Seadrill has announced today a historic cooperation agreement that will result in a significant equity investment by Russian oil supermajor Rosneft into North Atlantic Drilling (NADL), a company 69.7 percent owned by Seadrill.
As a result of this equity investment, “NADL will enter the onshore drilling market in Russia and enter into contracts for multiple offshore assets.” Seadrill will, at least in near term, remain the majority shareholder of NADL.
NADL notes in a statement that new regional offices, long-term rig contracts and newbuild commitments will be announced soon as part of an initial Russian employment of 9 rigs for 35 rig-years.
Alf Ragnar Lovdal, Chief Executive Officer of NADL says in a comment, “We have sought to access the growth opportunity represented by the Russian market for several years, and we are very pleased to have reached an agreement with Rosneft for this landmark transaction. The Russian market is one of the most attractive opportunities in the world and offers tremendous growth potential for North Atlantic Drilling. By partnering best in class drilling with a supermajor who produces over 5m barrels per day, we, after closing of this transaction, will have created a powerful force in the Russian market and for Arctic regions on a global basis. We look forward to closing this important transaction and working with Rosneft for many years to come”
NADL has already contracted to drill the first two wells in the Kara Sea, as part of Rosneft and Exxon’s joint venture during 2014 and 2015.
Closing of the transaction is expected during the second half of 2014, subject to customary due diligence, negotiation of detailed transaction terms, and respective Board approvals.