New Zealand sits on the western edge of the Pacific tectonic plate at the boundary with the Australian Plate, an active plate boundary forming part of the Pacific “Ring of Fire". As well as the volcanoes, plate boundaries are associated with earthquakes caused by movement on sets of geological faults near the plate margins. In New Zealand, the main fault along the plate boundary is called the Alpine Fault, which runs up the west side of the South Island, turning north eastwards across the northern part of the island, and then through Wellington on the North Island.
Oamaru is in a relatively quiet earthquake area because of its position on the opposite side of the island from the plate margin. The last major earthquake in Oamaru was in 1876 (5.8 Richter).
The regional landscape is formed by a dissected plateau, which falls eastwards at a shallow gradient. This plateau is an old erosion surface underlain by metamorphic "Basement Rock" dating from the Permian to the Triassic Periods (299 ma to 201 ma). This rock has been greatly altered from its original state by heat and pressure during burial and now consists of Schist, a foliated rock often containing glistening mica, but which usually still retains the structure of the original rock.
Around Oamaru, the basement rock is covered with more recent sedimentary and volcanic rocks dating from the Cretaceous to Cenozoic eras (145 ma to present). More recent glacial and alluvial sands and gravels cover the coastal margin and valley bottoms.
The plateau has been cut through by the Waitaki river, forming a valley which runs from the western highlands to the sea just north of Oamaru. Most rivers, as they approach the sea, meander over a broad flood plain but the Waitaki looks odd; it runs in a fairly narrow straight valley, only escaping the confines of the valley close the sea. This is the result of the valley having been eroded preferentially in the weaker rocks along a geological fault, the "Waitaki Fault".
A brief look at the local geological map reveals that the basement rock around Oamaru is mostly of Permian age (299 ma to 252 ma) and shows varying degrees of metamorphism. It is mostly "Otago Schist", comprising schists and sandstones interbedded with mudstones.
The younger rocks are mostly Paleocene to early Oligocene (66 ma to 28 ma) and comprise the Onekakara Group and the overlying Alma Group.
The Onekakara Group includes non-marine Conglomerate, Sandstone, Mudstone and Lignite; Marine Sandstone and Mudstone; and some impure Limestone. The mudstones include the Abbotsford Formation, which is notable for containing spherical calcareous concretions – the best-known examples being the Moeraki boulders.
The Alma Group includes the Deborah Volcanics (mostly brecciated and intrusive basalt); the Ototara Limestone (including some sediments of volcanic origin); and the Waiareka Volcanics – mostly intrusive basalt lava forming sills and notably, Pillow Lavas exposed in the cliff south of Oamaru.