A Touch of More Nostrum

In Rome last week a taut, red-faced man with an angry glint in his eye called in New York Times Correspondent Paul Hofmann and unburdened himself of a bitter complaint. "The Americans," said he, "have done a nasty thing to Italy in Libya."

The angry man was Enrico Mattel, boss of E.N.I., the state-owned oil and gas company which in little more than a decade has grown out of a near-bankrupt Fascist monopoly to become Italy's most successful economic enterprise. The "nasty thing," according to Mattei, was E.N.I.'s complete exclusion from Libya, where more than a dozen British, French and U.S. oil companies are engaged in a hard-driving search for oil. As Mattei told it, the Libyan government had suddenly reneged on a tentative agreement to give him a 17,000-sq.-mi. concession in the Libyan desert, instead gave the concession to American Overseas Petroleum, a jointly owned subsidiary of Texas Co. and Standard Oil of California.

To many oil experts it seemed likely that Libya had been motivated by E.N.I.'s relative lack of capital, its undistinguished record in finding oil in Italy, and the understandable reluctance of a former Italian colony to admit an Italian government corporation to its territory. Enrico Mattei had a simpler explanation: unfair pressure on the Libyan government by U.S. oil companies.

No Place. Libya was only an episode in a Mattei campaign that threatens to upset all the painfully negotiated agreements between Western oil companies and Arab governments in the Middle East. Mattei calls it a feud, and dates it from the day he applied for partnership in the international consortium that now runs the rich Iranian oilfields. "At the time," recalls Mattei, "E.N.I, had only two drilling rigs and no experience. The consortium laughed and denied me my place at the table."

Mattei set out to harry the major U.S. and British oil companies with every means at his disposal. He tried unsuccessfully to drive foreign oil firms from semi-autonomous Sicily, succeeded, through his influence over the Italian Parliament, in getting them excluded from Italy's promising Po Valley. Then, in a far more ambitious challenge, he began to move into the Middle East, offering Arab governments terms seemingly more generous than the standard fifty-fifty split negotiated by British and American companies. Under one such agreement, an E.N.I, subsidiary is now producing some 600,000 metric tons of oil a year in Egypt; others are exploring in Somaliland, negotiating in Morocco. The climax of Mattel's Middle East drive came last September, when, in return for a promise of 75% of profits,* the Iranian government gave him a 12,000-sq.-mi. exploratory concession, more than half of which lies just south of the highly productive Qum fields.

Our Natural Basin. These ventures, accompanied by a drumfire of propaganda appealing to Italian nationalism, have made Mattei one of the most popular as well as one of the most powerful men in Italy. They have also won him the wholehearted support of ambitious President Giovanni Gronchi, who makes little attempt to conceal his restiveness with Italy's postwar policy of unswerving support for U.S. foreign policies. In Mattel's invasion of the Middle East, Gronchi and Italian Foreign Minister Giuseppe Pella see a means of winning an independent international position for Italy. The Gronchi-Pella policy, confusingly christened "neo-Atlanticism," looks forward to a day when Italy will be a major force in the affairs of the Middle East, will be able to serve as "mediator" between the West and the Arab world. "Italy's natural basin for expansion," declared the Christian Democratic Party organ Il Popolo last week, "is the Mediterranean."

Mattei was clearly undeterred by the Libyan setback. Convinced that his terms for extracting oil give him an unbeatable weapon, Mattei last week declared that Italy would expand its oil interests in the Middle East "whenever and wherever there is a chance."

* An offer far less openhanded than it sounds. Reasons: Mattei did not pay the substantial concession bonus that Iran would have got from any U.S. company, and, unlike a normal fifty-fifty deal where the oil company puts up all the capital, Mattel's agreement obliges Iran to pay 50% of the exploration and development costs if oil is discovered. Some oil experts estimate that it could take 30 years of successful production before the Iranians begin to make as much money out of Mattel's seventy-five-twenty-five split as they would out of a standard fifty-fifty split.

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