Shell and ExxonMobil will file an arbitration claim against the Netherlands government over compensation for the early closure of gas field, according to Global Arbitration Review (GAR).
The arbitration-focused news provider said on Wednesday the companies will go to arbitration with the Netherlands over the early shutdown of the Groningen field.
The companies operate the Groningen gas field through NAM — a 50-50 Dutch joint venture. Production from the onshore gas field causes earthquakes affecting local communities, which has prompted the government to shut it down early.
The government has announced their intent for an accelerated closed down to reduce Groningen production to zero by mid-2022. “The exact date is still to be decided,” Shell said in its annual report in March.
NAM is working with the Dutch government and other stakeholders to fulfill its obligations to residents of the area, which include compensation for damage caused by the earthquakes.
But it’s unclear whether NAM or the partners, separately, will seek compensation from the government for the gas resources left on the ground. Kallanish Energy could not reach the parties for comments.
“Negotiations with the state are ongoing to determine how the accelerated close-down should be managed,” Shell said in March. “NAM’s joint-venture partners will review its financial robustness against different scenarios for Groningen’s liabilities and costs, with the objective that the venture can self-fund any additional expenses and claims.”
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