A Shell and Exxon joint venture will appeal a Dutch plan to lower production at the Groningen gas field

 
Courtney Goldsmith
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NAM has seen production at its Groningen natural gas field fall over the years since a 2012 earthquake (Source: Getty)

A joint venture between two oil majors will appeal a plan by the Dutch government to lower a production cap at the Groningen natural gas field by a further 10 per cent.

NAM, the 50-50 joint venture between Royal Dutch Shell and Exxon Mobil, has been subject to lowered production caps at the site a number of times over the past three years after an outbreak of small earthquakes were triggered by the work there.

The most recent cap for Groningen, one of the world's largest gas fields, lowers production to 21.6bn cubic metres per year from October. That's less than half of its output in 2013 of 53.9bn cubic metres.

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NAM said the latest decision, which said there was "no model that can predict at which level of production the seismic risks align with the safety norms", was too vague.

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

In a statement, Schotman said the new decision was at odds with last year's government-approved production plan, which was based on a peer-reviewed model.

He said it is crucial the government produces a framework for the company to work within.

NAM, the largest gas producer in the Netherlands, supplies 75 per cent of the natural gas required by Dutch households and businesses. Natural gas is an essential part of the country's energy mix, accounting for 45 per cent of all the energy used.

NAM's appeal will be heard from July 13 at the Council of State.

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