According to a Korea Times report, the agreement – signed on Friday with the South Korean Government – was the first time in 15 years a major foreign energy explorer had agreed to explore for oil and gas around the Korean Peninsula.

Under the deal, Woodside will conduct joint surveys in block zones 8 and 6-1, which lie in the Ulleung Basin in water depths of 300-2000m.

"The contract over Block 8 and northern portions of Block 6-1, 30km east of Pohang in the East Sea, includes a firm commitment to two-dimensional seismic in the first two-year exploration term," Woodside said in a statement.

"Subsequent terms would include commitments to exploration drilling, further seismic acquisition or both."

The agreement follows a year-long study by Woodside to review the hydrocarbon potential of the Basin.

Following the study, Woodside and KNOC had an option to enter formal exploration agreements with the South Korean Government.

The Ulleung Basin is immediately north of the Donghae-1 gas and condensate field, South Korea's only producing hydrocarbon project. The study area extended over 31,000 square kilometres, with water depths ranging from 300m to more than 2000m.

South Korea imports all of its oil and almost all of its natural gas. Oil accounts for more than half of the country’s primary energy needs and it is the world’s fifth-largest buyer of oil imports.