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International oil giant OMV has completed drilling off the Otago coast without discovering commercial quantities of oil or gas.
Work to drill the $80million exploration well Tawhaki-1, 146km southeast of Balclutha, began on January 8; yesterday the company announced it had been completed without success.
Partner Beach Energy said the results indicated there were no hydrocarbons in the target reservoir.
OMV Australasia senior vice-president Gabriel Selischi said preliminary indications from the Great South Basin were that there was not a commercial-scale discovery.
"OMV will provide a further update on drilling results once analysis is complete."
He said the drill ship COSL Prospector was preparing to plug and abandon the well.
The drilling hit a snag late last month, when it accidentally cut its own drill pipe after a blowout preventer — a device used to seal gas or oil wells and prevent hydrocarbons escaping — was mistakenly activated.
Oil Free Otago spokeswoman Rosemary Penwarden said yesterday’s news was "joyous."
"This is a small win for the climate, our future, our children and grandchildren."
There was more work that needed to be done, she said.
"We’re in a climate emergency. OMV need to quit their business altogether — they have no right to continue."
Dunedin Mayor Aaron Hawkins welcomed the news, calling it an outcome beneficial for the climate and the ocean.
"We can’t burn the fossil fuel that we know of, let alone go searching for more.
"Oil drilling does not have a future in Otago or New Zealand."
City councillor and Progas Otago spokesman Andrew Whiley was disappointed to hear the news, but was hopeful OMV would return to Otago.
"We always knew exploring in that area was going to be a challenge. I am disappointed they didn’t find anything.
"All the evidence has shown there is a major find out there — it’s just a matter of when they drill in the right hole, at the right time."
OMV had done everything by the book, and environmentally had "ticked all the boxes", Cr Whiley said.
He said it was a question of when, rather than if, OMV would return to southern waters.
Greenpeace climate and energy campaigner Amanda Larsson said the news would be welcomed by people across the country who had grown concerned about OMV’s New Zealand drilling programme.
"The communities along the Otago coast and the threatened and endangered sea creatures that live there are now safe from further oil development."