Texan oil and gas exploration company Anadarko has confirmed it will continue its bid to find oil off the Otago Coast.
The company had until today to commit to a five-year extension to its exploration permit off New Zealand's southern coast, or surrender it.
Anadarko found only small shows of natural gas last summer in a $150 million deepwater test well off Dunedin, and decided to cap the well and abandon it.
Its New Zealand manager, Alan Seay, said the company had committed to the five-year extension of its exploration permit off New Zealand's southern coast, and would soon begin seismic testing.
"The next step will probably be to acquire some seismic data in the Canterbury Basin," he said.
"We'll study the findings we get from that programme, the data that we have taken from the exploration well that we drilled earlier this year and, from that, hopefully we can identify a prospect that will be worth drilling at some point in the future."
Unwelcome but not unexpected - Oil Free Otago
Mr Seay said it was likely to be about two and a half years before the company commenced drilling, if that was what it decided to do.
He said earlier this year there were some preliminary 'shows', or indications, of natural gas but months of analysis were still required.
Petroleum Exploration and Production Association chief executive David Robinson said at the time that the search in the Canterbury and Great South Basins was just getting going.
But a protest group, Oil Free Otago, said it planned to increase pressure on Anadarko, to stop the exploration.
A spokesperson, Rosemary Penwarden, said the latest news was unwelcome but not unexpected.
"They can continue to expect resistance from the people here in Dunedin. We don't want to spend money on infrastructure building up an industry like gas or oil off our coast."
Ms Penwarden said the number of people who did not want the drilling to commence was building in Otago.
She said the region had people with the experience and expertise needed to invest in industries involved in clean energy instead.