Government spending $10 million on ocean oil exploration

The oil-producing potential of the southern ocean will become clearer this summer with the work of seismic survey vessel MV Bergen Resolution.

The ship will survey 3000-4000km of the northeast Great South Basin and the Bounty Trough, southeast of the South Island, along with the Pegasus Basin, Challenger Plateau, Bellona Trough, outer Taranaki Basin and the Northland East Slope Basin.

Crown Minerals petroleum group manager Mark Aliprantis said the southern ocean survey was outside the area of permits held by OMV NZ Ltd and ExxonMobil.

Depending on the results, the area would be split into blocks.

These would be put up for tender, possibly in 2011, to the oil industry, for further investigation and possible exploration.

OMV and ExxonMobil have permits for six of the 40 blocks, and are continuing to assess their potential.

The final decision on whether to extend that to drilling is still to be made.

Energy and Resources Minister Gerry Brownlee said in a statement oil was New Zealand's third largest export earner in 2008, and gathering fresh data could potentially discover new areas of oil and gas.

Mr Brownlee said the seismic data survey work was estimated to cost between $10 million and $12 million, and funding was provided in the last Budget.

The Government was funding the work the previous government stopped, because National considered the resource sector to have "significant potential" to boost the economy.