Shell, Exxon Cancel Sale Of UK North Sea Natural Gas Assets To Viaro Amid Regulatory Review

Shell and ExxonMobil have cancelled a proposal to sell their North Sea natural gas assets to upstart firm Viaro Energy, Bloomberg has reported.

According to a statement issued by Shell, the oil majors were unable to complete the transaction to sell the strategic Bacton onshore gas terminal and 11 offshore facilities to Viaro, owned by oil tycoon Francesco Mazzagatti, due to a protracted regulatory review by the North Sea Transition Authority (NSTA).

The regulator said it required additional information from Viaro before making a decision.

“The parties have worked hard and in close alignment to try and complete this transaction over many months, but despite this being a fully funded opportunity, the completion conditions were not met as commercial and market conditions evolved, and we mutually agreed not to proceed,” Mazzagatti said last Wednesday.

In 2024, Shell said the transaction was expected to be completed in 2025.

The NSTA, which was recently granted expanded powers to oversee mergers and acquisitions in the North Sea, said it was “waiting to receive the additional information requested from the purchasing party to make a decision.”

The deal included the Bacton terminal on England’s east coast, which Shell has described as being of “strategic national importance.”

The terminal is the sole entry point for gas from Belgium and the Netherlands and supplies as much as one-third of the UK’s gas demand.

Mazzagatti, Viaro’s founder, is facing criminal charges in Italy and civil forgery and fraud allegations in the UK. He has denied all allegations.

The collapse of the deal has paused an acquisition streak that made Viaro the most prolific buyer of UK oil and gas assets over the past five years, according to data compiled by Bloomberg. The decision also follows a ruling by the London Court of Appeal late last year in relation to a joint venture with an Abu Dhabi firm, in which judges overturned an earlier judgment in favour of Mazzagatti.

Shell and Exxon must now decide whether to pursue alternative buyers. Exxon has otherwise been reducing its UK asset footprint.

A multi-year process to divest the Bacton assets saw Shell narrow bidders to three finalists, Bloomberg reported in 2023. Ithaca Energy Plc and Perenco SA were shortlisted alongside Viaro.

Since announcing the deal, Shell has spun off its UK North Sea business and merged it with Equinor’s operations to create the basin’s largest independent fossil fuel producer under a new company, Adura.

Shell remains the operator of the assets.