November 24, 2024

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Vitor Abreu, head of US-based Act-Geo, readies himself at the Friday briefing on East Sea deepwater gas field development at the Sejong Office Building. (Ministry of Trade, Industry and Energy)

The proposed deepwater oil and gas field development off the coast of Yeongil Bay in Pohang, South Korea, is under intense scrutiny, with debates surrounding the reliability of the discovery and the credibility of Act-Geo, the US consulting firm behind the survey.

The Ministry of Trade, Industry and Energy has been actively addressing these concerns, including allegations of a fake Korean-language website for Act-Geo that was quickly found to be fraudulent on Monday.

Doubts about Act-Geo's survey results emerged last Wednesday following a report that Woodside Energy, Australia's largest oil exploration company, had previously surveyed a similar area and deemed it “no longer considered prospective.” Woodside collaborated with the Korea National Oil Corporation from 2007 to 2021 on oil and gas exploration projects in the East Sea, specifically in Block 8 and the northern part of Block 6-1, 30 kilometers east of Pohang.

Korea's Trade Ministry on Monday clarified that Woodside's withdrawal from the area was not due to a lack of viability but rather a “strategic reorganization” following its merger with BHP in June 2022. The ministry emphasized that Woodside's decision to withdraw was related to a shift in focus towards other international offshore projects, including those in Canada and Peru.

The government asserted that Woodside "had not completed a full structural analysis of the area before withdrawing." It explained that Woodside had conducted 3D surveys in 2021 and began data interpretation in January 2022 but left before fully evaluating the potential. Following Woodside's exit, a new prospect structure was identified using existing exploration data, Woodside's findings, and independent data from the KNOC in 2022.

Additional concerns about Act-Geo's credibility surfaced after a local newspaper reported after the company owner Vitor Abreu's press briefing on Friday that the firm had been subject to operational restrictions from January 2019 to March 2023 for failing to file a Franchise Tax return or pay state sales tax. Despite this, Act-Geo was engaged by KNOC for analysis in February 2023, after its deregistration had already occurred.

The ministry explained that under Texas state law, tax delinquency results in restrictions on some corporate activities but does not nullify the corporation’s legal status. They stated that the delinquency was a “minor issue” amounting to $1,650 and attributed it to a simple oversight.

Addressing concerns about whether Act-Geo's tax issues were resolved using funds from KNOC, the corporation confirmed that payments to Act-Geo began in May 2023, after Act-Geo had settled its taxes in March 2023.

By Moon Joon-hyun (mjh@heraldcorp.com)