If the country can duplicate the success of production from Taranaki -- the single locale for oil and natural gas production -- New Zealand's gross domestic product could increase an average of $1.7 billion, or 1.7 percent for each year of a 30-year development of a second basin, with the creation of 5,500 jobs, says a Financial Times report.
The government's second round of tenders for oil and gas exploration blocks last month yielded 10 new five-year exploration permits, drawing interest from Shell and deep-sea exploration specialist Andarko as well as OMV and Canadian company East West Petroleum.
Of the 10 permits, five are for onshore Taranaki basins and two for offshore Taranaki, with the remaining three in unexplored offshore areas.
"The award of two permits over the previously unexplored Pegasus Basin and another in the Great South Basin confirms the potential prospectivity of New Zealand outside Taranaki," Energy Minister Phil Heatley had said in a statement.
Collectively, the 10 permits represent a committed work program expenditure of $82 million, he said, which, if initial work was successful, could lead to the expenditure of a further $776 million within five years.
Shell and its partners OMV and Mitsui were awarded one permit in the Great South Basin and have spent about $80 million in seismic surveying of the area.
While it could cost Shell and its partners $126 million-$168 million to drill in the Great South Basin, Rob Jager, country chair of Shell New Zealand told the Financial Times that having more activity in the country "would also be beneficial for the industry in general," as it would allow companies to share logistics and reduce costs.
Shell said it would make a decision by the end of this year on drilling.
But environmentalists have warned of the risk of a deep-water spill in the offshore basins.
Greenpeace has called for the New Zealand government to drop its deep sea oil program, saying that of the three offshore permits awarded, two are at extreme depths of more than 8,858 feet, which it says is nearly twice as deep as the Deepwater Horizon disaster site in the Gulf of Mexico.
"The government should drop this risky program and give its full support to our world-leading clean energy sector which will create local jobs and grow our economy without risking our beaches or increasing pollution," Greenpeace New Zealand climate campaigner Simon Boxer said in a release.