Home > National > Social Affairs

President Lee rips Korea's national oil company for shoddy analysis of gas project viability

Published: 17 Dec. 2025, 18:13 Updated: 17 Dec. 2025, 20:02

The West Capella drillship conducts an operation in the East Sea to check for oil and gas under the seabed on Dec. 28, 2024. [NEWS1]

President Lee Jae Myung on Wednesday sharply rebuked the Korea National Oil Corporation (KNOC) over what he described as an inadequate profitability review of the “Great Whale” project, a deep-sea gas field development initiative in the East Sea pursued under the Yoon Suk Yeol administration.

“If production costs are high, the project would have little economic viability,” Lee said while questioning acting KNOC President Choi Moon-gyu during the company’s work report session at the Government Complex Sejong Convention Center. “Did KNOC calculate the production costs?”

Choi replied that the company had not conducted a separate calculation because of the many variables involved.

“Are you saying you didn’t run the numbers, even though it seems obvious you would have assessed the project’s feasibility?” Lee said.

Lee continued his criticism, questioning whether KNOC had planned to invest hundreds of billions of won in a project whose development value was uncertain due to numerous variables. “If that’s the case, shouldn’t the project have been scrapped altogether?” he said. “You don’t just drill anywhere.”

The Great Whale project was launched in June 2024 under the Yoon administration on the premise that there was large-scale development potential in promising deep-sea structures in the East Sea.

Lee also questioned KNOC’s financial condition after being briefed that the company holds 20 trillion won ($13.6 billion) in assets and 21 trillion won in liabilities, placing it in a state of capital impairment. “What realistic measures are there to escape this situation?” he asked.

Choi Moon-gyu, head of the planning and finance division at the Korea National Oil Corporation, answers a question from President Lee Jae-myung during a government work report at the Government Complex Sejong Convention Center on Dec. 17. [YONHAP]

When KNOC officials responded that they would consider strong restructuring measures, including the sale of underperforming assets, Lee was skeptical. “Selling bad assets doesn’t seem like it would improve the company’s financial health,” Lee said. “That would already be reflected in the current asset valuation.”

Meanwhile, during a separate work report by the Ministry of Trade, Industry and Energy held on the same day, Lee stressed the need to change what he described as a bureaucratic and overly passive organizational culture in the industrial and corporate sectors.

Industry Minister Kim Jung-kwan argued that regional growth and the AI transformation in the manufacturing sector would be impossible without cutting back on existing work, proposing to reduce "fake work" by 30 percent, referring to unnecessary overtime caused by bosses not leaving the office, inefficient report-writing and excessive events.

“Do not forget why we went to such lengths to bring in ministers with private-sector experience,” Lee said, addressing Kim and Han Seong-sook, minister of SMEs and startups. Calling the idea of reducing “fake work” an “interesting item,” Lee instructed that the initiative be expanded to other ministries as well, not just the industry ministry.

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

The Industry Ministry also outlined a plan to transform regions into new engines of growth through a “five poles, three special zones” strategy.

Under the plan, regional growth engine industries will be selected by February next year, with coordinated government support provided through a “five-piece package” covering regulation, talent, finance, funding and innovation. Mega-regional advanced industrialization plans, including a southern semiconductor innovation belt and a battery triangle belt, were also presented.

“We will go all-in on regional growth to nurture regions into hubs comparable to the Seoul metropolitan area,” Kim said. “Regional economies are not a matter of choice but a key determinant of Korea’s overall growth.”

To strengthen manufacturing competitiveness, the ministry identified a large-scale AI transformation of manufacturing as a core task. Centered on the M.AX (Manufacturing AI Transformation) Alliance launched in September, the government aims to roll out 500 “AI factories” by 2030 and provide integrated support packages covering data, budgets and regulatory improvements needed for the transition.

The alliance, which kicked off in September, comprises some 1,000 major companies and research institutes, including tech giant Samsung Electronics, auto giant Hyundai Motor Group, home appliances maker LG Electronics and robotics firm Rainbow Robotics.

The M.AX Alliance holds a strategy meeting for the AI transformation of the manufacturing sector in Seoul, in this file photo taken Oct. 1. [YONHAP]

In the areas of trade and investment, Kim also reported plans related to overseas investment, including investment in the United States.

“Under the overarching principle of commercial rationality, we will identify investment projects that serve the national interest and establish a system to ensure that investment returns flow back into the domestic economy,” said Kim.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY KIM WON [[email protected]]