President Yoon Suk-yeol directly announced that the first drilling for the Donghae deep-sea gas field development project, which drew national attention, ended in failure. Despite rosy prospects suggesting a value reaching "20 times that of Samsung Electronics' market capitalization," the drilling results showed a low gas saturation of hydrocarbons, indicating that the project's viability is uncertain.
Concerns have arisen that only positive factors, such as estimated reserves of "up to 14 billion BARRELs," have been exaggerated to secure project momentum. The government apologized for this criticism.
The government stated that while the Blue Whale promising structure lacks viability, additional drilling should be conducted for the remaining six candidate structures. Starting next month, the government plans to officially pursue foreign investment to carry out drilling for each block.
However, the amount of gas discovered in the Blue Whale promising structure, which was considered to have the greatest potential for development, was far below the threshold for viability, making it difficult to confirm whether foreign investment would be secured. The loss of national governance momentum resulting from the impeachment crisis following the martial law period is also considered a factor that makes the project's continuation difficult.
◇ Drilled 3,000 meters with high hopes, but the ‘Blue Whale’ is empty
According to the Ministry of Trade, Industry and Energy, the estimate of gas reserves in the Blue Whale promising structure, which was completed on the 4th, confirmed that its viability is not sustainable. A senior official from the ministry noted, "We confirmed some signs of gas in the Blue Whale promising structure, but the level of economic feasibility was not sufficient," adding that "the overall gas saturation of the Blue Whale structure was not high enough, so the necessity for additional exploration drilling of the Blue Whale is not significant."
The ministry explained that while structures likely to contain oil or gas were identified, they were found to be empty. Organic source rock was also discovered. In this case, it is possible that oil or gas migrated from that structure to another, or that there were cracks in the cap rock allowing gas to seep out. The structural conditions of the strata and the movement of energy sources are expected to be confirmed through detailed analysis over the next 5 to 6 months.
The drilling operation for the Blue Whale promising structure, conducted offshore Yeongilman in Pohang, North Gyeongsang Province, began on Dec. 20 last year and ended on the 4th. The costs incurred for drilling alone, including the chartering of drill ships, amount to approximately 100 billion won.
Drilling occurred below 3,000 meters from the sea surface, but the anticipated oil and gas layers were not found.
The government maintains that there are still promising structures where oil or gas may be present, and additional drilling work should be conducted. The government plans to obtain investments from major foreign oil corporations for the second round of drilling.
However, the amount of gas found in the Blue Whale promising structure, which was assessed to have the highest development potential, was significantly below the threshold for viability, making it difficult to predict whether foreign corporations would participate in the investment. If the oil majors decide to forgo investment intentions, continuing the development of the Donghae deep-sea gas field would become virtually impossible.
◇ Was the Donghae gas field an ‘illusion’? Opposition party harshly criticizes, calling it a ‘political show’
As the disappointing results were received in the first drilling, criticisms arose regarding whether the rosy prospects presented by the government were merely illusions.
Previously, President Yoon Suk-yeol held a national briefing on June 3 last year, stating, "There is a high possibility that a vast amount of oil and gas is buried in the ocean off Yeongilman in Pohang, North Gyeongsang Province." The Minister of Trade, Industry and Energy, Ahn Deok-geun, also mentioned that if the estimated reserves were to be calculated at current values, it would equate to "5 times that of Samsung Electronics' market capitalization."
Instances of economic development in foreign oil-producing countries, such as Guyana, which have seen rapid growth due to deep-sea oil development, have also been cited. In hindsight, it feels like popping the champagne too early.
Ultimately, in response to the criticism that only positive aspects were highlighted last June, the government expressed through a senior official from the ministry, "The first announcement was made during a process where unexpected political influences intervened, which led to an overemphasis on the (Minister's) analogy,” and acknowledged that while it was not intended, the resulting situation was regrettable.
In light of the growing controversy, some interpreted the phrase used by the senior official from the ministry, "the process of political influences intervening," as an acknowledgment that the Donghae deep-sea gas field project was announced as a "political judgment" to secure national governance momentum after the defeat in the April general elections.
As the controversy escalated, the ministry explained, "While Minister Ahn used the market capitalization of Samsung Electronics as an example during the briefing in June to explain the estimated value of the reserves in an easily understandable way, it became politically exploited, leading to controversy, and we express our regret for that."
The opposition party evaluated the results of this first drilling as the conclusion of "arrogance and self-righteousness." The Spokesperson for the Democratic Party of Korea, Park Kyung-mi, stated in a briefing on the 6th, "The Blue Whale project, which the government promoted widely as a 'game changer' tied to the future of the nation, turned out to be just a shadow on the lake," criticizing the disastrous reality of an oil development project that has been mired in poor verification, inflated projections, and political events. The spokesperson added that the era of using the lives of citizens as hostages for political shows must end.
On the other hand, the ruling party insists that additional drilling is necessary. The reasoning is that resource development projects with a slim chance of success cannot yield immediate results. Kwon Young-se, the Chairperson of the People Power Party's emergency response committee, stated on SBS radio on the 7th, "We've drilled once, and it didn't work, didn't it?" He added, "While I don't know if we'll drill more in the future, I think it's necessary to try," emphasizing that if oil or gas were to come out right away after a single drill, there wouldn't be any countries that wouldn’t be oil-producing nations.
A government official, speaking on condition of anonymity, stated, "If the Minister had presented the information calmly, such controversies would have been less," adding that "the president's excessive promotion has diminished the credibility of the project itself."