Auckland-headquartered Greymouth joins two other GSB ventures. One of these ventures is led by the world’s biggest oil company, ExxonMobil, in partnership with New Zealand’s largest energy company, Todd Energy; the other is led by Austrian giant OMV in partnership with Japan's Mitsui and Thailand's PTTEP Offshore Investment Company.

Associate Energy Minister Harry Duynhoven said the GSB blocks offer had attracted some of the world's major oil companies. He welcomed the introduction of Greymouth, saying the company had the required technical capabilities to take on this frontier basin and he was encouraged by Greymouth’s $NZ23 million work program.

Greymouth has been awarded licence PEP 50122, covering the northern margin of the GSB, starting onshore, north of the towns of Winton and Gore, and extending south beyond Invercargill and Bluff to include parts of Stewart Island.

The permit covers 15,740 square kilometres, of which 7700 sq.km are offshore.

Work program commitments for the Greymouth permit include reprocessing about 500km of 2D seismic, and acquiring and processing at least 200km of new seismic in the first 18 months. It is obliged to shoot a further 200km or so of 2D seismic within three years, and to drill and evaluate a well within five years.

“Greymouth Petroleum considers the gas and oil potential of this new permit is significant,” said Greymouth chief operating officer John Sturgess yesterday afternoon.

“Greymouth’s objective is to be the first company to deliver cheap fuel to backbone energy users in the South Island.”

Sturgess said Greymouth had successfully operated a market in the North Island for spot gas since October 2006 and anticipated that markets for spot, excess and short-fall gas would develop further during the next years as gas customers became aware of the flexibility, price and other advantages of this new gas market.

“This spot market initiative has translated into real cost savings for early spot market participants. Greymouth expects these savings to continue to filter down to gas and electricity consumers through 2008.”

Earlier this month the government awarded four new GSB permits to two consortiums, whose work program commitments involve spending about $NZ1.2 billion exploring the basin in the next five years.

Crown Minerals awarded ExxonMobil and Todd Energy one GSB licence, while the OMV-led joint venture picked up three new licences.

ExxonMobil operates PEP 50117 with a 90% interest, while Todd holds the remaining 10%. In PEPs 50119, 50120 and 50121, operator OMV and Mitsui have 36% each, PTTEP Offshore Investment Company holds 28%.

Both joint ventures plan to reprocess existing seismic and shoot new seismic within the first three years, followed by well commitments in the latter stages of the five-year permits.

"All these announcements herald a new era in oil and gas exploration in New Zealand. At the very least, this means a major boost for the lower South Island economy," Duynhoven said yesterday.

John Pfahlert, executive officer with the Petroleum Exploration and Production Association of New Zealand, welcomed the news of another home-grown participant in the GSB.

“It’s great to see a small player, such as Greymouth, able to participate in exploration in the Great South Basin. I believe it also marks the expansion of Greymouth’s exploration activities beyond the Taranaki Basin,” Pfahlert said.