NADL, Rosneft delay multi-billion rig deal

Norwegian offshore drilling contractor North Atlantic Drilling and Russian oil company Rosneft have delayed a $4.25 billion offshore rig deal.

According to an agreement signed by the two companies earlier this year, NADL was to provide six offshore drilling rigs to Rosneft. Also, in a separate deal with Seadrill and NADL, Rosneft was to acquire a 30 percent share in NADL in exchange for land drilling rigs and cash.

“NADL, Seadrill and Rosneft have mutually agreed to delay the announced transaction until the end of May 2015. The break rights under the transaction have also been extended to the end of May 2015. Both parties remain committed to the transaction,” a statement by North Atlantic Drilling reads.

According to Ria Novosti, one of the largest news agencies in Russia, the reason for the transactions delay are sanctions imposed against Russia by the United States, over its involvement in the Ukraine crisis. The sanctions package bans U.S. companies from exporting technology and services for oil drilling in Russia.

“The last round of the US sanctions against Russia imposed on September 12 could be the reason for the transaction’s delay, as NADL and Seadrill Limited are listed on the NYSE (New York Stock Exchange),” RIA Novosti alleges.

NADL is an offshore harsh environment drilling company with focus on the North Atlantic region. The Company has eight drilling units in the 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.