NAM pulls out of compensation programme for Groningen – DutchNews.nl

Gas and oil company NAM has told the government it will no longer contribute to the improvement of the local economy and liveability of Groningen because gas exploitation has been halted there, the Volkskrant reported on Friday.

In 2018 the company, which is jointly owned by ExxonMobil and Shell, agreed to pay €500 million in a deal between the state and NAM shareholders.

The agreement also included provisions about scaling down gas exploitation and the transfer of responsibility for the damage done to housing caused by numerous earthquakes after years of drilling.

According to the agreement, gas drilling was supposed to end between 2028 and 2035 but that was brought forward to April this year.

NAM was supposed to pay €75 million from 2018 to 2022, and an annual €25 million until 2029. The bill for 2023 was only partly paid, however, and nothing was paid in 2024, the paper found.

NAM director Martijn van Haaster said the payments to support the Groningen economy were linked to the end date. “It is not unreasonable to review the agreement,” he told the paper.

Junior minister Eddie van Marum who is responsible for the recovery of Groningen, said the NAM stance was “extremely disappointing and devoid of any self-reflection by NAM and its shareholders”.

Van Marum said the gas industry in Groningen “has caused and will cause enormous problems for the people of Groningen and Noord-Drenthe”. The state is investing €7.5 billion in Groningen in the next 30 years, to pay a “debt of honour”.

The decision by NAM comes after numerous conflicts with the state over bills for the repair and reinforcement of quake-damaged houses. NAM frequently refused to pay or disputed bills. Shell and ExxonMobil also want compensation for loss of gas earnings until 2030.

Some of the disputes are subject to arbitration. That is not the case with NAM’s current refusal to pay reparations, which, Van Haaster said, “is open for discussion but would include matters we do not agree on,” he told the paper.

The Groningen gas field was discovered in 1959. Over the next sixty years the state earned some €417 billion in revenue, of which NAM received 60% at the time. Very little of the revenue ended up benefitting Groningen. Over a 1,000 earthquakes have been recorded in Groningen and Drenthe so far.