On June 3, South Korea’s President Yoon Suk-yeol held a state-of-affairs briefing. It was striking for three reasons. First, it was his first such briefing. Second, the presidential office notified the press of the timing only minutes in advance – it had everyone wondering what was so important for Yoon to pop into the briefing room in the midst of back-to-back meetings that morning with African leaders. Third, the content of the briefing itself was eyebrow-raising: Yoon announced that the government had potentially found a vast offshore gas and oil reserve.
The country is abuzz. The reserve, if found and tapped, could yield upward of 140 billion barrels of oil and gas, an equivalent to three decades of domestic consumption. This amount of hydrocarbon deposits could save the country up to $1.87 trillion, or five times the market cap of Samsung, the country’s largest conglomerate. In response, stocks of South Korean energy companies skyrocketed.
Yet misgivings set in. For a start, Yoon rushed everything. The Ministry of Trade, Industry, and Energy (MOTIE) itself was taken aback by Yoon’s personal announcement. Korea National Oil Corporation (KNOC) wasn’t ready for the barrage of media calls. The spokesperson’s office at MOTIE didn’t know that its minister was to accompany Yoon in the national briefing. The minister presented to Yoon optimistic seismic analysis only the day prior; Yoon authorized exploratory drillings on the day of the briefing.
Industry experts noted his impetuosity. South Korea has dug some 50 offshore wellbores around its coasts, only one of which proved commercially viable. (The reserve tapped out in 2021 after having produced 48 million barrels of natural gas.) Geophysical examinations conducted by soundwaves can paint all the rosy pictures. Upon the vast majority of actual drillings, however, developers encounter unusable sediments or unexpected factors and anomalies that scupper the entire operation. This time too, there’s a flimsy chance of setting up a successful oil rig.
The president himself touting the issue in front of the whole nation misled the people with “optical illusion,” said Choi Kyung-sik, an authoritative scholar on marine geoscience. “Resources development should be driven in silence,” another source said, adding that what Yoon did gave his people “the wrong message.”
By contrast, then-President Kim Dae-jung kept mum when the government discovered gas off South Korea’s eastern coast in 1998, even after exploratory drilling confirmed its profitability. In 2014, when KNOC reported a potential reserve, neither MOTIE nor the president appeared before the press. Nobody paid much attention, knowing fully well that data analysis often missed the mark.
This time, the abrupt and premature nature of Yoon’s announcement fomented mistrust between the government and South Koreans.
KNOC and Woodside, an Australian energy company, had been scouring and drilling seabeds off South Korea’s southeastern coast from 2007 until January 2023, when the latter pulled out, deeming the area “no longer considered prospective.” The government then outsourced further data interpretation to a Houston-based consulting firm, Act-Geo. The company was founded by Dr. Vitor Abreu, former president of the Society of Sedimentary Geology, who used to work for ExxonMobil and teaches at Rice University. Yoon’s decision to initiate new drilling is based on Abreu’s analysis.
Nobody doubts Abreu’s personal credentials, but some aspects of his company, the officially registered name being Abreu Consulting and Training, have raised South Koreans’ eyebrows. As per data from the United States Census Bureau, Act-Geo’s sole employee is Abreu himself, with an annual sales volume of $27,000 and the office being his home. (Since contracting with South Korea, Geo-Act’s 2023 revenue ballooned to $50 million.) But for four years from early 2019 to soon after contracting with South Korea in 2023, Abreu had his company charter forfeited by the State of Texas for defaulting on his taxes.
Given this context, reasonable doubt has arisen among South Koreans as to why the government, to begin with, contracted with such a small remiss entity and decided to put so much faith in Abreu’s opinion. After all, the same data was compiled and analyzed for over a decade – and deemed unpromising – by Woodside, a company with 5,000 employees and assets of $60 billion.
That no industry wonks had known about this latest development indicates that not enough peer reviews and second opinions were sought. Even as they all have their fingers crossed that Abreu may be correct, they concur that Yoon should have exercised patience until more concrete evidence surfaced.
To quench South Koreans’ doubt, KNOC flew Abreu over to Seoul and held a press conference on June 7. Abreu explained the nature of his business and why his analysis differs from Woodside’s. South Korean stocks in the energy sector cratered right after.
Deep-sea exploration and drilling are nothing out of the ordinary. South Korea, just like any other country with access to the sea, has been doing it for decades. Yet, Yoon’s haste, South Koreans’ subsequent inordinate interest in the matter, and the government staging a national conference and standing a foreign contractor to justify its decision are all rarities.
It seems the unusual furor was Yoon’s attempt to salvage his dismal approval rating. He has been repeatedly thrashed in opinion polls; he’s used to it. Lately, however, the situation was getting alarming. His approval ratings in Gallup polls in May plunged below 25 percent, the worst two-year mark performance by any president since democracy settled in the country in 1987. In the May 31 poll, Yoon’s rating dipped still further, to 21 percent.
Approval ratings of 30-something percentage points at least confer a sense of being able to save one’s head. Yoon’s approval ratings were wallowing in this range in the few weeks leading up to the April general elections. Indeed, the ruling People Power Party (PPP) and its satellite party managed to scrape 108 out of 300 parliamentary seats. It sounded like Yoon’s death knell, but clearly wasn’t his funeral. Matters that can drastically change the course of politics, such as overturning a presidential veto, impeachment, and constitutional amendments, require 200 votes.
Yet figures below 25 percent meant that even the president’s conservative admirers had lost faith in him. And anything below 20 percent would mean that he was already impeached in the public opinion. Meanwhile, the pan-opposition camp, though riddled with disagreement in some of their policy conceptions, is united in lockstep when it comes to finishing off the “dead duck.”
Yoon has a lot on his plate that poisons and jeopardizes his presidency. The Anti-Corruption Commission had been prevaricating on First Lady Kim Keon-hee’s having received a designer handbag, which constitutes bribery under the country’s law, until June 10 when it completely dropped the case.
More evidence has come to light to confirm Yoon’s browbeating of the Defense Ministry to cover for a general whose professional negligence led to a marine’s tragic death. The inflation rate for the everyday fixture of South Koreans’ cooking, such as spring onions, pears, apples, and other vegetables, has hit highs not seen since the 1980s.
The public has been livid over how lightly the Yoon administration runs roughshod over the livelihood of common citizens and directs all its attention and resources to protecting Yoon’s people. As if this wasn’t enough, Yoon enjoyed beer shots on the day of the interment ceremony for an army conscript who died of torture by an officer in bootcamp, and when North Korea floated trash balloons over the inter-Korean border.
As the new congressional session began and the opposition camp prepared a suite of special counsel bills to bring Yoon and his clique to justice, his approval rating was without a doubt set to deteriorate in the first week of June.
The presidential office went into crisis management mode, this time for real. In early June, a warning circulated around the government that his approval rating could creep to the 10-percent range. Some have suggested that no means should be ruled out to jack it up and consolidate their conservative base.
Despite ample drilling potential and larger mining claims off the country’s western and southern coasts, KNOC has somehow been obsessed with the area of South Korea’s southeast – also a conservative part of the country – including near Pohang where Yoon authorized a new drilling.
When Yoon was briefed on Abreu’s conclusion, therefore, he didn’t have time to dally. He rounded up the journalists, kicked up a cloud of hope, and upset the stock market. It’s not yet clear what the impact will be on his approval rating; June 6 was a Memorial Day in South Korea, meaning Gallup skipped its poll for the first week of June.
Regardless of his ulterior motive, finding that elusive reservoir would surely benefit the country. Burning crude oil exacerbates global warming but the lion’s share of the resources Abreu predicted is natural gas, which is definitely a lesser evil in fueling a country.
Each drilling may set Seoul back by about $500 million, and the government will drill a few times at least. And history suggests they are more likely than not to be of no avail. This hit-or-miss approach was long considered part of the undesirable yet necessary process of locating a resources jackpot, and the government has done so with impunity. But now that Yoon forced the national attention on it, every penny and every result will be accounted for.
The issue has already been politicized too much. If the government finds some crude oil and gas, it will be totted up as Yoon’s single defining legacy. (The legislation to ban the breeding and butchering of dogs was largely the First Lady’s conception.) The economic boon will be so much that it can offset Yoon’s shortcomings.
It’s indeed a conundrum to choose which outcome to hope for: the perpetuation of Yoon’s modus operandi or South Korea’s continued energy dependence.