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International investors are preparing to spend more than a billion dollars exploring the Great South Basin now that the Government has announced the oil and gas exploration permits for four areas off the Southland coast.
Government ministers said today the proposed work was unprecedented and would effectively double the amount of investment in oil and gas exploration over the next few years.
The permits have been awarded to two major groups of investors:
* A consortium led by ExxonMobil New Zealand (Exploration) Limited (USA) which includes local company Todd Exploration Limited (New Zealand).
* A consortium led by OMV New Zealand Limited (Austria) which includes PTTEP Offshore Investment company Ltd (Thailand), Mitsui Exploration and Production Australia Pty Ltd (Japan).
Energy Minister David Parker and his associate Harry Duynhoven announced the permit awards in Invercargill today, saying the economies of Southland and Otago would get a major boost.
"Assuming exploration success, the country stands to earn significant revenue from royalties and taxes flowing from this investment and it will assist in ensuring security of energy supply," Mr Parker said.
"Although the world is working to lessen its reliance on fossil fuels, we will be dependent on oil and gas for some time to come. It is in our economic interest that the oil we use comes from local sources if possible."
Mr Duynhoven said the interest shown by major international oil companies indicated the basin's high potential.
"It is one of the world's hot spots for exploration," he said.
"The data indicates the potential for commercially viable finds, which could have significant future benefits to New Zealand."
Mr Duynhoven said the oil companies were expected to spend $1.2 billion exploring the Great South Basin, and a share of the money would be spent in the southern region.
- NZPA
