Seadrill, Petrobras Shake Hands On $4.1B Rig Deal



Seadrill secured an unconditional Letter of Award for contracts with a total revenue potential of approximately US$4.1 billion over 18 rig years for three newbuild deepwater units with Petroleo Brasileiro S.A -- Petrobras, in its capacity as operator of consortia of concession areas in Brazil. Upon execution, these new contracts will increase Seadrill's backlog to approximately US$12 billion.

The three separate drilling rig contracts' terms and potential revenues are:

West Eminence

The sixth generation, deepwater semi-submersible drilling rig is under construction at Samsung shipyard in South Korea. The rig will be delivered during the fourth quarter 2008 and start-up of operations offshore Brazil is scheduled for the first quarter 2009. Contract duration is six years, and contractual water depth is 2,400 meters. Including mobilization fee and five percent performance bonus, the total revenue potential is US$1.35 billion.

West Taurus

The sixth generation, deepwater semi-submersible drilling rig is under construction at the Jurong shipyard in Singapore. The rig is scheduled to be delivered during the fourth quarter 2008, and start-up of operations offshore Brazil is scheduled for the first quarter 2009. Contract duration is six years, and contractual water depth is 2,400 meters. Including mobilization fee and five percent performance bonus, the total revenue potential is US$1.42 billion.

West Orion

The sixth generation, deepwater semi-submersible drilling rig is under construction at the Jurong shipyard in Singapore. The rig is scheduled to be delivered during the second quarter 2010, and start-up of operations offshore Brazil is scheduled for the third quarter 2010. Contract duration is six years, and contractual water depth is 2,400 meters. Including mobilization fee and five percent performance bonus, the total revenue potential is US$1.35 billion.

Kjell E Jacobsen, Chief Executive Officer in Seadrill Management AS said, "This is one of the most important assignments ever awarded to Seadrill and will increase our contract backlog to more than US$12 billion. We look forward to satisfy Petrobras' future drilling requirements with our newest and most advanced drilling units. Brazil will become one of the strategically most important areas of operations for the Company in the years to come."

Including the three drilling units mentioned above, Seadrill's newbuild deepwater drillship West Polaris is scheduled to commence its drilling assignment offshore Brazil in the third quarter 2008.

The contracts are subject to final contract wording.


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