THE HAGUE, 01/09/10 - Economic Affairs Minister Maria van der Hoeven has made agreements with mineral extraction companies operating in the Dutch part of the North Sea on the maximum exploration and production of Dutch gas reserves and utilisation of empty fields.

From 16 September, a financial incentive will come into effect to encourage extraction of gas from marginal gas fields in the North Sea. The European Commission has approved this measure.

Mineral extraction companies can once in the year in which they invest in equipment for exploration or exploitation of marginal gas fields in the North Sea deduct 25 percent of the capital costs from the gross operating result, alongside their normal writeoffs. Expectations are that with the aid of this measure, some 21 billion cubic metres of extra natural gas will be produced from the marginal fields in the North Sea.

Van de Hoeven termed the introduction of these measures and activities necessary in order to get as many small offshore gas fields in production as possible in the coming five to 10 years. The currently producing fields on the Dutch Continental Shelf are running out and the existing infrastructure threatens to be dismantled. "Without this infrastructure it is likely that marginal small fields would not be used any more. The Netherlands cannot afford this."

The agreements are enshrined in a covenant that provides for a procedure that encourages the holder of an extraction licence offshore to first make an effort themselves to develop exploration, extraction or storage activities in their not yet utilised licence areas, and otherwise to give third parties the opportunity to do so. If the agreements are ignored, the minister can withdraw exploration licences, on the basis of a legislative amendment that came into effect on 1 January this year.