Seadrill deferring delivery of newbuild rigs

Offshore staff

HAMILTON, Bermuda -- Seadrill has reached a settlement agreement with Hyundai Samho Heavy Industries (HSHI) concerning the semisub West Mira, and has received $170 million in cash as full settlement of the dispute.

Arbitration proceedings started in October 2015 following the cancellation of the construction contract for the rig and were expected to continue into the first half of 2018. The agreement brings an early conclusion to the arbitration process.

As part of the settlement, Northern Drilling, an asset holding company, has purchased theWest Mira from HSHI. Seadrill is confident of executing an agreement in turn with the company for the commercial and technical management of the vessel, and gaining the right of first refusal for purchase of the unit.

Seadrill has also commissioned the newbuild rigs West Dorado and West Draco, and is in discussions on constructer Samsung on a deferral of the delivery dates prior to the units being completed and ready for delivery.

Among rigs currently in service, Seadrill’sWest Elara secured a one-well extension plus one option well from Statoil.

NDC in Abu Dhabi has issued a contract termination notice forWest Mischief, with the rig now likely to end operations for the operator four months early in August.

West Cressida will likely start a 90-day contract with PCPPOC off Malaysia next month.

SeaMex, the joint venture in which Seadrill has a 50% interest, has agreed a 29-month contract extension at currently contracted day rates for all five of its jackups assigned to PEMEX offshore Mexico.

West Freedom should start a one-well contract for Ecopetrol offshore Colombia during 3Q.

Seadrill says tendering activity is increasing, albeit from a low base, especially in the North Sea floater and Southeast Asia and Middle East jackup markets.

Recently there has been a greater number of tenders from oil companies seeking to contract rigs for longer periods at the current bottom-of-cycle dayrates, or with multiple fixed-price options periods.

5/24/2017

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