South Korea’s SK Earthon discovers crude oil offshore Vietnam

SK Earthon Co., the petroleum exploration and production (E&P) unit of South Korea’s top energy company SK Innovation Co., said on Thursday it has found crude oil after four years of exploration in an offshore block southeast of Vietnam.

Through exploration drilling in the 16-2 Block located in the Cuu Long Basin, one of Vietnam’s most promising oil reservoir sections, it has found crude layers, it said.

After drill stem tests in the block’s first reservoir section, it successfully extracted crude oil amounting to a maximum daily production of 4,700 barrels and 7.4 million standard cubic feet (MMscf) per day of natural gas, according to SK.

SK said extraction tests in the second crude oil reservoir section are currently underway.

The discovery marks SK Earthon’s first oil find at the exploration level since it confirmed oil reserves at the 15-1/05 Block off Vietnam in 2019.

SK signed a farmout agreement (FOA) with Vietnema’s state-run oil company, PetroVietnam Exploration Production Corp. (PVEP), in 2019 to operate the 16-2 Block. In 2020, SK acquired a 70% stake in the block, becoming the official operator of the section.

SK said it will conduct additional exploration and appraisal drilling of the 16-2 Block to determine its commercial viability before establishing specific development plans.

SK began its petroleum E&P business in Vietnam in 1998 by participating in the 15-1 Block development project as a partner. Subsequently, it secured E&P rights in the 15-1/05, 15-2/17 and 16-2 blocks.

The 15-1 Block started oil production in 2003. The 15-1/05 Block, of which SK declared commercial viability in 2019, is currently under preparation for development and production.

GREEN BUSINESS

Split off from the parent company in October 2021, SK Earthon has actively participated in overseas E&P projects while also focusing on green projects such as the carbon capture and storage (CCS) business based on its expertise in oil development technology.

In September, SK said it began crude production at an oil field in the South China Sea jointly owned by the company and China National Offshore Oil Corp., commonly known as CNOOC.

Capitalizing on SK’s long-accumulated experience and competency in the oil exploration business, the company said it will build an environmentally friendly green portfolio to minimize carbon emissions.

SK Earthon’s executives said in 2021 that the company’s green projects will account for 70% of its entire business portfolio by 2025 from 30% to reduce its carbon footprint and create new sustainable business opportunities.

SK Innovation, which owns Korea’s largest refiner SK Energy Co., generates most of its revenue and profit from the E&P business and battery manufacturing for electric vehicles.

Write to Mi-Sun Kang at misunny@hankyung.com

In-Soo Nam edited this article.