Dutch state earned €363.7 billion through Groningen gas extraction
After almost 60 years of gas extraction in Groningen, the involved parties finally announced how much money they made from it. Adjusted for inflation, the Groningen gas field yielded a total profit of 428 billion euros, of which the Dutch state received 363.7 billion euros, Het Financieele Dagblad reports based on calculations from shareholder Shell.
The remaining 64.7 billion euros in profit went to the Nederlandse Aardolie Maatschappij (NAM), the operator of the Groningen gas field. NAM paid the amount out as dividends to its shareholders - Shell and ExxonMobil.
Shell released the figures for the ongoing parliamentary inquiry into gas extraction in Groningen. The Ministry of Economic Affairs and Climate confirmed the profit division to FD.
The figures show that the government received 85 percent of the profit from the Groningen field - quite a bit higher than the about 70% income paid for other concessions. Aad Correlje, associate professor and energy expert at the Delft University of Technology, called that remarkable. “We knew that the government took a large part of the profit, but not that the difference with the gas companies’ profit was that big,” he said to the newspaper.
The relatively low costs of gas production in Groningen are also striking. Since 1969, that amounted to 27.8 billion euros, nearly half of which were incurred in the past decade when the NAM had to start paying out compensation for earthquake damage and reinforcement work in the province.
“That is due to the economies of scale of the Groningen field,” Correlje explained. “Because a huge amount of gas was produced in a small area, the number of processing installations could be concentrated. Moreover, the gas did not have to be transported far, and the pressure in the Groningen field was so high that no compressors were needed to pump the gas for a long time.”