‘I hate to be politically correct’ | USAEMALL.com

In the late 1990s, as rebels overthrew the longtime dictator Mobutu Sese Seko in what is now the Democratic Republic of Congo, Claudio Descalzi, then a 41-year-old regional manager for Italian oil major Eni, slept under his bed with his children to avoid being shot in the night.

“My wife was pregnant. Fortunately she was able to leave the country. I remained stuck with my two girls,” he says. It was two years before he saw Italy again. “I was responsible for the expatriates who remained. Clearly, the last thing you think about is cash flow or operations.”

It was not the first difficult overseas posting for Descalzi, now in his 11th year as Eni’s chief executive. He joined the oil company after training as a physicist and quickly found he had a taste for adventure and a cool head in “very challenging moments”.

He was in Libya in 1986 during US air strikes on Tripoli and Benghazi. He was overseeing exploration in 2006 when armed robbers stormed an Eni subsidiary in Port Harcourt, Nigeria, with multiple fatalities.

“That marks you a lot,” he says. He remembers witnessing extreme poverty and the desperation of those caught in violence. “They don’t have money, security, education and they are lost. When there is trouble, no one looks after them. That was a big lesson I got when I was really young,” he says.

After 18 years overseas, mostly in Africa, Descalzi now divides his time between Eni’s offices in Rome and in his hometown of Milan, where the company has a sprawling complex clad with brown strips to resemble the layers of the Earth’s crust. 

Tall and eloquent, at 70 years old, he says he retains the perspectives he gained in his years abroad and has long rejected the groupthink he has encountered in Europe.

“I hate to be politically correct because I see that as a constraint, as a barrier. It is fake . . . I hate the mainstream,” he says, emphatically. “You say the same thing everybody says, and if you do not say it, you are not in the right club. This is a way to stay stagnant. It is an empty box, and empty concept. In life you have to challenge everything.”

Being anti-woke is not unusual in the oil industry. Like many of his peers, Descalzi takes aim at the narrative that has cast Big Oil as the principal enemy of climate progress. “I believe that climate change is a big issue we have to solve. But if you want to solve a problem and the first thing you do is look for an enemy, I don’t think you really want to solve the problem. You want to find an enemy.”

He suggests that if the world wants to move beyond fossil fuels — which still supply 80 per cent of its energy — it is not just up to energy companies to stop using them but to consumers to stop buying them. He thinks this is particularly unlikely in the global south. 

“Europe thinks that the world is like Europe. It’s not like Europe,” he says. “[The EU] is 5 per cent of the [world’s] population.”

Descalzi says he began thinking seriously about climate change 12 years ago — before the 2015 Paris Agreement to try to limit global warming and before becoming chief executive — driven not by environmentalism but by economics.  

He sees the oil industry as cycling between long periods of relative stability and abrupt shocks. His appointment in May 2014 came just as one such shock hit: a market share war between Saudi Arabia and the US sent oil prices plunging 70 per cent by early 2016.

At the time, Eni’s dependence on oil and gas for its profits was, he says, “more than 100 per cent, maybe 110 per cent because some other businesses lost money”. He decided the company needed to diversify. 

Eni is smaller than the likes of ExxonMobil, Chevron and Shell — and Descalzi says understanding that disparity is crucial. “They have the money, the muscles. The strong political presence that we don’t have,” he says. “You have to really understand your weakness.”

In some ways this has forced him to take more risks — and respond to difficult challenges by facing them head on. He adds that the energy transition has been “super useful” as it forced the company to reimagine itself, forget its roots and face a future of declining oil and gas revenues.

“In life, you have to suffer if you want to grow. You have to change your skin, your muscles, your skeleton, your bones. You have to continuously evolve yourself mentally to manage yourself, your people and the future of your company,” he says.

Some rivals turned to mergers and acquisitions and aggressive cost-cutting, but Descalzi took a different route. He stepped up research and development, commissioned a powerful supercomputer and leaned on scientists and university researchers. “We needed a proprietary technology for the future,” he says. “I wanted to have all the tools in my hand to be flexible — and to understand how I can delink from oil and gas.”

While other companies outsourced, he brought capabilities in-house. And he doubled down on exploration, even as others scaled back. “In general, energy companies do not like exploration because the risk is very high. On average, you write off 70 to 80 per cent of your spending,” he says. “But I like to go where there is less competition.”

The upheaval has not stopped. Since 2014, Descalzi has led Eni through more oil price crashes, escalating tensions between the US and China, the Covid-19 pandemic, Russia’s invasion of Ukraine, higher inflation and now renewed conflict in the Middle East. 

While many European peers have struggled to make money from cleaner energy — and some, such as Shell and BP, have scaled back operations in the area as a result — Descalzi’s strategy has remained constant. Eni bundled future-facing businesses, such as biofuel refineries, with cash-generative assets such as service stations. The result: ESG-friendly but profitable units that have attracted interest from private equity firms such as KKR at valuations that have exceeded expectations. 

I ask how much longer he expects to stay in the top job. He waves the question away. “I think it is too early. We are in a volatile situation, and it is not easy to change [leader] very often. But clearly a CEO cannot remain forever.”

Then he smiles. “Energy comes from motivation. You can be very strong at 30 or 40 but if you have no motivation you do not see the future, you do not enjoy going to work,” he says. “My motivation is to be outside the mainstream. It gives me extreme motivation. We can only break through the surface and grow if we have people who are able to do things differently.”