Europe & Russia: Production

December 2016

Production from the Groningen field in the Netherlands increased in October and November, which will result in strong year-on-year declines in output later in the gas year. 

Groningen’s output rose by 27% year on year in October to reach around 1.9 bcm. Supply from Groningen rose again in November, but by just 1% year on year to reach 2.2 bcm. The field’s production for the current gas year (which runs from October 2016 to September 2017) has been capped at 24 bcm – 11% lower than last year. Groningen’s strong output in October  and rise in November will reduce the maximum volume available from the field for the remainder of the gas year. The field’s output will need to fall by 15% year on year between December and September 2017 to stay within the cap. Cold weather forced up demand in October, with supply increasing as a result. Although Groningen’s output cap can be lifted if the winter is severe, the current weather forecast makes this unlikely. Additionally, there is strong public opposition to any increase in the field’s output, with some pressure groups calling for further reductions in the cap. The limit will remain in place for the next five gas years, but it is open to revision and could be reduced.