There won’t be any confirmation for a year or more, but the South Korean government has suddenly become very, very optimistic that it has identified a potential major oil and gas resource in the East Sea, off the city of Pohang (home to the huge steel group, POSCO).
In a briefing widely reported Monday afternoon, President Yoon Suk Yeol said that “according to the results of a geophysical survey, there is a high possibility that a massive amount of oil and gas is buried off the coast of Yeongil Bay in Pohang (in North Gyeongsang Province).”
“The results show that there is a very high possibility that up to 14 billion barrels of oil and gas are buried, and this has been verified by leading research institutions and experts,” the President told the briefing.
The government indicated its studies had a preliminary estimate that about 75% of the 14 billion barrels are gas, and 25% is oil.
If confirmed that that size, it would be the biggest discovery in northern Asia. Russia’s Sakhalin 1 field contained 2.3 billion barrels of oil and 485 billion cubic meters of gas at discovery; Sakhalin 2 had 1.1 billion barrels of oil and 684 billion cubic meters of gas.
Gas would have a larger value for the country – South Korea is a major LNG importer from Australia and the Middle East. Gas is a lower carbon fuel compared to oil. The longer term value for any gas would be more attractive than any oil.
The government said exploratory drilling later this year, the presidential office and the Ministry of Trade, Industry, and Energy said.
If confirmed, the reserves would meet Korea’s gas demand for the next 29 years and oil demand for four years, and would have a value of $US1.64 trillion (although that is a bit pie in the sky at the moment because first the stuff has to be confirmed and then a lot more drilling undertaken to confirm and then development work undertaken).
That would take first oil to the mid-2030s if development work starts around 2027.
South Korea has not had much success and its biggest strike was a 45 million barrel find in the late 1990s in the East Sea.
