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

South Koreans turn to global stocks as domestic markets stumble A Hana Bank branch in Seoul/ Yonhap SEOUL, February 6 (AJP) - South Korean individual investors shifted their focus from domestic to overseas stock markets in 2024, with foreign stock trading volume surging 39 percent while domestic trading plummeted 13 percent, according to data from nine major brokerages released Thursday. The exodus from domestic equities continued as trading volume on Korean exchanges dropped to 635.25 billion shares in 2024, down from 730.38 billion shares the previous year, the data showed. The retreat from domestic markets marks a sharp reversal from the retail trading boom during the COVID-19 pandemic, with domestic trading volume now around half of its 2021 peak of 1.23 trillion shares. By contrast, overseas stock trading volume soared to 156.42 billion shares in 2024, marking the second consecutive year of strong growth after an 89.6 percent surge in 2022. The shift has significantly impacted brokerages’ revenue streams, with foreign exchange commission income doubling to 269.66 billion won ($186.6 million) in 2024 from the previous year. The mass migration comes despite government efforts to bolster domestic market valuations, as South Korea’s benchmark KOSPI index fell 9.43 percent in 2024 while major global indices steadily advanced. The S&P 500 and Nasdaq surged 26.58 percent and 33.37 percent, respectively, over the same period, while Japan’s Nikkei 225 climbed 20.37 percent. Market analysts attribute the investor flight to persistent corporate governance concerns. 2025-02-06 13:56:31

Current account surplus soars to $99 billion in 2024 A port in Busan/ Yonhap SEOUL, February 6 (AJP) - South Korea’s current account surplus surged to $12.37 billion in December last year, the highest monthly figure for the month on record, fueled by robust exports and rising dividends from overseas investments, the Bank of Korea said Thursday in a preliminary report. For the full year, the country’s current account surplus soared to $99.04 billion, more than tripling from $32.82 billion in 2023 and exceeding the central bank’s projection of $90 billion. The goods account surplus widened to $10.43 billion in December from $8.66 billion a year earlier, as exports rose 6.6 percent to $63.3 billion, outpacing a 4.2 percent increase in imports, which reached $52.87 billion. The growth in exports was driven by a sharp increase in semiconductor shipments, which jumped 30.6 percent, while information and communications technology products climbed 37 percent. Meanwhile, exports of passenger vehicles, petroleum products, machinery, and precision equipment remained subdued but showed signs of recovery, contributing to the overall export gains. The latest data highlights South Korea’s economic resilience despite political uncertainty and challenges in the global technology sector under President Trump’s second administration. Exports to major trading partners showed broad-based growth, with shipments to Southeast Asia rising 15.4 percent, the European Union increasing 15.2 percent, and exports to China climbing 8.6 percent. 2025-02-06 13:44:11

Korean firms join government in blocking access to DeepSeek The logo of DeepSeek, a keyboard, and robot hands illustrated together. Reuters-Yonhap SEOUL, February 6 (AJP) - South Korean firms have banned the use of the Chinese artificial intelligence model DeepSeek, citing concerns over potential data breaches and security risks. Leading companies, including Samsung, SK Group, and LG Electronics, have reinforced cybersecurity measures by blocking access to external generative AI tools. Kakao and LG Uplus have prohibited employees from using DeepSeek for work-related tasks. The decisions follows a broader government directive issued on Tuesday by the Ministry of the Interior and Safety, which urged central government agencies and 17 regional administrative bodies to exercise caution when using generative AI, including DeepSeek and ChatGPT. The Ministry of Foreign Affairs, the Ministry of National Defense, and the Ministry of Trade, Industry and Energy implemented restrictions on Wednesday. State-run enterprises are also aligning with the government’s stance. Korea Hydro & Nuclear Power and KEPCO Plant Service & Engineering recently announced internal bans on DeepSeek usage, reinforcing a national effort to safeguard sensitive information. “Multiple technical concerns have been raised both domestically and internationally regarding DeepSeek, prompting us to block access on military-use internet PCs,” the Ministry of National Defense said in a statement. DeepSeek has come under increasing scrutiny worldwide due to its extensive data collection practices, including the tracking of users’ keyboard input patterns for purported training purposes. Fears of information leaks through DeepSeek are growing globally. Australia, Taiwan, and the U.S. state of Texas have implemented bans on its usage for government devices, while Italy has gone a step further, blocking downloads of DeepSeek from mobile app stores. 2025-02-06 10:29:07

Xiaomi sprawling into AI, EV markets, challenging industry giants Xiaomi's booth at Cairo ICT 2024 in Cairo, Egypt/ Xinhua-Yonhap Editor's Note: This article is the fifth installment in our series on Asia's top 100 companies, exploring the strategies, challenges, and innovations driving the region's most influential corporations. SEOUL, February 5 (AJP) - Xiaomi, the Chinese electronics company known for its budget-friendly yet feature-rich devices, has intensified its global expansion, making a bold foray into South Korea, a stronghold of rival Samsung Electronics. The tech giant officially introduced its latest smartphone, the Redmi Note 14 Pro, to the South Korean market on Jan. 15, accompanied by subsidies that bring its effective cost close to zero. The move underscores Xiaomi’s ambitions to gain traction in a country where Samsung has long dominated - at one point contributing 26.6 percent of South Korea’s gross domestic product. Johnny Wu, chief executive of Xiaomi Korea, emphasized the synergy between Korean consumers’ demand for affordability and quality and the company’s philosophy of "innovation for everyone." Xiaomi’s reach extends far beyond smartphones. The company’s chairman, Lei Jun, has bolstered its partnership with Contemporary Amperex Technology Co. Ltd. (CATL), the world’s leading battery manufacturer, in a collaboration now in its fourth year. This alliance is proving instrumental as Xiaomi expands into electric vehicles, with a goal of delivering 300,000 units by the end of 2025 - an ambitious target representing a projected 122 percent increase year over year. Founded by Lei in 2010, Xiaomi disrupted the smartphone market with an aggressive pricing strategy that prioritized market penetration over immediate profitability. Its first device, the Xiaomi Mi 1, launched in 2011, gained popularity through viral marketing campaigns. By 2014, despite reaching operating profits of 61.5 billion won (approximately $46 million), its margins stood at just 1.28 percent - a calculated sacrifice that helped establish the brand. Xiaomi’s strategy has since evolved, with artificial intelligence and the Internet of Things (AIoT) playing a central role in its growth. In the third quarter of 2024, the company reported a 30 percent year-on-year revenue increase, reaching 92.5 billion yuan ($12.8 billion). Adjusted net profit also climbed 4 percent to 6.3 billion yuan. AIoT, in particular, has witnessed its fastest expansion since 2021, with sales in the white goods sector - air conditioners, refrigerators, and dishwashers - surging 55 percent year over year. Meanwhile, Xiaomi’s nascent electric vehicle division generated 9.7 billion yuan in revenue, exceeding industry expectations for a newcomer. As it continues to diversify, Xiaomi is also making inroads in artificial intelligence. Lei has reportedly sought collaboration with Luo Fuli, an AI expert from DeepSeek, underscoring the company’s intent to strengthen its capabilities in this space. From its beginnings as a low-cost electronics manufacturer to its current status as a global force in smartphones, home appliances, and electric vehicles, Xiaomi has leveraged innovation and affordability to carve out a significant position in the technology sector. As it advances in AIoT and electric mobility, its influence on the global stage is set to expand further. 2025-02-06 10:15:35

Korean battery makers struggle amid EV market slowdown Samsung SDI's booth in CES 2025 displaying its cell-to-pack technology, Jan. 10, 2025. Courtesy of Samsung SDI SEOUL, February 5 (AJP) - South Korean battery manufacturers are facing mounting challenges as the electric vehicle (EV) market experiences a temporary slowdown. The downturn marks a stark contrast to the industry’s boom just two years ago, when major player LG Energy Solution awarded performance bonuses of up to 900 percent of base salaries. Now, those bonuses have dwindled to a mere 50 percent. Samsung SDI’s battery division recorded no excess profit-sharing last year, while SK On replaced traditional bonuses with a stock-based "value-sharing" program worth about 20 to 30 percent of annual salary. All three of South Korea’s major battery manufacturers are posting steep losses. LG Energy Solution and Samsung SDI reported operating losses of 225.5 billion won ($155.6 million) and 256.7 billion won, respectively, in the fourth quarter of 2024. SK On is expected to follow suit when it releases its quarterly earnings on Thursday, analysts say. The industry's downturn coincides with concerns that U.S. President Donald Trump may dismantle the Inflation Reduction Act (IRA) subsidies, arguing that the EV supply chain disrupts free-market principles. “The contraction of the electric vehicle market could deal an even greater blow to the battery industry, given its deep reliance on EV demand,” said Cho Cheol, a senior researcher at the Korea Institute for Industrial Economics & Trade. Amid the crisis, company leaders are working to maintain morale and prevent an exodus of talent. “When crisis strikes, true capabilities emerge. Companies with real competence will dominate when the next super cycle arrives,” LG Energy Solution CEO Kim Dong-myung told employees in a recent statement. Samsung SDI CEO Choi Joo-sun echoed similar sentiments during a company meeting, saying, “The battery industry will ultimately grow, and if employees stay united with a positive mindset, we will ride the next super cycle.” Battery manufacturers are implementing cost-cutting measures. SK On and LG Energy Solution have already rolled out austerity programs, with POSCO Future M following suit. Samsung SDI is reportedly slashing expenses across its divisions as it prepares for emergency management. 2025-02-06 07:53:27

Korea to launch $23.4 billion fund to support battery, bio sectors Acting President Choi Sang-mok speaks at a ministerial meeting held in the Government Complex Sejong, Feb. 5, 2025. Yonhap SEOUL, February 5 (AJP) - South Korea plans to establish a 34 trillion won ($23.4 billion) fund aimed at bolstering its high-tech industries, with a focus on batteries and biotechnology, as the country prepares for potential economic headwinds from U.S. protectionist policies. The fund, tentatively named the "Strategic Advanced Industry Fund," will be managed by the state-run Korea Development Bank (KDB) and will be double the size of the country’s existing semiconductor support program, which currently stands at 17 trillion won. "We will swiftly prepare detailed plans for the fund's establishment and discuss related legal amendments with parliament in March," said Acting President Choi Sang-mok during a ministerial meeting on Wednesday. The initiative aims to provide low-interest loans and equity investments to nurture South Korea’s strategic industries, particularly small and medium-sized enterprises in the materials, parts, and equipment sectors. South Korea is also accelerating its artificial intelligence ambitions, with plans to fast-track the launch of a national AI computing center. This month, the government will convene a policy committee to devise strategies that will position the country as a global leader in AI development. The move comes as Seoul scrambles to shield its high-tech industries from expected challenges under the second Trump administration, which is widely anticipated to adopt even stronger "America First" trade policies. The announcement was made during a high-level ministerial meeting that also addressed concerns over the impact of the new U.S. administration on various industries and South Korea’s ongoing shift to low-carbon energy solutions. 2025-02-05 15:21:19