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Shell Exxon (NAM) induced Groningen Earthquake Damage €18 Billion plus

NAM reacted earlier to the news with the announcement that earthquake damage up to € 18 billion can be paid without problems in the next five years. On television at Jinek, Van Loon said that Shell is ‘legally liable’ anyway. ‘We guarantee and the damage is compensated, regardless of the amount’. In an advertisement in the newspaper, Shell stated that it would be ‘behind NAM and Groningen’. The Leiden professor of corporate law Steef Bartman mentioned during the hearing the statement that Van Loon gave to Jinek ‘richly vague’. “For what, how long, is there a maximum?” 

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

Shell defends Chamber: we guarantee NAM

Louis Hoeks • Economics & Politics

If the Nederlandse Aardolie Maatschappij (NAM) is unable to pay for the earthquake costs in Groningen, Shell guarantees this. That is what Marjan van Loon, the director of Shell Netherlands, said on Thursday during a hearing in the House of Representatives.

We are convinced that the NAM can pay the damage. If that is not the case, then the bill can go to Shell. ‘ Rolf de Jong of ExxonMobil, who owns the remaining 50% of NAM, added ‘never to let a daughter go bankrupt’.

Storm of criticism

The hearing was organized after the fuss that arose last weekend through an article in Trouw. It described that Shell Nederland bv had withdrawn liability for its daughter NAM. Although it was an accounting measure, the so-called 403 statement, the news led to a storm of criticism.

MPs were ‘white-hot’ (Agnes Mulder, CDA) or argued that the oil and gas multinational was ‘running fast for its responsibility’ (Jesse Klaver, GroenLinks). Groningers called on Shell to take away his predicate ‘Royal’. Angry farmers from the earthquake area went Thursday with their tractors, put on a charger for convenience, to The Hague.

Financially robust

Van Loon reiterated in the House that the group no longer considered the 403 statement to be necessary because NAM did not draw up its own annual accounts until last year. ‘We wanted people who do business with NAM to see that NAM is financially robust.’

MPs also expressed their concern about the solvency of NAM, which expects a recovery volume of 75 billion cubic meters for the next five years, while the State wants to drastically reduce gas production. Anton Broers, the financial director of NAM, said that the majority is generated from gas fields outside Groningen, such as in the North Sea.

Newspaper ad

NAM reacted earlier to the news with the announcement that earthquake damage up to € 18 billion can be paid without problems in the next five years. On television at Jinek, Van Loon said that Shell is ‘legally liable’ anyway. ‘We guarantee and the damage is compensated, regardless of the amount’. In an advertisement in the newspaper, Shell stated that it would be ‘behind NAM and Groningen’.

The Leiden professor of corporate law Steef Bartman mentioned during the hearing the statement that Van Loon gave to Jinek ‘richly vague’. “For what, how long, is there a maximum?” He would like Shell to come with a written statement.

Army of lawyers

Van Loon was evasive about that. She is going to put an ‘army of lawyers’ to work. She also did not want to say anything about the conversations with ExxonMobil. “We’re going to invent that in the coming years, but it will be billions.”

Next week there will be a parliamentary debate with Minister Eric Wiebes about the Groningen earthquakes.

DUTCH ARTICLE

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