The Korea National Oil Corporation (KNOC) is gearing up for a significant milestone in its energy exploration efforts. Minister of Trade, Industry and Energy, Ahn Duk-geun, announced on July 28 that KNOC plans to initiate a bidding process at the end of next month to select an investment procedure manager, targeting overseas investment banks. This move is part of a broader strategy to secure investors for the Donghae gas field, a resource-rich area off the coast of Pohang’s Yeongil Bay.

The investment-related bidding announcement is set to commence in August, with KNOC looking to sell shares through this process. The Donghae gas field, estimated to contain up to 14 billion barrels of oil and gas, is dispersed across seven promising structures, necessitating substantial investment and advanced technology for successful extraction.

Minister Ahn emphasized the importance of global collaboration, stating, “If global major companies are to invest in the development of the Donghae deep-sea gas field, there must be global-capacity managers who can handle the investment procedures.” This highlights the need for expertise and technology that foreign companies can provide, given the deep-sea location of the resources.

Preparations for the first drilling are progressing smoothly, with Busan New Port selected as the support port. The drillship ‘West Capella,’ built by Samsung Heavy Industries in 2008, will be in charge of the initial drilling operations. Measuring 228 meters in length, 42 meters in width, and 19 meters in height, the ‘West Capella’ boasts a maximum drilling depth of 11,430 meters. The drillship is scheduled to move in November, with the first drilling of the Daewang Whale Field likely to proceed in December.

Despite the ambitious plans, the path to securing foreign investment is fraught with challenges. A government official explained, “Considering the process of improving the exploration rights system and then attracting investment, it is physically difficult to receive foreign investment and conduct the first drilling.”

The financial demands of such a project are substantial. Drilling a potential oil and gas site once requires at least 100 billion won (around $740 million). The reality is that the technology and know-how to drill must be learned from foreign companies, making international collaboration essential for the project’s long-term success.

Source : Businesskorea