Shell New Zealand is joining a bid by OMV to explore for oil and gas in the Great South Basin.
Shell will take a 50% share in permits covering more than 32,000 square kilometres off the Southland Coast.
The joint venture, which also involves Thai company, PTTEP, and Mitsui Australia, has already spent $50 million studying the area in the last four years.
And OMV's managing director, Peter Zeilinger, says they will spend another $50 million conducting a 3D seismic survey of the area this summer.
He says there is still some uncertainty which is the nature of the oil and gas business.
Mr Zeilinger says the uncertainty needs to be narrowed down in order to commit to larger investments.
The announcement comes as a ruptured oil pipeline owned by Shell continues to leak into the North Sea.
The chairman of Shell companies in New Zealand, Robert Jager, says the spill is unfortunate, but it will make sure its safety systems are robust for exploration of the Great Southern Basin.
He says before you get to a spill a lot of things have to go drastically wrong, and Shell's focus is on preventing that.
Mr Jager says in the unlikely event that something did occur there are a number of ways to minimise the impact.