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An Alaska judge has thrown out a lawsuit filed by US supermajor ExxonMobil seeking damages from the state for the cancellation of its Port Thomson field leases.
The Alaska Department of Natural Resources moved to revoke the leases for the giant Point Thomson field in November, saying ExxonMobil and its partners had waited too long to develop the field which was discovered in the 1960s, Reuters reported.
Alaska oil and gas leases normally expire after five to 10 years if a find is not developed, but ExxonMobil and its partners had won regular extensions.
State officials had been pushing ExxonMobil to begin production at Point Thomson to bolster Alaska's sagging oil production, but the company argued in 2005 that putting the natural gas-rich Point Thomson field into production before an Alaska gas pipeline was built was not economically prudent.
Alaska is still trying to restart the stalled process to build a pipeline to carry its gas resources to the US Midwest. A process to select an operator for the pipeline, which is expected to cost more than $20 billion, is currently being relaunched by the state government.
Point Thomson holds between 8 trillion and 9 trillion cubic feet of natural gas and about 300 million barrels of condensate and oil, according to the Department of Natural Resources.
Further legal wrangling is expected as ExxonMobil can still appeal the dismissal of the lawsuit. ExxonMobil and lease partners ConocoPhillips, Chevron and BP, are also pursuing other legal avenues to recover the field.