The East Coast basin is "literally leaking oil and gas" and provides potential for thousands of wells, an oil company with exploration permits in the area says.
New Zealand's main oil and gas producing region is at Taranaki on the west coast of the North Island but Tag Oil says the East Coast basin on the other side of the North Island has "world class upside potential".
A presentation by the small Canadian-based company on its website says it has identified widespread oil and gas seeps over a large area.
The presentation says the "East Coast basin is literally leaking oil and gas".
Fairfax reported that the company regarded the East Coast as a "Texas of the south" and wanted to pursue an aggressive program there.
Last September the company said it was undertaking seismic testing in the region, with first exploration drilling planned after that. The region is seen as having potential for so-called shale oil extracted from rock.
The company has a farmout deal with Apache for the region, under which Apache may spend up to US$100 million to earn up to half of Tag's present 100 per cent share of exploration prospects.
"This is not where New Zealand's economic future lies. We need to be investing instead in renewable solutions," says Moana Mackey, Labour's Energy representative.