Previously permitted blocks in the frontier Great South Basin in 2007 attracted oil giants Shell, OMV and Exxon, but the latter departed about 18 months ago and a Shell and OMV joint venture could take up to two years to decide on whether to test-drill, having recently finished $50 million of ship-borne seismic surveys during the past five years.
While there are two blocks on offer in the overall grid of the Great South Basin, there are two other blocks north of Dunedin near Oamaru, where Houston-based Anadarko Petroleum wants to test-drill.
However, Anadarko's offshore drilling programme next summer, estimated to cost more than $US100 million ($NZ124 million) will probably be postponed because of a global shortage of oil rigs.
Both Shell and Anadarko in recent months have increased their corporate presence around the South Island, but neither would confirm they would be actively involved in tendering.
Offshore, all the blocks around the country cover 40,198sq km of seabed and onshore 3305sq km of land in Waikato, Taranaki, Tasman, West Coast and Southland. The competitive tendering process for the blocks closes in mid-October.
The potential for deep-water drilling in New Zealand is becoming an environmental flashpoint and attracting public attention. Both the Great South Basin and adjacent Canterbury Basin are in the deep-water range, well beyond depths of 1000m .
The Green Party is concerned deep-water drilling could see a repetition of the Gulf of Mexico oil spill, while the Government has the oil and gas sector high on its priority list of underpinning an export-based recovery.
Petroleum Exploration and Production Association of New Zealand chief executive David Robinson, said opening the tendering round was just the start of a process to establish whether the blocks had any oil and gas reserves, noting production from a successful discovery would be at least five years away.
"Any company winning one of these blocks will be required to operate to the highest standards of health and safety.
"We only welcome quality operators to New Zealand. It is very important to the industry that New Zealand's pristine environment is safeguarded," he said in a statement.
• The Great South Basin was last drilled by Hunt Petroleum, which sank eight test wells in the 1970s and '80s. Test-drilling off Oamaru was undertaken by Ocean Patriot in November 2006, but results were not considered commercially viable.
