Ministry of Trade, Industry and Energy Requests Board of Audit and Inspection Review Over "Daewang Whale Project" Allegations

ActGeo Selection, Cancellation of Earthquake Safety Review, and Performance Bonus Controversy

Yonhap News Agency

The Ministry of Trade, Industry and Energy has decided to request a public audit by the Board of Audit and Inspection regarding allegations that have arisen during the promotion of the Donghae Gas Field Development Project, known as the "Daewang Whale Project."

On October 15, the Ministry announced that Minister Kim Jeonggwan had officially ordered an audit of Korea National Oil Corporation, following controversies raised during the National Assembly's Trade, Industry, Energy, SMEs, and Startups Committee audit on October 13.

The key issues highlighted during the parliamentary audit included: ▲ the selection process and evaluation criteria for ActGeo, the contractor for the Ulleung Basin technical assessment; ▲ the circumstances surrounding the cancellation of the earthquake safety review research for Donghae exploratory drilling, which had been conducted by the Korea Institute of Geoscience and Mineral Resources; and ▲ the awarding of the highest performance ratings to the responsible team and executives.

The Ministry of Trade, Industry and Energy stated, "We plan to promptly request a public audit by the Board of Audit and Inspection in accordance with relevant regulations and procedures," adding, "We will also conduct a separate investigation at the ministry level into other allegations related to the president of Korea Coal Corporation."

The Daewang Whale Project is a national project promoted by Korea National Oil Corporation during the Yoon Suk-yeol administration to explore the potential for a gas field approximately 1,500 meters below the seabed in the deep waters of the East Sea.

The Daewang Whale drilling project, which began in the Ulleung Basin in 2021, was effectively put on hold after the 2023 exploration results concluded that it lacked economic viability. However, Korea National Oil Corporation did not completely abandon the project and instead commissioned a "technical assessment" to re-examine the structural potential of the Ulleung Basin. In this process, the U.S.-based geological analysis firm ActGeo was selected as the contractor, but questions were raised about the fairness of the evaluation criteria and selection procedures. Subsequently, in the second half of 2024, the earthquake safety review research being conducted by the Korea Institute of Geoscience and Mineral Resources was abruptly canceled, leading to suspicions of external pressure.

Additionally, controversy intensified when it was revealed that Korea National Oil Corporation paid performance bonuses to internal personnel and promoted the responsible executive to vice president at the end of 2024, immediately after the project was halted. At the time, some members of the National Assembly's Industry Committee demanded an audit by the Board of Audit and Inspection, stating, "It is unacceptable to give the highest ratings to a project that was reported as economically unviable."

The investigation is expected to target Korea National Oil Corporation's headquarters and Ulsan branch, among others. The scope of the audit is likely to include service contracts, external evaluation materials, and performance bonus calculation records.

Depending on the audit results, the issue of responsibility and any procedural violations between the Ministry and Korea National Oil Corporation could potentially lead to referrals to investigative agencies or personnel actions in the future.

This content was produced with the assistance of AI translation services.