ENI

Background information

Eni is the biggest Italian corporation. With some 80,000 employees, half of which abroad, it has its own identity based upon its international links, its own enterprise culture and its own history, a nation in the nation with its own leaders. Above all, the founder Enrico Mattei. Eni was created by law in February1953, even if a state owned company devoted to oil and gas searching in Italy, Agip, was active since 1926. Mattei, a former leader of the Resistence against the Nazi occupation in WWII, was appointed at the helm of Agip in 1945 with the mission of bailing it out. Just one year later, in 1946 the company made its first ever gas findings in the Po Valley. Thanks to that very timely discovery, Mattei was able to avoid Agip to go bankrupt and revamped it as a gas producer and distributor across the richest region of the country. In 1952 he invented the new logo, the still existing six-legs-dog and “the four-wheels-man best friend” and the following year was appointed to chair the newly created Eni, which Agip became part of. Eni accompanied Italy in the rush to what the Financial Times called the Italian Economic Miracle as, how Mattei stated, “if we can make cars we have to be capable to make the gasoline too.”
The need to feed with power the country booming economy suddenly drives the Group well beyond the national borders. In 1954 it signs with Egypt’s president and Arab leader Nasser a deal aimed at creating joint ventures between Eniand oil producer countries. A similar deal was struck three year later with Iran’s Shah Reza Pahlavi as this kind of agreements began to be known as the “Matteiformula”, which would have changed the way things were done between oil producers and oil companies. The positioning of Eni in the Cold War further strengthened when in October 1960 it signed with the Soviet Union a long term contract for cheap supplies of oil. The vision of Mattei, giving Italy a decent degree of energy independency, is becoming reality. But on October 27, 1962, his dreams blew up as his plane crashed while flying from Sicily to Milan in an accident whose fortuity is still being disputed.
Mattei was famous, among other things, for telling that political parties were like taxis: I take them, pay them, and they bring me where I want. The special relation between Eni and politics survived Mattei, but the fare the taxi driver charged for a ride grew exaggeratedly over years, to such an extent that in the Eighties and in the Nineties of last century it went under a number of investigations on charges it had become a cash cow for Italy’s First Republic parties as many deals were believed to incorporate a bribe to pay to politics. For instance, Eni sold and bought back its chemical business to private concerns several times, each time at a premium as a buyer and at discount as a seller. All this ended in the early Nineties when the bribery scandal wiped off the old political guard along with some Eni top managers (the chairman at the time, Gabriele Cagliari, committed suicide as he was jailed in Milan on corruption charges). Franco Bernabè, then a young second tier manager at the Group, was appointed chairman ad in a few months time turned the loss-making and corruption tainted group into a profitable business. Eni nevertheless, even during its most dark years, continued to cultivate its international relations by building on its joint ventures. After the Bernabè’s treatment Eni was ready to be transformed into a proper limited company and to offer its shares to the public: it was listed in Milan and NY stock exchanges late in 1995 in the first of a set of share offers by the Treasury which nowadays holds a remaining 30% of the equity capital.
At the same time a more efficient, profitable and respected Eni carried out major international efforts with “Blue Stream”, the joint venture with Gazprom for transporting gas from southern Russia to Turkey and the project for the new gas pipeline South Stream for importing in Europe Russian gas through the Black Sea. Eni ranks sixth in the global oil league table after Exxon Mobil, Shell, BP, Total and Chevron. Since 2005 the group is led by CEO Paolo Scaroni.

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