The East Sea deep-sea gas field development project, which had been put on hold after an unsuccessful round of exploration, will be pushed again with British energy company BP as a partner.
According to the Ministry of Trade, Industry and Energy on the 7th, Korea National Oil Corporation, after consulting with the ministry, selected BP last month as the preferred negotiator for the joint development of the East Sea deep-sea gas field and notified the company of the result. The two sides are currently negotiating detailed terms such as investment scale and cost-sharing.
BP is a global oil and gas company headquartered in the United Kingdom. Formerly known as British Petroleum, it is considered one of the world’s “oil majors,” alongside ExxonMobil and Shell. It is regarded as particularly strong in deep-sea exploration, with extensive experience in finding and producing resources in deep waters.
The project area covers the Donghae Block 8 and Block 6-1 offshore east of Pohang. It is a national project to explore and develop oil and natural gas and has long been referred to as the “Great Whale Project.”
◆ First drilling failed
The project did not get off to a smooth start. Korea National Oil Corporation carried out its first exploratory drilling from December 2024 to February of last year. About 100 billion won was invested. Although the geological structure where oil accumulates and is trapped was found to be favorable, no reserve volume sufficient for economically viable gas field development was confirmed.
Political attacks were also intense. The Democratic Party called it a “mass fraud against the public” and demanded a complete reconsideration from scratch. During the budget process, it cut the entire 49.7 billion won allocated to the project. As a result, the project, which had been pursued as a national policy task, was downgraded to a Korea National Oil Corporation standalone project.
A change in administration also overlapped. With the government changing after the Dec. 3 state of emergency crisis, the momentum for the project weakened further. The project, despite its enormous cost, drifted for a time.
◆ Project revived amid crisis in the Middle East
What changed the flow was an external variable: the military conflict between the United States and Iran that began in late February this year.
As the war dragged on and fears grew that the Strait of Hormuz could be blocked, geopolitical risks intensified. With energy security emerging as a national priority, the government reassessed the strategic value of the East Sea gas field. That is the background behind the revival of a project that had seemed likely to collapse.
The project structure has also changed. Korea National Oil Corporation shifted its approach toward minimizing its own financial input and relying on overseas companies with extensive deep-sea development experience.
It held an international bidding process aiming to attract equity investment of up to 49%, and global oil and gas companies including BP and ExxonMobil participated. Korea National Oil Corporation selected BP as the preferred negotiator in October last year.
If BP’s participation is finalized, further exploration and development are expected to accelerate. The project’s future depends on the outcome of detailed negotiations over investment 규모 and cost-sharing.