Dutch gas production can be maintained at current level

The total production of natyural gas in the Netherlands can remain at the current level until at least 2030 if the right measures are taken. This is one of the major conclusions of the annual gas report of EBN (Energie Beheer Nederland), the Dutch government institution that manages the gas reserves of the Netherlands.

A major landmark was reached in 2010: cumulative production of natural gas from fields in which EBN participates passed the 3000 billion cubic metres mark! Meanwhile, the volume of prospective resources remains at around the same level as before. The ambition to maintain annual production at 30 BCM until 2030 is challenging but achievable.

Maturation of the currently identified contingent and prospective resources in the EBN portfolio will enable annual production of around 30 BCM for the next five years. The Dutch E&P industry’s level of activity has been stable in recent years, while exploration-related activities are increasing, especially in comparison with the Danish sector of the North Sea and the UK Southern Gas Basin. Mature areas still show significant exploration potential. Renewed exploration efforts have started in underexplored areas, with large-scale seismic studies being a prime example.

Encouraging the production of already discovered, but as yet undeveloped fields (“stranded fields”) should unlock more significant volumes of gas reserves. After this five-year period, activities to extend field life, along with exploration and development of challenging reservoirs, will be needed to counter the declining production from identified resources. According to EBN’s latest information, the scope for end-of-field-life techniques will add several tens of BCMs to the Dutch reserve base, while the resources contained in challenging reservoirs may add hundreds of BCMs of recoverable gas. These resources could meet Dutch demand for gas for many years to come.

There are various opportunities to add reserves to the system: a number of areas in the tail-end production phase contain significant contingent resources. These areas should be focused on when maturing these contingent resources into reserves through the use of innovative technologies and efficient development strategies. There are also several mature and tail-end areas in which no significant amounts of contingent resources have yet been identified. Renewed exploration of these areas is needed if contingent resources are to be identified.

Availability of infrastructure is essential for production. Significant offshore exploration opportunities exist within 10 km of infrastructure tie-in points, but current production forecasts mean part of this infrastructure may disappear in about five years’ time. Joint efforts by all industry partners involved are required to maintain this infrastructure, which will be needed for an efficient and sustainable E&P sector.

The Dutch government is committed to ensuring an attractive mining climate in the Netherlands and has added two additional measures to the successful small fields policy. The first of these is the investmentallowance for marginal offshore gas fields, which is expected to result in an additional 20 BCM of reserves. The second incentive involves marking underused acreage as fallow so as to ensure access. Areas currently marked as fallow are estimated to contain some 76 BCM of recoverable gas.

Public acceptance of E&P activities is crucial. It is important for the Dutch E&P industry to work with local
communities to minimise the inconvenience caused by E&P activities. In addition, the Dutch government can support the industry by explaining the economic and strategic benefits of domestic gas production to society.

There are clearly some major challenges ahead. At the same time, however, these challenges can be seen as opportunities. Opportunities that contribute to the efficiency and sustainability of the E&P sector and will benefit society as a whole.

The full report can be accessed here.