Korea’s SK Innovation begins oil production in South China Sea

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.

Make strategic decisions with confidence!

Learn how we can support you in setting the right strategy in a fragmenting global economy.

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.

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Dutch chipmakers making investment plans in Vietnam

Dutch semiconductor companies and suppliers are making plans to invest in manufacturing facilities in Vietnam, signaling a strategic shift to reduce their reliance on China amid rising trade tensions between Beijing and the West. The Netherlands has been affected by these tensions…

HSBC suspends commercial payments to Russia, Belarus

HSBC has announced that it will halt commercial payments by its business customers to and from Russia and Belarus. This move comes as financial institutions continue to tighten restrictions beyond the sanctions imposed following Russia’s invasion of Ukraine.

Vietnam set to unlock funding to reduce coal use after agreement with G7

Vietnam is reportedly finalizing reform commitments with G7 governments and multilateral lenders, a move that could unlock significant funding to reduce coal usage in the country. The document in question, known as the Resource Mobilization Plan, is currently under discussion…

Stay informed

error: Content is protected !!