Sale of oil company backed by Tory billionaire stalls over fraud case

The sale of a North Sea oil company backed by a billionaire Tory donor has stalled amid accusations of fraud against its buyer.

A deal between Deltic Energy, which counts Lord Spencer as its largest shareholder, and Viaro Energy is on hold while the regulator investigates. The delay has emerged as Viaro’s owner, Francesco Mazzagatti, fights fraud claims in the High Court.

This includes allegations that he stole tens of millions of pounds from his former employer to help build his North Sea empire.

Mr Mazzagatti has repeatedly denied the claims and argued that they are part of a “vexatious campaign of defamation, harassment and extortion”.

The claims have overshadowed his attempts to buy up more of the North Sea, including deals for Deltic and a group of oil fields owned by Shell.

Viaro first announced its £6.9m takeover of Deltic, a London-listed developer that drills three fields in the North Sea, in June.

Lord Spencer, formerly the Conservative Party treasurer and founder of City broker ICAP, owns 18pc of the business and stands to benefit from any sale.

Deltic had told investors it planned to complete the deal this month. However, the timetable has now slipped.

It recently warned that the process was taking longer than expected as it awaits approval from the North Sea Transition Authority (NSTA).

Typically, the NSTA approves deals within three months, although Viaro’s attempted takeover of Deltic is now in its fifth month.

Viaro and Deltic have both said they remain confident that the deal will be completed by the end of the year.

Separately, Viaro’s attempt to buy 11 North Sea gas fields and the Bacton gas terminal from Shell in a £500m deal has also been held up. The transaction was first confirmed in April but remains in limbo.

Andrew Bowie, the shadow Scottish secretary, called on Ed Miliband, the Energy Secretary, to closely scrutinise the deal earlier this year in light of the fraud claims against Mr Mazzagatti.

A relative newcomer to the North Sea, Mr Mazzagatti’s Viaro currently produces around 25,000 barrels of oil a day.

While this is a small level of output in the context of the region, Mr Mazzagatti is currently the best-paid oil trader in the UK, taking home more than £36m since 2022.

A Deltic spokesman said: “Based on its understanding of published NSTA guidance, Deltic remains confident that relevant approvals will be forthcoming.

“Given the regulatory environment under which the company operates during a transaction, it can’t comment further at this time.”

A Viaro spokesman said: “Any discussions we may have with the regulator are confidential. We are happy to answer any questions they might raise.”