Not striking oil is one of the risks of oil drilling, Prime Minister John Key said today in response to news that Texan oil giant Anadarko found no commercially viable oil or gas in its deep-sea well in the Taranaki Basin.

"It's well established that a huge number of wells that these companies will drill for will prove not to actually have either commercial oil or hydrocarbons, or none whatsoever," Key said.



"So it's disappointing from Anadarko's point of view and from our point of view, because of course that would be great for New Zealand if there was some big oil findings there."



"My understanding is they're moving on to other parts of New Zealand, hopefully they'll be more successful there."



The Far North region was a place that could potentially benefit from oil exploration.



"That's a place where historically, you've got low levels of employment, high levels of unemployment, low wages and people screaming out for opportunities," Key said.



"It's also a place where there's highly likely to be prospective conditions for mineral, oil and gas exploration.



"And those two things could really help address the situation in Northland."



He doubted the failure of Anadarko's Taranaki drilling would have a negative impact on future prospecting licences.

Anadarko's drill ship Noble Bob Douglas will move to the Canterbury Basin this week.



"It's a disappointment, but this is by far the most frequent outcome in exploratory drilling," Anadarko New Zealand's corporate affairs manager Alan Seay said.



The 4619-metre well, which was drilled under 1500m of water, will be plugged and abandoned over the next few days, he said.



Anadarko spent about 70 days drilling in deep water off the Taranaki coast, at a cost of up to US$250 million (NZ$309m). The company's licence to drill in the Deepwater Taranaki Basin ends on February 14.



"In terms of the drilling operation, the ship performed above and beyond expectations," Seay said.



Energy campaigner for Greenpeace Steve Abel said it was a "real bad day" for Anadarko and the New Zealand Government.



"The Texan oil giant has not only announced that their New Zealand drilling has failed, they've also announced a loss of over $950 million dollars in the last quarter," he said.



"[Prime Minister John] Key's ministers have wasted a whole load of political capital on this bungle.



"Instead, they should be backing our own cutting-edge clean energy industry, which will bring thousands of jobs and a multi-billion dollar economic boost.



"That's what smart politicians would be doing."



In November, Greenpeace unsuccessfully challenged the Environmental Protection Agency in the High Court to have the granting of Anadarko's offshore drilling permit declared erroneous.

Key said planned protests over drilling to coincide with his arrival at Waitangi tomorrow were misguided.

"The protests are actually more often than not, fed by misinformation. In fact, actually we've been drilling in New Zealand for well over 30 years and we're the Government that brought in much tougher regulation when it came to deep-sea drilling.



"In fact, despite what David Cunliffe says the previous Labour Government allowed drilling without the new tougher regulation that we've brought in, in deeper waters."