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Earthquakes Hit Gas-Rich Groningen Province in Netherlands

Feb. 8 (Bloomberg) -- The Dutch province of Groningen, which sits on the Slochteren natural gas deposit, was hit by two earthquakes as pressure grows on Royal Dutch Shell Plc and Exxon Mobil Corp. to cut output amid forecasts for heavier temblors.

Two quakes measuring 3.2 and 2.7 on the Richter scale struck the area just before midnight and in the early morning today, the Royal Netherlands Meteorological Institute, or KNMI, said in a statement on its website. The village of Zandeweer, 200 kilometers (124 miles) northeast of Amsterdam, was at the epicenter, according to the KNMI.

The Nederlandse Aardolie Maatschappij BV, or NAM, the Dutch gas-production venture of Shell and Exxon that operates the Slochteren field, said today in a statement that it will compensate all damage resulting from the quakes. The company has set aside 100 million euros ($134 million) for claims.

“NAM has taken immediate action and is in contact with the relevant governments and services,” according to the statement on the company’s website. “Earthquakes have taken place in the northern Netherlands since 1986 and have been linked by experts to gas production.”

Increasing Strength

The strength of earthquakes triggered by gas production in the region may rise to 5 on the Richter scale, according to a study released last month by the State Supervision of Mining at the Ministry of Economic Affairs. An Aug. 16 quake last year, measuring 3.4, damaged the property of about 2,500 people. The biggest earthquake ever in the Netherlands hit the southern province of Limburg in 1992, reaching 5.8 on the scale.

The Slochteren field has generated about half of the more than 160 billion euros in gas proceeds for the Netherlands since its discovery in 1959. In 2011 NAM produced about 61 billion cubic meters of gas, more than 75 percent of which came from Slochteren, according to the company’s website. The Netherlands consumed 38 billion cubic meters of gas that year, according to BP Plc’s Statistical Review.

The Dutch parliament discussed the risks of gas production yesterday as municipalities and the executives of the province council urge the government and field operators to lower output and slow activity. Henk Kamp, the minister of economic affairs with energy in his portfolio, has said he will make a decision by the end of this year on whether or not to cut output, the local news agency, ANP, reported yesterday.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net

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