South Korea is working on a mid-term plan to explore oil and gas reserves off the country's coast as part of efforts to help reduce its heavy reliance on foreign crude imports, an energy ministry official said.
"The government plans to complete the plan by the end of this year," the official at the Ministry of Trade, Industry and Energy told Platts. Under the plan, state-run Korea National Oil Corporation would conduct another exploratory drilling in April next year for gas hydrates off the country's east coast, he said.
The drilling would be conducted at the Ulleung Basin where the Donghae-1 gas field is located. "Through the drilling, we will seek to determine the size of commercially viable deposits of gas hydrate there," the official said.
Results of preliminary seismic examinations in the Ulleung Basin held from April last year to February this year showed oil deposits in the area, though its size is unknown, the official said.
The government is also considering conducting joint drilling with China in the area off the western coast of Korea, the ministry official said, adding preliminary drilling would be also conducted off South Korea's southern coast. The official said the government would disclose further details on the plan later this year.
South Korea carried out its first exploratory and second drilling for gas hydrates in 2007 and 2010 in the Ulleung Basin off the eastern coast and estimated reserves at more than 600 million mt. Gas hydrates, ice-like deposits of water and natural gas, are located deep underwater where cold temperatures and extreme pressure causes natural gas to condense into semi-solid form. They can be used as an alternative to liquefied natural gas (LNG), the ministry said.
The Ulleung Basin is home to the Donghae-1 gas which has produced natural gas since 2004. "The Donghae-1 field in the Block 6-1 has so far produced 150 billion cubic feet of natural gas, or 29 million barrels of crude equivalent, and is currently producing 36 million cubic feet a day, or 7,000 barrels of crude equivalent," a KNOC official said. KNOC has a 100% stake in the Block 6-1.
KNOC has also been exploring the southern area of the Block 6-1 since October 2011. "The government plans to extend exploration of the 'Block 6-1 South' up until September 2019 or further as the first phase of exploration that started in October 2011 ends in September next year and the second phase comes to an end in October 2015," the KNOC official said. The Block 6-1 South is 70% controlled by South Korea's energy developers Daewoo International and 30% is held by KNOC.
KNOC also has a 50% stake in Block 8 with the other half controlled by Australia's Woodside Petroleum. KNOC is spearheading upstream oil projects abroad for South Korea, the world's fifth-largest crude buyer that imports almost all of its requirements.
