Sejong: President Lee Jae Myung criticized top executives at the Korea National Oil Corp. (KNOC) for advancing a project aimed at developing potential oil and gas reserves off the southeastern coast without conducting a proper economic feasibility study.

According to Yonhap News Agency, during a briefing, Lee questioned acting KNOC chief executive Choi Moon-gyu on the absence of cost calculations for deep-sea drilling in the East Sea. This project had been initiated under the previous administration of former President Yoon Suk Yeol. The Ministry of Trade, Industry and Resources indicated that the first round of exploratory drilling, carried out between December and February, did not prove the project's economic viability.

"In case of gas exploration projects in the East Sea, if production costs are high, there would not be much profitability," Lee stated. When Choi admitted that the development costs had not been calculated due to several variables, Lee argued that the project should not have proceeded without such essential information.

Lee further questioned the wisdom of potentially investing hundreds of billions of won into a project with uncertain development value. He also expressed concern over KNOC's financial health, highlighting its capital impairment, with approximately 20 trillion won in assets and around 21 trillion won in debt.

Choi mentioned that KNOC is considering restructuring through asset sales, but Lee pointed out that this would not address the root of the company's financial issues, as poorly performing assets would negatively impact asset valuations.