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The Sunday Times: The Andrew Davidson Interview: Energy chief pushes Italy into arms of Russian bear

December 24, 2006

Paolo Scaroni headed the glassmaker Pilkington for six years. Now he is cutting deals with the Russians as boss of the Italian energy giant Eni. Why is he jumping in where others fear to go? 
JAWS dropped when Paolo Scaroni, the former Pilkington glass boss, was appointed head of Italy’s energy giant Eni last year. What does the elegant Scaroni, a glass-industry veteran, know about oil? Enough to cut a dash, that’s for sure.

Last month Eni — the sixth-biggest oil company in the world — announced a ground-breaking agreement with the aggressive gas giant Gazprom that will allow the Russians to sell gas direct to consumers in Italy. This month, the Russian media were reporting that Eni could be bidding for local energy assets there, at a time when other oil giants have become nervous about the region.

If that were not enough, Scaroni, 60, has also emerged as the most outspoken boss in the industry: giving speeches, writing articles, even addressing competitors such as Shell on the future — despite the fact that he has worked in the oil business for only 18 months. How can he lecture anyone? Scaroni, sitting in Eni’s opulent London base in Belgravia, is unapologetic. “Shell invited me to talk at its annual seminar for senior management,” he says. “Maybe they invited me to tease me, but I don’t think so.” 
Perhaps they wanted to see what they were up against. Shell is one of the oil giants feeling the freeze in Russia. It must be wondering what on earth this Italian has that the long-time experts have missed? Scaroni, who only a year ago was signing off the merger of wholesaler Alliance Unichem with the British retailer Boots (he was chairman of the former), offers a Latin shrug.

Eni, he points out, is unusual as an oil giant in that it is a big seller and distributor of gas — the biggest in Europe. It also has a history of working with troublesome regimes, such as those in Iran and Libya. Tying in with the Russians, who control the world’s biggest source of gas, makes sense. “The consumption of gas is growing so strongly that if we just keep pace with that, we will be growing our business considerably.”

As to whether he knows enough about the oil and gas sector, his response is, what’s to learn? Before Eni, he headed Enel, the Italian power company, for three years. Slipping into Eni was not so hard.

“Eni is in five pieces,” he says, in his Italian-inflected English. “Exploration and production, gas and power, refining and marketing, chemicals, and contracting. I have been in contracting for many years, chemicals is just plants, similar to Pilkington. As for refining and marketing, remember my first job in Italy was for Chevron garages 40 years ago. Gas and power is like my last job, heading Enel. The real difference is exploration and production, and that’s where I have devoted most of my time and energy.”

Then he makes a face, as if to say “obvious”. And he does all this while gently chewing a Parma ham panini, brushing the crumbs off his trousers as they drop. Scaroni, thick-set and well-groomed, is unlike any oil boss you will ever meet. Warmly chatty and quick to sense a joke, he is also — even over an informal sandwich lunch — not shy of reminding you just how remarkable his business career has been. “I was saying to Erica (his communication director) on the plane over, that I have never met in my life anybody who’s been at the top of three large companies, doing such different business.”

But then, just when you think he’s an ego on legs, he plays it all down. “I have been in many businesses and every time they say ‘we are different, we are special’, but let me tell you, the reality is everything is equal.” He pats his lips with a napkin. “All are complex, all are simple and all have competitors.”

Listed in Milan and New York, Eni still has strong links to the London investment community, some of whom know Scaroni of old. They rate his strengths. “He’s good at issues, good at picking people and good at leadership,” says David Mayhew, chairman of Cazenove.

Scaroni’s weakness, according to others, is his short attention span. Yet he spent six years in Britain from 1996 overhauling Pilkington — closing plants, laying off workers and reorganising its global network. Brought in by Pilkington chairman Sir Nigel Rudd, he quickly won over the sceptics.

“I started as head of a venerable company, speaking a funny English. I was a strange animal, no?” says Scaroni. “But the good people understood I knew about glass, and confidence started to build and generally I think the years at Pilkington were a success.”

He returned to Italy to head Enel — “it was a different scale, with a €40 billion (£26.8 billion) market value, compared with Pilkington’s €2.5 billion” — where he did a similar job, refocusing the energy giant on its electricity and gas core.

He was asked by the Italian government to head Eni, twice as big again and part-owned by the state, when it was clear that the company had no natural successor for its 69-year-old chief executive. “It had to be an Italian with some knowledge of the energy sector,” says Scaroni, “whom the international investor community knew. I was the only candidate.” Unlike Enel, Eni already seemed an efficient performer that needed little in the way of an overhaul.

Others wondered if Scaroni’s leap meant a merger of Enel and Eni was on the cards, but so far the two businesses have remained apart. Scaroni, however, has not been slow in arguing the case for allowing bigger companies to emerge in Europe. Regulators holding back Europe’s gas companies, he says, just play into the hands of suppliers like Gazprom. “Creating a market of many small players is not in the interest of small consumers.”

Certainly Scaroni has an outsider’s courage for going where others fear to tread. He has even castigated American consumers for excessive oil consumption, blaming them for the surge in oil prices.

“Sixty dollars a barrel is not very high,” he told The New York Times in October. “If [oil prices] were high, the American consumer in particular would behave differently.”
Such candour, in a sector that is traditionally tight-lipped, has already got him noticed, and Scaroni likes it. He says that the big international oil companies are going to have to change their ways — countries with oil and gas simply won’t allow them to ride roughshod over their interests any more. These countries have expertise enough now to extract their own resources. The oil giants will have to offer more than just money and know-how. 
And cutting deals comes easily to a charismatic networker like Scaroni. “The deal we have just made with Gazprom is typical. As you make it at the highest level, it requires perseverance, the right team — I think I might give some contribution,” he says.

That ability to foster close bonds with others — “Paolo always seems to get a bit further than anyone else,” says one friend — has bolstered a career driven by fierce ambition. Born the only son, with two sisters, of a wealthy businessman in Vicenza, northern Italy, Scaroni studied economics at university in Milan and later management at business school in New York.

He worked for Chevron and McKinsey in Italy, then made a long career at the French glassmaker Saint-Gobain, where he was mentored by Xavier de Villepin, father of the current French prime minister Dominique de Villepin. Later Scaroni worked for Techint, an Italian construction and engineering giant, where in the mid-1990s he became entangled in the Tangentopoli bribe scandal.

“All the big companies, particularly in construction, were giving illegal contributions to political parties in order to do business. If you were a top manager you were likely to be involved,” he says. His disenchantment with Italian business then propelled him towards Britain. “Going abroad, leaving behind all the poisons, has been a plus. And, since then, in Italy there has been a huge change.”

His step up into the super-league of global bosses has not surprised former colleagues. “Paolo just has this ability to understand the three or four things that drive a business, and then get into the detail,” says Rudd. “And he doesn’t forget his friends.”

That helped when both were negotiating the Alliance Boots merger — Rudd was chairman of Boots. Since then, Scaroni has moved effortlessly into the big time, hobnobbing with heads of state and dealing casually with the retinue of bodyguards and advisers that seem a permanent accompaniment to leading oil bosses these days. Yet he is far more accessible than his peers.

Will Eni, with its €74 billion turnover, be Scaroni’s last big job? He pouts and makes the usual speech about it being early days. Then he says “no”.

Others say he has much to sort out first, like just what else Eni will do as Gazprom’s new best friend, or what others might do to Eni. The company is protected from takeover by the Italian government’s golden share, but, as Scaroni points out with an almost mischievous smile, “you never know until it’s tested”. You might even think he enjoys the speculation.

Vital statistics

Born: November 28, 1946

Marital status: married, with three children

School: Liceo Classico A Pigafetta in Vicenza

Universities: Bocconi, Milan, and Columbia, New York

First job: retail representative, Chevron

Salary: €1.4m plus bonus

Homes: Milan, Rome, Cortina

Car: silver Lexus Hybrid

Favourite book: Captain Hornblower

Favourite music: Verdi

Favourite film: ‘I never watch films’

Favourite gadget: Apple Ipod

Last holiday: Libya

Paolo Scaroni’s working day

THE chief executive of Eni wakes up at his home in Milan at 7.15am. Paolo Scaroni is driven to his office before 8am. “I have to spend part of my week in Milan and part in Rome,” he says.

Scaroni drinks a macchiato coffee and goes into meetings by 9am. “The five heads of business report to me, plus the corporate functions. Then I have the business reviews. This is the same as I had before. Everyone has ‘key performance indicators’.” He likes simplicity. “If I cannot explain Eni’s strategy to my wife in one minute, it means it is wrong.”

He works until 8pm, and often visits a social function on the way home.


PAOLO SCARONI relaxes by watching football — he was previously chairman of his hometown club Vicenza — and by playing golf. But he says his time for leisure has shrunk considerably since joining Eni.

“We work in countries where Saturday and Sunday are not holidays, and I am often working at weekends.”

He tries to take long holidays at Christmas and in summer, and spends his money on homes and art. His wife made him a folding screen collage of photos from his working life for his sixtieth birthday. “It’s lovely but to use it in my office would be a bit of a self-celebration, no?”,,2095-2517034,00.html and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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