Russia’s top oil producer Rosneft and North Atlantic Drilling have entered into a drilling agreement worth up to $4.25 billion, in line with a previous agreement and despite Western sanctions over Moscow’s role in Ukraine. Rosneft said the deal foresaw the employment of six offshore drilling rigs until 2022.
North Atlantic Drilling is a subsidiary of Seadrill, the world’s largest offshore driller. In a separate statement, North Atlantic Drilling said total revenue potential for the six contracts “exclusive of mobilization” was approximately $4.25 billion. Rosneft has first signed a cooperation agreement with North Atlantic Drilling in May with a view to start drilling two offshore wells in the Russian Arctic in 2014 and 2015.
“We are very pleased with the execution of these contracts, which is in line with the timetable agreed earlier this year,” Alf Ragnar Lovdal, North Atlantic Drilling’s chief executive officer said a statement. Rosneft plans to start drilling an exploration well jointly with ExxonMobil in Kara Sea next month. The United States and the European Union have imposed a number of sanctions against Russian individuals and companies, including Rosneft, in attempt to spot violence in eastern Ukraine where pro-Moscow rebels are fighting against the government forces.
On Tuesday, European diplomats said ambassadors from the 28-member European Union agreed restrictions on the trade of equipment for the oil and defence sectors, and “dual use” technology with both defence and civilian purposes. This may hamper Rosneft’s ambitions to tap the vast offshore Arctic riches. North Atlantic Drilling is based in Oslo, Norway, which is not a part of the EU and has not announced any sanctions against Russia. However its shares were listed its NYSE in January.
Rosneft Chief Executive Officer Igor Sechin, an ally of President Vladimir Putin, said in the statement the deal with North Atlantic Drilling “will allow Rosneft to ensure implementation of exploration and development of its harsh environment offshore license areas.”