Keep knowledgeable with free updates
Merely signal as much as the Oil & Fuel business myFT Digest — delivered on to your inbox.
One of the vital aggressive consumers of North Sea oil and fuel operations has defeated allegations he stripped thousands and thousands of {dollars} of belongings from a three way partnership that later collapsed.
The claims towards Francesco Mazzagatti, chief govt of Viaro Vitality, had been introduced in England’s Excessive Court docket by Taqa, Abu Dhabi’s nationwide vitality firm, and the UK’s Spirit Vitality.
It’s a important victory for Viaro, a privately held firm that has acquired pursuits in about 15 oilfields within the UK North Sea, the Atlantic Ocean west of Shetland and off the Netherlands over the previous 5 years.
The corporate has targeted on eking out the remaining reserves from fields within the territory, that are rising exhausted and more durable to use.
Taqa and Spirit claimed that Viaro intentionally eliminated the worth from their three way partnership within the North Sea’s Brae oil and gasfields by declaring an $84mn dividend from an working firm generally known as UKCS8. The dividend was in favour of a guardian managed by Viaro.
The case pitted the nationwide oil corporations of two of the seven emirates within the United Arab Emirates towards one another. One of many defendants within the case alongside Viaro was Fujairah Oil and Fuel, nationwide oil firm of the emirate of Fujairah, to which Viaro offered its Brae belongings.
UKCS8 subsequently collapsed into insolvency, having defaulted on not less than £35mn in funds to collectors.
The declared dividend cancelled out an an identical sum as a result of be paid from the guardian to the working firm, that means no money modified fingers.
In a judgment delivered on Friday, Mrs Justice Dias dismissed all of Taqa’s and Spirit’s allegations. She wrote she was “unable to simply accept” claims that declaration of the dividend was a “final determined throw of the cube” to “dump” UKCS8 having first extracted all of its belongings.
The courtroom heard that Taqa and Viaro had been at loggerheads over the way forward for the Brae belongings, with Taqa keen to finish manufacturing and Viaro eager to speculate and proceed with manufacturing.
Issues got here to a head as a result of in late 2020 UKCS8 wanted to place up £110mn in safety beneath its Decommissioning Safety Settlement (DSA), a mechanism meant to safe funds to decommission oil and gasfields.
Viaro had argued that it couldn’t instantly put up the safety and offered UKCS8 to Fujairah Oil and Fuel (FIOGC) in order that the UAE firm might use its credit standing as a state-owned firm to offer the required assure.
“On my evaluation of the witness and documentary proof, I discover and maintain that the sale to FIOGC was agreed for a reputable business objective, specifically, to interrupt the impasse with Taqa and to allow the availability of the required DSA safety,” the decide wrote.
The dividend was a “crucial adjunct” to the sale, she added.
Mazzagatti stated after Friday’s judgment that he was “very happy” with the end result.
“Immediately the Excessive Court docket has given a really sturdy judgment in our favour, which categorically dismisses the entire Taqa and Spirit claims,” he stated.
Taqa in the meantime stated it remained assured of the explanations that its UK subsidiary, Taqa Bratani, introduced the claims.
“In session with its authorized groups, Taqa Bratani shall be rigorously contemplating the following steps it needs to pursue, which incorporates whether or not any appeals shall be utilized for,” it stated.
Individually, a case lodged within the Excessive Court docket in November claimed Mazzagatti cast board paperwork to steal not less than €143.8mn from his former firm, Singapore’s Alliance Petrochemical and Funding.
The declare alleged that he used not less than a part of the misappropriated cash to purchase RockRose Vitality, proprietor of the Brae belongings. Mazzagatti and Francesco Dixit Dominus, Viaro’s finance director, deny these claims.
