Dutch offshore operators are losing hope for major concessions over licensing terms.
Government and operators agree small offshore gas field development projects need encouragement (OGJ, Feb. 21, p. 36). But they can't agree on the form of encouragement.
Latest flare-up between Nederlandse Olie & Gas Exploratie & Produktie Associatie (Nogepa) and the energy directorate at the Ministry of Economic Affairs follows revision of purchasing terms by state owned gas supplier Gasunie.
Gasunie demands that each gas development must be able to produce 11/2 times an agreed plateau level. In June, Gasunie sent Nogepa a letter saving development of fields with less than 6 billion cu m of gas reserves would require only 90% of productive capacity set out under current regulations.
In return for this improved load factor, Gasunie said operators must pay compensation of 0.5cts/cu m of gas produced. Nogepa Sec. Gen. Jean Mathey responded with an open letter in late June to members of parliament.
PENALTY
"This boils down to a penalization of the companies for careful and efficient reservoir management in relation to marginal gas fields," wrote Mathey of Gasunie's load factor proposal.
"The limited extent of measures announced by Gasunie and the introduction of a penalty give rise to the suspicion that for the remainder of the recommendations no high hopes should be formed."
As a consequence of the letter, said Mathey, questions have been asked in parliament about the ministry's policy. A written reply in parliament was expected from the ministry by the end of July.
Meanwhile, Nogepa feels its suspicions have been confirmed. After politicians received the Nogepa letter, Stan Dessens, director general for energy at the ministry, gave an interview to a Dutch financial newspaper. He expressed surprise at Nogepa's angry reaction to Gasunie's new terms.
WIN/WIN
"GASUNIE CERTAINLY DOES NOT IMPOSE A PENALTY," DESSENS TOLD the newspaper reporter. "On the contrary it is a classic win/win situation'. Gasunie's proposals provide the companies an advantage of 2cts/cu m against a slight compensation of 0.50."
Dessens told Oil & Gas journal three measures are being considered by the ministry: participation of state company Energie Beheer Nederland By during exploration, improved terms for depreciation of production facilities, and improved conditions for new exploration licenses.
These measures would apply to licenses awarded under a ninth Dutch offshore licensing round, Dessens said. This round is slated to open Apr. 1, 1995, for license awards in summer 1995.
In the newspaper interview, Dessens put his point figuratively: "The proposals ... apply to new fields, not to production of existing fields. He who is sitting on blisters will continue to sit on blisters."
Dessens expects from five to eight companies to bid for ninth round licenses, with small players offering new insights in geology and development techniques. The ninth round will be a test for the ministry, he said.
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