SK Earthon starts shipping crude oil from South China Sea

SK Earthon Co., the resources development unit of South Korean energy major SK Innovation Co., said Wednesday that it has started shipping crude oil produced from the northeastern South China Sea onto a tanker.  

The resources developer began crude production in the Lufeng 12-3 conventional oil field in Block 17/03 of the sea in September and has stored the oil on a floating production storage offloading (FPSO) unit.

Some 400,000 barrels of crude oil were shipped on Nov. 22, 15% of Korea’s daily oil consumption, SK Earthon said. The company aims to achieve peak production of some 29,500 barrels of crude oil per day.

SK Earthon forecasts it will post around 500 billion won ($386.1 million) in revenue from Block 17/03.

It marks SK the company’s first crude oil production from a field under its operation.

Its parent SK Innovation and state-run China National Offshore Oil Corp. (CNOOC) signed a production-sharing contract for the Lufeng 12-3 project in 2015. CNOOC owns a 60.8% stake in the field, while SK Earthon, split off from the parent in October 2021, holds the remainder as the operator.

SK Earthon discovered oil in the field in 2018 and has conducted oil reserve evaluation and platform construction since then.

SK Innovation Vice Chairman Kim Jun and SK Earthon Chief Executive Myeong Seong visited the oil platform and FPSO installation on Wednesday.

“The Block 17/03 is SK Earthon’s first successful project that encompasses oil exploration, development, production and shipping by using its in-house technology,” said the vice chairman.

This year marks the 40th anniversary of SK Innovation’s resource development and the 34th year of its (oil field) operation, and Block 17/03 proves that the company has grown its capabilities in the energy business, he added.

“We look forward to SK Earthon’s growth to become a global energy operating firm, responsible for Korea's national energy security,” the vice chairman said.

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

Jihyun Kim edited this article.