Korea’s SK Innovation begins oil production in South China Sea
- September 26, 2023
- Posted by: Quatro Strategies
- Categories: Asia Pacific, China, Oil & Gas
SK Innovation Co., South Korea’s largest energy major, has commenced oil production from an offshore field in the South China Sea through its subsidiary, SK Earthon Co. This venture is in collaboration with China National Offshore Oil Corporation (CNOOC), with CNOOC being the majority partner with a 60.8% interest, and SK Earthon holding the remaining stake.
The field is anticipated to reach a peak production rate of 29,500 barrels daily, contributing to over 1% of South Korea’s consumption. The peak production rate is expected to be achieved next year.
The South China Sea is a region of heightened geopolitical tension due to competing territorial claims, particularly involving China. Oil and gas resources in the basin are a significant factor in the dispute.
In 2013, the U.S. Energy Information Administration estimated substantial reserves in the South China Sea, including 11 billion barrels of crude oil and 190 trillion cubic feet of gas in proved and probable reserves. Most of the oil and gas extraction is concentrated in areas that are not disputed by China and lie close to the surrounding countries.
However, there could be an additional 12 billion barrels of oil and 160 trillion cubic feet of natural gas in untapped deposits, with about a fifth located in disputed areas. Initially considered non-commercial reserves, advancements in technology may render them commercially viable.
Despite tensions between South Korea and China over the South China Sea, CNOOC, a state-owned entity, has collaborated with SK Earthon, demonstrating the complexities of regional relationships in the context of energy exploration and production. SK Earthon already possesses stakes in ten oil fields, collectively producing 52,000 barrels daily.
QUATRO Strategies International Inc. is the leading business insights and corporate strategy company based in Toronto, Ontario. Through our unique services, we counsel our clients on their key strategic issues, leveraging our deep industry expertise and using analytical rigor to help them make informed decisions to establish a competitive edge in the marketplace.
Interested in learning more?
Sign up for Top Insights Today
Top Insights Today delivers the latest insights straight to your inbox.
You will get daily industry insights on
Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.
Read more insights
Ukraine establishes joint defense venture with Germany’s Rheinmetall
Ukraine has established a joint defense venture with the German arms manufacturer Rheinmetall AG to service and repair Western weapons sent to Ukraine to assist in its conflict with Russia. This development was announced by Prime Minister Denys Shmyhal at a German…
$44B Alaska LNG plan gains steam under Trump-led energy diplomacy
U.S. energy developer Glenfarne Group announced on Tuesday that more than 50 global firms have formally expressed interest in participating in its $44 billion Alaska LNG project, signaling revived momentum for a project long considered economically challenging. The surge of interest follows renewed political backing from President Donald Trump, who has made LNG exports a cornerstone of his administration’s energy diplomacy — particularly targeting allies in Asia.
The proposed 800-mile pipeline would transport natural gas from the North Slope of Alaska to an LNG export facility in Nikiski, on the Gulf of Alaska. The project, under discussion since the 1970s, is now being positioned as a strategic infrastructure initiative that could reshape trans-Pacific energy flows.
Taiwan’s tech giants bet big on U.S. as Trump reshapes global trade
The shift of Taiwan’s manufacturing base to the US is accelerating as President Donald Trump’s trade policies continue to reshape global supply chains. The $100 billion investment by Taiwan Semiconductor Manufacturing Co. (TSMC) in US chip production stands as one of the largest foreign investments in American history. For Taiwan’s industry leaders, this marks a turning point—one that demands prioritizing US expansion like never before.
Taiwanese electronics manufacturers—renowned for their expertise in high-end technology production—are now scaling up US operations at an unprecedented pace. This migration, initially triggered by US sanctions and export controls on China, has intensified as Trump threatens additional tariffs and trade barriers.