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Production at Groningen gas field to slash to 13.5bcm in second half of 2015

Production at Groningen gas field to slash to 13.5bcm in second half of 2015

AMSTERDAM: The Dutch government said it will cut production further at a giant gas field blamed for causing earthquakes, crimping output for energy titans Royal Dutch Shell PLC and Exxon Mobil Corp.

Production at the Groningen gas field will be slashed to 13.5 billion cubic meters in the second half of 2015, the government said, resulting in total output of 30 billion cubic meters this year, substantially lower than the previous target of 39.4 billion cubic meters.

The move is the latest in a series of production cutbacks by the Dutch government in recent years after a study by The Royal Netherlands Meteorological Institute linked gas extraction to a rise in earthquakes in the northern province of Groningen, where the field is located. The tremors have damaged many homes in the area.

The safety of the people of Groningen is the most important,” said Henk Kamp, the Dutch Minister of Economic Affairs. “Gas production from Groningen will be reduced as far as feasible.”

Discovered in 1959, the Groningen field is one of the world’s biggest natural gas reserves and is a key source for Europe, accounting for roughly 10% of the European Union’s total gas supply last year.

The field is operated by a joint venture of Exxon and Shell, called the Nederlandse Aardolie Maatschappij, or NAM. The operator is facing hundreds of compensation claims from people who allege the earthquakes have damaged their homes.

A report from the Dutch Safety Board, a government-financed body, concluded in February that the Dutch government, as well as the field’s operator, for decades ignored the risk of earthquakes stemming from gas extraction.

Shell and Exxon didn’t immediately respond to requests for comment on Tuesday. NAM has acknowledged that its operations have been responsible for earthquakes.