Korean government seeks foreign investment to continue 'Blue Whale' oil project A gas drilling facility in the East Sea/ Courtesy of the Korea National Oil Corporation SEOUL, February 10 (AJP) - South Korea’s controversial offshore oil exploration project, dubbed “Blue Whale,” faces an uncertain future after initial drilling yielded disappointing results. The state-run Korea National Oil Corporation (KNOC), which is leading the effort, is now scrambling to secure foreign investments to sustain further exploration. President Yoon Suk Yeol had touted the project as potentially holding up to 14 billion barrels of oil and gas reserves. However, the venture suffered a major setback when its first drilling operation - costing approximately 100 billion won ($68.5 million) - failed to yield economically viable results. The debt-laden company, burdened with 19.6 trillion won in liabilities, must now seek alternative financing, either through foreign investments, which it confirmed plans to pursue in March, or through corporate bond issuance. The Ministry of Trade, Industry and Energy defended the project’s prospects on Saturday, emphasizing the necessity for additional drilling at six other promising sites, despite each requiring an investment of 100 billion won. The ministry argued that successful gas development would generate broader economic benefits beyond project profitability, including improved trade balance, value-added creation, and enhanced industrial competitiveness. Drawing on past success, officials cited the East Sea gas field, which operated until 2021. That project generated sales of 3.1 trillion won after an initial investment of 1.3 trillion won, including drilling costs, while also contributing to government revenue through taxes and royalties. “This is just the first step. The next phase can proceed with more reliable data at hand,” said Lim Jong-sei, a professor of energy resources and engineering at Korea Maritime and Ocean University. While the ministry indicated that multiple foreign firms have expressed interest in the project, industry experts caution that a heavy reliance on foreign investment could significantly diminish South Korea’s share of any future development profits. 2025-02-10 11:12:00

Korean government signals potential abandonment of 'Blue Whale' offshore gas project The West Capella, the drilling vessel for the "Blue Whale" project, parked offshore in Pohang, Dec. 20, 2024. Yonhap SEOUL, February 6 (AJP) - South Korea may scrap development of an offshore gas field in the East Sea after preliminary drilling results showed little economic promise, the Ministry of Trade, Industry and Energy said Thursday. A 47-day drilling operation at the “Blue Whale” site, which concluded on Feb. 4, failed to yield sufficient hydrocarbons to justify commercial production, the ministry said. “While reservoir and cap rock thickness, along with porosity levels, exceeded our expectations, we could not confirm hydrocarbon deposits substantial enough to ensure economic feasibility,” a ministry official told reporters. The "Blue Whale" site is one of seven potential gas-bearing formations identified in South Korea’s eastern waters. A full analysis is expected in August following further laboratory testing. Despite the setback, the ministry expressed confidence in the remaining six sites, noting that international investment could play a crucial role. The drilling campaign, launched on Dec. 20 by state-run Korea National Oil Corp. (KNOC), was initially believed to hold up to 14 billion barrels of oil and gas reserves. The project had been backed by President Yoon Suk-yeol. 2025-02-06 17:27:08