Yoon Demanded Great Whale Drilling Within Term: "Political Judgment Is Mine"

Audit Board: "Hasty Push Without Verification"

MOTIE Warned of "Success Probability Below 20% and Need for PR Caution"

President Yoon Made Direct Announcement Despite Negative Reports

Plan for Four More Wells by 2026; KNOC Violated St

An investigation by the Board of Audit and Inspection revealed that, during the process of promoting the East Sea deep-sea gas field development project, also known as the “Daewang Whale Project,” the Presidential Office under the Yoon Suk-yeol administration requested that the additional drilling schedule, which was originally set until 2029, be brought forward to fall within President Yoon's term. Although the Ministry of Trade, Industry and Energy recommended restraint in public promotion due to a less than 20 percent likelihood of successful exploration, a public announcement by the president was still decided. The Korea National Oil Corporation subsequently accelerated drilling before sufficient verification of the prospect evaluation results had been completed.

In the early morning of December 30 last year, the West Capella vessel was conducting exploratory drilling work at the Daewang Whale promising structure located offshore of Pohang city, Gyeongbuk. 2025.1.1 Yonhap News

On the 16th, the Board of Audit and Inspection released the results of the “Public Interest Audit Request on the East Sea Deep-Sea Gas Field Development Project.” The Board of Audit and Inspection focused its audit not on the correctness of policy decisions, but rather on the process of project promotion, the selection of service providers, and the appropriateness of drilling execution.

According to the audit findings, on November 13, 2023, the Ministry of Trade, Industry and Energy reported to the Presidential Office that, while there was a possibility that between 3.5 billion and 14 billion barrels of oil and gas might be present in the East Sea deep-sea area, their actual existence had not been confirmed and further analysis and verification were necessary.

Furthermore, during a face-to-face report to the Presidential Office on May 24, 2024, the ministry again conveyed that the probability of successful exploration was quite low—within 20 percent—and advised against external promotion. When, in an internal discussion on May 31, the ministry was instructed to provide a direct report from the minister to the president as well as to prepare for a public announcement, the Ministry of Trade, Industry and Energy suggested that releasing unconfirmed exploratory resource quantities via drilling could create excessive public expectations, and instead proposed expressing the information in terms of area rather than volumes.

However, during the minister’s report to the president on June 2, the then policy chief of the Presidential Office recommended a public announcement, citing concerns that a leak of information could significantly impact the stock market. The following day, on June 3, President Yoon personally held a national briefing to announce that “there is a high possibility that up to 14 billion barrels of oil and gas are buried off the coast of Yeongil Bay, Pohang.” On the day of the announcement, the share price of Korea Gas Corporation hit the upper price limit for the first time since its listing. Later, on February 7, 2025, when it was announced that the first drilling had proven to be uneconomical, the share price dropped by more than 10 percent.

The audit also confirmed that the Presidential Office had requested a shortening of the drilling schedule. The Ministry of Trade, Industry and Energy had initially planned to begin the first drilling at Daewang Whale at the end of 2024, followed by four additional wells by 2029. However, after the Presidential Office received a detailed timeline in September 2024, it requested that drilling be accelerated to be completed before the end of President Yoon’s term in May 2027.

When the Ministry of Trade, Industry and Energy indicated that reducing the schedule would be difficult due to the time needed for well assessment and analysis, the Presidential Office requested a direct report from the minister to the president. Upon receiving a first revised plan with the schedule brought forward to the first quarter of 2028, and after the minister explained that “a political decision is necessary,” President Yoon reportedly rebuked him, stating, “I am the one to make the political decisions,” and instructed the plan to be redrawn. Ultimately, even though the minister believed the timeline was unrealistic, he again reported a plan to drill four additional wells by 2026.

However, the Board of Audit and Inspection, noting the absence of any applicable regulations for presidential announcements to the public, did not require separate measures regarding this issue from either the Presidential Office or the ministry.

More direct legal and procedural issues were identified in the project execution process. The Korea National Oil Corporation, when commissioning the prospect evaluation, selected only four companies for the first contract and three companies for the second contract, even though there were 17 companies with relevant experience—falling short of the requirements for a limited competitive bid under the National Contracts Law, and conducting bidding without a separate market survey. The evaluation criteria, such as project manager experience, were also not disclosed to the bidders.

In particular, for the second contract’s technical evaluation, the “service manager performance” criterion—absent from the original standards—was added and used to eliminate one company. The Board of Audit and Inspection pointed out that if the original criteria had been followed, the company would have passed the technical evaluation, and since its final proposed price matched the winning bid, the winner should have been determined by drawing lots. The Board requested disciplinary measures and actions to prevent recurrence for those involved.

The Board also found that the evaluation of the prospects for the Daewang Whale structure—the first drilling target—had not been sufficiently verified. The contractor estimated the median (P50) of the exploration resource quantities for seven prospective structures at a total of 7.42 billion barrels—165 times the volume produced by the East Sea gas field over the past 17 years. In some cases, their estimate for a structure was more than 39 times higher than previous assessments by other organizations.

The geological probability of success for Daewang Whale was 19.1 percent, lower than the 25–32 percent probability for the “Bangeo Structure,” which failed to discover gas during actual drilling in 2021. Even so, the Korea National Oil Corporation set its initial drilling plans in October 2023, before the contract work was completed, after only confirming the appropriateness of its analysis method through a foreign advisory group.

In fact, the results of the Daewang Whale-1 exploratory drilling, conducted from December 2024 through February of the following year, showed a gas saturation of only 6.3 percent—far below the original expectation of 50 to 70 percent. Furthermore, the discovered gas was found to be biogenic methane produced by biodegradation, rather than the thermogenic hydrocarbons from which oil and natural gas can be derived.

Problems were also identified in the drillship contract process. The Korea National Oil Corporation began the drillship charter tender procedure even before seeking review and approval from the Investment Risk Committee and the board of directors. The Board of Audit and Inspection analyzed that, had the operation period been adjusted from December 2024 to June–July 2025 in consideration of the drillship market situation, approximately 4.3 billion won in charter fees could have been saved.

The Board of Audit and Inspection notified the Korea National Oil Corporation to establish a system to ensure that all prospect evaluation results are subject to internal cross-verification and external technical assessment by expert institutions such as the Korea Institute of Geoscience and Mineral Resources, prior to drilling. The Ministry of Trade, Industry and Energy was instructed to change procedures so that the timing for submitting exploratory drilling approval requests would be moved forward, allowing for sufficient verification of the target structure and location before any key decisions such as the drillship contract are made.

Meanwhile, the Daewang Whale structure was ultimately confirmed to have no recoverable gas after the first drilling and subsequent detailed analysis, meaning it has no economic viability. Since then, the Korea National Oil Corporation has been conducting follow-up exploration on other prospective structures except for Daewang Whale.

This content was produced with the assistance of AI translation services.