An $85 million dividend and a deal to sell a stake in aging North Sea oil wells for one dollar has landed Viaro Energy in a London lawsuit against Taqa (ADX: TAQA), Abu Dhabi’s biggest utility.
Francesco Mazzagatti, the CEO of Viaro Energy Ltd., is accused of orchestrating a move to deprive partner Abu Dhabi’s Taqa of millions of dollars by paying out a dividend just before selling a share in the oil wells in December 2020. Mazzagatti denies the claim saying the dividend freed up the company from any future claims.
“The dividend was an asset-stripping transaction designed to prejudice” creditors, lawyers for Taqa said in a court filing.
© Supplied by Viaro EnergyMazzagatti shocked oil market watchers with a string of acquisitions off the Scottish coast including the £247.5 million ($320 million) purchase of UK-listed RockRose Energy Plc in the space of just 15 months. The United Arab Emirates-based financier previously brokered oil deals in the Mediterranean before pivoting to pursue North Sea assets.
The London lawsuit involves a souring partnership between RockRose and the state-run utility known as Taqa in the North Sea oil fields. Taqa says a RockRose unit owed at least £110 million in funds needed to pay for its share of decommissioning costs but struggled to pay up. It brought the claim after the Viaro-owned firm then declared the $85 million dividend.
Brae oilfield – Taqa and Viaro clash
The two are fighting over the purpose of that dividend. Taqa’s lawyers say the dividend, which was used to write off inter-company loans was at an “undervalue,” saying it was actually designed to put the funds out of reach. Viaro counters the payment was needed to free the company from its liabilities before it was sold for $1 to an entity backed by Fujairah, another emirate in the UAE.
The relationship with Taqa over the future of the oil field had deteriorated through the fall of 2020, with Viaro’s lawyers bemoaning “the animus which had apparently infected Taqa’s commercial decision-making at the UK management level.”
Viaro’s stake was sold to Fujairah on the same day as the dividend was declared.
Energy Voice broke news in 2021 that Fujairah Oil and Gas – the firm RockRose sold to – had defaulted in decom costs for the Brae oilfield, leaving the Brae partners to pick up the costs.
Taqa and Spirit Energy launched legal action in November against Viaro Energy, who owned RockRose before the sale.
The UAE’s Taqa said last September that its share of decom costs increased by $350m over the default.
Mazzagatti’s deal for RockRose in September was his largest acquisition but the court documents released this week reveal that Viaro only acquired the UK oil operator after taking more than £200 million of loans from RockRose itself. The firm had lined up financing from two members of the Abu Dhabi royal family before switching to take the loans from the target company.
The two royals, Sheikh Thiab Bin Khalifa Al Nehayan and Sheikh Zayed bin Suroor bin Mohammed Al Nahyan, were intending to provide two £250 million facility arrangements to fund the RockRose deal as late as July.
Instead, no sums were drawn down.
Mazzagatti “used the assets of RockRose and its subsidiaries to fund, directly or indirectly, the takeover of RockRose itself,” Taqa’s lawyers said.
Mazzagatti owns more than 96% of Viaro Energy Ltd., and his ex-wife Nadia Al Matrook, a Bahraini national, owns the remainder, according to the filings.
Lawyers for Mazzagatti and Taqa didn’t immediately respond to requests for further comment.
Recommended for you
