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Oil exploration company L and M Petroleum is about to drill its first well in the Waiau Basin, in Western Southland.
The company's chief executive, John Bay, says there has been very little exploration in the area and he is calling it a frontier basin. He says up till now the Maui field in Taranaki has swamped the market, but as it has begun to decline in the last three or four years, other areas have become attractive to explore.
Bay says the potential for oil and gas in Western Southland is similar to Maui.
However, it will be a long time before we will be using oil or gas from there if it is found.
Bay says the Eastern Bush well will drill to a depth of two and a quarter thousand metres, which will take three weeks. He says this is just the first phase, but it is a critical one.
Bay says construction of the infrastructure to bring the product to market could take three to seven years.
