Shell wants to buy off liability for the earthquakes in Groningen in one go. That is what president Marjan van Loon of Shell Netherlands says in an interview with The Financial Times (FD). Shell is a half shareholder of the Nederlandse Aardolie Maatschappij (NAM), the company that carries out gas extraction in Groningen. The other half is owned by ExxonMobil.
By buying off the liability, the settlement of damage caused by the earthquakes can be accelerated, according to Van Loon. The parties have been disagreeing for years about who will pay for the damage, which means that the settlement process is slow.
In a figure (pdf) from the Ministry of Economic Affairs from last January, it is expected that claims settlement will cost 3 billion euros up to and including 2027. In addition, 5.4 billion euros in compensation for the reinforcement operation. Van Loon does not want to comment in the FD on the amount of a lump sum payment, except that it concerns ‘a lot of money’.
Disappointed in the NAM
The NAM has two arbitrationzaken filed because the company says it wants clarity from the State. According to the NAM, it is not possible to agree with the government who will pay for the damage. The company does not want to pay the entire bill for the recovery operation, because it is the earthquake damage from gas extraction doubts. The NAM states that more damage is being claimed than for which the company is liable.
State Secretary for Mining Vijlbrief (D66) late in a letter to parliament know that the State was prepared for a legal dispute with NAM, but is nevertheless disappointed with the decision to fight this legally.
The letter also states that NAM has fully paid the costs for the reinforcement operation for the first half of 2020. However, NAM has paid only 60 percent of the costs of the second half of 2020 and the first quarter of 2021. On January 18, the State summoned NAM to pay this amount, but according to Vijlbrief, this has not yet happened.
Legal Joust Account
The Ministry of Economic Affairs held there last year take into account that the dispute with NAM would result in a legal joust, said the then outgoing minister Van ‘t Wout. “The cabinet is preparing for this and will not waste any legal resources,” he wrote in a statement brief to the House of Representatives. “I will ensure that all costs that can be charged to NAM will also be charged. As long as that does not happen, the costs will be borne by the State.”
Van Loon now says in the FD that Shell is in talks with the ministry to pay the outstanding amount. According to her, the accounts of the central government are “too complex” and a commutation arrangement is a better solution.
Empty subsidy pot
Residents of Groningen have suffered from damage to their homes for years, as a result of earthquakes caused by gas extraction by the NAM. There is a lot of dissatisfaction with the way NAM and the government are handling the recovery operation.
At the beginning of January, a subsidy pot from which households could receive 10,000 euros to improve the quality of their home was empty within a few hours. There are 53,000 households that qualify for that money. The empty jar and the message that more gas will be extracted this year than was promised led to a torchlight procession in Groningen where thousands of people expressed their dissatisfaction.
Member of Parliament Henk Nijboer (PvdA):
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