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International oil giant Petrobras has been awarded a five-year permit to drill for oil off the North Island's East Cape.

The Brazilian company becomes the first exploration company to be awarded a permit over the Raukumara Basin, which has been identified by Crown Minerals as having large reservoirs of oil and gas.

Energy and Resources Minister Gerry Brownlee said Petrobras International Braspetro B.V. was one of the biggest players in the petroleum industry.

"Given Petrobras's expertise, and financial and technical pedigree, this is an exciting step into areas of New Zealand until now unexplored," he said.

Applications for exploration rights to the Raukumara Basin have been under consideration since the beginning of the year

The permit awarded to Petrobras covers 12,333 square kilometres.

- NZ Herald staff