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Shell, Exxon may appeal over planned Groningen gas output cut

Shell, Exxon may appeal over planned Groningen gas output cut

AMSTERDAM, May 24 (Reuters) – A joint venture between Royal Dutch Shell and Exxon Mobil said on Wednesday it was considering appealing against a Dutch government plan to cut production at the Groningen gas field by 10 percent.

The Dutch state earlier on Wednesday confirmed it intended to go ahead with a tightening of output at the massive field from Oct. 1. It said interested parties had until July 7 to announce an appeal.

The 50-50 Shell-Exxon joint venture known as NAM, said in a reaction that the measure was “disproportionate” and ignored previously agreed safety norms, which do not call for such a large reduction.

The NAM said it appeared as if the government wanted it to “provide absolute safety guarantees” which is impossible.

The proposed cut, first announced in April, is the latest in a series over the past two years following earthquakes causing major damage to properties in the northernmost region of the Netherlands.

With the new cut, production will be capped at 21.6 billion cubic metres (bcm) per year, down from 53.9 bcm in 2013. NAM has accepted civil responsibility for damage caused by the quakes and is paying damages of more than 1 billion euros ($1.1 billion). ($1 = 0.8937 euros)

(Reporting by Toby Sterling and Bart Meijer; Editing by Mark Potter/Keith Weir)

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