Brazilian oil giant Petrobras has pulled out of New Zealand, but the Government is hoping another company will pick up from where it left off.
The state-run energy company has handed back its prospecting licences, Prime Minister John Key confirmed this morning.
The world's third-biggest oil company with sales of close to $150 billion a year, Petrobras had planned to invest $300m over the next three years in exploration and production.
The decision was seen by Greenpeace as a "victory for Kiwis opposed to risky deep sea drilling", but Treaty of Waitangi Negotiations Minister Christopher Finlayson was hopeful another company will pick up from where they left off.
"Other companies who are much more involved in frontier exploration may pick up those permits and we hope they do," he said.
"We know that there are opportunities to explore out there and we've got companies interested."
Finlayson was confident other companies would explore the area in the future because "we believe it's quite prospective".
Petrobras, however, did not.
"I've met with them and they've said pretty clearly that it's technical reasons and based on prospectivity, meaning that they didn't find enough to keep them sort of on the string, so they want to regroup in Brazil," Finlayson said.
Petrobras had carried out 2D seismic surveys before deciding to discontinue its exploration in the area. Before drilling, 3D and then 4D seismic surveying would be needed, Finlayson said.
"It's not until you can drill an exploration well that you know for sure that oil is down there."
He said Petrobras' decision was not influenced by opposition.
A campaign by East Cape iwi Te Whanau a Apanui, Greenpeace and other groups against Petrobras' exploration of the Raukumara Basin started early last year.
"The likelihood of oil from a deep sea blowout washing onto the beautiful beaches and coastline of the East Cape and Bay of Plenty just went down by 100 per cent," says Greenpeace Climate Campaigner Simon Boxer of the Petrobras decision.
Petrobras is struggling with rising inflation in Brazil and is having to import gasoline to meet demand because it lacks refinery capacity.
It is reported to be considering selling off assets in Africa and the US and recently withdrew from a huge ethanol pipeline project.
The news is a blow to the Government's aim to grow the oil and gas sector. In August, Texan oil company Anadarko announced delays to their plans to deep-sea drill off the coast until summer 2013.
The Green Party also welcomed Petrobras decision to give up plans to carry out what the Greens called "risky" deep sea oil drilling in New Zealand.
The Green Party said it shows the Government's plans for deep sea drilling are collapsing.
"The Government's deep sea drilling plans have so far failed, and it's just as well. Petroleum development, including deep sea drilling, is the wrong focus for our economy," said Green Party energy spokesperson Gareth Hughes.
Earlier this year, the joint Greenpeace-iwi bid to quash the East Coast exploration permit was thrown out by the High Court.
Finance minister Bill English shrugged off the loss - saying other companies are interested.
"There's others who are interested ... The Government has invested a bit of time and money making sure that oil and gas exploration is attractive.
"The companies are always making their decisions in terms of quite big shifts in world energy markets with the extensive shale gas finds in the US for instance."
He admitted New Zealand's oil and gas reserves are a "challenge" to get to.
"It's not as easy as some other resources around the world, but their decisions will be affected as much by world energy markets as by anything about New Zealand."
- The Dominion Post
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