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NADL says receives notice of termination from Rosneft of service order for drillship

March 14, 2015, 11:12 UTC+3 NEW YORK

The deal envisions reaching agreements on Rosneft receiving a substantial stake in North Atlantic Drilling Ltd

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Rosneft` head Igor Sechin

Rosneft` head Igor Sechin

© TASS/Mikhail Metzel

NEW YORK, March 14. /TASS/. Russian oil giant Rosneft majority owned by the government has sent North Atlantic Drilling Ltd. (NADL), a drilling company, a notice of termination of the service order for the West Navigator drillship in connection with the Framework Agreement, NADL said in a statement.

"The drillship was indicatively scheduled to commence operations under its five-year contract with Rosneft during the summer of 2015, which would have required earlier mobilization," the statement said.

"As outlined in our fourth quarter 2014 results report, NADL believes that it will be very challenging to close the transactions with Rosneft on the same terms or in the timeframe contemplated in the executed agreements, and that there were significant risks attached to the US$4.1 billion order backlog related to the drilling contracts with Rosneft," it said.

"The termination of the service order for West Navigator will reduce NADL's contract backlog by US$1.0 bn. NADL will be marketing the West Navigator for alternative future opportunities, however remains in discussions with Rosneft to explore various alternatives for future cooperation," NADL said.

On May 24, 2014, Rosneft signed an agreement with Norway’s SeaDrill and North Atlantic Drilling on investment and cooperation for establishment of a long-term partnership aimed at implementation of capabilities in the development of sea and on-land projects of the Russian company until 2022. The document was signed at the St. Petersburg International Economic Forum.

The deal envisions reaching agreements on Rosneft receiving a substantial stake in North Atlantic Drilling Ltd. and the latter’s entry to the market of on-land drilling in Russia, as well as conclusion of long-term contracts for on-land and sea drilling.

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