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Oil, gas stocks skyrocket on massive drilling prospects

June 3, 2024 - 18:21 By Choi Ji-won
An electronic board showing the Korea Composite Stock Price Index behind a dealer working at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)

Stock prices of oil- and gas-related companies spiked Monday, following President Yoon Suk Yeol's approval for exploratory drilling of potentially massive reserves of natural resources off the country's southeastern coast.

Out of 10 stocks that hit upper price limits on Monday, seven were related to oil and gas. The benchmark Kospi was up 1.74 percent from the previous day.

Shares of the state-run Korea Gas Corp. surged by 29.9 percent to close at 38,600 won ($28). Other shares in the private sector that surged nearly 30 percent include Korea Petroleum, Hung-gu Oil, Daesung Energy and Dongyang Steel Pipe, all reaching unprecedented highs.

Industry heavyweights also gained big, with SK Gas climbing by 8.24 percent to 193,000 won, SK Innovation by 6.9 percent to 106,900 won and steelmaker Posco International also benefiting, gaining 16.84 percent to 50,300 won.

The prices jumped following the president's announcement authorizing a large-scale project to carry out exploration drilling in deep-sea areas off Yeongil Bay near Pohang, North Gyeongsang Province. The announcement was based on a recent study conducted by the government and a foreign seismic research company, which verified the vast prospects of the natural resources. The government estimated that the maximum amount of buried gas and oil would be enough for the country to use for 29 years and four years, respectively.

Industry Minister Ahn Deok-geun compared the potential amount to five times the market capitalization of Samsung Electronics, which is the country's largest company, valued at 452 trillion won on the Korean stock market as of Monday's closing.