Exploration & Production

Groningen cap overshadowed by Brexit

The Groningen field’s new output cap has brought welcome certainty to European markets, but volatility caused by the UK’s Brexit vote may mean the move has little immediate effect The Groningen field’s new output cap has brought welcome certainty to European markets, but volatility caused by the UK’s Brexit vote may mean the move has little immediate effect.
By Annemarie Botzki 28 June 2016 0 20831
The Gate LNG terminal in the Netherlands. Groningen’s output cap means Europe needs to import more gas. (Gate)

The Dutch government has lowered its annual production cap for the country’s giant Groningen field by 3 billion cubic metres per year, removing uncertainty that has surrounded its target output for months.

However, the result of the UK referendum on Friday to leave the EU has overshadowed the news and caused considerable volatility at Europe’s main gas hubs.

Groningen’s output will be limited to 24 bcm/y for the next five gas years – a cut of 11% from the 2015/2016 cap of 27 bcm/y. The gas year...