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Test drilling for oil and gas could resume off Oamaru's coast in 2017 on potentially the nation's ''largest hydrocarbon discovery''.
New Zealand Oil and Gas is seeking joint venture partners to drill in the Barque prospect, which it says could hold up to 530 million barrels of oil equivalent.
Company chief executive Andrew Knight yesterday described the exploration as a potential ''game-changer for New Zealand''.
''Ideally, it's large enough to be spending billions [in development].''
He estimated drilling costs would be ''at the upper end of $US120 million'' ($NZ181 million).
The chances of success for a discovery and development were 10% to 20% - typical of many unproven basins in New Zealand, Mr Knight said.
''This is a new formation which hasn't been drilled before.''
Since 1985, eight wells have been drilled off Oamaru, part of the Canterbury Basin. Several have returned shows of hydrocarbons but none in commercially viable quantities.
Mr Knight was bullish about the Barque prospect following recent shipborne 3-D analysis, saying links had been found between several prospects in the area.
The prospect was potentially ''the largest hydrocarbon discovery in New Zealand to date''.
He likened the scale of the prospect to that of Maui, the country's largest natural gas field off the Taranaki coast.
''It's in 150sq km [of seabed], a large structure in anyone's book; very significant for New Zealand.''
The Barque prospect lies within the Clipper permit, a 50:50 venture held between NZOG and Beach Energy.
Expected to hold a mix of gas and condensate, it lies 60km offshore, in 800m of water, at a depth of 2500m to 3000m below sea level.
Under the project, a single hole would be drilled to probe three prospective seafloor formations, including one previously unidentified. Mr Knight said the company hoped to secure joint venture partners by the end of this year.
An announcement was expected early next year.
Although depressed oil prices could hamper some companies from becoming partners, he believed Barque's potential volume made it viable, even at $US50-$US55 a barrel.
All forms of production developments could be considered, including ships directly taking off and processing the gas-condensate or piping it ashore for separation, for use domestically and/or export.
Asked why it was a ''game-changer'' for the country, Mr Knight conceded it would not be to motorists' benefit, as the owners would sell the product at international prices.
But the long-term benefit would be ''changing the dynamic'' of the country's reliance on importing $9million in petroleum products annually, balancing trade receipts, Mr Knight said.
NZOG had yet to determine its share of the drilling joint venture, but it would be ''around 10%'', but ''not above 25%''.
The drilling proposal was also bound by the availability of rigs. Mr Knight rejected a suggestion exploration at the adjacent Galleon prospect was being deferred.
Galleon was being further evaluated as it was ''potentially relevant to Barque''.
Earlier 3-D seismic survey data at the Toroa prospect, south of Dunedin in the Great South Basin, was still being evaluated, the company said.
Last year, Anadarko spent $400million drilling the adjacent Caraval prospect, with no major finds.
It found hydrocarbon traces but not in commercially viable quantities.
NZOG's permit from Government agency New Zealand Petroleum and Minerals requires it to make a formal commitment by early next year to drill the area, or relinquish the permit.
Updating its performance, the company said revenue in the quarter to June was $47.4million, including its shares in the fields Kupe, Tui and from its 48.11% stake in Cue Energy's assets.
It had no debt and $83.6million cash in hand.
It could be up to two years before Anadarko makes a decision to drill again, while Shell will neither confirm nor deny it has plans to drill in the Great South Basin within the next year.