Origin Energy has announced a joint venture with Anadarko Petroleum, the second-largest independent US natural gas producer, to begin drilling for oil in the Canterbury Basin off the coast of Dunedin.
Anadarko will invest $US30 million to help explore the Carrack/Caravel prospect, which it says has the potential to deliver more than the equivalent of 500 million barrels of oil and gas.
Origin's Dr Rob Willink has welcomed the partnership.
"Origin has been very excited by the petroleum potential of the frontier Canterbury Basin, particularly the extension of this basin into deep water, since first commencing evaluation studies in the area in 2005"
"We are now fortunate to have been joined by a company with a proven capability operating in challenging deep water environments."
Origin says the 390 square kilometre prospect, which lies in about 1,000 metres of water, is significantly larger than the Maui field.
The venture hopes to begin drilling in 2011.
"Should this be a substantial find it could well turn dunedin from the Edinburgh of the south to the Aberdeen of the south," says market analyst Greg Easton from Craigs Investment Partners.