The next news is about the controversy surrounding the development project of the East Sea oil field. The issue escalated after it was revealed that the Australian company Woodside, which had been conducting exploration for 16 years, withdrew, citing a lack of business viability. In response, the government has explained that the withdrawal was due to merger issues, but this has been seen as only a partial explanation. It has now been confirmed that two years ago, the government received notice from Woodside that they would withdraw due to low business viability. 

Reporter Kim Soo has more. In June 2022, the Korea National Oil Corporation sent a legal consultation request to a major law firm. When Woodside announced its withdrawal from the East Sea exploration, which had been ongoing for over ten years, they asked for a plan that could be executed without Woodside's involvement. The document indicated that Woodside, which holds a 50% stake, conveyed that they were withdrawing due to high exploration risks and small resource quantities after evaluating the target structure. The same year, in the corporation's annual report, Woodside's Joe Sgambati stated that this led to further developments.

It has been reported that the exploration has been abandoned and the operation has been withdrawn. However, when the government announced the Great Whale Project last June, the explanation was different. They had conducted a large-scale exploration but failed to make sufficient evaluations before notifying us of their intention to withdraw. Looking at the background, BHP was already aware of the reasons for the withdrawal. Nevertheless, they continued to tell the public that the withdrawal was due to the merger. The company has not denied that the withdrawal was based on Woodside's business viability, stating that they confirmed the withdrawal reasons were mentioned in Woodside's 2022 annual report, citing the merger. In fact, the government has acknowledged that the asset formation from the merger took place. However, in an internal report from Woodside released the same year, it was assessed that the risks of exploration in the East Sea were significant. Therefore, it seems difficult to avoid criticism that the government only selected information that suited its narrative. This is JTBC. Yesterday, our JTBC reported that the government...

There has been a report indicating a high possibility of oil discovery, particularly concerning squid, which was explored by the Australian company Woodside. The Korea National Oil Corporation, which had not properly responded to our official inquiries until now, has acknowledged this today. However, they also released a rebuttal stating that the reports related to squid were a result of a misunderstanding in Woodside's report. This raises the question of whether they have actually read the report thoroughly. Here is reporter Lee Seo-jun.

This is Woodside's pre-merger report. The potential structure of Korea's squid has a 75% probability of being a viable structure. The report analyzed the economic viability of drilling at seven sites, including Korea's squid, through an EMV analysis, assuming a 100% development possibility. It indicates that while it is still a potential structure, it was analyzed as a promising structure for drilling development. However, the results showed that squid does not have economic viability. Nevertheless, the Korea National Oil Corporation stated that squid was a potential structure, but the report referred to it as a promising structure.

The explanation was that it was referred to as money and analyzed based on the Yuman structure at home. They stated that they were not familiar with the contents of the report and simply explained it as a minor issue. They ignored the analysis results indicating that it was not economically viable. JTBC also reported that Woodside's quarterly reports for 2019, 2020, and 2021 are among the Yuman structures announced by the government. The Korea National Oil Corporation explained that squid is merely a proprietary name attached to the 3D exploration data set. When JTBC asked the Oil Corporation if the government's selected squid Yuman structure area is included in the squid 3D exploration data, they confirmed that it is indeed included. JTBC, this is Seo Jun. Ladies and gentlemen, we will begin the JTBC newsroom. We will first share the content we have gathered regarding the government's development of the East Sea oil and gas fields. Our government has stated that among the seven locations where oil is likely to be found, two of them have already been analyzed by an Australian company, which concluded that they are not commercially viable.

It was confirmed that, after conducting a detailed analysis on the snow crab, which was considered to have some potential, the conclusion was reached that the economic viability was negative, leading to the withdrawal from the project. First, we have an exclusive report from reporter Kim Man-soo. 

The report from before the merger with Woodside, released in April 2022, mentions the snow crab and the crab in the East Sea exploration area. The probability of advancing to a promising structure, just before drilling, was only 25% for the crab, while the snow crab was estimated at 75%. However, since they were both classified as potential structures, it was concluded that there was no economic viability. 

In this regard, the Korea National Oil Corporation stated that Woodside could not analyze the promising structure and withdrew. However, it has been confirmed that Woodside conducted a detailed analysis based on the assumption that the snow crab would become a promising structure before withdrawing from the Korean project. 

The pre-merger report from Woodside includes the potential for oil deposits, drilling failure costs, and identifies seven locations worldwide, including the snow crab, that could be considered promising structures.

The analysis revealed that only the promising structures in Australia's Tri and Northeast yielded positive results, which can be interpreted as expected economic value. The analysis indicates that these regions have high investment potential and economic viability. In contrast, including South Korea's Daegye, the remaining areas were deemed to have negative economic viability. A negative NPV means that the invested money cannot be recovered, indicating that there is no reason to proceed. Initially, Woodside considered all seven locations to be economically viable. However, after re-evaluating external assessments and their own analysis, they concluded that there was no economic viability and completely withdrew from the project. This is JTV's Kim Man-soo reporting. It has been confirmed that Woodside explored one more location besides the previously mentioned ones: the squid site, which has been identified as a key area following the government's announcement. Thus, it has been confirmed that at least three of the seven promising sites identified by the government have already been explored, raising several questions. Please watch the exclusive report by Kim Il-ran.

We will take a closer look in the studio. Woodside has been disclosing the progress of its oil exploration through quarterly reports. The term Squid first appeared in the fourth quarter report of 2019, when Woodside extended its exploration rights in the East Sea for another ten years. It stated that a 3D survey of the Squid area, covering an area of 6,093 km across the northern region of Block 8 and Block 6-1, was scheduled to begin in the first quarter of 2020. However, in the first quarter report of 2020, it was mentioned that the Squid 3D survey had been postponed. Subsequently, in the 2021 annual report, Squid appeared again. It stated that the 3D exploration of the Squid area was completed in May 2021, and to confirm the potential for the upcoming 2022 plans, it mentioned the analysis of Korean 3D data. In 2021, a large-scale audit, approximately four times the size of the past 500 km area, was conducted in this region. With this report, the term Squid can no longer be found in Woodside's reports.

The analysis of the data has not been released. Woodside has conducted a detailed analysis of at least three locations, including crabs and squid, among the seven announced by the government, but ultimately decided to withdraw. We have JTBC's Kim Hee-ran here to discuss several questions with reporter Kim Han-soo. So, reporter Kim, in the case of squid, it has been confirmed for the first time that exploration has already taken place. Was there any assessment regarding its economic viability? 

No, there wasn't. I couldn't find any quarterly reports from 2019 to 2021. Therefore, I can't say for certain, but it seems likely that they completely withdrew from the Korean business because they assessed that there was no economic viability, similar to crabs and squid. 

Additionally, among the seven locations where the government stated there is a high possibility of oil, at least three have already been reviewed. I'm curious about the remaining locations. The government has not disclosed which ones they are.

Yes, the East Sea is located between the 0-1 and 6-1 zones, but the government only discloses certain security names and does not reveal the exact locations. So far, among the seven locations, squid and pollock have been introduced, and JTBC has found statistics and data in the recent Woodside report. It has also been confirmed that squid was reviewed by Woodside. Woodside conducted economic analyses of seven locations, including our country's data and other countries. While some locations received a negative evaluation, are there places that continue their projects? As mentioned earlier, the seven locations announced by our government are different. At that time, Woodside was referring to seven promising structures they were participating in worldwide. So far, only one location, Senegal, has been confirmed. Despite its economic viability being questioned, the project is still ongoing. The last internal review showed differing opinions; what factors contributed to this?

It has not yet been confirmed whether it was there or not. There are places that continue their business even when they are in the negative, but in the case of our country's major companies, that was not the case. I am curious about the reason for this. Also, the government has made a significantly different judgment in just one year regarding the three locations that Woodside gave up, stating that there is a high possibility of oil being found there. I am also curious about the reason behind this. Is the government providing any explanation? Yes, the Korea National Oil Corporation explained that it analyzed the exploration data received from Woodside along with its own exploration data. They mentioned that the data reviewed included Woodside's pre-merger report. I asked whether the existence of this report was acknowledged and whether it was reviewed, but I received no response. Many questions remain, but rather, the government is withholding some information.

The information is being switched to non-disclosure. Yes, the contract information related to the blue whale has changed from partial disclosure to non-disclosure on the information disclosure portal. This was data that was publicly available even after President Yoon Seok-yeol's announcement, but as media scrutiny began, it was later switched to non-disclosure. Understood. That's all for today. This was reporter Kim Han-soo.

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