South Korea to develop “large” offshore oil and gas discovery holding up to 14 Bbbl of oil

(Bloomberg) – South Korean oil and gas shares surged Monday after President Yoon Suk Yeol approved a plan to develop a fossil fuels offshore discovery off the country’s southeastern coast.

State-run Korea Gas Corp. closed up 30%, the most on record, and Posco International Corp. advanced 19% following Yoon’s televised speech on the discovery. SK Gas Ltd settled almost 7% higher on Monday, after jumping as much as 29% earlier, and SK Innovation Co., an oil refiner, rose more than 6%.

Fossil fuel importers like South Korea have been looking to boost energy security after Russia’s invasion of Ukraine upended markets, briefly sending gas prices to an all-time high and triggering shortages. Developing domestic resources is one way to reduce dependence on overseas suppliers and normalize subsidized prices at home.

Geophysical exploration indicated there’s a “high possibility” the discovery offshore the port city of Pohang holds as much as 14 Bbbl of oil and gas, Yoon said. The estimated volume could be worth more than four years of oil consumption and as much as 29 years of gas demand for the country, he added.

While the president called the offshore oil and gas discovery “large,” the estimated amount of fuel still pales in comparison to reserves in major exporting countries like the U.S. or Saudi Arabia. The energy ministry said the reserves are estimated to hold as much as 1.29 billion tons of natural gas and up to 4.22 Bbbl of oil.

Drilling, which will be carried out by Houston-based exploration and production consultant Act-Geo, will begin at the end of this year to evaluate the actual level of reserves, with results due by the first half of 2025, Yoon said. It typically takes seven to 10 years before production can take place, and the expected life of the resource is about 30 years, according to the energy ministry.