Large oil and gas reserves have been discovered in South Korea, very close to its southeastern territory, in the East Sea. This was announced by President Yoon Suk Yeol on official television broadcasts.
Potential oil and gas reserves in South Korea
President Yoon announced that he has authorized the energy ministry to conduct exploratory drilling in the vast potential oil and gas reserves. It is important to analyze and verify the hydrocarbon potential for the country.
“The probability that the area contains up to 14 billion barrels of oil and gas is very high,” Yoon mentioned, during the press conference, citing a research study, reviewed by hydrocarbon institutions and experts.
In addition, the President stated that he had given his approval for the Ministry of Commerce, Industry and Energy – with the exploratory drilling in the East Sea.
Reserves analysis
The presidential office said the government last year commissioned a comprehensive analysis of the area for possible oil and gas reserves from U.S. research firm ACT-Geo, after an earlier study showed a high probability of oil and gas reserves near the Donghae gas field.
If the volume is confirmed by drilling, the value of the reserves, located off Yeongil Bay in Pohang, about 260 km southeast of Seoul, is estimated at $1.4 billion, or five times the market valuation of Samsung Electronics, the country’s most valuable stock, government officials said.
Yoon explained that 14 billion barrels of gas and oil, more than 300 times greater than the gas discovered in the Donghae gas field in the 1990s, would be enough to meet Korea’s natural gas demand for 29 years and oil demand for four years.
Exploratory drilling
The president also mentioned that the first drilling operations to evaluate reserves will begin later this year, with preliminary results expected in the first half of next year. The process of oil and gas development generally involves three stages: physical surveys, exploratory drilling and commercial development.
State-owned Korea National Oil Corp(KNOC) will lead the initial drilling to determine the size of the reserves. Industry, Trade and Energy Minister Ahn Duk-geun mentioned that he expects exploratory drilling to begin in December, with commercial production scheduled for 2035. Three-quarters of the reserves are estimated to contain gas and the remaining quarter oil, he added.
The minister avoided giving estimates on the costs of exploratory drilling, but noted that the Donghae gas field development project, which produced 45 million barrels of gas, cost about $872 million.
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Source and photo: The Korea Economic Daily
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