The latest deepwater oil and gas exploration well has started drilling off the South Island coast near Dunedin, targeting a prospect likely to be "gas prone" and potentially holding many trillions of cubic feet of gas.
But it is seen as a high-risk and expensive project. If the partners make a big commercial discovery, it could take billions of dollars and many years to develop into production.
United States exploration giant Anadarko is the operator of the Caravel-1 well in an offshore area called the Canterbury Basin, about 60km northeast of Dunedin.
Anadarko has said it would drill one or perhaps two wells in the exploration permit area, in a joint venture with Origin Energy of Australia, and a new partner from Amsterdam, Discover Exploration.
The well is being drilled by the contracted ship Noble Bob Douglas in more than 1100 metres of water, and will go to a total depth of 2800 metres below the sea. It is expected to take 40 days at a cost of more than $1 million a day.
In the past couple of months, Anadarko and another set of joint-venture partners drilled about 70 days in deep water about 200km off the coast of Raglan but the well came up dry. The Taranaki well was part of a US$250m (NZ$308m) drilling programme off Taranaki and the South Island this summer.
The Canterbury Basin prospect could be a huge gas field, that could transform the South Island economy. "We target multiple trillions of cubic feet of gas, and we think that's the potential," Anadarko spokesman Alan Seay said last year.
Initial Origin Energy estimates suggested the prospects may hold the equivalent of 750 million barrels of oil, or more likely gas.
Australia's biggest power retailer, Origin Energy, holds 45 per cent of the Caravel permit. Origin has a 53.1 per cent interest in Contact Energy, one of New Zealand's largest energy retailers.
The minor partner in the well is Discover Exploration Canterbury NZ with 10 per cent, an offshoot of an Amsterdam-based company. Discover Exploration Limited is privately owned specialising in deepwater petroleum systems, and funded by the holding company of a Dutch exploration and production company.
Discover Exploration entered the Canterbury Basin joint venture PEP 38264 in December 2013 and also had an interest in the failed Romney well in Deepwater Taranaki.
In 2012, a group that had been considering drilling for oil and gas in the Canterbury Basin in another area, returned an exploration permit to the Crown. New Zealand Oil & Gas said then that the risk profile of the Barque prospect was "too high". The permit stretched from about 15km off Oamaru to about 25km northwest of Dunedin.