Kim Dong-sub, head of Korea National Oil Corp., speaks during an interview with Yonhap News Agency in Seoul on June 13, 2024. (Image courtesy of Yonhap)
SEOUL, Jun. 14 (Korea Bizwire) — South Korea is ready to work with foreign partners to develop potential oil and gas reserves in the East Sea, the chief of the state-run Korea National Oil Corp. (KNOC) said Friday.
Earlier this month, the government announced that it has found potential oil reserves in the East Sea, which could hold between 3.5 billion and 14 billion barrels of oil and gas.
If confirmed, the reserve would be sufficient to meet the country’s oil and gas demand for up to four and 29 years, respectively.
The government also said it has found seven potential locations for oil and gas reserves, with an estimated success rate of around 20 percent, meaning one out of every five holes drilled would be successful
“We need to solve a complicated equation that can make the project attractive for foreign partners,” Kim Dong-sub, head of KNOC, said during an interview with Yonhap News Agency.
“There are quite a lot of companies expressing interest in the project, including the so-called oil majors,” Kim said, without elaborating on the details.
Kim said partnerships with foreign companies are important as the funding of the project is crucial, with the drilling of the first hole estimated to cost around 100 billion won (US$72.8 million) to 130 billion won.
“We need to inject funds to carry out the project starting next year. How we will reflect the foreign investment is also a variant,” Kim said.
The latest move to refine the deep-sea blocks in the East Sea is aimed at maximizing the country’s interests in the development project when implementing the project with foreign partners.
“If we divide it into smaller lots, major companies are not likely to participate. If they are too big, we might be giving out future potential as well. We are studying all options,” Kim said.
As to the ongoing controversies surrounding Act-Geo, the U.S. geoscience research company responsible for the recent discovery of potential oil and gas reserves, Kim stated that issues such as unpaid taxes do not undermine the data supporting the discovery.
The KNOC CEO stressed that KNOC has the final say in the process of resource development, noting that Act-Geo is simply offering consulting services based on its experience.
“The fact that we have found geologically hopeful evidence with potential means it is time for the country to join forces and proceed with the development gradually,” Kim said.
South Korea plans to select the first spot for drilling in July, with the operation set to begin in December. If successful, the first commercial production is anticipated to begin around 2035.
(Yonhap)
