Once in awhile a well is drilled that changes history. This was true of Spindletop, drilled in 1901 in Texas. It was true of the Damman-7 well, drilled in 1938 in Saudi Arabia.
And it’s very true of the Slochteren-1 well, spudded on May 25, 1959, in The Netherlands.

To fully appreciate the world-changing effect this gas well had, we turned to “The Texan and Dutch Gas,” a book co-authored by Douglass Stewart and Elaine Madsen. At the time of the discovery Stewart was with Esso, which had a 50/50 partnership with Shell in a company called Nederlandse Aardolie Maatschappij (NAM). A Shell engineer, H.A. Stheeman, had drilled the discovery.

Convinced that the area around Groningen was “geologically extraordinary,” Stheeman

Figure 1. Douglass Stewart arrives in Amsterdam in November 1960. (Photo courtesy of Douglass Stewart)
began drilling there in 1955, finding a gas show at 10,000 ft (3,050 m) near the village of Ten Boer. A safety valve malfunction shut down those operations, and it was 4 more years before Shell resumed its operations.

“Without mishap this time, they were rewarded with a very high-pressure flow of natural gas,” wrote Madsen and Stewart. “By mid-August, further testing in other areas near the town of Groningen indicated that something extensive might be present.”

The Groningen field ultimately turned out to have reserves of more than 100 Tcf. But at the time there was no market for natural gas in Europe. Shell didn’t report the discovery to its NAM partner — a spokeswoman for NAM commented, “Shell in the beginning did not dare to believe that the field was of this size.” Esso didn’t learn of the discovery until October of the following year, when a Belgian newspaper article reported remarks by Belgian Senator Victor Leeman referring to “an enormous gas field.” Esso promptly dispatched Stewart to The Netherlands to verify the size of the field.

Stewart had additional plans. Before crossing the pond he learned that Shell had an exploration drilling permit only; to produce the gas would require a production concession that could not be obtained without Esso’s involvement. He also hoped to prevent his company from making the same mistake in Europe that it had in the United States, where a decision to sell gas at the wellhead meant that gas utilities reaped most of the profits of natural gas sales there.

“Although my assignment was only to determine the size of the discovery, I decided that when I got to The Netherlands I would try to get a better fix on just exactly what the possible markets there might be for all that natural gas,” Stewart remembered. “I resolved right then and there to come back and startle [Esso] with some ideas for what they might do about it.”

The revolution begins
Stewart visited Groningen on that first trip, and he came away impressed by the size of the field (then estimated to hold 10 Tcf of gas) and the potential for it to be even larger than expected. “I realized right then and there that if everything that wasn’t on wheels could somehow suddenly be converted to natural gas at the current rate of energy consumption, there was already enough gas to displace all the oil and coal markets for something like 25 years,” he said.

If, on the other hand, the gas was sold to Dutch power plants, as was the current plan, it would compete head-to-head with Esso’s fuel oil market in the region.

But how does one create a market for natural gas where none exists? The answer was 4 years of hard work and harder negotiations with everyone from the governments of Belgium, The Netherlands, Germany and France to major natural gas utilities like Ruhrgas.

Stewart got his first inkling that his plan could work on that first visit. He was asked to dine
Figure 2. The ambitious plan for marketing Groningen gas took shape in the early 1960s. Here pipe is being laid through the Dutch countryside. (Photo provided by Douglass Stewart, courtesy of Gasunie)
with an Esso colleague, Jan van den Berg, and discovered a gas pipe in the house. Many Dutch houses were provided with “town gas,” a low-Btu gas derived from coal. Town gas was hugely expensive and was thus used sparingly. The van den Bergs used their gas only for heating water and for cooking.

Seeing the gas pipe in van den Berg’s house gave Stewart the idea that converting European homes and small businesses to natural gas could be done fairly simply. (Today the many glass greenhouses in The Netherlands owe their existence to this foresight.)
And Groningen’s reserves were significant enough to transport the gas outside of the Dutch borders as well.

Convincing governments of these benefits proved to be relatively easy. But Stewart and his team had others to convince as well, Shell in Germany, for example. By now Stewart and his Dutch counterpart at Shell, Krik Schepers, had decided to set up two new companies since anti-trust legislation prohibited Shell and Esso from marketing gas jointly. One company, NAM Gas Export, marketed the gas at the Dutch border. The other company, IGTM, transported the gas from the Dutch border to consumers for a fee.

Stewart and Schepers went to Hamburg to break the news to Shell’s managing director in Germany, Baren Scheffer, that their companies would handle negotiations in Germany, not Scheffer.

Stewart’s recollection of this visit is amusing. When he and Scheper arrived at the airport, they were greeted by Scheffer’s personal chauffeur in his private limousine. “Over lunch, [Scheffer] proposed that all of our future activities be channeled through his office right there in Hamburg,” he said. “This would have made him the one to coordinate everything in Germany.

“Krik did rather enjoy explaining, quite politely as I remember, that we were now two companies operating independently from our parent oil companies. When we told Scheffer we would be opening our own brand-new office in Frankfurt, not Hamburg, the wine dried up, the limousine disappeared and we had to take a taxi to the airport.”

Negotiations with regional gas utilities went even more poorly, with Stewart and Scheper being escorted rudely from their offices. But the dogged determination of the two men and their teams ultimately paid off. Representatives of Germany-based Thyssengas, for instance, were taken to Portland, Ore., to see how natural gas was used in the United States. Hans Loblich, who managed the Frankfurt office for the two companies, was the host on these trips.

“The change of their opinions came about, in large part, through these eye-opening trips,” Loblich later recalled.

Shell and Esso ended up buying half of Thyssengas when offered the opportunity by the
Figure 3. The Groningen field dwarfs later North Sea finds. (Map courtesy of ExxonMobil)
company’s founder and owner, Baron Hans Heinrich Bornemisca Thyssen. Stewart mentioned in the book that Thyssen’s offer might have something to do with his pending divorce — the amount awarded to his third wife in the settlement was roughly the same as the amount the two companies paid for half of Thyssengas.

“One of the surprises we got when we finally closed that deal was that not only had we bought half of Thyssen’s company, but Esso and Shell also found themselves with a half-interest in a palatial yacht on the Rhine as well as an interest in the artificial insemination business because Thyssengas owned a large herd of fine dairy cattle,” Stewart recalled.

Results
More than 40 years later, Groningen is still producing, though the field is in decline and is used primarily as a “swing producer” to cover peaks in demand. Still, NAM has launched a 15-year project to modernize and regenerate Groningen.

In addition to helping Europe develop a natural gas market, Groningen is also credited with opening up the North Sea play later in the 1960s, resulting in annual production by 1998 of 8.8 Tcf.

“In considering the importance of Groningen … [one] could emphasize the environmental effect of bringing natural gas to Europe where it not only cleaned up the air by removing the millions of coal stoves, but it simultaneously improved the living standards of the people, who up to that time mostly lived in poorly heated damp homes,” commented Stewart. “Today 25% of the energy comes from clean natural gas, where none existed in 1960.”

W.J.E. van de Graaff wrote in “Netherlands Journal of Geosciences” in 2001, “In terms of economic impact, the discovery of the Groningen gas field was one of the most fundamental events in Western Europe in the second half of the 20th century. The availability of plentiful, cheap natural has fundamentally changed the economies of Western Europe.”
For more information about “The Texan and Dutch Gas,” please visit www.trafford.com.

Editor’s Note: This article is based on information from “The Texan and Dutch Gas,” which is Douglass Stewart’s recollection of events in the early 1960s supplemented with interviews with many of his former colleagues. It is not meant to be a definitive history of the Groningen gas field.