The West Capella, operated by Norway-based Seadrill Ltd., anchors about 40 kilometers off the eastern port city of Pohang on Dec. 18, 2024, for its first drilling operation as part of South Korea’s gas and oil exploration project in the East Sea, dubbed the “Blue Whale Project.” The project is estimated to have the potential to uncover between 3.5 billion and 14 billion barrels of gas and oil. (Image courtesy of Yonhap)
SEOUL, Dec. 24 (Korea Bizwire) — South Korea has revised a maritime resource development rule to offer more business predictability for investors in an ongoing project to search for oil and gas in the East Sea, the industry ministry said Tuesday.
The revised enforcement decree on submarine mineral resources development was passed during a Cabinet meeting held on the day, according to the Ministry of Trade, Industry and Energy, after the first drilling operation for the East Sea exploration began last week.
“The revision aims to enhance the existing resource development policy, which previously focused on small-scale projects, by expanding its scope to support larger development explorations,” the ministry said in a release.
“The new rule will also aim to achieve a balanced share of profits between the government and investors, offering a more predictable business environment for companies,” it added.
Under the revision, mining royalties to be paid to the government by developers will be based on profits, instead of production volume under the current system.
The government will also offer a royalty rate of as low as 1 percent during the early stages of a project to help ease the financial burden on participating companies, according to the ministry.
The revised rule also allows the government to impose additional mining royalties of up to 33 percent on sales exceeding 120 percent of average sales over the previous five years due to a surge in global oil prices, the ministry said, adding detailed terms will still be subject to negotiations.
“Following the improved mining regulations, the government will make efforts for the success of domestic exploration projects, including the ongoing East Sea project,” the ministry said.
(Yonhap)
