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

3134. For Under Secretary. Following is résumé of conversation at luncheon at Villa Taverna May 22 attended by Under Secretary Ball, Enrico Mattei, President of ENI, Colonel Vernon Walters, Brazza Savorgnan (Mattei’s interpreter) and myself.

Mattei stated at length and with some emotion that his only aim was to provide Italy with a cheap power source and to put Italian labor to work. He repeated over and over that the major oil companies would have to treat him like a human being and realize that he was here to stay. He said that up to now they had fought him at every turn and tried to keep him out of several countries. He had had to take leftovers but he had brought in oil in commercial quantities in some of these leftovers (Sinai, parts of Iran, etc.). Mattei said that now however there were some indications that there was a change of heart on the part of the oil companies. A British company was holding out an offer of crude at a lower price than Soviet crude and he had a useful talk with Mr. Stott of Standard Oil of New Jersey. Secretary Ball said that the US Government had no special brief for the oil companies other than where US vital interests were concerned and recognized that relations between them and ENI had not been good in the past and that we welcomed what appeared to be an improvement of these relations. We recognized what Mattei had created and how important it was to Italy and were anxious to keep communications open to him.

Mattei said that in many of the newly developing areas of Africa and Asia there was distrust of the US, UK and France and that his presence there had prevented Bloc countries from moving in. He cited an appeal by Castro last year which he had not answered and said that as a result the Czechs had moved in. He said that he too was of the West and it was better for ENI to be there than for one of the Bloc countries. He said that he attempted to bring the local countries and people in not only in matters of financial participation but also in training indigenous personnel in oil techniques. In a refinery which he owned jointly with a US corporation he had been forbidden to train Italian personnel. The British did not do this and he said that if he published the letter from this US corporation it would have a very bad effect on Italian public opinion. In reply to a question as to whether this might not be a regular commercial practice to protect patents he said that this was not the case as this refinery was outmoded and no new processes were in use there.

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In reply to a question by the Under Secretary regarding pipe he said that he had made a deal with the Soviets to supply them with 250,000 tons over 5 years in return for crude and that other countries such as West Germany and Japan were supplying them with larger quantities every year. With regard to crude imports into Italy he said that he was buying Soviet oil because it was the cheapest he could get. It was his duty to provide Italy with the cheapest possible sources of energy. In reply to a question by the Under Secretary, he said that he had been asked by Chancellor Raab of Austria to look into the construction of a pipeline from Trieste to Vienna to lessen Austria’s dependence on Soviet sources. He avoided commenting on the possibility of an eventual extension to Bratislava that the Under Secretary had raised or on the possibility that Soviet crude might flow in the opposite direction to Trieste.

Mattei then spoke of China and said that there was great resentment there against the Soviet Union and the other Bloc countries as the Chinese had found out that they had been overcharged for much of the equipment that they had been furnished by these countries. He said that two months ago the Russians had practically moved out of China and there had been a vacuum but that the Russians had realized how dangerous this might become and had moved back in; in fact the Soviet Minister of Foreign Trade Patolichev had been there. It was to apprise him of the importance and extent of this vacuum that had led Mattei to try to see President Kennedy at the time. He himself was doing some work with the Chinese and exhibited a friendly letter from Marshal Chen Yi suggesting further cooperation. Mattei implied that he might be useful in China but did not put forth any definite suggestion. From cheap industrial machinery exported to other Asiatic countries and remittances from the overseas Chinese they had about $350,000,000 in foreign currency. He was doing a hundred million dollars worth of business with them which was as much as he could handle. In reply to a question by Ambassador Reinhardt as to what type of goods the Chinese particularly wanted he replied vaguely “industrial plants”. Mattei expressed the belief that China would be increasingly influential in world affairs.

Asked by the Under Secretary how he felt about the Common Market, Mattei replied that by extending his present practices to the whole of the Common Market he could survive and prosper and lower the price for petroleum products throughout the area.

The tone of the meeting was friendly and Mattei seemed appreciative of this opportunity of setting forth his views to the Under Secretary.

Detailed memorandum follows by pouch.

  1. Source: Department of State, Central Files, 110.12–BA/5–2762. Confidential; Priority; Limit Distribution.