Eni wades into troubled Kazakh waters

MILAN, Italy, June 13 (UPI) -- Italian energy company Eni said it joined a Kazakh counterpart to tap into offshore oil reserves the same day OPEC said it expected less oil from the country.

Eni said it signed a strategic deal with KazMunayGas to develop the Isatay exploration area in the Caspian Sea.

"The block is estimated to have significant potential oil resources and will be operated by a joint operating company," the Italian company said in a statement Thursday.

Eni's deal extends to shipyard development at the Kuryk port in Kazakhstan.

The announcement comes the same day the Organization of Petroleum Exporting Countries said it expected oil output from Kazakhstan to decline by 20,000 barrels per day to 1.62 million bpd this year.

OPEC said the expected decline was because of problems at the giant Kashagan oil field off the coast of Kazakhstan. Lauded as one of the largest oil fields in the world, problems with the pipelines associated with Kashagan have led to lingering production woes.

Eni offered no reserve estimate for the Isatay exploration block.