Page 15 - EurOil Week 39 2021

EurOil POLICY EurOil

Netherlands to close Groningen

despite gas price spike

NETHERLANDS THE Netherlands will end gas production at the few sites at the field will remain on standby. To
giant quake-causing Groningen gas field next keep these sites operational, 1.5 bcm per year
Output at Groningen year as planned, despite calls for it to boost flow of supply will be extracted on an annual basis,
is due to be slashed amid the unprecedented supply crunch on the until a gas storage site can be converted to take
by more than 50% in European gas market. imported low-calorific gas, rather than the
the gas year starting Output at Groningen is due to be slashed by high-calorific gas that Groningen yields.
October 1. more than 50% in the gas year beginning Octo- The government said before that the stor-
ber 1, 2021, to just 3.9bn cubic metres, before age site would not be converted until between
ceasing regular production altogether. 2025 and 2028, but this week it asked regula-
Groningen’s output hit a peak of 88 bcm in tors to see whether the project could take place
1976, but production activities led to earth- sooner.
quakes, causing damage to property in the area. The gas price spike in recent months has led
Eventually the Dutch government took action gas suppliers across Europe to declare bank-
and in 2014, it ordered the NAM joint venture ruptcy, while some energy-intensive industries
between Royal Dutch Shell and ExxonMobil have had to close down because operating costs
that operates the field to start reining in supplies. are too high. Several companies in the Neth-
Originally, the field’s full closure was anticipated erlands, including large aluminium, zinc and
in 2030, but this was brought forward in 2019 ammonia producers, have already said they will
to 2022. reduce output at their facilities because of the
The government said in 2019 that Groningen high prices.
would only produce gas after October 2022 in However, the government’s resolve to close
the event of extreme weather, for which only a Groningen according to plan remains. ™

PROJECTS & COMPANIES

Kistos resumes output

at Q10-A field

NETHERLANDS LONDON-LISTED operator Kistos announced Netherlands in May in a transaction valued at
on September 23 that it had resumed gas flow at least $263mn. The seller was local producer
The restart comes at a from the Q10-A gas field in the Dutch North Sea, Tulip Oil.
time when European following the end of four weeks of maintenance Q10-A produced at a gross rate of 1.42mn
gas prices are at a at a platform that handles its gas. cubic metres per day in January to June, and Kis-
record high. The restart comes at a time when European tos expects this to expand to 2mn cubic metres
gas prices are at a record high, owing to a supply per day by the end of the year. The company is
crunch and a faster-than-anticipated growth in also undertaking drilling work to increase flow
demand. It follows the completion of mainte- from the Vlieland light oil discovery and plans
nance at the TAQA-operated P15-D platform to drill appraisal wells at Q10-A in the hope of
on schedule. converting some 100mn barrels of oil equivalent
“This and our ongoing drilling programme, (boe) of 2C resources into 2P reserves.
which includes work designed to enhance out- “If successful, it could lead to a further sig-
put from the Q10-A area, will allow us to realise nificant uplift in Kistos’ production by the mid-
enhanced returns from the prevailing gas prices 2020s,” the company said in its first-half results.
during the remainder of 2021 and into 2022,” Kistos earned €29.2mn ($34.2mn) in adjusted
Kistos interim CEO Andrew Austin said in a EBITDA in the first half of 2021, up from
statement. €12.4mn a year earlier. Revenues amounted to
Kistos has a 60% operating interest in Q10- €33.7mn, up from €17.1mn, as a gain in its aver-
A, which it acquired along with interests in age realised gas price to €20.76/MWh from €7.69
several other undeveloped discoveries off the more than offset a 19% slide in output. ™

Week 39 30•September•2021 www. NEWSBASE .com P15