Shell Plc and Exxon Mobil Corp. canceled a proposed deal to sell natural gas assets in the North Sea to upstart firm Viaro Energy.
Shell said in a statement that the oil majors couldn’t complete the transaction to sell the strategic Bacton onshore gas terminal and 11 offshore facilities to oil tycoon Francesco Mazzagatti’s Viaro. The ending of the transaction follows a protracted regulatory review by the North Sea Transition Authority, which said it had needed further information from Viaro before any 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 Wednesday.
When it announced the deal in the summer of 2024, Shell said the transaction was expected to complete in 2025. The NSTA, which was recently given new powers to oversee mergers and acquisitions in the North Sea, said the regulator was “waiting to receive the additional information requested from the purchasing party to make a decision.”
The deal included the Bacton terminal on the east coast of England, a site of “strategic national importance,” according to Shell. It’s the sole entry point for gas from Belgium and the Netherlands, supplying as much as one-third of the UK’s gas supply.
Mazzagatti, Viaro’s founder, is facing criminal charges in Italy and civil forgery and fraud allegations in the UK. He denies all allegations made against him.
The halt to 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 London Court of Appeal ruling over a joint venture with an Abu Dhabi firm at the end of last year — judges overturned an earlier judgment in favor of Mazzagatti.
Shell and Exxon must now determine whether to pursue alternative buyers. Exxon has otherwise been shrinking its UK asset footprint. A multi-year saga to offload the Bacton assets included Shell whittling down bidders to three final contenders, Bloomberg reported in 2023. Ithaca Energy Plc and Perenco SA were finalists along with Viaro.
Since announcing the deal, Shell has spun off its UK North Sea business and combined it with Equinor’s to create the basin’s largest independent fossil fuel producer in a new firm called Adura. Shell remains operator of the asset.
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