Seadrill sees risks in closure of deal with Rosneft, drilling contracts
MOSCOW. Feb 26 (Interfax) - Drilling company Seadrill believes it is unlikely that the deal with Russian state oil major Rosneft on the sale of shares in North Atlantic Drilling Limited (NADL) will be closed under the previous terms and within the agreed timeframe, Seadrill, which controls NADL, said in a financial statement.
Consequently, "there are significant risks attached to the $4.1 billion order back-log related to the drilling contracts with Rosneft," Seadrill said.
"However, the parties remain in discussions and continue to explore various alternatives for future cooperation," Seadrill said.
A Rosneft representative said that the companies were looking for ways of carrying out the contracts that have been signed. "Rosneft and NADL have not yet completed the procedure for getting the necessary corporate approvals from the regulating authorities to conclude the deal. The parties are continuing talks and are interested in finding ways of carrying out the agreement's terms," the representative added.
In November of last year, Northern Offshore agreed with partners North Atlantic Drilling and Seadrill to postpone the contract with Rosneft on the jackup drilling unit Energy Endeavor until late May 2015, Northern Offshore said in a statement.
In July 2014 Rosneft and NADL entered into long-term offshore drilling contracts. The $4.25 billion deal envisages the employment of six offshore drilling rigs until 2022 with the purpose of carrying out Rosneft offshore projects, including harsh environment.
Rosneft, Seadrill Limited and North Atlantic Drilling Limited (NADL) earlier signed a framework agreement that envisages long-term cooperation in the sphere of oilfield development projects. The document foresees the acquisition by Rosneft of NADL shares through an exchange of assets and investments in NADL charter capital. Moreover, the agreement's options contemplate the possibility of Rosneft increasing its stake in NADL in line with the development of the cooperation.
North Atlantic Drilling Limited (NADL) will acquire about 150 onshore drilling rigs from Rosneft along with an award of new five-year contracts for these units under its asset swap agreement with the Russian oil major. Rosneft will receive about 30% of shares in the drilling company at a price agreed in May, $9.25 each. After the deal is closed, Seadrill Limited will continue to own over 50% of NADL shares.
It had been planned to conclude the deal in the fourth quarter of last year.
North Atlantic Drilling Ltd. is a drilling company that specializes in harsh environment drilling. The company's shares are traded on the New York Stock Exchange and the Norwegian OTC market. Capitalization totals around $2.4 billion, and around 74% of shares currently belong to SeadrillLimited.
