Eni SpA said Thursday that it has signed an agreement with Algerian state energy company Sonatrach to create an oil-and-gas development in the region.

The Italy-based energy company said Chief Executive Claudio Descalzi agreed with Sonatrach's chief executive to implement exploration and development activities in the southern part of the Berkine Basin, in eastern Algeria. These activities would be carried out through existing infrastructure, it said.

The agreement comes within the framework of a memorandum of understanding the companies signed in July to collaborate in the upstream sector--the part of the oil-and-gas industry which revolves around exploration and production.