By Maarten VanTartwijk in Amsterdam and Sarah Kent in London
AMSTERDAM--The Dutch government said Tuesday it will cut
production further at a giant gas field blamed for causing
earthquakes, crimping output for energy titans Royal Dutch Shell
PLC and Exxon Mobil Corp.
Production at the Groningen gas field will be slashed to 13.5
billion cubic meters in the second half of 2015, the government
said, resulting in total output of 30 billion cubic meters this
year, substantially lower than the previous target of 39.4 billion
cubic meters.
The move is the latest in a series of production cutbacks by the
Dutch government in recent years after a study by The Royal
Netherlands Meteorological Institute linked gas extraction to a
rise in earthquakes in the northern province of Groningen, where
the field is located. The tremors have damaged many homes in the
area.
"The safety of the people of Groningen is the most important,"
said Henk Kamp, the Dutch Minister of Economic Affairs. "Gas
production from Groningen will be reduced as far as feasible."
Discovered in 1959, the Groningen field is one of the world's
biggest natural gas reserves and is a key source for Europe,
accounting for roughly 10% of the European Union's total gas supply
last year.
The field is operated by a joint venture of Exxon and Shell,
called the Nederlandse Aardolie Maatschappij, or NAM. The operator
is facing hundreds of compensation claims from people who allege
the earthquakes have damaged their homes.
A report from the Dutch Safety Board, a government-financed
body, concluded in February that the Dutch government, as well as
the field's operator, for decades ignored the risk of earthquakes
stemming from gas extraction.
Shell and Exxon didn't immediately respond to requests for
comment on Tuesday. NAM has acknowledged that its operations have
been responsible for earthquakes.
"We will keep investing in the protective strengthening program
and our studies for getting a better view of the hazards and risks
of earthquakes," NAM spokesman Sander van Rootselaar said on
Tuesday.
"We are now looking at the possibilities on how we are going to
implement these new caps on production," he said.
In the more than 50 years that the field has been pumping,
experts say, the porous underground gas-bearing reservoir has begun
to deflate, building tension along a fault zone that is released
from time to time in sudden jolts, and which are felt at the
surface as earthquakes.
The first such quake occurred in 1991. As the gas field becomes
more depleted, the tremors are growing both in size and frequency,
experts have said.
In 2013, NAM registered a record number of 119 quakes, of which
two measured between magnitude 3 to 3.5. A year later, the number
of quakes dropped to 80, which experts attributed to production
cutbacks.
The Dutch government has been reluctant to lower output at the
Groningen field, which generates billions of euros in revenue for
the state.
The production cutbacks could mean the Netherlands becomes more
reliant on gas imports, for example from Norway and Russia, Mr.
Kamp has said previously.
Write to Maarten VanTartwijk at maarten.vantartwijk@wsj.com
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