $53
billion at signing. Among other things,
Section 1.3(a) of the Merger Agreement
requires Chevron and its Board of
Directors, upon closing of the proposed
2 See Decision and Order, In the Matter of
Chevron Corp. & Hess Corp., File No. 241–0008
(Jan. 16, 2025), ¶ II.A. The Order also prohibits
Chevron from appointing Mr. Hess to serve in an
advisory or consultative capacity to Chevron or its
board, with limited exceptions. Id. at ¶ II.B.
3 See Complaint, In the Matter of Chevron Corp.
& Hess Corp., File No. 241–0008 (Jan. 16, 2025),
¶¶ 19–20, 50.
4 See generally Dissenting Statement of
Commissioner Andrew N. Ferguson, In the Matter
of Chevron Corp. & Hess Corp., File No. 241–0008
(Sep. 30, 2024) (the ‘‘Ferguson Dissent’’); Dissenting
Statement of Commissioner Melissa Holyoak, In the
Matter of Chevron Corp. & Hess Corp., File No. 241–
0008 (Sep. 30, 2024) (the ‘‘Holyoak Dissent’’). While
Commissioners Holyoak and Ferguson did not issue
separate written dissents to the Commission’s
January 17, 2025 final Decision and Order, their
dissents are incorporated into the final order, and
they are referenced in Commissioner Holyoak’s
written dissent to the Commission’s
contemporaneous final Decision and Order for the
ExxonMobil matter. See Dissenting Statement of
Commissioner Melissa Holyoak Joined by
Commissioner Andrew N. Ferguson, In the Matter
of ExxonMobil/Pioneer Res., Final Decision and
Order, File No. 241–0004 (Jan. 17, 2025), at 1 n.3
(‘‘I also voted today to reject the finalization of the
Decision and Order that resolves the merger of
Chevron and Hess. . . . My views have not
changed with respect to the flawed nature of the
complaint and consent in Chevron/Hess—views
that continue to apply to my decision to vote
against today’s finalization of the Decision and
Order [in the matter of ExxonMobil].’’).
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merger, to take all actions necessary to
increase the size of the Chevron Board
from twelve to thirteen members and to
appoint Mr. Hess as a Chevron director.
Upon closing of the merger, Hess’s
shareholders will hold in the aggregate
approximately 15 percent of Chevron’s
outstanding voting securities, and the
covenant to appoint Mr. Hess to
Chevron’s Board is consistent with
board representation for those
shareholders, as well as with their
expectations when they voted to
approve the merger. Mr. Hess’s
appointment to Chevron’s Board is also
consistent with Chevron’s
communications to Hess before the
Merger Agreement was signed, in which
Chevron conveyed its desire that Mr.
Hess join the Chevron Board upon the
closing of the merger. Chevron’s
commitment to appoint Mr. Hess as one
of thirteen members of the Chevron
Board is a fundamental part of the
overall merger transaction.
The Respondents have not yet closed
the merger. On May 28, 2024, holders of
a majority of Hess’s outstanding
common stock voted to approve the
merger. Hess Guyana Exploration
Limited (‘‘HGEL’’), a wholly owned
subsidiary of Hess, is currently in
arbitration relating to the applicability
of a right of first refusal (the ‘‘Stabroek
ROFR’’) contained in the operating
agreement among HGEL and affiliates of
Exxon Mobil Corporation and China
National Offshore Oil Corporation to the
merger. An arbitration merits hearing
about the applicability of the Stabroek
ROFR to the merger has been scheduled
for May 2025, with a decision expected
in the following three months.
B. The Order
On January 17, 2025, on the last
Federal working day before the change
of administrations, the Commission
finalized the Order following a 3-to-2
vote. The Order bars Chevron from
nominating, designating, or appointing
Mr. Hess to the Chevron Board, or
allowing Mr. Hess to serve in an
advisory or consulting capacity to, or as
a representative of, Chevron or the
Chevron Board, other than with respect
to interactions and discussions with (a)
Guyanese government officials about
Hess’s oil-related and health ministryrelated activities in Guyana, and (b) the
Salk Institute’s Harnessing Plants
Initiative.
By its terms, the Order will terminate
in ten years. Unless set aside, the Order
will preclude Chevron from fulfilling its
contractual obligation to appoint Mr.
Hess to the Chevron board upon closing
of the merger, and deprive shareholders
of the benefit of his service.
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The Respondents acknowledge that a
majority of the prior Commission voted
to issue the Order pursuant to an
Agreement Containing Consent Order
among Chevron, Hess, and the
Commission staff (the ‘‘ACCO’’). The
Respondents did not sign the ACCO
because they agreed with the prior
Commission’s characterization of the
facts, or with its interpretation and
application of section 7 or section 5 to
those facts. As explicitly noted in the
document, the ACCO was ‘‘for
settlement purposes only and does not
constitute an admission . . . that the
law has been violated as alleged in the
Draft Complaint, or that the facts as
alleged in the Draft Complaint, other
than jurisdictional facts, are true.’’ 5
Chevron and Hess entered into the
ACCO solely to satisfy a key closing
condition to their Merger Agreement,
and thereby to reduce uncertainty and
facilitate a more prompt closing of the
proposed transaction, in the best
interest of each company’s shareholders.
As noted in the Ferguson Dissent, in
getting the Respondents to agree to the
ACCO, ‘‘[t]he Commission leveraged its
Hart-Scott-Rodino Act authority by
threatening to hold up Chevron and
Hess’s $53 billion merger even though
the lack of a plausible section 7 theory
had long been obvious.’’ 6 That the
Respondents acceded to this leverage
should not factor into the Commission’s
decision whether to reopen and set
aside this Order.
C. The Respondents’ Compliance With
the Order
Chevron has been in compliance with
the Proposed Decision and Order
contained in the ACCO since it was
executed on September 23, 2024, and
with the Order since it was finalized on
January 17, 2025, as reflected in the
required compliance reports filed by
Chevron on October 23, 2024; November
22, 2024; December 20, 2024; and March
17, 2025.
II. The Commission Should Reopen and
Set Aside the Order in the Public
Interest
Respondents subject to a Commission
decision containing an order which has
become effective may file a request that
the Commission reopen the proceeding
to consider whether the order should be
altered, modified, or set aside in whole
or in part, if the public interest requires
it.7
5 Agreement Containing Consent Order, In the
Matter of Chevron Corp. & Hess Corp., File No. 241–
0008 (Sept. 23, 2024), at ¶ 5.
6 Ferguson Dissent at 5–6 (citation omitted).
7 See 16 CFR 2.51.
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Here, public interest in the effective
enforcement of the antitrust laws, as
well as in the continued investment in
oil and gas production championed by
Mr. Hess, is best served by setting aside
the Order and allowing Mr. Hess to join
Chevron’s Board.
A. Setting Aside the Order Serves the
Public Interest in the Effective
Enforcement of the Antitrust Laws, as
the Complaint Failed To State a
Cognizable Theory of Harm Under
Section 7 or Section 5
Section 7 prohibits acquisitions the
effect of which ‘‘may be substantially to
lessen competition, or to tend to create
a monopoly,’’ 8 and section 5 declares
unlawful ‘‘unfair methods of
competition in or affecting commerce.’’ 9
As noted in the Holyoak Dissent, the
Complaint ‘‘does not take issue with
Chevron’s acquisition of Hess
Corporation’s assets. Nor could it.’’ 10
The Respondents’ combined share in
the global market for oil and gas is in
the low single digits, and Hess’s
incremental portion of that share—what
Hess will add to Chevron post-close—is
de minimis. Even under the agencies’
2023 Merger Guidelines, the
Respondents’ combined share is far
below the level at which a merger could
be presumed to harm competition. The
fact that the prior Commission, after its
months-long investigation into the
Respondents’ operations, allowed the
merger to proceed without any
structural or behavioral remedies
demonstrates that there are no
anticompetitive grounds on which to
challenge the combination of these two
companies. That fact was amplified by
Senator Mike Lee and Congressman Jim
Jordan in their November 18, 2024 joint
letter to former Chair Khan: ‘‘These
mergers did not present any
anticompetitive concerns, thus the
FTC’s consent decrees are unwarranted
and did nothing to enforce the Clayton
Act or protect consumers from
anticompetitive harm.’’ 11
Rather, the prior Commission relied
on a novel theory on which to extract
a concession from the parties, focused
not on the two companies’ asset
footprints and oil and gas production,
but rather on the appointment of Mr.
Hess to Chevron’s Board of Directors.
8 15
U.S.C. 18.
U.S.C. 45(a)(1).
10 Holyoak Dissent at 2.
11 Letter from Sen. Mike Lee and Congressman
Jim Jordan to Chair Lina Khan (Nov. 18, 2024), at
2, https://judiciary.house.gov/sites/evo-subsites/
republicans-judiciary.house.gov/files/evo-mediadocument/2024-11-18%20JDJ%
20Lee%20to%20Khan%
20re%20Exxon%20Pioneer%20Chevron%20Hess%
20briefing.pdf.
9 15
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Pointing to certain communications by
Mr. Hess with Organization of the
Petroleum Exporting Countries
(‘‘OPEC’’) officials and a representative
of an OPEC member State—but without
alleging any improper collusion—the
Commission alleged that, through the
merger, Mr. Hess would have access to
Chevron’s ‘‘broader platform’’ from
which to continue such
communications, and in turn increase
the likelihood that Chevron would
collude with OPEC regarding the supply
and price of oil and gas.
This allegation fails to state a
cognizable antitrust theory of harm. As
highlighted in the Holyoak Dissent,
Nothing in the complaint alleges that
Mr. Hess has ever attempted to, or
coordinated with, a rival.
*
*
*
*
*
Taking the allegations and the
implications against Mr. Hess as true,
neither he nor Hess Corporation ever
coordinated or attempted to coordinate
with Hess Corporation’s rivals.12
Given that fact, there is no basis under
the 2023 Merger Guidelines to conclude
the proposed merger would violate
section 7 or section 5 under a
coordinated effects theory of
competitive harm. But as also noted in
the Holyoak Dissent, ‘‘the tangible and
intangible assets of Hess Corporation
have nothing to do with the violation of
law [alleged in the prior Commission’s
complaint]—it’s all about the
acquisition of Mr. Hess.’’ This theory of
harm, Commissioner Holyoak notes, is
‘‘farcical’’ and one that ‘‘[c]ertainly no
court would endorse.’’ 13
Even were the Respondents to accept
that this is a plausible theory of harm
under section 7, it fails on its own
terms. As highlighted in the Ferguson
Dissent, this theory assumes that: (i)
Chevron would allow Mr. Hess to
continue such communications postclosing of the transaction; (ii) that such
communication is made worse by the
transaction—a transaction through
which Mr. Hess’s role would be reduced
from CEO and significant shareholder
(as he currently is in Hess Corporation)
to non-executive member of a thirteenperson Board (as he would be at
Chevron post-merger); and (iii) that this
conduct would have a significant effect
on global oil prices, which, as stated
above, is implausible given the
Respondents’ low combined shares and
lack of any coordinated behavior or
sharing of competitively sensitive
information. The Complaint provides no
12 Holyoak
13 Id.
Dissent at 2, 4.
at 2.
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justification for any of these three
assumptions.
While the former Chair touted the
withdrawal of Mr. Hess’s nomination to
the Chevron Board in exchange for
clearance of the Respondents’ merger in
a list of Commission Accomplishments
achieved under her tenure,14 the
Ferguson Dissent rightly notes that this
settlement ‘‘does not vindicate the rule
of law,’’ but rather serves to further
reduce antitrust enforcement to a ‘‘payfor-peace racket inflict[ing] serious
injury on the rule of law—and on the
Commission’s credibility.’’ 15 Preserving
the Commission’s credibility is
paramount to the public interest in the
effective enforcement of the antitrust
laws, and this interest is best served by
setting aside the Order in recognition of
the Complaint’s deficiencies.
B. The Public Interest in Continued
Investment in Oil and Gas Supply Is
Served by Setting Aside the Order
In addition to the public’s interest in
the just enforcement of the antitrust
laws, there is a significant public
interest in continued investment in oil
and gas supply. Ensuring that U.S. oil
and gas producers can meet expected
increases in consumer demand for
energy is vital to the interest of
consumers, downstream industries that
rely on oil and gas production, as well
as U.S. national and energy security.16
Mr. Hess has spent his career
advocating for such an increase in
investment to grow oil and gas supply,
for the benefit of consumers, workers,
and U.S. energy security. Throughout
his career, Mr. Hess has been recognized
as an industry authority on energy
policy. He has been called on to advise
U.S. administrations on their energy
policy, including as an informal advisor
to members of the cabinets of Presidents
Clinton, Bush, Obama, Biden, and
Trump.
As CEO of Hess, Mr. Hess has put this
advocacy for greater investment into
practice. Under Mr. Hess’s leadership,
Hess has differentiated itself from its
peers with the highest levels of cash
flow reinvestment in the industry in
14 Federal Trade Commission Accomplishments,
June 2021–January 2025 (Jan. 19, 2025), at 16,
https://www.ftc.gov/system/files/ftc_gov/pdf/ftcaccomplishments-june-2021-january-2025.pdf
(claiming the Order and the ExxonMobil/Pioneer
settlement ‘‘[a]dvanced the increased risk of
coordination as a basis for Section 7 liability’’).
15 Ferguson Dissent at 6, 7.
16 See Exec. Order No. 14156, 90 FR 8433, 8433
(Jan. 29, 2025), https://www.federalregister.gov/
documents/2025/01/29/2025-02003/declaring-anational-energy-emergency (‘‘The integrity and
expansion of our Nation’s energy infrastructure—
from coast to coast—is an immediate and pressing
priority for the protection of the United States’
national and economic security.’’).
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order to increase future oil and gas
supply. This prioritization of
reinvestment for long-term production
growth is manifest in Hess’s global
production of oil and gas, which grew
from 101 million barrels of oil
equivalent in 2018 to 144 million
barrels in 2023, an increase of nearly 45
percent.17 This reinvestment strategy is
projected to yield further robust growth
in the near-term: a recent Bloomberg
analyst consensus projects Hess will
achieve a 14 percent compound annual
growth rate (‘‘CAGR’’) over the years
2023 to 2025, compared to the median
cohort CAGR of two percent.18 This
projected organic growth rate is
approximately double that of Hess’s
closest peer, and is multiples of that of
U.S. major oil and gas producers. Hess,
under Mr. Hess’s leadership, has chosen
to invest its capital in future oil and gas
production for the long term, rather than
return capital to shareholders.
This record shows Mr. Hess’s
longstanding commitment in investing
to grow long-term oil and gas supply; it
is this same commitment that first led
Chevron to propose his appointment to
the Chevron Board under the Merger
Agreement, and that would make Mr.
Hess an asset to the Chevron Board. At
this vital moment when the
administration looks to expand oil and
gas production, it is in the public
interest that Mr. Hess be allowed to
continue this work.
III. Conclusion
The Respondents agree with
Chairman Ferguson that ‘‘[n]othing in
[s]ection 7 requires Mr. Hess to stay off
the Chevron board.’’ 19 Consistent with
the discussion above, the Respondents
respectfully request that the
Commission reopen and set aside the
Order. Setting aside the Order is
consistent with the public interest in the
Commission’s appropriate and effective
enforcement of the antitrust laws, and
will promote long-term capital
investments to grow American oil and
gas supplies.
Dated: March 27, 2025.
Respectfully submitted,
lllllllllllllllllllll
Nelson O. Fitts,
17 Hess Corp., 2020 Annual Report (Mar. 2021), at
7, https://investors.hess.com/static-files/0869f80e06ec-419d-b18a-b51d34968c44; Hess Corp., 2023
Annual Report (Feb. 2024), at 12, https://
investors.hess.com/static-files/64c3f1e7-08e2-40b19190-ca2492e17343.
18 These data are based on FactSet, Enverus, and
Bloomberg consensus estimates as of July 8, 2024.
The 2023–2025 production growth estimates are pro
forma for announced mergers, acquisitions, and
divestitures per public company disclosures.
19 Ferguson Dissent at 6–7.
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17APN1
16134
Federal Register / Vol. 90, No. 73 / Thursday, April 17, 2025 / Notices
Wachtell, Lipton, Rosen & Katz, 51 West
52nd Street, New York, New York 10019,
Attorney for Respondent Hess Corporation.
lllllllllllllllllllll
David A. Higbee,
A&O Shearman, 1101 New York Avenue NW,
Washington, DC 20005, Attorney for
Respondent Chevron Corporation.
[FR Doc. 2025–06564 Filed 4–16–25; 8:45 am]
BILLING CODE 6750–01–P
FEDERAL TRADE COMMISSION
[Docket No. C–4815]
Petition of Scott Sheffield To Reopen
and Set Aside Order
Federal Trade Commission.
Announcement of petition;
request for comment.
AGENCY:
ACTION:
Scott Sheffield, formerly of
Pioneer Natural Resources Company
(‘‘Pioneer’’), has asked the Federal Trade
Commission (‘‘FTC’’ or ‘‘Commission’’)
to reopen and set aside the
Commission’s Decision and Order
entered on January 16, 2025, concerning
Exxon Mobil Corporation’s acquisition
of Pioneer. Publication of Mr.
Sheffield’s petition is not intended to
affect its legal status or its final
disposition.
SUMMARY:
Comments must be received on
or before May 12, 2025.
ADDRESSES: Interested parties may file
comments online or on paper, by
following the instructions in the
Request for Comment part of the
SUPPLEMENTARY INFORMATION section
below. Please write: ‘‘Sheffield Petition
to Reopen; Docket No. C–4815’’ on your
comment and file your comment online
at https://www.regulations.gov/docket/
FTC-2025-0030/document by following
the instructions on the web-based form.
If you prefer to file your comment on
paper, please mail your comment to the
following address: Federal Trade
Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail
Stop H–144 (Annex M), Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT:
Peter Richman (202–326–2563), Bureau
of Competition, Federal Trade
Commission, 600 Pennsylvania Avenue
NW, Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant
to section 6(g) of the Federal Trade
Commission Act, 15 U.S.C. 46(g), and
FTC Rule 2.51, 16 CFR 2.51, notice is
hereby given that the above-captioned
petition has been filed with the
Secretary of the Commission and is
being placed on the public record for a
period of 30 days. After the period for
ddrumheller on DSK120RN23PROD with NOTICES1
DATES:
VerDate Sep<11>2014
23:16 Apr 16, 2025
Jkt 265001
public comments has expired and no
later than 120 days after the date of the
filing of the request, the Commission
shall determine whether to reopen the
proceeding and modify the Order as
requested. In making its determination,
the Commission will consider, among
other information, all timely and
responsive comments submitted in
connection with this notification.
The text of the petition is provided
below. An electronic copy of the filed
petition and any public exhibits
attached to it can be obtained from the
FTC website at this URL: https://
www.ftc.gov/legal-library/browse/casesproceedings/241-0004-c-4815-exxonmobil-corporation-matter.
You can file a comment online or on
paper. For the Commission to consider
your comment, we must receive it on or
before May 12, 2025. Write ‘‘Sheffield
Petition to Reopen; Docket No. C–4815’’
on your comment. Your comment—
including your name and your State—
will be placed on the public record of
this proceeding, including, to the extent
practicable, on the www.regulations.gov
website.
Because of the agency’s heightened
security screening, postal mail
addressed to the Commission will be
subject to delay. We strongly encourage
you to submit your comments online
through the www.regulations.gov
website. If you prefer to file your
comment on paper, write ‘‘Sheffield
Petition to Reopen; Docket No. C–4815’’
on your comment and on the envelope,
and mail your comment to the following
address: Federal Trade Commission,
Office of the Secretary, 600
Pennsylvania Avenue NW, Mail Stop
H–144 (Annex M), Washington, DC
20580. If possible, submit your paper
comment to the Commission by
overnight service.
Because your comment will be placed
on the publicly accessible website at
www.regulations.gov, you are solely
responsible for making sure that your
comment does not include any sensitive
or confidential information. In
particular, your comment should not
include any sensitive personal
information, such as your or anyone
else’s Social Security number; date of
birth; driver’s license number or other
State identification number, or foreign
country equivalent; passport number;
financial account number; or credit or
debit card number. You are also solely
responsible for making sure your
comment does not include any sensitive
health information, such as medical
records or other individually
identifiable health information. In
addition, your comment should not
include any ‘‘trade secret or any
PO 00000
Frm 00029
Fmt 4703
Sfmt 4703
commercial or financial information
which . . . is privileged or
confidential’’—as provided by section
6(f) of the FTC Act, 15 U.S.C. 46(f), and
FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2)—
including in particular competitively
sensitive information such as costs,
sales statistics, inventories, formulas,
patterns, devices, manufacturing
processes, or customer names.
Comments containing material for
which confidential treatment is
requested must be filed in paper form,
must be clearly labeled ‘‘Confidential,’’
and must comply with FTC Rule 4.9(c).
In particular, the written request for
confidential treatment that accompanies
the comment must include the factual
and legal basis for the request and must
identify the specific portions of the
comment to be withheld from the public
record. See FTC Rule 4.9(c). Your
comment will be kept confidential only
if the General Counsel grants your
request in accordance with the law and
the public interest. Once your comment
has been posted on
www.regulations.gov—as legally
required by FTC Rule 4.9(b)—we cannot
redact or remove your comment from
that website, unless you submit a
confidentiality request that meets the
requirements for such treatment under
FTC Rule 4.9(c), and the General
Counsel grants that request.
Visit the FTC website at https://
www.ftc.gov to read this document and
the news release describing this matter.
The FTC Act and other laws that the
Commission administers permit the
collection of public comments to
consider and use in this proceeding, as
appropriate. The Commission will
consider all timely and responsive
public comments that it receives on or
before May 12, 2025. For information on
the Commission’s privacy policy,
including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/
site-information/privacy-policy.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition of Scott Sheffield To
Reopen and Set Aside the Order
Pursuant to section 5(b) of the Federal
Trade Commission Act, 15 U.S.C. 45(b),
and section 2.51 of the Federal Trade
Commission’s Rules of Practice, 16 CFR
§ 2.51, Scott Sheffield respectfully
requests that the Commission set aside
and vacate in its entirety the Decision
and Order entered on January 16, 2025
in Docket No. C–4815 (‘‘Order’’). As
contemplated by section 2.51(a) of the
Federal Trade Commission’s Rules of
Practice, 16 CFR 2.51(a), Mr. Sheffield is
E:\FR\FM\17APN1.SGM
17APN1
]]>Agencies
[Federal Register Volume 90, Number 73 (Thursday, April 17, 2025)]
[Notices]
[Pages 16130-16134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-06564]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
[Docket No. C-4814]
Petition of Chevron Corporation and Hess Corporation To Reopen
and Set Aside Order
AGENCY: Federal Trade Commission.
ACTION: Announcement of petition; request for comment.
-----------------------------------------------------------------------
SUMMARY: Chevron Corporation and Hess Corporation (collectively, the
``Respondents''), have asked the Federal Trade Commission (``FTC'' or
``Commission'') to reopen and set aside the Commission's Decision and
Order entered on January 17, 2025, concerning Chevron's acquisition of
Hess. Publication of Respondents' petition is not intended to affect
its legal status or its final disposition.
DATES: Comments must be received on or before May 12, 2025.
ADDRESSES: Interested parties may file comments online or on paper, by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please write: ``Chevron/Hess
Petition to Reopen; Docket No. C-4814'' on your comment and file your
comment online at https://www.regulations.gov/docket/FTC-2025-0029/document by following the instructions on the web-based form. If you
prefer to file your comment on paper, please mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex O), Washington, DC
20580.
FOR FURTHER INFORMATION CONTACT: Peter Richman (202-326-2563), Bureau
of Competition, Federal Trade Commission, 600 Pennsylvania Avenue NW,
Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(g) of the Federal
Trade Commission Act, 15 U.S.C. 46(g), and FTC Rule 2.51, 16 CFR 2.51,
notice is hereby given that the above-captioned petition has been filed
with the Secretary of the Commission and is being placed on the public
record for a period of 30 days. After the period for public comments
has expired and no later than 120 days after the date of the filing of
the request, the Commission shall determine whether to reopen the
proceeding and modify the Order as requested. In making its
determination, the Commission will consider, among other information,
all timely and responsive comments submitted in connection with this
notification.
[[Page 16131]]
The text of the petition is provided below. An electronic copy of
the filed petition and any public exhibits attached to it can be
obtained from the FTC website at this URL: https://www.ftc.gov/legal-library/browse/cases-proceedings/241-0008-chevronhess-matter.
You can file a comment online or on paper. For the Commission to
consider your comment, we must receive it on or before May 12, 2025.
Write ``Chevron/Hess Petition to Reopen; Docket No. C-4814'' on your
comment. Your comment--including your name and your State--will be
placed on the public record of this proceeding, including, to the
extent practicable, on the www.regulations.gov website.
Because of the agency's heightened security screening, postal mail
addressed to the Commission will be subject to delay. We strongly
encourage you to submit your comments online through the
www.regulations.gov website. If you prefer to file your comment on
paper, write ``Chevron/Hess Petition to Reopen; Docket No. C-4814'' on
your comment and on the envelope, and mail your comment to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex O), Washington, DC
20580. If possible, submit your paper comment to the Commission by
overnight service.
Because your comment will be placed on the publicly accessible
website at www.regulations.gov, you are solely responsible for making
sure that your comment does not include any sensitive or confidential
information. In particular, your comment should not include any
sensitive personal information, such as your or anyone else's Social
Security number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include any
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including in particular competitively sensitive
information such as costs, sales statistics, inventories, formulas,
patterns, devices, manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on www.regulations.gov--as legally required by FTC Rule
4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing this matter. The FTC Act and other laws
that the Commission administers permit the collection of public
comments to consider and use in this proceeding, as appropriate. The
Commission will consider all timely and responsive public comments that
it receives on or before May 12, 2025. For information on the
Commission's privacy policy, including routine uses permitted by the
Privacy Act, see https://www.ftc.gov/site-information/privacy-policy.
Authority: 15 U.S.C. 46, 5 U.S.C. 552.
April J. Tabor,
Secretary.
Text of Petition by Chevron Corporation and Hess Corporation To Reopen
and Set Aside the Order
Pursuant to section 5(b) of the Federal Trade Commission Act, 15
U.S.C. 45(b), and section 2.51 of the Federal Trade Commission Rules of
Practice, 16 CFR 2.51, Respondents Chevron Corporation (``Chevron'')
and Hess Corporation (``Hess'') (collectively, the ``Respondents'')
respectfully request that the Commission reopen and set aside the
Commission's Decision and Order entered on January 17, 2025,\1\ in
Docket No. C-4814 (the ``Order'').
---------------------------------------------------------------------------
\1\ The Order was issued on January 16, 2025, and final when
received by the Respondents on January 17, 2025. See 16 CFR 2.34(c).
---------------------------------------------------------------------------
The Order bars Chevron from nominating, designating or appointing
Hess CEO John B. Hess from joining Chevron's Board of Directors, as is
required by the Respondents' merger agreement.\2\ A divided Commission
voted to issue a Complaint alleging that Mr. Hess's appointment to the
Chevron Board ``would heighten the risk of harm to competition,
including meaningfully increasing the risk of industry coordination''
in the global market for the development, production, and sale of crude
oil.\3\ As set forth below, and as made clear in Chairman Ferguson's
and Commissioner Holyoak's September 30, 2024 dissenting statements,
the Commission's Complaint failed to state a cognizable theory of
competitive harm under section 7 of the Clayton Act, as amended, 15
U.S.C. 18, or section 5 of the Federal Trade Commission Act, 15 U.S.C.
45, under which to challenge the Chevron/Hess merger.\4\ The
Respondents hereby respectfully petition the Commission to reopen and
set aside the Order in the public interest.
---------------------------------------------------------------------------
\2\ See Decision and Order, In the Matter of Chevron Corp. &
Hess Corp., File No. 241-0008 (Jan. 16, 2025), ] II.A. The Order
also prohibits Chevron from appointing Mr. Hess to serve in an
advisory or consultative capacity to Chevron or its board, with
limited exceptions. Id. at ] II.B.
\3\ See Complaint, In the Matter of Chevron Corp. & Hess Corp.,
File No. 241-0008 (Jan. 16, 2025), ]] 19-20, 50.
\4\ See generally Dissenting Statement of Commissioner Andrew N.
Ferguson, In the Matter of Chevron Corp. & Hess Corp., File No. 241-
0008 (Sep. 30, 2024) (the ``Ferguson Dissent''); Dissenting
Statement of Commissioner Melissa Holyoak, In the Matter of Chevron
Corp. & Hess Corp., File No. 241-0008 (Sep. 30, 2024) (the ``Holyoak
Dissent''). While Commissioners Holyoak and Ferguson did not issue
separate written dissents to the Commission's January 17, 2025 final
Decision and Order, their dissents are incorporated into the final
order, and they are referenced in Commissioner Holyoak's written
dissent to the Commission's contemporaneous final Decision and Order
for the ExxonMobil matter. See Dissenting Statement of Commissioner
Melissa Holyoak Joined by Commissioner Andrew N. Ferguson, In the
Matter of ExxonMobil/Pioneer Res., Final Decision and Order, File
No. 241-0004 (Jan. 17, 2025), at 1 n.3 (``I also voted today to
reject the finalization of the Decision and Order that resolves the
merger of Chevron and Hess. . . . My views have not changed with
respect to the flawed nature of the complaint and consent in
Chevron/Hess--views that continue to apply to my decision to vote
against today's finalization of the Decision and Order [in the
matter of ExxonMobil].'').
---------------------------------------------------------------------------
I. Background
A. Merger Transaction
On October 22, 2023, the Respondents entered into an Agreement and
Plan of Merger (the ``Merger Agreement'') pursuant to which Chevron
will acquire Hess. As consideration for the merger, Hess shareholders
will receive shares of Chevron voting securities with an aggregate
value of approximately $53 billion at signing. Among other things,
Section 1.3(a) of the Merger Agreement requires Chevron and its Board
of Directors, upon closing of the proposed
[[Page 16132]]
merger, to take all actions necessary to increase the size of the
Chevron Board from twelve to thirteen members and to appoint Mr. Hess
as a Chevron director. Upon closing of the merger, Hess's shareholders
will hold in the aggregate approximately 15 percent of Chevron's
outstanding voting securities, and the covenant to appoint Mr. Hess to
Chevron's Board is consistent with board representation for those
shareholders, as well as with their expectations when they voted to
approve the merger. Mr. Hess's appointment to Chevron's Board is also
consistent with Chevron's communications to Hess before the Merger
Agreement was signed, in which Chevron conveyed its desire that Mr.
Hess join the Chevron Board upon the closing of the merger. Chevron's
commitment to appoint Mr. Hess as one of thirteen members of the
Chevron Board is a fundamental part of the overall merger transaction.
The Respondents have not yet closed the merger. On May 28, 2024,
holders of a majority of Hess's outstanding common stock voted to
approve the merger. Hess Guyana Exploration Limited (``HGEL''), a
wholly owned subsidiary of Hess, is currently in arbitration relating
to the applicability of a right of first refusal (the ``Stabroek
ROFR'') contained in the operating agreement among HGEL and affiliates
of Exxon Mobil Corporation and China National Offshore Oil Corporation
to the merger. An arbitration merits hearing about the applicability of
the Stabroek ROFR to the merger has been scheduled for May 2025, with a
decision expected in the following three months.
B. The Order
On January 17, 2025, on the last Federal working day before the
change of administrations, the Commission finalized the Order following
a 3-to-2 vote. The Order bars Chevron from nominating, designating, or
appointing Mr. Hess to the Chevron Board, or allowing Mr. Hess to serve
in an advisory or consulting capacity to, or as a representative of,
Chevron or the Chevron Board, other than with respect to interactions
and discussions with (a) Guyanese government officials about Hess's
oil-related and health ministry-related activities in Guyana, and (b)
the Salk Institute's Harnessing Plants Initiative.
By its terms, the Order will terminate in ten years. Unless set
aside, the Order will preclude Chevron from fulfilling its contractual
obligation to appoint Mr. Hess to the Chevron board upon closing of the
merger, and deprive shareholders of the benefit of his service.
The Respondents acknowledge that a majority of the prior Commission
voted to issue the Order pursuant to an Agreement Containing Consent
Order among Chevron, Hess, and the Commission staff (the ``ACCO''). The
Respondents did not sign the ACCO because they agreed with the prior
Commission's characterization of the facts, or with its interpretation
and application of section 7 or section 5 to those facts. As explicitly
noted in the document, the ACCO was ``for settlement purposes only and
does not constitute an admission . . . that the law has been violated
as alleged in the Draft Complaint, or that the facts as alleged in the
Draft Complaint, other than jurisdictional facts, are true.'' \5\
Chevron and Hess entered into the ACCO solely to satisfy a key closing
condition to their Merger Agreement, and thereby to reduce uncertainty
and facilitate a more prompt closing of the proposed transaction, in
the best interest of each company's shareholders. As noted in the
Ferguson Dissent, in getting the Respondents to agree to the ACCO,
``[t]he Commission leveraged its Hart-Scott-Rodino Act authority by
threatening to hold up Chevron and Hess's $53 billion merger even
though the lack of a plausible section 7 theory had long been
obvious.'' \6\ That the Respondents acceded to this leverage should not
factor into the Commission's decision whether to reopen and set aside
this Order.
---------------------------------------------------------------------------
\5\ Agreement Containing Consent Order, In the Matter of Chevron
Corp. & Hess Corp., File No. 241-0008 (Sept. 23, 2024), at ] 5.
\6\ Ferguson Dissent at 5-6 (citation omitted).
---------------------------------------------------------------------------
C. The Respondents' Compliance With the Order
Chevron has been in compliance with the Proposed Decision and Order
contained in the ACCO since it was executed on September 23, 2024, and
with the Order since it was finalized on January 17, 2025, as reflected
in the required compliance reports filed by Chevron on October 23,
2024; November 22, 2024; December 20, 2024; and March 17, 2025.
II. The Commission Should Reopen and Set Aside the Order in the Public
Interest
Respondents subject to a Commission decision containing an order
which has become effective may file a request that the Commission
reopen the proceeding to consider whether the order should be altered,
modified, or set aside in whole or in part, if the public interest
requires it.\7\
---------------------------------------------------------------------------
\7\ See 16 CFR 2.51.
---------------------------------------------------------------------------
Here, public interest in the effective enforcement of the antitrust
laws, as well as in the continued investment in oil and gas production
championed by Mr. Hess, is best served by setting aside the Order and
allowing Mr. Hess to join Chevron's Board.
A. Setting Aside the Order Serves the Public Interest in the Effective
Enforcement of the Antitrust Laws, as the Complaint Failed To State a
Cognizable Theory of Harm Under Section 7 or Section 5
Section 7 prohibits acquisitions the effect of which ``may be
substantially to lessen competition, or to tend to create a monopoly,''
\8\ and section 5 declares unlawful ``unfair methods of competition in
or affecting commerce.'' \9\ As noted in the Holyoak Dissent, the
Complaint ``does not take issue with Chevron's acquisition of Hess
Corporation's assets. Nor could it.'' \10\ The Respondents' combined
share in the global market for oil and gas is in the low single digits,
and Hess's incremental portion of that share--what Hess will add to
Chevron post-close--is de minimis. Even under the agencies' 2023 Merger
Guidelines, the Respondents' combined share is far below the level at
which a merger could be presumed to harm competition. The fact that the
prior Commission, after its months-long investigation into the
Respondents' operations, allowed the merger to proceed without any
structural or behavioral remedies demonstrates that there are no
anticompetitive grounds on which to challenge the combination of these
two companies. That fact was amplified by Senator Mike Lee and
Congressman Jim Jordan in their November 18, 2024 joint letter to
former Chair Khan: ``These mergers did not present any anticompetitive
concerns, thus the FTC's consent decrees are unwarranted and did
nothing to enforce the Clayton Act or protect consumers from
anticompetitive harm.'' \11\
---------------------------------------------------------------------------
\8\ 15 U.S.C. 18.
\9\ 15 U.S.C. 45(a)(1).
\10\ Holyoak Dissent at 2.
\11\ Letter from Sen. Mike Lee and Congressman Jim Jordan to
Chair Lina Khan (Nov. 18, 2024), at 2, https://judiciary.house.gov/sites/evo-subsites/republicans-judiciary.house.gov/files/evo-media-document/2024-11-18%20JDJ%20Lee%20to%20Khan%20re%20Exxon%20Pioneer%20Chevron%20Hess%20briefing.pdf.
---------------------------------------------------------------------------
Rather, the prior Commission relied on a novel theory on which to
extract a concession from the parties, focused not on the two
companies' asset footprints and oil and gas production, but rather on
the appointment of Mr. Hess to Chevron's Board of Directors.
[[Page 16133]]
Pointing to certain communications by Mr. Hess with Organization of the
Petroleum Exporting Countries (``OPEC'') officials and a representative
of an OPEC member State--but without alleging any improper collusion--
the Commission alleged that, through the merger, Mr. Hess would have
access to Chevron's ``broader platform'' from which to continue such
communications, and in turn increase the likelihood that Chevron would
collude with OPEC regarding the supply and price of oil and gas.
This allegation fails to state a cognizable antitrust theory of
harm. As highlighted in the Holyoak Dissent,
Nothing in the complaint alleges that Mr. Hess has ever attempted
to, or coordinated with, a rival.
* * * * *
Taking the allegations and the implications against Mr. Hess as
true, neither he nor Hess Corporation ever coordinated or attempted to
coordinate with Hess Corporation's rivals.\12\
---------------------------------------------------------------------------
\12\ Holyoak Dissent at 2, 4.
Given that fact, there is no basis under the 2023 Merger Guidelines
to conclude the proposed merger would violate section 7 or section 5
under a coordinated effects theory of competitive harm. But as also
noted in the Holyoak Dissent, ``the tangible and intangible assets of
Hess Corporation have nothing to do with the violation of law [alleged
in the prior Commission's complaint]--it's all about the acquisition of
Mr. Hess.'' This theory of harm, Commissioner Holyoak notes, is
``farcical'' and one that ``[c]ertainly no court would endorse.'' \13\
---------------------------------------------------------------------------
\13\ Id. at 2.
---------------------------------------------------------------------------
Even were the Respondents to accept that this is a plausible theory
of harm under section 7, it fails on its own terms. As highlighted in
the Ferguson Dissent, this theory assumes that: (i) Chevron would allow
Mr. Hess to continue such communications post-closing of the
transaction; (ii) that such communication is made worse by the
transaction--a transaction through which Mr. Hess's role would be
reduced from CEO and significant shareholder (as he currently is in
Hess Corporation) to non-executive member of a thirteen-person Board
(as he would be at Chevron post-merger); and (iii) that this conduct
would have a significant effect on global oil prices, which, as stated
above, is implausible given the Respondents' low combined shares and
lack of any coordinated behavior or sharing of competitively sensitive
information. The Complaint provides no justification for any of these
three assumptions.
While the former Chair touted the withdrawal of Mr. Hess's
nomination to the Chevron Board in exchange for clearance of the
Respondents' merger in a list of Commission Accomplishments achieved
under her tenure,\14\ the Ferguson Dissent rightly notes that this
settlement ``does not vindicate the rule of law,'' but rather serves to
further reduce antitrust enforcement to a ``pay-for-peace racket
inflict[ing] serious injury on the rule of law--and on the Commission's
credibility.'' \15\ Preserving the Commission's credibility is
paramount to the public interest in the effective enforcement of the
antitrust laws, and this interest is best served by setting aside the
Order in recognition of the Complaint's deficiencies.
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\14\ Federal Trade Commission Accomplishments, June 2021-January
2025 (Jan. 19, 2025), at 16, https://www.ftc.gov/system/files/ftc_gov/pdf/ftc-accomplishments-june-2021-january-2025.pdf (claiming
the Order and the ExxonMobil/Pioneer settlement ``[a]dvanced the
increased risk of coordination as a basis for Section 7
liability'').
\15\ Ferguson Dissent at 6, 7.
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B. The Public Interest in Continued Investment in Oil and Gas Supply Is
Served by Setting Aside the Order
In addition to the public's interest in the just enforcement of the
antitrust laws, there is a significant public interest in continued
investment in oil and gas supply. Ensuring that U.S. oil and gas
producers can meet expected increases in consumer demand for energy is
vital to the interest of consumers, downstream industries that rely on
oil and gas production, as well as U.S. national and energy
security.\16\
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\16\ See Exec. Order No. 14156, 90 FR 8433, 8433 (Jan. 29,
2025), https://www.federalregister.gov/documents/2025/01/29/2025-02003/declaring-a-national-energy-emergency (``The integrity and
expansion of our Nation's energy infrastructure--from coast to
coast--is an immediate and pressing priority for the protection of
the United States' national and economic security.'').
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Mr. Hess has spent his career advocating for such an increase in
investment to grow oil and gas supply, for the benefit of consumers,
workers, and U.S. energy security. Throughout his career, Mr. Hess has
been recognized as an industry authority on energy policy. He has been
called on to advise U.S. administrations on their energy policy,
including as an informal advisor to members of the cabinets of
Presidents Clinton, Bush, Obama, Biden, and Trump.
As CEO of Hess, Mr. Hess has put this advocacy for greater
investment into practice. Under Mr. Hess's leadership, Hess has
differentiated itself from its peers with the highest levels of cash
flow reinvestment in the industry in order to increase future oil and
gas supply. This prioritization of reinvestment for long-term
production growth is manifest in Hess's global production of oil and
gas, which grew from 101 million barrels of oil equivalent in 2018 to
144 million barrels in 2023, an increase of nearly 45 percent.\17\ This
reinvestment strategy is projected to yield further robust growth in
the near-term: a recent Bloomberg analyst consensus projects Hess will
achieve a 14 percent compound annual growth rate (``CAGR'') over the
years 2023 to 2025, compared to the median cohort CAGR of two
percent.\18\ This projected organic growth rate is approximately double
that of Hess's closest peer, and is multiples of that of U.S. major oil
and gas producers. Hess, under Mr. Hess's leadership, has chosen to
invest its capital in future oil and gas production for the long term,
rather than return capital to shareholders.
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\17\ Hess Corp., 2020 Annual Report (Mar. 2021), at 7, https://investors.hess.com/static-files/0869f80e-06ec-419d-b18a-b51d34968c44; Hess Corp., 2023 Annual Report (Feb. 2024), at 12,
https://investors.hess.com/static-files/64c3f1e7-08e2-40b1-9190-ca2492e17343.
\18\ These data are based on FactSet, Enverus, and Bloomberg
consensus estimates as of July 8, 2024. The 2023-2025 production
growth estimates are pro forma for announced mergers, acquisitions,
and divestitures per public company disclosures.
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This record shows Mr. Hess's longstanding commitment in investing
to grow long-term oil and gas supply; it is this same commitment that
first led Chevron to propose his appointment to the Chevron Board under
the Merger Agreement, and that would make Mr. Hess an asset to the
Chevron Board. At this vital moment when the administration looks to
expand oil and gas production, it is in the public interest that Mr.
Hess be allowed to continue this work.
III. Conclusion
The Respondents agree with Chairman Ferguson that ``[n]othing in
[s]ection 7 requires Mr. Hess to stay off the Chevron board.'' \19\
Consistent with the discussion above, the Respondents respectfully
request that the Commission reopen and set aside the Order. Setting
aside the Order is consistent with the public interest in the
Commission's appropriate and effective enforcement of the antitrust
laws, and will promote long-term capital investments to grow American
oil and gas supplies.
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\19\ Ferguson Dissent at 6-7.
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Dated: March 27, 2025.
Respectfully submitted,
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Nelson O. Fitts,
[[Page 16134]]
Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New
York 10019, Attorney for Respondent Hess Corporation.
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David A. Higbee,
A&O Shearman, 1101 New York Avenue NW, Washington, DC 20005,
Attorney for Respondent Chevron Corporation.
[FR Doc. 2025-06564 Filed 4-16-25; 8:45 am]
BILLING CODE 6750-01-P
