SK earthon finds new oil reserve off Vietnam's southeastern coast

SK earthon discovered an offshore petroleum reserve in Block 15-2/17 in the waters off Vietnam. Courtesy of SK earthon

SK earthon, an energy resource developer under SK Innovation, announced Wednesday that it discovered a new petroleum reserve beneath the seabed in Vietnamese waters.

The reserve was located in Block 15-2/17 within the Cuu Long Basin, off Vietnam's southeastern coast. Murphy Oil Corp., a U.S.-based company holding operating rights for the block, has confirmed the discovery.

SK earthon started exploration of the block, located 64 kilometers from Ho Chi Minh City, in 2019. It joined the development project with a 25 percent working interest. Murphy Oil’s subsidiary, Murphy Cuu Long Tay Oil, operates the block with a 40 percent working interest, while Vietnam’s state-run petroleum company, Petro Vietnam Exploration Production, holds the remaining 35 percent.

The financial term "working interest" refers to an investor's share in a property, such as land containing oil and gas, and the rights and responsibilities that come with it.

SK earthon said Block 15-2/17 has a high potential for energy storage because it is adjacent to Blocks 15-1 and 15-1/05, which currently produce the second-largest amount of petroleum for Vietnam among energy resource blocks around the country. The Cuu Long Basin also currently produces over 50 percent of Vietnam’s entire gas and petroleum resources. The company added that Block 15-2/17’s closeness to Block 15-1 also presents the possibility for synergy when developing both blocks.

“Our latest accomplishment in Block 15-2/17 comes just as our development of Block 15-1/05 has just shifted to higher gears,” an SK earthon official said.

“Our projects in Vietnam are all sailing smoothly right now. They will lead our further energy development projects in the waters off Southeast Asia.”

The process of offshore petroleum exploration typically follows three sequential phases: search, development and production. For instance, Block 15-1/05 is currently in the development phase.

SK earthon’s latest discovery of petroleum reserves comes after it discovered another oil reserve in Block 16-2, also in the waters off Vietnam, in November 2023. Block 16-2 marks the first project in Vietnam where the company holds operating rights.

SK earthon also surpassed 10 million barrels of petroleum produced from Block 17/03 in waters off China. It was the first block the company ever searched, developed, started production and shipped out products using its own technology. The company began producing barrels from the block in 2023.

With SK earthon’s operations in the waters off China and Vietnam, SK Innovation’s energy resource development division reported sales of over 1.9 trillion won ($1.3 billion) and operating profits of 428 billion won during the first three quarters of 2024.

“SK Innovation's energy development businesses have been seeing annual sales surpassing 1 trillion won every year since 2022. Its earnings have also been upping steadily. Thanks to SK earthon, which has been the company's cash cow,” an SK earthon official said.

SK Innovation started its energy resource development business in 1983. It is currently working on 11 energy blocks in the waters off eight countries, as well as three liquefied natural gas reserves. It is currently producing about 57,000 barrels of crude oil and gas daily.