“New Zealand is a remarkably under-explored country, and with hydrocarbon deposits found in all the near-shore petroleum basins there is enormous potential in our oceans,” he said.

More than 4 million square kilometres of offshore acreage is available to explore in New Zealand, of which about 104,000 sq.km is currently being offered for exploration bids, with a further 360,000 sq.km to be offered soon in the Great South Basin.

Crown Minerals has conducted extensive surveys to assist prospective companies decide what locations they will bid for drilling rights.

But results for the recent Northland and deepwater Taranaki Basin rounds were disappointing – while OMV and Origin picked up two Northland blocks, three other were left untaken, and none of the Outer Offshore Taranaki blocks were awarded.

There are concerns that poor exploration results in 2005 have affected perceptions of New Zealand’s prospectivity.

Crown Minerals says regions outside Northland and Taranaki with some of the strongest potential include the area south and east of Invercargill, known as the Great South Basin, and the East Coast Basin, east of Hawkes Bay.

In the East Coast Basin, the government last year paid for a seismic survey vessel to study the area's geology, then made the information available for exploration companies.

Crown Minerals will award the right to explore across 43,267 sq.km of ocean in this basin. The area contains an active petroleum system but has only been very lightly explored.

Explorers have until Friday to put in bids for this offshore acreage. The industry will be watching keenly to see what the response is.

Last year saw record levels of drilling and five new petroleum mining permits being issued for both oil and gas discoveries.

However, while exploration results for wells drilled between 1999 and 2004 were fairly good and included the major offshore Pohokura gas field discovery in 2000, 2005 was a very poor year.

Some 34 wells were drilled in New Zealand last year - 19 were classified as exploration wells and the remainder appraisal and production wells. All were in Taranaki. Technically there was a 10% success rate, but not one sizeable discovery was made.

But time is running out and costs are going up.

This lack of exploration success comes as the large Maui gas field is rapidly depleting and New Zealand needs to either find new resources or plan for LNG or CNG imports.

To add to the pressure, oil and gas project costs are skyrocketing worldwide.

There will be a lot of activity in Taranaki for the next few years, with four substantial projects being developed, but none of these are enough to provide more than breathing space for New Zealand’s major gas users.