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

• 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
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/S0301-4215(99)00092-0

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.