Top Paid UK Oil CEO Fights Forgery Claims as He Chases North Sea Deal

A relatively unknown Italian businessman could soon own a key UK energy asset -- but allegations surrounding some of his previous dealmaking are stalking him

For nearly six decades, the Bacton gas terminal has been at the fulcrum of the UK's energy supply. Photographer: Chris Ratcliffe/Bloomberg Photo by Chris Ratcliffe /Photographer: Chris Ratcliffe/Bl

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(Bloomberg) — For nearly six decades, the Bacton gas terminal has been at the fulcrum of the UK’s energy supply. A sprawling complex of pipework and silos on the North Sea coast in eastern England, it is the sole entry point for gas from Belgium and the Netherlands, connecting the UK to Europe via a 235-kilometer pipeline. According to Shell Plc, one of the terminal’s main operators, it supplies as much as one-third of the UK’s gas needs, making it a site of national strategic importance. 

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Shell and Exxon Mobil Corp. are now looking to sell the site. The prospective buyer is an upstart company, Viaro Energy, whose founder, Francesco Mazzagatti, is a 39-year-old Italian energy tycoon and one of the highest-paid people in UK oil, according to publicly available company filings. His 2024 earnings of £27.6 million ($36.2 million) were more than three times that of Shell’s Chief Executive Officer, Wael Sawan.

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In the nearly six years since it was founded, Viaro has pursued at least half a dozen deals for North Sea assets, moves that make it one of the biggest players in sector. The £400 million acquisition of Shell’s Bacton assets would be the company’s “crowning achievement,” Mazzagatti said when he announced the proposed deal in July last year.

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The strategic implications of the sale ensured that it’s under heavy scrutiny from the industry regulator, the North Sea Transition Authority. For Mazzagatti, that means an exploration of his rise from trading fruit juice in southern Italy to rubbing shoulders with dealmakers and political leaders in Davos. He has faced criminal probes that never led to convictions and civil claims from former business partners that he won. 

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However, there remain other live criminal and civil challenges that he’s facing in Italy and the UK. And that’s brought a spotlight onto the authenticity over the funding documents that underpinned Mazzagatti’s first move into the UK oil industry.

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Viaro Energy’s £248 million takeover of RockRose Energy Plc in 2020 touted a loan facility from a wealthy Abu Dhabi sheikh, who has since denied any knowledge of that bridge loan. A key document, a bank statement purportedly showing sufficient funds in an account of the sheikh’s private office, contained numerous errors — not least, that at the time, the private office didn’t exist.

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At a London court hearing on Monday, Mazzagatti was accused of using the allegedly forged document to mislead regulators, the stock exchange and a high court judge.

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Mazzagatti has denied all allegations of fraud and forgery and is contesting the cases in Milan and London. He has sought to distance himself from any involvement in the bank statement and said that he considers it to be genuine.

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“The sale of Shell’s offshore gas assets in the UK Southern North Sea to Viaro Energy has received a number of regulatory approvals. We have a well-established due diligence process and continue to work with all relevant regulators, including the North Sea Transition Authority,” a Shell spokesperson said. Exxon Mobil didn’t reply to a request for comment.

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Viaro’s bid for Bacton is a major test for the NSTA, which was only recently granted new powers to block transactions. Politicians have separately sought details on the progress of the review. 

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“This transaction should certainly be scrutinized. The UK is hardening its stance on national security matters,” said Maximilian Hess, a political risk consultant at Enmetena Advisory. “I don’t see why it is in the British national interest to approve such a deal.”

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With reporting from investigative website SourceMaterial, dozens of documents from a court application in Italy and additional filings from the UK, alongside information from people familiar with the matter, Bloomberg has pieced together Mazzagatti’s career, which began in Calabria, the toe of Italy’s boot-shaped peninsula, where he founded his first company in 2004.

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Mazzagatti’s business, Pascal, was a family-run operation that sold fruit juice in an old warehouse, a former olive oil depot, on the outskirts of the port of Gioia Tauro. It was named for Mazzagatti’s older brother, who died when he was young. 

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In 2009, Mazzagatti was caught up in a broad police investigation, known as Operation Easy, that looked into how local companies were allegedly used in a multimillion euro fraud. Prosecutors suspected Mazzagatti indirectly helped further the fraud by holding goods in his warehouse, according to a final court ruling in 2013. A judge initially said that Mazzagatti should be placed under a form of “preventative” measures, but his lawyers say the order was never enforced. Mazzagatti was cleared of wrongdoing, although the judge noted in the ruling, dated June 2013, that the facts were complex and “do not entirely eliminate the suspicion that the defendant took part in the fraud.”

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On five occasions between 2007 and 2012, Mazzagatti was recorded at police checkpoints with individuals with police records, including three who had suspected mafia associations, Italy’s financial police, known as the Guardia di Finanza, said in a 25-page court filing dated January 2019, obtained by Bloomberg from a regional court.

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Calabria is infamous as the base of the mafia organization known as the ‘Ndrangheta, a deeply-embedded network of clans that has evolved into Italy’s most powerful crime syndicate by smuggling cocaine into Europe. The region’s connections to mafia clans meant an active police presence and routine monitoring of many routes across the region.

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Mazzagatti has no recollection of the police sightings, his lawyers said. There is no suggestion that Mazzagatti himself was ever a suspect in any investigation and no indication that any Italian police agencies ever came to any conclusions about the checkpoint sightings. “It is impossible to live in Calabria and avoid all contact with anyone who is currently or has in the past been suspected, under investigation for, or charged with mafia-type crime,” his lawyers said.

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From Calabria, Mazzagatti relocated to Dubai using a company called Napag, shifting from fruit juice to oil, to build a commodity trading firm with connections to some of the biggest oil companies. By 2017, revenue growth at Napag Italia had soared, the Guardia di Finanza said.

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The first two letters of Napag are the first two of his now former wife Nadia Al-Matrook, a member of a wealthy Bahraini family. The ‘pa’ stands for Mazzagatti’s brother Pascal, according to a London filing. 

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Part of Napag’s business was supplying petrochemical products to the Italian oil giant Eni SpA. In 2019, Napag was an intermediary in a deal for a shipment of around 700,000 barrels of crude oil from the Middle East. Eni chartered a tanker named White Moon to ship the cargo all the way to the Sicilian port of Milazzo, where it has a refinery. 

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However, Eni began to suspect that the oil, along with shipments from other companies, may have originated from Iran. That would potentially be a violation of US sanctions. The White Moon turned around, and went back to the Middle East, a round trip of more than 17,000 kilometers.

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Napag denied “it was aware or had any suspicion that the oil cargo loaded onto the tanker originated from Iran,” Mazzagatti’s lawyers said at the time. Eni complained to authorities, who began an investigation and eventually brought criminal proceedings in Milan that started in October 2023.

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The initial list of allegations included multiple counts of fraud, but at the beginning of the trial in Milan, the judge dismissed the most severe allegations. Mazzagatti is currently on trial for allegedly investing profits of €26 million obtained fraudulently to buy a stake in an Iranian oil refinery. The funds came from trading with alleged rogue Eni officials, according to a charge sheet. Mazzagatti’s lawyers said he remains “confident of a positive outcome.”

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Mazzagatti did have dealings in Iran. In 2014, his then brother-in-law, Mohammed Al-Matrook, introduced the Italian to an American-Iranian named Arshiya Jahanpour. The two became so close that they “treated each other almost as brothers,” Mazzagatti’s lawyers said in a court filing. Mazzagatti says he acquired a large stake in an Iranian business, Mehr Petrochemical Co., a maker of plastic resin, in 2018, which he characterized almost as a favor to Jahanpour.

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The controlling stake in Mehr is held by Alliance Petrochemical Investment, a Singaporean company. API has accused Mazzagatti in a London lawsuit of expropriating the Iranian company’s products and secretly retaining his own stake even after the company was sanctioned by US authorities. 

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API is suing for $143 million, saying that Mazzagatti diverted money from the sale of Mehr products to a separate corporate vehicle he set up in the United Arab Emirates. In its filing, API said in Dubai in 2021, Mazzagatti produced a fake bank document bearing a false account balance. In the suit API also accuses him of forging signatures. 

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“We have a pattern of forged bank confirmations,” Hodge Malek, a lawyer for API, said at the London court hearing on Monday.

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Mazzagatti denies the allegations and said that he never controlled Mehr, and calls the complaint part of a “vexatious campaign” by Jahanpour. “Mr. Mazzagatti denies and rejects in the strongest possible terms the allegations that he has stolen, embezzled and / or misappropriated any funds from API,” Mazzagatti’s lawyers said. He rejects the forgery allegation too.

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Jahanpour’s spokesman in turn rejected Mazzagatti’s claims.

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“These claims are entirely baseless and represent another desperate attempt by Mr. Mazzagati to divert the attention of the UK authorities from the serious legal claims, tough questions and stolen money trail that Mr. Mazzagatti cannot explain.”

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Mazzagatti’s first deal in the UK was to buy a small London-listed operator of oil and gas fields named RockRose Energy Plc. in the summer of 2020, with wells dotted across the North Sea.

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Once one of the biggest offshore oil reservoirs, with hundreds of fields, including Brent, the field which gave its name to the benchmark crude, the North Sea basin has dwindled from its peak in the late 1990s. But the seabed remains critically important to the UK, with oil and gas production set to contribute some £8.6 billion to the Treasury, near all time highs. 

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Mazzagatti needed £248 million to buy RockRose. To reassure investors, Viaro presented a £250 million loan facility that it claimed to have arranged with Abu Dhabi-based Sheikh Zayed. 

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Two London lawsuits have highlighted how Viaro ultimately took financing directly from RockRose to buy the company. 

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While Mazzagatti never ultimately tapped the loan, he made much of its existence through the summer of 2020. He cited the £250 million facility to answer written concerns from regulators over Viaro’s financial position, according to additional letters reviewed by Bloomberg. When a senior official at the regulator warned that it couldn’t approve the deal without further details, Mazzagatti responded by saying that the loan facilities could be used to fund further acquisitions.

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In addition, two separate London Stock Exchange statements, which named Viaro’s financial advisers as Hannam & Partners, said that the company could use the facility to fund the deal. The facility was “entered into in connection with the acquisition of Rockrose Energy,” according to one of the statements in August 2020.

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In 2022, Abu Dhabi’s state oil company, known as Taqa, sued RockRose over a soured joint venture. Mazzagatti won the case last year, with the judge dismissing all of the claims against him. 

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“His long-term target was to reach production of 100,000 barrels equivalent per day. While hindsight is a wonderful thing, it can at least be said that he has lived up to his word in that respect. RockRose now has extensive long-term interests in fields in the North Sea,” she said.

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She called Mazzagatti “a highly successful businessman with an entrepreneurial mindset who was willing to take risks.” During the hearings, the judge said that the loan facility, which had a 12% interest rate, was considered “as a last resort” to help pay for decommissioning liabilities. 

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Nevertheless, evidence presented in the trial highlighted that there were doubts that the loan facility existed almost from the very beginning. One insurance broker, whose job it was to arrange the underwriting for decommissioning liabilities, wrote in December 2020 to say that, despite the company producing “audited’ evidence” of the facility, he was concerned about its true position. “This almost has Enron type dynamics which I am not going to be involved with on any basis,” the broker wrote in an email submitted as evidence in the trial. 

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In an earlier letter to Bloomberg, Mazzagatti’s lawyers said the allegation of forgery is “denied by our clients in the strongest possible terms.” They said that Viaro’s lawyers and banking advisers “were required to give, and did in fact give, their confirmation that funds were available.” The law firm, Bird & Bird LLP, which acted on behalf of Hannam & Partners, declined to comment. Hannam & Partners didn’t respond to multiple emails seeking comment.

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In the London lawsuit involving API, the company’s lawyers contend that the loan facilities “never existed and/or were shams.” 

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The sheikh denied any knowledge of the £250 million loan offer in a statement to Bloomberg earlier this year. 

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New documents obtained by Bloomberg raise questions about checks carried out by Mazzagatti’s bankers and lawyers into the authenticity of a key bank statement. Mazzagatti sent the document, dated July 6, 2020, to Hannam & Partners, his lawyers said. The statement featured a letterhead from Abu Dhabi Commercial Bank, showing that an account in the name of the sheikh’s private office had more than 1.3 billion dirhams ($354 million.)

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But the document had a series of discrepancies, including typos. Rather than a customer ID for the sheikh, the identification number actually belonged to an associate of Mazzagatti’s from his early business years in his hometown in Calabria. 

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ADCB told the sheikh’s lawyers in a September letter seen by Bloomberg that the account statement was not “generated” by the bank and the account number wasn’t genuine. The sheikh’s lawyers told Bloomberg that he didn’t have a private office at the time of the RockRose transaction.

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Mazzagatti’s lawyers said he “did not suspect that the ADCB documents (which bear ADCB’s seal) were anything other than genuine and he continues to believe them to be genuine.” They said he was provided the documents by a “representative of Sheikh Zayed’s office.”

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It’s not the first time Mazzagatti has been accused of forgery. In an unsuccessful London libel case he brought against two Italian newspapers, a judge noted in 2020 that the defendants alleged that a series of invoices presented by Mazzagatti to show the supposed PR costs he was incurring were “not-very-good-forgeries.” The judge never ultimately ruled on the matter, and Mazzagatti “emphatically rejects the allegation that the invoices were fabricated,” his lawyers said.

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In the UK, API also alleges that money to fund the RockRose deal in 2020 came from the $143 million of funds it claims Mazzagatti misappropriated. As part of the acquisition, Viaro funded £55 million towards the purchase price by way of a loan. Mazzagatti’s lawyers said he didn’t believe any of those funds came via API but recognized the issue will need to be determined by a court.

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The NSTA is now reviewing the Shell purchase at a critical juncture for the country’s energy sector. In recent months, the UK has seen the collapse of a number of key energy projects, including the Lindsey refinery and North Sea services provider Petrofac Ltd. entering administration. 

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The regulator is required to consider whether a potential licensee to develop oil and gas fields is “fit and proper,” and to examine whether a bidder has been the subject of any previous investigation or disciplinary proceeding. The agency will look at whether a “director or other individual has been candid and truthful in all their dealings, including with any regulatory body,” according to the guidelines.

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A NSTA spokesman said: “We have a strict policy of never discussing any individual or any individual assets.”

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Mazzagatti’s lawyers say that the due diligence process is continuing. “Our clients have confirmed that this due diligence process related to all relevant areas for a transaction of this nature, including sanctions, anti-bribery and money laundering clearances. They have also confirmed that Shell and Exxon Mobil also operate a system of continuing due diligence,” they said.

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When it announced the transaction, Shell said the deal was expected to complete in 2025.

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“The allegations are sufficiently concerning that clearing them publicly should be a prerequisite to allowing this transaction to proceed,” Hess, the political risk consultant, said.

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Nearly one and a half years later, the deal is still pending. 

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—With assistance from Mitchell Ferman and Priscila Azevedo Rocha.

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