SK Earthon began crude oil production at its offshore oil field in the South China Sea, the company’s first project to spearhead all stages of oil field development from exploration to production.
SK Innovation said Monday that SK Earthon, its resource development subsidiary, began production of crude oils in September at the Lufeng 12-3 oil field in Block 17/03, located 300 kilometers (186.4 miles) off the coast of Shenzhen, south China.
The field produces about 29,500 barrels a day, which is equivalent to more than 1 percent of Korea’s entire oil consumption per day.
The project in Block 17/03 marks SK Earthon’s first case of managing the entire process of oil exploration and production.
In 2015, SK Earthon signed a petroleum contract with state-run China National Offshore Oil Corporation for the project as Korea’s first private company to enter an offshore block in the South China Sea.
After geological and geophysical surveys of the site, SK Earthon discovered oil during a drilling in 2018 and completed the oil appraisal and construction of production facilities.
SK Earthon employed carbon emission reduction measures at the offshore production site, such as recycling waste heat from the power generator’s exhaust gases and automating production facilities. In order to further cut down carbon emissions during crude oil production, the company is also considering deploying liquefied natural gas (LNG) vessels and using renewables at the site.
The project was backed by the Korean government through its financial support program. Upon starting production at the site, SK Earthon will repay the principal along with interest on the loan, and later share a portion of its profits with the government for a certain period of time.
“Since entering an overseas resource development project as the first private company to do so in 1983, we have now successfully begun to produce crude oil on our own based on the technological experience we accumulated over the past 40 years,” said SK Earthon CEO Myeong Seong, adding that “we will continue to invest in carbon capture and storage projects alongside oil exploration and production in order to achieve our goals for carbon neutrality and growth.”
In 2021, SK Earthon spun off from SK Innovation, which currently owns the entire company. SK Earthon is engaged in projects in 10 oil blocks across 8 countries and 4 LNG projects.
Source : KoreaJoongAngDaily
