Feeding Foreign Venders
According to the data submitted to lawmaker Kim Jung-hoon of the ruling Saenuri Party by the Korea National Oil Corp. (KNOC) on August 21, the KNOC involved in a total of 95 cases of offshore oil exploration from January 2000 to July 2016.
Of these, the KNOC carried out 90 cases of oil drilling operations by renting drill rigs from foreign oil drilling vessel lenders, which cost US$512.9 million (574.45 billion won).
The reason why the KNOC had to pay such astronomical prices for charterage to conduct offshore oil explorations is that the state-run oil company has only one old drillship which has limits in terms of design life and range of use, according to the office of Representative Kim.
The KNOC spent a total of 41.6 billion won (US$46.59 trillion won) for a decade from 2006 to 2015 to repair and maintain the old drilling ship.
Korea's only drillship “Doosung” currently has 1,145 kinds of the major drilling equipment in five sectors. About 94 percent, or 1,075, of them are the same equipment featured when the drilling ship was first introduced. Accordingly, it is urgent to improve the performance of the rig.
In addition, the Doo Sung drill rig is not being fully utilized considering the fact that its maximum water depths stands at 1500 feet and jack-up rigs are usually used under 400 feet.
Congressman Kim Jung-hoon said, “It can be inappropriate to carry out the oil drilling business at the moment when the oil prices continue to stay low and the KNOC runs the emergency management system. However, the continuous offshore oil explorations depending on the nation’s only drillship, which is outdated and has a lot of limits, will ultimately fill the stomach of foreign oil drilling vessel lenders.”
He added, “The KNOC currently considers introducing a semi-submersible drilling rig with up to 3,000 feet water depth, which costs US$550 million (616 billion won). When constructing the drillship, it can also help the domestic shipbuilding industry which is in crisis at the moment.”