South Korea’s first attempt to explore potential oil and gas reserves in the East Sea has fallen short, with the government and the Korea National Oil Corporation (KNOC) confirming on Feb. 6 that the initial drilling failed to prove economic viability. The operation was part of the nation’s ambitious “Blue Whale” prospect.
Named after the largest of seven potential structures in the area, the “Blue Whale Project” aimed to tap into what the government had estimated as a significant reserve, valued at up to five times Samsung Electronics’ market capitalization.
The Ministry of Trade, Industry and Energy said that while traces of gas were detected, they were not at commercially viable levels. “The Blue Whale structure did not meet the criteria for appraisal drilling,” a senior ministry official said.
The drilling, which took place from Dec. 20 to Feb. 4, marked the project’s first exploratory phase. The site has since been restored, but KNOC remains optimistic about the remaining six structures.
“Preliminary assessments indicate that conditions such as cap rock, reservoirs, and porosity are better than initially predicted, which raises hopes for future exploration,” the official added.
KNOC plans to analyze samples from the first well and release interim results by May or June, with final conclusions expected in August. The company also intends to sign a contract this month with a foreign institution specializing in drilling technology.
Each well is estimated to cost around 100 billion won ($78.7 million), with funding emerging as a major concern after the National Assembly completely cut the project’s budget, forcing KNOC to rely on bond issuance.
To secure additional investment, the government and KNOC plan to start seeking foreign partners in March. They are also considering dividing key exploration zones, including the “Squid” and “Pollock” structures, to attract investors.
“If major international firms validate the project’s potential through investment, it will help persuade the public,” the ministry official said.
Drilling timelines are expected to be lengthy. With each well taking over eight months from start to result, the plan to drill five wells could take up to five years.
Despite the setback, industry experts remain hopeful. “There’s no such thing as failure in drilling,” said Lee Kun-sang, a professor at Hanyang University. “Even without a discovery, data from the first well can guide future analysis of surrounding areas.”
Lee cited successful cases elsewhere, such as Guyana’s oil fields, discovered after decades of drilling, and Israel’s deep-sea gas fields, found after 12 years of exploration. Norway struck oil on its 33rd attempt.
