In a state-versus-oil company battle with major implications for the development of Alaska's untapped North Slope gas, a state judge this week issued a ruling in favor of oil companies.
State Superior Court Judge Sharon Gleason said the state violated Exxon Mobil and its partners' constitutional right to due process last year when it terminated their Point Thomson unit — potentially the second-most lucrative collection of gas leases on the Slope.
The oil and gas field sat undeveloped for decades though the state and Exxon had signed an agreement creating the Point Thomson unit in 1977. The goal of creating the unit was to make it more efficient to produce oil and gas from leases held by multiple companies.
The state began tussling with Exxon over the lack of drilling at Point Thomson during Gov. Frank Murkowski's administration, and the next two governors have carried the dispute forward.
The Alaska Department of Natural Resources rejected a couple of Exxon's development plans for Point Thomson, saying the company's commitments were too weak. When he terminated the unit last year, DNR Commissioner Tom Irwin said he couldn't trust Exxon to carry out its latest plan.
But Exxon protested, saying the time was now ripe to develop Point Thomson. Since then, the state has allowed Exxon to drill on two of the unit's 31 leases.
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