The Dutch government has agreed a €1 billion deal with Shell and Exxon to redevelop the Groningen gas fields after production ends in 2030.

NAM, the joint venture of the two companies which is responsible for gas production, agreed in return to drop a claim against the government for the unextracted gas, which has an estimated value of €70 billion.

Under the terms of the deal NAM will continue to meet the cost of claims for damage caused by earthquakes linked to gas extraction and measures to protect buildings from collapse.

The government and the two oil firms will each set aside €500 million to cover the anticipated costs.

Economic affairs minister Eric Wiebes said the negotiations had taken longer than expected because of the economic and legal complexity of the deal. ‘I think people in Groningen can now be sure that somebody will always pay the cost of their damage and structural support. We are still a long way from the end of the process, but this is a step forwards.

‘The oil companies have taken responsibility by not charging for the gas that will remain in the ground. Don’t forget that this is their gas, not the government’s.’

No mandate

Marjan van Loon, president of Shell Netherlands, said: ‘We are entering the last phase of gas extraction in Groningen. As Shell we are supporting the people of Groningen. This agreement confirms that.’

However, Labour (PvdA) MP Henk Nijboer said the deal would cost taxpayers billions in the long term and accused Wiebes of putting the interests of the oil companies above those of Groningen residents.

‘The minister is giving away billions in future gas revenues to Shell and Exxon Mobil without securing a democratic mandate from parliament,’ said Nijboer. ‘That conflicts with the Lower House’s budget rules. This deal should have been put before parliament in advance.’