Newly discovered oil and gas reserves could supply South Korea for 29 years

Yeongil Bay oil and gas reserves valued at five times Samsung Electronics’ market cap.The oil and gas field off the coast of Yeongil Bay in Pohang, for which President Yoon Suk-yeol approved a drilling plan on June 3, is estimated to contain enough oil and gas for South Korea to use for up to 29 years.

“The estimated reserves of the Yeongil Bay oil and gas field, potentially 3.5 billion to 14 billion barrels, are larger than the world’s largest deepwater gas field in Guyana, South America, at 11 billion barrels,” a senior official at the Ministry of Trade said. “This could supply South Korea with natural gas for up to 29 years.”

However, the figures for the Yeongil Bay oil and gas field are based on exploratory resource estimates, whereas the figures for the Guyanese gas field are based on the discovered potential resources after borehole drilling, so the actual reserves may differ from the estimates.

“The value of oil and gas reserves in the East Sea is about five times the market capitalization of Samsung Electronics,” Trade Minister Ahn Duk-Geun said. Considering that Samsung Electronics’ market capitalization was around 455 trillion won ($330 billion) on June 3, this amounts to a staggering 2,270 trillion won.

President Yoon Suk Yeol said Monday that a potentially massive oil and gas reserve could be buried off the southeast city of Pohang and drilling will begin later this year to determine whether it is real.The reserve off Yeongil Bay in Pohang, about 260 kilometers southeast of Seoul, could hold up to 14 billion barrels of oil and gas, an amount that could meet Korea’s gas demands for 29 years and oil demands for four years, Yoon said.

He cited a geophysical study conducted by an unidentified foreign seismic research company.”The recent results indicate a very high possibility of deposits amounting to 14 billion barrels of oil and gas, and these findings have been verified by leading research institutions and experts,” Yoon said during the briefing at the presidential office.

The Ministry of Trade, Industry and Energy has approved the exploration drilling plan, with preliminary results expected by the first half of next year.The government had discovered the high likelihood of additional oil and gas fields around the gas field in the East Sea in February last year, and a leading deep-sea technology evaluation company was commissioned to conduct an in-depth geophysical survey, Yoon said.

Based on the survey results, an exploration drilling project will be launched to confirm the actual deposits, a process that typically takes at least three years before proceeding to commercial development. The government estimates that three-quarters of the reserves are gas, with the remainder being oil.Industry Minister Ahn Duck-geun said that preparations for commercial drilling are expected to begin once the actual deposits are confirmed, expecting construction to start around 2027-2028.

“We anticipate commercial development to start around 2035, but it is difficult to specify an exact timeline until the deposits are confirmed,” Ahn said during the briefing.Ahn explained the maximum potential deposits of 14 billion barrels are equivalent to five times the market value of Samsung Electronics, Korea’s most valuable company. As of Monday, Samsung Electronics holds a market cap of 451.9 trillion won ($328.3 billion).