The hunt for oil in New Zealand has been boosted by one of the world's biggest oil companies committing to explore off East Cape, although experts are warning chances of early success in the frontier basin are low.
Brazil's state oil company Petrobras has been awarded a five-year permit for much of the Raukumara Basin and if it commits to an exploration well within that time it will have spent an estimated $156 million.
Energy and Resources Minister Gerry Brownlee said it was exciting that the company - among the top 10 oil and gas companies in the world - was coming to New Zealand.
"Petrobras is an international giant in this industry and a world leader in development of offshore drilling technology and production. Given Petrobras' expertise, and financial and technical pedigree, this is an exciting step into areas of New Zealand until now unexplored."
The exploration permit covers 12,333 sq km where seismic data and modelling work showed the basin had geology capable of trapping hydrocarbons in commercial quantities.
Water depths range from coastal to 3000m at its northern reaches.
BP's ruined well in the Gulf of Mexico is in water 1500m deep.
In scale of companies exploring around New Zealand, Petrobras ranks behind only Exxon Mobil, which soon must make a call on whether to drill in the Great South Basin.
The head of research at McDouall Stuart, John Kidd, said it was extremely positive to have such a big player committing to the country.
Like other oil majors, Petrobras was under pressure to build up reserves and to sustain its high production capacity, now at 2.4 million barrels a day.
"There's a lot of legwork that needs to be done first and they have a massive permit. Petrobras is not here for small oil, they're obviously here for the big prize."
Petroleum Exploration and Production Association chief executive John Pfahlert said Petrobras was a world leader in the development of advanced technology for deep water and ultra-deep water production.
He said the global strike rate from exploration wells is about one in 10, and in New Zealand the odds are longer - about one in 20.
"This is frontier country that nobody knows much about at all."
A petroleum reservoir expert, Michael Adams, said there were good signs of gas movement in the field but any estimate of reserves was speculative.
New Zealand Oil & Gas said it had not been interested in the basin, given it was unproven and did not fit its investment criteria.
Frontier basins manager at GNS Science, Chris Uruski, said although it was close to the active boundary between the Pacific and Australian tectonic plates, there was a surprising lack of faulting in the basin.
He said this was a positive for oil exploration as accumulations were more likely to have remained undisturbed.
* The Raukumara Basin covers approximately 25,000sq km - Petrobras will explore half that.
* GNS seismic mapping shows considerable potential for oil and gas.
* Satellite imaging has detected potential offshore seeps that indicate oil and gas.
* Brazilian state-owned Petroleo Brasileiro - Petrobras - is worth about $300 billion.
* It operates in 27 countries.
* Between 2009 and 2013 it plans to invest $260 billion, much in "elephant" fields off Brazil.