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Lee scolds state-run oil firm over offshore fuel project

Published: 17 Dec. 2025, 16:45

President Lee Jae Myung speaks during a policy briefing by the Ministry of Trade, Industry and Resources in Sejong on Dec. 17. [YONHAP]

President Lee Jae Myung scolded top executives at the Korea National Oil Corp. (KNOC) on Wednesday for pushing ahead with a project to develop potential oil and gas reserves off the nation's southeastern coast without conducting a proper economic feasibility study.

Lee questioned acting KNOC chief executive Choi Moon-gyu about whether the state-run company had calculated the cost of deep-sea drilling for potential oil and gas reserves in the East Sea, which had been pushed under the previous administration of former President Yoon Suk Yeol.

The KNOC carried out the first round of exploratory drilling at one of the project sites between December and February, but the Ministry of Trade, Industry and Resources said the results failed to demonstrate the project's economic viability.

"In case of gas exploration projects in the East Sea, if production costs are high, there would not be much profitability," Lee said during the briefing in the central administrative city of Sejong.

When Choi replied that the company had not calculated development costs because of several variables, Lee pushed back, saying the project should not have been pursued in the first place under such circumstances.

"Was [the KNOC] really planning to pour hundreds of billions of won into a project whose development value was uncertain because of so many variables?" Lee asked.

Lee also took issue with the company's state of capital impairment and its measures to improve its weak financial position, noting that it holds about 20 trillion won ($13.5 billion) in assets while carrying roughly 21 trillion won in debt.

Choi said KNOC is considering restructuring through asset sales, but Lee countered that such measures would do little to fundamentally improve the company's finances, pointing out that poorly performing assets would ultimately be reflected in asset valuations.

Yonhap