Australian-listed Origin Energy, whose South Island oil exploration partner includes Anadarko Petroleum Corp, is expected to announce within three weeks if it will go ahead with test drilling for oil and gas off the coast of Dunedin.
Anadarko is separately partnered with oil giant BP, whose Mexican Gulf oil spill is the largest US environmental disaster, expected to cost tensof billions of dollars for clean-up and compensation.
Origin, with Anadarko coming on board as a 50% partner in New Zealand in late February to fund $US30 million ($NZ41.6 million) towards exploration, holds the permitted area in the southern part of the Canterbury Basin.
Having completed survey work, Origin and Anadarko must announce a decision to drill in the area, or drop the permit holding by August 21, but they could possibly seek also a change of conditions from permit agency Crown Minerals, which would stop the clock on the permit.
Origin completed a hydrographic seismic survey of the Carrack and Caravel prospects in 2009, covering about 300sq km within the area and Anadarko has since paid for specialist processing of the survey material.
The southern prospects are estimated to have potential for more than 500 million barrels of oil (and gas) equivalents.
A test drilling programme is estimated at between $US75 million and $US100 million.
"The good news is having earlier farmed-in [a joint venture partner in Anadarko] they could be in a position to make an announcement in the next three weeks," Petroleum Exploration and Production Association chief executive John Pfahlert said.
Following the Gulf oil spill and clean up, Mr Pfahlert expects changes in New Zealand later in the year from the Government on health and safety issues - a review which was just getting under way.
Regulatory changes are likely to be announced before the end of the year.
"We're not anticipating any major dramas but we are expecting changes," he said.
The Ocean Patriot rig capped and abandoned a test well 21km off the North Otago coast when it was deemed to be commercially unviable.
The nearby Galleon oil and gas prospect, drilled in 1985 by BP Shell Todd, was capped because it was economically unviable.
