SEOUL (AFP) - SOUTH Korean and Australian firms will conduct exploratory drilling for oil and gas in the Sea of Japan (East Sea) in early 2011, officials said on Thursday.

The exploration follows joint surveys by Australia's Woodside Energy and state-run Korea National Oil Corp (KNOC) in two blocks off the east coast.

'After analysing joint surveys, we concluded that there is a possibility of discovering oil and gas,' a KNOC spokesman told AFP. 'However, we are still unsure that we can discover commercially viable reserves.'

Woodside is the first foreign firm to join an exploration around the Korean peninsula since 1994, when a British firm pulled out after failing to discover oil and gas.

The two blocks cover 12,560 square kilometres, the Ministry of Knowledge Economy said.

South Korea is the world's fifth largest crude importer and currently has no proven oil reserves.

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