Energy Ministry says drilling of potential oil reserves in Korea will start in December

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Energy Ministry says drilling of potential oil reserves in Korea will start in December

Published: 10 Jun. 2024, 18:33

JIN EUN-SOO
jin.eunsoo@joongang.co.kr

Choe Nam-ho, second vice minister of energy speaks in a press briefing on Monday. [YONHAP]

Drilling of the potential gas reserves off Korea's east coast will kick off in December, with the result expected in the first half of next year, according to Korea's Ministry of Trade, Industry and Energy on Monday.

"The exact location of the drilling will be decided at least in July to carry out the project as planned," said Choe Nam-ho, second vice minister of energy, in a press briefing on Monday in Sejong.

"The drilling process is expected to take three months, and another three months will be required for the analysis."

The briefing follows President Yoon Suk Yeol's announcement last week that as many as 14 billion barrels of oil and gas could exist near Yeongil Bay in Pohang, North Gyeongsang.

The announcement was met with numerous concerns about the viability of the project, including the withdrawal of Australian energy company Woodside Energy in 2023 from the same exploration project in 2022 after concluding that the discovery of substantial gas and oil reserves off Korea's east coast appeared unlikely.

The vice energy minister said the exit derives from the Australian company's overhaul of its business portfolio at the time rather than the unpromising prospect of the project. He also added that the latest finding of potential reserves reflects research that Woodside did not have access to at the time.

Regarding the 20 percent chance of success for the project as indicated by Vitor Abreu, founder of the consulting firm ACT-GEO that was commissioned to conduct the study on the finding, Choe said "it is still a high possibility."

"The success rate of Guyana's finding of its reserve, which is considered the biggest deep-sea reserve discovery of the century, was at a mere 16 percent," he said.

"Dr. Abreu, who analyzed Guyana's reserve, forecast 20 percent for our project, and other experts also assessed that they are worth drilling."

The Energy Ministry said Monday that it will reconfigure the deep-sea blocks of Korea's east cost to reflect the latest finding to facilitate possible investment regarding the potential reserves.

"For effective investment attraction and development, we will redefine the blocks in consideration of the latest findings of seven potential locations," Choe said.

The deep sea of Korea's east cost is currently divided into three blocks, a segmentation that the ministry considers insufficient to attract investment since they were defined before the findings of the potential reserves.

"Of the seven potential locations, we have not yet decided which one will attract foreign investment," Choe said.

"Korea has never done any deep-sea drilling projects before, so drawing foreign investors should be mandatory."

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]