Gov’t Secures 12 Bln Won Required This Year for 1st Drilling of Potential East Sea Deposits

The government has secured around 12 billion won, or eight-point-six million U.S. dollars, required for this year to launch the first exploratory drilling for potential gas deposits in the East Sea, set to begin in December.

According to government officials on Friday, out of the 12 billion won set aside by the Energy Ministry and the Korea National Oil Corporation (KNOC), about six billion won came from state investment funds for KNOC this year, totaling 48-point-one billion won. The other half will come from KNOC’s own funds.

Under a number of service contracts, including the one with Norwegian firm Seadrill, the government plans to inject around 100 billion won to conduct the drilling at one of seven promising structures from December through April 2025. Nearly 90 billion won of the drilling cost, which will be due for payment after the first drilling, will have to be derived from next year’s budget.

Taking into account the project’s estimated success rate of around 20 percent, the government and KNOC expect to conduct drilling in at least five boreholes over the next five years, resulting in a cost of an additional 500 billion won.

The Ministry has proposed injecting state investments as well as enforcing a special state loan program for resource development and exempting loans upon project failure to finance future drilling projects.

Covering the costs, however, remains uncertain as the opposition Democratic Party, which has been skeptical about the project due to insufficient information sharing, has refused partisan cooperation on the related budget.