Seadrill-Petrobras rig deal falls through?

Seadrill has informed it will remove US$1.1 billion from the backlog reported in its third quarter earnings release on account of contract extensions for two semi-submersible rigs, the West Taurus and West Eminence, signed with Petrobras.

“Due to recent developments within Petrobras, the company no longer believes the contracts will be concluded in the timeframe or on the previously approved commercial terms,” Seadrill said in the press release.

Namely, Petrobras has been involved in a widespread corruption scandal which lead its CEO Maria das Graças Silva Foster and five executive directors to resign in an effort to repair company’s bad image. Soon after, Petrobras has announced the new leadership by appointing Aldemir Bendine as CEO of Petrobras.

Consequently, Seadrill will remove US$1.1 billion from the backlog in its third quarter earnings release. However, Seadrill says it continues to work with Petrobras and its partners to find a mutually agreeable commercial solution, the company said in the press release.

Furthermore, at the time of the third quarter earnings release, Seadrill also announced approval for contract awards on the Libra Field for the ultra-deepwater drillships the West Tellus and West Carina. According to Seadrill, the final contracts have been signed and the beginning of operations is expected to begin in the second quarter of 2015.

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