speeches - second part
MATTEI PREPARES TO FIGHT
Petroleum Engineer for Management, December 28, 1960, interview by Ernestine Adams
[...] he is one of the main power centres in Italy: well-liked by people, a pole of attraction for his highly qualified staff who appoints "our president" in a reverential tone.
He has enough weapons, and does not hesitate to use them. He did not hesitate to break the respected 50-50 formula for the distribution of oil profits when he obtained his first concession in the Middle East. Despite his concessions in Arab countries, he buys oil from Russia at prices that damage Middle Eastern markets. It has reduced the prices of petroleum products in Italy and keeps alive the threat of reducing prices in other parts of Europe. His enemies say that high natural gas prices make up for the lack of profits from oil. [...]
The president of ENI is unquestionably a great politician. And it has the qualifications. Lean and handsome, he has a strong personal magnetism. As a speaker, he demands attention, both for the content and for the way of speaking. These are well written and are of high stature, whether or not agreeing with their content. At every opportunity he puts all the woes of industry on the comfortable shoulders of international oil companies. [...]
Mattei must act skillfully and quickly to achieve a 'mushroom' expansion and keep all channels active, from purchasing the crude oil needed by ENI to selling fertilizers, which have a limited market in Italy.
This has led him to make certain agreements which, to use an understatement, are viewed with disapproval by the private international oil industry.
It has been said that Mattei reacted harshly when ENI was excluded from the Iranian consortium, and the subsequent agreement with the Shah of Persia, which modified the traditional conditions of the oil concessions, was the consequence of this irritation.
Three concessions (for approximately 8,800 square miles) were issued to a company established on the basis of 50-50 by one of the ENI group companies and the National Iranian Oil Company. 50% of the net profits are allocated to the State of Iran in the form of royalties and taxes, and the remaining 50% is shared between the two parties, so that Iran receives a total of 75% of the total profits. Morocco subsequently granted research rights in an area of 10,000 square miles, on the same basis. [...]
The maximum production of ENI abroad is made in Egypt. A combination of ENI and the Egyptian State has enhanced oil reserves on the Sinai Peninsula since 1956. Mattei also concluded concession agreements with Tunisia, Libya, Sudan and Somalia. ENI's maximum production in Italy is concentrated in Gela in Sicily [...]. I observed that Gela's project represented a technological triumph.
Mattei: 'You are the first American to say this,' replied the engineer Mattei, smiling with cordiality, which mitigated the grudge of his words.
When I saw the president of ENI in October, he had just signed the agreement with Russia for the supply of 12 million of crude oil within a four-year period. This corresponds to 60,000 barrels per day on a constant basis. [...]
Do not you think dangerous to rely more and more on Soviet oil supplies? [...]
Mattei: 'Regardless of the fact that the oil imported by us from the USSR covers only a modest share of our consumption, the multiplication of sources of supply makes this concern completely unjustified. Italy is a strong consumer Country and it is right that it purchases oil where it pays less. If other producers worry about this, they have the means of avoiding it in their hands: lower prices. [...]
It should be noted that Italian domestic consumption jumped 13% in 1959 compared to 1958 to reach a figure of 293,000 barrels per day, while the increase in 1960 is estimated at around 22% compared to 1959. This kind of increase it requires drastic measures, given that the production is only 36,000 barrels per day in the country, mostly in Sicily'.
We went back to the topic of the organization.
With which deadline your plans are made? I asked.
Mattei: 'We have short, medium and long-term plans; the latter of course are only rough. We learned about this planning from the Americans’, he observed.
We ourselves learned it not so long ago; so you picked us up pretty early. And on the topic of investments?
Mattei: 'In the next four years, we plan to invest around 230 million dollars a year to expand the business. This figure will be the largest allocated so far.’
Could you give me an idea on the breakdown of expenses: how much for research? How much for oil pipelines etc.?
Mattei: 'About 29% is for research, 7% for transport, 28.5% for the refining and distribution of petroleum products, 15% for petrochemicals and about 20% for the nuclear industry.'
I had met several senior ENI executives, and had been impressed by their stature. I asked the engineer Mattei how he managed to attract and retain men of this calibre, when there is a well- known shortage of good managers throughout Europe,
Do you pay them more?, I added.
The president of ENI replied very seriously: 'They believe, as I believe, in what we do. Our struggle in the oil world is a tough fight, and for this we must have the best men.’
In the spring of 1958 the management consulting firm Booz Allen and Hamilton set up a new organizational plan for the decentralization of ENI. In San Donato Milanese, the ENI model city where the operating offices are located, there are schools for everyone, from managers to staff at service stations. In the administrative offices of Rome, one of the officials of the aforementioned consultancy firm has entered ENI and is now head of the management technique. The ENI group is now well organized to satisfy the desire for knowledge and to offer possibilities to those who have obtained such knowledge.
What kind of man is this, who has built an empire in business without material compensation? What makes you work twelve to fourteen hours a day? What does he want?
Mattei has always refused a salary and part of the reimbursement of expenses assigned to him. The latter is intended for an orphanage. He has no children. With his Austrian-born wife, whom he married in 1936, he lives in a modest apartment in the Hotel Eden in Rome. Of his still living family there are: a brother in Matelica, a brother who runs Enrico Mattei's business in Milan; a married sister, and a younger sister I met. Miss Mattei runs the guesthouse on top of the San Donato Milanese office building. His aristocratic bearing is similar to that of his famous brother. Apparently his own needs and those of his family are easily covered by his private income. Given this circumstance, it is not easy to establish why he devoted himself wholeheartedly to business. And here too his personal needs are limited. His office, although exquisite in taste, is certainly not luxurious. [...]
But there is another point of view that can correspond even more to the reality of the facts. Mattei represents an anachronism in the oil industry. He has a passion for the industry of a Mike Benedum and the cunning decision of a John Rockefeller. [...]
He is now fighting to build an Italian oil company that will be counted among the top names on the international scene. He fights international oil companies to become one himself.
I am told that his only hobby is fishing. Do you have any more? I asked, falling into a trap.
Mattei: 'Fishing is my business, oil is my real hobby, my recreation', he insists. "I have been to Alaska three times, and each time I have caught enough salmon to cover the travel expenses."
You mean to say that you sell them and that pays the expenses?
This may explain Mattei's success, perhaps only a hobby can highlight the sort of worry-free skill that characterizes the champions.
MEETING WITH MATTEI
Rome, April 12, 1961, television interview with RAI
Enrico Mattei journalist (namesake): 'Would you please explain to us what ENI is?'
Mattei: 'Instead of immediately providing figures or data, I prefer to start by telling a personal episode. About twenty years ago I was a good hunter and I went hunting in the mountains near Varzi. We went hunting for partridges and rock partridges, on gullies on which we go up and down from morning to night. Then I had two dogs, a German pointer and a setter, and starting at dawn and ending in the evening the men and dogs were very tired, fatigued. Returning to the peasant house where we met in the evening, the first thing that was done was to feed the dogs. Then a large bowl of soup was prepared and while I took off my boots I saw the dogs with their heads in the basin that ate voraciously. It was a soup that was perhaps enough for five dogs, not two. At a certain point, in a corner, I heard a meow and saw a kitten arrive, of those found in the houses of the farmers, thin hungry, weak. He was very afraid of dogs, but he was also very hungry. He slowly approached meowing and looking at the dogs and as they were immersed with their heads in the basin he continued to move forward. Suddenly, when he had already put a paw on the edge of the basin, the German pointer gave him a paw launching him 3-4 meters away, with his spine broken. The kitten breathed a few more minutes and then died. This episode made a great impression on me and I have often remembered it in these years. We have been, for the first few years, like the kitten struggling with dogs, there were many interests united against us. We were at the centre of a gigantic controversy, but we continued to work, to strengthen ourselves, trying not to get hit. The attempt was either to suffocate us or to keep us weak. Gradually, working with tenacity, we have strengthened ourselves, and today the ENI group is a great strength, a great enterprise, which can look to the future with tranquility and successfully face the great coalition of the oil giants.’ [...] Enrico Mattei journalist: '[...] What did all this cost in direct disbursement to the national community?'
Mattei: ’Very little. All that the State has given was 15 billion at the time of the establishment of ENI. It is known that ENI was established with an endowment fund of 30 billion. Fifteen billion were the contribution that the group companies made with what they had already earned and 15 billion the contribution of fresh money by the italian State. Since then we have not had a lira and of course we have had to resort to credit.’ [...]
Della Giovanna: ‘[...] I would like to know what made the ENI's activity to the community, to Italy, regardless of the fact that it started with 15 billion [...]’.
Mattei: 'The investments made by ENI so far amount to 600 billion. 220 billion have already been repaid as depreciation, in addition we have paid more than 200 billion in labour costs, i.e. wages and salaries in these seven years. [...] 100 billion of interest to credit institutions [...] and we had around 45 billion in profits. Of these 45 billion, 10 went in the form of dividends to private capital in those companies where private capital enters (such as ANIC; STANIC; IROM) and 35 billion went to the State. Of these, 19 billion were paid to the Treasury and the rest goes, again on behalf of the italian State, to reserves and studies and research, as required by law. But in addition to this, I would
say that a great patrimony has been created, because today the value of ENI far exceeds 1000 billion and it is a patrimony that belongs to all Italians, workers, consumers and taxpayers [...]'.
Della Giovanna: 'Russia [...]’
Mattei: '[...] We bought 12 million tons paying 100 million dollars against 100 million dollars of Italian material that we exported making more money. We now consider that oil, among our productions and what we have bought, costs us 32% less than the international price. [...]'
Mattei: 'Yes, you see, international companies were used to considering consumer markets as hunting reserves for their monopolistic policy and we started to break this system, because we got out of these big companies, of this big cartel. At the end of 1959 I was invited to meet with one of the big seven, one of the biggest, with a budget that is almost equal to the budget of the italian State ...’
Granzotto: 'One of the Seven Sisters?'
Mattei: 'One of the Seven Sisters, perfectly'
Della Giovanna: 'The biggest?'
Mattei: 'You cannot say who is the biggest, there are two who are both the biggest ... to see if we can establish collaborative relationships. It was early December 1959 and I went to Montecarlo, which was the meeting place, and we started talking. I had a young engineer with me, a collaborator of mine. All the collaboration offered by this illustrious boss concerned Italy: keeping prices higher, we all earn more. [...] I said to him: 'But I think that in Italy you have finished making your own policy, that from now on we will do it and that is the period in which Italy was the part of the kitten, of which I spoke to you at the beginning. [...]
Rather let’s see in Switzerland, Germany: we are building an oil pipeline, [..] Are you interested in let us transporting oil to you? [...]
He replied: 'We had no intention, but since you make this pipeline we will make one too.' [...] We will walk alone.’ Then he said to me," What do you want to do in Tunisia?’
Mattei: 'In Tunisia', I replied, 'we want to build a refinery. And he said to me: 'You will not do the refinery because we will do it, we with one of the other big cartel companies, another of the Seven Sisters'. And I very humbly asked him: 'What would you think if instead of doing it in two we would do in three?' He said: 'No'.
Then I took the pencil out of my pocket, I had other topics to discuss, I looked at it, I erased them, and I said to him: 'I have the impression that we have nothing more to say to each other, so today you will remember the interview for the whole life. Because we are poor, we need to work and we can no longer go abroad like poor emigrants who have no other strength than their own arms. We also want to go out as entrepreneurs, with technical assistance and with all that a modern country like ours can give today.’ [...]
At that moment, a terrible fight, with no holds barred, began for Tunisia, as had already happened in Morocco, Ghana, Sudan.’
Granzotto: ‘[...] do you think you have not made any mistakes?'
Mattei: '[...] for example we made a mistake in Ravenna. [...] when we started to make the Ravenna plant, we had to make a plant that was to produce 300,000 tons of synthetic rubber per year. You all remember the controversy of those days, namely that the plant was useless, that Italian consumption was largely covered. I did not make the plant with a production capacity of 300,000 tons of fertilizers, I did it with a capacity of 1 million tons: if I had declared it in those days they would have told me I was crazy. And instead of a plant capable of producing 30,000 tons of synthetic
rubber, I made one capable of producing 100,000 tons of synthetic rubber. [...] But I will tell you that we were all wrong, us and them. Why? Because this year, for example, we have sold 40% of our production in Italy: in addition we have sold abroad [...] And therefore: either the experts of that time were not real experts or did not see a palm further than their nose. [...]'
INAGURATION OF THE MOBILE PLATFORM PERRO NEGRO
Marina di Carrara, 24 August 1961
[...] adequate means are needed to carry out such a vast program.
The ENI group already has two mobile platforms, the Scarabeo, equipped with the Saipem support vessel and the Gatto Selvatico, a self-sufficient system of the same type as the Perro Negro, as well as two fixed platforms, the first mounted in the Persian Gulf, the second in preparation course in the sea of Gela.
To these is added the Perro Negro, which will carry out exploratory surveys to ascertain structures in the Northern Adriatic identified with geophysical relief at sea. The first location is 18 km from the Ravenna coast, on a seabed of over 20 m.
The Gatto Selvatico and the Perro Negro, entirely made in Italy, represent the most modern and grade in the field of self-sufficient platforms. They are able to operate on 35 m seabeds [...].
PRESS CONFERENCE AT THE FOREIGN PRESS ASSOCIATION
Rome, Foreign Press Association, February 14, 1962
Mattei: '[...] I am very grateful to you and I am also intimidated to find myself in such an important assembly, attended by the major foreign journalists. As you know, I come from the world of work and I was a worker. So I am not that important person that your president wanted to indicate. I am simply a man who, in the face of the needs in which Italy came to find out about the problems of her country, has done everything possible to achieve the current goals. As a boy, when I was a worker, I learned many things that later proved to be false. They told us that we were a poor Country and destined to remain poor; a Country full of arms that were intended for emigration; a Country where nothing could have been done. But the reality is another. Gradually I realized that many of these teachings were false and that we were not the Country of sweet doing nothing as they painted us.
In recent years I have been able to see how much in Italy it is worked hard and how much to commit to work is done. And we have tried, within the limits of what were our possibilities, to export work and not workers. [...]
And we believe in the relationships we have with depressed Countries, with Countries that need to start industrial development, to be able to offer an industrial organization prepared in men and means and therefore to be able to carry out an important collaborative work. [...]'
Livia Rokach (Radio Israel): 'It is known that the Ente Nazionale Idrocarburi, much thanks to itself, has planted oil extraction activities in Egypt. As this is a far-reaching initiative and that engages the Italian taxpayer, who is in part co-owner of ENI, I would like to know if the company by you managed has secured financial as well as economic guarantees against the United Arab Republic. If so, what guarantees are we talking about? [...] Is it true that you and people close to you influence even some of the decisions of the Foreign Minister? [...]'
Mattei: '[...] This year in Egypt we have a production of 4 million t of oil, while the coming year we will reach 6 million. I think Egypt is close to becoming a major oil producing Country.
Egypt's relations with us have always been excellent: we regularly receive everything we owe, we believe we have more than enough guarantees. [...]
In general, then, relations with Israel do not concern ENI, but the policy of the italian government. [...]
We need to have affordable prices. [...]
The Arabs sell their production through intermediaries, whose toll is heavy. The price claimed by large companies is made up of 12-20% of production costs, 40% of royalties, which are paid to the concessionary Country and more than 40% of the benefit of the companies, a benefit that we italians no longer intend to pay. We want to establish direct relations with all Countries, as we have done with the Soviet Union and Egypt. [...]
In 1962, ENI's needs will be covered for 38% by Russian oil, 9% by Iranian oil, 12% by Gela oil, 26% by Egyptian oil, 15% by oil purchased by French and others. [...]
On the other hand, how can you think that the italian industry will continue to operate in a situation of unfair competition? [...]'
John Pasetti: 'ENI makes a considerable contribution to italian foreign policy. Do you think that this contribution will increase with the formation of a centre-left government in Italy? Is it true that a secret agreement has been signed with the algerian provisional government? "
Mattei: ‘As for the first question, I answer that foreign policy obviously does not depend on me: our institution is a modest tool that the italian government can use and therefore it is up to the italian government to decide on it.
To the second question, that is, if we have signed a secret agreement with the algerian government, I answer negatively. [...] When everything is calm, we will be happy to work in the Sahara.’ [...]
Zevi (Israel Agency): '[...] how much are the investments of ENI and the companies affiliated to ENI from 1957 up to today, also in Europe, Asia, Africa, and how much can the annual income of these investments be assessed?
Mattei: 'ENI's investments, from the foundation to today, have been 652 billion, of which amortized 217. We plan to invest 663 billion over the next four years, that is from 1962 to 1965. 57% of investments in Italy will be reserved for the South. This year we had almost 400 billion in turnover. We had 25 billion financial charges, 106 billion tax charges, of which 9 billion direct and 97 indirect, 60 billion self-financing, after paying interest and profits, about 40 billion wages and salaries. But our ambition is to have early, perhaps within three years, 100 billion a year of self-financing, that is, a mass of money that corresponds, for example, to the annual investments of the Cassa del Mezzogiorno, with the difference that we must first earn them and then we will decide how to spend it. [...]'
Mariones: 'We hear about ENI very often; they are often very strong criticisms; I would like to ask you three questions:
1) We have heard of death threats against engineer Mattei, of sabotage of his plane: what is true?
2) As for the policy of the ENI group abroad, a policy that seems very risky with the danger of even wars, we would like to know if this policy is an autonomous ENI policy or not.
3) I would like you to explain to us what are the benefits that the Italian economy derives from ENI's business.’
Mattei: 'As for the first question, it is true that I received a death threat letter [...] The fact of the plane is unfortunately another proof. It is not that this does not scare me: it certainly scares me. [...] It is enough to read the press campaigns of certain newspapers in order not to be calm. The same questions you asked are unfair. If, in spite of everything, we continue our work, it is that we have remained too detached from the other Countries not to worry about the terrain that we must regain. Even if we are afraid, we must continue walking because we must raise the standard of living of our Country. To the other question you asked me, I answer that all the initiatives we have taken have been regularly authorized by the Italian government.’ [...]
VISIT OF MALLAM MAITAMA SULE, NIGERIAN MINISTER OF MINES AND ENERGY
Rome, March 21, 1962
With the agreement whose preliminaries have been signed today, the premises for a fruitful collaboration between Italy and Nigeria in the oil sector are laid, from which the Nigerian government expects a decisive contribution to the economic development of the Country. The agreement was reached quickly, after the federal government opened the tender for the concession of areas of the Niger Delta, previously returned by the Shell-British Petroleum consortium, on 1 February. [...]
THE POWERS THAT DISCONNECT PUBLIC OPINION
Corriere della Sera 27 July 1962, letter from Mattei in reply to some articles by Indro Montanelli
Mr. Director, in the five articles that Dr. Montanelli has dedicated to the Ente Nazionale Idrocarburi and to my business, there are general assessments or appreciations on people I do not reply to, together with numerous inaccuracies and deformations of reality, which cannot instead go under silence and to which I will reply by grouping them by topics. I therefore invite you, in accordance with article 8 of the law on the press, to publish the following clarifications. [...]
VISIT OF THE PRESIDENT SIGNS TO THE ENI VILLAGE OF CORTE DI CADORE
Borca di Cadore, August 1962
[...] Corte di Cadore is, par excellence, the social village of ENI. [...] centre where, in absolute equality of rights and in complete fraternity, workers, employees, managers and their respective families also come to rest.
There is a lot of talk about sociality, but little is recognized that it is only one of the aspects of christian brotherhood, an expression of the broader duty that binds us to our fellow men and that cannot be expressed only in assistance and mutual understanding. [...]
A PROMISE IN SICILY
Gagliano Castelferrato, 27 October 1962
[...] My friends, I too come from a poor province, from a poor country like yours. Even today there is here of our people, I am from the Marche, those are very poor countries, who come to work in Sicily: because before here, in Upper Italy and in Central Italy, we did mining research like these,
and therefore we created schools, we created the men who work in Sicily and we plan to send Sicilians to other areas of Italy as well. Then, with the reserves that have been ascertained, great wealth is available to Sicily.
My friends, we will not take anything away from you. All that has been found, that we have found, is for Sicily, and our effort has been made for Sicily and for you. [...]
[From the square a voice interrupts]: 'So it can get rid of this misery of Gagliano'
[Turning to the anonymous]: my friend, I do not know what your name is, but I too was a poor man like you; and I also had to emigrate because my country did not give me work: I went to the North, and now we are returning from the North to the South with all the experience we have acquired. We commit ourselves with our strength, with our knowledge, with our men, to give all our contribution necessary for the development and industrialization of Sicily and your province. [...]
I knew that one day I would come among you, that you would look at me with sympathy and affection. [...]
They are small problems: the important thing is this huge mass of resources that is now made available to Sicily, and on which it will be possible and will have to be built, if there is everyone's commitment.