Royal Dutch Shell Plc  .com Rotating Header Image

Groningen Earthquakes: Dutch Minister Wiebes discusses ‘other financial arrangements’ with Shell and Exxon

Wiebes discusses ‘other financial arrangements’ with Shell and Exxon

Printed below is an English translation of an article published today by the Dutch Financial Times, Financieele DagbladRoyal Dutch Shell and ExxonMobil each own a 50% share in NAM, the company responsible for the earthquake blighted Groningen Gas Field and consequential potential bill for untold billions in damages to effected residences.

Because 300 billion to 500 billion cubic meters of gas will remain unproduced, this will result in a value destruction of € 50 billion to € 125 billion…

Louis Hoeks Carel Grol • Entrepreneurship

The endgame for gas extraction in Groningen has been deployed. After more than half a century of gas extraction, you need very different roles, very different agreements and also very different financial arrangements. We are all looking at that in connection with each other, ‘said Minister Eric Wiebes of Economic Affairs and Climate on Friday after the Council of Ministers.

Two weeks ago Wiebes announced that at the end of the next decade gas production in Groningen must be completely over. That was not a financial consideration, but it was about safety, according to the minister. He also said that it would be ‘up to me to ensure that there is no claim for the gas that is not won’. That could be a billion bill, since NAM has invested a lot and there are billions of gas left behind in the ground.

Intricate

On Friday morning the NOS reported on the basis of anonymous sources that there is a fight behind the scenes between the State and Shell and Exxon, about the billions that remain in the ground.

It is quite complicated, Wiebes acknowledged Friday after the weekly Council of Ministers. But he said ‘in an extremely constructive atmosphere’ to speak with Shell and Exxon. These are the parent companies of NAM, with a 50% interest each. ‘The parties see each other very regularly. We will continue step by step. ‘

To start with, we talk about the amount of gas that is extracted, according to Wiebes. ‘Until now, the oil companies did so, they asked for a permit for that.’ But that is not convenient, Wiebes thinks. ‘If we think that the gas has to go down and at the same time want security of supply, then it should actually be the government that determines how much gas is being extracted that year.’

Untenable

On Friday, the NOS published documents about the Groningen field, the large gas field around Slochteren, which the broadcaster had discovered through the Public Access Act (wob). In the document from 2015, called ‘Future of Groningen’, the NAM makes estimates of the loss of income if the Groningen field would close. Because 300 billion to 500 billion cubic meters of gas will remain unproduced, this will result in a value destruction of € 50 billion to € 125 billion, according to the document.

Furthermore, NAM writes that lower volumes and higher earthquake costs lead to ‘unsustainable economics’. There would also be a ‘significant impact’ on the region for jobs and economic development.

SOURCE

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellnews.net and cybergriping.com are all owned by John Donovan

0 Comments on “Groningen Earthquakes: Dutch Minister Wiebes discusses ‘other financial arrangements’ with Shell and Exxon”

Leave a Comment

%d bloggers like this: