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NAM proposes substantial reduction in gas production

…there was another earthquake last Monday, of 3.4 on the Richter scale. That was the second heaviest earthquake in the area above the Groningen field. So the big question is: when is it safe?

Printed below is an English translation of an article published today by the Dutch equivalent of the Financial Times, Financieele Dagblad.

Heavy earthquake Groningen: Earthquake had a force of 3.4 on the Richter scale

Bert van Dijk Carel Grol • Entrepreneurship

The Dutch Petroleum Company (NAM) has advised Minister Eric Wiebes of Economic Affairs and Climate to substantially reduce gas production in the Groningen field. This is the first time that NAM has so explicitly managed a production reduction.

NAM has already significantly reduced production in the past five years. In 2013, production from the Groningen field was still 54 billion cubic meters. This is 21.6 billion cubic meters this year. Gas is now also won more evenly. Yet there was another earthquake last Monday, of 3.4 on the Richter scale. That was the second heaviest earthquake in the area above the Groningen field.

So the big question is: when is it safe? NAM does not mention volumes. But the closing of a number of production clusters in the gas field, the substantial reduction of annual production as well as the already taken production reduction by 10% as of 1 October 2017, ‘will enable NAM to […] improve safety and safety perception within acceptable parameters. to hold’.

That is what the NAM has on Wednesday published in a letter to the State Supervision of Mines (SSM). They will study NAM’s analysis and proposed measures as soon as possible and advise Minister Wiebes about this. It must ultimately make a decision.

Probability of large earthquake in 2018 is 16%

That the extraction will soon decrease is almost certain. ‘It is no secret that gas extraction has to be reduced’, said Wiebes Wednesday at the beginning of the evening in the provincial government building. “I want that in this cabinet period. It’s exciting to see how fast that goes, but I’m going to do everything I can to reduce that.”

A new damage protocol must also be submitted as soon as possible. NAM has withdrawn from claim handling, but is still liable. This requires a damage protocol. That is not there, and so no damage is handled now. After the quake in Zeerijp, more than 1300 new claims were reported.

“As it has now been with the settlement of the damage, it is a tragedy,” said René Paas, Commissioner of the King, who had consulted with Wiebes for 45 minutes. ‘How do I get my money if I have damage after a quake? That sounds very simple. But that’s not true. And in this we are now a step further. ‘

Compensation fund

The damages must be paid with a fund. That fund is not there yet. Minister Wiebes said earlier Wednesday that he hoped for a damage fund, preferably before the summer: “Otherwise it would disappoint me. I think it will take a long time now. ”

As Minister Wiebes is now involved in the earthquake problem for two months. Next Tuesday evening there will be a debate about the current situation in Groningen, where mainly the handling of the damage will be discussed.

Coalition agreement

The NAM can now still earn 21.6 billion cubic meters of gas from the Groningen field. In the coalition agreement it has been agreed that the extraction must be reduced by 1.5 billion cubic meters to 20.1 billion in 2021.

NAM also earned € 526 million in gas extraction in 2016. Most of the proceeds must be paid to the State.

At the provincial government, where Wiebes and Paas stood side by side in the corridor, 12 billion cubic meters was still suggested as a safe extraction level. That should be a decision by the minister. The two ministers did not want to go into that.

But, was they asked, is that possible, such a drastic reduction? NAM is also with supply contracts to large customers. According to Paas, it is mainly about the safety of the Groningen people. And the contracts? Easter: ‘It is not my role to have a lot of understanding for the practical problems of the minister.’

Wiebes could then smile again.


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