The gas field development project in the deep sea of the East Sea, referred to as the 'Blue Whale Project,' has revealed low economic feasibility from the first drilling results, damaging the credibility of Actgeo, the American deep-sea resource exploration company responsible for evaluating the project's feasibility. Actgeo recently announced that it found promising structures where gas and oil might exist in the East Sea, but some in the energy industry speculate that the likelihood of success at this site is not high. The newly identified promising structure has been named 'Devil Shark.'
According to the energy industry on the 7th, a senior official from the Ministry of Trade, Industry and Energy stated while meeting with reporters the previous day at the government complex in Sejong, "We have confirmed that there are signs of gas deposits in the drilling of the Blue Whale promising structure, but it is not at an economically viable level."
The Blue Whale Project became widely known after President Yoon Suk-yeol stated during a government briefing in June last year that there is a high possibility of large-scale gas and oil deposits in the waters off Pohang, North Gyeongsang Province. At that time, President Yoon reported that, starting in 2023, he received information from the world's leading deep-sea exploration companies indicating that the deposits range from a minimum of 3.5 billion barrels to a maximum of 14 billion barrels. Based on the maximum deposit, the oil can be used domestically for four years and the gas for about 30 years. A total of seven promising structures were identified then, each named after marine creatures such as 'Blue Whale,' 'Squid,' and 'Pollock.' Among these, the size of the Blue Whale was the largest, leading to the entire project being called the 'Blue Whale Project.'
However, as the first drilling of the Blue Whale showed no economic feasibility, skepticism about Actgeo, the company contracted for this project, is growing. Established in 2016, Actgeo has faced criticism for its short experience in winning government contracts. Its headquarters is located in an ordinary single-family home in the United States, and it has fewer than 10 employees.
Korea National Oil Corporation (KNOC) paid Actgeo a total of $2.95 million, including $1.25 million in 2023 and $1.7 million last year. Applying the current exchange rate, this amounts to about 4.3 billion won over two years. As the momentum of the Blue Whale Project weakens, the likelihood of this two-year endeavor only benefiting Actgeo is increasing.
The energy industry's attention is now focused on the Devil Shark, which is the follow-up project to the Blue Whale. At the end of last year, Actgeo submitted a report to the government and the oil corporation stating that it had discovered 14 new promising structures in the Ulleung Basin of the East Sea, where gas and oil deposits are likely to exist. The report noted, "The total deposits could reach up to 5 billion barrels. The Devil Shark alone is estimated to contain up to 1.29 billion barrels of gas and oil."
The oil corporation has not yet entered the process of analyzing the feasibility and drilling for the Devil Shark. A spokesperson from the oil corporation stated, "The investigation for Devil Shark is scheduled to begin in the first half of this year," adding that "the survey is expected to take about six months, so the economic evaluation results for Devil Shark will likely be released in the second half of the year."
However, as the National Assembly cut the budget for the Blue Whale last year and the conclusion of no economic feasibility arose from this drilling, there are forecasts that Devil Shark will struggle to receive the necessary support for exploration. An insider from the energy industry noted, "The drilling results indicating no economic feasibility for the Blue Whale significantly diminished Actgeo's credibility. Many believe that the results for Devil Shark will not be much different."