Office of the Historian

206. Telegram From the Embassy in Italy to the Department of State0

Rome, January 28, 1958, 7 p.m.

2392. During call on Pella January 241 mentioned, among others oil question (Deptel 2848).1

Pella explained background Brosio’s call on Under Secretary2 as follows: At end Secretary dinner in December,3 Pella adverted to GOI [Page 439] preoccupation with possible political repercussions of competing activities of US and Italian companies in ME and North Africa. Secretary agreed problem deserved consideration and said he would discuss with Brosio. Latter was instructed to follow up.

I pointed out, per reftel, proposed consultations not practical from US viewpoint due independence private oil companies of government control. I also suggested problem more of domestic character for Italy since GOI ought find way to guide State-owned ENI’s activities in manner consonant with GOI economic capabilities.

Pella replied this true to some extent but Foreign Office can exert influence only if foreign policy implications of oil activities recognized and thus Foreign Office interference justified. If problem viewed merely as commercial competition, Foreign Office has no reason to inject itself. In other words, Pella said purpose of proposed consultation would be strengthen Foreign Office’s hand in dealing with issue. He emphasized other aspects Foreign Office interests, specifically desire open up Po Valley to Foreign (US) interests and improve recent petroleum law for rest of mainland to make it more attractive for foreign participation because Foreign Office would like to see US oil companies in Italy, more particularly around Adriatic.

Pella admitted, however, that suggestion put forward by Brosio originated with Gronchi (see Embtel 1340 October 10, 1957).4 In fact, Pella had inquiry from Gronchi re US reaction to oil talk proposal very day Brosio’s report on visit with Under Secretary received. Pella himself much prefers informal, unpublicized exchange views between GOI and Embassy.

I expressed readiness talk with him further if he wished. He suggested we resume discussion early February. Would appreciate Department’s guidance.

May add that information from several sources indicates Gronchi much preoccupied with what he considers potential danger of competition oil companies in ME and North Africa for Western unity; he is apparently pushing idea of some sort of intergovernmental discussion (principally with US). It should be noted in this connection Embassy received reports from several independent sources to effect Gronchi support of Mattei has been weakening lately, although it clear to us that no action to curb Mattei can be expected prior elections.5

Zellerbach
  1. Source: Department of State, Central Files, 865.2553/1–2858. Secret; Limit Distribution.↩
  2. Telegram 2848 to Rome, January 18, summarized Document 205. (Department of State, Central Files, 865.2553/1–1858)↩
  3. See Document 205.↩
  4. A memorandum of Secretary Dulles’ conversation with Pella on December 6, 1957, is in Department of State, Secretary’s Memoranda of Conversation: Lot 64 D 199.↩
  5. See footnote 1, Document 205.↩
  6. Italian national elections were tentatively scheduled for May.↩