(KPL/ Yonhap) The Republic of Korea has failed to confirm the economic feasibility of one of the potential oil and gas reserves in the East Sea, the industry ministry said Thursday, as it announced the results of the first exploratory drilling in the country's "Blue Whale" prospect.

The country conducted the first exploratory drilling into one of the seven potential oil and gas reserves discovered last year in the deep sea off the coast of Yeongil Bay in Pohang, about 270 kilometers southeast of Seoul, for nearly two months from December 20.

The preliminary result of the drilling showed that the Blue Whale prospect has signs of gas but the hydrocarbon saturation rate -- a key factor in estimating how much oil and gas can be produced from a reservoir -- was not "meaningful enough" to have economic feasibility, according to the Ministry of Trade, Industry and Energy.

The ministry plans to issue an interim report around May or June and a final report on the results of the drilling in August.

We have tentatively confirmed signs of gas through exploration but believe the hydrocarbon saturation level is not meaningful enough to guarantee economic feasibility of the (Blue Whale) prospect," a senior official at the ministry said.

A second drilling into the Blue Whale prospect is "unlikely" to take place, according to the official.

"But we have checked that the prospect has a fine geological system and plan to use the samples and data we have secured to better explore the remaining six prospects, if it happens," he added.

The geological system for natural oil and gas reserves is comprised of four main components -- source rock, reservoir rock, cap rock and traps.

The official said the Blue Whale prospect was found to have a better-than-expected quality of reservoir rock and cap rock, explaining that the findings increase the possibility of the six other prospects having "prospective" geological systems.

Such findings, however, don't necessarily guarantee a successful extraction of natural resources from the prospects.

The government previously assessed there being about a 20 percent chance of succeeding with the extraction.

Last year's announcement of the potential discovery of the seven oil and gas reserves in the East Sea have raised hopes for South Korea, one of the world's biggest energy importers, in reducing its energy dependence on foreign imports.

The government had estimated the deposits could hold up to 3.5 billion and 14 billion barrels of gas and oil, which if confirmed, is a quantity theoretically sufficient to meet the country's gas and oil demand for up to 29 years and four years, respectively.

Earlier this year, Act-Geo, a U.S. geoscience research company commissioned last year by the South Korean government to conduct a feasibility study, issued a report on the potential discovery of 14 additional reserves around the area.

The report pointed toward the existence of potential deposits of between 680 million barrels and 5.17 billion barrels of oil and gas, according to officials at the industry ministry and the Korea National Oil Corp.

Seoul plans to kick off a bidding process in March to select companies to lead projects to explore the untapped prospects in the East Sea and attract foreign investment.

"Attraction of foreign investment will help reduce the financial risk of the project for the government and also give proof the exploration projects are worthy of investment," the industry ministry official said.

"Several of the major global oil and gas reserve developers have shown interest in the project," he noted, without disclosing the companies' names.

KPL