Shell, Exxon to appeal latest Groningen gas production cap

AMSTERDAM, (Reuters) - A joint venture between Royal Dutch Shell and Exxon Mobil said yesterday it would appeal against a Dutch government plan to lower a production cap at the Groningen natural gas field by a further 10 percent.

The Dutch government has lowered production at Groningen several times over the past three years due to small earthquakes triggered by work there.

The latest cap, announced in May, would lower production to 21.6 billion cubic metres (bcm) per year from October. It was 53.9 bcm in 2013.

The 50-50 Exxon-Shell joint venture, known as NAM, said it had been left in an impossible position by being told it could continue production - vital to supply homes with gas - but without guarantees it is meeting safety standards.

NAM cited one paragraph of the government’s May production decision in particular as troubling: “There is no model that can predict at which level of production the seismic risks align with the safety norms.”

“We need to know the rules of the game,” NAM director Gerald Schotman told reporters. “Models based on independent research have been shoved aside.”

Schotman said last year’s production plan used estimates of scenarios put together by a panel of scientists and then subjected to independent review by peers - the way the Dutch government determines acceptable levels of risk in other areas, such as the safety of its dikes and flood defenses.

NAM’s appeal will be heard starting July 13 at the Council of State, along with appeals by environmentalists who think the latest cap did not go far enough.