SK Innovation finds oil in South China Sea

The oil refining company SK Innovation discovered crude oil at a sea block in the South China Sea during its offshore oil exploration projects, the company said Thursday.

This is the first time that the energy company has discovered crude oil in Block 17/03, which is located in the Pearl River Mouth basin, after signing a production-sharing contract with China’s state-owned China National Offshore Oil Corporation (Cnooc) in 2015.
Under the contract, SK Innovation owns 80 percent of the block while the rest is held by Cnooc.

According to SK Innovation, it discovered a 34.8-meter-thick (114-foot) effective oil pool at a depth of 2,014 meters and was subsequently able to produce up to 3,750 barrels of crude oil a day during follow-up test productions.

The company will further drill in the block to assess oil reserves and explore the commercial value of the project.

“Once commercial value of the project in the Pearl River Mouth basin is verified,” a spokesperson from SK Innovation said. “SK Innovation will use it as a platform of growth into other areas in the South China Sea.”

SK’s oil refining arm first started its oil and gas business in 1983 by acquiring shares in Karimun Block in Indonesia, and has been focusing mainly on producing conventional oil in Peru, Vietnam and the Middle East.

SK Innovation currently produces 55,000 barrels of oil equivalent a day from 13 blocks in nine countries globally.

In the South China Sea, the company is exploring two more blocks, Block 04/20 and Block 17/08, under production-sharing contracts.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]