Korea National Oil Corp. (KNOC) has reportedly signed a contract with Norway’s Seadrill to use a drill ship as it pursues a deep-water gas field project in the East Sea.
According to industry sources on June 4, the Korean government and KNOC signed a contract in early May with Norwegian offshore driller Seadrill, one of the world’s leading offshore drillers, to use a drill ship named West Capella. The West Capella was built by Samsung Heavy Industries in 2008. The West Capella will spend approximately 40 days in Korea to fulfill the drilling contract. The contract is valued at US$32 million and will take effect beginning in December.
The Korean government and KNOC will begin drilling later this year in a Great Whale Gas Field candidate area off the northern part of the East Sea’s Block 8 and Block 6-1 to drill a long exploratory hole deep into the seabed to determine if there is oil and natural gas.
Through a process of physical exploration, which is the primary method of determining the likelihood of oil and natural gas in the sea, Korean government authorities have identified large deposits of natural gas and oil in a wide range of waters 38 to 100 kilometers off Yeongil Bay in Pohang, North Gyeongsang Province.
The estimated resources are 75 percent gas and 25 percent oil. Therefore, experts say that if a large amount of resources are actually found, it will be in the form of a gas field with the proportion of gas eclipsing that of oil.
Unlike a small-scale East Sea gas field that South Korea previously developed on the shallow East Sea continental shelf, this time the field is located in deep water more than 1 kilometer down, so drilling a single exploration borehole is expected to cost 100 billion won in this field.
The Korean government received a report from an overseas expert organization that said the exploratory drilling has a 20 percent chance of success. This is considered a very high probability of success.
The Korean government and KNOC reportedly selected the area as the top priority for development after verification by a committee of domestic and foreign companies and experts in addition to the results of a physical exploration analysis from Act-Geo.