SEOUL – Shares of companies associated with the "Great Whale Project," a highly touted gas exploration venture in South Korea's East Sea, nosedived on Tuesday after the government announced that initial findings indicated insufficient economic viability.

The news sent shockwaves through the market, with Korea Gas Corporation (KOGAS), the state-owned energy company leading the project, plunging by 13.82% to close at ₩30,550. Other related stocks, including gas pipe manufacturer Hwaseong Valve and steel pipe maker Nexsteel, also suffered double-digit losses.

The project, which garnered significant attention last year after President Yoon Suk Yeol announced the potential discovery of up to 14 billion barrels of oil and gas reserves, had raised hopes of bolstering South Korea's energy independence. However, the recent announcement has cast doubt on the project's future.

"While we did confirm the presence of some gas during the drilling operations, the scale is too small to be considered economically viable," stated an official from the Ministry of Trade, Industry and Energy.

The news comes as a significant blow to the project, which had been touted as potentially holding reserves worth five times the market capitalization of Samsung Electronics. The discrepancy between the initial projections and the current findings has led to a sharp decline in investor confidence.

The government plans to conduct further analysis of the data collected from the initial drilling and will announce its final decision on the project's future in August. In the meantime, the market remains cautious, with further volatility expected in the shares of companies associated with the Great Whale Project.