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SK Innovation discovers oil in South China Sea

SK Innovation
SK Innovation’s oil discovery was made in block 17/03. SK Innovation holds additional PSCs in the nearby blocks – 04/20 and 17/08 [Photo provided by SK Innovation Co.]
South Korea’s top refiner SK Innovation Co. said on Wednesday that it has succeeded in extracting oil from new oil reserves in one of the Pearl River Mouth Basin blocks in the South China Sea.

It is the first time for SK Innovation to make oil discovery in the 17/03 block of the area since it drilled a 2,014-meter deep exploration well in December last year, and found a 34.8-meter thick effective oil reservoir. The company successfully mined up to 3,750 barrels of oil a day from the reservoir based on natural pressure from the strata.

The latest discovery comes after SK Innovation secured mining operations rights from China’s national oil company for the 17/03 block of the Pearl River Mouth Basin in February 2015. Since then, the Korean refiner has been conducting basic exploration such as geological and seismic surveys in the block. The Korean refiner has also signed production sharing contracts for the 04/20 and 17/08 blocks in the basin.

SK Innovation plans to evaluate the block to confirm total oil reserves and commercial viability of the 17/03 block. SK Innovation owns a 80 percent stake in the 17/03 block and the remaining is owned by China National Offshore Oil Corporation.

An unnamed official from SK Innovation said the company was able to successfully explore oil based on 36 years of technology knowhow since it engaged in overseas resource development for the first time as a Korean private entity in 1983. If the 17/03 block of the Pearl River Mouth Basin is confirmed to be commercially viable, SK Innovation will be able to establish an oil production platform in South China Sea.

As of last year, SK Innovation has secured 530 million barrels oil equivalent (BOE) in confirmed reserves at 13 oil blocks in nine countries, with average daily production reaching 55,000 BOE.

The Original Posted By Kang Doo-soon and Lee Eun-joo/Maeil Business News Korea