WELLINGTON, Jan 7 (Reuters) - Royal Dutch Shell,Austria's OMV and Japan's Mitsui will drill anexploration well off New Zealand's southeast coast, becoming thelatest group to search for natural gas in the country's largelyuntapped deepwater basins.
The Shell-led project would follow a programme by AnadarkoPetroleum of the United States to drill two deepwaterwildcat wells in New Zealand this year in a joint venture withAustralia's Origin Energy Ltd.
Anadarko has already started drilling its first well off thewest coast of the North Island.
After decades of neglect, interest in exploring in NewZealand's rough seas has been on the rise following thedevelopment -- spearheaded by Shell -- of floating LNGfacilities, as it means gas can be processed for shippingwithout having to build an expensive onshore plant.
Shell on Tuesday said it planned to drill an initial projectwell in the remote waters of the Great South Basin in 2016.
"We're very confident that any find will be natural gasrather than oil. We believe there's less than a 1 percent chancethat there's going to be oil," Shell New Zealand Chairman RobJager told Reuters.
"It's most likely going to be a gas export development," hesaid, given the limited size of New Zealand's domestic gasmarket. Shell saw the possibility that any find could lead to afloating LNG development, Jager said.
The Anadarko and Shell projects follow a decades-old lull indeep-water drilling in New Zealand's frontier basins.
U.S.-based Hunt Petroleum halted exploration in the GreatSouth Basin in the early 1980s due to harsh conditions andpolitical red tape.