Korea's east coast may harbor 14 billion barrels of oil and gas, Yoon says

President Yoon Suk Yeol said Monday that there is a high likelihood that a large amount of oil and gas is buried in waters off Korea's east coast near Yeongil Bay in Pohang, North Gyeongsang, and announced further exploration of the area.

President Yoon Suk Yeol, left, reveals that a large oil and gas reserve is believed to be buried off the coast of Pohang in the East Sea in a press briefing at the Yongsan presidential office in central Seoul Monday. [JOINT PRESS CORPS]

President Yoon Suk Yeol said Monday that a large amount of oil and gas is likely buried in waters off Korea's east coast near Yeongil Bay in Pohang, North Gyeongsang, and announced further exploration of the area.

"There is a very high possibility that there are as much as 14 billion barrels of oil and gas reserves," Yoon said in a press briefing at the Yongsan presidential office, referring to studies that have been "verified by leading research institutions and experts."

Yoon said that since February 2023, his administration believed there was a great likelihood that "more oil and gas fields exist around the East Sea gas field" and has consulted with a "world-class company specializing in deep-sea technology."

He said that this is more than 300 times the size of the East Sea gas field found in the late 1990s, and it is believed that the country can use natural gas for up to 29 years and oil reserves for four years.

Yoon added that he has approved the exploration of possible oil and gas reserves under the sea off Korea's east coast.

He said the Ministry of Trade, Industry and Energy has been instructed to proceed with deep-sea exploration and drilling in the East Sea.

This marked Yoon's first press briefing on government affairs since taking office two years ago, though he didn't answer any questions from journalists.

In February last year, the Korean government commissioned the U.S.-based research company ACT-Geo to conduct an in-depth study of the area's potential following a preliminary study indicating a possibility of more gas and oil reserves near the East Sea gas field. The study found that deposits of between 3.5 billion and 14 billion barrels of gas and oil may be located there.

Korea has attempted to explore underwater oil and gas fields since the 1960s and discovered a 45-million-barrel gas field in the East Sea in the late 1990s. Commercial development of that reserve was completed in 2021.

Yoon said oil and gas field development is carried out in three stages: physical exploration, exploratory drilling and commercial development. He said that the government is currently in the drilling phase to confirm whether the oil and gas reserve exists and how large it actually is.

He said that at least five boreholes must be drilled, with each shaft costing over 100 billion won.

Yoon added that "global energy development companies are already showing interest" in the project.

Minister of Trade, Industry and Energy Ahn Duk-geun later said that further exploration can begin as early as December and preparations for commercial drilling, if actual deposits are confirmed, could start as early as 2027.

The preliminary results are expected to be announced in the first half of next year, he added.

According to such a scenario, he said commercial development "could begin around 2035, though it is too early to confirm the specific timeline."

He said that the maximum potential deposits of 14 billion barrels are equivalent to five times the market value of Samsung Electronics, which had a market cap of some 440 trillion won ($319 billion) as of last weekend. Ahn said it had cost about 1.2 trillion won to develop the East Sea gas field.

Based on average import prices, 14 billion barrels of gas and oil are worth around $1.4 trillion.

Some experts believe it is too early to conclude that developing the offshore gas and oil reserve is feasible based solely on the survey results.

A senior government official said the data suggested the project's feasibility was "around 20 percent."

Lee Hae-sik, a spokesman for the liberal Democratic Party (DP), in turn criticized Yoon's announcement, calling it "a hasty judgment to announce reserve estimates before confirming oil and gas deposits or business value."

BY SARAH KIM [kim.sarah@joongang.co.kr]