Termination of North Atlantic Drilling and Rosneft deal extended

Termination of North Atlantic Drilling and Rosneft deal extended

Oslo: In August 2014 John Fredriksen controlled North Atlantic Drilling (NADL),  Seadrill and Rosneft entered into a framework agreement opening up potentially massive work in the Arctic. The deal was first delayed until May 2015. Yesterday the termination date of the agreement was postponed until May 31, 2017, whereby any party can terminate any offshore drilling contracts at any time prior to May 31, 2017 at no cost. During this time, NADL is permitted to market the offshore drilling rigs subject to existing drilling contracts with Rosneft and enter into binding contracts with third parties.  NADL will also be permitted to delay the construction, delivery, or shipyard stay of any of those rigs, says a release.

In mid-March Rosneft terminated a five-year contract for the drillship West Navigator. NADL said then that it  believes that it will be very challenging to close the transactions with Rosneft on the same terms or in the timeframe contemplated in the executed agreements, and that there were significant risks attached to the $4.1bn order backlog related to the drilling contracts with Rosneft.

NADL signed a $4.25bn deal with Rosneft in the last days of July 2014 for six rigs to operate in the Russian Arctic up to 2022. The deal then avoided EU sanctions that forbid the export of technology to be used in Arctic oil exploration as they only entered into force on August 1. A further part of the NADL-Rosneft deal was signed in August with the Russian company buying 30% of the Norwegian group in exchange for land rigs and cash.

NADL has eight drilling units in tits fleet, including four semi-submersibles, a drillship, and three jack-up rigs. Seadrill Limited currently owns 70% of the outstanding shares and the company is listed on the New York Stock Exchange and on the Norwegian OTC exchange.

 

 

Hans Thaulow

Hans Henrik Thaulow is an Oslo-based journalist who has been covering the shipping industry for the last 15 years. As well as some work for the Informa Group, Hans was the China correspondent for TradeWinds. He also contributes to Maritime CEO magazine. Hans’ shipping background extends to working as a shipbroker trainee with Simpson, Spence & Young in Hong Kong.

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