In winter 1957, american and british oil companies did not want that italian ENI interfered with their plan to monopolize the exploitation of oil in Libya, writes Massimiliano Cricco, associate professor of History of International Relations at Marconi University in Rome, in his paper Giovanni Gronchi and the Mediterranean in the ’50: from Suez crisis to political-economic relations with Libya, presented at the conference “Giovanni Gronchi and Italian Foreign Policy, 1955-1962”, held in Pontedera (Pisa, Italy) on 13th and 14th November 2015.
“The british and american oil companies -we read in the paper- learned that Agip was signing an agreement to acquire concessions in Libya and threatened libyan government to terminate their drilling in the country if ENI or its subsidiaries had entered the market of libyan oil. The main reason for this boycott -writes Cricco- was the strategic importance for the United States and United Kingdom to monopolize an important source of oil west of Suez, perspective too tempting to be put in difficulty by the competitive “Mattei’s formula”.
It is not a secret that large companies reluctantly bore with Enrico Mattei, then president of italian national oil company ENI. In 1957, in fact, Mattei baffled the world by signing a contract for oil concession in Iran with National Iranian Oil Company (NIOC) with a new profits redistribution: 75% to the iranians and 25% to Eni. The agreement was signed on 14th March. It was the first time that a producer country was rewarded with 75% of profits while the foreign oil company was satisfied with 25% (Yergin, The Prize, Sperling & Kupfer, 1991, p. 426; Maugeri, L’arma del petrolio, Loggia de ‘Lanzi, 1994, p.142).
The new conditions between ENI and NIOC left speechless the other oil companies operating in the Middle East. Until that time, the concession contracts in the whole area was the so-called fifty-fifty agreement: 50% of the profits to the producing country, 50% of the profits to the company. It was so since 1950, when the four major oil companies composing consortium Aramco (Standard Oil of New Jersey, Socony-Vacuum, Standard Oil of California and Texaco) had to renegotiate their concession with Saudi Arabia. The Mattei’s formula of 75-25 destabilized the new balance so painstakingly found.
No wonder then that the first Italian request to obtain an oil concession in Libya encountered a hard opposition. “The request was made in May 1957 by Agip Mineraria -writes Cricco- for three areas in the Fezzan desert. The Libyan government refused, under pressure from the anglo-american companies, on the pretext that Agip was a public company and that instead the concessions had to be assigned to private companies. So, in 1958, Eni formed the CORI company, formally private, although 90% was owned by Agip and 10% was owned by Snam projects, and in 19th November 1959 obtained the concession number 82 in the Cyrenaica desert, near the Gialo and Jagbub oases. CORI applied the rule of fifty-fifty, but applying royalties very advantageous for the Libyan government. It was the beginning of the large technical, economic and commercial cooperation between Eni and Libyan government, which has continued through the 42 years of Gaddafi regime and to date” concludes Cricco.