Oil giant no longer in drilling partnership

Tag Oil has announced that Apache Corporation will not continue its partnership to explore and develop potential East Coast oil reserves.

Stratford-based Canadian oil company Tag intends to continue the exploration programme.

"We look forward to executing our long-term goal for the East Coast - to drill and hopefully prove the concept of unconventional oil potential in this frontier basin," Tag chief executive Garth Johnson said.

Under its profit-sharing agreement, industry giant Apache was obligated to pay all expenses incurred or committed during the initial phase.

The companies were poised to drill exploratory wells in southern Hawke's Bay this year.

A government report released in October last year said an oil and gas development, similar to the one being undertaken by Tag in Taranaki could be worth $1.5 billion annually in exports and create 5500 jobs.

Tag reported improving results in Taranaki, with the last 19 wells drilled proving successful.