[Sakhalin was once a forsaken land where convicts were exiled in the past, but it has now become a treasure trove of energy resources coveted by countries around the world.
Right here, Bluehole Energy, owned by Chairman Park Seok-won, known as one of the world's wealthiest individuals, has discovered massive oil fields and natural gas deposits in Sakhalin Block 2 after years of exploration.
The reserves confirmed so far are estimated at 1.05 billion barrels of crude oil and 40 million cubic meters of natural gas.
This is an enormous amount, enough to supply the city of Seoul for ten years. Bluehole Energy is...]
After dinner, Chairman Park Tae-hong came out to the living room and sat on the sofa with his wife, Madam Jo Deok-rye, watching the 9 p.m. news.
When the report turned to news about their second son, Chairman Park Tae-hong let out a dry chuckle and said,
"He said he was going on a business trip for a few days, and he came back having struck oil. That kid really does appear and disappear like a ghost."
Despite his words, his face was filled with unmistakable pride.
Madam Jo Deok-rye speared a slice of apple with a fork and handed it to him, asking with an intrigued expression.
"If it's big enough to make the 9 p.m. news, the oil field they found this time must be pretty massive, right?"
"Massive doesn't even begin to cover it. Just the crude oil alone is worth well over 28.3 billion dollars at current market prices."
At that, Madam Jo Deok-rye's eyes widened, and she covered her mouth with her hand.
"Oh my! How much money is that, exactly?"
"In won, it comes out to nearly forty trillion."
"My goodness."
Madam Jo Deok-rye watched the television screen in awe as towering crimson flames, burning off gas spewing from a lone drilling platform floating in the vast open sea, shot upward from the top of the tall derrick.
"Really impressive."
Chairman Park Tae-hong put the apple into his mouth and spoke as he chewed.
"Seok-won really did hit the jackpot this time, but the reason it's been on the news all day, with even the government and the Blue House stepping in to promote it so heavily, is because there's an even bigger payoff behind it."
"What would that be?"
Madam Jo Deok-rye tilted her head in curiosity and casually speared another piece of apple, handing it to him.
"To load crude oil or natural gas onto large transport vessels in the Middle East and bring it all the way to Korea, even at the fastest pace, it takes more than two weeks."
"That's an incredibly long time."
"You have to pass through the Arabian Sea and the Bay of Bengal, go around the Strait of Malacca, then head back up through the East China Sea. Of course it's going to take a while."
It was a matter of physical distance, with no real way to solve it.
"Up to now, we've gone through all that trouble to bring crude oil and natural gas from such faraway places. But the oil field Seok-won found is in Sakhalin, practically right next door. You cross the East Sea, and you're there."
"Ah! Then transportation costs would drop dramatically."
Madam Jo Deok-rye clapped her hands and spoke as if calling out the correct answer.
"Not only does it save on costs, but having a nearby source from which we can bring in crude oil and natural gas, instead of clinging solely to the Middle East, is a huge help in terms of energy security as well."
Chairman Park Tae-hong set down his fork and leaned back against the sofa.
"Especially at a time like this, when the United States has declared a war on terror and the Middle East is unstable, it'll be a real lifeline that lets us breathe easier. Of course, it'll still be quite a while before full-scale production actually begins."
Recalling how President Kim Jae-chun had personally called earlier that day to praise his second son, Chairman Park Tae-hong let a satisfied smile form at the corners of his mouth.
"On top of that, this will also make the so-called Asian Premium openly imposed by Middle Eastern countries fade away, at least to some extent."
"Isn't a premium supposed to be a good thing?"
When his wife looked at him with a puzzled expression, Chairman Park Tae-hong let out a soft snort and replied.
"Good, my ass. When Middle Eastern oil-producing countries export crude oil and natural gas, they jack up the price by one to two dollars per barrel compared to what they charge Europe or the United States, then sell it to Korea and Japan. That's what they call the Asian Premium."
"What? If we're importing that much, shouldn't they be selling it cheaper? They actually charge more?"
Madam Jo Deok-rye's eyes widened as if she could not believe what she was hearing.
"Exactly. Countries like ours, along with Japan and China, depend so heavily on Middle Eastern crude oil and natural gas that you could say it makes up the bulk of our supply. They know we don't have many alternatives, so they play hardball, figuring we have nowhere else to buy from."
"My goodness. That's really awful."
"We know they're overcharging us, but what choice do we have? If we can't import energy from the Middle East right away, factories would shut down, and people would not even be able to drive their cars. Even if their power plays leave a bad taste, we still have to grit our teeth and keep buying crude oil and natural gas."
In the international oil market, long dominated by Middle Eastern oil-producing countries led by Saudi Arabia, South Korea, a nation that produced not a single drop of oil itself, could only remain in a weaker position.
"Now that there's an oil field the Seok-won discovered, the Middle Eastern producers won't be able to tack on extra charges anymore, right?"
"That's right."
Chairman Park Tae-hong nodded his head in agreement.
"Given how enormous the daily consumption of crude oil and natural gas is, we'll still have no choice but to import large volumes from the Middle East. But now that we have another source, they won't be able to pull the same outrageous power plays they used to."
"That alone is a relief."
"Hmph. And all of that is thanks to finding a massive oil field this time, one with both crude oil and natural gas."
Madam Jo Deok-rye looked at Chairman Park Tae-hong, whose shoulders were practically puffed up with pride, with an exasperated expression.
"The one who discovered the oil field was Seok-won, so why are you the one acting all smug?"
"He's my child, so what he did is basically the same as me doing it."
Chairman Park Tae-hong shot back shamelessly.
It was utterly ridiculous, but Madam Jo Deok-rye was just as proud of Seok-won herself. In the end, she gave a small, helpless chuckle, as if admitting there was no stopping him.
***
As if by some lie, the icy rain that had been lashing down fiercely until just yesterday had come to a complete stop. On the apron at Yuzhno-Sakhalinsk Airport, a single Gulfstream IV private jet sat in silence.
Seok-won, seated in a beige leather chair, gave a slight nod to Andrea as she set an old-fashioned glass filled with ice down on the table. Keeping a satellite phone pressed to his ear, he continued the call.
[We've received a report saying that the oil field you discovered this time has both massive reserves and extremely high commercial viability.]
At the sound of President Putin's voice, which carried a clear note of good humor, Seok-won picked up the old-fashioned glass in front of him and responded.
"Of course, we still need to review the results of further drilling, but we're viewing things quite optimistically as well. It's all thanks to the full support you've given us, Mr. President."
[Hahaha. I don't recall doing anything that deserves such credit.]
"By swiftly handling the necessary procedures and approvals for exchanging block equity with the Japanese firm and moving forward with exploration, you made it possible for us to achieve these results."
Thanks to the generous greasing of the wheels, not only at the Kremlin but also across the relevant ministries, the exploration process had moved ahead at remarkable speed. Still, Seok-won chose not to mention any of that and instead credited President Putin with the success of the oil field discovery.
[If it hadn't been for Chairman Park's drive to boldly push forward with exploration while sparing no small amount of capital, we never would have found an oil field and natural gas deposits this quickly.]
Just as expected, President Putin seemed pleased at the praise, letting out a low chuckle on the other end of the phone.
[Chairman Park hits the jackpot like this, while the Japanese firms that started exploration alongside him are dragging their feet without producing any meaningful results. It's downright pathetic. Knowing how this would turn out, I should have entrusted Block 3 to Chairman Park as well.]
At the sound of him clicking his tongue and grumbling, Seok-won took a sip of his whiskey and set the glass back down.
"Before long, there will be good news from Block 3 as well."
[Unlike Chairman Park, who kept drilling ships operating and pushed exploration forward whenever the sea thawed, the Japanese firms have drilled fewer than five wells in total so far. The gap is just too big. At this point, I can't help but wonder whether they even have the will to explore.]
President Putin continued to vent his complaints.
In truth, the Japanese companies that had secured development stakes in Sakhalin Block 3 also had their own reasons for the sluggish progress.
Japan's economy was reeling from the need to deal with massive non-performing loans caused by the collapse of the bubble economy. As a result, overseas resource development projects, which required enormous capital and carried significant risk, were inevitably pushed down the priority list.
Even so, the fact that they had drilled as many as five wells, each of which cost well over ten billion won to complete, showed just how seriously the Japanese firms viewed the Sakhalin oil and natural gas development project.
'If development succeeds, they would secure a reliable energy source close to Japan, so there's no way they could just give up.'
Even so, despite pushing ahead with exploration under such difficult circumstances, the biggest reason the results were disappointing was Seok-won himself.
Unlike Block 2, where massive oil fields and natural gas deposits had been discovered one after another, Block 3 was an area where, according to survey data from the Russian Federation's Ministry of Natural Resources, an estimated 5.3 billion barrels of crude oil and an enormous 1.073 trillion cubic meters of resources were believed to be buried underground.
The reality, however, was different. Even before the regression, Block 2 had succeeded in exploration fairly quickly, but Block 3 had produced no results at all despite repeated surveys.
'If the block equity hadn't been exchanged, the ones hitting the jackpot wouldn't have been me, but the Japanese companies. It would've taken a bit longer, sure, but still.'
Not knowing that it was nothing more than an empty shell, the Japanese firms, spurred on by the news of his oil discovery, would only drill even harder. Thinking about that, Seok-won could not help but feel a twinge of pity for them.
Worried that President Putin might even consider stripping the Japanese companies of the development rights to Block 3 and handing them over to him, Seok-won quickly changed the subject.
"You've likely already received the report, but to export the crude oil and natural gas we discovered this time smoothly, we're planning to build a large-scale LNG plant on the Prigorodnoye coast at the southern tip of Sakhalin Island."
To transport natural gas extracted from deep beneath the sea by ship, an LNG plant was essential, as the gas had to be cooled to ultra-low temperatures, condensed, and liquefied.
[I already heard about it. I personally called the Sakhalin governor and told him to provide every bit of support necessary, so you have nothing to worry about.]
"Thank you for taking care of that."
[If natural gas exports increase, that means more money flowing into Russia as well. Of course, we should cooperate.]
With a faint smile, Seok-won lowered his voice slightly as he continued.
"Before long, Governor Pavlovich will visit the Kremlin and hand over the account details and password for the paper company we set up in Panama."
[...]
"Once crude oil and natural gas sales begin in earnest, we'll skim a certain portion of the profits and deposit it into the paper company account. Please feel free to use it whenever you need."
At that, President Putin burst out laughing.
[That's exactly why I like Chairman Park so much. Since you're offering it, I'll make good use of it.]
Holding the satellite phone, Seok-won let the corners of his mouth curl upward.
After talking a little longer, he ended the call. Folding the thick satellite phone's antenna to the side, he set it down on the table, his expression settling into a calm, unreadable mask.
"Once money starts flowing in from selling crude oil and natural gas, people everywhere will come sniffing around, eager to stick their spoons in. If that's inevitable, it's better to cleanly skim off the under-the-table money first."
By making sure even President Putin, the highest authority of all, got his share like this, it ensured that lesser figures would not dare to stick their noses in.