Korea National Oil Corporation (KNOC) has designated “Blue Whale,” one of the promising structures in the deep-sea gas fields of the East Sea, as its first exploration drilling site.

According to industry sources on July 16, KNOC has provisionally designated the Blue Whale as the location for its first drilling well, following recent technical evaluations and expert verifications. They are preparing to seek drilling approval from the Ministry of Trade, Industry, and Energy.

On June 3, President Yoon Suk-yeol announced that there is a potential for 3.5 billion to 14 billion barrels of oil and gas in Block 8 of the East Sea near Yeongil Bay in Pohang City, North Gyeongsang Province. Based on advice from the U.S. company ACT-Geo, KNOC previously identified seven promising oil and gas reservoir structures in the areas around Blocks 8 and 6-1 in the East Sea.

These structures have been named after marine creatures, including Blue Whale, Squid, and Pollack, for management purposes. The government and KNOC plan to commence the first exploratory drilling from December this year, investing 100 billion won (approximately $72.17 million) over four months.

The Blue Whale, which has been selected as the first drilling site, is estimated to have the largest oil and gas reserves among the identified structures. It stretches east to west, spanning across Block 8 and the northern part of Block 6-1.

With the first candidate site confirmed, the government and KNOC are expected to accelerate practical preparations, including setting up support ports and arranging drilling rigs on-site. Analyzing the data obtained from exploratory drilling typically takes about three months, so the initial drilling results are anticipated to be available by the first half of next year at the earliest.

The results of the initial exploratory drilling could significantly impact the overall project progression. Given that the government and KNOC estimate the development success rate for each promising structure at around 20 percent, securing a commercially viable block will require exploratory drilling of at least five sites over several years, with an investment of more than 500 billion won.

This means that the government will need to secure funding through parliamentary discussions or attract overseas investment. However, securing future budget allocations could become challenging depending on the analysis results of the first drilling, given past controversies over the commercial drilling potential.

Source: Businesskorea