Exit from Italy

Gulf Oil, which spent $2,000,000 drilling for oil in Italy and discovered one potentially large field in Abruzzi on the Adriatic, last week struck its rig, announced that it was "renouncing the oil search and oilfields exploitation on the Italian continent." With that, the last U.S. company in Italy stopped hunting oil on the mainland, leaving a clear field to the state-owned Ente Nazionale Idrocarburi (formerly the Fascist A.G.I.P.) that has grown under government pampering into a $100 million combine with a stranglehold on Italy's oil and natural gas. Four years ago, after spending some $10 million to find oil in the Po Valley,

Esso similarly quit when the government turned over the entire valley to E.N.I.

Gulf's decision followed passage of a new oil law by the Chamber and Senate after long debate. The law sets up a sliding royalty scale splitting the profits 60-40 in favor of the government, instead of the usual 50-50 split. It also contains a set of clauses designed to favor E.N.I. Example: when a private company brings in a new field, its concession is automatically restricted to 7,413 acres around each well, thus allowing E.N.I, to move in and buy up the land all around the proven field.

Under these circumstances, said Gulf, it was "impractical for the company to continue." Moreover, if Gulf accepted a 60-40 deal in Italy, it would jeopardize its 50-50 deals with countries such as Ku wait, where Gulf owns half of the West's third-biggest oil producer. Last week Gulf sold its half interest in Petrosud, its mainland subsidiary, to the big Montecatini Chemical complex (TIME, Jan. 21), its partner in the enterprise. Gulf will press ahead in semi-autonomous Sicily where operations are governed by a more favorable oil law. This week, as Gulf's field in Ragusa, Sicily hit 18,000 bbls. a day, it opened a 14-in. pipeline to the port of Augusta, announced plans for a sharp step-up in production.

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