Italian energy company said it's getting closer to an exploration phase at a basin off the coast of Kazakhstan. Photo of the Kashagan oil field infrastructure courtesy of the North Caspian Operating Co.
Dec. 22 (UPI) -- Italian energy company Eni said Friday it grabbed a stronger hold over a reservoir in Kazakhstan it said has a "significant" potential for oil resources.
The Kazakh government and a state-controlled energy company transferred 50 percent of their subsoil usage rights in the Isatay basin in the Caspian Sea over to Eni so it can move on with an exploration and production campaign.
"The block is estimated to have significant potential for hydrocarbon resources, which are geologically not complex and technologically developable in short time" the Italian company said in a statement.
Eni has historically been consolidating its position in the Isatay basin, but has offered no formal estimate of the reserve potential. Two years ago, the company said the block "is estimated to have significant potential oil resources."
Operations will be carried out through a joint venture with Kazakh entities. The transfer announced Friday marks the start of a new phase of operations where Eni said would use its exploration experience to help development the technologically complex Kazakh waters in the Caspian Sea.
Kazakhstan holds vast oil deposits near its Caspian shore. Economists at the Organization of Petroleum Exporting Countries said the country added about 180,000 barrels per day to total global oil production this year.
Oil is Kazakhstan's primary export commodity and the country is party to a multilateral effort led by the OPEC to balance an oversupplied market with managed production declines.
The Kashagan oil field in Kazakhstan, where Eni is a partner, is one of the country's brighter prospects, though development has been impeded by a series of issues with infrastructure in a complex reservoir environment. The North Caspian Operating Co., a consortium managing the field, said exports would rely on a mix of existing pipelines and rail. A possible new route for pipelines from the southwest could link Kashagan up to more cross-border and international markets.