[Reporter’s Notebook] Advanced Industries Buried by the ‘Daewang Whale’

Industry Ministry Audit Dispute Over Donghae Gas Field
Buried Amid Semiconductor Subsidy Support Debate

On the 7th, at the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises Committee’s audit of the Ministry of Trade, Industry and Energy, opposition lawmakers immediately targeted Minister An Deok-geun over the East Sea deep-sea gas field and the Czech nuclear power plant issues as if by prior agreement. Their intention was to expose President Yoon Seok-yeol’s mistakes. Meanwhile, voices concerning the truly important future national growth engines and support for advanced industries failed to gain attention.

In June, President Yoon announced the discovery of a block in the East Sea estimated to contain up to 14 billion barrels of oil and natural gas without prior notice. However, suspicions grew when it was revealed that Actgeo, the U.S. company that identified the promising structure (a geological formation presumed to contain oil or natural gas), was effectively a one-person company.

During the audit, questions arose regarding recent media reports that Schlumberger, the world’s number one drilling company, had evaluated the East Sea gas field exploration conducted from October to December 2022 as having low economic feasibility and potential. Minister An explained, “Woodside, an Australian resource developer, and the Korea National Oil Corporation jointly conducted the exploration and entrusted Schlumberger for third-party verification,” adding, “Schlumberger proposed that it would be better to conduct a technical evaluation, so we requested Actgeo to do so.”

The issue of whether South Korea had promised financial support to the Czech side for the Czech nuclear power plant, which Korea Hydro & Nuclear Power won the contract for in July, also came under scrutiny. It was claimed that the Letter of Intent (LOI) submitted by the two organizations to the Czech side included financial support details. Minister An refuted this by reading aloud the English phrase in the LOI stating, “This letter does not constitute a commitment to provide funds.” He also added that the previous Moon Jae-in administration had routinely sent LOIs with the same content multiple times as a matter of practice.

Ruling party lawmakers strongly demanded government support for advanced industries. Go Dong-jin, a former Samsung Electronics president who entered the National Assembly and proposed the Semiconductor Special Act as his first bill, pointed out that the U.S. provides direct subsidies to companies through four semiconductor funds and urged the Ministry of Trade, Industry and Energy to actively respond as the main ministry in charge of semiconductors. Go even used the analogy, “The U.S. is running on the Autobahn, but Korea is driving in the city.”

Lawmaker Na Kyung-won questioned, “The U.S., European Union (EU), and China are spending 2100 trillion won on subsidies for fostering advanced industries. Can we afford not to spend anything?”

On the same day, the Korea Economic Association released a report titled “Comparison of Major Countries’ Support Policies for Representative Companies in Advanced Industries.” It was clearly aimed at the audit. However, at the Ministry of Trade, Industry and Energy’s audit, the discussion was buried under the issues of the blue whale and the Czech nuclear power plant, and no serious debate took place. Minister An also only gave a general response, saying, “All ministries are making an all-out effort.”