Chapter 46 Italian Oil Strategy

One European company expressed strong interest in buying oil from Mossadegh's nationalized oil company.This is an Italian company.More specifically, it was a man—Enrique Mattei, founder of a fledgling Italian state-owned company that would later cause the Anglo-American oil cartel such a headache. Enrique Mattei means "determination" in Old Prussian.During World War II, he was the leader of the largest non-communist resistance in Italy.When Arched Gasperi formed the Christian Democratic government in 1945, Mattei was appointed head of a failing business in northern Italy, a 20-year-old oil company called AGIP.

After more than 20 years of Mussolini's fascist rule, Italy turned to the Allies in 1943.The country was devastated by two years of war and bombing by the Confederate States. In 1945, Italy's GNP remained at its 1911 level, a 40% decline from its 1938 level.Although Italy suffered a huge number of deaths in the war, due to the loss of its colonies and the repatriation of a large number of colonial residents, the population increased rapidly.Hunger is a constant threat to people, and living standards are very low. In this case, Mattei proposed that for the economic reconstruction of Italy after the war, indigenous energy sources must be established.Despite orders to prepare for the privatization of AGIP as soon as possible, he offered to find oil and gas.For this reason, he actively carried out exploration in the Po River Plain in northern Italy, and made a series of meaningful discoveries.First in 1946 near Cavia, then in 1949 in Cortemaggiore, south of Cremona, where not only gas but also oil were discovered for the first time in Italy.After discovering all this, Mattei was given carte blanche to establish his own business, at which point he was already the top leader of AGIP.

The greedy American oil giants united to try to deal with Mattei in the Italian energy market, but their plots came to nothing.Mattei was a staunch Italian nationalist determined to create a self-sufficient national economy.Using precious dollar reserves to buy oil from the United States and Britain is a heavy burden on Italy and is the main cause of Italy's post-war trade deficit.Matthij tackled the problem with audacity, going forward and overcoming daunting obstacles.A 2,500-mile natural gas pipeline was built to carry natural gas from Cortemaggiore to the industrial cities of Milan and Turin.Proceeds from gas sales are used to build AGIP's industrial infrastructure throughout the industrial regions of Northern Italy.

It was this Mattei who named the seven Anglo-American oil companies that dominated the world oil market in the 1950s the "Seven Sisters" in reference to the ruthless cartelization of the world oil market.Mattei believes that Italy should not bow to the authority of these seven companies. He pointedly pointed out that the policies pursued by these companies are to limit production around the world, maintain high prices, and sell their crude oil at prices far higher than production costs. The price is sold to oil-poor European countries.Mattei proposed to maximize production and reduce costs.Needless to say, he quickly clashed with the seven companies and their representatives in the government.

In February 1953, Mattei successfully lobbied for the passage of a new law establishing a semi-autonomous national energy holding company (ENI), with Mattei as president, with an oil and gas refining subsidiary ( AGIP) and pipeline subsidiary (SNAM), the company soon established a fleet of tankers and a network of gas stations throughout Italy, surpassing Esso and Shell in quality and customer service, incorporating for the first time modern restaurants and modern facilities.Using the same model as AGIP, Mattei invested in oil refineries, giant chemical companies, synthetic rubber plants using ENI's natural gas as raw materials, and heavy engineering construction companies specializing in the construction of ENI's oil refineries and related facilities. The company also acquired An oil tanker fleet specially helps ENI transport oil from overseas, breaking the monopoly of the British and American fleets.

By 1958, the portion of Italian gas sales handled by ENI alone amounted to $75 million per year.This is all money saved, otherwise, as before, these precious Italian dollar reserves would mainly be used to buy imported oil and coal.Perhaps no one contributed more to building Italian industry in the fifteen years after the war. As early as 1954, the US embassy in Rome sounded the alarm about Mattei's activities, writing in an ambassador's memo to Washington: "In the history of the Italian economy, a state-owned company has such good financial solvency. First time. It is all due to the excellent and responsible leadership of this business".