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Park Chan-kyong

South Korea’s offshore energy exploration projects have come under scrutiny after a highly publicised deep-sea gas field was found to be unproductive, with officials admitting that political considerations led the government to exaggerate its potential.
A costly test drilling revealed that the development in the East Sea, known as the “Blue Whale Project”, was “not economically viable”, the Ministry of Trade, Industry, and Energy said on Thursday.
“The takeaway from this failure is that scientific discretion is still being sacrificed for political considerations,” political science expert Jhee Byong-kuen of Chosun University told This Week in Asia.
Jhee noted that South Korea had squandered billions of dollars in “ill-conceived and reckless” overseas energy projects during the administration of former conservative president Lee Myung-bak from 2008 to 2013.
The state-financed Korea National Oil Corporation alone lost US$5.6 billion in acquiring shares in oil and gas fields as well as in oil sand projects in Canada in 2009.
“I am afraid this country is not learning lessons from past failures,” Jhee warned.
Last June, now-suspended president Yoon Suk-yeol made a rare live TV appearance, announcing the discovery of potentially vast oil and gas reserves off the country’s southeastern coast.
The move sent energy stock prices soaring.
At the time, Yoon claimed there was a “very high possibility” that up to 14 billion barrels of oil and gas were beneath the seabed – an estimate he said was verified by leading research institutes and experts.
He further asserted that such reserves could meet South Korea’s gas demands for 29 years and oil needs for four years.
The president authorised exploratory drilling to confirm the reserves near Yeongil Bay, close to the city of Pohang, about 260km southeast of Seoul.
Yoon’s energy announcement came when he was grappling with chronically low approval ratings after his party’s stinging loss in April’s parliamentary elections last year. He is now suspended from office following his short-lived December 3 martial law decree.


Minister of Trade, Industry and Energy Ahn Duk-geun later stated that the estimated value of the oil and gas reserves was around five times the market capitalisation of Samsung Electronics. The tech giant was worth US$30 billion at the time.
However, with the first exploratory drilling – which began last December – now completed, the government has decided to halt further drilling in the Blue Whale field and has closed the test well, according to the ministry.
“The probability of success in the first exploratory drilling was lower than winning the lottery, but due to various political pressures, we had to proceed with the project,” a high-ranking ministry official told reporters.
Conservative daily the Dong-A Ilbo said in an editorial on Friday that the statement was effectively an admission that Yoon had been too optimistic without sufficient proof.
“Given these circumstances, it is now questionable whether the president and the minister deliberately staged a scam-like political stunt,” the column stated.
Another leading conservative newspaper, the JoongAng Ilbo, reported that Yoon’s presidential office allegedly ignored concerns from working-level officials and pushed forward with the announcement last year.
“If political considerations interfere with resource development projects – which should be guided by scientific and economic assessments – it would be a betrayal of public trust,” the editorial said in a piece titled “Was It Just False Hope from the Start?”.
The newspaper warned that if the government continued to adopt a “just announce it first and see what happens” approach, future resource development efforts would face significant challenges.
It called for an independent investigation to prevent the government from becoming “the boy who cried wolf”.
The same ministry official also apologised for its minister’s premature optimism about the project, stating: “I am sorry about that.”
Despite the setback, the ministry said it planned to continue exploration drilling in six other deep-sea structures off the eastern coast, potentially through joint ventures with overseas partners.


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South Korea

South Korea’s ambitious offshore energy exploration project in Pohang has been met with disappointment after a much-hyped gas field proved to be economically unviable. Photo: EPA-EFE/Yonhap

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Yoon Suk-yeol attends a hearing at the Constitutional Court in Seoul last month amid his ongoing impeachment trial. Photo: Xinhua

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Soldiers attempt to enter the National Assembly building in Seoul on December 4 after Yoon had declared martial law. Photo: AFP

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Choi Sung-ryong (centre), founder of the Association of Those Abducted by North Korea, started campaigning for the freedom of South Koreans seized by the North after his father was abducted in the 1960s. Photo: Association of Those Abducted by North Korea

Choi Sung-ryong’s father Choi Won-mo, who was abducted by North Korea in 1967. Photo: Choi Sung-ryong

An image received from Penguin Random House shows South Korean actress Choi Eun-hee (left), Kim Jong-il, and South Korean filmmaker Shin Sang-ok at a party thrown by Kim to reunite the couple in March 1983. Photo: Choi Eun-hee

One of the leaflets that Choi Sung-ryong’s Association of Those Abducted by North Korea plans to drop by drone into the compound of Chosen Soren. Photo: Choi Sung-ryong

Activists from the Association of Those Abducted by North Korea intend to use drones to drop leaflets into the grounds of the Tokyo headquarters of the General Association of Korean Residents of Japan. Photo: Association of Those Abducted by North Korea

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