Texas-based ConocoPhillips ( COP - Analyst Report ) is set to begin drilling around two exploration wells in remote Arctic waters in 2014.

The oil major aims to explore and drill a prospect – Devils Paw – in the Chukchi Sea. The announcement was made by the Chukchi program manager at the National Oceanic and Atmospheric Administration's (NOAA) annual Arctic Open Water Meeting.

Currently, ConocoPhillips’ exploration plan is being evaluated by the Bureau of Ocean Energy Management and additional information is likely to be submitted by the company by mid March.

ConocoPhillips remains completely undaunted by the innumerable hindrances faced by its rival Royal Dutch Shell plc ( RDS.A - Analyst Report ) while exploring the Arctic waters. Shell’s drilling operations were centered on the Burger prospect, which lies in the Chukchi, off northwestern Alaska. The drilling season in which it started was reduced by permit issues, floating ice obstacles and vessel disasters.

Shell also began spudding a well in the Beaufort Sea, off northern Alaska but is very likely to stop operations in the region in 2013, when the company intends to send its vessels to shipyard for repairs.

Taking all these hurdles encountered by Shell into account, ConocoPhillips proposes to employ a jackup rig, with legs that will rest directly on the sea floor, rather than a mobile drillship like the two utilized by Shell. The rig is being built by Noble Corporation ( NE - Analyst Report ) and will be well equipped to operate even in extreme weather conditions.

Moreover, Devils Paw is located farther south in the Chukchi, in an area where sea ice melts earlier in the spring and forms later in the fall, implying a longer open-water season in most years.

With an immense potential for greater activities in the Arctic, the first mover companies will be greatly benefited. Therefore, ConocoPhillips is poised to benefit from these activities in the Arctic, which will fuel its long-term production growth target.

ConocoPhillips carries a Zacks Rank #3, which is equivalent to a short-term Hold rating. However, PostRock Energy Corporation ( PSTR ) is another stock in the energy sector, which holds a Zacks Rank #1 (Strong Buy) and is expected to perform better.