US-based oil and gas company Anadarko will begin drilling the first test well of a two well drilling programme off the coast of Oamaru in New Zealand in November or December, 2012.

"The first single-hole programme, which will take four to six weeks, will have an estimated drilling cost of $1m a day."

The programme is expected to cost between $50m to $100m and will take 14 months to complete.

Drill ship Noble Bob Douglas, which is still under construction, will be employed to begin the drilling of maximum three holes in 1,100m of water.

The second well will be drilled off Taranaki and based on earlier results, a second either exploratory or appraisal hole well off Oamaru, at the Caravel prospect.

Anadarko corporate affairs manager Alan Seay said: "A contract is signed. We are very committed to coming here."

He also said the possibility of the drill ship being met at sea by environmental protesters can’t be ruled out in wake of the criticism in New Zealand of deepwater drilling operations.

The company is expected to undertake negotiations with local government and businesses in the city of Dunedin.

Otago Chamber of Commerce chief executive John Christie said the one-hole drilling programme is just the first step.

"This is tremendous news for the region. [But] we have to look at the long term to see what ancillary roles or business services would be needed for the future," Christie added.

The first single-hole programme, which will take four to six weeks, will have an estimated drilling cost of $1m a day.

The company has a three-year contract for the deepwater drilling vessel, worth $677m, reports odt.co.nz.