NZOG has revealed an exciting natural gas find off the east coast of the South Island.

The potential for a new massive gas field off the South Island's east coast could create 5700 jobs and bring in $32 billion in royalties, the firm behind the field says.

But environmental groups say the science is clear and we should not be looking for new fossil fuels at all.

New Zealand Oil & Gas said earlier this year the Barque prospect, 60 kilometres off the Oamaru coast, held potentially more gas than previously thought.

NZOG says the Barque prospect, 60 kilometres off the Oamaru coast, holds potentially more gas than previously thought. (File photo)

On Monday, the company released a report showing it had the potential to add $7.1b annually to the national economy, and $32b in royalties and taxes over the life of the field.

NZOG is the operator of the Clipper joint venture, where the Barque prospect is situated.

READ MORE: Monaco oil and gas company competes for NZOG's hand

The company acknowledged it had a one in five chance of success if drilling proceeded.

But if successful, the field could virtually double New Zealand's oil and gas production, chief executive Andrew Jefferies said.

The venture could also create a gas market in the South Island and reduce New Zealand's reliance on overseas-made fertiliser and methanol.

"We believe natural gas from New Zealand would be better for the globe than alternative energy sources such as Canadian tar sands, Venezuelan bitumen or coal-bed methane from Australia," Jefferies said.

New Minister of Conservation Eugenie Sage said the area proposed for "risky" deep sea gas and potentially oil drilling was "important marine habitat not empty ocean".

"As Minister of Conservation I will ensure that the Minister of Energy is well informed of the significant wildlife and marine habitat values of the North Otago coast and seas and the risks that deep sea oil and gas drilling would pose to the marine environment and its fisheries, seabirds, marine mammals and other wildlife."

She said many species, including some found nowhere else in the world, lived along the Oamaru coast and fed some distance offshore. New Zealand had an "international responsibility to safeguard their habitats".

New Energy and Resources Minister Megan Woods said she was seeking advice on the economic and broader environmental aspects of the field and hoped to make a statement soon.

"This is an issue that's obviously topical."

The Petroleum Exploration and Production Association said the Barque could be an "economic game changer" for the region.

Chief executive Cameron Madgwick said the field could have a transformational economic impact on Canterbury and Otago.

"This option of bringing gas-to-shore could generate $450 million in annual GDP from operations and $700m each year in government royalties and taxes over the life of the field.

"It could also have important environmental benefits, given that natural gas has half the emissions of coal."

Madgwick said there were another four drillable South Island prospects "and the economic returns would be expected to be similar or potentially even greater, demonstrating the enormous potential of our industry in New Zealand".

But environment groups do not think the economic benefits outweigh the potential costs to the environment.

Greenpeace climate and energy campaigner Kate Simcock said no gas should be extracted and it "doesn't matter what was down there and how much it was worth".

Gas was a "very potent fossil fuel" that contributed to climate change and science had shown we could not burn the amount of fossil fuel already discovered without failing the goal of keeping global warming within 2 degrees Celsius of pre-industrial levels.

Her comment was based off a study published in Nature journal in January 2015, which said half of current gas reserves, a third of current oil reserves, and 80 per cent of current coal reserves should remain unused between 2010 and 2050 to stay below the 2C target.

"We need to be urgently transitioning away from oil and coal and gas, and embracing the opportunities and jobs that come from renewable energy," Simcock said.

NZOG has until April next year to make a decision to drill a well and until 2020 to actually do so.

The New Zealand-listed company has recently been subject to two partial takeover bids, with the highest bid coming from Singapore-based OG Oil & Gas.

The company, whose parent is based in Monaco, is chaired by Eyal Ofer – son of shipping magnate Sammy Ofer – and is looking to buy up to 67.55 per cent of the NZOG shares it does not already hold for a price of 78 cents.

NZOG shares are currently trading at 71c each.

OG Oil & Gas currently holds just under 18 per cent of the company after NZOG's second biggest shareholder, H&G – the investment arm of the Cushing family – committed its 9.2 per cent stake.

Ofer's offer closes on December 9 unless extended.

OG Oil & Gas said in its takeover offer that unlike its rival, Zeta Energy, it did not want to cash up or restructure the company but rather push its exploration rights further.

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