Gisborne District Council is allowing Tag Oil, a Canadian company, to search for more oil on the East Coast.
The announcement means an exploratory well will be drilled near Te Karaka, 40km northwest of Gisborne.
Tag Oil has done seismic testing in the area and believes oil and gas are present in quantity at a shallow depth.
The district council says it will not require public notification for the company to search, as adverse effects will be minor.
Drilling and testing will take seven weeks.
