New Zealand. The Great South Basin lies south of South Island, and Cape Reinga forms the most northern tip of North Island. (aceproject.org)

The New Zealand government has announced the discovery of at least ten untapped offshore oil fields located along the country’s coast, Stuff.com reported on Wednesday. According to an account released by GNS Science, the new fields, which run between the Great South Basin and Cape Reinga, could contain as many as 6.5 billion barrels of crude, worth an estimated $67 billion (in New Zealand dollars).

With evident enthusiasm, Energy and Resources Minister Gerry Brownlee claimed that the tax receipts from the oil would amount to about $10 billion a year—enough to wipe out New Zealand’s current cash deficit. “New Zealand’s largely unexplored petroleum resource could be one of the country’s most significant economic opportunities,” Brownlee said. “The industry has been neglected by successive governments for far too long.”

Brownlee announced that in light of the discoveries, the government will reconsider the tax and regulatory framework of the petroleum sector, in order to make investment more attractive to foreign oil explorers. At the moment, however, it is unclear exactly how far below the ocean floor the oilfields are hidden, or how much it will cost to tap them.

New Zealand’s discovery of pristine oil closely follows a similar find by oil giant BP, which announced on Monday that it has discovered a new oilfield in the Gulf of Mexico, five miles west of the company’s Tiber reservoir. How profitable these new fields will be is a matter of some debate. As Heatingoil.com reported, the costs of extracting oil can be vertiginously high, and may render oil production uneconomical. For instance, deepwater production in Angola and Nigeria, considered (along with offshore Brazil) to be exciting new frontiers, operate with costs of about $90 per barrel, well above the current price of oil.

With the price of oil increasing, oil companies and governments have more incentive to find new, untapped resources. Still, this is no guarantee that increased supply will mean greater demand or heightened profit. The fact that oil prices might continue to rise as supplies increase means that consumers are likely to be saddled with the skyrocketing costs of oil production.

Until drilling costs can be determined, New Zealanders are advised not to count their barrels before they’re sealed.

This 2006 map shows other drilling operations in the Gulf of Mexico. (image: online.wsj.com)

BP made a “giant” crude oil discovery in the Gulf of Mexico, the Houston Chronicle reported on Monday. The U.K.-based oil leviathan and Devon Energy Corp., the largest independent U.S. oil and gas producer, confirmed the presence of oil in the Lower Tertiary formation, a layer of rocks that formed as many as 65 million years ago and situated deeper than any existing oil-producing fields.

This week’s find is located about 5 miles west of BP’s Tiber reservoir, discovered by the company in early September. At the time, Steve Zweig wrote on heatingoil.com that Tiber was the deepest vertical well ever drilled and, although BP did not specify the discovery’s size, the company said it was “in the same league” as its other large Gulf oil fields.

As is usually the case, this news of a new oil reservoir near the US is good news for heating oil users. More crude oil that can be easily transported to the US for refining means an increased supply of refined products like heating oil, which means downward pressure on prices.