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Financial tremors for Shell and Exxon from Groningen earthquakes

By John Donovan

A Dutch court has just upheld a government decision to cap production at the Groningen gas field, a giant natural gas field located in Groningen province in the northeastern part of the Netherlands. The largest natural gas field in Europe.

It is operated by the Nederlandse Aardolie Maatschappij BV (NAM), a joint venture between Royal Dutch Shell and ExxonMobil, with each company owning a 50% share. 

For decades, the venture has been a money spinner for the oil giants and the Dutch government.

All was going splendidly until ground tremors linked to gas extraction started and escalated in intensity until they could fairly be described as earthquakes. Experts subsequently warned that the earthquakes could reach 4.6 on the Richter scale.

The tremors have not only caused widespread damage to properties and their values but have undermined the credibility of the Dutch government and NAM. This happened after it was revealed that the dangers caused by gas extraction at the Groningen field were ignored for years by the Dutch authorities and Shell/Exxon.

As the intensity of the tremors increases, so does the growing anxiety by all those affected, particularly residents in the area.

It is the understandable public outcry that has led to the change in attitude by the Dutch government.

ARTICLE ENDS

The first two paragraphs contain extracts from a Wikipedia article

Related article by The Guardian in 2015: Shell and Exxon’s €5bn problem: gas drilling that sets off earthquakes and wrecks homes

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