To the outsider, little appears to have happened since Exxon Mobil and an OMV-led joint venture took up permits in the Great South Basin in July 2007, and Origin Energy and partner United States oil giant Anardako began seismic surveys off the coast of Oamaru in the lower Canterbury Basin.
While Canterbury Basin operator Anardako hopes it will be drilling in late 2011, at prospects 65km off the coast from Dunedin, several successful hydrographic surveys and permit extensions also bode well for the future.
Anardako is already said to be looking for suitable buildings in Dunedin and is otherwise well advanced in having partners arranged to share rig costs.
But nothing is being confirmed publicly.
Dunedin business interests were well represented at the New Zealand Petroleum Conference in Auckland this week, representatives from the University of Otago, the Dunedin City Council's economic development unit and Farra Engineering having an informal presence.
The representatives were upbeat about the conference, and several oil and gas companies, contractors and industry analysts have shown interest in visiting Dunedin in coming months to assess infrastructure and opportunities.
Nationally, several companies are tentatively talking of oil-rig delivery times, including a drill-ship from Asia most likely for Taranaki waters, but it appears more work is required on some permits before another rig visit is confirmed for the South.
However, during the past two years, tens of millions of dollars have been spent in multiple hydrographic surveys off the New Zealand coast: 37 wells were drilled in 2009 and northern oil-producing fields contributed $2.1 billion in exports in 2009-10, while the Government took about $990 million in royalties in two years.
Prime Minister John Key, Finance Minister Bill English and Energy Minister Gerry Brownlee all see the oil and gas sector playing a major part in New Zealand's recovery from recession.
This has prompted regulatory reviews, streamlining of bureaucracy and boosting of investment in surveys.
Government permit agency Crown Minerals has completed about $15 million of its own seismic surveys in recent years.
It has been granted a further $25 million for more surveys and was this week told it would be expanded as an organisation - possibly with its annual budget almost doubling from the present $9 million.
Delegates at the New Zealand Petroleum Conference in Auckland this week were told by Pepanz chairman John Bay that the mood of the conference two years ago was "bipolar", given the "blinkered focus" of the forthcoming emissions trading scheme and ban on development of geothermal energy by the former Labour-led government.
"It was being conveyed to us as being a sunset industry and we should just quietly go away," Mr Bay said.
The oil flows from the Tui field and change of government were seen by Mr Bay as drivers of change for New Zealand.
He said a transformation from static to exciting developments had occurred in the industry, and the National-led Government recognised the economic and social effects of new oil and gas discoveries.
Mr Bay saw more hurdles, and negative regulation issues were still to be dealt with, including biosecurity, where regulators wanted incoming offshore vessels for exploration to be cleaned before entering New Zealand's now vast waters.
Also, under schedule 4 of the Crown Minerals Act, New Zealand's marine reserves could remain closed to exploration.
Mr Bay said several key considerations lay ahead.
If large oil discoveries were made in the Great South Basin, New Zealand could become a net exporter of oil for the 2020s and bring in substantial royalty and tax revenue.
To achieve a more permanent improvement in the country's oil security, ongoing investment in exploration of the 15 frontier petroleum basins had to occur, coupled with efforts to reduce oil demand.
Apart from mum and dad investors, there was little interest by banks or larger investors in New Zealand, especially for explorers.
"In making New Zealand an attractive place and getting more from capital markets: this is where the industry and Government need to work together."
Mr Bay was "radically opposed" to Government becoming an oil-company owner and funding exploration, believing taxpayers would not have the stomach for the millions of dollars required for high-risk exploration.
"The Government needs to allocate its funds elsewhere."
While business attracted offshore investors to buy into projects, the Government's contribution was to make regulation and fiscal controls attractive to prospective offshore partners, he said.
As shown by Solid Energy with its development of lignite as a credible energy source, Mr Bay also said the industry had to look at the potential of "unconventional" petroleum products.
Chief executive of political lobby group Straterra, Chris Baker said Crown Minerals' hiring of more skilled staff would greatly benefit the petroleum industry, and the resource sector as a whole.
"It's really important for industry and investment that government processes are efficient and effective. These changes clearly reflect the Government's understanding of these issues," he said.
Reporter Simon Hartley was hosted at the conference by Crown Minerals.
