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Exxon Mobil Corporation, Royal Dutch Shell Dealt A Blow As Dutch Govt. Cuts Groningen Production

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Screen Shot 2015-06-05 at 21.03.05Exxon Mobil Corporation, Royal Dutch Shell Dealt A Blow As Dutch Govt. Cuts Groningen Production

The Dutch government has decided to cut production from its Groningen gas field after a series of earthquakes led to heightened safety concerns

By: MICHEAL KAUFMANPublished: Jun 24, 2015

Responding to a series of earthquakes in the northern parts of Netherlands, the Dutch government has decided to slash the gas production at the gas field in Groningen, according to Reuters.

Production at Holland’s Groningen oil field, the biggest of its kind in Europe, will be restricted to 30 billion cubic metres (bcm) for the calendar year 2015, according to the country’s Economy Minister, Henk Kamp. The government had previously planned production of 39.4 bcm during the current year.

“The earthquakes are still there, and we will have to reckon with earthquakes in the future,” Mr. Kamp told Reuters on Tuesday. “We can do two things to preserve safety: reduce the production of natural gas and strengthen houses, and we’re doing both,” Mr. Kamp added.

European gas prices may move higher as ANP, a Dutch news agency, reported earlier this week Mr. Kamp plans to further tighten production at the world’s 10th largest gas field in Groningen.

Earlier this year, the Dutch government had decided to cap production at 16.5 bcm for the first half of 2015, after the country’s safety board said gas production companies failed to realize the gravity of the threat of earthquakes in the region. With the new 30 bcm limit coming in play, the production for the second half of the year will be 13.5 bcm. Production for the next year could be as low as 21 bcm, according to Mr. Kamp.

Following the announcement, the TTF Natural Gas Day-Ahead Index gained 3.29% on Tuesday to move to 21.1225 euros per megawatt-hour (mwh). “We’ll do whatever is necessary for the safety of the people in Groningen,” Mr. Kamp said.

Nederlandse Aardolie Maatschappij (NAM), a joint venture between Royal Dutch Shell plc (ADR) (NYSE:RDS.A) and Exxon Mobil Corporation (NYSE:XOM), operates the Groningen gas field, in collaboration with the Dutch government. Both companies hold a 50% stake, respectively.

SOURCE

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Screen Shot 2015-06-24 at 17.47.10By CHRISTOPHER HARDER: 24 June 2015

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A gas production plant is seen in ‘t Zand in Groningen February, 2015. Dutch church bells that for centuries have tolled to warn of floods across the low-lying countryside are sounding the alarm for a new threat: earthquakes linked to Europe’s largest natural gas field.  Reuters

The Dutch government will cut production further at a natural-gas field blamed for causing earthquakes, Maarten VanTartwijk and Sarah Kent report. The field is operated by a joint venture of Royal Dutch Shell PLC and Exxon Mobil Corp. and  is called the Nederlandse Aardolie Maatschappij, or NAM. The operator faces hundreds of compensation claims from people who allege the earthquakes have damaged their homes.

The Groningen field is one of the world’s biggest gas reserves…

FULL ARTICLE

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