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Oil and gas drillers are savouring prospects for the biggest onshore exploration area to come on the market for the past 20 years.
On offer are nine blocks covering an area of about 3273sq km in Taranaki. Most are near productive gas and oil fields.
New Zealand exploration companies say they are "very interested" in the new blocks, known as acreage, and Associate Energy Minister Harry Duynhoven said there had been some interest from overseas explorers.
The large blocks were the result of aggregation of smaller blocks and were being released now to coincide with exploration interest stemming from oil prices which have been at near record levels.
Duynhoven said much of the area for tender had been explored in the past to shallow levels, but new technology allowed companies to exploit oil or gas to depths of 5000m.
Companies do not pay for exploration licences and from yesterday had access to Government-owned technical data from the regions.
Duynhoven said with royalties, income and company tax, the Government could get up to a 40 per cent return.
"The blocks offer will provide significant opportunities to discover and develop new sources of gas for domestic use, as well as oil to assist New Zealand's energy future and economic growth."
The minister said that while the New Zealand Energy Strategy emphasised a renewable energy future, it also recognised that more gas still needed to be found to fuel current gas-fired power stations' baseload and peaking plants for electricity generation, as well as industrial and residential uses.
An analyst at McDouall Stuart Securities, John Kidd, said the blocks up for grabs were "extensive and attractive".
"The nine sites are nicely peppered between already producing fields - I would imagine there will be some very strong interest this time around."
The area offered potential for a mixture of oil and gas which could be producing within four years of an investment decision being made.
"People go looking for oil because it's a high-value product and if you stumble across gas, well you think about what to do with that next," Kidd said.
He said the "usual suspects" including Todd Energy, OMV and Mitsui Oil, would be interested as well as local private company Greymouth Petroleum, which operates the Turangi gas field, and Tui field joint venture partner New Zealand Oil & Gas.
A Greymouth Petroleum spokeswoman said the company was "very interested" in the blocks and a NZOG spokesman said the company had been assessing the area for some time.
"It's good to have those permit areas available. Our tech teams will be poring over the data," he said.
The bidding round will close on May 30 next year.
Meanwhile, New Zealand Oil & Gas, has celebrated the five millionth barrel of oil from its Tui area oil project, off Taranaki.
Production from the field began in July and production rates have risen to around 50,000 barrels a day.
Tui now is expected to produce 41.7 million barrels, almost 50 per cent more than the original estimate.
