Oil companies and Dutch State agree on settlement of claims in Groningen

29-06-2018

The parties comprising the 'Gasgebouw' (the single gas market structure) have reached an agreement on the settlement of claims resulting from gas extraction in Groningen. These parties consist of the State, represented by the Minister for Economic Affairs and Climate, and NAM's two shareholders, Shell and ExxonMobil. Both those companies, along with the Ministry of Economic Affairs and Climate and state-owned EBN, are also shareholders of GasTerra, which trades in Groningen gas.  EBN, Shell and ExxonMobil own the partnership which operates the Groningen field.

Matters needed to be discussed by the Minister and the oil companies because, as is widely known, the circumstances relating to gas production have changed dramatically. The claims handling procedure and reinforcement operations in Groningen are very expensive. Due to the Minister's decision to reduce production in Groningen to nil as quickly as possible, however, revenues from the field will eventually dry up completely. For that reason, profit distribution will be adjusted in favour of the oil companies who will, in turn, continue to fully guarantee the costs to be incurred in Groningen. Over the next few years, NAM and the government will also invest one billion euros in the economic development of the region.

The structure and division of roles within the 'Gasgebouw' will also be revised; we expect to know later in the year what the exact implications will be for GasTerra. Nothing will change for the time being in this respect and GasTerra’s guiding role in operating the Groningen field will stay the same. Customers buying low-calorific gas produced from Groningen and other sources will also be unaware of this 'outline agreement', which is the name given to the outcome of the negotiations. Security of supply continues to be guaranteed.