April 20 (Bloomberg) -- International oil companies must improve their technological expertise to survive a trend of increasing nationalism among nations with energy resources, Eni SpA Chief Executive Officer Paolo Scaroni said.

``The balance of power between international energy companies and producing nations is changing, and not in our favor,'' Scaroni said today in a Bloomberg Television interview at the International Energy Forum in Rome. `` The game is about technology. We need to be needed.''

Oil-producing countries are seeking a higher share of profit from crude as prices for the commodity have doubled in three years, touching a record $116.97 a barrel last week. Nigeria and Libya are renegotiating contracts, while Eni and its partners had to cede a bigger stake in Kazakhstan's Kashagan field to that country's government last year.

The share of global crude reserves held by international oil companies has dropped to 6 percent from 75 percent in the 1970s, Scaroni said. Governments in some producing nations are taking close to 90 percent of the profit from projects, he said. Even with oil prices near records, ``companies' profitability is decreasing, in many cases below their cost of capital,'' he said.

Libya Oil Profit

Libya is among nations increasing their share of oil revenue. The country is getting 88 percent of profit from crude projects once companies developing its deposits have paid off their costs, Shokri Ghanem, chairman of Libya's National Oil Corp., said in a Bloomberg Television interview late yesterday in Rome.

``The days of 50-50 oil are over,'' Ghanem said, referring to contracts under which companies and states split oil profit equally. Libya renegotiated its contract with Eni last year and aims to agree on new terms with Total SA, Repsol YPF SA and Wintershall AG, a unit of BASF SE, ``soon,'' he said. The terms will be valid as of Jan. 1 this year, he said.

The future viability of international oil companies such as Eni, Exxon Mobil Corp. and Royal Dutch Shell Plc depends on their ability to develop complex fields in deep waters, recover oil from aging fields and build other ``challenging projects'' that state-run national companies can't do alone, Scaroni said.

``They need to profoundly rethink their business model in order to survive and prosper in the new oil and gas landscape,'' Scaroni said in his address to the forum, attended by ministers and executives from Saudi Arabia, Venezuela, Iran and other members of the Organization of Petroleum Exporting Countries.

`Long-Term Vision'

``A long-term vision is necessary, but it must be effectively `sold' to the financial community,'' which seeks immediate returns, said Scaroni, whose company is Italy's largest oil company.

Mohamed Meziane, CEO of Algeria's state-run energy company Sonatrach, echoed Scaroni's call for investment in innovative exploration methods. The means for finding and bringing oil to market must overcome rising project costs and shortages of skilled labor in the industry, he said.

``Developed countries having the technological and financial capabilities should take the lead in the development and deployment of these technologies,'' Meziane said in a speech at the conference.

Fulvio Conti, CEO of Enel SpA, Italy's largest utility, said the European Union should adopt a collective approach to ensure energy supply security, rather than have each of the 27 members act separately.

``To avoid security of supply being jeopardized by shortages and price increases, it is of paramount importance to establish effective partnerships between producing and consuming countries,'' Conti told the conference.

EU Energy Needs

The EU, the second-largest energy market behind the U.S., imports more than half its natural gas, mainly from Russia and Algeria, he said. More than 62 percent of its energy needs are bought from outside the region and the bloc's dependency is growing, he said.

Qatar is diverting some liquefied natural gas supplies that were destined for the U.S. and Europe to China instead, because the Asian country pays more, Qatar's oil minister said yesterday.

A new supply agreement this month between Qatar and China ``is a diversion'' from Europe and the U.S., ``not new production,'' Abdullah bin Hamad al-Attiyah said yesterday in Rome. ``We are not in the charity business. Whoever will give me the best price, I will follow him.''

Qatar and Rome-based Eni today agreed to jointly seek projects in oil and gas production, transport and refining, Attiyah and Scaroni said at a press conference.

Russia has the world's largest proven deposits of gas, followed by Iran and Qatar. Qatar is the world's largest supplier of LNG, which is gas that's cooled and condensed for transport by ship.

Iran Ventures

Iranian Oil Minister Gholamhossein Nozari told reporters in Rome that he will talk to companies about joint projects, adding that no new contracts are expected to be signed during the forum.

Scaroni and Conti are among more than 40 company chiefs and 90 energy ministers attending the three-day biennial energy conference, where industry leaders will discuss investment, resource nationalism and sustainable development. Rising energy costs are pushing some consumers, such as airlines, to bankruptcy.

OPEC officials including Saudi Arabian Oil Minister Ali al- Naimi have rebuffed previous requests from U.S. and European politicians for more oil, saying supply is sufficient and high prices are being driven by investors using commodity markets as a hedge against falling currencies. Pressure from consumers to raise output is ``probably politically driven,'' oil newsletter Argus reported yesterday, citing al-Naimi.

To contact the reporters on this story: Maher Chmaytelli in Paris at mchmaytelli@bloomberg.net; Anthony DiPaola in Rome at adipaola@bloomberg.net

Last Updated: April 20, 2008 13:09 EDT