The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

Mattei began talking seriously to Iran and to the Shah. If the majors had become expert at corporate intermarriages through their joint ventures, Mattei would go them one better: Thinking dynastically in his quest for Italian access to Iranian oil, he floated the idea of marrying off an Italian princess to the Shah, who was in urgent need of a male heir. The Shah was also in urgent need of a larger share of oil revenues than he obtained from the consortium. One of the legacies of Mossadegh, nationalization, gave the Shah comparative flexibility. In the other oil-producing countries, the concessionaires—the foreign companies—still owned the reserves in the ground. By contrast, the government owned all the oil resources in Iran, and the Shah was no less committed than Mossadegh to control of the country’s petroleum resources. Mattei took advantage of that situation, and over the spring and summer of 1957 he moved to hammer out a wholly unprecedented arrangement with Iran, one that took into account both Iran’s new position and the Shah’s ambitions. The Shah personally championed and pushed the deal through his government, under the terms of which the National Iranian Oil Company would be ENI’s partner as well as its landlord. That meant, in practice, that Iran would get 75 percent of the profits to ENI’s 25 percent—breaking the treasured fifty-fifty arrangement. As J. Paul Getty and others had already found, it cost more to get into the game when you were a latecomer.