US ELECTIONS: Antitrust regulators approve nearly all US oil, gas megadeals

Antitrust concerns did little to derail the speeding train of consolidation in the US oil and gas industry over the past year, and experts do not expect any sharp changes in antitrust enforcement after the presidential election, no matter the winner.

Despite the Federal Trade Commission's requests for more information on specific oil and gas deals, 17 of 19 North American oil and gas mergers worth more than $1 billion have closed since the latest M&A wave kicked off in September 2023, according to S&P Global Market Intelligence data.

The FTC approved Chevron's $60.7 billion purchase of Hess Sept. 30, but the deal has yet to close. ConocoPhillips is awaiting FTC approval of its $22.5 billion acquisition of Marathon Oil.

Part of the reason the FTC has allowed the deals to go forward is the fragmented nature of the upstream oil and gas business, particularly in Texas' Permian Basin, the location of many deals in the past year.

"You're really dealing with a market that has a lot of players that do not have significant market share," Diana Moss, the Progressive Policy Institute's vice president and director of competition policy, said in an interview.

"There are just little, tiny, tiny little players down there," and no single deal has locked up a monopoly share of oil and gas production from the Permian, Moss said.

Political games

The election probably will not change the direction of the FTC’s antitrust efforts, said Moss. "Interestingly, we did not see a huge dip in merger enforcement under the Trump administration. That's different than what we've seen in past transitions from Democratic to Republican administrations."

What worries Moss in another Trump administration would be the "weaponization" of antitrust laws against prospective targets of former President Donald Trump's choosing. As president in 2017, he suggested the Justice Department block the merger of AT&T Corp. with Time Warner over objections to CNN's news reporting, according to a March 2019 report from The New Yorker. The Trump campaign in 2016 said he would never approve the deal that included the "wildly anti-Trump CNN."

University of Houston law professor Darren Bush, who has worked in the antitrust division of the FTC, was not concerned about another Trump administration using the agency this way.

"Trump is a little more of a wild card in terms of who is he going to get mad at today, and therefore some focused wrath," Bush said. "But the antitrust laws — they [can be] political, but they're a crude political weapon. If you're trying to weaponize them in a political fashion, that is a much harder avenue" than using other means of regulatory enforcement."

Bush expects current FTC Chairwoman Lina Khan to keep her position in a new Harris administration. If that happens, Kahn's focus will remain on Big Tech.

"If they reappoint her, I think it'll be business as usual," Bush said. "But if not, then there is always a risk that those who have wanted … the FTC's focus reallocated to other industries, maybe such as oil," will get their way.

In a new Trump administration, Bush said, "I really don't think there is any risk [to the oil and gas industry], because he is going to appoint someone who is not necessarily a pro-enforcement person under the guise of reining in what he is going to paint as a wildly rogue agency."

Regulators have not held up the combination that has taken the longest to close — Chevron's deal for Hess. While the FTC approved it, the deal has stalled because rival ExxonMobil Corp. challenged a key feature of the deal: The first rights to Hess' 30% non-operated stake in ExxonMobil's offshore oil development in Guyana.