While Amsterdam is constitutionally the capital of the Netherlands, The Hague is its administrative capital—the seat of its government and location of its parliament, the capital city of the province of South Holland, and the city where Holland’s King Willem-Alexander and Queen Máxima reside. Located in southwestern Holland on a coastal plain, with its center just inland from the North Sea, Den Haag or ’s-Gravenhage (i.e., the count’s haghe or “hedge”) has several phrases it is known by: the “Royal City by the Sea,” the “Residence City” where the Dutch nobility resides, and the “International City of Peace and Justice” where more than 160 international institutions and organizations dedicated to the cause of world peace are housed.
The city is grand and stately, filled with gardens and parks, renowned museums such as the Mauritshuis and the Gemeentemuseum art museums, and many architectural wonders including embassies and royal residences along the beautiful North Sea coastline. Although the Dutch weather can be harsh at times—frequently cold and very windy—those who live there enjoy the café culture and gastronomic delights offered by the city’s numerous eateries.
Fit and Active Citizens
Scheveningen, the best-known seaside resort on the Dutch coast, is one of The Hague’s eight districts. On summer days, people are often seen kite surfing and bungee jumping around the lighthouse at Scheveningen; and during the cold winter months, people love to go ice skating on the 550-m2 rink set up in the square in front of the Kurhaus.
The active Dutch lifestyle is very much reflected in The Hague, with most people riding bicycles to work and running to keep fit in all types of weather. The Dutch attitude towards fitness garners a lot of praise and respect from foreigners and expatriates living in the city.
A Center for Peace, Hope, and Diplomacy
For many people and corporations, The Hague represents a beacon of hope, another chance at justice. The Peace Palace in the center of The International Zone houses the keepers of international justice—among many other organizations, these include the International Court of Justice and Permanent Court of Arbitration. Even though it actually is the fourth-largest United Nations location, the Hague has been called the United Nations’ “second city.”
During the 13th century, the city was just a hamlet built around a count’s castle. In the 17th century, when the Dutch Republic played a leading role in Europe, The Hague became a center for diplomatic negotiation. The royal residence was based here, leading to the establishment of embassies in The Hague, sparking its metamorphosis into an international city. The 20th century saw The Hague coming of age as an international city of peace and justice, with numerous conferences and arbitrations taking place there.
The Hague: An Important Oil and Gas Hub
A large number of oil and gas, international engineering, and consultancy firms have bases in the region around The Hague. Several international corporations have corporate headquarters in The Hague—among them Holland-based Royal Dutch Shell; energy infrastructure company Chicago Bridge & Iron; Aramco Overseas, a subsidiary of Saudi Aramco; APM Terminals, a separate business of Moller-Maersk Group; and Total E&P Nederland, Total’s Netherlands operation. In addition, one of Schlumberger’s four principal offices is in The Hague. The presence of the national government and its role in issuing oil and gas licenses (in the Dutch North Sea Shelf) makes The Hague an ideal location for oil companies’ administrative offices. More than 10,000 people work within the oil and gas sector in The Hague region.
Currently, the Delft University of Technology is the only university that offers an SPE-recognized petroleum engineering degree in the Netherlands, although several other Netherlands universities offer courses related to the petroleum industry. Delft University is also home to the first Netherlands-based SPE student chapter, established in 1984. The industry’s growing need for young talent has been reflected in the creation of two additional Netherlands-based SPE student chapters in the past 10 years: Utrecht University, established in 2009; and Vrije University Amsterdam, established in 2010.
The Netherlands is not a significant producer of liquid fuels, but it is an important European liquid fuels transportation and processing hub, according to the US Energy Information Administration (EIA). In addition, it is a major petroleum liquids refining and storage center. After Norway, the EIA states, it is the second-largest producer and exporter of natural gas in Europe. At the start of 2014, Oil & Gas Journal estimated the Netherlands’ proved reserves at 302.5 million bbl of oil and 39.9 Tcf of natural gas, well behind the other North Sea mainstays—the United Kingdom, Norway, and Denmark. However, activity in the Netherlands is high. Proved oil reserves have tripled between 2010 (100 million bbl) and 2014 (302.5 million bbl), according to the EIA, reaching a level not seen since 1985.
According to the Netherlands Oil and Gas Portal (www.nlog.nl), in 2012, the Netherlands saw 2.6 Tcf of gas and 8.1 million bbl of oil production from over 250 developed gas fields and 15 producing oil accumulations. Gas is the most significant hydrocarbon fuel for the Netherlands, and most of it comes from the largest onshore natural gas field in western Europe, Groningen, which was discovered in 1959, with first production in 1963. It is located in northern Netherlands. The remaining gas fields in the country are considered “small fields” in comparison to this giant.
The government has capped Groningen’s production—which is the source of approximately 75% of the country’s natural gas output—at 1.5 Tcf per year from 2006 through 2015 as part of a policy to stem reserve declines and encourage production from smaller fields. (www.eia.gov).
The largest onshore oil field in western Europe, Schoonebeek, is also located in the Netherlands, extending partially into Germany. Discovered in 1943 while Holland was under German occupation, Schoonebeek has seen a recent revitalization after being shuttered in 1996 due to high operating costs and low oil prices. With rising commodity prices and new seismic processes reducing risk of geological uncertainty, measures were taken beginning in 2009 to bring the field back on production. An aggressive drilling program of 73 wells, including 25 steam-injection wells and a revitalized infrastructure, paved the way for production to resume in January 2012. Nederlandse Aardolie Maatschappij (NAM) anticipates that it will produce 120 million bbl from this oil field in the next 25 years, according to EBN’s 2013 Annual Report. EBN is an independent company with the Dutch state as the sole sharholder.
Faced with declining gas reserves (reserves peaked at just over 70 Tcf in 1987), companies in the Netherlands maintain a focused effort on improving ultimate recovery from existing resources. Operators are extending existing field life by utilizing methods such as velocity strings, foam injection, jet pumps, tail pipe extension, compression, and plunger lift. EBN notes in the annual report that the implementation of such methods has increased the country’s recoverable reserves by about 2 Bcm of gas (71 Bcf) in the past 10 years.
Not limited to simply improving production from existing fields, the development of recent discoveries looms on the horizon. In 2012, six successful exploration wells added a total of 3.5 Bcm (12.4 Bcf) to Dutch resources. According to Wintershall, these were successfully drilled the F17-10 chalk oil-well in late 2012, making it the most recent Dutch offshore discovery. With two appraisal and three wildcat wells planned for this year, Wintershall estimates the oil accumulation to be 30 MM bbl of oil (www.wintershall.no).
Key challenges to the industry include public perception that natural gas reserves are declining. And—not to be exempt from the nearly universal issue—the industry faces opposition from the ongoing shale gas debate and anti-hydraulic fracturing proponents. However, with the long history of successful production in this country, combined with innovative methods of extending field life and new field development looming on the horizon, the Netherlands continues to be positioned for a healthy contribution to hydrocarbon production in Europe.
While tourists are drawn to The Hague for its history, architectural wonders, and vibrant spirit, the oil and gas industry embraces this multifaceted city as an important center for the petroleum sector. This year, SPE members have another reason to gravitate to the Royal City by the Sea—The Hague is only an hour away from the site of SPE’s 2014 Annual Technical Conference & Exhibition in Amsterdam.
YPGT: A Glance Back and a Glance Ahead
The section you’re reading, called the “Young Professional’s Guide to…..” (YPGT) the cities of the world, has flourished as a consistently favorite section for The Way Ahead’s readers because of its ability to connect with its audience in various parts of the world. It captures the truly global spirit of the oil and gas industry where overseas travel is frequent. YPGT celebrates the international nature of the petroleum industry by investigating the global oil and gas hubs and metropolitan cities along with sharing top stories of the developments and technological advancements in our business.
The “YP’s Guide to….” section debuted in the 2009 Vol. 5 No. 2 issue, with an article focused on Aberdeen, Scotland. YPGT’s tone is friendly yet informative for the traveling reader. To this end, the article typically covered major sightseeing landmarks, local customs to observe, educational institutions that power growth in this industry, the largest companies in the area, and the political climate regarding the oil and gas business. Designed to help professionals when they did business around the world, YPGT was a cross between a tour guide and a brief essay about oil-and-gas-related activity..
Scoping an article with such ambition was not easy. We could not travel to every location to report firsthand experiences, and many times we could not obtain input from someone with intimate knowledge of the technical breakthroughs and discoveries occurring in that part of the world. In hindsight, the more interesting pieces were probably those covering areas that seldom had major media exposure yet played an integral role in commodity trading and, in many cases, the economy of a state.
Improvements in technology were often included in the discussions, as they are the main driver for recovering dwindling reserves and the impetus for further investment in these petroleum centers. We also often briefly sketched regional geological trends, the reserves figures, and production to date. A sidebar listing some interesting facts about the city often left our readers amazed and wondering what the city would really be like. It has been a truly a memorable decade, during which we covered more than 11 places prominent in the oil and gas industry: Sakhalin Island; Calgary, Alberta; Perth, Western Australia; Port Harcourt, Nigeria; Dubai, UAE; Houston, Texas; Jakarta, Indonesia; San Francisco, California; Rio de Janeiro, Brazil; Abu Dhabi, UAE; Mexico City, Mexico.
While our team remembers the days of putting together those lively articles, we are also looking forward to further experimentation with different approaches. Our article in Vol. 10 No. 1 “A YP’s Guide to Continental Savvy: Energy Entrepreneurship Across Three Continents,” was one such experiment: Instead of focusing on one city, we covered three continents, each with different examples of energy-related entrepreneurship.
The response to the “Continental Savvy” article was so positive that in the following issue—with its overall theme “Job Security in the Oil and Gas Industry”—we once again took you around the world. But this time we focused on those countries where job opportunities were created or affected by technology advancement, geopolitics, or market expansion, all of which demanded that we tap into the insights of experts we knew. We stressed the impact these phenomena had on oil and gas industry development and quality of life in the highlighted countries.
Our aim is to keep bringing you multidimensional stories from our industry across the world, enabling trend comparisons among specific topics. Going forward, it will be interesting to compare energy industry trends specific to geographical locations, cultures, areas of industrial growth, political stability issues, and the availability of local talent. This will be in addition to travel tips and historic facts about the cities. We hope to provide our readers with a wider perspective regarding the actions and decisions of popular energy hubs’ “makers and breakers.” Additionally, we would like to extend the scope of our articles, where appropriate, on safety and environmental issues faced by some countries and the impact they have on the oil and gas industry and government relations.
Of utmost importance, the section seeks to stay up to date about the industry’s most recent developments. We will continue to expand our horizons to bring you interesting stories emerging from the oil-dominant provinces and their business models. The YPGT section is ready to be your guide as you explore the oil and gas industry across cities, countries, and continents.