Britain's BP tapped as preferred bidder for Korea's deep-sea gas project: sources

This photo shows the West Capella drillship conducting an operation in the East Sea to check an oil and gas prospect in the ocean, Dec. 18, 2024. Courtesy of KNOC

The Korea National Oil Corp. (KNOC) has tapped British oil major BP as the preferred bidder for Korea's project to develop oil and gas prospects in the East Sea, industry sources said Monday.

KNOC reached the internal decision last week and is in talks with the Ministry of Trade, Industry and Resources before officially announcing the bidding result, according to the sources familiar with the matter.

The Korean company opened the bid in March to find a foreign partner who will have up to 49 percent of the stake in the project aimed at developing seven potential oil and gas reserves in the deep sea off the coast of Yeongil Bay in Pohang, North Gyeongsang Province.

KNOC conducted its first exploratory drilling into the "blue whale prospect," one of the seven prospects, for nearly two months since December and concluded the prospect does not have economic feasibility.

KNOC earlier said it will newly establish a business plan for the deep-sea gas development project after it selects a preferred bidder, including whether to conduct an additional exploratory drilling of the potential reserves.

According to the sources, BP was selected as the preferred bidder as it applied for the largest stake in the project and submitted a detailed road map on developing the gas prospects.

Multiple foreign companies, including U.S. oil major ExxonMobil, reportedly took part in the bidding.

Meanwhile, the industry ministry recently decided to ask the Board of Audit and Inspection to look into controversies surrounding the deep-sea gas project, including the selection of U.S.-based geoscience consulting firm Act-Geo as an advisory firm to conduct an initial feasibility study on the project.