The move comes amid heightened political tensions following President Yoon Suk Yeol's declaration of martial law on Dec. 3.
The main opposition Democratic Party, which currently controls the National Assembly, zeroed out proposed funding for the project as the legislature approved downsized national budget for next year Tuesday.
The state-run Korea National Oil Corp. (KNOC), which is spearheading the project, will now have to seek alternative financing methods, such as corporate bonds. The company is already burdened with a significant debt of 19.6 trillion won against a mere 1.3 trillion won in capital.
Despite the funding crisis, the first drilling vessel, the West Capella, owned by Seadrill, is still scheduled to depart for the exploration site on Dec. 17. Government officials still maintain that drilling operations will proceed as planned.
President Yoon had previously touted the project, citing potential oil and gas reserves of up to 14 billion barrels. However, opposition parties have consistently questioned the project's feasibility, particularly the accuracy of the initial resource assessment conducted by U.S.-based Act Geo.
Each drilling operation is estimated to cost around 100 billion won, and the project aims to drill between five and ten exploratory wells.
A Ministry of Industry official stated, "While drilling operations have commenced and will not be interrupted, we are exploring various options to ensure KNOC can continue its regular business activities."
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