Four decades of Groningen production and pricing policies and a view to the future

The 1959-discovered Groningen gasfield's size and low-cost production are unique in Europe. As the monopolistic supplier to Europe's gas markets from 1965, it earned supernormal profits for the Dutch state, Shell and Exxon. A decade later, when alternative suppliers broke the monopoly and...

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Bibliographic Details
Published in:Energy policy 2000, Vol.28 (1), p.19-27
Main Authors: Correljé, Aad F, Odell, Peter R
Format: Article
Language:English
Subjects:
Applied sciences
Deregulation
Economic data
Economics
Energy
Energy economics
Energy policy
Europe
European gas industry
Exact sciences and technology
Fossil fuels and derived products
Gas
General, economic and professional studies
Liberalization
Monopolies
Natural gas reserves
Netherlands
Oil industry
Policy
Pricing
Studies
Suppliers
The Netherlands
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Summary:The 1959-discovered Groningen gasfield's size and low-cost production are unique in Europe. As the monopolistic supplier to Europe's gas markets from 1965, it earned supernormal profits for the Dutch state, Shell and Exxon. A decade later, when alternative suppliers broke the monopoly and Dutch energy policy — anticipating gas scarcity — stimulated the exploitation of smaller fields, Groningen production was constrained. Yet, it remained highly profitable and its large remaining reserves still offered long-term production potential. Now, impending European gasmarket liberalisation is threatening the traditional role of Groningen in the gas supply system. New marketing arrangements are required that secure and enhance the balancing role of the field and its profitable exploitation within the wider European context.
ISSN:0301-4215
1873-6777
DOI:10.1016/S0301-4215(99)00092-0