The Government has awarded the first exploration permit for oil and gas off East Cape to one of the biggest petrol companies in the world.
The Brazilian energy giant Petrobras has been given the permit after a one-year international tender process.
The deal with Petrobras, one of the world's top five oil exploration companies, could be worth many million of dollars.
The deal, announced by Energy Minister Gerry Brownlee, gives Petrobras the sole rights for five years to explore and drill in a large area called the Raukumara Basin.
The permit covers an area of 12,300 square kilometres to the north of East Cape, from four kilometres from shore out to 110 kilometres, and includes areas classfied as deepwater.
Petrobras has committed to spend about $20 million over the next two years on collecting initial seismic data before deciding whether to drill exploratory wells.
Mr Brownlee says it could be the beginning of much larger investments in the energy sector. He says he's confident the company has sufficient experience to make sure a Gulf of Mexico-style spill disaster does not occur.