South Korea’s offshore energy exploration projects have faced criticism after a highly publicized deep-sea gas field was deemed unproductive. Government officials acknowledged that political factors contributed to overestimating its potential.
The Ministry of Trade, Industry, and Energy announced on Thursday that costly test drilling revealed the development in the East Sea, known as the “Blue Whale Project,” was “not economically viable.”
Political science expert Jhee Byong-kuen from Chosun University stated that the failure highlights how scientific judgment is often compromised by political motives. He warned that South Korea has a history of wasted billions in poorly planned overseas energy ventures, especially during the administration of former president Lee Myung-bak (2008-2013).
The state-funded Korea National Oil Corporation lost US$5.6 billion in 2009 on oil and gas field acquisitions and oil sand projects in Canada.
“I fear the country is not learning from past mistakes,” Jhee said.
In June, President Yoon Suk-yeol made a rare live TV appearance to announce the discovery of vast oil and gas reserves off South Korea’s southeastern coast, which sent energy stock prices soaring. He claimed there was a “very high possibility” of finding up to 14 billion barrels of oil and gas in the region, an estimate confirmed by research institutes and experts. Yoon added that these reserves could meet South Korea’s gas needs for 29 years and its oil needs for four years.
At the time, Yoon was struggling with low approval ratings following a major loss in the April 2024 parliamentary elections. He is currently suspended from office after a brief martial law decree in December.
Minister of Trade, Industry, and Energy Ahn Duk-geun later stated that the value of these reserves was estimated to be five times the market capitalization of Samsung Electronics, which was worth US$30 billion at the time.
However, the first exploratory drilling, which started in December, has now concluded, and the government has decided to halt further drilling at the Blue Whale field and close the test well, according to the ministry.
A high-ranking official from the ministry admitted that the chances of success were extremely low, saying, “The probability of success in the first exploratory drilling was lower than winning the lottery, but due to political pressures, we had to proceed with the project.”
In response, conservative daily Dong-A Ilbo published an editorial suggesting that Yoon’s announcement lacked sufficient evidence, and questioned whether it was a politically motivated stunt. Another conservative newspaper, JoongAng Ilbo, reported that Yoon’s office had ignored concerns from working-level officials when pushing forward with the announcement.
The JoongAng Ilbo editorial criticized the interference of politics in resource development, calling it a breach of public trust. The newspaper warned that a “just announce it and see what happens” approach could hinder future resource projects and called for an independent investigation to prevent the government from losing credibility.
The same ministry official also apologized for the premature optimism shown about the project, saying, “I am sorry about that.”
Despite the setback, the ministry said it plans to continue exploration drilling in six other deep-sea structures off the eastern coast, possibly in partnership with international companies.
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