Australian firm to look for oil

Major oil and gas exploration and production company Woodside Petroleum will jointly search for oil with the Korea National Oil Corp. starting this year, said the Ministry of Industry, Commerce and Energy in a press release.
The two organizations will hold equal stakes in the project. It is the first time in 15 years for a global oil company to operate in Korea, the commerce ministry said.
The two will survey offshore in the East Sea (Sea of Japan) near Pohang for oil and gas as Asia’s third-largest economy seeks to boost its energy supply. Korea imports almost all its oil, and prices have tripled since 2001.
Exploration areas are blocks 8 and 6-1, blocks the government created that are part of the Ulleung Basin in the East Sea.
The 12,560 square kilometer (4,800-square-mile) “concession” area will be searched for two years in the first phase. The entire project will consist of three, two-year phases that can be extended. The first phase will not involve drilling, and Woodside will invest $20 million. If the company concludes that oil exists in the areas, one well will be drilled in the second phase.
Woodside started to have interest in the Korean seas after gas was discovered at the East Sea-1 gas field in 1998 and commercially produced in 2004.
The East Sea-1 gas field is 150 meters (492 feet) under water, but the area related to this project is more than 1,500 meters underwater.
“That is why we decided to work with Woodside, an expert in deep water exploration,” said an official at the ministry.
Kim Young-joo, the Energy Minister, and Don Voelte, managing director and chief executive officer of Woodside, met in Seoul yesterday and agreed on the joint exploration.
“Precise exploration has not been made on the areas, yet,” said the press release.
“So as of now, we cannot confirm whether oil or gas will be found. But the fact that an expert company like Woodside is interested is why the joint project is significant.”
Woodside is Australia’s largest publicly traded oil and gas exploration and production company with market capitalization of more than $20 billion as of 2006.
Currently, Korea produces about 1,000 barrels a day of condensate from Block 6-1.

By Hwang Young-jin Staff Writer [yhwang@joongang.co.kr]