Legal Challenge Emerges Against Viaro Energy CEO Amid Shell North Sea Acquisition Bid

Allegations Unveiled Against Viaro Energy CEO

Francesco Mazzagatti, the Chief Executive Officer of Viaro Energy, is currently at the center of a significant High Court fraud case in the United Kingdom. The litigation, brought by his former employer, Alliance Petrochemical Investment (API), alleges that Mazzagatti relied on "fictitious" loans totaling £500 million from Abu Dhabi Sheikhs to finance Viaro Energy's 2020 acquisition of RockRose Energy, a rival oil and gas company. Court documents indicate that these facilities "never existed," with newly filed papers claiming Viaro leveraged "sham" facilities from Sheikh Zayed and Sheikh Thiab, members of the Abu Dhabi royal family.

Separately, Mazzagatti is also accused by API of embezzling $151.6 million (€143.8 million) from product sales of Iran's Mehr Petrochemical Company during his tenure as CEO of API between 2018 and 2020. These funds were allegedly diverted to a separate company he established in the UAE, with a portion used to fund the RockRose Energy acquisition. Mehr Petrochemical Company was designated by the U.S. Treasury in 2023 as part of a significant "shadow banking" network.

Shell's North Sea Asset Sale Under Scrutiny

The surfacing of these allegations coincides with Viaro Energy's pending $500 million acquisition of 11 North Sea gas fields and an onshore terminal from Shell and ExxonMobil. This deal, valued at approximately £400 million, represents a substantial transfer of assets, with the fields accounting for roughly 5% of the UK's total gas production. The acquisition, signed in July 2024, is currently awaiting crucial approval from the UK's North Sea Transition Authority (NSTA), a process described as rigorous and time-consuming.

Shell (SHEL) has maintained its intention to proceed with the sale, asserting that it has conducted a "well-established due diligence process." The company is divesting these assets as part of a broader strategy to exit mature North Sea basins and reallocate resources to other ventures.

Market Reaction and Regulatory Implications

The legal challenges introduce a layer of uncertainty into the proposed Shell-Viaro transaction. While Mazzagatti insists the case has not derailed the deal, the enhanced regulatory powers of the NSTA under the 2023 Energy Act are likely to result in intensified scrutiny. This legislation requires government approval for transactions where operatorship changes hands before completion, marking a shift from previous post-fact reviews. The NSTA is expected to critically assess Viaro Energy's financial credibility and the stability of its leadership, potentially delaying or even jeopardizing the acquisition, particularly given the broader context of the UK government's increased oversight in its oil sector following recent financial irregularities involving other operators.

Viaro Energy's Position and Broader Context

Mazzagatti vehemently denies all allegations, characterizing the litigation as a "vexatious campaign of defamation, harassment, and extortion" orchestrated by a third party, aimed at extracting a settlement. He claims there is "not a single piece of credible evidence" supporting API's allegations and has reportedly brought a counter-claim against API. Viaro Energy has stated that the acquisition is "on track to be completed in 2025," emphasizing its strategy to expand its presence and become a significant independent producer in the North Sea.

Viaro Energy, through its subsidiary RockRose, currently produces 25,000 barrels of oil per day, and the Shell deal would significantly bolster its position. Mazzagatti has indicated that while super-majors seek higher returns, smaller players like Viaro can operate profitably on lower return percentages, making such acquisitions sensible for their growth model.

Looking Ahead

The ultimate fate of Viaro Energy's acquisition of Shell's North Sea assets hinges critically on the outcome of both the ongoing High Court proceedings and the NSTA's regulatory approval. The legal battle against Francesco Mazzagatti will likely continue to cast a shadow over the deal, prompting close observation from investors and market participants. Any delays or negative rulings could impact Viaro Energy's growth trajectory and potentially influence investor confidence in the broader UK North Sea energy market, especially concerning due diligence standards in large-scale asset transfers. Future developments will depend on court verdicts, the NSTA's detailed review, and any further statements from the involved parties.