XOM Exxon Mobil Corp

By Maarten van Tartwijk

AMSTERDAM--Production at the giant Groningen gas field in the Netherlands must be lowered further to reduce earthquake risks, a Dutch court ruled Wednesday.

The Council of State, the highest administrative court in the Netherlands, said annual production must be temporarily reduced to 27 billion cubic meters, down from a current cap of 33 billion cubic meters set in June by the Dutch minister of economic affairs, Henk Kamp.

"The minister should have explained more clearly why the limitation on gas extraction could not be set at less than 33 billion cubic meters," the court said. "After all, the studies on which this decision was based concluded that less gas extraction would mean a lower seismic risk."

The ruling, which cannot be appealed, represents a victory for residents and local authorities who claim that gas extraction continues to pose a risk to public safety, despite a series of production cutbacks in recent years.

The Groningen field, one of the world's largest gas reserves, is a key source for European countries like France, Belgium and Germany. It is operated by the Nederlandse Aardolie Maatschappij, or NAM, a joint-venture of Royal Dutch Shell Plc and Exxon Mobil.

Several government studies have showed that a rise in earthquakes was linked to extraction. The tremors have damaged many homes in the area, prompting a wave of compensation claims against NAM. In September, a Dutch court ruled that NAM must also compensate homeowners for a drop in house prices caused by earthquakes.

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(END) Dow Jones Newswires

November 18, 2015 10:30 ET (15:30 GMT)

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