Shell, Exxon Must Pay Groningen Quake Compensation
02 Septembre 2015 - 6:50PM
Dow Jones News
AMSTERDAM—A Dutch court ruled Wednesday that Royal Dutch Shell
PLC and Exxon Mobil Corp must compensate homeowners for a drop in
house prices caused by earthquakes linked to production at the
Groningen gas field.
The ruling could open the door to a wave of compensation claims
against the energy companies, which operate the field through a
joint-venture called the Nederlandse Aardolie Maatschappij BV, or
NAM.
The court said NAM is responsible for earthquakes in the
northern province of Groningen and that these have led to a decline
in home values of "several percent." Homeowners should therefore be
compensated even when they are not planning to sell their property,
it said, adding "there is no reason not to do it now."
The lawsuit was filed by a group representing 900 homeowners and
12 housing associations.
Earthquakes in the region began in 1991, and hundreds have been
recorded in the subsequent period; a total of 119 quakes were
recorded in 2013 alone. Experts suggest the pumping of the
Groningen field has deflated a porous gas-bearing reservoir deep
below the surface, which has in turn led to a buildup of pressure
along a fault zone, which is periodically released in sudden
jolts.
NAM, which has acknowledged responsibility for a rise in
earthquakes in the area, said it would study the ruling and
consider any further steps. So far, the company has set aside €1.2
billion ($1.4 billion) in part to compensate homeowners for damages
to their property.
"We recognize the concerns of the residents and agree that in
specific cases earthquakes can cause a decline in value," spokesman
Sander van Rootselaar said.
The Groningen field is one of the world's biggest natural-gas
reserves and a key source for Europe, accounting for roughly 10% of
the European Union's total gas supply last year. But the Dutch
government has restricted output in the area in recent years, after
reports linked gas extraction to a rise in earthquakes.
In June, the government said production will be slashed to 30
billion cubic meters this year, substantially lower than a previous
target of 39.4 billion cubic meters.
Write to Maarten van Tartwijk at maarten.vantartwijk@wsj.com
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(END) Dow Jones Newswires
September 02, 2015 12:35 ET (16:35 GMT)
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