OMV says the well it drilled off the Otago coast did not make a commercial discovery.
Work drilling Tawhaki-1 began on January 8 but was interrupted when a blow-out preventer on the COSL Prospector was triggered during a test late last month – shearing the project's drill pipe.
Today the company said the drilling had been completed and had not been successful. Partner Beach Energy said the results indicated there were no hydrocarbons in the target reservoir.
"OMV will provide a further update on drilling results once analysis is complete," Gabriel Selischi, the company's senior vice president for Australasia, said in a statement.
AdvertisementAdvertise with NZME.
Today's result will be a big disappointment for Vienna-based OMV and Mitsui who have spent 12 years working up the permit in the Great South Basin. Beach joined the venture in December and earlier this month estimated its 30 per cent share of the well cost at A$25 million ($26.1m).
It is also a setback for many firms and businesses operating in Otago and Southland that had been hoping to see an export gas business developed in their region, or have gas brought to shore to reduce the reliance of South Island industry on higher-emitting coal.
The basin is a known hydrocarbon-producing region, but to date has failed to deliver a commercial discovery after 40 years of sporadic exploration.
Nor will today's result improve the appetite to drill two other permitted prospects off the South Island. Beach and its partners New Zealand Oil & Gas and OG Oil & Gas have interests in two permits off the coast from Dunedin and Oamaru.
Beach has been aiming to drill the Wherry structure during the 2021 financial year, subject to rig availability.
Tawhaki-1 was drilled about 146 kilometres south-east of Balclutha. Once it is plugged and made safe the rig will relocate to Taranaki where the company plans two further wells, including a well in the ageing Maui gas field.