Groningen production cap reduction: implications for 2015 and beyond
The Groningen production cap for the first half of 2015 has been restricted to 16.5 bcm and we now believe that output will be only 33 bcm this year. Revenues for both the state and for the operator will fall. Additional gas purchases of over 5 bcm are now required to satisfy Dutch demand plus its export commitments in 2015. Despite this reduction, we see the risk of European spot prices falling below US$7/mmbtu in Q4 2015. Longer-term we have reduced our outlook for Groningen output.