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Shell and Exxon secured ‘secret deal’ on Groningen gas production

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Friday 13 May 2016

Oil companies Shell and Exxon held secret talks with the economic affairs ministry in 2005 to set levels of production in the Groningen gas field up to and beyond 2020, according to documents obtained by NOS.

The documents show that the two companies exerted pressure on the ministry not to scale back gas extraction despite increasing concern over the increased frequency of earthquakes in the region.

The Dutch parliament was informed of the talks, which took place in 2005, but only knew of an agreement to set production levels for the next 10 years. The documents obtained under freedom of information legislation show that the deal also covered the years up to 2020, when the gas field is expected to go into decline, and afterwards.

In 2010 a civil servant wrote in a memo that parliament had ‘not been informed about long-term production’ and that the agreement between the oil companies and the ministry ‘limits the policy capacity of the minister’ to set production levels.

In December last year the government reduced the amount of gas to be extracted in Groningen this year to 27 billion cubic metres, following a Council of State ruling. In 2105 33 billion cubic metres was extracted.


The 2005 deal allowed a maximum production level of 425 billion cubic metres over the 10 years from 2006 to 2015, higher than the government’s preferred limit of 375 billion cubic metres.

Tens of thousands of homes in Groningen province have had to be shored up because of damage caused by earthquakes that have been linked to gas extraction, and some houses are unsellable. House prices have fallen by as much as 12% in areas worst hit by earth tremors.

NOS requested the documents as part of an investigation into gas production in 2013, when it reached its highest level for 30 years despite a warning by the regulator (Staatstoezicht op de Mijnen) that extraction needed to be scaled back urgently.

Read more at Shell and Exxon secured ‘secret deal’ on Groningen gas production

RELATED Gas group NAM says more serious earthquakes will hit Groningen: 1 October 2014 Quakes force Dutch lawmakers to cut gas production: 11 March 2015

Bloomberg: Dutch Quakes Toss Wrench Into Gears of Europe Gas Market: 10 March 2015

Devastating report of a scary scenario: 07 March 2015

Dutch government says sorry for quakes caused by Groningen gas field: 02 March 2015

Reuters: Bells toll for Europe’s largest gas field: 02 March 2015

Groningen Gas Field Shock: Risk of earthquakes at 4.6 on the Richter scale: 24 Feb 2015

Shell and Exxon ignored seismic dangers at Groningen Gas Field: 18 Feb 2015

REUTERS ARTICLE: Dutch Court hears challenge over Groningen gas production: 1 April 2015

BLOOMBERG: Dutch Court to Rule on Gas Output From Europe’s Biggest Field: 13 April 2015

BLOOMBERG: Dutch court limits fracking on earthquake fears: 14 April 2015

REUTERS ARTICLE: Exxon-Shell gas venture may have to adjust Groningen output after court ruling: 15 April 2015

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REUTERS ARTICLE: Reinforcing homes in Dutch gas extraction quake zone estimated at 30 bln euros: 20 April 2015

NEW YORK TIMES/REUTERS ARTICLE: Dutch Court Says Gas Producer Must Compensate Homeowners in Quake Zone: 2 Sept 2015

THE WALL STREET JOURNAL: Shell, Exxon Ordered to Pay Groningen Earthquake Compensation: 2 Sept 2015

BLOOMBERG.COM: Riled Locals Fight Output From Europe’s Largest Gas Field: 10 Sept 2015

REUTERS: Groningen gas production challenged in Dutch court: 10 Sept 2015

THE GUARDIAN NEWSPAPER: Shell and Exxon’s €5bn problem: gas drilling that sets off earthquakes and wrecks homes: 10 October 2015

THE NEW YORK TIMES: New Concern Over Quakes in Oklahoma Near a Hub of U.S. Oil: 15 October 2015

Enid News & Eagle: Oklahoma world’s No. 1 earthquake area: 11 Nov 2015

BLOOMBERG.COM: Dutch Court to Rule on Gas Output From Europe’s Biggest Field: 18 Nov 2015

BLOOMBERG: Exxon’s Dutch Gas Gag: 18 Nov 2015

Reuters: Safety risks prompt Dutch court to order cuts at Groningen gas field: 18 Nov 2015

Jurist: Dutch court orders more cuts in gas production: 19 Nov 2015

The Sunday Times: Gas Field quakes hit Dutch dykes: 22 Nov 2015

NAM, the Dutch Gas joint venture by Shell and Exxon investigate impact of earthquakes triggered by Groningen Gas Field activity: 18 February 2016


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