The state-run Korea National Oil Corp. has decided to abandon the oil exploration business in Yemen, a project that has consumed $81.5 million over the past six years.

“The oil reserves in the Yemen gas field No. 4 turned out to fall below the break-even point so we decided in the latest directorate meeting to terminate the project,” said an official of KNOC on Monday.

The corporation will thus liquidate KNOC Yemen, a special company established for the purpose, and return the exploration and management rights to the Yemeni government, according to officials.

KNOC began the exploration in 2007 in a consortium with Hyundai Heavy Industries and Hanwha Group, with the aim of producing some 18,412 barrels of natural oil per day.

But after years of fruitless exploration, the actual oil production capacity in the area turned out to be around 102 barrels per day, or 0.5 percent of the anticipated amount.

The decision of KNOC largely reflected the stance of President Park Geun-hye, who pledged to reduce the excessive number of unprofitable overseas natural resource development businesses.

“A private and public joint task force is probing into the public corporations’ overseas projects, and the discussion results will consequently affect KNOC and other public firms,” said an official of the Ministry of Trade, Industry and Energy.

By Bae Hyun-jung (tellme@heraldcorp.com)