The East Sea deepwater gas field development project, which had been on the brink of grounding after a failed exploration, entered a renewed push after securing British energy corporations BP as a partner. With instability in the Middle East heightening the importance of energy security, the government appears to be putting weight behind continuing the project.
According to the Ministry of Trade, Industry and Energy on the 7th, Korea National Oil Corporation (KNOC), after consultations with the Ministry of Trade, Industry and Energy, selected BP last month as the preferred bidder for joint development of the East Sea deepwater gas field and notified the parties of the decision. The two sides are currently negotiating detailed contract terms.
The East Sea deepwater gas field development project is a plan to explore and develop oil and natural gas in blocks Donghae 8 and 6-1 off the coast east of Pohang. It drew attention during the Yoon Suk-yeol administration as the "Blue Whale project."
However, the project hit a snag from the first exploration phase. KNOC conducted the first exploratory drilling from late 2024 to early last year but did not confirm a meaningful reserve sufficient to secure economic viability. As the first drilling, into which about 100 billion won was invested, was effectively deemed a failure, controversy grew over whether to continue the project.
In response, KNOC shifted the project structure from the second exploration onward to share risk with overseas corporations and launched an international tender. Global oil and gas corporations, including BP and ExxonMobil, were reported to have participated in the bidding.
KNOC selected BP as the preferred negotiating partner last year, but the final decision was postponed as the project's momentum weakened during the change of administration. Some even suggested the project itself could be halted.
But with tensions in the Middle East escalating recently and energy security emerging as a key policy agenda, the government was said to have reexamined the project's strategic value. If BP's participation is finalized, additional exploration and development work is expected to accelerate.