Russian oil company Rosneft and the world’s largest offshore driller, Norway’s Seadrill subsidiary North Atlantic Drilling (NADL) on Saturday signed a cooperation agreement. As part of these proposed opportunities, NADL will enter the onshore drilling market in Russia and enter into contracts for multiple offshore assets.
In addition Rosneft will be acquiring a “significant equity” stake in NADL. However, no financial details were disclosed. Seadrill owns 70 percent of NADL.
“Rosneft’s capitalization growth is first of all connected to the shelf”, Rosneft boss Igor Sechin said at the St. Petersburg International Economic Forum, where the agreement was signed. He called the company’s joint project with American ExxonMobil on drilling in the Barents Sea “the main event of the year,” Kommersant writes. According to Sechin, Rosneft’s production level will double by 2033, taking offshore projects into account – even though the company has virtually no technology for operations under such conditions, the paper writes.
NADL has already been contracted to drill the first two wells in the Kara Sea, as part of Rosneft and Exxon’s joint venture during 2014 and 2015.
As part of the agreement, a number of long term contracts for NADL’s near-term availability are expected to be signed as well as a commitment to future contracts and newbuild projects,” Seadrill said in a press release.
The agreement envisions initial employment of up to nine offshore rigs to Rosneft with a total commitment of 35 rig years. Closing of the transaction is expected during the second half of 2014.
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”
Norwegian-born tycoon John Fredriksen is main owner of Seadrill with 28 percent of the share through his family company Hemen. The company has a marked value of over NOK 102 billion and is registered on the Oslo and New York stock exchanges.