Seadrill's Unit North Atlantic Drilling Signs Deal With Rosneft - Quick Facts

(RTTNews) - Offshore drilling contractor Seadrill Ltd. (SDRL) announced Monday that its 70 percent owned unit North Atlantic Drilling Ltd. (NADL) has executed an Investment and Co-operation Agreement with Russian state oil company OAO Rosneft (ROSN.L) in order to pursue growth opportunities offshore and onshore in the Russian market through at least 2022.

In the deal, North Atlantic will enter the onshore drilling market in Russia and enter into contracts for multiple offshore assets. In addition, Rosneft will acquire a significant equity stake in North Atlantic.

Seadrill noted that North Atlantic 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.

Under the latest deal, a number of long term contracts for North Atlantic's near-term availability are expected to be signed as well as a commitment to future contracts and newbuild projects.

The agreement includes initial employment of up to 9 offshore rigs to Rosneft with a total commitment of 35 rig years.

The companies expect to close the transaction during the second half of 2014, subject to customary due diligence, negotiation of detailed transaction terms, and respective Board approvals.

North Atlantic's operations in Stavanger will continue as present and will focus on the current operations and future growth. The companies expect that overall activity levels would increase significantly and provide employees with attractive opportunities.

Seadrill, after the initial transaction, will remain the largest shareholder in North Atlantic. The company said its Board is confident that the deal with Rosneft will strengthen North Atlantic as the leading harsh environment drilling company.

Alf Ragnar Lovdal, Chief Executive Officer of NADL said, "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."