Newspaper article International New York Times

Refinery Closures Test Eni's Resolve ; Energy Giant Faces Fight with Government and Unions to Shutter Plants

Newspaper article International New York Times

Refinery Closures Test Eni's Resolve ; Energy Giant Faces Fight with Government and Unions to Shutter Plants

Article excerpt

The plants that are likely to be shut employ more than 1,500 people and account for about 40 percent of the company's refining capacity in Italy.

The new chief executive of Eni, the Italian energy giant, has put himself on a collision course with workers and possibly the government with a plan to close much of the company's unprofitable refinery network in Italy.

Claudio Descalzi, who was named chief executive in May, has told union leaders that the refineries most likely to be closed are those at Gela in Sicily, Taranto in the Puglia region and Livorno in Tuscany, according to local news reports. Together they account for about 40 percent of Eni's refining capacity in Italy and employ more than 1,500 people.

Beside taking on the unions, Mr. Descalzi must secure the approval of the Italian government, which owns a 30 percent controlling stake in Eni, the largest company in Italy. The government, which appointed Mr. Descalzi, may have to weigh protecting jobs against encouraging economic overhauls.

Union leaders were quick to condemn Mr. Descalzi's plans. "Eni's strategy could cripple the refinery sector," said Luigi Ulgiati, secretary general of the chemical workers' division of the General Labor Union, known as the U.G.L. for its initials in Italian, according to the Italian news agency ANSA. "The government must step in because we risk de-industrializing the country and creating mass unemployment in the name of debatable notions of efficiency."

According to local news reports, workers at the Gela refinery have staged protests, including the seizure on Wednesday of a terminal that receives natural gas from Libya.

But some financial analysts say that they consider Mr. Descalzi's proposal to be long overdue, and that the strategy should be emulated by other European energy companies. Eni's refineries are an unwanted legacy for a company that over the past few years has been shifting its focus to the more lucrative business of finding and producing oil and natural gas. …

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