American oil company Anadarko says its maiden New Zealand deep sea exploration well failed to find commercial quantities of oil or natural gas.
Drilling of the Romney 1 well in the Deepwater Taranaki Basin - about 160 km off the Raglan coast - began in November but was found to be "water-bearing" after reaching its total depth of 4619m, the Texas-based firm said in a statement.
"Though the well, drilled by the state-of-the-art drillship Noble Bob Douglas in 1550m of water, did not encounter commercial quantities of oil or natural gas, the data collected from the well will be very useful in determining future activity," the company said.
The firm said the Romney 1 well would be abandoned and plugged in accordance with New Zealand regulations.
Anadarko spokesman Alan Seay said the Noble Bob Douglas would now move to another exploration site in the Canterbury Basin off the Otago coast.
The US company's New Zealand exploration programme has been controversial, with environmental groups questioning the safety of deep sea drilling in the wake of BP's Deep Sea Horizon oil spill in the Gulf of Mexico in 2010.
Questions have also been raised over this country's ability to respond to a similar disaster.
A flotilla of protest boats has shadowed the Noble Bob Douglas during its time off the North Island's West Coast.
Anadarko had a 25 per cent interest in the Gulf of Mexico oil prospect in which the Deep Sea Horizon was drilling.
Greenpeace energy campaigner Steve Abel said the announcement was "a real bad day for John Key's government and for Anadarko".
"The Texan oil giant has not only announced that their New Zealand drilling has failed, they've also announced a loss of over NZ$950 million dollars in the last quarter," Abel said.
He said the Government had wasted a lot of political capital over the drilling programme.
"Instead, they should be backing our own cutting-edge clean energy industry, which will bring thousands of jobs and a multi-billion dollar economic boost. That's what smart politicians would be doing."