From Bulletin 1996, N.2
 
 
 

THE HISTORY OF SPI: THE OLDEST ITALIAN OIL COMPANY

Introduction

In the first months of this year the following important news concerning the Italian upstream oil industry was announced. The companies SPI, Petrex and Sori, all within the Agip group, merged to form a single company which will assume SPI as its name. In this way a medium-sized oil company came into being and will fulfill the perceived need for such a company on the Italian oil industry scene. The new SPI will operate only on-shore.

Continuing on our journey through the past concerning the pioneering of the Italian oil industry we will outline the history of SPI, the oldest Italian oil company still in operation and which is currently undergoing a relaunch.

The birth of SPI

The first Italian oil company of a size to go beyond that of small local businesses, was established in Emilia in 1905, a region just south of the Po where surface shows of oil and gas were most in evidence. It was the idea of an elementary school teacher, Luigi Scotti, to create the, "Società Petrolifera Italiana" (SPI) to explore and produce oil and gas. The determining factor which led him in this direction occurred in 1896. Scotti, who taught in an elementary school in the Apennines near Piacenza, came to know about a water well at the castle of Aloè in the province of Parma from which came strange noises. He decided to carry out an inspection at the site and got a farmer to do down into the well, which was about ten meters deep, with a candle to investigate the nature of the gurgling. Although there was an explosion it did not harm the courageous explorer who was certain that he had come across, not a supernatural event, but the emission of hydrocarbons. Scotti left his teaching post and entered industry in order to explore for oil and gas. Ten years later in 1905 he established SPI with its head office in Piacenza. Later the head office was moved to Fornovo, in the province of Parma, where it remains to this day.

Scotti increased exploration activities, discovering the oil reservoir Vallezza and at the same time he became involved in the downstream industry, constructing refineries in Vallezza (1916) and Fornovo Taro (1923). For the first two decades of the century production remained low, about a thousand tons of oil a year, which at that time was considered worthwhile at least on a local scale. However, exploration and production technology was only just taking off and, as it relied on craftsmanship, much capital was needed to produce the equipment to successfully continue activities.

Esso enters the scene

In 1927 Standard Oil of New Jersey, then known as Esso, took over SPI. There was an immediate increase in SPI production which jumped from 1,147 tons in 1927 to 20,649 tons in 1933. SPI was the first company to use a rotary drilling rig in Italy. It was a Perrersburg National Portable Drilling rig and was used to drill the well Vallezza 116.

When Italy entered the war (1940) the government seized SPI assets and Esso was forced to withdraw temporarily. During the forties production was maintained at about 5000 tons a year but continuing exploration was conducted by Agip despite the many obstacles. The SPI refineries were subjected to 24 aerial bombardments which caused extensive damage. At the beginning of 1944 the Germans occupied the SPI fields which were still producing. In 1944 4,700 tons of oil and 7 million cubic meters of gas were produced, solely for use as fuel for transport.

Esso leaves and Phillips enters

After the war SPI was returned to Esso although in 1954 Esso was to pull out of Italy. For the next ten years SPI was run by a private group who extensively developed the downstream part of the business, especially on the refinery side with the construction in 1964 of the refinery Arcade near La Sepia. In 1966 another American company Phillips took over SPI with plans to develop particularly the downstream activities. Its plan was to create the refining capacity in politically stable Italy to handle the Libyan crude which had been discovered in great quantities around that time. After Colonel Gheddafi’s coup d’état in 1969 and with the nationalization in Libya that followed, the initial plans for development had to be abandoned and Phillips was to be one of the first American companies to pull out of the country (1973). The year before Phillips had pulled out of SPI, it was then taken over by a group of private industrialists, led at first by Angelo Moratti and then Santi Zuco, which continued to develop downstream operations.

Agip enters

In 1987 control of SPI was assumed by Agip which intensified hydrocarbon exploration and production activities while setting up the downstream operations under a different company. Now, in March 1996 SPI is being relaunched after its merger with Petrex and Sori. The new SPI should reach yearly production of a billion cubic meters of gas this year, a good basis from which to achieve its challenging objectives for the future.