Greymouth Petroleum Ltd also declined to comment to media yesterday, but the Otago Daily Times understands drilling at the former quarry could begin as soon as next week.
Stewart Island resident Dr Britt Moore said she was appalled by the "crazy" non-notified decision, which had angered many of the 380-strong island population.
"The lack of public input is disgraceful. We were never even given a chance to fight against it."
A petition would be made available at the local RSA hall tomorrow, with support from the Green Party and Greenpeace likely to result in protest action.
Earlier this week Dr Moore, who owns Stewart Island Spa, spoke to residents going to the local store about the proposal, and found at least 80 residents in opposition - with more expected.
The former Unesco World Heritage Centre employee said this move would effectively destroy any long-held ambition of making the island a world heritage site.
"It is established all over the world that fossil fuel drilling ruins eco-tourism."
Since the fishing quota system was introduced in 1989, the SDC had helped the island's population "transition from a fishing economy to an eco-tourism economy".
Stewart Island Community Board chairman Jon Spraggon said the board was supportive of the initial "one-off well, and then the whole thing would be re-evaluated".
A spokeswoman for John Key said the Prime Minister had "consistently said that if New Zealanders want to have better jobs and better incomes, we should be exploring the natural resources we have".
"However, economic benefits must be balanced with environmental protection."
As part of its consent Greymouth Petroleum had been given 13 conditions to comply with - including putting the land back to its original state, and after its consent expires would "go through a rigorous consent process again if they want to drill any further wells".
"Legitimate exploration work can benefit the New Zealand economy and this government will encourage that, as long as environmental protections are in place," the spokeswoman added.
However Green Party mining spokesperson Catherine Delahunty said the Government was failing to protect areas of natural beauty and this was a "threat to our economically valuable clean, green image".
According to a 2007 permit, for an on and offshore Great South Basin block around the Southland coast, the company had until the end of this month to "drill or drop" the application.
A Department of Conservation (DoC) spokeswoman said Stewart Island staff had checked the former quarry site and were satisfied there were no protected species at the site.
Southland District Council Mayor Frana Cardno declined to comment until she knew more about the consent.
The regional council, Environment Southland, was yet to grant consent for the project with a decision expected within a week.
The Great South Basin has not been drilled since Hunt Petroleum sank eight test wells in the 1970s and '80s.
