ConocoPhillips accepts state deal to drill promising oil field

ConocoPhillips has accepted a deal from the state allowing it to add an increasingly promising oil prospect to its Colville River Unit on the North Slope. The company said it plans to drill in the so-called Tofkat area next year.

ConocoPhillips told the Alaska Department of Natural Resources on Friday it will accept the terms of the state’s deal that lays out development steps for the 9,000-acre prospect — located on state and Native corporation land between two large recent discoveries.

[State gives ConocoPhillips shot at drilling prized prospect]

Since 2002, ConocoPhillips has twice failed to drill the area as the state expected, leaving Alaska officials skeptical about the company’s intentions.

The deal, proposed by Natural Resources Commissioner Andy Mack, set a series of development steps that includes drilling two appraisal wells, the first by June and another in 2020. The deal also requires the company to pay $7 million to bring the field into production, money meant to replace lost income the state may have received if it had put Tofkat up for competitive auction.