Plans for more than $1 billion of exploration drilling for gas and oil in the Great South Basin have been shelved for at least a year.
A joint venture led by oil and gas group OMV has been granted a year's extension in making a decision on whether to do the exploration work in waters off Southland.
The project was expected to inject millions of dollars into the Southland and Otago economies through the use of local services.
OMV has now confirmed its deadline for a decision on drilling has been put back to July 2011.
Exploration work would begin the following year if a decision was made to go ahead, the group says.
Five wells would be drilled, depending on the results of ongoing evaluation of seismic and other geographical data.
In October, ExxonMobil New Zealand and Todd Energy announced a delay to their venture in the Great South Basin, while they seek new business partners.
