SEADRILL LIMITED
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(Exact name of Registrant as specified in its charter)
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(Address of principal executive offices)
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Bermuda
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(Jurisdiction of incorporation or organization)
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Par-la-Ville Place, 4th Floor, 14 Par-la-Ville Road, Hamilton, HM 08 Bermuda
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(Address of principal executive offices)
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Georgina Sousa
Par-la-Ville Place, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda
Tel: +1 (441) 295-9500, Fax: +1 (441) 295-3494
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person
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Common stock, $2.00 par value
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New York Stock Exchange
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Title of class
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Name of exchange on which registered
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[X] Yes
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[_] No
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[_] Yes
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[X] No
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[X] Yes
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[_] No
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[X] Yes
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[_] No
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Large accelerated filer [X]
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Accelerated filer [_]
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Non-accelerated filer [_]
(Do not check if a smaller reporting company)
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Smaller reporting company [_]
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Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:
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[X] U.S. GAAP
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[_] International Financial Reporting Standards as issued by the International Accounting Standards Board
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[_] Other
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If "Other" has been checked in response to the previous question, indicate by check mark which
financial statement item the Registrant has elected to follow.
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[_] Item 17
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[_] Item 18
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[_] Yes
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[X] No
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•
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factors related to the offshore drilling market, including supply and demand, utilization rates, day rates, customer drilling programs, commodity prices, effects of new rigs on the market, effects of retirement or scrapping of rigs on the market, exploitation of sources of oil that do not require offshore drilling units, the development of alternative sources of fuel and energy, and effects of changes in oil and gas prices and the state of the global economy on market outlook for our various geographical operating sectors and classes of rigs,
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•
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hazards inherent in the drilling industry and marine operations causing personal injury or loss of life, severe damage to or destruction of property and equipment, pollution or environmental damage, claims by third parties or customers and suspension of operations,
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•
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customer contracts, including contract backlog, contract commencements, contract terminations, contract option exercises, contract revenues, contract awards and rig mobilizations,
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•
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repudiation, nullification, modification or renegotiation of contracts,
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•
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delay in payments by, or disputes with our customers under our drilling contracts,
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•
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newbuildings, upgrades, shipyard and other capital projects, including completion, delivery and commencement of operations dates,
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•
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expected downtime and lost revenue and the ability of our drilling units to perform satisfactorily or to our expectations,
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•
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political and other uncertainties, including political unrest, risks of terrorist acts, war and civil disturbances, piracy, significant governmental influence over many aspects of local economies, seizure, nationalization or expropriation of property or equipment,
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•
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limitations on insurance coverage, such as war risk coverage, in certain areas,
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•
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foreign and U.S. monetary policy and foreign currency fluctuations and devaluations,
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•
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the inability to repatriate income or capital,
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•
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expected costs of maintenance and repairs, including complications associated with repairing and replacing equipment in remote locations,
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•
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import-export quotas,
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•
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wage and price controls and imposition of trade barriers,
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•
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regulatory or financial requirements to comply with foreign bureaucratic actions, including potential limitations on drilling activity, changing taxation policies and other forms of government regulation and economic conditions that are beyond our control,
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•
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the level of expected capital expenditures, our expected financing of such capital expenditures and the timing and cost of completion of capital projects,
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•
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our ability to successfully employ our drilling units,
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•
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our ability to procure or have access to financing,
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•
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our expected debt levels,
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•
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our ability to comply with loan covenants,
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•
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liquidity and adequacy of cash flow for our obligations,
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•
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factors affecting our results of operations and cash flow from operations, including revenues and expenses, uses of excess cash, including debt retirement, timing and proceeds of asset sales,
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•
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tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, including those associated with our activities in Bermuda, Brazil, Norway, the United Kingdom, and the United States,
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•
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legal and regulatory matters, including results and effects of legal proceedings , outcome and effects of internal and governmental investigations,
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•
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customs and environmental matters,
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•
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effects of accounting changes and adoption of accounting policies,
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•
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recruitment and retention of personnel ,
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•
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pension plan and other post-retirement benefit plan contributions,
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•
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the timing of severance payments and benefit payments,
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•
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acquisitions and divestitures of businesses and assets and the execution of transactions to acquire and divest businesses and assets, and
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•
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other important factors described from time to time in the reports filed or furnished by us with the Securities and Exchange Commission, or the Commission, and the New York Stock Exchange, or NYSE.
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TABLE OF CONTENTS
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Page
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PART 1
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ITEM 1.
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ITEM 2.
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ITEM 3
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ITEM 4.
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ITEM 4A
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 8
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ITEM 9.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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PART II
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ITEM 13.
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ITEM 14.
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ITEM 15
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ITEM 16.
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ITEM 16A.
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ITEM 16B.
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ITEM 16C.
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ITEM 16D.
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ITEM 16E.
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ITEM 16F.
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ITEM 16G.
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ITEM 16H.
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PART III
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ITEM 17.
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ITEM 18.
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ITEM 19.
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ITEM 1.
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IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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ITEM 2.
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OFFER STATISTICS AND EXPECTED TIMETABLE
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ITEM 3.
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KEY INFORMATION
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A.
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SELECTED FINANCIAL DATA
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Year ended December 31,
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|||||||||||||
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2014
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2013
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2012
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2011
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2010
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(In millions of U.S. dollars except common share and per share data)
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Statement of Operations Data:
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Total operating revenues
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4,997
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5,282
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4,478
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4,192
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4,041
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Net operating income
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2,279
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2,098
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1,791
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1,774
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1,625
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Net income
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4,087
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2,786
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1,205
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1,482
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1,172
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Earnings per share, basic
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8.32
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5.66
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2.37
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3.05
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2.73
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Earnings per share, diluted
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8.30
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5.47
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2.34
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2.96
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2.73
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Dividends paid
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1,466
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1,356
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1,975
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1,440
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990
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Dividends paid per share
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2.98
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2.74
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4.31
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3.14
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2.41
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Dividends declared per share *
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2.00
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3.72
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3.51
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3.06
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2.74
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Year ended December 31,
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2014
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2013
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2012
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2011
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2010
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(In millions of U.S. dollars except
common share and per share data)
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Balance Sheet Data (at end of period):
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Cash and cash equivalents
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831
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744
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318
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483
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755
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Drilling units
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15,145
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17,193
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12,894
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11,223
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10,795
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Newbuildings
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2,030
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3,419
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1,882
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2,531
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1,247
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Investment in associated companies
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2,898
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140
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509
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721
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205
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Goodwill
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604
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1,200
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1,320
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1,320
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1,676
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Total assets
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26,506
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26,300
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19,632
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18,304
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17,497
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Long-term debt (including current portion)
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12,620
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13,466
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10,761
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9,993
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9,157
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Common share capital
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985
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938
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938
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935
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886
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Total equity
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10,390
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8,202
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6,024
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6,302
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5,937
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Common shares outstanding (in millions)
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492.8
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469.0
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469.2
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467.8
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443.1
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Weighted average common shares outstanding (in millions)
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478.0
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469.0
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468.5
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458.6
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409.2
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Other Financial Data:
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Net cash provided by operating activities
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1,574
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1,695
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1,590
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1,669
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1,210
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Net cash provided by/(used in) investing
activities
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66
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(2,964
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)
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(1,360
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)
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(2,486
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)
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(2,207
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)
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Net cash provided by/(used in) by financing activities
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(1,521
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)
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1,695
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(395
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)
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538
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1,293
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Capital expenditures
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(3,168
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)
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(4,463
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)
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(1,690
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)
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(2,543
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)
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(2,368
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)
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B.
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CAPITALIZATION AND INDEBTEDNESS
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C.
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REASONS FOR THE OFFER AND USE OF PROCEEDS
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D.
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RISK FACTORS
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•
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worldwide production and demand for oil and gas;
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•
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the cost of exploring for, developing, producing and delivering oil and gas;
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•
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expectations regarding future energy prices;
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•
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advances in exploration, development and production technology;
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•
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the ability of the Organization of Petroleum Exporting Countries (“OPEC”), to set and maintain levels and pricing;
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•
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the level of production in non-OPEC countries;
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•
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government regulations, including restrictions on offshore transportation of oil and natural gas;
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•
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local and international political, economic and weather conditions;
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•
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domestic and foreign tax policies;
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•
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development and exploitation of alternative fuels and non-conventional hydrocarbon production;
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•
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the policies of various governments regarding exploration and development of their oil and gas reserves, accidents, severe weather, natural disasters and other similar incidents relating to the oil and gas industry; and
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•
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the worldwide political and military environment, including uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or other crises in the Middle East, eastern Europe or other geographic areas or further acts of terrorism in the United States, or elsewhere.
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•
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general economic and market conditions affecting the offshore contract drilling industry, including competition from other offshore contract drilling companies;
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•
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types, sizes and ages of drilling units;
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•
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supply and demand for drilling units;
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•
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costs of newbuildings;
|
•
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prevailing level of drilling services contract dayrates;
|
•
|
governmental or other regulations; and
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•
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technological advances.
|
•
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terrorist acts, armed hostilities, war and civil disturbances;
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•
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acts of piracy, which have historically affected ocean-going vessels, trading in regions of the world such as the South China Sea, the Gulf of Aden off the coast of Somalia, and off the west coast of Africa;
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•
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significant governmental influence over many aspects of local economies;
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•
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seizure, nationalization or expropriation of property or equipment;
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•
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repudiation, nullification, modification or renegotiation of contracts;
|
•
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limitations on insurance coverage, such as war risk coverage, in certain areas;
|
•
|
political unrest;
|
•
|
foreign and U.S. monetary policy and foreign currency fluctuations and devaluations;
|
•
|
the inability to repatriate income or capital;
|
•
|
complications associated with repairing and replacing equipment in remote locations;
|
•
|
import-export quotas, wage and price controls and imposition of trade barriers;
|
•
|
U.S. and foreign sanctions or trade embargoes;
|
•
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regulatory or financial requirements to comply with foreign bureaucratic actions;
|
•
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changing taxation policies, including confiscatory taxation;
|
•
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other forms of government regulation and economic conditions that are beyond our control; and
|
•
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governmental corruption.
|
•
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the equipping and operation of drilling units;
|
•
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repatriation of foreign earnings and exchange controls;
|
•
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oil and gas exploration and development;
|
•
|
taxation of offshore earnings and the earnings of expatriate personnel; and
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•
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use and compensation of local employees and suppliers by foreign contractors.
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ITEM 4.
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INFORMATION ON THE COMPANY
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A.
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HISTORY AND DEVELOPMENT OF THE COMPANY
|
•
|
Seadrill Partners, an associated company, is a Marshall Islands limited liability company formed in 2012 that focuses on owning and operating offshore drilling rigs under long term contracts with major oil companies. In October 2012, Seadrill Partners completed its IPO in the United States of 8,750,000 common units at $22.00 per unit. As of January 2, 2014, Seadrill Partners was deconsolidated. As of December 31, 2014, we currently own
46.6%
of the outstanding limited liability interests of Seadrill Partners, which includes outstanding common and subordinated units. Seadrill Partners' common units trade on the NYSE under the symbol "SDLP". We also own significant non-controlling interests in various subsidiaries of Seadrill Partners.
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•
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Archer, a global oilfield service company that specializes in drilling and well services. We currently own 39.9% of the outstanding common shares of Archer.
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•
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SapuraKencana, an integrated oil and gas services and solutions provider. We currently own 8.2% of the outstanding common shares of SapuraKencana.
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•
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Seabras Sapura, a group of related companies that construct, own and operate pipe-laying service vessels in Brazil. We have a 50% ownership stake in each of these companies.
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B.
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BUSINESS OVERVIEW
|
•
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Floaters: We offer services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to semi-submersible rigs and drillships for harsh and benign environments in mid-, deep- and ultra-deep waters.
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•
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Jack-ups: We offer services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environments.
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•
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Petroleo Brasileiro S.A., or Petrobras, which accounted for approximately
20%
of our revenues;
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•
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Total S.A. Group, or Total, which accounted for approximately
13%
of our revenues;
|
•
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Statoil ASA, or Statoil, which accounted for approximately
13%
of our revenues;
|
•
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Exxon Mobil Corp, or Exxon, which accounted for approximately
10%
of our revenues; and
|
•
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Petróleos Mexicanos, or Pemex, which accounted for approximately
7%
of our revenues.
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Year ending December 31,
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% of rig-days committed
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2015
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|
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2016
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2017
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Floaters
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80
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%
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|
53
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%
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31
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%
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Jack-up rigs
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72
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%
|
|
37
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%
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|
9
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%
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C.
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ORGANIZATIONAL STRUCTURE
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D.
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PROPERTY, PLANTS AND EQUIPMENT
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Unit
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Year built
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Water depth (feet)
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Drilling depth (feet)
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Area of location
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Month of contract expiry
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Jack-up rigs
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West Epsilon (2)
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1993
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400
|
|
30,000
|
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Norway
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|
December 2016
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West Resolute
|
2007
|
|
350
|
|
30,000
|
|
Sharjah
|
|
|
West Prospero
|
2007
|
|
400
|
|
30,000
|
|
Malaysia
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|
May 2016
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West Vigilant
|
2008
|
|
350
|
|
30,000
|
|
Malaysia
|
|
May 2015
|
West Ariel
|
2008
|
|
400
|
|
30,000
|
|
Republic of Congo
|
|
August 2016
|
West Triton
|
2008
|
|
375
|
|
30,000
|
|
Sharjah
|
|
|
West Freedom
|
2009
|
|
350
|
|
30,000
|
|
Venezuela
|
|
April 2017
|
West Cressida
|
2009
|
|
375
|
|
30,000
|
|
Singapore
|
|
March 2016 (5)
|
West Mischief
|
2010
|
|
350
|
|
30,000
|
|
Republic of Congo, Abu Dhabi
|
|
July 2017
|
West Callisto
|
2010
|
|
400
|
|
30,000
|
|
Saudi Arabia
|
|
November 2015
|
West Leda
|
2010
|
|
375
|
|
30,000
|
|
Malaysia, Vietnam
|
|
July 2015
|
West Elara (2)
|
2011
|
|
450
|
|
40,000
|
|
Norway
|
|
March 2017
|
West Castor
|
2013
|
|
400
|
|
30,000
|
|
Brunei
|
|
May 2016
|
West Telesto
|
2013
|
|
400
|
|
30,000
|
|
Australia
|
|
July 2015
|
West Tucana
|
2013
|
|
400
|
|
30,000
|
|
In transit, Angola
|
|
May 2017
|
AOD-1 (3)
|
2013
|
|
400
|
|
30,000
|
|
Saudi Arabia
|
|
May 2016
|
AOD-2 (3)
|
2013
|
|
400
|
|
30,000
|
|
Saudi Arabia
|
|
June 2016
|
AOD-3 (3)
|
2013
|
|
400
|
|
30,000
|
|
Saudi Arabia
|
|
October 2016
|
West Linus (2)
|
2014
|
|
450
|
|
40,000
|
|
Norway
|
|
May 2019
|
West Titan (NB)(1)
|
2015
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Proteus (NB)(1)
|
2015
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Rhea (NB)(1)
|
2015
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Tethys (NB)(1)
|
2016
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Hyperion (NB)
|
2016
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Umbriel (NB)(1)
|
2016
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Dione (NB)(1)
|
2017
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
West Mimas (NB)(1)
|
2017
|
|
400
|
|
30,000
|
|
Dalian Shipyard (China)
|
|
|
|
|
|
|
|
|
|
|
|
|
Semi-submersible rigs
|
|
|
|
|
|
|
|
|
|
West Alpha (2)
|
1986
|
|
2,000
|
|
23,000
|
|
Norway, Russia
|
|
July 2016
|
West Venture (2)
|
2000
|
|
2,600
|
|
30,000
|
|
Norway
|
|
July 2015
|
West Phoenix (2)
|
2008
|
|
10,000
|
|
30,000
|
|
UK
|
|
September 2015
|
West Hercules
|
2008
|
|
10,000
|
|
35,000
|
|
Canada
|
|
January 2017
|
West Taurus
|
2008
|
|
10,000
|
|
35,000
|
|
Brazil
|
|
April 2015
|
West Eminence
|
2009
|
|
10,000
|
|
30,000
|
|
Brazil
|
|
July 2015
|
Sevan Driller (4)
|
2009
|
|
10,000
|
|
40,000
|
|
Brazil
|
|
June 2016
|
West Orion
|
2010
|
|
10,000
|
|
35,000
|
|
Brazil
|
|
July 2016
|
West Pegasus
|
2011
|
|
10,000
|
|
35,000
|
|
Mexico
|
|
August 2016
|
West Eclipse
|
2011
|
|
10,000
|
|
40,000
|
|
Angola
|
|
June 2015
|
Sevan Brasil (4)
|
2012
|
|
10,000
|
|
40,000
|
|
Brazil
|
|
July 2018
|
Unit
|
Year built
|
|
Water depth (feet)
|
|
Drilling depth (feet)
|
|
Area of location
|
|
Month of contract expiry
|
Sevan Louisiana (4)
|
2013
|
|
10,000
|
|
40,000
|
|
USA
|
|
May 2017
|
Sevan Developer (NB) (1)(4)
|
2015
|
|
10,000
|
|
40,000
|
|
COSCO Shipyard (China)
|
|
|
West Mira (NB)(1)
|
2015
|
|
10,000
|
|
40,000
|
|
Hyundai Shipyard (South Korea)
|
|
September 2020
|
West Rigel (NB)(1)(2)
|
2015
|
|
10,000
|
|
40,000
|
|
Jurong Shipyard (Singapore)
|
|
|
|
|
|
|
|
|
|
|
|
|
Drillships
|
|
|
|
|
|
|
|
|
|
West Navigator (2)
|
2000
|
|
7,500
|
|
35,000
|
|
Norway
|
|
|
West Polaris
|
2008
|
|
10,000
|
|
35,000
|
|
Angola
|
|
March 2018
|
West Gemini
|
2010
|
|
10,000
|
|
35,000
|
|
Angola
|
|
October 2017
|
West Tellus
|
2013
|
|
12,000
|
|
40,000
|
|
In transit, Brazil
|
|
April 2018
|
West Neptune
|
2014
|
|
12,000
|
|
40,000
|
|
USA
|
|
December 2017
|
West Jupiter
|
2014
|
|
12,000
|
|
40,000
|
|
Nigeria
|
|
December 2019
|
West Saturn
|
2014
|
|
12,000
|
|
40,000
|
|
Nigeria
|
|
December 2016
|
West Carina (1)
|
2015
|
|
12,000
|
|
40,000
|
|
In transit, Brazil
|
|
May 2018
|
West Aquila (NB)(1)
|
2015
|
|
12,000
|
|
40,000
|
|
DSME Shipyard (South Korea)
|
|
|
West Libra (NB)(1)
|
2015
|
|
12,000
|
|
40,000
|
|
DSME Shipyard (South Korea)
|
|
|
West Draco (NB)(1)
|
2015
|
|
12,000
|
|
40,000
|
|
Samsung Heavy Industries (South Korea)
|
|
|
West Dorado (NB)(1)
|
2015
|
|
12,000
|
|
40,000
|
|
Samsung Heavy Industries (South Korea)
|
|
|
ITEM 4A.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 5.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
|
|
|
Floaters
|
|
|
|
|
|||||||
Unit type
|
Jack-up
rigs |
|
Drillships
|
|
Semi-
submersible rigs |
|
Tender
rigs |
|
Total
units |
|||||
|
|
|
|
|
|
|
|
|
|
|||||
At December 31, 2011
|
15
|
|
|
4
|
|
|
10
|
|
|
11
|
|
|
40
|
|
additions
|
1
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
(disposals)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
At December 31, 2012
|
16
|
|
|
4
|
|
|
12
|
|
|
11
|
|
|
43
|
|
additions
|
5
|
|
|
3
|
|
|
3
|
|
|
2
|
|
|
13
|
|
(disposals)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|
(11
|
)
|
At December 31, 2013
|
20
|
|
|
7
|
|
|
15
|
|
|
3
|
|
|
45
|
|
additions
|
4
|
|
|
3
|
|
|
1
|
|
|
—
|
|
|
8
|
|
(disposals)
|
—
|
|
|
(3
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(10
|
)
|
At December 31, 2014
|
24
|
|
|
7
|
|
|
12
|
|
|
—
|
|
|
43
|
|
•
|
the number and timing of availability of our drilling units;
|
•
|
the dayrates obtainable of our drilling units;
|
•
|
the daily operating expenses of our drilling units;
|
•
|
utilization rates for our drilling units;
|
•
|
administrative expenses we incur;
|
•
|
gains on disposals of assets;
|
•
|
interest and other financial items;
|
•
|
acquisitions and divestitures of businesses and assets;
|
•
|
tax expenses;
|
•
|
deconsolidation of subsidiaries.
|
|
Year ended December 31,
|
|||||||||||||
|
2014
|
|
2013
|
|
2012
|
|||||||||
|
Average
dayrates
$
|
|
Economic utilization
%
|
|
Average
dayrates
$
|
|
|
Economic utilization
%
|
|
Average
dayrates
$
|
|
|
Economic utilization
%
|
|
Jack-up rigs
|
179,327
|
|
|
96
|
|
168,000
|
|
|
98
|
|
153,000
|
|
|
86
|
Floaters
|
488,771
|
|
|
92
|
|
497,000
|
|
|
94
|
|
489,000
|
|
|
90
|
Tender rigs
|
N/A
|
|
|
N/A
|
|
152,000
|
|
|
99
|
|
115,000
|
|
|
98
|
•
|
Vessel and rig operating expenses are related to the drilling units we have in operation and include the remuneration of offshore crews, onshore rig supervision staff, expenses for repairs and maintenance, as well as other expenses specifically related to the drilling units.
|
•
|
Reimbursable expenses are incurred at the request of customers, and include supplies, personnel and other services.
|
•
|
Depreciation and amortization expenses are based on the historical cost of our drilling units and other equipment.
|
•
|
General and administrative expenses include the costs of our regional offices in various locations, as well as the remuneration and other compensation of the directors and employees engaged in the management and administration of the Company.
|
•
|
The amount of interest expense recognized depends on the overall level of debt we have incurred and prevailing interest rates for our agreements. However, overall interest expense may be reduced as a consequence of capitalization of interest expense relating to drilling units under construction.
|
•
|
Share in results from associated companies recognized relate to our share of earnings or losses in our investments accounted for as equity method investments.
|
•
|
Gains/losses recognized on derivative financial instruments reflect various mark-to-market adjustments to the value of our interest rate and forward currency swap agreements and other derivative financial instruments, and the net settlement amount paid or received on swap agreements.
|
•
|
Foreign exchange gains/losses recognized generally relate to transactions and revaluation of balances carried in currencies other than the US dollar.
|
•
|
Other non-operating income or expense relate to items which generally do not fall within any other categories listed above
|
A.
|
RESULTS OF OPERATIONS
|
|
Year ended December 31, 2014
|
|
Year ended December 31, 2013
|
||||||||||||||||||||||||
In US$ millions
|
Floaters
|
|
|
Jack-
up rigs |
|
|
Tender
Rigs |
|
|
Other
|
|
Total
|
|
|
Floaters
|
|
|
Jack-
up rigs |
|
|
Tender
Rigs |
|
|
Other
|
|
Total
|
|
Total operating revenues
|
3,360
|
|
|
1,478
|
|
|
—
|
|
|
159
|
|
4,997
|
|
|
3,698
|
|
|
1,175
|
|
|
382
|
|
|
27
|
|
5,282
|
|
Gain on sale of assets
|
632
|
|
|
—
|
|
|
—
|
|
|
—
|
|
632
|
|
|
|
|
|
61
|
|
|
|
|
|
—
|
|
61
|
|
Total operating expenses
|
(2,000
|
)
|
|
(1,203
|
)
|
|
—
|
|
|
(147
|
)
|
(3,350
|
)
|
|
(2,226
|
)
|
|
(786
|
)
|
|
(206
|
)
|
|
(27
|
)
|
(3,245
|
)
|
Net operating income
|
1,992
|
|
|
275
|
|
|
—
|
|
|
12
|
|
2,279
|
|
|
1,472
|
|
|
450
|
|
|
176
|
|
|
—
|
|
2,098
|
|
Interest expense
|
|
|
|
|
|
|
|
(478
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(445
|
)
|
|||||
Other financial items
|
|
|
|
|
|
|
|
2,305
|
|
|
|
|
|
|
|
|
|
|
|
|
1,287
|
|
|||||
Income before taxes
|
|
|
|
|
|
|
|
4,106
|
|
|
|
|
|
|
|
|
|
|
|
|
2,940
|
|
|||||
Income taxes
|
|
|
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
(154
|
)
|
|||||
Net income
|
|
|
|
|
|
|
|
4,087
|
|
|
|
|
|
|
|
|
|
|
|
|
2,786
|
|
In US$ millions
|
2014
|
|
|
2013
|
|
Interest income
|
63
|
|
|
24
|
|
Share in results of associated companies
|
89
|
|
|
(223
|
)
|
(Loss)/gain on derivative financial instruments
|
(497
|
)
|
|
133
|
|
Foreign exchange gain/(loss)
|
164
|
|
|
52
|
|
Other financial items
|
70
|
|
|
45
|
|
Net loss on debt extinguishment
|
(54
|
)
|
|
—
|
|
Gain on realization of marketable securities
|
131
|
|
|
—
|
|
Gain on deconsolidation of Seadrill Partners
|
2,339
|
|
|
—
|
|
Gain on sale of tender rig business
|
—
|
|
|
1,256
|
|
Total other financial items
|
2,305
|
|
|
1,287
|
|
|
Year ended December 31, 2013
|
|
Year ended December 31, 2012
|
|||||||||||||||||||||||||
In US$ millions
|
Floaters
|
|
|
Jack-up rigs
|
|
|
Tender Rigs
|
|
|
Other
|
|
Total
|
|
|
Floaters
|
|
|
Jack-up rigs
|
|
|
Tender Rigs
|
|
|
Other
|
|
|
Total
|
|
Total operating revenues
|
3,698
|
|
|
1,175
|
|
|
382
|
|
|
27
|
|
5,282
|
|
|
2,859
|
|
|
861
|
|
|
758
|
|
|
—
|
|
|
4,478
|
|
Gain on sale of assets
|
—
|
|
|
61
|
|
|
—
|
|
|
—
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total operating expenses
|
(2,226
|
)
|
|
(786
|
)
|
|
(206
|
)
|
|
(27
|
)
|
(3,245
|
)
|
|
(1,609
|
)
|
|
(637
|
)
|
|
(441
|
)
|
|
—
|
|
|
(2,687
|
)
|
Net Operating income
|
1,472
|
|
|
450
|
|
|
176
|
|
|
—
|
|
2,098
|
|
|
1,250
|
|
|
224
|
|
|
317
|
|
|
—
|
|
|
1,791
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(445
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(340
|
)
|
|
Other financial items
|
|
|
|
|
|
|
|
|
|
|
1,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14
|
)
|
|
Income before taxes
|
|
|
|
|
|
|
|
|
|
|
2,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,437
|
|
|
Income taxes
|
|
|
|
|
|
|
|
|
|
|
(154
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(232
|
)
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
2,786
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,205
|
|
In US$ millions
|
2013
|
|
2012
|
|
Interest income
|
24
|
|
25
|
|
Share in results of associated companies
|
(223
|
)
|
(220
|
)
|
(Loss)/gain on derivative financial instruments
|
133
|
|
3
|
|
Foreign exchange gain
|
52
|
|
(70
|
)
|
Gain on realization of marketable securities
|
—
|
|
85
|
|
Gain on re-measurement of previously held equity interest
|
—
|
|
169
|
|
Other financial items
|
45
|
|
(6
|
)
|
Gain on sale of tender rig business
|
1,256
|
|
—
|
|
Total other financial items
|
1,287
|
|
(14
|
)
|
B.
|
LIQUIDITY AND CAPITAL RESOURCES
|
(In US$ millions)
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020 and thereafter
|
|
|
Total
|
|
Newbuildings
|
4,722
|
|
|
667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,389
|
|
(In US$ millions, unless otherwise indicated)
|
|
Outstanding as at December 31, 2014
|
|
Credit facilities:
|
|
|
|
$700 facility
|
|
420
|
|
$2,000 facility (NADL)
|
|
1,367
|
|
$400 facility
|
|
280
|
|
$420 facility
|
|
351
|
|
$440 facility
|
|
258
|
|
$450 facility
|
|
416
|
|
$1,450 facility
|
|
433
|
|
$360 facility (Asia Offshore Drilling)
|
|
309
|
|
$300 facility
|
|
210
|
|
$1,750 facility (Sevan Drilling)
|
|
1,225
|
|
$150 facility
|
|
150
|
|
$450 facility (2013)
|
|
397
|
|
$1,500 facility (2014)
|
|
1,469
|
|
$1,350 facility
|
|
1,317
|
|
Total credit facilities
|
|
8,602
|
|
|
|
|
|
Ship Finance Loans
|
|
|
|
$390 facility (SFL Deepwater)
|
|
303
|
|
$375 facility (SFL Hercules)
|
|
284
|
|
$475 facility (SFL Linus)
|
|
451
|
|
Total Ship Finance Loans
|
|
1,038
|
|
|
|
|
|
Unsecured bonds
|
|
|
|
NOK1,800 million bond
|
|
242
|
|
$350 bond
|
|
342
|
|
$1 billion bond
|
|
1,000
|
|
$500 bond
|
|
479
|
|
NOK1,500 million bond (NADL)
|
|
190
|
|
$ 600m bond (NADL)
|
|
413
|
|
SEK 1,500 bond
|
|
190
|
|
Total unsecured bonds
|
|
2,856
|
|
|
|
|
|
CIRR Loans
|
|
|
|
NOK850 million Eksportfinans
|
|
27
|
|
NOK904 million Eksportfinans
|
|
29
|
|
NOK1,011 million Eksportfinans
|
|
68
|
|
Other credit facilities with corresponding restricted cash deposits
|
|
124
|
|
|
|
|
|
Total debt
|
|
12,620
|
|
•
|
Aggregated minimum liquidity requirement for the group: to maintain cash and cash equivalents of at least
$150 million
within the group.
|
•
|
Interest coverage ratio: to maintain an EBITDA to interest expense ratio of at least
2.5
:1.
|
•
|
Current ratio: to maintain current assets to current liabilities ratio of at least
1
:1. Current assets are defined as book value less minimum liquidity, but including up to
20.0%
of shares in listed companies owned
20.0%
or more. Current liabilities are defined as book value less the current portion of long term debt.
|
•
|
Equity ratio: to maintain total equity to total assets ratio of at least
30.0%
. Both equity and total assets are adjusted for the difference between book and market values of drilling units.
|
•
|
Leverage ratio: to maintain a ratio of net debt to EBITDA no greater than
4.5
:1. Net debt is calculated as all interest bearing debt less cash and cash equivalents excluding minimum liquidity requirements.
|
•
|
Debt service coverage ratio: The $1,450m secured debt facility and the $1,500m secured debt facility (2014) contain a requirement for the individual borrowers to maintain a ratio of EBITDA of the respective borrower to debt services (being all finance charges and principal) of not less than 1.15:1.
|
•
|
total loss or sale of a drilling unit securing a credit facility;
|
•
|
cancellation or termination of any existing charter contract or satisfactory drilling contract; and
|
•
|
a change of control.
|
•
|
failure to comply with the financial or insurance covenants;
|
•
|
cross-default to other indebtedness held by both Seadrill Partners and its subsidiaries and by the Company;
|
•
|
failure by the Company to remain listed on a stock exchange;
|
•
|
the occurrence of a material adverse change;
|
•
|
revocation, termination, or modification of any authorization, license, consent, permission, or approval as necessary to conduct operations as contemplated by the applicable Rig Financing Agreement; and
|
•
|
the destruction, abandonment, seizure, appropriation or forfeiture of property of the guarantors or the Company and its subsidiaries, or the limitation by seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority, of the authority or ability of the Company or any subsidiary thereof to conduct its business, which has or reasonably may be expected to have a material adverse effect.
|
•
|
guarantees from rig owning subsidiaries (guarantors),
|
•
|
a first priority share pledge over all the shares issued by each of the guarantors,
|
•
|
a first priority perfected mortgage in all collateral rigs and any deed of covenant thereto, subject to contractual agreed "quiet enjoyment" undertakings with the end-user of the collateral rigs to be entered into if this is required by the relevant end-user pursuant to the relevant contract,
|
•
|
a first priority security interest over each of the rig owners' with respect to all earnings and proceeds of insurance, and
|
•
|
a first priority security interest in the earnings accounts.
|
•
|
Ship Finance must maintain cash and cash equivalents of at least
$25 million
.
|
•
|
Ship Finance must maintain positive working capital.
|
•
|
Ship Finance must have a ratio of total liabilities to total assets of at least
0.8
to
1.0
at the end of each quarter.
|
•
|
The Company's covenants under the bank loans listed above also apply.
|
C.
|
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
|
D.
|
TREND INFORMATION
|
E.
|
OFF BALANCE SHEET ARRANGEMENTS
|
F.
|
CONTRACTUAL OBLIGATIONS
|
|
Payment due by period
|
|||||||||||||
(In millions of US dollars)
|
Less than
1 year |
|
|
1 – 3
years |
|
|
3 – 5
years |
|
|
After
5 years |
|
|
Total
|
|
Interest bearing debt
|
2,309
|
|
|
6,596
|
|
|
2,725
|
|
|
990
|
|
|
12,620
|
|
Related party interest bearing debt
|
—
|
|
|
—
|
|
|
—
|
|
|
415
|
|
|
415
|
|
Total debt repayments
|
2,309
|
|
|
6,596
|
|
|
2,725
|
|
|
1,405
|
|
|
13,035
|
|
Interest payments
|
433
|
|
|
933
|
|
|
115
|
|
|
35
|
|
|
1,516
|
|
Related party interest payments
|
25
|
|
|
76
|
|
|
25
|
|
|
25
|
|
|
151
|
|
Pension obligations
|
11
|
|
|
36
|
|
|
13
|
|
|
69
|
|
|
129
|
|
Operating lease obligations
|
15
|
|
|
29
|
|
|
7
|
|
|
21
|
|
|
72
|
|
Newbuilding commitments (1)
|
4,722
|
|
|
667
|
|
|
—
|
|
|
—
|
|
|
5,389
|
|
Total contractual obligations (2)
|
7,515
|
|
|
8,337
|
|
|
2,885
|
|
|
1,555
|
|
|
20,292
|
|
G.
|
SAFE HARBOR
|
ITEM 6.
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
A.
|
DIRECTORS AND SENIOR MANAGEMENT
|
Name
|
Age
|
Position
|
John Fredriksen
|
70
|
President, Director and Chairman of the Board
|
Kate Blankenship
|
50
|
Director and Audit Committee member
|
Kathrine Fredriksen
|
31
|
Director
|
Bert Bekker
|
76
|
Director
|
Paul Leand Jr.
|
48
|
Director
|
Ørjan Svanevik
|
49
|
Director
|
Dr. Charles Woodburn
|
44
|
Director
|
Georgina Sousa
|
64
|
Company Secretary
|
Per Wullf
|
55
|
Chief Executive Officer and President, Seadrill Management
|
Rune Magnus Lundetræ (1)
|
38
|
Chief Financial Officer and Senior Vice President, Seadrill Management
|
David Sneddon
|
51
|
Chief Accounting Officer and Senior Vice President, Seadrill Management
|
Anton Dibowitz
|
43
|
Chief Commercial Officer and Senior Vice President, Seadrill Management
|
Svend Anton Maier
|
50
|
Senior Vice President Americas
|
José Firmo
|
45
|
Senior Vice President Brazil
|
Alf Ragnar Løvdal
|
57
|
Senior Vice President and CEO of North Atlantic Management
|
Ray Watkins
|
55
|
Vice President Asia Pacific
|
Philip Souyris
|
46
|
Vice President Mexico
|
Silvio Bresciani
|
58
|
Senior Vice President, Africa & Middle East
|
B.
|
COMPENSATION
|
C.
|
BOARD PRACTICES
|
D.
|
EMPLOYEES
|
Total employees (including contracted-in staff )
|
December 31,
2014 |
|
|
December 31,
2013 |
|
|
December 31,
2012 |
|
Operating segments:
|
|
|
|
|
|
|||
Floaters
|
4,505
|
|
|
5,100
|
|
|
3,900
|
|
Jack-up rigs
|
2,985
|
|
|
2,650
|
|
|
2,150
|
|
Tender rigs
|
—
|
|
|
1,115
|
|
|
2,500
|
|
Other
|
1,850
|
|
|
—
|
|
|
—
|
|
Corporate
|
110
|
|
|
100
|
|
|
150
|
|
Total employees
|
9,450
|
|
|
8,965
|
|
|
8,700
|
|
Geographical location:
|
|
|
|
|
|
|
|
|
Norway
|
1,455
|
|
|
1,695
|
|
|
1,350
|
|
Rest of Europe
|
110
|
|
|
100
|
|
|
100
|
|
North America
|
2,485
|
|
|
1,990
|
|
|
1,250
|
|
South America
|
1,155
|
|
|
1,015
|
|
|
700
|
|
Asia Pacific
|
1,130
|
|
|
1,355
|
|
|
3,050
|
|
Africa and Middle East
|
3,115
|
|
|
2,810
|
|
|
2,250
|
|
Total employees
|
9,450
|
|
|
8,965
|
|
|
8,700
|
|
E.
|
SHARE OWNERSHIP
|
Director or Key Employee
|
Beneficial Interest in
Common Shares of
$2.00 each
|
|
Interest in Options and Restricted Stock Units (RSUs)
|
||||||||||||||||
|
Number of shares
|
|
|
%
|
|
Scheme
|
|
Total number of options
|
|
|
Number of options vested
|
|
|
Exercise price
|
|
Expiry date
|
|||
John Fredriksen (Note 2)
|
(Note 2)
|
|
|
(Note 2)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kate Blankenship
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kathrine Fredriksen
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Bert Bekker
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Paul Leand Jr.
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Ørjan Svanevik
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Dr. Charles Woodburn
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Georgina Sousa
|
—
|
|
|
(Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Per Wullf
|
—
|
|
|
(Note 1)
|
|
Options
|
|
60,000
|
|
|
48,000
|
|
|
NOK 185.20
|
|
December 2015
|
|||
|
|
|
|
|
Options
|
|
60,000
|
|
|
30,000
|
|
|
NOK 202.05
|
|
December 2016
|
||||
|
|
|
|
|
Options
|
|
130,000
|
|
|
32,500
|
|
|
NOK 273.00
|
|
December 2017
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rune Magnus Lundetræ
|
—
|
|
|
(Note 1)
|
|
Options
|
|
15,000
|
|
|
12,000
|
|
|
NOK 192.90
|
|
December 2015
|
|||
|
|
|
|
|
Options
|
|
15,000
|
|
|
7,500
|
|
|
NOK 202.05
|
|
December 2016
|
||||
|
|
|
|
|
Options
|
|
40,000
|
|
|
10,000
|
|
|
NOK 219.13
|
|
April 2017
|
||||
|
|
|
|
|
Options
|
|
40,000
|
|
|
10,000
|
|
|
NOK 273.00
|
|
December 2017
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
David Sneddon
|
—
|
|
|
(Note 1)
|
|
RSUs
|
|
15,000
|
|
|
—
|
|
|
—
|
|
December 2016
|
|||
|
|
|
|
|
RSUs
|
|
4,500
|
|
|
—
|
|
|
—
|
|
December 2017
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Anton Dibowitz
|
—
|
|
|
(Note 1)
|
|
Options
|
|
25,000
|
|
|
20,000
|
|
|
NOK 192.90
|
|
December 2015
|
|||
|
|
|
|
|
Options
|
|
35,000
|
|
|
17,500
|
|
|
NOK 202.05
|
|
December 2016
|
||||
|
|
|
|
|
Options
|
|
60,000
|
|
|
15,000
|
|
|
NOK 273.00
|
|
December 2017
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Svend Anton Maier
|
—
|
|
|
(Note 1)
|
|
RSUs
|
|
4,500
|
|
|
—
|
|
|
—
|
|
|
December 2017
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Jose Firmo
|
—
|
|
|
(Note 1)
|
|
RSUs
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
December 2017
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Alf Ragnar Løvdal
|
—
|
|
|
(Note 1)
|
|
Options
|
|
16,000
|
|
|
12,000
|
|
|
NOK 185.20
|
|
December 2015
|
|||
|
|
|
|
|
Options
|
|
45,000
|
|
|
7,500
|
|
|
NOK 202.05
|
|
December 2016
|
||||
|
|
|
|
|
RSUs
(Note 3) |
|
71,850
|
|
|
—
|
|
|
—
|
|
|
December 2016
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ray Watkins
|
—
|
|
|
(Note 1)
|
|
Options
|
|
20,000
|
|
|
10,000
|
|
|
NOK 202.05
|
|
December 2016
|
|||
|
|
|
|
|
RSUs
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
December 2016
|
|||
|
|
|
|
|
RSUs
|
|
4,500
|
|
|
—
|
|
|
—
|
|
|
December 2017
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Philip Souyris
|
—
|
|
|
(Note 1)
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Silvio Bresciani
|
—
|
|
|
(Note 1)
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
ITEM 7.
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
A.
|
MAJOR SHAREHOLDERS
|
|
Common Shares Held
|
||||
Shareholder
|
Number
|
|
|
%
|
|
Hemen (1)
|
119,097,583
|
|
|
24.2
|
%
|
Barrow, Hanley, Mewhinney & Strauss, LLC (2)
|
31,289,877
|
|
|
6.4
|
%
|
Tong Jinquan (3)
|
25,620,984
|
|
|
5.2
|
%
|
B.
|
RELATED PARTY TRANSACTIONS
|
(1)
|
acquiring, owning, operating or contracting for Non-Five-Year Drilling Rigs;
|
(2)
|
acquiring one or more Five-Year Drilling Rigs if Seadrill promptly offers to sell the drilling rig to Seadrill Partners for the acquisition price plus any administrative costs (including reasonable legal costs) associated with the transfer to Seadrill Partners at the time of the acquisition;
|
(3)
|
putting a Non-Five-Year Drilling Rig under contract for five or more years if Seadrill offers to sell the drilling rig to Seadrill Partners for fair market value (x) promptly after the time it becomes a Five-Year Drilling Rig and (y) at each renewal or extension of that contract for five or more years;
|
(4)
|
acquiring one or more Five-Year Drilling Rigs as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or contracting for those drilling rigs; provided, however, that:
|
(a)
|
if less than a majority of the value of the business or assets acquired is attributable to Five-Year Drilling Rigs, as determined in good faith by Seadrill’s board of directors, Seadrill must offer to sell such drilling rigs to Seadrill Partners for their fair market value plus any additional tax or other similar costs that Seadrill incurs in connection with the acquisition and the transfer of such drilling rigs to Seadrill Partners separate from the acquired business; and
|
(b)
|
if a majority or more of the value of the business or assets acquired is attributable to Five-Year Drilling Rigs, as determined in good faith by Seadrill’s board of directors, Seadrill must notify Seadrill Partners of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, Seadrill Partners will notify Seadrill if Seadrill Partners wishes to acquire such drilling rigs in cooperation and simultaneously with Seadrill acquiring the Non-Five-Year Drilling Rigs. If Seadrill Partners does not notify Seadrill of its intent to pursue the acquisition within 10 days, Seadrill may proceed with the acquisition and then offer to sell such drilling rigs to Seadrill Partners as provided in (a) above;
|
(5)
|
acquiring a non-controlling interest in any company, business or pool of assets;
|
(6)
|
acquiring, owning, operating or contracting for any Five-Year Drilling Rig if Seadrill Partners does not fulfill its obligation to purchase such drilling rig in accordance with the terms of any existing or future agreement;
|
(7)
|
acquiring, owning, operating or contracting for a Five-Year Drilling Rig subject to the offers to Seadrill Partners described in paragraphs (2), (3) and (4) above pending Seadrill Partners’ determination whether to accept such offers and pending the closing of any offers Seadrill Partners accepts;
|
(8)
|
providing drilling rig management services relating to any drilling rig;
|
(9)
|
owning or operating a Five-Year Drilling Rig that Seadrill owned and operated as of October 24, 2012, and that was not included in the initial fleet of Seadrill Operating LP, Seadrill Capricorn Holdings LLC and Seadrill Operating LLC (collectively, “OPCO”); or
|
(10)
|
acquiring, owning, operating or contracting for a Five-Year Drilling Rig if Seadrill Partners has previously advised Seadrill that Seadrill Partners consents to such acquisition, operation or contract.
|
•
|
certain defects in title to Seadrill’s assets contributed or sold to OPCO and any failure to obtain, prior to the time they were contributed, certain consents and permits necessary to conduct, own and operate such assets, which liabilities arise on or before October 24, 2015 (or, in the case of the T-15 or the T-16, within three years after its purchase of the T-15 or the T-16); and
|
•
|
tax liabilities attributable to the operation of the assets contributed or sold to OPCO prior to the time they were contributed or sold.
|
(In US$ millions)
|
|
December 31,
2014 |
|
Rig financing agreements and Loan agreements
|
|
237
|
|
$109.5 million Vendor financing loan
|
|
110
|
|
Deferred consideration receivable
|
|
74
|
|
Other receivables
|
|
264
|
|
Other payables
|
|
(77
|
)
|
•
|
Ship Finance
|
•
|
Metrogas
|
•
|
Archer
|
•
|
Frontline Management (Bermuda) Limited, or Frontline Management
|
C.
|
INTEREST OF EXPERTS AND COUNSEL
|
ITEM 8.
|
FINANCIAL INFORMATION
|
A.
|
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
|
Payment date
|
Amount per share
|
|
|
2014
|
|
||
March 20, 2014
|
$
|
0.98
|
|
June 19, 2014
|
$
|
1.00
|
|
September 18, 2014
|
$
|
1.00
|
|
|
|
||
2013
|
|
||
June 20, 2013
|
$
|
0.88
|
|
September 20, 2013
|
$
|
0.91
|
|
December 20, 2013
|
$
|
0.95
|
|
|
|
||
2012
|
|
||
March 23, 2012
|
$
|
0.80
|
|
June 7, 2012
|
$
|
0.97
|
|
September 20, 2012
|
$
|
0.84
|
|
December 21, 2012
|
$
|
1.70
|
|
B.
|
SIGNIFICANT CHANGES
|
ITEM 9.
|
THE OFFER AND LISTING
|
A4.
|
OFFER AND LISTING DETAILS
|
|
NYSE
|
|
OSE
|
||||||||
|
High
(US$)
|
|
|
Low
(US$)
|
|
|
High
(NOK)
|
|
|
Low
(NOK)
|
|
Fiscal year ended December 31
|
|
|
|
|
|
|
|
||||
2014
|
40.84
|
|
|
10.66
|
|
|
250.00
|
|
|
80.65
|
|
2013
|
47.78
|
|
|
34.75
|
|
|
289.00
|
|
|
202.00
|
|
2012
|
42.07
|
|
|
32.07
|
|
|
244.20
|
|
|
192.90
|
|
2011
|
38.24
|
|
|
25.88
|
|
|
215.00
|
|
|
148.00
|
|
2010
|
34.76 *
|
|
|
18.09 *
|
|
|
207.80
|
|
|
115.90
|
|
|
NYSE
|
|
OSE
|
||||||||
|
High
(US$)
|
|
|
Low
(US$)
|
|
|
High
(NOK)
|
|
|
Low
(NOK)
|
|
Fiscal year ended December 31, 2014
|
|
|
|
|
|
|
|
||||
First quarter
|
40.84
|
|
|
32.93
|
|
|
250.00
|
|
|
197.50
|
|
Second quarter
|
40.37
|
|
|
32.75
|
|
|
246.50
|
|
|
195.60
|
|
Third quarter
|
40.22
|
|
|
26.58
|
|
|
248.30
|
|
|
172.30
|
|
Fourth quarter
|
25.47
|
|
|
10.66
|
|
|
170.60
|
|
|
80.65
|
|
|
NYSE
|
|
OSE
|
||||||||
|
High
(US$)
|
|
|
Low
(US$)
|
|
|
High
(NOK)
|
|
|
Low
(NOK)
|
|
Fiscal year ended December 31, 2013
|
|
|
|
|
|
|
|
||||
First quarter
|
39.68
|
|
|
36.13
|
|
|
217.60
|
|
|
206.90
|
|
Second quarter
|
41.47
|
|
|
34.75
|
|
|
245.20
|
|
|
202.00
|
|
Third quarter
|
47.78
|
|
|
40.31
|
|
|
289.00
|
|
|
244.30
|
|
Fourth quarter
|
46.95
|
|
|
38.54
|
|
|
284.40
|
|
|
236.40
|
|
|
NYSE
|
|
OSE
|
||||||||
|
High
(US$)
|
|
|
Low
(US$)
|
|
|
High
(NOK)
|
|
|
Low
(NOK)
|
|
April 20, 2015 *
|
12.59
|
|
|
9.35
|
|
|
95.85
|
|
|
75.10
|
|
March 2015
|
11.11
|
|
|
8.97
|
|
|
86.80
|
|
|
73.60
|
|
February 2015
|
14.34
|
|
|
11.46
|
|
|
104.90
|
|
|
87.00
|
|
January 2015
|
12.01
|
|
|
9.52
|
|
|
88.50
|
|
|
73.60
|
|
December 2014
|
13.92
|
|
|
10.66
|
|
|
97.05
|
|
|
80.65
|
|
November 2014
|
22.26
|
|
|
14.66
|
|
|
154.30
|
|
|
100.50
|
|
October 2014
|
25.47
|
|
|
22.61
|
|
|
170.60
|
|
|
148.00
|
|
B.
|
PLAN OF DISTRIBUTION
|
C.
|
MARKETS
|
D.
|
SELLING SHAREHOLDERS
|
E.
|
DILUTION
|
F.
|
EXPENSES OF THE ISSUE
|
ITEM 10.
|
ADDITIONAL INFORMATION
|
A.
|
SHARE CAPITAL
|
B.
|
MEMORANDUM OF ASSOCIATION AND BYE-LAWS
|
•
|
If he becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health and the Board resolves that he shall be removed from office;
|
•
|
If he becomes bankrupt or compounds with his creditors;
|
•
|
If he is prohibited by law from being a Director; or
|
•
|
If he ceases to be a Director by virtue of the Companies Act.
|
•
|
we will not be able to pay our liabilities as they fall due; or
|
•
|
the realizable value of our assets is less than our liabilities.
|
C.
|
MATERIAL CONTRACTS
|
D.
|
EXCHANGE CONTROLS
|
E.
|
TAXATION
|
•
|
at least
75%
of the corporation's gross income for such taxable year consists of passive income (e.g. dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
•
|
at least
50%
of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holders' aggregate holding period for the common stock;
|
•
|
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
|
•
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
•
|
the gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is subject to United States federal Income tax only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
•
|
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
•
|
fails to provide an accurate taxpayer identification number;
|
•
|
is notified by the IRS that he has failed to report all interest or dividends required to be shown on his United States federal income tax returns; or
|
•
|
in certain circumstances, fails to comply with applicable certification requirements.
|
F.
|
DIVIDENDS AND PAYING AGENTS
|
G.
|
STATEMENT BY EXPERTS
|
H.
|
DOCUMENTS ON DISPLAY
|
I.
|
SUBSIDIARY INFORMATION
|
ITEM 11.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In millions of U.S. dollars)
|
Outstanding principal
|
|
|
Fair value
|
|
|
Outstanding principal
|
|
|
Fair Value
|
|
Other current assets (liabilities)
|
7,918
|
|
|
(134
|
)
|
|
9,776
|
|
|
(89
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In millions of U.S. dollars)
|
Outstanding principal
|
|
|
Fair value
|
|
|
Outstanding principal
|
|
|
Fair Value
|
|
Other current assets (liabilities)
|
224
|
|
|
(3
|
)
|
|
246
|
|
|
(2
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In millions of U.S. dollars)
|
Outstanding principal
|
|
|
Fair value
|
|
|
Outstanding principal
|
|
|
Fair Value
|
|
Other current assets (liabilities)
|
807
|
|
|
(201
|
)
|
|
786
|
|
|
(46
|
)
|
•
|
the measurement of debt and other monetary assets and liabilities denominated in foreign currencies converted to U.S. dollars, with the resulting gain or loss recorded as "Other financial items";
|
•
|
changes in the fair value of foreign currency forward contracts, which are recorded as "Other financial items";
|
•
|
the impact of fluctuations in exchange rates on the reported amounts of our revenues and expenses which are contracted in foreign currencies; and
|
•
|
foreign subsidiaries whose accounts are not maintained in U.S. dollars, which when converted into U.S. dollars can result in exchange adjustments which are recorded as a component in shareholders' equity.
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In millions of U.S. dollars)
|
Notional Amount
|
|
|
Fair value
|
|
|
Notional Amount
|
|
|
Fair Value
|
|
Other current assets (liabilities)
|
260
|
|
|
(24
|
)
|
|
272
|
|
|
(3
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In millions of U.S. dollars)
|
Notional Amount
|
|
|
Fair value
|
|
|
Notional Amount
|
|
|
Fair Value
|
|
Other current assets (liabilities)
|
49
|
|
|
(3
|
)
|
|
65
|
|
|
1
|
|
•
|
a
39.9%
equity interest in Archer (OSE:ARCHER), a Bermuda oil service company;
|
•
|
a
6.4%
equity interest in SapuraKencana (BURSA: SKPETRO), a Malaysian oil services company;
|
•
|
a
50%
equity interest in Seabras Participacoes SA, a Brazilian holding company, which owns the vessel-owning company of one pipe-laying vessel currently under construction.
|
•
|
a
50%
equity interest in Seabras Sapura Holding GmbH, an Austria holding company, which owns the vessel-owning entities of five pipe-laying vessels currently under construction.
|
•
|
a
30%
equity interest in Itaunas, a Holland vessel-owning company of one drillship currently under construction.
|
•
|
a
30%
equity interest in Camburi, a Holland vessel-owning company of one drillship currently under construction.
|
•
|
a
30%
equity interest in Sahy, a Holland vessel-owning company of one drillship currently under construction.
|
•
|
a
46.6%
equity interest in Seadrill Partners, which included our ownership interest in both its common and subordinated units.
|
•
|
Direct Ownership interests in the following entities controlled by Seadrill Partners:
|
ITEM 12.
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
A.
|
DEBT SECURITIES
|
B.
|
WARRANTS AND RIGHTS
|
C.
|
OTHER SECURITIES
|
D.
|
AMERICAN DEPOSITORY SHARES
|
•
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of Company's management and directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
(
in U.S. dollars)
|
2014
|
|
|
2013
|
|
Audit fees (a)
|
5,781,969
|
|
|
9,398,155
|
|
Audit-related fees (b)
|
—
|
|
|
—
|
|
Taxation fees (c)
|
24,565
|
|
|
158,010
|
|
All other fees (d)
|
550,934
|
|
|
1,137,210
|
|
Total
|
6,357,468
|
|
|
10,693,375
|
|
Period
|
Total Number of Shares Purchased
|
Average Price
|
Total Number of Shares Purchased as part of Publicly announced plans or programs
|
Maximum Number of shares that may yet be purchased under the plans of programs
|
|||||
March 2013
|
150,000
|
|
NOK
|
212.30
|
|
—
|
|
2,000,000
|
|
April 2013
|
150,000
|
|
NOK
|
212.92
|
|
—
|
|
2,000,000
|
|
August 2013
|
300,000
|
|
NOK
|
273.50
|
|
300,000
|
|
1,700,000
|
|
November 2013
|
300,000
|
|
NOK
|
279.60
|
|
300,000
|
|
1,400,000
|
|
April 2014
|
300,000
|
|
NOK
|
196.80
|
|
—
|
|
1,400,000
|
|
June 2014
|
200,000
|
|
NOK
|
232.30
|
|
—
|
|
1,400,000
|
|
November 2014
|
—
|
|
—
|
|
—
|
|
50,675,994
|
|
•
|
Independence of Directors.
The NYSE
requires that a U.S. listed company maintain a majority of independent directors. As permitted under Bermuda law and our bye-laws, four members of our Board, Mrs. Kate Blankenship, Mr. Paul Leand, Dr. Charles Woodburn and Mr. Bert Bekker, are independent according to the NYSE's standards for independence applicable to a foreign private issuer.
|
•
|
Executive Sessions.
The NYSE
requires that non-management directors meet regularly in executive sessions without management. The NYSE
also requires that all independent directors meet in an executive session at least once a year. As permitted under Bermuda law and our bye-laws, our non-management directors do not regularly hold executive sessions without management and we do not expect them to do so in the future.
|
•
|
Nominating/Corporate Governance Committee
. The NYSE
requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Bermuda law and our bye-laws, we do not currently have a nominating or corporate governance committee.
|
•
|
Audit Committee
. The NYSE
requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Rule 10A-3 under the Exchange Act, our audit committee consists of one independent member of our Board, Mrs. Kate Blankenship.
|
•
|
Corporate Governance Guidelines
. The NYSE
requires that a listed U.S. Company adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. We are not required to adopt such guidelines under Bermuda law and we have not adopted such guidelines.
|
Consolidated Financial Statements of Seadrill Limited
|
|
(1)
|
Incorporated by reference to the Company's registration statement on Form 20-F, filed on March 18, 2010
|
(2)
|
Incorporated by reference to the Company's annual report on Form 20-F, filed on May 5, 2010
|
(3)
|
Incorporated by reference to the Company's annual report on Form 20-F, filed on April 23, 2014
|
†
|
Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the Commission.
|
Consolidated Financial Statements of Seadrill Limited
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Operating revenues
|
|
|
|
|
|
|||
Contract revenues
|
4,518
|
|
|
4,892
|
|
|
4,295
|
|
Reimbursable revenues
|
190
|
|
|
278
|
|
|
180
|
|
Other revenues
|
289
|
|
|
112
|
|
|
3
|
|
Total operating revenues
|
4,997
|
|
|
5,282
|
|
|
4,478
|
|
|
|
|
|
|
|
|||
Gain on disposals
|
632
|
|
|
61
|
|
|
—
|
|
|
|
|
|
|
|
|||
Operating expenses
|
|
|
|
|
|
|||
Vessel and rig operating expenses
|
1,938
|
|
|
1,977
|
|
|
1,656
|
|
Reimbursable expenses
|
172
|
|
|
257
|
|
|
166
|
|
Depreciation and amortization
|
693
|
|
|
711
|
|
|
615
|
|
Loss on impairment
|
232
|
|
|
—
|
|
|
—
|
|
General and administrative expenses
|
315
|
|
|
300
|
|
|
250
|
|
Total operating expenses
|
3,350
|
|
|
3,245
|
|
|
2,687
|
|
|
|
|
|
|
|
|||
Operating income
|
2,279
|
|
|
2,098
|
|
|
1,791
|
|
|
|
|
|
|
|
|||
Financial items and other income and expense
|
|
|
|
|
|
|
||
Interest income
|
63
|
|
|
24
|
|
|
25
|
|
Interest expense
|
(478
|
)
|
|
(445
|
)
|
|
(340
|
)
|
Share in results from associated companies (net of tax)
|
89
|
|
|
(223
|
)
|
|
(220
|
)
|
(Loss)/gain on derivative financial instruments
|
(497
|
)
|
|
133
|
|
|
3
|
|
Net loss on debt extinguishment
|
(54
|
)
|
|
—
|
|
|
—
|
|
Foreign exchange gain/(loss)
|
164
|
|
|
52
|
|
|
(70
|
)
|
Gain on realization of marketable securities
|
131
|
|
|
—
|
|
|
85
|
|
Gain on deconsolidation of Seadrill Partners
|
2,339
|
|
|
—
|
|
|
—
|
|
Gain on sale of tender rig business
|
—
|
|
|
1,256
|
|
|
—
|
|
Other financial items
|
70
|
|
|
45
|
|
|
163
|
|
Total financial items and other income and expense
|
1,827
|
|
|
842
|
|
|
(354
|
)
|
|
|
|
|
|
|
|||
Income before income taxes
|
4,106
|
|
|
2,940
|
|
|
1,437
|
|
|
|
|
|
|
|
|||
Income tax expense
|
(19
|
)
|
|
(154
|
)
|
|
(232
|
)
|
Net income
|
4,087
|
|
|
2,786
|
|
|
1,205
|
|
|
|
|
|
|
|
|||
Net income attributable to the non-controlling interest
|
108
|
|
|
133
|
|
|
97
|
|
Net income attributable to the parent
|
3,979
|
|
|
2,653
|
|
|
1,108
|
|
|
|
|
|
|
|
|||
Basic earnings per share (U.S. dollar)
|
8.32
|
|
|
5.66
|
|
|
2.37
|
|
Diluted earnings per share (U.S. dollar)
|
8.30
|
|
|
5.47
|
|
|
2.34
|
|
Declared regular dividend per share (U.S. dollar)
|
2.00
|
|
|
3.72
|
|
|
2.54
|
|
Declared extraordinary dividend per share (U.S. dollar)
|
—
|
|
|
—
|
|
|
0.97
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|||
Net income
|
4,087
|
|
|
2,786
|
|
|
1,205
|
|
|
|
|
|
|
|
|||
Other comprehensive income/(loss), net of tax:
|
|
|
|
|
|
|
|
|
Change in unrealized (loss)/gain on marketable securities, net
|
(982
|
)
|
|
333
|
|
|
205
|
|
Change in unrealized foreign exchange differences
|
(22
|
)
|
|
6
|
|
|
13
|
|
Change in actuarial (loss)/gain relating to pension
|
(28
|
)
|
|
(7
|
)
|
|
(25
|
)
|
Change in unrealized gain/(loss) on interest rate swaps in VIEs and subsidiaries
|
1
|
|
|
3
|
|
|
20
|
|
Other comprehensive (loss)/income:
|
(1,031
|
)
|
|
335
|
|
|
213
|
|
|
|
|
|
|
|
|||
Total comprehensive income for the period
|
3,056
|
|
|
3,121
|
|
|
1,418
|
|
|
|
|
|
|
|
|||
Comprehensive income attributable to the non-controlling interest
|
53
|
|
|
134
|
|
|
111
|
|
Comprehensive income attributable to the parent
|
3,003
|
|
|
2,987
|
|
|
1,307
|
|
|
2014
|
|
|
2013
|
|
ASSETS
|
|
|
|
||
Current assets
|
|
|
|
||
Cash and cash equivalents
|
831
|
|
|
744
|
|
Restricted cash
|
268
|
|
|
168
|
|
Marketable securities
|
426
|
|
|
416
|
|
Accounts receivables, net
|
1,017
|
|
|
1,042
|
|
Amount due from related party - current
|
466
|
|
|
101
|
|
Assets held for sale - current
|
134
|
|
|
—
|
|
Other current assets
|
273
|
|
|
363
|
|
Total current assets
|
3,415
|
|
|
2,834
|
|
|
|
|
|
||
Non-current assets
|
|
|
|
||
Investment in associated companies
|
2,898
|
|
|
140
|
|
Marketable securities
|
325
|
|
|
666
|
|
Newbuildings
|
2,030
|
|
|
3,419
|
|
Drilling units
|
15,145
|
|
|
17,193
|
|
Goodwill
|
604
|
|
|
1,200
|
|
Restricted cash
|
181
|
|
|
150
|
|
Deferred tax assets
|
30
|
|
|
37
|
|
Equipment
|
46
|
|
|
49
|
|
Amount due from related party - non-current
|
313
|
|
|
—
|
|
Assets held for sale - non-current
|
1,105
|
|
|
—
|
|
Other non-current assets
|
414
|
|
|
612
|
|
Total non-current assets
|
23,091
|
|
|
23,466
|
|
Total assets
|
26,506
|
|
|
26,300
|
|
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
|
||
Current liabilities
|
|
|
|
||
Current portion of long-term debt
|
2,309
|
|
|
1,566
|
|
Trade accounts payable
|
84
|
|
|
90
|
|
Short-term debt to related party
|
189
|
|
|
55
|
|
Liabilities associated with assets held for sale - current
|
58
|
|
|
—
|
|
Other current liabilities
|
1,934
|
|
|
2,114
|
|
Total current liabilities
|
4,574
|
|
|
3,825
|
|
|
|
|
|
||
Non-current liabilities
|
|
|
|
||
Long-term debt
|
10,311
|
|
|
11,900
|
|
Long-term debt due to related parties
|
415
|
|
|
1,415
|
|
Deferred tax liabilities
|
67
|
|
|
60
|
|
Liabilities associated with assets held for sale - non-current
|
50
|
|
|
—
|
|
Other non-current liabilities
|
699
|
|
|
898
|
|
Total non-current liabilities
|
11,542
|
|
|
14,273
|
|
|
|
|
|
||
Commitments and contingencies
(see note 33)
|
|
|
|
|
|
Equity
|
2014
|
|
|
2013
|
|
Common shares of par value US$2.00 per share: 800,000,000 shares authorized 492,759,938 outstanding at December 31, 2014 (December 31, 2013, 468,978,492)
|
985
|
|
|
938
|
|
Additional paid in capital
|
3,258
|
|
|
2,641
|
|
Contributed surplus
|
1,956
|
|
|
1,956
|
|
Accumulated other comprehensive (loss)/income
|
(448
|
)
|
|
528
|
|
Retained earnings
|
4,013
|
|
|
1,449
|
|
Total Shareholder's equity
|
9,764
|
|
|
7,512
|
|
Non-controlling interest
|
626
|
|
|
690
|
|
Total equity
|
10,390
|
|
|
8,202
|
|
Total liabilities and equity
|
26,506
|
|
|
26,300
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Cash Flows from Operating Activities
|
|
|
|
|
|
|||
Net income
|
4,087
|
|
|
2,786
|
|
|
1,205
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|||
Depreciation and amortization
|
693
|
|
|
711
|
|
|
615
|
|
Amortization of deferred loan charges
|
54
|
|
|
43
|
|
|
30
|
|
Amortization of unfavorable and favorable contracts
|
(131
|
)
|
|
(65
|
)
|
|
12
|
|
Amortization of mobilization revenue
|
(177
|
)
|
|
(136
|
)
|
|
(162
|
)
|
Share of results from associated companies
|
(121
|
)
|
|
223
|
|
|
220
|
|
Share-based compensation expense
|
10
|
|
|
7
|
|
|
8
|
|
Gain on disposals and deconsolidations
|
(2,971
|
)
|
|
(1,367
|
)
|
|
(169
|
)
|
Unrealized loss/(gain) related to derivative financial instruments
|
197
|
|
|
(249
|
)
|
|
6
|
|
Impairment of goodwill
|
232
|
|
|
—
|
|
|
—
|
|
Gain on realization of marketable securities
|
(138
|
)
|
|
—
|
|
|
(86
|
)
|
Dividends received from associated company
|
526
|
|
|
15
|
|
|
18
|
|
Deferred income tax
|
(6
|
)
|
|
(47
|
)
|
|
25
|
|
Unrealized foreign exchange (gain)/loss on long-term debt
|
(165
|
)
|
|
(47
|
)
|
|
6
|
|
Payments for long-term maintenance
|
(295
|
)
|
|
(190
|
)
|
|
(133
|
)
|
Loss on sale of investments
|
89
|
|
|
—
|
|
|
—
|
|
Net gain on debt extinguishment
|
(12
|
)
|
|
—
|
|
|
—
|
|
Changes in operating assets and liabilities, net of effect of acquisitions and disposals
|
|
|
|
|
||||
Unrecognized mobilization fees received from customers
|
348
|
|
|
226
|
|
|
238
|
|
Trade accounts receivable
|
(295
|
)
|
|
(206
|
)
|
|
(198
|
)
|
Trade accounts payable
|
21
|
|
|
(29
|
)
|
|
34
|
|
Net related party balances
|
(248
|
)
|
|
(114
|
)
|
|
60
|
|
Prepaid expenses/accrued revenue
|
13
|
|
|
(45
|
)
|
|
(64
|
)
|
Interest bearing note receivable with customers
|
—
|
|
|
—
|
|
|
(76
|
)
|
Other, net
|
(137
|
)
|
|
179
|
|
|
1
|
|
Net cash provided by operating activities
|
1,574
|
|
|
1,695
|
|
|
1,590
|
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Cash Flows from Investing Activities
|
|
|
|
|
|
|||
Additions to newbuildings
|
(2,508
|
)
|
|
(3,884
|
)
|
|
(1,343
|
)
|
Additions to drilling units and equipment
|
(365
|
)
|
|
(389
|
)
|
|
(214
|
)
|
Sale of rigs and equipment
|
—
|
|
|
48
|
|
|
—
|
|
Settlement of disputes with ship yard
|
—
|
|
|
—
|
|
|
38
|
|
Business combinations and step acquisitions, net of cash acquired
|
—
|
|
|
(554
|
)
|
|
—
|
|
Sale of business, net of cash disposed
|
1,138
|
|
|
1,958
|
|
|
—
|
|
Cash in deconsolidated subsidiary
|
(90
|
)
|
|
—
|
|
|
—
|
|
Change in restricted cash
|
(131
|
)
|
|
123
|
|
|
102
|
|
Investment in associated companies
|
(586
|
)
|
|
(151
|
)
|
|
(153
|
)
|
Proceeds from disposal of investments in associated companies
|
373
|
|
|
—
|
|
|
65
|
|
Short-term loan granted to related parties
|
—
|
|
|
—
|
|
|
(55
|
)
|
Purchase of marketable securities
|
(150
|
)
|
|
—
|
|
|
(19
|
)
|
Long term loan granted to related parties
|
(18
|
)
|
|
(125
|
)
|
|
(20
|
)
|
Repayment from long-term loan granted to related parties
|
2,096
|
|
|
10
|
|
|
20
|
|
Proceeds from disposal of marketable securities
|
307
|
|
|
—
|
|
|
219
|
|
Net cash provided by/(used in) investing activities
|
66
|
|
|
(2,964
|
)
|
|
(1,360
|
)
|
|
|
|
|
|
|
|||
Cash Flows from Financing Activities
|
|
|
|
|
|
|||
Proceeds from debt
|
5,072
|
|
|
7,703
|
|
|
3,477
|
|
Repayments of debt
|
(4,344
|
)
|
|
(4,919
|
)
|
|
(2,752
|
)
|
Debt fees paid
|
(65
|
)
|
|
(93
|
)
|
|
(37
|
)
|
Proceeds from debt to related party
|
90
|
|
|
756
|
|
|
1,013
|
|
Repayments of debt to related party
|
(910
|
)
|
|
(1,181
|
)
|
|
(487
|
)
|
Dividends paid to non-controlling interests
|
(51
|
)
|
|
(69
|
)
|
|
(50
|
)
|
Contribution from non-controlling interests, net of issuance cost
|
115
|
|
|
365
|
|
|
350
|
|
Proceeds relating to share forward contracts and other derivatives
|
—
|
|
|
453
|
|
|
—
|
|
Purchase of treasury shares
|
(18
|
)
|
|
(39
|
)
|
|
—
|
|
Proceeds from sale of treasury shares
|
—
|
|
|
6
|
|
|
16
|
|
Dividends paid
|
(1,415
|
)
|
|
(1,287
|
)
|
|
(1,925
|
)
|
Employee stock options exercised
|
5
|
|
|
—
|
|
|
—
|
|
Net cash (used in)/provided by financing activities
|
(1,521
|
)
|
|
1,695
|
|
|
(395
|
)
|
|
|
|
|
|
|
|||
Cash reclassified as held for sale
|
(26
|
)
|
|
—
|
|
|
—
|
|
Effect of exchange rate changes on cash and cash equivalents
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||
Net increase/(decrease) in cash and cash equivalents
|
87
|
|
|
426
|
|
|
(165
|
)
|
Cash and cash equivalents at beginning of the year
|
744
|
|
|
318
|
|
|
483
|
|
Cash and cash equivalents at the end of year
|
831
|
|
|
744
|
|
|
318
|
|
|
|
|
|
|
|
|||
Supplementary disclosure of cash flow information
|
|
|
|
|
|
|||
Interest paid, net of capitalized interest
|
(493
|
)
|
|
336
|
|
|
260
|
|
Taxes paid
|
(227
|
)
|
|
109
|
|
|
179
|
|
|
|
Common shares
|
|
|
Additional paid in capital
|
|
|
Contributed surplus
|
|
|
Accumulated other comprehensive (loss)/income
|
|
|
Retained Earnings
|
|
|
Total equity before NCI
|
|
|
Non-controlling interest
|
|
|
Total equity
|
|
Balance at December 31, 2011
|
|
935
|
|
|
2,097
|
|
|
1,956
|
|
|
(5
|
)
|
|
994
|
|
|
5,977
|
|
|
325
|
|
|
6,302
|
|
Sale of treasury shares
|
|
3
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
Share-based compensation
|
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Private placement in North Atlantic Drilling Ltd ("NADL")
|
|
—
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|
66
|
|
|
150
|
|
Establishment of non-controlling interest in Seadrill Partners
|
|
—
|
|
|
134
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
69
|
|
|
203
|
|
Costs related to capital increase in subsidiary
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
199
|
|
|
—
|
|
|
199
|
|
|
14
|
|
|
213
|
|
Dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,019
|
)
|
|
(2,019
|
)
|
|
(50
|
)
|
|
(2,069
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,108
|
|
|
1,108
|
|
|
97
|
|
|
1,205
|
|
Balance at December 31, 2012
|
|
938
|
|
|
2,332
|
|
|
1,956
|
|
|
194
|
|
|
83
|
|
|
5,503
|
|
|
521
|
|
|
6,024
|
|
Sale of treasury shares
|
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
Purchase of treasury shares
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(39
|
)
|
|
—
|
|
|
(39
|
)
|
Share-based compensation
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
Establishment of non-controlling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
297
|
|
|
297
|
|
Issuance of common units by Seadrill Partners to public
|
|
—
|
|
|
228
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
228
|
|
|
137
|
|
|
365
|
|
Issuances of common units by Seadrill Partners and impact on non-controlling interest
|
|
—
|
|
|
(102
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
102
|
|
|
—
|
|
Sale of drilling units to Seadrill Partners
|
|
—
|
|
|
209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
209
|
|
|
(209
|
)
|
|
—
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
334
|
|
|
—
|
|
|
334
|
|
|
1
|
|
|
335
|
|
Dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,287
|
)
|
|
(1,287
|
)
|
|
(69
|
)
|
|
(1,356
|
)
|
Dividend to Non-controlling interests in VIEs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(223
|
)
|
|
(223
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,653
|
|
|
2,653
|
|
|
133
|
|
|
2,786
|
|
Balance at December 31, 2013
|
|
938
|
|
|
2,641
|
|
|
1,956
|
|
|
528
|
|
|
1,449
|
|
|
7,512
|
|
|
690
|
|
|
8,202
|
|
Sale and purchase of treasury shares, net
|
|
(1
|
)
|
|
(22
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(23
|
)
|
Share-based compensation charge
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
Employee stock options issued
|
|
1
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
Conversion of convertible bond
|
|
47
|
|
|
568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
615
|
|
|
—
|
|
|
615
|
|
Deconsolidation of Seadrill Partners
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
(115
|
)
|
Initial public offering of NADL
|
|
—
|
|
|
63
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
63
|
|
|
52
|
|
|
115
|
|
Acquisition of West Polaris
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(7
|
)
|
|
(13
|
)
|
Sale of NCI
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(976
|
)
|
|
—
|
|
|
(976
|
)
|
|
(55
|
)
|
|
(1,031
|
)
|
Dividends declared
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,415
|
)
|
|
(1,415
|
)
|
|
(51
|
)
|
|
(1,466
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,979
|
|
|
3,979
|
|
|
108
|
|
|
4,087
|
|
Balance at December 31, 2014
|
|
985
|
|
|
3,258
|
|
|
1,956
|
|
|
(448
|
)
|
|
4,013
|
|
|
9,764
|
|
|
626
|
|
|
10,390
|
|
•
|
Floaters: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to semi-submersible rigs and drillships for harsh and benign environments in mid-, deep- and ultra-deep waters.
|
•
|
Jack-up rigs: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environment.
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Floaters
|
3,360
|
|
|
3,698
|
|
|
2,859
|
|
Jack-up rigs
|
1,478
|
|
|
1,175
|
|
|
861
|
|
Tender Rigs
|
—
|
|
|
382
|
|
|
758
|
|
Other
|
159
|
|
|
27
|
|
|
—
|
|
Total
|
4,997
|
|
|
5,282
|
|
|
4,478
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Floaters
|
1,992
|
|
|
1,472
|
|
|
1,250
|
|
Jack-up Rigs
|
275
|
|
|
450
|
|
|
225
|
|
Tender Rigs
|
—
|
|
|
176
|
|
|
316
|
|
Other
|
12
|
|
|
—
|
|
|
—
|
|
Operating income
|
2,279
|
|
|
2,098
|
|
|
1,791
|
|
Unallocated items:
|
|
|
|
|
|
|
|
|
Total financial items and other
|
1,827
|
|
|
842
|
|
|
(354
|
)
|
Income tax expense
|
(19
|
)
|
|
(154
|
)
|
|
(232
|
)
|
Net income
|
4,087
|
|
|
2,786
|
|
|
1,205
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Floaters
|
12,849
|
|
|
15,459
|
|
Jack-up Rigs
|
4,326
|
|
|
4,699
|
|
Tender Rigs
|
—
|
|
|
454
|
|
Total Drilling Units and Newbuildings
|
17,175
|
|
|
20,612
|
|
Assets held for sale
|
1,239
|
|
|
—
|
|
Investments in Associated companies
|
2,898
|
|
|
140
|
|
Marketable securities
|
751
|
|
|
1,082
|
|
Goodwill
|
604
|
|
|
1,200
|
|
Cash and restricted cash
|
1,280
|
|
|
1,062
|
|
Other assets
|
2,559
|
|
|
2,204
|
|
Total
|
26,506
|
|
|
26,300
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Floaters
|
604
|
|
|
890
|
|
Jack-up Rigs
|
—
|
|
|
281
|
|
Tender Rigs
|
—
|
|
|
29
|
|
Total
|
604
|
|
|
1,200
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Floaters
|
2,327
|
|
|
3,178
|
|
|
1,342
|
|
Jack-up Rigs
|
776
|
|
|
1,371
|
|
|
150
|
|
Tender Rigs
|
—
|
|
|
150
|
|
|
198
|
|
Total
|
3,103
|
|
|
4,699
|
|
|
1,690
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Norway
|
1,071
|
|
|
1,198
|
|
|
815
|
|
Brazil
|
991
|
|
|
825
|
|
|
629
|
|
Angola
|
707
|
|
|
734
|
|
|
358
|
|
Others *
|
2,228
|
|
|
2,525
|
|
|
2,676
|
|
Total Revenue
|
4,997
|
|
|
5,282
|
|
|
4,478
|
|
(US$ millions)
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Petroleo Brasileiro S.A ("Petrobras")
|
|
20
|
%
|
|
16
|
%
|
|
15
|
%
|
Total S.A Group ("Total")
|
|
13
|
%
|
|
14
|
%
|
|
14
|
%
|
Statoil ASA ("Statoil")
|
|
13
|
%
|
|
14
|
%
|
|
9
|
%
|
Exxon Mobil Corp ("Exxon")
|
|
10
|
%
|
|
12
|
%
|
|
11
|
%
|
Royal Dutch Shell Group ("Shell")
|
|
2
|
%
|
|
7
|
%
|
|
10
|
%
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Brazil
|
2,798
|
|
|
2,881
|
|
Norway
|
2,252
|
|
|
2,298
|
|
Angola
|
1,852
|
|
|
2,090
|
|
USA
|
1,382
|
|
|
2,718
|
|
Others *
|
6,861
|
|
|
7,206
|
|
Total
|
15,145
|
|
|
17,193
|
|
|
Year ended December 31
|
|||||||
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Amortization of unfavorable contracts
|
130
|
|
|
67
|
|
|
—
|
|
Amortization of favorable contracts
|
—
|
|
|
(2
|
)
|
|
(12
|
)
|
Revenues related party
|
97
|
|
|
2
|
|
|
15
|
|
External management fees with third parties
|
62
|
|
|
45
|
|
|
—
|
|
Total
|
289
|
|
|
112
|
|
|
3
|
|
(In US$ millions)
|
Net proceeds
|
|
|
Book value on
disposal
|
|
|
Gain
|
|
Year ended December 31, 2014:
|
|
|
|
|
|
|||
Sale of West Auriga business
|
466
|
|
|
26
|
|
|
440
|
|
Sale of West Vela business
|
536
|
|
|
344
|
|
|
192
|
|
Total for year ended December 31, 2014
|
1,002
|
|
|
370
|
|
|
632
|
|
|
|
|
|
|
|
|||
Year ended December 31, 2013:
|
|
|
|
|
|
|
|
|
Sale of Jack-up rig West Janus
|
73
|
|
|
12
|
|
|
61
|
|
Total for year ended December 31, 2013
|
73
|
|
|
12
|
|
|
61
|
|
|
|
|
|
|
|
|||
Year ended December 31, 2012:
|
|
|
|
|
|
|
|
|
None
|
—
|
|
|
—
|
|
|
—
|
|
Total for year ended December 31, 2012
|
—
|
|
|
—
|
|
|
—
|
|
|
Year ended December 31
|
|||||||
(In US$ millions) |
2014
|
|
|
2013
|
|
|
2012
|
|
Gross interest expense
|
548
|
|
|
540
|
|
|
416
|
|
Capitalized interest
|
(70
|
)
|
|
(95
|
)
|
|
(76
|
)
|
Net interest expense
|
478
|
|
|
445
|
|
|
340
|
|
|
Year ended December 31
|
|||||||
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Current tax expense:
|
|
|
|
|
|
|||
Bermuda
|
—
|
|
|
—
|
|
|
—
|
|
Foreign
|
23
|
|
|
200
|
|
|
167
|
|
Deferred tax (benefit)/expense:
|
|
|
|
|
|
|
|
|
Bermuda
|
—
|
|
|
—
|
|
|
—
|
|
Foreign
|
(4
|
)
|
|
(50
|
)
|
|
58
|
|
Tax related to internal sale of assets in subsidiary, amortized for group purposes
|
—
|
|
|
4
|
|
|
7
|
|
Total tax expense
|
19
|
|
|
154
|
|
|
232
|
|
Effective tax rate
|
0.5
|
%
|
|
5.2
|
%
|
|
16.1
|
%
|
|
Year ended December 31
|
|||||||
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Income taxes at statutory rate
|
—
|
|
|
—
|
|
|
—
|
|
Effect of transfers to new tax jurisdictions
|
—
|
|
|
4
|
|
|
7
|
|
Effect of change on uncertain tax positions relating to prior year
|
(85
|
)
|
|
(7
|
)
|
|
91
|
|
Effect of taxable income in various countries
|
104
|
|
|
157
|
|
|
134
|
|
Total tax expense
|
19
|
|
|
154
|
|
|
232
|
|
(In US$ millions)
|
December 31,
2014 |
|
|
December 31,
2013 |
|
Pension
|
19
|
|
|
12
|
|
Provisions
|
20
|
|
|
8
|
|
Net operating losses carried forward
|
291
|
|
|
130
|
|
Other
|
3
|
|
|
2
|
|
Gross deferred tax asset
|
333
|
|
|
152
|
|
Valuation allowance related to net operating losses carried forward
|
(280
|
)
|
|
(115
|
)
|
Net deferred tax asset
|
53
|
|
|
37
|
|
(In US$ millions)
|
December 31,
2014 |
|
|
December 31,
2013 |
|
Property, plant and equipment
|
60
|
|
|
60
|
|
Foreign exchange
|
7
|
|
|
—
|
|
Gross deferred tax liability
|
67
|
|
|
60
|
|
Net deferred tax
|
(14
|
)
|
|
(23
|
)
|
(In US$ millions)
|
December 31,
2014 |
|
|
December 31,
2013 |
|
Short-term deferred tax asset
|
19
|
|
|
—
|
|
Long-term deferred tax asset
|
34
|
|
|
37
|
|
Long-term deferred tax liability
|
(67
|
)
|
|
(60
|
)
|
Net deferred tax
|
(14
|
)
|
|
(23
|
)
|
|
Year ended December 31
|
|||||||
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Balance beginning of period
|
147
|
|
|
154
|
|
|
63
|
|
Increases as a result of positions taken in prior periods
|
9
|
|
|
29
|
|
|
109
|
|
Increases as a result of positions taken during the current period
|
—
|
|
|
12
|
|
|
8
|
|
Decreases as a result of positions taken in prior periods
|
(147
|
)
|
|
(14
|
)
|
|
(26
|
)
|
Decreases as a result of positions taken in the current period
|
—
|
|
|
(34
|
)
|
|
—
|
|
Balance end of period
|
9
|
|
|
147
|
|
|
154
|
|
Jurisdiction
|
Earliest Open Year
|
United States
|
2013
|
Angola
|
2007
|
Australia
|
2008
|
Nigeria
|
2007
|
Norway
|
2007
|
Thailand
|
2003
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|||
Net income attributable to the parent
|
3,979
|
|
|
2,653
|
|
|
1,108
|
|
Less: Allocation to participating securities
|
(6
|
)
|
|
—
|
|
|
—
|
|
Net income available to stockholders
|
3,973
|
|
|
2,653
|
|
|
1,108
|
|
Effect of dilution
|
117
|
|
|
38
|
|
|
37
|
|
Diluted net income available to stockholders
|
4,090
|
|
|
2,691
|
|
|
1,145
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Basic earnings per share:
|
|
|
|
|
|
|||
Weighted average number of common shares outstanding
|
478
|
|
|
469
|
|
|
469
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
Effect of dilutive convertible bonds
|
14
|
|
|
22
|
|
|
20
|
|
Effect of dilutive share options
|
1
|
|
|
1
|
|
|
1
|
|
Weighted average number of common shares outstanding adjusted for the effects of dilution
|
493
|
|
|
492
|
|
|
490
|
|
(In US$)
|
2014
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|||
Basic Earnings per share
|
8.32
|
|
|
5.66
|
|
|
2.37
|
|
Diluted earnings per share
|
8.30
|
|
|
5.47
|
|
|
2.34
|
|
(In US$ millions)
|
As at January 2, 2014
|
|
Fair value of investment in Seadrill Partners (a)
|
3,724
|
|
Carrying value of the non-controlling interest in Seadrill Partners
|
115
|
|
Subtotal
|
3,839
|
|
Less:
|
|
|
Carrying value of Seadrill Partners’ net assets
|
1,260
|
|
Goodwill allocated to Seadrill Partners
|
240
|
|
Gain on deconsolidation of Seadrill Partners
|
2,339
|
|
(In US$ millions)
|
As of January 2, 2014
|
|
Common units (i)
|
671
|
|
Subordinated units (ii)
|
427
|
|
Seadrill Member Interest and Incentive Distribution Rights ("IDRs") (iii)
|
244
|
|
Direct ownership interests (iv)
|
2,382
|
|
Total
|
3,724
|
|
•
|
70%
ownership in Seadrill Operating LP
|
•
|
49%
ownership in Seadrill Capricorn Holdings LLC
|
•
|
39%
ownership of Seadrill Deepwater Drillship Ltd. and
39%
(indirect) ownership of Seadrill Mobile Units (Nigeria) Ltd.
|
(In US$ millions)
|
Book value
|
|
Fair value
|
|
Basis Difference
|
|
Seadrill's share of basis difference (1)
|
||||
Drilling units
|
3,444
|
|
|
5,245
|
|
|
1,801
|
|
|
1,295
|
|
Drilling contracts
|
—
|
|
|
170
|
|
|
170
|
|
|
142
|
|
Goodwill
|
—
|
|
|
1,214
|
|
|
1,214
|
|
|
352
|
|
Total
|
3,444
|
|
|
6,629
|
|
|
3,185
|
|
|
1,789
|
|
(In US$ millions)
|
March 21, 2014
|
|
Enterprise value
|
1,240
|
|
Less: Debt assumed
|
(443
|
)
|
Purchase price
|
797
|
|
|
|
|
Less: Working capital adjustment
|
(331
|
)
|
Adjusted purchase price
|
466
|
|
|
|
|
Cash
|
697
|
|
Discount note issued
|
100
|
|
Less: Working capital payable
|
(331
|
)
|
Fair value of purchase consideration
|
466
|
|
|
|
|
Less: net carrying value of assets and liabilities
|
7
|
|
Less: allocated goodwill to subsidiaries
|
(33
|
)
|
Gain on sale
|
440
|
|
(In US$ millions)
|
November 4, 2014
|
|
Enterprise value
|
900
|
|
Deferred consideration receivable
|
74
|
|
Less: Debt assumed
|
(433
|
)
|
Purchase price
|
541
|
|
|
|
|
Less: Working capital adjustment
|
(6
|
)
|
Adjusted purchase price
|
535
|
|
|
|
|
Cash
|
467
|
|
Deferred consideration receivable
|
74
|
|
Less: Working capital payable
|
(6
|
)
|
Fair value of purchase consideration
|
535
|
|
|
|
|
Less: net carrying value of assets and liabilities
|
(303
|
)
|
Less: allocated goodwill to subsidiaries
|
(41
|
)
|
Gain on sale
|
191
|
|
(In US$ millions)
|
December 31, 2013
|
|
Fair value of consideration received
|
2,600
|
|
Carry value of assets and liabilities
|
1,324
|
|
Other related costs to sale
|
20
|
|
Total gain on sale
|
1,256
|
|
(In US$ millions)
|
|
January 3, 2013
|
|
|
|
|
|
Fair value of net assets acquired:
|
|
|
|
Drilling units
|
|
698
|
|
Unfavorable contract – Other current liabilities
|
|
(27
|
)
|
Unfavorable contract – Other non-current liabilities
|
|
(81
|
)
|
Net assets acquired
|
|
590
|
|
|
|
|
|
Fair value of consideration
|
|
590
|
|
(In US$ millions)
|
|
March 25, 2013
|
|
|
|
|
|
Cash and cash equivalents
|
|
1
|
|
Current assets
|
|
1
|
|
Drilling units
|
|
633
|
|
Non-current assets
|
|
633
|
|
Construction obligation
|
|
(316
|
)
|
Other current liabilities
|
|
(8
|
)
|
Current liabilities
|
|
(324
|
)
|
Non-current liabilities
|
|
—
|
|
Net assets acquired
|
|
310
|
|
|
|
|
|
Net book value of equity investment
|
|
185
|
|
Fair value of previously held equity investment
|
|
195
|
|
Gain on re-measurement of previously held equity investment
|
|
10
|
|
|
|
|
|
Fair value of establishment of non-controlling interest
|
|
100
|
|
|
|
|
|
Bargain purchase
|
|
|
|
Fair value of establishment of non-controlling interest
|
|
100
|
|
Fair value of previously held equity investment
|
|
195
|
|
Total
|
|
295
|
|
|
|
|
|
Net assets acquired
|
|
310
|
|
Gain on bargain purchase
|
|
15
|
|
(In US$ millions) |
|
July 2,
2013 |
|
|
|
|
|
Cash and cash equivalents
|
|
54
|
|
Restricted cash
|
|
63
|
|
Trade and other receivables
|
|
49
|
|
Current assets
|
|
166
|
|
Drilling units
|
|
1,246
|
|
Newbuildings
|
|
1,227
|
|
Deferred income tax asset
|
|
76
|
|
Valuation allowance income tax asset
|
|
(76
|
)
|
Other non-current assets
|
|
1
|
|
Non-current assets
|
|
2,474
|
|
Total assets
|
|
2,640
|
|
|
|
|
|
Current portion of long-term debt
|
|
(112
|
)
|
Trade and other payables
|
|
(115
|
)
|
Construction obligation
|
|
(923
|
)
|
Unfavorable contracts
|
|
(79
|
)
|
Other current liabilities
|
|
(26
|
)
|
Current liabilities
|
|
(1,255
|
)
|
Long-term interest bearing debt
|
|
(703
|
)
|
Unfavorable contracts
|
|
(257
|
)
|
Other non-current liabilities
|
|
(16
|
)
|
Non-current liabilities
|
|
(976
|
)
|
Total liabilities
|
|
(2,231
|
)
|
Net assets acquired
|
|
409
|
|
|
|
|
|
Net book value of equity investment
|
|
109
|
|
Fair value of previously held equity investment
|
|
117
|
|
Gain on re-measurement of previously held equity investment
|
|
8
|
|
|
|
|
|
Fair value of establishment of non-controlling interest
|
|
197
|
|
|
|
|
|
Bargain purchase
|
|
|
|
Fair value of consideration transferred
|
|
78
|
|
Fair value of establishment of non-controlling interest
|
|
197
|
|
Fair value of previously held equity investment
|
|
117
|
|
Total
|
|
392
|
|
|
|
|
|
Net assets acquired
|
|
409
|
|
Gain on bargain purchase
|
|
17
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
CIRR deposits (1)
|
124
|
|
|
197
|
|
Margin calls related to share forward agreements
|
264
|
|
|
72
|
|
Cash pledged as collateral under credit facilities
|
50
|
|
|
—
|
|
Tax withholding deposits
|
11
|
|
|
49
|
|
Total restricted cash
|
449
|
|
|
318
|
|
Long-term restricted cash
(related to CIRR deposits and margin calls)
|
181
|
|
|
150
|
|
Short-term restricted cash
|
268
|
|
|
168
|
|
|
As at December 31, 2014
|
||||||
(In US$ millions)
|
Original cost
|
|
Cumulative unrealized fair value gains/(losses)
|
|
Cumulative other than temporary impairments
|
|
Carrying value
|
Petromena
|
—
|
|
—
|
|
—
|
|
—
|
Sapura Kencana
|
373
|
|
(48)
|
|
—
|
|
325
|
Seadrill Partners - Common Units
|
821
|
|
(395)
|
|
—
|
|
426
|
Total
|
1,194
|
|
(443)
|
|
—
|
|
751
|
|
As at December 31, 2013
|
||||||
(In US$ millions)
|
Original cost
|
|
Cumulative unrealized fair value gains/(losses)
|
|
Cumulative other than temporary impairments
|
|
Carrying value
|
Petromena
|
20
|
|
—
|
|
(16)
|
|
4
|
Sapura Kencana
|
539
|
|
539
|
|
—
|
|
1,078
|
Total
|
559
|
|
539
|
|
(16)
|
|
1,082
|
|
Year ended December 31, 2014
|
||||||||||||
(In US$ millions)
|
Gross realized gains
|
|
Gross realized losses
|
|
Gross Unrealized gains
|
|
Gross Unrealized losses
|
|
Gross proceeds from sales
|
|
Recognition and purchases
|
|
Gain/(loss) reclassified into income
|
Petromena
|
6
|
|
—
|
|
—
|
|
—
|
|
10
|
|
—
|
|
—
|
Sapura Kencana
|
—
|
|
—
|
|
—
|
|
(456)
|
|
297
|
|
—
|
|
131
|
Seadrill Partners - Common Units
|
—
|
|
—
|
|
—
|
|
(395)
|
|
—
|
|
821
|
|
—
|
|
Year ended December 31, 2013
|
||||||||||||
(In US$ millions)
|
Gross realized gains
|
|
Gross realized losses
|
|
Gross Unrealized gains
|
|
Gross Unrealized losses
|
|
Gross proceeds from sales
|
|
Recognition and purchases
|
|
Gain/(loss) reclassified into income
|
Petromena
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Sapura Kencana
|
—
|
|
—
|
|
333
|
|
—
|
|
—
|
|
416
|
|
—
|
|
Year ended December 31, 2012
|
||||||||||||
(In US$ millions)
|
Gross realized gains
|
|
Gross realized losses
|
|
Gross Unrealized gains
|
|
Gross Unrealized losses
|
|
Gross proceeds from sales
|
|
Recognition and purchases
|
|
Gain/(loss) reclassified into income
|
Other
|
—
|
|
(19)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1)
|
Sapura Kencana
|
—
|
|
—
|
|
205
|
|
—
|
|
197
|
|
237
|
|
(84)
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Prepaid expenses
|
30
|
|
|
43
|
|
Deferred charges
|
42
|
|
|
38
|
|
Accrued revenue
|
—
|
|
|
43
|
|
Unrealized gains on derivative contracts
|
5
|
|
|
9
|
|
Reimbursable amounts due from customers
|
79
|
|
|
59
|
|
Deferred mobilization cost
|
7
|
|
|
57
|
|
Deferred tax asset
|
9
|
|
|
—
|
|
Taxes receivable
|
29
|
|
|
28
|
|
Other current assets
|
72
|
|
|
86
|
|
Total other current assets
|
273
|
|
|
363
|
|
|
December 31, 2014
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
Varia Perdana Sdn Bhd ("Varia Perdana")
|
—
|
%
|
|
—
|
%
|
|
49.0
|
%
|
Tioman Drilling Company Sdn Bhd ("Tioman Drilling")
|
—
|
%
|
|
—
|
%
|
|
49.0
|
%
|
Archer
|
39.9
|
%
|
|
39.9
|
%
|
|
39.9
|
%
|
Asia Offshore Drilling Ltd ("AOD")
|
(1)
|
|
|
(1)
|
|
|
66.2
|
%
|
Sevan Drilling ASA ("Sevan Drilling")
|
(1)
|
|
|
(1)
|
|
|
28.5
|
%
|
Seabras Sapura Participacoes SA ("Seabras Sapura Participacoes")
|
50.0
|
%
|
|
50.0
|
%
|
|
50.0
|
%
|
Seabras Sapura Holding GmbH ("Seabras Sapura Holdco")
|
50.0
|
%
|
|
50.0
|
%
|
|
50.0
|
%
|
Itaunas Drilling B.V. ("Itaunas Drilling")
|
30.0
|
%
|
|
30.0
|
%
|
|
30.0
|
%
|
Camburi Drilling B.V. ("Camburi Drilling")
|
30.0
|
%
|
|
30.0
|
%
|
|
30.0
|
%
|
Sahy Drilling B.V. ("Sahy Drilling")
|
30.0
|
%
|
|
30.0
|
%
|
|
30.0
|
%
|
Seadrill Partners ("SDLP")
|
(2)
|
|
|
(1)
|
|
|
(1)
|
|
i.
|
42%
in Seadrill Operating LP
: Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners.
|
ii.
|
49%
Seadrill Capricorn Holdings LLC
: Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock.
|
iii.
|
39%
in Seadrill Deepwater Drillship Ltd
and
29%
indirect interest in Seadrill Mobile Units (Nigeria) Ltd.
: Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock.
|
|
As of December 31, 2014
|
||||||||||
(In US$ millions)
|
Current assets
|
|
|
Non-current
assets
|
|
|
Current liabilities
|
|
|
Non-current liabilities
|
|
Archer
|
633
|
|
|
1,171
|
|
|
441
|
|
|
817
|
|
Seabras Sapura Participacoes
|
17
|
|
|
194
|
|
|
14
|
|
|
149
|
|
Seabras Sapura Holding
|
104
|
|
|
690
|
|
|
52
|
|
|
730
|
|
Itaunas Drilling
|
—
|
|
|
187
|
|
|
137
|
|
|
42
|
|
Camburi Drilling
|
1
|
|
|
336
|
|
|
133
|
|
|
183
|
|
Sahy Drilling
|
—
|
|
|
173
|
|
|
109
|
|
|
53
|
|
Seadrill Partners
|
762
|
|
|
5,585
|
|
|
686
|
|
|
3,617
|
|
Total
|
1,517
|
|
|
8,336
|
|
|
1,572
|
|
|
5,591
|
|
|
December 31, 2013
|
||||||||||
(In US$ millions)
|
Current assets
|
|
|
Non-current
assets
|
|
|
Current liabilities
|
|
|
Non-current liabilities
|
|
Archer
|
594
|
|
|
1,201
|
|
|
476
|
|
|
684
|
|
Seabras Sapura Participacoes
|
12
|
|
|
129
|
|
|
3
|
|
|
112
|
|
Seabras Sapura Holding
|
—
|
|
|
219
|
|
|
—
|
|
|
219
|
|
Itaunas Drilling
|
1
|
|
|
161
|
|
|
44
|
|
|
108
|
|
Camburi Drilling
|
1
|
|
|
199
|
|
|
95
|
|
|
91
|
|
Sahy Drilling
|
1
|
|
|
155
|
|
|
40
|
|
|
103
|
|
Total
|
609
|
|
|
2,064
|
|
|
658
|
|
|
1,317
|
|
|
Year ended December 31, 2014
|
|||||||
(In US$ millions)
|
Operating revenues
|
|
|
Net operating
income
|
|
|
Net
income
|
|
Archer
|
2,254
|
|
|
26
|
|
|
(96
|
)
|
Seabras Sapura Participacoes
|
29
|
|
|
(6
|
)
|
|
(6
|
)
|
Seabras Sapura Holding
|
39
|
|
|
24
|
|
|
13
|
|
Itaunas Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Camburi Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Sahy Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Seadrill Partners
|
1,343
|
|
|
615
|
|
|
315
|
|
Total
|
3,665
|
|
|
659
|
|
|
226
|
|
|
Year ended December 31, 2013
|
|||||||
(In US$ millions)
|
Operating revenues
|
|
|
Net operating
income
|
|
|
Net
income
|
|
Archer
|
2,041
|
|
|
(438
|
)
|
|
(519
|
)
|
Seabras Sapura Participacoes
|
—
|
|
|
(2
|
)
|
|
(1
|
)
|
Seabras Sapura Holding
|
—
|
|
|
—
|
|
|
(1
|
)
|
Itaunas Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Camburi Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Sahy Drilling
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
2,041
|
|
|
(440
|
)
|
|
(521
|
)
|
|
Year ended December 31, 2012
|
|||||||
(In US$ millions)
|
Operating revenues
|
|
|
Net operating
income
|
|
|
Net
income
|
|
Varia Perdana
|
106
|
|
|
85
|
|
|
83
|
|
Tioman
|
157
|
|
|
12
|
|
|
6
|
|
Archer
|
2,191
|
|
|
(322
|
)
|
|
(375
|
)
|
AOD
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
Sevan Drilling
|
173
|
|
|
11
|
|
|
(12
|
)
|
Seabras Sapura Participacoes
|
—
|
|
|
—
|
|
|
(1
|
)
|
Sahy Drilling
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
Total
|
2,627
|
|
|
(217
|
)
|
|
(302
|
)
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Archer
|
—
|
|
|
8
|
|
Seabras Sapura Participacoes
|
21
|
|
|
12
|
|
Seabras Sapura Holding
|
117
|
|
|
109
|
|
Itaunas Drilling
|
3
|
|
|
3
|
|
Camburi Drilling
|
6
|
|
|
4
|
|
Sahy Drilling
|
4
|
|
|
4
|
|
Seadrill Partners - Total direct ownership interests
|
2,091
|
|
|
—
|
|
Seadrill Partners - Subordinated Units
|
412
|
|
|
—
|
|
Seadrill Partners - Seadrill Member Interest and IDRs *
|
244
|
|
|
—
|
|
Total
|
2,898
|
|
|
140
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
Tioman
|
—
|
|
|
—
|
|
|
10
|
|
Varia Perdana
|
—
|
|
|
—
|
|
|
105
|
|
Archer
|
218
|
|
|
253
|
|
|
370
|
|
AOD
|
—
|
|
|
—
|
|
|
110
|
|
Sevan Drilling
|
—
|
|
|
—
|
|
|
189
|
|
Seabras Sapura Participacoes
|
24
|
|
|
13
|
|
|
22
|
|
Seabras Sapura Holding
|
6
|
|
|
—
|
|
|
—
|
|
Itaunas Drilling
|
3
|
|
|
3
|
|
|
3
|
|
Camburi Drilling
|
6
|
|
|
4
|
|
|
4
|
|
Sahy Drilling
|
4
|
|
|
4
|
|
|
3
|
|
Seadrill Partners *
|
N/A
|
|
|
—
|
|
|
—
|
|
Total
|
261
|
|
|
277
|
|
|
816
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Opening balance
|
3,419
|
|
|
1,882
|
|
Additions
|
2,433
|
|
|
4,930
|
|
Capitalized interest and loan related costs
|
70
|
|
|
95
|
|
Re-classified as Drilling Units
|
(3,892
|
)
|
|
(3,335
|
)
|
Disposal of tender rigs
|
—
|
|
|
(153
|
)
|
Closing balance
|
2,030
|
|
|
3,419
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Cost
|
19,101
|
|
|
19,967
|
|
Accumulated depreciation
|
(2,991
|
)
|
|
(2,774
|
)
|
Re-classified as assets held for sale
|
(965
|
)
|
|
—
|
|
Net book value
|
15,145
|
|
|
17,193
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Cost
|
73
|
|
|
79
|
|
Accumulated depreciation
|
(27
|
)
|
|
(30
|
)
|
Net book value
|
46
|
|
|
49
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Net book balance at January 1
|
1,200
|
|
|
1,320
|
|
Disposals and deconsolidations
|
(315
|
)
|
|
(120
|
)
|
Impairment of goodwill
|
(232
|
)
|
|
—
|
|
Re-classified as assets held for sale
|
(49
|
)
|
|
—
|
|
Net book balance of December 31
|
604
|
|
|
1,200
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net carrying amount
|
||||||
Favorable contracts - intangible assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
—
|
|
|
—
|
|
|
—
|
|
|
51
|
|
|
(49
|
)
|
|
2
|
|
Amortization of favorable contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
Derecognition of fully amortized contracts
|
—
|
|
|
—
|
|
|
—
|
|
|
(51
|
)
|
|
51
|
|
|
—
|
|
Balance at end of period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unfavorable contracts - intangible liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
444
|
|
|
(67
|
)
|
|
377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Additions
|
—
|
|
|
—
|
|
|
—
|
|
|
444
|
|
|
—
|
|
|
444
|
|
Amortization of unfavorable contracts
|
—
|
|
|
(130
|
)
|
|
(130
|
)
|
|
—
|
|
|
(67
|
)
|
|
(67
|
)
|
Balance at end of period
|
444
|
|
|
(197
|
)
|
|
247
|
|
|
444
|
|
|
(67
|
)
|
|
377
|
|
|
Year ended December 31
|
||||||||||||||||
(In US$ millions)
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
Total
|
|
Amortization of unfavorable contracts
|
116
|
|
|
65
|
|
|
43
|
|
|
23
|
|
|
—
|
|
|
247
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Deferred charges
|
103
|
|
|
114
|
|
Deferred tax effect of internal transfer of assets
|
102
|
|
|
131
|
|
Deferred mobilization costs
|
47
|
|
|
65
|
|
Deferred consideration (1)
|
154
|
|
|
142
|
|
Accrued revenue
|
—
|
|
|
155
|
|
Other
|
8
|
|
|
5
|
|
Total other non-current assets
|
414
|
|
|
612
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Debt arrangement fees
|
385
|
|
|
338
|
|
Accumulated amortization
|
(240
|
)
|
|
(186
|
)
|
Total book value
|
145
|
|
|
152
|
|
Less: Short-term amount
|
(42
|
)
|
|
(38
|
)
|
Long-term amount
|
103
|
|
|
114
|
|
|
|
|
|
||
Amortization for the period
|
54
|
|
|
43
|
|
(In US$ millions)
|
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Credit facilities:
|
|
|
|
|
|
|
$1,500 facility
|
|
—
|
|
|
706
|
|
$1,200 facility
|
|
—
|
|
|
733
|
|
$700 facility
|
|
420
|
|
|
490
|
|
$1,121 facility
|
|
—
|
|
|
72
|
|
$2,000 facility (NADL)
|
|
1,367
|
|
|
1,503
|
|
$400 facility
|
|
280
|
|
|
320
|
|
$550 facility
|
|
—
|
|
|
440
|
|
$420 facility
|
|
351
|
|
|
—
|
|
$440 facility
|
|
258
|
|
|
293
|
|
$450 facility
|
|
416
|
|
|
450
|
|
$1,450 facility
|
|
433
|
|
|
1,390
|
|
$360 facility (Asia Offshore Drilling)
|
|
309
|
|
|
345
|
|
$300 facility
|
|
210
|
|
|
234
|
|
$1,750 facility (Sevan Drilling)
|
|
1,225
|
|
|
1,400
|
|
$150 facility
|
|
150
|
|
|
150
|
|
$450 facility (2013)
|
|
397
|
|
|
450
|
|
$1,500 facility (2014)
|
|
1,469
|
|
|
—
|
|
$1,350 facility
|
|
1,317
|
|
|
—
|
|
Total credit facilities
|
|
8,602
|
|
|
8,976
|
|
|
|
|
|
|
||
Ship Finance Loans
|
|
|
|
|
|
|
$420 facility (SFL Polaris)
|
|
—
|
|
|
387
|
|
$375 facility (SFL Hercules)
|
|
284
|
|
|
362
|
|
$390 facility (SFL Deepwater)
|
|
303
|
|
|
383
|
|
$475 facility (SFL Linus)
|
|
451
|
|
|
—
|
|
Total Ship Finance Loans
|
|
1,038
|
|
|
1,132
|
|
|
|
|
|
|
||
Unsecured bonds and convertible bonds
|
|
|
|
|
|
|
Total unsecured bonds
|
|
2,856
|
|
|
2,584
|
|
Convertible bonds
|
|
—
|
|
|
577
|
|
Total unsecured bonds and convertible bonds
|
|
2,856
|
|
|
3,161
|
|
|
|
|
|
|
||
Other credit facilities with corresponding restricted cash deposits
|
|
124
|
|
|
197
|
|
Total debt
|
|
12,620
|
|
|
13,466
|
|
Less: current portion
|
|
(2,309
|
)
|
|
(1,566
|
)
|
Long-term portion
|
|
10,311
|
|
|
11,900
|
|
•
|
Aggregated minimum liquidity requirement for the group: to maintain cash and cash equivalents of at least
$150 million
within the group.
|
•
|
Interest coverage ratio: to maintain an EBITDA to interest expense ratio of at least
2.5
:1.
|
•
|
Current ratio: to maintain current assets to current liabilities ratio of at least
1
:1. Current assets are defined as book value less minimum liquidity, but including up to
20.0%
of shares in listed companies owned
20.0%
or more. Current liabilities are defined as book value less the current portion of long term debt.
|
•
|
Equity ratio: to maintain total equity to total assets ratio of at least
30.0%
. Both equity and total assets are adjusted for the difference between book and market values of drilling units.
|
•
|
Leverage ratio: to maintain a ratio of net debt to EBITDA no greater than
4.5
:1. Net debt is calculated as all interest bearing debt less cash and cash equivalents excluding minimum liquidity requirements.
|
•
|
Debt service coverage ratio: The $1,450 secured debt facility and the $1,500 secured debt facility (2014) contain a requirement for the individual borrowers to maintain a ratio of EBITDA of the respective borrower to debt services (being all finance charges and principal) of not less than 1.15:1.
|
•
|
total loss or sale of a drilling unit securing a credit facility;
|
•
|
cancellation or termination of any existing charter contract or satisfactory drilling contract; and
|
•
|
a change of control.
|
•
|
failure to comply with the financial or insurance covenants;
|
•
|
cross-default to other indebtedness held by both Seadrill Partners and its subsidiaries and by the Company;
|
•
|
failure by the Company to remain listed on a stock exchange;
|
•
|
the occurrence of a material adverse change;
|
•
|
revocation, termination, or modification of any authorization, license, consent, permission, or approval as necessary to conduct operations as contemplated by the applicable Rig Financing Agreement; and
|
•
|
the destruction, abandonment, seizure, appropriation or forfeiture of property of the guarantors or the Company and its subsidiaries, or the limitation by seizure, expropriation, nationalization, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority, of the authority or ability of the Company or any subsidiary thereof to conduct its business, which has or reasonably may be expected to have a material adverse effect.
|
•
|
guarantees from rig owning subsidiaries (guarantors),
|
•
|
a first priority share pledge over all the shares issued by each of the guarantors,
|
•
|
a first priority perfected mortgage in all collateral rigs and any deed of covenant thereto, subject to contractual agreed "quiet enjoyment" undertakings with the end-user of the collateral rigs to be entered into if this is required by the relevant end-user pursuant to the relevant contract,
|
•
|
a first priority security interest over each of the rig owners' with respect to all earnings and proceeds of insurance, and
|
•
|
a first priority security interest in the earnings accounts.
|
•
|
Ship Finance must maintain cash and cash equivalents of at least
$25 million
.
|
•
|
Ship Finance must maintain positive working capital.
|
•
|
Ship Finance must have a ratio of total liabilities to total assets of at least
0.8
to
1.0
at the end of each quarter.
|
•
|
The Company's covenants under the bank loans listed above also apply.
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Taxes payable
|
160
|
|
|
332
|
|
Employee withheld taxes, social security and vacation payment
|
122
|
|
|
105
|
|
Intangible liabilities - unfavorable contracts (1)
|
116
|
|
|
109
|
|
Accrued interest expense
|
77
|
|
|
70
|
|
Liabilities relating to investment in shares (2)
|
167
|
|
|
198
|
|
Deferred mobilization revenue
|
178
|
|
|
192
|
|
Derivative financial instruments (3)
|
372
|
|
|
145
|
|
Accrued expenses
|
292
|
|
|
458
|
|
Construction obligation (4)
|
428
|
|
|
483
|
|
Other current liabilities
|
22
|
|
|
22
|
|
Total other current liabilities
|
1,934
|
|
|
2,114
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Accrued pension liabilities
|
84
|
|
|
58
|
|
Deferred mobilization revenues
|
224
|
|
|
311
|
|
Intangible liabilities - unfavorable contracts (1)
|
131
|
|
|
268
|
|
Derivative financial instruments (2)
|
257
|
|
|
250
|
|
Other non-current liabilities
|
3
|
|
|
11
|
|
Total other non-current liabilities
|
699
|
|
|
898
|
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
All shares are common shares of $2.00 par value each
|
Shares
|
|
|
$millions
|
|
|
Shares
|
|
|
$millions
|
|
|
Shares
|
|
|
$millions
|
|
Authorized share capital
|
800,000,000
|
|
|
1,600
|
|
|
800,000,000
|
|
|
1,600
|
|
|
800,000,000
|
|
|
1,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Issued and fully paid share capital
|
493,078,678
|
|
|
986
|
|
|
469,250,933
|
|
|
939
|
|
|
469,250,933
|
|
|
938
|
|
Treasury shares held by Company
|
(318,740
|
)
|
|
(1
|
)
|
|
(272,441
|
)
|
|
(1
|
)
|
|
(72,859
|
)
|
|
—
|
|
Outstanding shares in issue
|
492,759,938
|
|
|
985
|
|
|
468,978,492
|
|
|
938
|
|
|
469,178,074
|
|
|
938
|
|
(In US$ millions)
|
|
Ship Finance International Ltd VIEs
|
|
North Atlantic Drilling Ltd
|
|
Seadrill Partners LLC
|
|
Asia Offshore Drilling Ltd
|
|
Sevan Drilling ASA
|
|
Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited
|
|
Total
|
|||||||
December 31, 2011
|
|
215
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
325
|
|
Changes in 2012
|
|
20
|
|
|
10
|
|
|
69
|
|
|
—
|
|
|
—
|
|
|
|
|
|
99
|
|
Net income attributable to non-controlling interest in 2012
|
|
39
|
|
|
48
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
|
|
|
97
|
|
December 31, 2012
|
|
274
|
|
|
168
|
|
|
79
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
521
|
|
Changes in 2013
|
|
(220
|
)
|
|
(56
|
)
|
|
15
|
|
|
100
|
|
|
197
|
|
|
—
|
|
|
36
|
|
Net income attributable to non-controlling interest in 2013
|
|
24
|
|
|
61
|
|
|
21
|
|
|
11
|
|
|
16
|
|
|
—
|
|
|
133
|
|
December 31, 2013
|
|
78
|
|
|
173
|
|
|
115
|
|
|
111
|
|
|
213
|
|
|
—
|
|
|
690
|
|
Changes in 2014
|
|
(57
|
)
|
|
(4
|
)
|
|
(115
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(172
|
)
|
Net income attributable to non-controlling interest in 2014
|
|
11
|
|
|
36
|
|
|
—
|
|
|
23
|
|
|
38
|
|
|
—
|
|
|
108
|
|
December 31, 2014
|
|
32
|
|
|
205
|
|
|
—
|
|
|
134
|
|
|
251
|
|
|
4
|
|
|
626
|
|
(In US$ millions)
|
December 31,
2014 |
|
December 31,
2013 |
||
Unrealized (loss)/gain on marketable securities
|
(443
|
)
|
|
539
|
|
Unrealized gain on foreign exchange
|
51
|
|
|
73
|
|
Actuarial loss relating to pension
|
(57
|
)
|
|
(35
|
)
|
Share in unrealized gains from associated companies
|
1
|
|
|
—
|
|
Unrealized loss on interest rate swaps in VIEs
|
—
|
|
|
(49
|
)
|
Accumulated other comprehensive (loss)/income
|
(448
|
)
|
|
528
|
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
Options
|
|
|
Weighted average exercise price
$
|
|
|
Options
|
|
|
Weighted average exercise price
$
|
|
|
Options
|
|
|
Weighted average exercise price
$
|
|
Outstanding at beginning of year
|
2,838,758
|
|
|
28.53
|
|
|
3,875,891
|
|
|
29.88
|
|
|
5,420,438
|
|
|
26.16
|
|
Granted
|
—
|
|
|
—
|
|
|
270,000
|
|
|
45.66
|
|
|
181,012
|
|
|
37.41
|
|
Exercised
|
(461,477
|
)
|
|
20.19
|
|
|
(700,418
|
)
|
|
22.60
|
|
|
(1,415,000
|
)
|
|
16.39
|
|
Forfeited
|
(136,165
|
)
|
|
34.57
|
|
|
(606,715
|
)
|
|
32.30
|
|
|
(312,559
|
)
|
|
30.84
|
|
Outstanding at end of year
|
2,241,116
|
|
|
35.10
|
|
|
2,838,758
|
|
|
28.53
|
|
|
3,875,891
|
|
|
29.88
|
|
Exercisable at end of year
|
1,169,584
|
|
|
27.38
|
|
|
1,080,306
|
|
|
27.38
|
|
|
1,164,214
|
|
|
21.19
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Non-current liabilities
|
82
|
|
|
58
|
|
Deferred tax
|
(22
|
)
|
|
(16
|
)
|
Shareholders equity
|
60
|
|
|
42
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
|
2012
|
|
Service cost
|
13
|
|
|
14
|
|
|
12
|
|
Interest cost on prior years' benefit obligation
|
7
|
|
|
7
|
|
|
5
|
|
Gross pension cost for the year
|
20
|
|
|
21
|
|
|
17
|
|
Expected return on plan assets
|
(6
|
)
|
|
(4
|
)
|
|
(5
|
)
|
Administration charges
|
1
|
|
|
—
|
|
|
—
|
|
Net pension cost for the year
|
15
|
|
|
17
|
|
|
12
|
|
Social security cost
|
2
|
|
|
2
|
|
|
2
|
|
Amortization of actuarial gains/losses
|
2
|
|
|
2
|
|
|
—
|
|
Impact of settlement/curtailment funded status
|
—
|
|
|
(2
|
)
|
|
(4
|
)
|
Total net pension cost
|
19
|
|
|
19
|
|
|
10
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Projected benefit obligations at end of period
|
186
|
|
|
180
|
|
Plan assets at market value
|
(114
|
)
|
|
(129
|
)
|
Accrued pension liability exclusive social security
|
72
|
|
|
51
|
|
Social security related to pension obligations
|
10
|
|
|
7
|
|
Accrued pension liabilities
|
82
|
|
|
58
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Projected benefit obligations at beginning of period
|
180
|
|
|
171
|
|
Interest cost
|
7
|
|
|
7
|
|
Service cost
|
13
|
|
|
14
|
|
Benefits paid
|
(2
|
)
|
|
(2
|
)
|
Change in unrecognized actuarial gain
|
23
|
|
|
13
|
|
Foreign currency translations
|
(35
|
)
|
|
(15
|
)
|
Acquisition/transfer members
|
—
|
|
|
(8
|
)
|
Projected benefit obligations at end of period
|
186
|
|
|
180
|
|
(In US$ millions)
|
2014
|
|
|
2013
|
|
Fair value of plan assets at beginning of year
|
129
|
|
|
122
|
|
Estimated return
|
2
|
|
|
5
|
|
Contribution by employer
|
17
|
|
|
19
|
|
Administration charges
|
(1
|
)
|
|
—
|
|
Benefits paid
|
(2
|
)
|
|
(2
|
)
|
Change in unrecognized actuarial loss
|
(9
|
)
|
|
—
|
|
Foreign currency translations
|
(22
|
)
|
|
(10
|
)
|
Acquisition/transfer members
|
—
|
|
|
(5
|
)
|
Fair value of plan assets at end of year
|
114
|
|
|
129
|
|
(In %)
|
2014
|
|
|
2013
|
|
Equity securities
|
7.2
|
%
|
|
4.2
|
%
|
Debt securities
|
51.9
|
%
|
|
55.7
|
%
|
Real estate
|
14.2
|
%
|
|
13.9
|
%
|
Money market
|
23.5
|
%
|
|
24.7
|
%
|
Other
|
3.2
|
%
|
|
1.50
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
(In US$ millions)
|
December 31, 2014
|
|
2015
|
11
|
|
2016
|
12
|
|
2017
|
12
|
|
2018
|
12
|
|
2019
|
13
|
|
2020-2024
|
69
|
|
Total payments expected during the next 10 years
|
129
|
|
(In US$ millions)
|
|
December 31,
2014 |
|
Rig financing agreements and Loan Agreements
|
|
237
|
|
$109.5 million Vendor financing loan
|
|
110
|
|
Deferred consideration receivable
|
|
74
|
|
Other receivables
|
|
264
|
|
Other payables
|
|
(77
|
)
|
•
|
Ship Finance International Limited ("Ship Finance")
|
•
|
Metrogas
|
•
|
Archer
|
•
|
Frontline Management (Bermuda) Limited ("Frontline")
|
Maturity date
|
|
Total outstanding principal as at December 31, 2014
|
|
Receive rate
|
|
Pay rate range
|
|||
|
|
(In US$ millions)
|
|
|
|
|
|
|
|
Expiring in 2015
|
|
50
|
|
|
3 month LIBOR
|
|
4.63%
|
|
4.63%
|
Expiring in 2016
|
|
1,350
|
|
|
3 month LIBOR
|
|
2.14%
|
|
3.36%
|
Expiring in 2016
|
|
35
|
|
|
6 month LIBOR
|
|
3.83%
|
|
3.83%
|
Expiring in 2017
|
|
1,428
|
|
|
3 month LIBOR
|
|
0.74%
|
|
3.8%
|
Expiring in 2018
|
|
1,000
|
|
|
3 month LIBOR
|
|
2.83%
|
|
3.34%
|
Expiring in 2019
|
|
707
|
|
|
3 month LIBOR
|
|
1.11%
|
|
1.36%
|
Expiring in 2020
|
|
3,141
|
|
|
3 month LIBOR
|
|
1.36%
|
|
2.19%
|
Expiring in 2022
|
|
207
|
|
|
3 month LIBOR
|
|
1.38%
|
|
1.38%
|
Total
|
|
7,918
|
|
|
|
|
|
|
|
Variable interest entity
|
|
Outstanding principal as at December 31, 2014
|
|
Receive rate
|
|
Pay rate
|
|
Length of contract
|
|
|
(In US$ millions)
|
|
|
|
|
|
|
SFL Linus Limited
(West Linus)
|
|
4.0
|
|
1 month LIBOR
|
|
2.01%
|
|
Mar 2014 - Oct 2018
|
SFL Linus Limited
(West Linus)
|
|
4.0
|
|
2 month LIBOR
|
|
2.01%
|
|
Mar 2014 - Nov 2018
|
SFL Linus Limited
(West Linus)
|
|
215.7
|
|
3 month LIBOR
|
|
1.77%
|
|
Dec 2013 - Dec 2018
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||
(In US$ millions)
|
|
Fair value
|
|
|
Carrying
value
|
|
|
Fair value
|
|
|
Carrying
value
|
|
Cash and cash equivalents
|
|
831
|
|
|
831
|
|
|
744
|
|
|
744
|
|
Restricted cash
|
|
449
|
|
|
449
|
|
|
318
|
|
|
318
|
|
Current portion of floating rate debt
|
|
1,928
|
|
|
1,928
|
|
|
1,315
|
|
|
1,315
|
|
Long-term portion of floating rate debt
|
|
7,713
|
|
|
7,713
|
|
|
8,793
|
|
|
8,793
|
|
Current portion of fixed rate CIRR loans
|
|
39
|
|
|
39
|
|
|
47
|
|
|
47
|
|
Long term portion of fixed rate CIRR loans
|
|
84
|
|
|
84
|
|
|
150
|
|
|
150
|
|
Fixed interest convertible bonds
|
|
—
|
|
|
—
|
|
|
704
|
|
|
577
|
|
Fixed interest bonds - short term
|
|
323
|
|
|
342
|
|
|
—
|
|
|
—
|
|
Fixed interest bonds - long term
|
|
2,015
|
|
|
1,892
|
|
|
1,837
|
|
|
1,842
|
|
Floating interest bonds - short term
|
|
—
|
|
|
—
|
|
|
204
|
|
|
204
|
|
Floating interest bonds - long term
|
|
483
|
|
|
622
|
|
|
541
|
|
|
538
|
|
|
|
Fair value
|
|
|
Fair value measurements
at reporting date using
|
|||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
|
Significant Other Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
(In US$ millions)
|
|
December 31, 2014
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
||||
Marketable securities
|
|
751
|
|
|
751
|
|
|
—
|
|
|
—
|
|
Interest rate swap contracts – short term receivable
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Total assets
|
|
756
|
|
|
751
|
|
|
5
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||
Interest rate swap contracts – short term payable
|
|
139
|
|
|
—
|
|
|
139
|
|
|
—
|
|
Interest rate swap contracts – long term payable
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Cross currency interest rate swap contracts – short term payable
|
|
201
|
|
|
—
|
|
|
201
|
|
|
—
|
|
Foreign exchange forwards – short term payable
|
|
27
|
|
|
—
|
|
|
27
|
|
|
—
|
|
Other derivative instruments – short term payable
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Total liabilities
|
|
375
|
|
|
—
|
|
|
375
|
|
|
—
|
|
|
|
Fair value
|
|
|
Fair value measurements
at reporting date using
|
|||||||
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
|
Significant Other Observable Inputs
|
|
|
Significant Unobservable Inputs
|
|
|
(In US$ millions)
|
|
December 31, 2013
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level 3)
|
|
Assets:
|
|
|
|
|
|
|
|
|
||||
Marketable securities
|
|
1,082
|
|
|
1,078
|
|
|
—
|
|
|
4
|
|
Interest rate swap contracts – short term receivable
|
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
Foreign exchange forwards – short term receivable
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Other derivative instruments – short term receivable
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Total assets
|
|
1,091
|
|
|
1,078
|
|
|
9
|
|
|
4
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||
Interest rate swap contracts – short term payable
|
|
94
|
|
|
—
|
|
|
94
|
|
|
—
|
|
Interest rate swap contracts – long term payable
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Cross currency swap contracts – short term payable
|
|
46
|
|
|
—
|
|
|
46
|
|
|
—
|
|
Foreign exchange forwards – short term payable
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
Other derivative instruments – short term payable
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Total liabilities
|
|
147
|
|
|
—
|
|
|
147
|
|
|
—
|
|
(In US$ millions)
|
|
|
Beginning balance January 1, 2014
|
4
|
|
Realization
|
6
|
|
Proceeds on disposal
|
(10
|
)
|
Closing balance December 31, 2014
|
—
|
|
(US$ millions)
|
|
2014
|
|
|
2013
|
|
|
2012
|
|
Petroleo Brasileiro S.A ("Petrobras")
|
|
20
|
%
|
|
16
|
%
|
|
15
|
%
|
Total S.A Group ("Total")
|
|
13
|
%
|
|
14
|
%
|
|
14
|
%
|
Statoil ASA ("Statoil")
|
|
13
|
%
|
|
14
|
%
|
|
9
|
%
|
Exxon Mobil Corp ("Exxon")
|
|
10
|
%
|
|
12
|
%
|
|
11
|
%
|
Royal Dutch Shell Group ("Shell")
|
|
2
|
%
|
|
7
|
%
|
|
10
|
%
|
(In US$ millions)
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|
2019
|
|
|
2020 and thereafter
|
|
|
Total
|
|
Newbuildings
|
4,722
|
|
|
667
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,389
|
|
(In US$ millions)
|
December 31, 2014
|
|
|
December 31, 2013
|
|
Guarantees to customers of the Company's own performance
|
1,824
|
|
|
1,541
|
|
Guarantee in favor of banks
(1)
|
1,254
|
|
|
970
|
|
Guarantee in favor of suppliers (1) (2)
|
3,898
|
|
|
6,321
|
|
Guarantee in favor of Variable Interest Entities
|
1,428
|
|
|
1,674
|
|
Total
|
8,404
|
|
|
10,506
|
|
Year
|
(In US$ millions)
|
|
2015
|
15
|
|
2016
|
12
|
|
2017
|
10
|
|
2018
|
7
|
|
2019
|
7
|
|
2020 and thereafter
|
21
|
|
Total
|
72
|
|
Unit
|
|
Effective
from
|
|
Sale value
(In $ millions)
|
|
First
repurchase
option
(In $ millions)
|
|
Month of first
repurchase
option
|
|
Last
repurchase
option *
(In $ millions)
|
|
Month of last
repurchase
Option *
|
West Taurus
|
|
Nov 2008
|
|
850
|
|
418
|
|
February 2015
|
|
149
|
|
November 2023
|
West Hercules
|
|
Oct 2008
|
|
850
|
|
580
|
|
August 2011
|
|
135
|
|
August 2023
|
West Linus
|
|
Jul 2013
|
|
600
|
|
370
|
|
June 2018
|
|
170
|
|
June 2028
|
(In US$ millions)
|
|
December 31, 2014
|
|
December 31, 2013
|
|||||||||||||||||||
|
|
SFL West
Polaris Limited ** |
|
SFL
Deepwater Limited |
|
|
SFL
Hercules Limited |
|
|
SFL
Linus Limited |
|
|
SFL
West Polaris Limited |
|
|
SFL
Deepwater Ltd. |
|
|
SFL
Hercules Limited |
|
|
SFL
Linus Limited |
|
Name of unit
|
|
West Polaris
|
|
West Taurus
|
|
|
West Hercules
|
|
|
West Linus
|
|
|
West
Polaris |
|
|
West
Taurus and West Hercules |
|
|
West Hercules
|
|
|
West Linus
|
|
Investment in finance lease
|
|
N/A
|
|
429
|
|
|
426
|
|
|
574
|
|
|
488
|
|
|
515
|
|
|
477
|
|
|
195
|
|
Amount due from related parties *
|
|
N/A
|
|
45
|
|
|
5
|
|
|
14
|
|
|
45
|
|
|
30
|
|
|
25
|
|
|
—
|
|
Other assets
|
|
N/A
|
|
13
|
|
|
10
|
|
|
—
|
|
|
5
|
|
|
13
|
|
|
10
|
|
|
—
|
|
Total assets
|
|
N/A
|
|
487
|
|
|
441
|
|
|
588
|
|
|
538
|
|
|
558
|
|
|
512
|
|
|
195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Short-term interest bearing debt
|
|
N/A
|
|
32
|
|
|
28
|
|
|
51
|
|
|
36
|
|
|
80
|
|
|
28
|
|
|
—
|
|
Long-term interest bearing debt
|
|
N/A
|
|
271
|
|
|
256
|
|
|
400
|
|
|
351
|
|
|
303
|
|
|
333
|
|
|
—
|
|
Other liabilities
|
|
N/A
|
|
6
|
|
|
1
|
|
|
3
|
|
|
2
|
|
|
6
|
|
|
2
|
|
|
2
|
|
Long-term debt due to related parties *
|
|
N/A
|
|
145
|
|
|
145
|
|
|
125
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
195
|
|
Total liabilities
|
|
N/A
|
|
454
|
|
|
430
|
|
|
579
|
|
|
534
|
|
|
534
|
|
|
508
|
|
|
197
|
|
Equity
|
|
N/A
|
|
33
|
|
|
11
|
|
|
9
|
|
|
4
|
|
|
24
|
|
|
4
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Book value of units in the Company's consolidated accounts
|
|
N/A
|
|
450
|
|
|
603
|
|
|
581
|
|
|
577
|
|
|
458
|
|
|
617
|
|
|
162
|
|
Date
|
Number of Common Units Issued to the Public
|
|
Number of Common Units Issued to Seadrill
|
|
Offering Price ($)
|
|
Gross proceeds from public
($'millions) |
|
Net proceeds from public ($'millions)
|
|
Seadrill's ownership after the offering
|
|
October 24, 2012 (IPO)
|
10,062,500
|
|
14,752,525
|
|
22.00
|
|
221
|
|
203
|
|
75.67
|
%
|
October 18, 2013
|
—
|
|
3,310,622
|
|
32.29
|
|
—
|
|
—
|
|
77.47
|
%
|
December 13, 2013
|
12,880,000
|
|
3,394,916
|
|
29.50
|
|
380
|
|
365
|
|
62.35
|
%
|
(In US$millions)
|
T-15
|
|
T-16
|
|
West Sirius
|
|
West Leo
|
|
Total
|
|
Adjusted sales price *
|
74
|
|
68
|
|
922
|
|
729
|
|
1,793
|
|
Less net assets transferred
|
5
|
|
—
|
|
(375
|
)
|
(116
|
)
|
(486
|
)
|
Excess of sales price over net assets transferred
|
79
|
|
68
|
|
547
|
|
613
|
|
1,307
|
|
Deemed contribution to Seadrill shareholders from non-controlling interest
|
19
|
|
16
|
|
105
|
|
69
|
|
209
|
|
(In US$ millions)
|
|
As at December 31, 2014
|
|
ASSETS
|
|
|
|
Current assets
|
|
|
|
Cash and cash equivalents
|
|
27
|
|
Accounts receivables, net
|
|
78
|
|
Deferred tax assets
|
|
9
|
|
Other current assets
|
|
20
|
|
Total current assets
|
|
134
|
|
|
|
|
|
Non-current assets
|
|
|
|
Drilling units
|
|
965
|
|
Deferred tax assets LT
|
|
5
|
|
Goodwill
|
|
49
|
|
Other non-current assets
|
|
86
|
|
Total non-current assets
|
|
1,105
|
|
Total assets
|
|
1,239
|
|
|
|
|
|
LIABILITIES
|
|
|
|
Current liabilities
|
|
|
|
Trade accounts payable
|
|
(2
|
)
|
Other current liabilities
|
|
(56
|
)
|
Total current liabilities
|
|
(58
|
)
|
|
|
|
|
Non-current liabilities
|
|
|
|
Other non-current liabilities
|
|
(50
|
)
|
Total non-current liabilities
|
|
(50
|
)
|
Total liabilities
|
|
(108
|
)
|
(In US$ millions) |
December 31, 2014
|
|
|
December 31, 2013
|
|
|
December 31, 2012
|
|
Non-cash investing activities
|
|
|
|
|
|
|||
Disposal of West Auriga - consideration received as a loan note (1)
|
100
|
|
|
—
|
|
|
—
|
|
Disposal of West Vela - deferred consideration receivable (1)
|
74
|
|
|
—
|
|
|
—
|
|
Disposal of tender rig business - deferred consideration received in shares (1)
|
—
|
|
|
416
|
|
|
—
|
|
Disposal of tender rig business - deferred consideration in receivables (1)
|
—
|
|
|
145
|
|
|
—
|
|
Acquisition of Archer shares, settled against existing related party loan (2)
|
—
|
|
|
55
|
|
|
—
|
|
Acquisition of AOD shares, settled against existing related party loan (3)
|
—
|
|
|
67
|
|
|
—
|
|
Non-cash financing activities
|
|
|
|
|
|
|||
Conversion of convertible bond into shares, decrease in long term debt (4)
|
584
|
|
|
—
|
|
|
—
|
|
Conversion of convertible bond into shares, net increase in equity (4)
|
615
|
|
|
—
|
|
|
—
|
|
Purchase of SFL Polaris, net increase in related party payables and net decrease in equity (5)
|
13
|
|
|
—
|
|
|
—
|
|
Sale of non-controlling interest, increase in receivables (6)
|
4
|
|
|
—
|
|
|
—
|
|
Dividend to non-controlling interests in VIEs (7)
|
—
|
|
|
223
|
|
|
—
|
|
Dividend payable to related party (8)
|
—
|
|
|
—
|
|
|
93
|
|
1.
|
Disposals of the
West Auriga
,
West Vela
, in 2014 and the disposal of the tender rig business in 2013 - refer to Note 11 - Disposals of businesses
|
2.
|
Private placement of Archer shares in February 2013 was settled against related party loan receivable - refer to Note 17 - Investments in associated companies
|
3.
|
Private placement of AOD shares in March 2013 was settled against elated party loan receivable - refer to Note 17 - Investments in associated companies
|
4.
|
Conversion of convertible bonds in July 2014 - refer to Note 23 - Long term debt
|
5.
|
Purchase of SFL Polaris from Ship Finance - refer to Note 35 - VIEs
|
6.
|
Sale of interests in Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited to Hiers Holding Limited - refer to Note 27 - Non-Controlling interests
|
7.
|
Dividends declared by VIEs in 2013 to Ship Finance was settled against related party balances with Ship Finance - refer to Note 27 - Non-Controlling interests
|
8.
|
Loan issued to Metrogas in 2012 - refer to Note 31 - Related party transactions
|
|
By:
|
/s/ Per Wullf
|
|
Name:
|
Per Wullf
|
|
Title:
|
Chief Executive Officer of Seadrill Management Ltd
(Principal Executive Officer of Seadrill Limited)
|
By:
|
/s/ Tor Olav Trøim
Name: Tor Olav Trøim Title: Vice-President and Director |
By:
|
/s/ Graham Robjohns
Name: Graham Robjohns Title: Chief Executive Officer |
By:
|
/s/ Tor Olav Trøim
Name: Tor Olav Trøim Title: Vice-President and Director |
By:
|
/s/ Rune Magnus Lundetræ
Name: Rune Magnus Lundetræ Title: President |
By:
|
Seadrill Operating GP LLC, its general partner
|
By:
|
/s/ Rune Magnus Lundetræ
Name: Rune Magnus Lundetræ Title: President |
By:
|
/s/ Robert Hingley-Wilson
Name: Robert Hingley-Wilson Title: Director |
1.
|
Shareholders’ Agreement (including restated by-laws of NADL)
|
2.
|
Russian SPA
|
3.
|
Registration Rights Agreement
|
4.
|
Legal opinion by Bermudan counsel regarding the valid issuance of the Consideration Shares and the Subscription Shares, and the future issuance of the Contract Shares
|
5.
|
Pre-emption waiver in respect of shares in the Company
|
6.
|
Decision of Rosneft as the sole participant of the Company approving: (i) the resignation of the existing general director of the Company; and (ii) the appointment of the person designated by NADL as general director
|
7.
|
Minutes of the general participants’ meeting of Orenburg approving: (i) the resignation of the existing general director of Orenburg and the termination of the board of directors of Orenburg; and (ii) the appointment of persons designated by NADL as general director and to the Orenburg board, respectively
|
8.
|
Decision of Orenburg approving: (i) the resignation of the existing general director of Orenburg Subsidiary; and (ii) the appointment of the person designated by NADL as general director.
|
9.
|
Agreement terminating the employment agreement of the existing general director of the Company
|
10.
|
Agreement terminating the employment agreement of the existing general director of Orenburg
|
11.
|
Agreement terminating the employment agreement of the existing general director of Orenburg Subsidiary
|
12.
|
Notices from each resigning general director of the Company, Orenburg and the Orenburg Subsidiary to the relevant respective banks informing the relevant bank(s) of their resignation and authorising the relevant bank(s) to no longer act in accordance with their instructions
|
13.
|
Powers of attorney relating to each resigning general director of the Company, Orenburg and Orenburg Subsidiary
|
14.
|
Pro forma Onshore Drilling Contract
|
1.
|
ROSNEFT OIL COMPANY
, an open joint stock company incorporated and registered under the laws of the Russian Federation with main state registration number (OGRN) 1027700043502 and having its head office located at Russian Federation, 115035 Moscow, 26/1 Sofiyskaya embankment (“
Rosneft
”);
|
2.
|
SEADRILL LIMITED
, an exempted limited company incorporated under the laws of the Islands of Bermuda with official number 36832 and having its head office located at Par-la-Ville Place, 14 Par-la-ville Road, Hamilton HM08, Bermuda (“
Seadrill
”);
|
3.
|
NORTH ATLANTIC DRILLING LTD.,
an exempted limited company incorporated under the laws of the Islands of Bermuda with official number 45094 and having its head office located at Par-la-Ville Place, 14 Par-la-ville Road, Hamilton HM08, Bermuda (“
NADL
”).
|
(A)
|
The Company operates a fleet of onshore drilling rigs used for the exploration and production of hydrocarbons onshore in Russia. The Company is a wholly-owned subsidiary of Rosneft.
|
(B)
|
NADL owns and operates a fleet of offshore drilling rigs. NADL operates solely in the NADL Area and is a specialist in providing drilling services in the NADL Area. Seadrill owns approximately 70.4% (seventy point four per cent.) of the shares in NADL.
|
(C)
|
NADL has agreed to issue the Consideration Shares and the Subscription Shares to Rosneft in return for the transfer of the Shares and the payment of the Subscription Price, respectively, on the terms and subject to the conditions set out in this Agreement.
|
(D)
|
The transfer of the Shares will be effected by the Russian SPA and whilst this Agreement is not a transaction directed at the disposal of a participatory interest within the meaning of paragraph 1 of Article 21(11) of the LLC Law, this Agreement will be considered a contract establishing an obligation to enter into a transaction directed at the disposal of a participatory interest, provided that certain circumstances have occurred or the counterparty has performed certain counter-obligations, within the meaning of paragraph 3 of Article 21(11) of the LLC Law.
|
(E)
|
The Retained Group has entered into Offshore Drilling Contracts for each of the Offshore Rigs with the NADL Group. Following the Acceptance Date under the Offshore Drilling Contracts in respect of each of the Offshore Rigs by the Retained Group, NADL has agreed to issue the Contract Shares to Rosneft.
|
(F)
|
The Retained Group may enter into Additional Drilling Contracts with the NADL Group and/or the Seadrill Group following Completion. Following the Acceptance Date under Additional Drilling Contracts between the Retained Group and the NADL Group, NADL has agreed to issue the NADL Additional Contract Shares to Rosneft. Following the Acceptance Date under Additional Drilling Contracts between the Retained Group and the Seadrill Group, Seadrill has agreed to transfer the Seadrill Additional Contract Shares to Rosneft.
|
(G)
|
Rosneft and Seadrill have agreed to enter into the Shareholders’ Agreement at Completion for the purpose of regulating the relationship between Rosneft and Seadrill as shareholders in NADL.
|
(H)
|
The execution and delivery of the NADL Approval Documents, the issuance of the Consideration Shares and the Subscription Shares and the future issuance of the Contract Shares have been approved by the board of directors of NADL, and each necessary committee of the board of directors of NADL, including the NADL Conflicts Committee and the execution and delivery of the Seadrill Approval Documents has been approved by the board of Seadrill and each necessary committee of the board of directors of Seadrill.
|
1.
|
INTERPRETATION
|
1.1
|
In this Agreement:
|
1.2
|
In this Agreement, unless otherwise specified:
|
(A)
|
references to Clauses, Paragraphs, Schedules and Attachments are to clauses and paragraphs of, and schedules and attachments to, this Agreement;
|
(B)
|
all headings and titles are inserted for convenience only and are to be ignored in the interpretation of this Agreement;
|
(C)
|
the Schedules and Attachments form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement;
|
(D)
|
references to any document in the “agreed form” means that document in the form agreed by the parties and initialled for the purposes of identification by Rosneft’s Solicitors on behalf of Rosneft and Seadrill’s Solicitors on behalf of Seadrill and NADL (in each case with such amendments as may be agreed by or on behalf of the parties);
|
(E)
|
a reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, consolidated, amended, modified or re-enacted;
|
(F)
|
references to “$”, “Dollars” or “US$” are to the lawful currency of the United States of America;
|
(G)
|
use of any gender includes the other genders;
|
(H)
|
references to a “company” shall be construed so as to include any corporation or other body corporate, wherever and however incorporated or established;
|
(I)
|
references to a “person” shall be construed so as to include any individual, firm, company, corporation, body corporate, Authority, government, state or agency of a state, local or municipal authority or government body or any joint venture, association or partnership (whether or not having separate legal personality);
|
(J)
|
the expressions “body corporate”, “holding company”, “subsidiary”, “subsidiary undertaking” and “wholly owned subsidiary” shall have the meaning given in the UK Companies Act 2006;
|
(K)
|
references to writing shall include any modes of reproducing words in a legible and non-transitory form;
|
(L)
|
the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word “other” shall not be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things;
|
(M)
|
general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words;
|
(N)
|
any reference to a “day” (including the phrase “Business Day”) shall mean a period of 24 hours running from midnight to midnight;
|
(O)
|
references to times are to London time, unless specifically stated otherwise;
|
(P)
|
any reference to any English or Russian (as the case may be) legal term for any action, remedy, method of financial proceedings, legal document, legal status, court, official or any legal concept or thing shall, in respect of any jurisdiction other than, in respect of any English legal term, England or, in respect of any Russian legal term, the Russian Federation, be deemed to include what most closely approximates in that jurisdiction to the English or Russian (as the case may be) legal term;
|
(Q)
|
any reference to “shares” shall include a reference to participatory interests, units or the charter capital of a company and “shareholder” and “shareholding” will be construed accordingly, and references to “shareholders” will include a reference to participants and members;
|
(R)
|
a reference to a “director” shall in the context of a company incorporated in the Russian Federation include a reference to the sole executive body (being either a general director or a managing company or a manager), each member of a collegial executive body and each member of a board of directors (supervisory board);
|
(S)
|
any statement in this agreement qualified by the expression “to the best of Rosneft’s knowledge” or “so far as Rosneft is aware” or any similar expression shall mean the actual knowledge of
the current CEO and CFO of the Company and the current CEO and CFO of Orenburg, Krzys Zielicki and Ilya Matveev, having made all reasonable enquiries;
|
(T)
|
any statement in this agreement qualified by the expression “to the best of NADL's knowledge” or “so far as NADL is aware” or any similar expression shall mean the actual knowledge of Jon Olav Osthus, Robert Hingley-Wilson and the current CEO and CFO of NADL,
having made all reasonable enquiries;
|
(U)
|
references to “disclosed” or any similar expression shall mean fairly disclosed in sufficient detail so as to allow the recipient of the disclosure to appreciate the meaning, significance and implications of the matters disclosed;
|
(V)
|
any amount to be converted from one currency into another currency for the purposes of this Agreement shall be converted into an equivalent amount at the Conversion Rate. For the purposes of this Clause 1.2(V):
|
(i)
|
“
Conversion Rate
” means (i) where one of the currencies is RUB, the official exchange rate established by the Central Bank of Russia for the exchange of the relevant currency into RUB; and (ii) in all other cases the closing spot mid-trade composite London rate for a transaction between the two currencies in question as quoted on Bloomberg, in either case on the date immediately preceding the Relevant Date or, if no such rate is established or quoted on that date, on the preceding date on which such rates are quoted;
|
(ii)
|
“
Relevant Date
” means, save as otherwise provided in this Agreement, the Business Day on which a payment or an assessment is to be made, save that, for the purposes of Clause 8 (Rosneft Actions Pending Completion), the Relevant Date shall mean the Signing Date;
|
(W)
|
any reference to a “contingent” liability shall mean, for the purposes of Paragraphs 2(A)(iv), 7(B) and 18(A) of Part A of Schedule 5 (Rosneft Representations and Warranties), a “contingent liability” as determined in accordance with RAS 8/2010 “Estimated Liabilities, Contingent Liabilities, and Contingent Assets;” and for the purposes of Paragraphs 5(C), 9(E), 11(D) and 12(E) of Part A of Schedule 5 (Rosneft Representations and Warranties), a liability dependent on the occurrence or non-occurrence of one or more uncertain future events, and any reference to a “liability”, without further clarification as to whether such liability is actual or contingent, will be deemed to refer to an actual liability only;
|
(X)
|
any reference to “any amounts outstanding from Rosneft to NADL under this Agreement” (or similar) or “any amounts outstanding from Rosneft to Seadrill under this Agreement” (or similar) shall mean:
|
(i)
|
an arbitration tribunal constituted under Clause 34 (Arbitration) has issued an award or judgment in respect of the amount in respect of which no right of appeal exists or is waived; or
|
(ii)
|
the parties have so expressly agreed in writing; or
|
(iii)
|
the outstanding amount is due from Rosneft under an undisputed invoice,
|
(Y)
|
where there is any reference to the issue of shares in the share capital of NADL based on a share price of US$9.25 per share, that share price shall be adjusted as necessary to take account of any subdivision or consolidation of the shares in the share capital of NADL; and
|
(Z)
|
the parties hereby agree that it is not necessary for any part of this Agreement which is in Russian to be translated into English in order for it to have effect.
|
2.
|
NADL ISSUANCE
|
2.1
|
NADL shall issue the Consideration Shares to Rosneft in accordance with Clause 2 (NADL Issuance), Clause 10 (Completion) and Schedule 4 (Completion arrangements) and, subject to the terms of this Agreement, Rosneft shall:
|
(AA)
|
at Completion, contribute the Shares, free from all Encumbrances, together with all rights attached or accruing to them by entering into the Russian SPA at Completion; and
|
(BB)
|
contribute the amount of the Consideration Deficit (if any) in accordance with Clause 2.11,
|
2.2
|
Each of the Consideration Shares shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue the Consideration Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at Completion.
|
2.3
|
NADL and Seadrill shall procure that all rights of pre-emption over any of the Consideration Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to Completion.
|
2.4
|
NADL shall be entitled to exercise all rights attached to or accruing to the Shares, including the right to receive all dividends, distributions or return of capital declared, paid or made by the Company on or after the Completion Date.
|
2.5
|
At Completion, NADL shall issue the Subscription Shares to Rosneft and Rosneft shall subscribe and pay for the Subscription Shares at an aggregate price equal to the Subscription Price.
|
2.6
|
Each of the Subscription Shares shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue the Subscription Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at Completion.
|
2.7
|
NADL and Seadrill shall procure that all rights of pre-emption over any of the Subscription Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to Completion.
|
2.8
|
The total value of the Shares (the “
Consideration
”) shall be calculated and adjusted in accordance with this Clause 2 (NADL Issuance), Clause 11 (Completion Accounts) and Schedule 8 (Completion Accounts).
|
2.9
|
If the Completion Adjustment Amount:
|
(A)
|
is a positive amount or is zero (US$0); or
|
(B)
|
is a negative amount and the modulus of the Completion Adjustment Amount is less than or equal to the Estimated Adjustment Amount,
|
2.10
|
If the Completion Adjustment Amount is a negative amount and the modulus of the Completion Adjustment Amount is more than the Estimated Adjustment Amount, the Consideration shall be reduced by an amount equal to the excess (the “
Consideration Deficit
”), subject to the provisions of Paragraph 1.5 of Part A of Schedule 8 (Completion Accounts).
|
2.11
|
Rosneft shall transfer to NADL an amount equal to the Consideration Deficit in accordance with Clause 2.1 within five Business Days of determination of the Completion Accounts. If the Consideration Deficit is in excess of US$30,000,000, then the Consideration Deficit shall be increased by an amount equal to LIBOR plus 4% (four per cent.) of the Consideration Deficit for the period from (and including) Completion to (but excluding) the date of actual payment.
|
3.
|
CONTRACT SHARES
|
3.1
|
Within 5 Business Days of the first Acceptance Date which occurs following Completion under any Offshore Drilling Contract (the “
First Offshore Drilling Contract
”), NADL shall issue Contract Shares to Rosneft in respect of the First Offshore Drilling Contract.
|
3.2
|
Within 5 Business Days of any Acceptance Date which occurs thereafter under any Offshore Drilling Contract (each a “
Subsequent Offshore Drilling Contract
”) NADL shall issue Contract Shares to Rosneft in respect of the Subsequent Offshore Drilling Contract in relation to which the Acceptance Date related. On the issue of such Contract Shares the Rolled Forward Amount (if any) shall then be zero.
|
3.3
|
Any Contract Shares issued pursuant to Clause 3.1 and Clause 3.2 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any Contract Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the Contract Shares
conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
|
3.4
|
As at each Settlement Date, NADL shall calculate:
|
(A)
|
the amount (if any) by which A exceeds B where:
|
A =
|
***** of the aggregate Estimated Drilling Revenue in the Assessed Settlement Period; and
|
B =
|
***** of the aggregate Actual Drilling Revenue under all of the Offshore Drilling Contracts in the Assessed Settlement Period,
|
(B)
|
the amount (if any) by which X exceeds Y where:
|
X =
|
***** of the aggregate Actual Drilling Revenue under all of the Offshore Drilling Contracts in the Assessed Settlement Period; and
|
Y =
|
***** of the aggregate Estimated Drilling Revenue in the Assessed Settlement Period,
|
(C)
|
the Rolled Forward Amount (if any) or the Rolled Forward Surplus Amount (if any),
|
3.5
|
If there is a Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Revenue Deficit in the Assessed Settlement Period; (ii) plus the Rolled Forward Amount (if any) or minus the Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “
Aggregate Deficit
”) is:
|
(A)
|
a positive amount and equal to or more than US$10,000,000, then NADL shall receive from Rosneft an amount equal to the Aggregate Deficit within 10 Business Days following receipt of the notice from NADL under Clause 3.4 and the Rolled Forward Amount and the Rolled Forward Surplus Amount shall then each be zero;
|
(B)
|
a negative amount, then the Rolled Forward Surplus Amount shall then be equal to the modulus of the Aggregate Deficit; or
|
(C)
|
a positive amount and less than US$10,000,000, then no true-up is required at that time and the Rolled Forward Amount shall then be an amount equal to the Aggregate Deficit and the Rolled Forward Surplus Amount shall then be zero.
|
3.6
|
If there is a Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Revenue Surplus in the Assessed Settlement Period, (ii) less the Rolled Forward Amount (if any) or plus the Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “
Aggregate Surplus
”) is:
|
(A)
|
a positive amount and more than US$10,000,000, then, within 10 Business Days of that Settlement Date, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
|
A =
|
the Aggregate Surplus; and
|
(B)
|
a negative amount and more than $10,000,000, then NADL shall receive from Rosneft an amount equal to the Aggregate Surplus within 10 Business Days following receipt of the notice from NADL under Clause 3.4 and the Rolled Forward Amount and the Rolled Forward Surplus Amount shall then each be zero;
|
(C)
|
a negative amount and less than or equal to US$10,000,000, then the Rolled Forward Amount shall then be equal to the modulus of the Aggregate Surplus; or
|
(D)
|
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Rolled Forward Surplus Amount shall then be an amount equal to the Aggregate Surplus.
|
3.7
|
At the time of the termination or expiry of the last of the Offshore Drilling Contracts and outstanding Additional Drilling Contracts to terminate or expire:
|
(A)
|
if there is a Rolled Forward Amount, Rosneft and NADL shall discuss an efficient mechanism for dealing with the remaining Rolled Forward Amount and, failing such agreement, Rosneft shall, either:
|
(i)
|
on the Settlement Date immediately following such termination or expiry, elect to waive its dividend rights and Clause 16.9(B) shall apply; or
|
(ii)
|
pay such amount to NADL within 10 Business Days following the Settlement Date immediately following such termination or expiry provided that if such amount is subject to Russian withholding tax, Rosneft shall gross up the remaining Rolled Forward Amount in such a way that after deducting Russian withholding tax from the grossed up Rolled Forward Amount NADL receives an amount equal to the Rolled Forward Amount less an amount equal to 50% (fifty per cent.) of the tax being withheld; and
|
(B)
|
if there is a Rolled Forward Surplus Amount, within 10 Business Days following the Settlement Date immediately following such termination or expiry, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
|
3.8
|
Any shares issued pursuant to Clause 3.6 or 3.7 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any shares issued pursuant to Clause 3.6 or 3.7 free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the shares issued pursuant to Clause 3.6 or 3.7 conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
|
3.9
|
On each issue of Contract Shares or fully paid common shares of par value US$5 each in the share capital of NADL under Clause 3.6 or 3.7, NADL shall deliver a share certificate for the relevant Contract Shares or fully paid common shares of par value US$5 each in the share capital of NADL in the name of Rosneft.
|
3.10
|
Any Rolled Forward Amount or Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Rolled Forward Amount or Rolled Forward Surplus Amount (as the case may be).
|
3.11
|
If, prior to the Acceptance Date in respect of an Offshore Drilling Contract, Rosneft and NADL agree that the amount or timing of the Actual Drilling Revenue in respect of all Settlement Periods estimated to be earned from that Offshore Drilling Contract over the term of that Offshore Drilling Contract is different from that set out in Part C of Schedule 10 (Offshore Drilling Contracts), the parties shall make corresponding adjustments to the amounts set out in column 10 of Part A of Schedule 10 (Offshore Drilling Contracts) and / or column 2 of Part B of Schedule 10 (Offshore Drilling Contracts), and Schedule 10 (Offshore Drilling Contracts) and the number of Contract Shares to be issued pursuant to Clause 3.2 shall both be adjusted accordingly. The adjustments to Schedule 10 (Offshore Drilling Contracts) and to the Estimated Drilling Revenue pursuant to this Clause shall only be made in respect of an Offshore Drilling Contract if agreed by Rosneft and NADL prior to the Acceptance Date in respect of that Offshore Drilling Contract.
|
4.
|
ONSHORE DRILLING CONTRACTS
|
4.1
|
Rosneft agrees that, subject to the satisfaction of the Conditions in Paragraphs 4 and 6(A) of Schedule 1 (Conditions to Completion), it shall procure that the relevant members of the Retained Group and the relevant members of the Sale Group execute each of the Onshore Drilling Contracts on or prior to, but conditional on, Completion. Rosneft agrees that the execution of each of the Onshore Drilling Contracts shall comply with the Procurement Law and Procurement Documentation of the relevant members of the Retained Group.
|
4.2
|
Rosneft shall procure that, between the Signing Date and Completion, the Sale Group shall enter into lease contracts with VTB Leasing for the lease of 28 (twenty eight) land rigs, details of which are set out in Part B of Attachment 3 (the “
VTB Rigs
”) (the “
VTB Leases
”). The VTB Leases shall be on substantially the same terms as the leases which are already in place as at the Signing Date between the Sale Group and VTB-Leasing and shall reflect the following principles:
|
(A)
|
the VTB Rigs shall operate in Nefteyugansk;
|
(B)
|
the VTB Rigs shall be delivered to the Sale Group at DDP Nefteyugansk (Pyt-Yakh) rail station (the “
Delivery Location
”) during the period from October 2014 to June 2015;
|
(C)
|
the monthly lease payments to VTB Leasing in respect of each VTB Rig shall be as set out in the lease payment schedule in Part A of Attachment 7 (VTB Schedule);
|
(D)
|
the Sale Group shall have the option exercisable at any time during the term of such VTB Leases to require VTB-Leasing to sell to the Sale Group such VTB Rigs as the Sale Group shall designate in writing. The purchase price for each VTB Rig shall be equal to the amount set out in the table entitled
“ОРИЕНТИРОВОЧНЫЙ ГРАФИК ЛИЗИНГОВЫХ ПЛАТЕЖЕЙ”
in each of Part B, Part C, Part D or Part E (as the case may be) of Attachment 7 (VTB Schedule); and
|
(E)
|
VTB Leasing shall not be entitled to terminate the VTB Leases as a result of the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA and no break fee, termination payments, penalties or similar liabilities shall arise under the VTB Leases as a result of such change in ownership or control.
|
4.3
|
Subject to the entry into of the VTB Leases and the satisfaction of the Conditions in Paragraphs 4 and 6(A) of Schedule 1 (Conditions to Completion), Rosneft shall procure that the relevant members of the Retained Group and the relevant members of the Sale Group execute an Onshore Drilling Contract in respect of each of the VTB Rigs on or prior to, but conditional on, Completion. The parties agree that the Onshore Drilling Contracts will provide for the Retained Group to pay for the mobilisation from the Delivery Location to the drilling location.
|
4.4
|
Rosneft shall procure that the day rate for:
|
(D)
|
the VTB Rigs under the Onshore Drilling Contracts shall, at all times during the five year term of such Onshore Drilling Contracts, be no less than:
|
(i)
|
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the Uralmash VTB Rigs; and
|
(ii)
|
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the ZJ-50DBS VTB Rigs; and
|
(E)
|
the Leased Rigs under the Onshore Drilling Contracts shall, at all times during the five year term of such Onshore Drilling Contracts, be no less than:
|
(i)
|
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the Uralmash Leased Rigs; and
|
(ii)
|
***** per day (which number shall be increased by inflation of 6 per cent. per annum) (excluding VAT) for the ZJ-50DBS Leased Rigs.
|
5.
|
EXTENDED CO-OPERATION
|
5.1
|
Each of Rosneft, Seadrill and NADL agrees that it shall seek to extend its co-operation with the other parties beyond Completion and on or prior to, but conditional on, Completion Seadrill and Rosneft shall execute the Shareholders’ Agreement.
|
5.2
|
Seadrill agrees and acknowledges that Rosneft’s objective is to increase its shareholding in NADL to 50% (fifty per cent.) less one (1) share in NADL and that this objective ideally will be achieved through the entry into of Additional Drilling Contracts and the related issue of NADL Additional Contract Shares to Rosneft or the transfer of Seadrill Additional Contract Shares to Rosneft pursuant to this Clause 5 (Extended Co-Operation). However, the parties further agree that to the extent that the issue of NADL Additional Contract Shares to Rosneft when combined with the transfer of Seadrill Additional Contract Shares to Rosneft, would result in Rosneft's shareholding in NADL exceeding 50% (fifty per cent.) less one (1) share in NADL then, notwithstanding any other provision in this Clause 5 (Extended Co-Operation), NADL shall only issue such number of NADL Additional Contract Shares to Rosneft or Seadrill shall only transfer such number of Seadrill Additional Contract Shares to Rosneft as results in Rosneft's shareholding in NADL not exceeding 50% (fifty per cent.) less one (1) share in NADL with an amount attributable to the value of the NADL Additional Contract Shares not issued or Seadrill Additional Contract Shares not transferred, as the case may be, being satisfied by a cash payment to Rosneft by NADL (if the amount is attributable to an Additional Drilling Contract with a member of the NADL Group) or Seadrill (if the amount is attributable to an Additional Drilling Contract with a member of the Seadrill Group) at the same time as the issue of the NADL Additional Contract Shares or transfer of the Seadrill Additional Contract Shares that are issued or transferred, respectively.
|
5.3
|
The parties shall bear their own costs of identifying and implementing opportunities and entering into any Additional Drilling Contracts unless otherwise agreed.
|
5.4
|
Subject to Clause 5.2, if any member of the Retained Group and any member of the NADL Group agree to enter into any Additional Drilling Contract, then NADL shall issue NADL Additional Contract Shares to Rosneft within 5 Business Days from the Additional Contract Acceptance Date in respect of the relevant drilling rig.
|
5.5
|
Any NADL Additional Contract Shares issued pursuant to Clause 5.4 shall be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL. NADL shall issue any NADL Additional Contract Shares free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the time of issue. NADL shall procure that all rights of pre-emption over any of the NADL Additional Contract Shares conferred by the constitutional documents of NADL, by applicable law or in any other way are waived prior to their issue.
|
5.6
|
As at each Settlement Date, NADL shall calculate:
|
(C)
|
the amount (if any) by which A exceeds B where:
|
A =
|
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred; and
|
B =
|
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is party,
|
(D)
|
the amount (if any) by which X exceeds Y where:
|
X =
|
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is party; and
|
Y =
|
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the NADL Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred,
|
(E)
|
the Additional Contract Rolled Forward Amount (if any) or the Additional Contract Rolled Forward Surplus Amount (if any),
|
5.7
|
If there is an Additional Contract Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Additional Contract Revenue Deficit in the Assessed Settlement Period; (ii) plus the Additional Contract Rolled Forward Amount (if any) or minus the Additional Contract Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date in accordance with Clause 16.9 (the “
Additional Contract Aggregate Deficit
”) is:
|
(A)
|
a positive amount and more than US$10,000,000, then NADL shall receive from Rosneft an amount equal to the Additional Contract Aggregate Deficit within 10 Business Days following receipt of the notice from NADL under Clause 5.6 and the Additional Contract Rolled Forward Amount and the Additional Contract Rolled Forward Surplus Amount shall then each be zero;
|
(B)
|
a negative amount, then the Additional Contract Rolled Forward Surplus Amount shall then be equal to the modulus of the Additional Contract Aggregate Deficit; or
|
(C)
|
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Additional Contract Rolled Forward Amount shall then be an amount equal to the Additional Contract Aggregate Deficit and the Additional Contract Rolled Forward Surplus Amount shall then be zero.
|
5.8
|
If there is an Additional Contract Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Additional Contract Revenue Surplus in the Assessed Settlement Period, (ii) less the Additional Contract Rolled Forward Amount (if any) or plus the Additional Contract Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to NADL under this Agreement as at the Settlement Date (the “
Additional Contract Aggregate Surplus
”) is:
|
(A)
|
a positive amount and more than $10,000,000, then, within 10 Business Days following that Settlement Date, NADL shall issue to Rosneft such number of NADL Additional Contract Shares (rounded up to the nearest whole number of shares) as equals A/B where:
|
A =
|
the Additional Contract Aggregate Surplus; and
|
(B)
|
a negative amount and more than $10,000,000, then NADL shall receive from Rosneft an amount equal to the Additional Contract Aggregate Surplus within 10 Business Days following receipt of the notice from NADL under Clause 5.6 and the Additional Contract Rolled Forward Amount and the Additional Contract Rolled Forward Surplus Amount shall then each be zero;
|
(C)
|
a negative amount and less than or equal to US$10,000,000, then the Additional Contract Rolled Forward Amount shall then be equal to the modulus of the Additional Contract Aggregate Surplus; or
|
(D)
|
a positive amount and less than or equal to $10,000,000, then no true up is required at that time and the Additional Contract Rolled Forward Surplus Amount shall be an amount equal to the Additional Contract Aggregate Surplus.
|
5.9
|
At the time of the termination or expiry of the last of the Offshore Drilling Contracts and outstanding Additional Drilling Contracts to which a member of the NADL Group is a party to terminate or expire:
|
(A)
|
if there is an Additional Contract Rolled Forward Amount, Rosneft and NADL shall discuss an efficient mechanism for dealing with the remaining Additional Contract Rolled Forward Amount and, failing such agreement, Rosneft shall, either:
|
(i)
|
on the Settlement Date immediately following such termination or expiry, elect to waive its dividend rights and Clause 16.9(B) shall apply; or
|
(ii)
|
pay such amount to NADL within 10 Business Days following the Settlement Date following such termination or expiry provided that if such amount is subject to Russian withholding tax, Rosneft shall gross up the remaining Rolled Forward Amount in such a way that after deducting Russian withholding tax from the grossed up Rolled Forward Amount NADL receives an amount equal to the Rolled Forward Amount less an amount equal to 50% (fifty per cent.) of the tax being withheld; and
|
(B)
|
if there is an Additional Contract Rolled Forward Surplus Amount, within 10 Business Days following such termination or expiry, NADL shall issue to Rosneft such number of common shares of par value US$5 each in the share capital of NADL (rounded up to the nearest whole number of shares) as equals A/B where:
|
B =
|
the share price used to calculate the number of NADL Additional Contract Shares when they were issued, being “B” in the definition of NADL Additional Contract Shares,
|
5.10
|
On each issue of NADL Additional Contract Shares, NADL shall deliver a share certificate for the relevant NADL Additional Contract Shares in the name of Rosneft.
|
5.11
|
Any Additional Contract Rolled Forward Amount and Additional Contract Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Additional Contract Rolled Forward Amount or Additional Contract Rolled Forward Surplus Amount (as the case may be).
|
5.12
|
Where practicable, the parties will seek to combine and consolidate the true-up mechanisms and the provisions dealing with the issuance of the Contract Shares and the NADL Additional Contract Shares in Clause 3 (Contract Shares) and this Clause 5 (Extended Co-Operation) on any Settlement Date, Acceptance Date or Additional Contract Acceptance Date taking into account the differences in the share prices used in the calculations of the Contract Shares and the NADL Additional Contract Shares, including with the aim of simplifying the true-up provisions.
|
5.13
|
Subject to Clause 5.2, if any member of the Retained Group and any member of the Seadrill Group agree to enter into any Additional Drilling Contract then Seadrill shall within 5 Business Days from the Additional Contract Acceptance Date in respect of the relevant drilling rig either:
|
(A)
|
if Rosneft holds shares representing less than 50% (fifty per cent.) less one (1) share in NADL of all of the issued shares in NADL,
transfer Seadrill Additional Contract Shares to Rosneft, provided that to the extent that the transfer of Seadrill Additional Contract Shares to Rosneft would result in Seadrill holding less than 10% (ten per cent.) of the share capital of NADL at such time, Seadrill shall satisfy its obligations under this Clause 5.13 by the transfer of an equivalent amount in cash to Rosneft; or
|
(B)
|
if Rosneft holds shares representing 50% (fifty per cent.) less one (1) share in NADL or more of all the issued shares in NADL, pay in cash to Rosneft an amount equal to (i) ***** of the Additional Contract Estimated Drilling Revenue for that Additional Drilling Contract (ii) minus the Seadrill Additional Contract Rolled Forward Amount (if any) or plus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any) in each case as at the Additional Contract Acceptance Date under that Additional Drilling Contract and (iii) minus any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Additional Contract Acceptance Date under that Additional Drilling Contract.
|
5.14
|
Any Seadrill Additional Contract Shares transferred pursuant to Clause 5.13 shall be fully paid and transferred free from all Encumbrances and from all other rights exercisable by or claims by third parties, together with all rights attached or accruing to them at the date of transfer. On each transfer of Seadrill Additional Contract Shares, Seadrill shall deliver an executed form of transfer in the form required by applicable law and NADL shall deliver a share certificate for the relevant Seadrill Additional Contract Shares in the name of Rosneft.
|
5.15
|
As at each Settlement Date, Seadrill shall calculate:
|
(A)
|
the amount (if any) by which A exceeds B where:
|
A =
|
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred; and
|
B =
|
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is party,
|
(B)
|
the amount (if any) by which X exceeds Y where:
|
X =
|
***** of the aggregate Additional Contract Actual Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is party; and
|
Y =
|
***** of the aggregate Additional Contract Estimated Drilling Revenue in the Assessed Settlement Period under all Additional Drilling Contracts to which any member of the Seadrill Group is a party and in respect of which the Additional Contracts Acceptance Date has occurred,
|
(C)
|
the Seadrill Additional Contract Rolled Forward Amount (if any) or the Seadrill Additional Contract Rolled Forward Surplus Amount (if any),
|
5.16
|
If there is a Seadrill Additional Contract Revenue Deficit in respect of the Assessed Settlement Period and the aggregate of: (i) the Seadrill Additional Contract Revenue Deficit in the Assessed Settlement Period; (ii) plus the Seadrill Additional Contract Rolled Forward Amount (if any) or minus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any); and (iii) plus any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Settlement Date in accordance with Clause 16.9 (the “
Seadrill
Additional Contract Aggregate Deficit
”) is:
|
(A)
|
a positive amount and more than US$10,000,000, then Seadrill shall receive from Rosneft an amount equal to the Seadrill Additional Contract Aggregate Deficit within 10 Business Days following receipt of the notice from Seadrill under Clause 5.15 and the Seadrill Additional Contract Rolled Forward Amount and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then each be zero;
|
(B)
|
a negative amount, then the Seadrill Additional Contract Rolled Forward Surplus Amount shall then be equal to the modulus of the Seadrill Additional Contract Aggregate Deficit; or
|
(C)
|
a positive amount and less than or equal to US$10,000,000, then no true-up is required at that time and the Seadrill Additional Contract Rolled Forward Amount shall then be an amount equal to the Seadrill Additional Contract Aggregate Deficit and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then be zero.
|
5.17
|
If there is a Seadrill Additional Contract Revenue Surplus in respect of the Assessed Settlement Period and the aggregate of: (i) the Seadrill Additional Contract Revenue Surplus in the Assessed Settlement Period, (ii) less the Seadrill Additional Contract Rolled Forward Amount (if any) or plus the Seadrill Additional Contract Rolled Forward Surplus Amount (if any), (iii) less any amounts outstanding from Rosneft to Seadrill under this Agreement as at the Settlement Date (the “
Seadrill
Additional Contract Aggregate Surplus
”) is:
|
(A)
|
a positive amount and more than $10,000,000, then, within 10 Business Days following that Settlement Date, Seadrill shall transfer to Rosneft such number of Seadrill Additional Contract Shares (rounded up to the nearest whole number of shares) as equals A/B where:
|
A =
|
the Seadrill Additional Contract Aggregate Surplus; and
|
(B)
|
a negative amount and more than $10,000,000, then Seadrill shall receive from Rosneft an amount equal to the Seadrill Additional Contract Aggregate Surplus within 10 Business Days following receipt of the notice from Seadrill under Clause 5.15 and the Seadrill Additional Contract Rolled Forward Amount and the Seadrill Additional Contract Rolled Forward Surplus Amount shall then each be zero;
|
(C)
|
a negative amount and less than or equal to US$10,000,000, then the Seadrill Additional Contract Rolled Forward Amount shall then be equal to the modulus of the Seadrill Additional Contract Aggregate Surplus; or
|
(D)
|
a positive amount and less than or equal to $10,000,000, then no true up is required at that time and the Seadrill Additional Contract Rolled Forward Surplus Amount shall be an amount equal to the Seadrill Additional Contract Aggregate Surplus.
|
5.18
|
Any Seadrill Additional Contract Rolled Forward Amount and Seadrill Additional Contract Rolled Forward Surplus Amount shall increase by an amount equal to LIBOR plus 4% (four per cent.), which shall accrue from day to day and shall form part of the Seadrill Additional Contract Rolled Forward Amount or Seadrill Additional Contract Rolled Forward Surplus Amount (as the case may be).
|
5.19
|
Each of the parties shall appoint a management representative (the “
Relationship Managers
”). The Relationship Managers shall meet at such times and places as the Relationship Managers shall determine (but excluding in the territory of Russia, unless otherwise agreed by the Relationship Managers), subject to such meetings taking place at least on a quarterly basis. At the meetings of the Relationship Managers:
|
(A)
|
the Rosneft Relationship Manager shall discuss the onshore and offshore drilling requirements of the Retained Group, including its proposed work programme;
|
(B)
|
the NADL Relationship Manager and the Seadrill Relationship Manager shall discuss the future availability of onshore and offshore drilling rigs within the Seadrill Group and the NADL Group, including the type of rigs available and applicable rates; and
|
(C)
|
the Relationship Managers shall discuss progress towards meeting the objective described in Clause 5.2 and other areas of possible co-operation between the Retained Group, the NADL Group and the Seadrill Group.
|
5.20
|
If the parties agree to award any additional onshore contract opportunities to the Company, the parties will negotiate in good faith to agree arrangements to provide the Retained Group with remuneration or commission in respect thereof.
|
5.21
|
After Completion, NADL shall procure that no relevant member of the Sale Group terminates any of the Onshore Drilling Contracts before the expiry of its term other than in accordance with the terms of the relevant Onshore Drilling Contract (subject to proper performance by the relevant members of the Retained Group).
|
5.22
|
Rosneft and NADL shall work together in good faith to develop and agree Work Orders in respect of all of the Land Rigs on the terms and subject to the conditions set out in the Onshore Drilling Contracts on an annual basis (or at such frequency as shall be agreed between Rosneft and NADL) for a period of five (5) years following the Completion Date. Rosneft and NADL agree that the process of developing and agreeing Work Orders is not intended to be an opportunity for the Retained Group or the Sale Group to renegotiate the commercial terms of the Onshore Drilling Contracts.
|
5.23
|
The parties agree that the intention is for the Sale Group to make the Land Rigs available to Rosneft under the Onshore Drilling Contracts. Rosneft shall procure that all of the Land Rigs shall be the subject of a Work Order between the Retained Group and the Sale Group at all times throughout the five (5) year period following the Completion Date and shall pay on demand to NADL any losses suffered by NADL and/or any member of the Sale Group if any of the Land Rigs are not so subject (subject in each case to NADL acting in accordance with Clause 5.22 and the relevant members of the Sale Group not unreasonably withholding their agreement to the Work Orders in accordance with the Onshore Drilling Contract).
|
5.24
|
NADL shall procure that the relevant members of the Sale Group do not unreasonably withhold their agreement to the Work Orders as described in Clause 5.23. If any member of the Sale Group unreasonably withholds their agreement to the Work Orders, NADL shall pay on demand to Rosneft any losses suffered by Rosneft and/or any member of the Retained Group.
|
5.25
|
Rosneft and NADL shall establish a working party (the “
Working Party
”) in relation to the Onshore Drilling Contracts. Each of Rosneft and NADL shall appoint 5 representatives (or such other number as Rosneft and NADL shall agree from time to time) to the Working Party. The Working Party shall meet in person or by telephone at a minimum on a fortnightly basis.
|
5.26
|
In the period between the Signing Date and 31 August 2014, Rosneft and NADL shall procure that the Working Party shall:
|
(A)
|
develop fair and manageable key performance indicators for monitoring the performance of the various parties to the Onshore Drilling Contracts;
|
(B)
|
develop a performance based incentive programme that aligns the parties’ respective goals and objectives for achieving solid drilling performance metrics under a profitable economic incentive; and
|
(C)
|
replace Appendices 4.3 and 4.4 of the Pro forma Onshore Drilling Contract with provisions which reflect the agreements reached in relation to (A) and (B) above.
|
5.27
|
In the period between the Signing Date and Completion, Rosneft and NADL shall procure that the Working Party shall:
|
(A)
|
prepare and finalise each of the Onshore Drilling Contracts based on the Pro forma Onshore Drilling Contract; and
|
(B)
|
prepare and agree the initial Work Orders which will be signed at Completion for all of the Land Rigs under the Onshore Drilling Contracts.
|
5.28
|
The parties agree that, subject to Clause 5.26 and 5.27, the only changes that should be made to the Pro forma Onshore Drilling Contract should be such changes as are reasonably necessary to deal with business processes, logistical and drilling issues and norms arising in each specific region.
|
5.29
|
Notwithstanding anything to the contrary in any of the Onshore Drilling Contracts, but subject to Clauses 5.31 and 5.32:
|
(A)
|
the maximum aggregate liability of the NADL Group (subject to Clauses 5.29(B) and (C)):
|
(i)
|
in respect of each well under the Onshore Drilling Contracts shall be:
|
(a)
|
where there has been negligence of the NADL Group, *****; and
|
(b)
|
where there has been gross negligence of the NADL Group, *****,
|
(ii)
|
in respect of any and all wells under all Onshore Drilling Contracts shall be ***** in aggregate (the "
Aggregate Tier One Liability Cap
");
|
(B)
|
where the aggregate liability of the NADL Group under the Onshore Drilling Contracts in respect of all wells reaches the Aggregate Tier One Liability Cap, then, in respect of all further wells under any and all Onshore Drilling Contracts after that time, the maximum aggregate liability of the NADL Group (subject to Clause 5.29(C)):
|
(i)
|
in respect of each such well under the Onshore Drilling Contracts shall be:
|
(a)
|
where there has been negligence of the NADL Group, reduced from ***** to *****;
|
(b)
|
where there has been gross negligence of the NADL Group, reduced from ***** to *****,
|
(ii)
|
in respect of any and all wells under all Onshore Drilling Contracts shall be ***** in aggregate (the "
Aggregate Tier Two Liability Cap
"); and
|
(C)
|
where the aggregate liability of the NADL Group under the Onshore Drilling Contracts in respect of all wells reaches the Aggregate Tier Two Liability Cap, then, in respect of all further wells under any and all Onshore Drilling Contracts after that time, the maximum aggregate liability of the NADL Group in respect of each such well under the Onshore Drilling Contracts shall be:
|
(i)
|
where has been negligence of the NADL Group, reduced from ***** to *****; and
|
(ii)
|
where has been gross negligence of the NADL Group, reduced from ***** to *****,
|
5.30
|
Rosneft shall procure that the Retained Group shall give effect to the provisions set out in Clause 5.29 and, to the extent that payments are made by the NADL Group at any time in excess of the liability caps set out in Clause 5.29, then Rosneft shall pay to NADL promptly on demand the difference between the amount paid by the NADL Group and the amount that should have been paid by the NADL Group in accordance with Clause 5.29. For the avoidance of doubt notwithstanding anything to the contrary in this Agreement, but subject to the caps on liability provided for in Clauses 5.29 to 5.33 (inclusive), the parties agree that liability under the Onshore Drilling Contracts shall be assessed under the terms of those Onshore Drilling Contracts.
|
5.31
|
The parties agree that, in the event that any of the rates set out in Appendix 4.1 of the Onshore Drilling Contracts increase, then each of the liability caps set out in Clause 5.29 above shall be increased by an amount equal to X in the following formula:
|
Y =
|
the relevant liability cap immediately prior to the operation of this Clause 5.31; and
|
Z =
|
the percentage by which the rates set out in Appendix 4.1 of the Onshore Drilling Contracts have increased.
|
5.32
|
The parties agree that if Rosneft has a claim in respect of a well under an Onshore Drilling Contract and:
|
(A)
|
the aggregate liability of the NADL Group in respect of all wells under any and all Onshore Drilling Contracts has not then reached the Aggregate Tier One Liability Cap; and
|
(B)
|
the balance of the Aggregate Tier One Liability Cap remaining after all previous claims in respect of wells under any and all Onshore Drilling Contracts have either been determined under the dispute resolution provisions of the Onshore Drilling Contracts or settled between the parties to the relevant Onshore Drilling Contract (the "
Tier One Balance
") is less than the lower of:
|
(i)
|
the value of the claim; and
|
(ii)
|
the Relevant Well Tier One Liability Cap,
|
(y)
|
the aggregate of the Aggregate Tier One Liability Cap and Aggregate Tier Two Liability Cap shall not increase,
|
5.33
|
The parties agree that if Rosneft has a claim in respect of a well under an Onshore Drilling Contract and:
|
(A)
|
the aggregate liability of the NADL Group in respect of all wells under any and all Onshore Drilling Contracts has exceeded the Aggregate Tier One Liability Cap but has not then reached the Aggregate Tier Two Liability Cap; and
|
(B)
|
the balance of the Aggregate Tier Two Liability Cap (as increased, if applicable, pursuant to Clause 5.32) remaining after all previous claims in respect of wells under any and all Onshore Drilling Contracts have either been determined under the dispute resolution provisions of the Onshore Drilling Contracts or settled between the parties to the relevant Onshore Drilling Contract (the "
Tier Two Balance
") is less than the lower of:
|
(i)
|
the value of the claim; and
|
(ii)
|
the Relevant Well Tier Two Liability Cap,
|
6.
|
CONDITIONS
|
6.1
|
Completion is in all respects conditional upon the satisfaction or waiver of the Conditions in accordance with this Agreement (and, where applicable, such Conditions remaining satisfied up to Completion).
|
6.2
|
Rosneft will use reasonable endeavours to fulfil or procure the fulfilment of the Conditions listed in Paragraphs 3, 4, 5 and 6 of Schedule 1 (Conditions to Completion) as soon as possible and in any event before the Long Stop Date and will notify Seadrill and NADL in writing as soon as reasonably practicable of the satisfaction of each such Condition.
|
6.3
|
Seadrill and NADL will use reasonable endeavours to fulfil or procure the fulfilment of the Conditions listed in Paragraphs 1 and 7 to 8 (inclusive) of Schedule 1 (Conditions to Completion) as soon as possible and in any event before the Long Stop Date and will notify Rosneft in writing as soon as reasonably practicable of the satisfaction of each such Condition.
|
6.4
|
Each party will provide the other parties with such information and assistance as reasonably required in order to satisfy the Conditions, as soon as reasonably practicable following a request for the same, provided however that no party shall be required to provide another with any information of a commercially sensitive nature.
|
6.5
|
NADL (with the written consent of Seadrill) may waive in writing in whole or in part all or any of the Conditions listed in Paragraphs 3 to 5 (inclusive) of Schedule 1 (Conditions to Completion) and Rosneft may waive in whole or in part all or any of the Conditions listed in Paragraphs 7 to 8 (inclusive) of Schedule 1 (Conditions to Completion).
|
6.6
|
The Conditions set out in Paragraphs 1 and 2 of Schedule 1 (Conditions to Completion) may not be waived by any party. The Conditions set out in Paragraph 6 of Schedule 1 (Conditions to Completion) may only be waived by agreement of the parties.
|
6.7
|
The waiver by any party of any Condition shall not act as a waiver of any breach by any other party of its obligations in connection therewith or otherwise and shall be without prejudice to any claim that the parties may have against each other.
|
6.8
|
Each party undertakes to disclose in writing to the other parties anything which will or may prevent any of the Conditions from being satisfied on or prior to the Long Stop Date (or subsequently) immediately when it comes to its attention and otherwise to keep each other party informed of the progress towards satisfaction of the Conditions.
|
6.9
|
For the purpose of satisfaction of the Condition listed in Paragraph 1 of Schedule 1 (Conditions to Completion) the parties shall cooperate and shall procure that the members of the Retained Group, the Seadrill Group and the NADL Group (as the case may be) co-operate for the provision and evaluation of information with a view to the preparation of the competition filings with all reasonable speed, as well as for the prompt and complete answer to any queries of the competent authorities and otherwise for the diligent pursuit of the process to obtain competition clearances, and, in particular, Rosneft shall, and shall procure that the relevant members of the Retained Group and the Sale Group shall, as soon as practicable, comply with the reasonable requests of NADL in connection with the provision of information to, and the response to requests from, FAS.
|
6.10
|
In the event that competition filings other than the filing to FAS listed as a Condition in Paragraph 1 of Schedule 1 (Conditions to Completion) are or may be triggered by Clause 4.1(a) and (b) of the Shareholders’ Agreement, the parties shall negotiate in good faith to agree whether such filings are required and warranted. If it is agreed that filings should be made, the parties shall then co-operate and shall procure that the members of the Retained Group, the Seadrill Group and the NADL Group (as the case may be) co-operate for the provision and evaluation of information with a view to the preparation of the competition filings with all reasonable speed, as well as for the prompt and complete answer to any queries of the competent authorities and otherwise for the diligent pursuit of the process to obtain competition clearances or, as soon as reasonably practicable and if required by the relevant law or regulation, before the occurrence of the relevant trigger event.
|
6.11
|
Each party undertakes to:
|
(A)
|
notify the other parties and provide copies of any written communications from any Authority or other person in relation to obtaining any consent, approval or action required to satisfy a Condition or in relation to any future competition filing covered by Clause 6.10 where such communications have not been independently or simultaneously supplied to such other parties;
|
(B)
|
(where permitted by the Authority or other person concerned) provide the other parties (or advisers nominated by such parties) with draft copies of all submissions and communications to Authorities or other persons in relation to obtaining any consent, approval or action required to satisfy a Condition or in relation to any future competition filing covered by Clause 6.10 (excluding communications of an administrative nature) at such time as will allow such other parties a reasonable opportunity to provide comments on such submissions and communications before they are submitted or sent and provide such other parties (or such advisers nominated by such parties) with copies of all such submissions and communications in the form submitted or sent, provided however that no party shall be required to provide another with copies of any element of such submissions or communications which contains information of a commercially sensitive nature; and
|
(C)
|
to give the other parties reasonable notice of and reasonable opportunity to participate in and to attend all meetings and telephone calls with Authorities or other persons in connection with the satisfaction of a Condition or in relation to any future competition filing covered by Clause 6.10 (where permitted by the Authority or other person concerned), and allow such other parties or persons nominated by such other parties to make oral submissions at such meetings or telephone calls, provided however that no party shall be required to permit another to attend any part of such meetings or telephone calls during which information of a commercially sensitive nature is likely to be disclosed.
|
6.12
|
Notwithstanding anything to the contrary in this Agreement, Rosneft shall not be obliged to provide any correspondence or other information or documents in relation to satisfaction of the Condition listed in Paragraph 6 of Schedule 1 (Conditions to Completion) other than the relevant extract from the Rosneft board of directors minutes or Rosneft management board minutes evidencing satisfaction of such Condition.
|
6.13
|
If on the date on which Completion is to take place in accordance with Clause 10.1:
|
(A)
|
each of the Conditions has been satisfied or waived (as the case may be); and
|
(B)
|
Rosneft has notified NADL and Seadrill that it is ready, willing and able to satisfy its obligations under Part A of Schedule 4 (Completion Arrangements),
|
6.14
|
If NADL and / or Seadrill reasonably consider that the Condition in Paragraph 2 of Schedule 1 (Conditions to Completion) will not be satisfied on the date on which Completion is otherwise intended to take place in accordance with Clause 10.1 (the “
Intended Completion Date
”) because of sanctions, embargoes, export controls or restrictive measures which have been imposed or expanded between 10 November 2014 and the Intended Completion Date (other than made pursuant to Bermuda’s International Sanctions Regulations 2013 that extend, or any other enactment of the United Kingdom or Bermuda that extends, Council Regulation (EU) 833/2014 (31st July 2014) to Bermuda or introduce equivalent sanctions in Bermuda)) (the “
Sanctions
”), and which have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts then, on or before the Intended Completion Date, Seadrill and NADL shall notify Rosneft in writing of such matter (a “
Sanctions Matter
“), and then:
|
(D)
|
Completion shall be deferred;
|
(E)
|
NADL and Seadrill shall obtain legal opinions from two independent international law firms of reputable standing which confirm that the Sanctions (1) were imposed or expanded between 10 November 2014 and the Intended Completion Date and (2) have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts (the “
NADL Legal Opinions
”); and
|
(F)
|
NADL and Seadrill shall provide copies of such NADL Legal Opinions to Rosneft within 10 Business Days of the Intended Completion Date.
|
6.15
|
For the avoidance of doubt, NADL shall not be obliged to pay the NADL Break Fee to Rosneft pursuant to Clause 6.13 where this Agreement terminates prior to 10 November 2014.
|
6.16
|
If on the date on which Completion is to take place in accordance with Clause 10.1:
|
(E)
|
each of the Conditions has been satisfied or waived (as the case may be); and
|
(F)
|
NADL and Seadrill have notified Rosneft that they are ready, willing and able to satisfy their respective obligations under Part B of Schedule 4 (Completion Arrangements),
|
6.17
|
If Rosneft reasonably considers that the Condition in Paragraph 2 of Schedule 1 (Conditions to Completion) will not be satisfied on the Intended Completion Date because of Sanctions which have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts then, on or before the Intended Completion Date, Rosneft shall notify NADL and Seadrill in writing of such matter, and then:
|
(A)
|
Completion shall be deferred;
|
(B)
|
Rosneft shall obtain legal opinions from two independent international law firms of reputable standing which confirm that the Sanctions (1) were imposed or extended between 10 November 2014 and the Intended Completion Date and (2) have the effect of making unlawful or otherwise prohibiting the Completion of the Transactions or the execution or performance of any of the Drilling Contracts (the “
Rosneft Legal Opinions
”); and
|
(C)
|
Rosneft shall provide copies of such Rosneft Legal Opinions to NADL and Seadrill within 10 Business Days of the Intended Completion Date.
|
6.18
|
For the avoidance of doubt, Rosneft shall not be obliged to pay the Rosneft Break Fee to NADL and Seadrill pursuant to Clause 6.16 where this Agreement terminates prior to 10 November 2014.
|
7.
|
TERMINATION OF THIS AGREEMENT
|
7.1
|
If any of the Conditions is not fulfilled or waived, as the case may be, on or before 5.00 p.m. on the Long Stop Date then:
|
(F)
|
if it was the obligation of Rosneft under Clause 6.2 to satisfy the relevant Condition (or Conditions) then NADL (with the written consent of Seadrill) may, in its absolute discretion, postpone the Long Stop Date by up to 20 Business Days; or
|
(G)
|
if it was the obligation of Seadrill and NADL under Clause 6.3 to satisfy the relevant Condition (or Conditions) then Rosneft may, in its absolute discretion, postpone the Long Stop Date by up to 20 Business Days; or
|
(H)
|
if responsibility for satisfaction of the relevant Condition or Conditions falls upon none of Rosneft, Seadrill and NADL, then the parties may postpone the Long Stop Date by mutual agreement,
|
7.2
|
If, in the circumstances set out in Clause 7.1, either:
|
(E)
|
the Long Stop Date is not postponed pursuant to Clause 7.1; or
|
(F)
|
any of the Conditions remains to be fulfilled or waived, by 5.00 p.m. on the Postponed Long Stop Date,
|
7.3
|
This Agreement may be terminated at any time prior to Completion by NADL (with the consent of Seadrill) if, prior to Completion, it provides a written notice of termination to Rosneft if:
|
(C)
|
any of the Rosneft Warranties, as modified by the Original Rosneft Disclosure Letter, (either individually or collectively) are, or become, untrue or misleading in any respect or would be untrue or misleading if repeated at that time by reference to the facts and circumstances subsisting at that time on the basis that any reference in the Rosneft Warranties (whether express or implied) to the Signing Date were substituted by a reference to that time, and the underlying circumstances have a material adverse effect on the Sale Group, taken as a whole; or
|
(D)
|
the Original Rosneft Disclosure Letter has been supplemented by an Updated Rosneft Disclosure Letter in accordance with Clause 12.1(B), if the substance of any update of any of the Rosneft Warranties which was made in the Updated Rosneft Disclosure Letter and the circumstances disclosed have a material adverse effect on the Sale Group, taken as a whole; or
|
(E)
|
a Sale Group Material Adverse Change has occurred,
|
7.4
|
This Agreement may be terminated at any time prior to Completion by Rosneft if, prior to Completion, it provides a written notice of termination to Seadrill and NADL if:
|
(F)
|
any of the NADL Warranties, as modified by the Original NADL Disclosure Letter, (either individually or collectively) are, or become, untrue or misleading in any respect or would be untrue or misleading if repeated at that time by reference to the facts and circumstances subsisting at that time on the basis that any reference in the NADL Warranties (whether express or implied) to the Signing Date were substituted by a reference to that time, and the underlying circumstances have or could reasonably be expected to have a material adverse effect on NADL; or
|
(G)
|
the Original NADL Disclosure Letter has been supplemented by an Updated NADL Disclosure Letter in accordance with Clause 13.1(B), if the substance of any update of any of the NADL Warranties which was made in the Updated NADL Disclosure Letter and the circumstances disclosed have a material adverse effect on NADL, taken as a whole; or
|
(H)
|
a NADL Material Adverse Change has occurred,
|
7.5
|
If any Service Order is terminated prior to Completion pursuant to clause 13.3 of the Master Agreement, either Rosneft or NADL (with the written consent of Seadrill) may terminate this Agreement forthwith on written notice to the other parties given at any time prior to Completion.
|
7.6
|
If this Agreement is terminated in accordance with Clause 7 (Termination of this Agreement), all rights and obligations of the parties under this Agreement shall immediately terminate (except for the Surviving Provisions) but (for the avoidance of doubt) all rights, obligations and liabilities of the parties which have accrued before termination shall continue to exist.
|
7.7
|
Notwithstanding any other provision in this Agreement but without prejudice to Clauses 6.13 to 6.18 (inclusive), if at any time sanctions, embargoes, export controls, or restrictive measures are in force or are imposed or extended which have the effect of making unlawful or otherwise restricting or prohibiting any member of the NADL Group, member of the Seadrill Group or member of the Rosneft Group from performing their actual or prospective obligations under or pursuant to any of the Key Agreements (a “
Sanctions Event
”) then:
|
(C)
|
if the Sanctions Event occurs before Completion, the parties shall use all reasonable endeavours to restructure the transactions or rights and obligations of the parties under the Key Agreements (including making changes to the transaction structure, the parties, its mechanics or sequence of steps) to enable the parties, so far as possible, to perform their respective obligations and enjoy and receive their respective rights and benefits as initially envisaged under the Key Agreements and in any other way that is reasonably practicable; or
|
(D)
|
if the Sanctions Event occurs after Completion:
|
(i)
|
the parties shall use all reasonable endeavours to restructure the transactions or rights and obligations of the parties under the Key Agreements (including making changes to the transaction structure, the parties, its mechanics or sequence of steps) to enable the parties, so far as possible, to perform their respective obligations and enjoy and receive their respective rights and benefits as initially envisaged under the Key Agreements and in any other way that is reasonably practicable; and
|
(ii)
|
to the extent that any rights or obligations of a party under the Key Agreements are affected by the Sanctions Event, the parties shall not be in breach of the Key Agreements or otherwise liable to the other parties for any delay in performance or any non-performance of any obligations under the Key Agreements (and the time for performance will be extended accordingly) if and to the extent that the delay or non-performance is owing to the Sanction Event.
|
8.
|
ROSNEFT ACTIONS PENDING COMPLETION
|
8.1
|
Rosneft shall procure that between the Signing Date and Completion each member of the Sale Group shall carry on its business, as carried on as at the Signing Date, in the normal course and not, without the consent in writing of Seadrill and NADL, such consent not to be unreasonably withheld, delayed or conditioned, do any of the acts or matters listed in Schedule 2 (Rosneft Conduct of Business for the Sale Group before Completion).
|
8.2
|
Without prejudice to any of Rosneft’s other rights hereunder, Clause 8.1 and Schedule 2 (Rosneft Conduct of Business for the Sale Group before Completion) shall not operate so as to restrict or prevent:
|
(F)
|
the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by any member of the Sale Group prior to the Signing Date and which, in the case of a Material Contract, was disclosed no later than five (5) Business Days before the Signing Date in the Rosneft Data Room;
|
(G)
|
any matter undertaken by any member of the Sale Group in an emergency or disaster situation with the intention of minimising any adverse effect thereof (and of which Seadrill and NADL will be promptly notified);
|
(H)
|
any matter carried out in order to comply with this Agreement or the other Transaction Documents;
|
(I)
|
any matter undertaken at the written request of Seadrill or NADL or with the written consent of Seadrill and NADL;
|
(J)
|
any matter reasonably required in connection with the satisfaction of the Conditions;
|
(K)
|
any matter required by law, including Tax law, regulation or any Authority, including any Tax Authority;
|
(L)
|
a contribution to the charter capital of the Company in an aggregate amount of ***** to be made by Rosneft on or around (1) one Business Day before Completion; or
|
(M)
|
a contribution of Shareholder Debt to the charter capital of the relevant member(s) of the Sale Group made in accordance with the provisions of Clause 19.1.
|
8.3
|
Subject to applicable law, as from the Signing Date:
|
(I)
|
Rosneft shall (on a confidential basis) keep Seadrill and NADL informed of material developments affecting the Sale Group and promptly provide Seadrill and NADL with copies of relevant monthly reports;
|
(J)
|
Rosneft shall, upon reasonable notice and subject to receipt of such undertakings as to confidentiality as Rosneft shall reasonably require, procure that the Sale Group shall give Seadrill, NADL and any persons authorised by them reasonable access during Working Hours to the premises and all the Books and Records and title deeds of the Sale Group and the directors and employees of the Sale Group and each member of the Sale Group will be instructed to give promptly all information and explanations to Seadrill, NADL or any such persons as they may reasonably request.
|
9.
|
NADL ACTIONS PENDING COMPLETION
|
9.1
|
NADL shall ensure that between the Signing Date and Completion NADL shall carry on its business, as carried on as at the Signing Date, in the normal course and not, without the consent in writing of Rosneft, such consent not to be unreasonably withheld, delayed or conditioned, do any of the acts or matters listed in Schedule 3 (NADL Conduct of Business before Completion). Seadrill shall ensure that between the Signing Date and Completion Seadrill will exercise its rights as a shareholder of NADL to ensure, so far as within its power and control, that none of the acts or matters listed in Part B of Schedule 3 (NADL Conduct of Business before Completion) are approved by NADL’s shareholders in general meeting or by written resolution without the consent in writing of Rosneft, such consent not to be unreasonably withheld, delayed or conditioned.
|
9.2
|
Without prejudice to any of NADL’s other rights hereunder, Clause 9.1 and Schedule 3 (NADL Conduct of Business before Completion) shall not operate so as to restrict or prevent:
|
(K)
|
the completion or performance of any obligations undertaken pursuant to any contract or arrangement entered into by any member of the NADL Group prior to the Signing Date and which, in the case of a NADL Material Contract, was disclosed no later than five (5) Business Days before the Signing Date in the NADL Data Room;
|
(L)
|
the entry into or operation of, and any commitment in connection with, any drilling contract entered into by NADL (or any member of the NADL Group) in relation to any Offshore Rig provided that any such action shall not result in the Offshore Rigs being unavailable for use pursuant to the Offshore Drilling Contracts from the anticipated date of commencement;
|
(M)
|
any matter undertaken by NADL in an emergency or disaster situation with the intention of minimising any adverse effect thereof (and of which Rosneft will be promptly notified);
|
(N)
|
any matter carried out in order to comply with this Agreement or the other Transaction Documents;
|
(O)
|
any matter undertaken at the written request of Rosneft or with the written consent of Rosneft;
|
(P)
|
any matter reasonably required in connection with the satisfaction of the Conditions; or
|
(Q)
|
any matter required by law, including Tax law, regulation or any Authority, including any Tax Authority.
|
9.3
|
Subject to applicable law, as from the Signing Date:
|
(D)
|
NADL shall (on a confidential basis) keep Rosneft informed of material developments affecting NADL and promptly provide Rosneft with copies of relevant monthly reports;
|
(E)
|
NADL shall, upon reasonable notice and subject to receipt of such undertakings as to confidentiality as NADL shall reasonably require, give Rosneft and any persons authorised by them reasonable access during Working Hours to the premises and all the Books and Records and title deeds of the NADL Group and the directors and employees of the NADL Group and NADL will give promptly all information and explanations to Rosneft or any such persons as they may reasonably request.
|
10.
|
COMPLETION
|
10.1
|
Completion shall take place on the last Business Day of the month in which all of the Conditions shall have been satisfied or waived in accordance with this Agreement, provided that if such Business Day falls less than 5 (five) Business Days following the day on which all of the Conditions have been so satisfied or waived, Completion shall take place on the last Business Day of the month immediately following, or such other date as the parties may agree. Completion shall be no earlier than 10 November 2014.
|
10.2
|
Completion shall take place at the offices of Rosneft’s Solicitors in Moscow.
|
10.3
|
At Completion, Rosneft shall do those things listed in Part A (Rosneft’s Obligations) of Schedule 4 (Completion arrangements) and Seadrill and NADL shall do those things listed in Part B (Seadrill and NADL’s Obligations) of Schedule 4 (Completion arrangements).
|
10.4
|
No later than three Business Days prior to Completion, Rosneft shall notify NADL of:
|
(E)
|
the Estimated Cash Amount;
|
(F)
|
the Estimated Debt Amount;
|
(G)
|
the Estimated Net Cash / Debt Amount;
|
(H)
|
the Estimated Working Capital Amount; and
|
(I)
|
the Estimated Consideration.
|
10.5
|
Upon completion of the process of notarisation by the Notary of the Russian SPA and the Transfer Application Form in relation to the Russian SPA in accordance with this Clause 10 (Completion) and Schedule 4 (Completion arrangements), Rosneft and NADL shall use all reasonable endeavours to procure that the Notary submits the Transfer Application Form in relation to the Russian SPA to the Register as soon as reasonably practicable (and in any case within three (3) calendar days) following Completion in compliance with the requirements of parts 14 and 15 of Article 21 of the LLC Law.
|
10.6
|
If the obligations of the parties to be performed on the Completion Date under this Agreement are not complied with on the Completion Date, Rosneft, if Seadrill or NADL has not so complied, or Seadrill and NADL, if Rosneft has not so complied, may:
|
(A)
|
defer Completion (so that the provisions of this Clause 10 (Completion) shall apply to Completion as so deferred); or
|
(B)
|
proceed to Completion as far as practicable (without limiting its rights under this Agreement) and specify a later date (not being later than 5 Business Days after the Long Stop Date) on which Rosneft or, as the case may be, Seadrill and NADL shall be obliged to complete its outstanding obligations; or
|
(C)
|
terminate this Agreement by notice in writing.
|
10.7
|
If there is any conflict between the terms of this Agreement and the Russian SPA, this Agreement shall prevail and the parties shall take such steps to make sure that the intention of the parties under this Agreement is implemented. The parties acknowledge and agree that the Russian SPA is to be entered into in furtherance of the transactions contemplated by this Agreement and to comply with the requirements of the law governing the Russian SPA, but collectively with this Agreement record the terms of one (1) series of related transactions, and not independent transactions. Each party covenants to each other party that it will not assert in any forum any argument predicated on the existence of a conflict between this Agreement and the Russian SPA or otherwise seek to deny the operability of any provision of this Agreement on the basis of an alleged conflict with the Russian SPA.
|
10.8
|
Rosneft on the one part, and NADL on the other part (each, the “
indemnifying parties
”) covenant to each other that they will, immediately on demand, pay an amount equal to all liability which: (i) if the indemnifying party is Rosneft, any of Seadrill or NADL or any other member of the Seadrill Group or the NADL Group; and (ii) if the indemnifying party is NADL, Rosneft or any other member of the Retained Group, in each case incurs or suffers in connection with, arising out of or resulting from, any breach of Clause 10.7 by any of such indemnifying parties (or, in the case of NADL, Seadrill).
|
11.
|
COMPLETION ACCOUNTS
|
11.1
|
Following Completion, the parties shall comply with their respective obligations set out in Schedule 8 (Completion Accounts).
|
11.2
|
Rosneft shall procure that the Sale Group has Cash balances as at the Completion Date of at least ***** that are freely available immediately following Completion for use by members of the Sale Group. Rosneft shall satisfy its procurement obligation described in the immediately preceding sentence by a contribution to the charter capital of the Company.
|
11.3
|
If a provision has been accrued in the Completion Accounts and included in the Completion Debt Amount for any loss-making contract(s) of the Sale Group in accordance with Paragraph 17 of Part C of Schedule 8 (Completion Accounts) (the "
Loss Provision
") then, to the extent that at any time after the Completion Date revised terms for any such contract are negotiated so that any such losses which have been provided for in the Completion Accounts are reduced partially or eliminated in full under the revised terms, then NADL undertakes to pay Rosneft within 15 Business Days of the entry into force of the revised terms of the relevant contract a cash amount equal to the lower of:
|
(J)
|
the Loss Provision included in the Completion Accounts in respect of the relevant contract; and
|
(K)
|
the amount by which the Loss Provision would have been reduced had the negotiations of the revised terms of the relevant contract been concluded immediately prior to the determination or agreement of the Completion Accounts.
|
11.4
|
If any penalties or early termination fees in accordance with Paragraph 30(b) of Part C of Schedule 8 (Completion Accounts) and/or any claims in accordance with Paragraph 30(c) of Part C of Schedule 8 (Completion Accounts) have, in each case, been included in the Completion Debt Amount in the Completion Accounts then, to the extent that at any time after the Completion Date such penalties, early termination fees or claims are waived, forgiven or withdrawn, NADL undertakes to pay Rosneft within 15 Business Days of any such waiver, forgiveness or withdrawal a cash amount equal to the lower of: (i) the amount waived, forgiven or withdrawn; and (ii) the penalty, early termination fee and/or claim, as the case may be, included in the Completion Debt Amount in the Completion Accounts. Rosneft and NADL shall, and shall procure that the NADL Group and the Retained Group (as the case may be) shall, cooperate and provide such reasonable assistance as may be requested in the negotiation of any such waiver, forgiveness or withdrawal.
|
11.5
|
If a provision has been accrued in the Completion Accounts in relation to the receivables, accrued income or work in progress in relation to Severneft-Urengoy in accordance with Paragraph 24 of Part C of Schedule 8 (Completion Accounts) then, to the extent that at any time after the Completion Date Severneft-Urengoy formally accepts such receivables, accrued income or work in progress, then NADL undertakes to pay Rosneft within 15 Business Days of the receipt by the Sale Group of such formal acceptance from Severneft-Urengoy a cash amount equal to the lower of: (i) the amount accepted by Severneft-Urengoy; and (ii) the provision included in the Completion Accounts. Rosneft and NADL shall, and shall procure that the NADL Group and the Retained Group (as the case may be) shall, cooperate and provide such reasonable assistance as may be requested in obtaining relevant acceptances from Severneft-Urengoy.
|
11.6
|
If Rosneft makes a request for additional capital expenditure of the Sale Group to be agreed between the parties for the purposes of Paragraph 15 of Part C of Schedule 8 (Completion Accounts), neither NADL nor Seadrill shall withhold their agreement to such request provided the capital expenditure requested is reasonable.
|
12.
|
ROSNEFT WARRANTIES AND COVENANTS
|
12.1
|
Rosneft represents and warrants to Seadrill and NADL that each of the Rosneft Warranties:
|
(E)
|
is accurate in all respects and not misleading at the Signing Date, except as disclosed in the Original Rosneft Disclosure Letter; and
|
(F)
|
will be accurate in all respects and not misleading at the Completion Date as if repeated immediately before Completion by reference to the facts and circumstances subsisting at that date on the basis that any reference in the Rosneft Warranties, whether express or implied, to the Signing Date is substituted by a reference to the Completion Date, except as disclosed in any updated disclosure letter which shall be in equivalent form to the Original Rosneft Disclosure Letter and delivered by Rosneft to Seadrill and NADL not later than five (5) Business Days prior to the Completion Date (the “
Updated Rosneft Disclosure Letter
”). The Updated Rosneft Disclosure Letter shall not:
|
(i)
|
contain any disclosure of facts or circumstances which were known by Rosneft on or before the Signing Date (“
Known Matters
”), and to the extent the Updated Rosneft Disclosure Letter does contain any Known Matters such Known Matters shall not qualify the Rosneft Warranties or limit Rosneft’s liability in any way in respect thereof; or
|
(ii)
|
contain any disclosure against any of the Key Rosneft Warranties (“
Key Warranty Disclosure
”), and to the extent the Updated Rosneft Disclosure Letter does contain any Key Warranty Disclosure such Key Warranty Disclosure shall not qualify the Key Rosneft Warranties or limit Rosneft’s liability in any way in respect thereof.
|
12.2
|
Save as provided in Paragraph 27 of Part B of Schedule 5 (Rosneft Representations and Warranties), none of the Company Warranties shall apply to Orenburg or any of the Orenburg Subsidiaries or their respective business, assets or liabilities.
|
12.3
|
Rosneft accepts that Seadrill and NADL are entering into this Agreement in reliance upon the Rosneft Warranties and that Seadrill and NADL have been induced to enter into this Agreement by each of the Rosneft Warranties.
|
12.4
|
Rosneft undertakes to notify in writing to Seadrill and NADL anything which is or may constitute material breach of or be materially inconsistent with any of the Rosneft Warranties as soon as reasonably practicable after it comes to its notice both before or at the time of Completion.
|
12.5
|
Rosneft undertakes (in the absence of fraud) that, if any claim is made against it in connection with the Transactions, it shall not make any claim against any member of the Sale Group or any director, employee, agent or adviser of any member of the Sale Group on whom it may have relied before agreeing to any term of the Transaction Documents or authorising any statement in the Current Rosneft Disclosure Letter.
|
12.6
|
Each of the Rosneft Warranties shall be construed as a separate and independent warranty and (except where expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Rosneft Warranty.
|
12.7
|
In the event that the representation or warranty given in Clause 12.1 is breached in relation to a Rosneft Tax Warranty, Rosneft undertakes to pay to NADL an amount equal to such amount as would be required to indemnify and hold harmless each member of the Sale Group against any cost, damage, expense, liability or loss arising in connection with or in consequence of the matter giving rise to such breach, without prejudice to any other claim as may be made in respect of such breach. For the avoidance of doubt the Rosneft Tax Warranties shall be qualified by any disclosures made in the Current Rosneft Disclosure Letter and Rosneft shall not be liable for any claim under the Rosneft Tax Warranties in respect of any fact, matter, event or circumstance to the extent that such fact, matter, event or circumstance has been disclosed in this Agreement or the Current Rosneft Disclosure Letter, as provided for in Clause 12.1.
|
12.8
|
For the avoidance of doubt, the parties agree and acknowledge that any damages arising as a result of or by reference to any breach of the Rosneft Tax Warranty set out at Paragraph 18(R) of Part A of Schedule 5 (Rosneft Representations and Warranties) will be calculated by reference to the difference between the actual payment and the relevant market value rather than the full amount of the relevant market value.
|
13.
|
NADL WARRANTIES AND COVENANTS
|
13.1
|
NADL represents and warrants to Rosneft that each of the NADL Warranties:
|
(L)
|
is accurate in all respects and not misleading at the Signing Date, except as disclosed in the Original NADL Disclosure Letter;
|
(M)
|
will be accurate in all respects and not misleading at the Completion Date as if repeated immediately before Completion by reference to the facts and circumstances subsisting at that date on the basis that any reference in the NADL Warranties, whether express or implied, to the Signing Date is substituted by a reference to the Completion Date, except as disclosed in any updated disclosure letter which shall be in equivalent form to the Original NADL Disclosure Letter and delivered by NADL to Rosneft not later than five (5) Business Days prior to the Completion Date (the “
Updated NADL Disclosure Letter
”). The Updated NADL Disclosure Letter shall not:
|
(iv)
|
contain any disclosure of facts or circumstances which were known by NADL on or before the Signing Date (“
NADL Known Matters
”), and to the extent the Updated NADL Disclosure Letter does contain any NADL Known Matters such NADL Known Matters shall not qualify the NADL Warranties or limit NADL’s liability in any way in respect thereof; or
|
(v)
|
contain any disclosure against any of the Key NADL Warranties (“
NADL Key Warranty Disclosure
”), and to the extent the Updated NADL Disclosure Letter does contain any NADL Key Warranty Disclosure such NADL Key Warranty Disclosure shall not qualify the Key NADL Warranties or limit NADL’s liability in any way in respect thereof.
|
13.2
|
NADL accepts that Rosneft is entering into this Agreement in reliance upon the NADL Warranties and that Rosneft has been induced to enter into this Agreement by each of the NADL Warranties.
|
13.3
|
NADL undertakes to notify in writing to Rosneft anything which is or may constitute a material breach of or be materially inconsistent with any of the NADL Warranties as soon as reasonably practicable after it comes to its notice both before or at the time of Completion.
|
13.4
|
NADL undertakes (in the absence of fraud) that if any claim is made against it in connection with the Transactions, not to make any claim against any current director, employee, agent or adviser of any member of the NADL Group on whom it may have relied before agreeing to any term of the Transaction Documents or authorising any statement in the Current NADL Disclosure Letter.
|
13.5
|
Each of the NADL Warranties shall be construed as a separate and independent warranty and (except where expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other NADL Warranty.
|
13.6
|
In the event that the representation or warranty given in Clause 13.1 is breached in relation to a NADL Tax Warranty, NADL undertakes to pay to Rosneft an amount equal to such amount as would be required to indemnify and hold harmless each member of the Retained Group against any cost, damage, expense, liability or loss arising in connection with or in consequence of the matter giving rise to such breach, without prejudice to any other claim as may be made in respect of such breach. For the avoidance of doubt the NADL Tax Warranties shall be qualified by any disclosures made in the Current NADL Disclosure Letter and NADL shall not be liable for any claim under the NADL Tax Warranties in respect of any fact, matter, event or circumstance to the extent that such fact, matter, event or circumstance has been disclosed in this Agreement or the Current NADL Disclosure Letter, as provided for in Clause 13.1.
|
13.7
|
For the avoidance of doubt, the parties agree and acknowledge that any damages arising as a result of or by reference to any breach of the NADL Tax Warranty set out at Paragraph 4(O) of Schedule 6 (NADL Representations and Warranties) will be calculated by reference to the difference between the actual payment and the relevant market value rather than the full amount of the relevant market value.
|
14.
|
SEADRILL WARRANTY
|
15.
|
PARTIES’ WARRANTIES
|
15.1
|
Each party represents and warrants to each other party as at the Signing Date and immediately before Completion that:
|
(D)
|
it is validly incorporated, in existence and duly registered and has the requisite capacity, power and authority to enter into and, subject to the satisfaction of the Conditions, perform this Agreement and the other Transaction Documents to which it is or will be a party and to execute, deliver and, subject to the satisfaction of the Conditions, perform any obligations it may have under this Agreement and any other Transaction Documents to which it is or will be a party;
|
(E)
|
the obligations of it under this Agreement and any other Transaction Documents to which it is or will be a party constitute, or will constitute, binding obligations of it in accordance with their respective terms;
|
(F)
|
the execution and delivery of, and, subject to the satisfaction of the Conditions, the performance by it of its obligations under this Agreement and any other Transaction Document to which it is or will be a party will not:
|
(i)
|
result in a breach of any provision of its constitutional documents;
|
(ii)
|
result in a breach of, or constitute a default under, any instrument by which it is bound;
|
(iii)
|
result in a breach of any order, judgment or decree of any court or Authority by which it is bound; or
|
(iv)
|
require it to obtain any governmental, statutory, regulatory or other approvals, consents, licences, waivers or exemptions, or give any notice to or make any registration with, any Authority or other party which has not been made or obtained at the date hereof save, for the avoidance of doubt, any approval, consent, licence, waiver, exemption, notice or registration required to satisfy the Conditions.
|
15.2
|
Rosneft gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the Retained Group that is or will be a party to a Transaction Document.
|
15.3
|
NADL gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the NADL Group that is or will be a party to a Transaction Document.
|
15.4
|
Seadrill gives the representations and warranties set out in Clause 15.1 in respect of each of the members of the Seadrill Group that is or will be a party to a Transaction Document.
|
16.
|
LIABILITY; LIMITATIONS ON LIABILITY
|
16.1
|
Rosneft shall not be liable in respect of any breach of this Agreement to the extent that the limitations set out in Part A of Schedule 7 (Limitations on liability) apply.
|
16.2
|
Seadrill and NADL shall not be liable in respect of any breach of this Agreement to the extent that the limitations set out in
Part B
of Schedule 7 (Limitations on liability) apply.
|
16.3
|
In the absence of fraud and subject to Clause 13.1, Rosneft shall not be entitled to claim that any fact, matter or circumstance causes any of the NADL Warranties to be breached if it has been disclosed in the Current NADL Disclosure Letter.
|
16.4
|
In the absence of fraud and subject to Clause 12.1, Seadrill and NADL shall not be entitled to claim that any fact, matter or circumstance causes any of the Rosneft Warranties to be breached if it has been disclosed in the Current Rosneft Disclosure Letter.
|
16.5
|
If, whether before or following Completion, Seadrill or NADL becomes aware (whether by reason of any disclosure made pursuant to Clause 12 (Rosneft Warranties and Covenants) or not) that there has been any breach of the Rosneft Warranties or any other term of this Agreement, none of Seadrill or NADL shall be entitled to terminate or rescind this Agreement, save under Clauses 7.2, 7.3, 7.4 and 7.5 or Clause 10.6.
|
16.6
|
If, whether before or following Completion, Rosneft becomes aware (whether by reason of any disclosure made pursuant to Clause 13 (NADL Warranties and Covenants) or not) that there has been any breach of the NADL Warranties or any other term of this Agreement, Rosneft shall not be entitled to terminate or rescind this Agreement, save under Clauses 7.2, 7.3, 7.4 and 7.5 or Clause 10.6.
|
16.7
|
The provisions of Clauses 16.5 and 16.6 shall be without prejudice to any other right or remedy (other than termination or rescission) which any party may now or hereafter hold in respect of all or any part of the obligations of any other party under this Agreement and the other documents referred to in this Agreement.
|
16.8
|
If NADL fails to perform any of its obligations under this Agreement, Rosneft shall be entitled to make a claim against Seadrill in respect thereof as if Seadrill and NADL were jointly and severally liable for the relevant obligation(s) under this Agreement. The liability of Seadrill under this Clause 16.8 shall not exceed the liability of NADL in respect of non-performance of the relevant obligations.
|
16.9
|
Where any amount is due from Rosneft to NADL pursuant to this Agreement (other than any payment pursuant to Clause 2.11 or any payment for the subscription of shares in the share capital of NADL), Rosneft shall be entitled to elect no later than 5 Business Days before the due date for settlement of such amount to satisfy such amount in whole or in part by:
|
(A)
|
payment of such amount (in whole or in part) in cash subject to Clauses 29.3 to 29.5; and/or
|
(B)
|
waiving (in whole or in part, as required) all its rights to any dividend payable by NADL at the next two dividend payment dates in an amount equal to the amount of the payment due from Rosneft under this Clause 16.9 as increased by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for settlement of such amount to (but excluding) the date on which the relevant dividend would have otherwise been settled provided that the maximum amount which Rosneft shall be entitled to waive on any one occasion shall be an amount equal to the lower of:
|
(vi)
|
US$40,000,000; and
|
(vii)
|
the aggregate of the quarterly dividend payments received by Rosneft in the seven months immediately preceding the due date for settlement of the amount from Rosneft to NADL; and/or
|
(C)
|
to the extent that such amount is less than US$10,000,000, treating such amount (in whole or in part) as an amount outstanding from Rosneft to NADL for the purposes of Clause 3 (Contract Shares) at the Acceptance Date or Settlement Date (as the case may be) immediately following the due date for settlement and such amount shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for such settlement to (but excluding) such Acceptance Date or Settlement Date (as the case may be); and/or
|
(D)
|
to the extent that such amount is less than US$10,000,000,
treating such amount (in whole or in part) as an amount outstanding from Rosneft to NADL for the purposes of Clause 5 (Extended Co-Operation) at the Additional Contract Acceptance Date or Settlement Date (as the case may be) immediately following the due date for settlement and such amount shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the due date for such settlement to (but excluding) such Additional Contract Acceptance Date or Settlement Date (as the case may be),
|
(i)
|
Rosneft shall only be entitled to exercise its rights under Clauses 16.9(C) and (D) where there is any Offshore Drilling Contract or Additional Drilling Contract in force and an Acceptance Date or Additional Contract Acceptance Date under any such contract or a Settlement Date is scheduled to fall within 6 months from the due date for settlement by Rosneft. Where an election has been made under Clause 16.9(B), an equivalent amount to that so waived shall cease to be an amount outstanding from Rosneft to NADL for the purposes of this Agreement, including Clauses 3 (Contract Shares) or 5 (Extended Co-Operation); and
|
(ii)
|
if Rosneft does not make an election under this Clause 16.9, then Rosneft shall be deemed to have exercised its rights under Clause 16.9(B).
|
16.10
|
Rosneft may, at any time, elect to reduce the Rolled Forward Amount or the Additional Contract Rolled Forward Amount or the Seadrill Additional Contract Rolled Forward Amount by paying an amount in cash provided that Clauses 29.3 to 29.5 shall apply to such payment.
|
17.
|
TAJIKISTAN; OBK CONTRACTS
|
17.1
|
Rosneft shall procure that, prior to Completion, the Sale Group shall sell, and a member of the Retained Group shall buy, the Tajikistan Business and that such member of the Retained Group shall assume all of the liabilities and obligations of the Sale Group in relation to the Tajikistan Business (the “
Carve Out
”).
|
17.2
|
Where the consent of any third party is required to the Carve Out (or any elements thereof), Rosneft shall be responsible (at its own expense) for obtaining any such consent.
|
17.3
|
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay NADL on demand on an after-Tax basis (which shall be construed in accordance with Clauses 29.3 to 29.5 (inclusive)) an amount equal to all costs, losses, damages, reasonable expenses (including reasonable legal and other professional expenses) or liabilities suffered or incurred by NADL or any member of the Sale Group:
|
(G)
|
as a consequence of, or which would not have arisen but for, the implementation and completion of the Carve Out; and
|
(H)
|
arising after Completion out of, or in connection with, the Tajikistan Business.
|
17.4
|
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay to NADL on demand on an after-Tax basis (which shall be construed in accordance with Clauses 29.3 to 29.5 (inclusive)) an amount equal to all break fees, termination payments, penalties or other similar liabilities suffered or incurred by NADL or any member of the Sale Group (net of any Cash Tax Saving) before, on or after Completion to the extent not discharged before Completion and arising out of or in connection with:
|
(D)
|
the termination or cancellation by Rosneft or any member of the Sale Group of any drilling contracts which Orenburg has entered into with any third party (not being a member of the NADL Group) (the “
Orenburg Contracts
”); and
|
(E)
|
the termination or cancellation by any of the third parties to any Orenburg Contract of any of the Orenburg Contracts as a result of the exercise of a contractual right to terminate arising as a result of the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA,
|
(i)
|
any Orenburg Contracts entered into between Orenburg and Lukoil and any Orenburg Contracts entered into between Orenburg and Rusvetpetro;
|
(ii)
|
any Orenburg Contracts terminated or cancelled prior to the Orenburg Acquisition; and
|
(iii)
|
those Orenburg Contracts expressly referenced in Paragraph 30b(ii) of Schedule 8 (Completion Accounts).
|
18.
|
NON-SOLICITATION
|
18.1
|
Rosneft will not and undertakes to procure that each member of the Retained Group will not do any of the following things:
|
(C)
|
neither pending nor within one year after Completion, employ any person at present or at Completion an employee of any member of the Sale Group save with the prior written consent of NADL, such consent not to be unreasonably withheld or delayed; nor
|
(D)
|
between one and two years after Completion, solicit or entice away from the employment of any member of the Sale Group any person at present or at Completion an employee of any member of the Sale Group except for any employee who answers a public advertisement not intended to target any specific employee or group of employees.
|
18.2
|
Each undertaking contained in Clause 18.1 shall be construed as a separate undertaking and if one or more of the undertakings is held to be against the public interest or unlawful or in any way an unreasonable restraint of trade, the remaining undertakings shall continue to bind Rosneft.
|
19.
|
INTER-COMPANY AMOUNTS
|
19.1
|
Immediately prior to Completion, Rosneft shall (or shall procure that the relevant members of the Retained Group shall):
|
(I)
|
settle the Shareholder Debt in full; and / or
|
(J)
|
contribute the Shareholder Debt to the charter capital of the relevant member(s) of the Sale Group,
|
19.2
|
Rosneft shall ensure that its compliance with the provisions in Clause 19.1 shall not result in:
|
(A)
|
the waiver of any Shareholder Debt; or
|
(B)
|
any change in the number of shareholders (participants) in any member of the Sale Group.
|
19.3
|
Rosneft as agent for the members of the Retained Group shall settle the Inter-Company Receivables (in respect of the supply of goods and services) within 60 Business Days following Completion (the “
Payment Date
”). If any Inter-Company Receivables remain outstanding as at the Payment Date, then those Inter-Company Receivables shall increase by an amount equal to LIBOR plus 4% (four per cent.) per annum from (and including) the Payment Date to (but excluding) the date of actual payment.
|
19.4
|
Without restricting the rights of NADL or its ability to claim damages on any basis, Rosneft shall pay to NADL on demand an amount equal to the aggregate of all amounts of incremental Tax incurred or suffered by any member of the NADL Group as a consequence of, or which would not have arisen but for, the settlement of the Shareholder Debt.
|
20.
|
TRANSITIONAL SERVICES; POST COMPLETION UNDERTAKINGS; WEATHERFORD OPTION
|
20.1
|
Rosneft and NADL shall give effect to Schedule 13 (TSA Provisions).
|
20.2
|
Following Completion, NADL undertakes to Rosneft and to each member of the Retained Group:
|
(A)
|
to procure that, as soon as reasonably practicable after the Completion Date and in any event within one month afterwards, the name of any member of the Sale Group which consists of or incorporates “RN” or “Rosneft” or anything which in the reasonable opinion of Rosneft is confusingly similar to “RN” or “Rosneft”, is changed to a name which does not include “RN” or “Rosneft” or any name confusingly similar thereto; and
|
(B)
|
to procure that, as soon as reasonably practicable after the Completion Date and in any event within three months afterwards, the Sale Group shall cease to use or display any trade or service names, marks or logos owned by any member of the Retained Group or any trade or service names, marks or logos confusingly similar thereto and shall not order or create any new item including such trade or service name, mark or logo.
|
20.3
|
Rosneft hereby grants to each member of the Sale Group a non-exclusive, royalty free, fully paid-up licence to use “RN” and “Rosneft” for the period of three months after the Completion Date solely for the purposes of carrying on the business of any member of the Sale Group which incorporates, displays or uses “RN” or “Rosneft” in the manner carried on immediately prior to Completion.
|
20.4
|
As from delivery of a notice from NADL requesting access to undertake due diligence on the Weatherford Business, Rosneft shall (or shall procure that such member(s) of the Retained Group as own(s) the Weatherford Business shall), upon reasonable notice and subject to receipt of such undertakings of confidentiality as Rosneft shall reasonably require, make available to NADL and any persons authorised by them through an agreed individual or group of individuals within Rosneft and at an agreed location all the Books and Records and information relating to the Weatherford Business (including, for the avoidance of doubt, the Weatherford SPA) as NADL may reasonably request (the date on which the first such information or access is provided shall be the “
Due Diligence Commencement Date
”) and such inspection visits to each of the premises of the Weatherford Business as the parties shall reasonably agree and Rosneft shall promptly so provide all information to NADL or any such persons as they may reasonably request so as to enable NADL to carry out due diligence on the Weatherford Business and assess whether it wishes to exercise the Weatherford Option. The due diligence process under this Clause 20.4 shall last for a maximum period of four months from the Due Diligence Commencement Date subject to Rosneft complying with its obligations to provide such information.
|
20.5
|
Rosneft hereby grants to NADL an option (the “
Weatherford Option
”) exercisable during the Weatherford Option Period, to require Rosneft to sell, or to require Rosneft to procure that such member(s) of the Retained Group as own(s) the Weatherford Business at the time of the exercise of the Weatherford Option sell, the Weatherford Business to NADL (or such member of the NADL Group as NADL shall designate in writing) on the sale terms set out in Clauses 20.8 to 20.13 (inclusive).
|
20.6
|
The Weatherford Option may be exercised by the giving of a notice in writing by NADL to Rosneft during the Weatherford Option Period (the “
Weatherford
Option Notice
”). NADL shall be entitled to exercise the Weatherford Option only in respect of all of the Weatherford Business.
|
20.7
|
If the Weatherford Option is exercised in accordance with this Clause then, Rosneft (or the relevant member(s) of the Retained Group) shall sell and NADL (or a member of the NADL Group) shall purchase the Weatherford Business. If the Weatherford Option is not duly exercised during the Weatherford Option Period, it shall lapse and cease to have any further effect.
|
20.8
|
Each party undertakes to negotiate in good faith to agree whether the sale of the Weatherford Business should be subject to the satisfaction of any conditions. If it is agreed that any filings should be made and/or any regulatory or other third party approvals are necessary, the parties shall then co-operate in good faith and Rosneft and NADL shall use their respective reasonable endeavours to make any such filings or obtain any such regulatory or third party approvals.
|
20.9
|
The total consideration for the purchase of the Weatherford Business shall be an amount equal to the Weatherford Option Price.
|
20.10
|
The Weatherford Option Price shall be equal to the Weatherford Consideration, plus any capital invested by any member of the Retained Group into the Weatherford Business on or before exercise of the Weatherford Option, minus any dividends, distributions, returns of capital or other leakage (if any) paid out of the Weatherford Business to any member of the Retained Group on or before the date of exercise of the Weatherford Option. Each of the aforementioned cashflows shall be expressed in Dollars and shall be increased by an amount of interest equal to 13.3% per annum calculated from the date that the respective cashflow took place up to the exercise of the Weatherford Option.
|
20.11
|
The parties shall use their respective reasonable endeavours to procure that the Weatherford Option Price shall be agreed in good faith as soon as possible following the service of the Weatherford Option Notice and, in any event, within 20 (twenty) Business Days failing which, each matter in dispute shall be settled in accordance with Clause 34 of this Agreement.
|
20.12
|
Without prejudice to Clause 20.13, any transfer of the Weatherford Business shall be on the following terms:
|
(A)
|
completion of the transfer of the Weatherford Business shall take place within one hundred and twenty (120) calendar days after the date of the Weatherford Option Notice (or such longer period as may be required in order to obtain any Regulatory Approval(s)); and
|
(B)
|
the Retained Group shall do all such other things and execute all other documents (including any deed) as NADL may reasonably request to give effect to the sale and purchase of the Weatherford Business.
|
20.13
|
The parties agree that the sale and purchase of the Weatherford Business pursuant to the Weatherford Option Notice shall:
|
(A)
|
be effected on substantially the same terms as those set out in the Weatherford SPA (but, subject to Clause 20.10);
|
(B)
|
shall not include any terms similar to the completion accounts adjustment in the Weatherford SPA;
|
(C)
|
include warranties, indemnities and associated liability limitation provisions which are substantially similar to the warranties and indemnities and associated liability limitation provisions (including the date of expiry for bringing claims) contained in the Weatherford SPA, subject only to such changes as are necessary to reflect any differences in sale structure (if applicable); and
|
(D)
|
include a warranty from Rosneft that no facts, circumstances or events have arisen or occurred and nothing has been done or omitted to be done in relation to the Weatherford Business which would have given rise to a breach of any of the warranties contained in the Weatherford SPA during the period of the Retained Group’s ownership of the Weatherford Business provided that no claim shall be brought under such warranty unless written notice of such claim in accordance with Paragraph 2.1 of Part A of Schedule 7 (Limitations on Liability) shall have been given to Rosneft on or before the first anniversary of the completion of the transfer of the Weatherford Business to the NADL Group.
|
20.14
|
Subject to Clauses 20.8 to 20.13 (inclusive), if NADL exercises the Weatherford Option, the parties shall negotiate the terms of the documentation pursuant to which the transfer of the Weatherford Business will be effected in good faith and shall use their respective reasonable endeavours to agree all of the terms of the documentation as soon as reasonably practicable after the exercise of the Option Notice.
|
21.
|
BOOKS AND RECORDS
|
22.
|
EFFECT OF COMPLETION
|
23.
|
REMEDIES AND WAIVERS
|
23.1
|
No delay or omission by any party to this Agreement in exercising any right, power or remedy provided by law or under this Agreement or any other documents referred to in it shall:
|
(A)
|
affect that right, power or remedy; or
|
(B)
|
operate as a waiver of it.
|
23.2
|
The single or partial exercise of any right, power or remedy provided by law or under this Agreement shall not preclude any other or further exercise of it or the exercise of any other right, power or remedy.
|
23.3
|
Save as otherwise provided in this Agreement, the rights, powers and remedies provided in this Agreement are cumulative and not exclusive of any rights, powers and remedies provided by law (save for the right to rescind).
|
24.
|
ASSIGNMENT
|
24.1
|
This Agreement is personal to the parties to it. Accordingly no party may, without the prior written consent of Rosneft (in the case of Seadrill and NADL) or NADL (acting with consent of Seadrill) (in the case of Rosneft), assign, grant any security interest over, hold on trust or otherwise transfer the benefit of all or any of another party’s obligations under this Agreement, save in accordance with Clause 24.2.
|
24.2
|
Subject to Clause 24.3:
|
(A)
|
Rosneft may, without the consent of the other parties, assign to a subsidiary the benefit of the whole or any part of this Agreement, provided that if the assignee ceases to be a subsidiary of Rosneft, it shall before ceasing to be so assign the benefit, so far as assigned to it, back to Rosneft or assign the benefit to another subsidiary of Rosneft; and
|
(B)
|
Seadrill and/or NADL may, without the consent of Rosneft, assign the benefit of the whole or any part of this Agreement to a member of the Seadrill Group or the NADL Group (as the case may be), provided that if the assignee ceases to be a member of the Seadrill Group or the NADL Group, it shall before ceasing to be so assign the benefit, so far as assigned to it, back to Seadrill, NADL or another member of the Seadrill Group or NADL Group.
|
24.3
|
If any assignment is made in accordance with Clause 24.2, the assignee shall not be entitled to benefit from any greater obligation, or to receive any greater amount, than that to which the assignor would have been entitled.
|
25.
|
ENTIRE AGREEMENT
|
25.1
|
The Transaction Documents, the documents referred to therein to be entered into on the Signing Date and the Completion Date and the Letter of Award constitute the whole and only agreement between the parties relating to the Transactions.
|
25.2
|
The Transaction Documents and the Letter of Award supersede any previous agreements (other than the Offshore Drilling Contracts) relating to the subject matter of the Transaction Documents, and set out the complete legal relationship of the parties arising from or connected with that subject matter.
|
25.3
|
Except in the case of fraud, each party acknowledges that it is entering into the Transaction Documents in reliance upon only the Transaction Documents and the Letter of Award and that it is not relying upon any other pre contractual statement.
|
25.4
|
For the purposes of this Clause 25 (Entire Agreement), “pre contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this Agreement made or given by any person at any time prior to this Agreement becoming legally binding.
|
25.5
|
A party’s only right or remedy under this Agreement in respect of a breach of any provision of this Agreement shall be for breach of this Agreement.
|
25.6
|
This Agreement may only be varied in writing signed by each of the parties.
|
25.7
|
At the Signing Date, the heads of agreement concluded by Rosneft and Seadrill and dated 31 March 2014 shall terminate, save for any rights of the parties accrued thereunder before the Signing Date.
|
25.8
|
In the event of any ambiguity or discrepancy between the provisions of this Agreement and any of the other Transaction Documents, the provisions of this Agreement shall prevail.
|
26.
|
NOTICES
|
26.1
|
A notice under this Agreement shall only be effective if it is in writing. E-mails are permitted.
|
26.2
|
Notices under this Agreement shall be sent to a party at its address and for the attention of the individual notified by each party to the other parties on or before the Signing Date, provided that a party may change its notice details on giving notice to the other parties of the change in accordance with this Clause 26 (Notices). That notice shall only be effective on the day falling five clear Business Days after the notification has been received or such later date as may be specified in the notice.
|
26.3
|
Any notice given under this Agreement shall be deemed to have been duly given as follows:
|
(A)
|
if delivered personally, on delivery;
|
(B)
|
if sent by airmail, six clear Business Days after the date of posting; and
|
(C)
|
if sent by e-mail, when sent/at the expiration of 48 hours after the time it was sent.
|
26.4
|
Any notice given under this Agreement outside Working Hours in the place to which it is addressed shall be deemed not to have been given until the start of the next period of Working Hours in such place.
|
27.
|
ANNOUNCEMENTS
|
27.1
|
Subject to Clause 27.2, the parties shall not make any announcement concerning the Transactions or any ancillary matter without the prior written approval of the other parties, such approval not to be unreasonably withheld or delayed.
|
27.2
|
A party may (and any member of the Retained Group or the Seadrill Group or the NADL Group may) make an announcement concerning the Transactions or any ancillary matter if required by:
|
(D)
|
law; or
|
(E)
|
any securities exchange or Authority or any Tax Authority to which that party (or member of the Retained Group or the Seadrill Group or the NADL Group) is subject or submits, wherever situated, whether or not the requirement has the force of law,
|
27.3
|
The restrictions contained in this Clause 27 (Announcements) shall continue to apply after Completion or the termination of this Agreement without limit in time.
|
28.
|
CONFIDENTIALITY
|
28.1
|
Each party shall treat as confidential (and Rosneft shall procure that each member of the Retained Group shall treat as confidential, Seadrill shall procure that each member of the Seadrill Group shall treat as confidential and NADL shall procure that each member of the NADL Group shall treat as confidential), all information received or obtained as a result of entering into or performing this Agreement which relates to:
|
(F)
|
the provisions of this Agreement;
|
(G)
|
the negotiations relating to this Agreement and the Transactions;
|
(H)
|
the subject matter of this Agreement; or
|
(I)
|
the other parties,
|
28.2
|
Notwithstanding the other provisions of this Clause 28 (Confidentiality), a party may disclose any such confidential information:
|
(A)
|
to the extent required by law or for the purpose of any judicial proceedings;
|
(B)
|
to the extent required by any securities exchange or Authority or any Tax Authority to which that party is subject or submits, wherever situated, whether or not the requirement for information has the force of law;
|
(C)
|
to the extent required to vest the full benefit of this Agreement in that party;
|
(D)
|
to its professional advisers, auditors and bankers provided they have a duty to keep such information confidential;
|
(E)
|
to the extent the information has come into the public domain through no fault of that party; or
|
(F)
|
to the extent the other parties have given prior written consent to the disclosure, such consent not to be unreasonably withheld or delayed.
|
28.3
|
The restrictions contained in this Clause 28 shall continue to apply until three years after Completion or until three years after the termination of this Agreement (as applicable).
|
28.4
|
Rosneft acknowledges and agrees that:
|
(C)
|
if any information provided under Clause 9.3 constitutes material non-public information, then until such information has been made public it shall not (and shall procure that the members of the Retained Group shall not) engage in any behaviour while in possession of such information which would amount to insider trading, or market manipulation or other market abuse, for the purposes of U.S. federal and state securities laws, including
Section 10(b) of the Exchange Act and Rules 10b-5, 10b5-1 and 10b5-2 promulgated thereunder (collectively, “
U.S. Securities Laws
”)
; and
|
(D)
|
some or all of the information referred to in (A) above may constitute material non-public information for the purposes of U.S. Securities laws. Rosneft hereby acknowledges that it is aware (and such members of the Retained Group as shall receive such information have been or will be advised by Rosneft) that the U.S. Securities Laws restrict both the purchase and sale of securities by persons who possess material non-public information relating to the issuer of such securities and the communication of such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities and further acknowledges that it shall not (and shall procure that the members of the Retained Group shall not) purchase or sell such securities while in possession of any such material non-public information, encourage another person to purchase or sell such securities or disclose such information to any other person under circumstances in which it is reasonably foreseeable that such other person is likely to purchase or sell such securities before such information has been made public.
|
29.
|
COSTS; EXPENSES AND TAX
|
29.1
|
Except as otherwise agreed, each party shall pay its own costs and expenses in relation to the negotiations leading up to the Transactions and the preparation, execution and carrying into effect of this Agreement and the other Transaction Documents and Rosneft confirms and undertakes that no expense of whatever nature relating to the Transactions has been or is to be borne by any member of the Sale Group.
|
29.2
|
All costs relating to the notarisation of the Russian SPA, certification of Rosneft’s (and its authorised representative’s) and NADL’s (and its authorised representative’s) signature on the Russian SPA, certification of Rosneft’s (and its authorised representative’s) signature on the Transfer Application Form, notification of the Company on transfer of the Shares to NADL and other related notarial services will be borne in equal proportions by NADL (on the one hand) and Rosneft (on the other hand).
|
29.3
|
Except as required by law, all payments made by any party (or any member of the NADL Group, member of the Seadrill Group or member of the Retained Group) pursuant to this Agreement shall be made free and clear of any deduction or withholding whether in respect of Tax or otherwise.
|
29.4
|
If any deductions or withholdings in respect of Tax are required by law to be made from any amounts due from any party pursuant to this Agreement then that party shall be obliged to pay the receiving party (or the relevant member of the NADL Group, member of the Seadrill Group or member of the Retained Group) such sum as shall, after the deduction or withholding has been made, leave the receiving party (or the relevant member of the NADL Group, member of the Seadrill Group or member of the Retained Group) with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding.
|
29.5
|
If any sum payable under this Agreement shall be subject to Tax in the hands of the receiving party (or any member of the NADL Group, member of the Seadrill Group or member of the Retained Group), then, except to the extent that the amount of such payment has been increased to take account of the Tax that will be charged on receipt of such payment and, except in relation to interest, the amount so payable shall be increased by such amount as shall ensure that after payment of the Tax so charged there shall be left a sum equal to the amount that would otherwise be payable under this Agreement.
|
29.6
|
Rosneft and NADL shall discuss an efficient mechanism for the issue of the Contract Shares and the NADL Additional Contract Shares.
|
29.7
|
Clauses 29.3 and 29.5 shall be subject to Clause 3.7(A)(ii) and Clause 5.9(A)(ii), which shall prevail.
|
30.
|
COUNTERPARTS
|
30.1
|
This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart.
|
30.2
|
Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute but one and the same instrument.
|
31.
|
INVALIDITY
|
31.1
|
If at any time any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:
|
(E)
|
the legality, validity or enforceability in that jurisdiction of any other provision of this Agreement; or
|
(F)
|
the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this Agreement.
|
32.
|
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
|
32.1
|
Clauses 12.5, 13.4, 29.4 and 29.5 (the “
Third Party Rights Clauses
”) confer a benefit on certain persons named therein who are not a party to this Agreement (each for the purposes of this Clause 32 a “
Third Party
”) and, subject to the remaining provisions of this Clause, are intended to be enforceable by the Third Party by virtue of the Contracts (Rights of Third Parties) Act 1999.
|
32.2
|
The parties to this Agreement do not intend that any term of this Agreement, apart from the Third Party Rights Clauses, should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Agreement.
|
32.3
|
Notwithstanding the provisions of Clause 32.1, this Agreement may be varied in any way and at any time by the parties to this Agreement without the consent of any Third Party.
|
33.
|
CHOICE OF GOVERNING LAW
|
34.
|
ARBITRATION
|
34.1
|
All disputes arising out of or in connection with the present Agreement (other than those in relation to the Completion Accounts) shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules. The seat, or legal place, of arbitration shall be Paris. The language of the arbitration proceedings shall be English.
|
34.2
|
In the event that, after a dispute has arisen and arbitration is commenced under Clause 34.1 (“
First Arbitration
”), another dispute arises between some or all of the same parties that concerns the same or substantially similar issues of law or fact as those at issue in the First Arbitration (“
Related Conflict
”), then, for the purpose of constituting the arbitral tribunal in the Related Conflict, the parties agree to nominate the same arbitrators as they nominated in the First Arbitration and to write jointly to the International Chamber of Commerce to request the appointment of the same arbitrators for the Related Conflict.
|
34.3
|
If, before or after the commencement of the First Arbitration, an arbitration is commenced under any Transaction Document other than this Agreement (“
Transaction Document Conflict
”), and any party to the First Arbitration contends that the Transaction Document Conflict raises similar issues of law or fact to those at issue in the dispute the subject of the First Arbitration (such that the issues should be resolved in one proceeding), then, provided that no date has been fixed for the final hearing in the First Arbitration, the arbitral tribunal appointed in the First Arbitration (“
First Tribunal
”) will have the absolute discretion to determine whether in the interests of justice and efficiency the proceedings will be consolidated and heard together.
|
34.4
|
In the event that the First Tribunal makes an order under Clause 34.3 consolidating two (2) or more arbitrations (“
Consolidation Order
”), then the composition of the First Tribunal will remain unchanged, unless any members of the First Tribunal are subject to a disqualifying conflict of interest. In such event, a new tribunal will be constituted for the consolidated proceeding (“
New Tribunal
”), and the members of the New Tribunal will be selected as follows:
|
(A)
|
the parties to the consolidated proceeding will agree on the composition of the New Tribunal; and
|
(B)
|
failing such agreement within thirty (30) days of the First Tribunal issuing its Consolidation Order, the International Chamber of Commerce will appoint all members of the New Tribunal.
|
34.5
|
Each party to the consolidated proceeding will be bound by the award rendered by the First Tribunal (or the New Tribunal, if one is constituted), even if it chooses not to participate in the consolidated proceeding.
|
35.
|
NATURE OF THIS AGREEMENT
|
36.
|
LANGUAGE
|
36.1
|
Each notice, demand, request, statement, instrument, certificate, or other communication under or in connection with this Agreement shall be:
|
(A)
|
in English; or
|
(B)
|
if not in English, accompanied by an English translation made by a translator, and certified to be accurate by an officer of the party giving the notice.
|
36.2
|
The receiving party or its agent (as appropriate) shall be entitled to assume the accuracy of and rely upon any English translation of any document provided pursuant to Clause 36.1.
|
1.
|
Competition consents
|
2.
|
Regulatory matters
|
3.
|
Operation of rigs
|
(C)
|
All of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) being: (i) operated by the Sale Group; (ii) fit for purpose on an as is basis; and (iii) the subject of an Onshore Drilling Contract with a term of at least five years or with a term equivalent to the remaining useful life of the relevant Land Rig.
|
(D)
|
The Sale Group having entered into the VTB Leases with VTB Leasing in accordance with Clause 4.2, each of the VTB Leases remaining in full force and effect and each of the VTB Rigs being the subject of an Onshore Drilling Contract with a term of at least 5 years.
|
(E)
|
The Existing VTB Leases remaining in place and Rosneft having obtained the consent of VTB Leasing to the change in ownership or control of the Sale Group pursuant to this Agreement and the Russian SPA and a waiver from VTB Leasing of:
|
(i)
|
any rights that VTB Leasing has or may have under the terms of each of the Existing VTB Leases or otherwise to terminate any of the Existing VTB Leases as a result of such change in ownership or control and;
|
(ii)
|
any rights that VTB Leasing has or may have under the terms of each of the Existing VTB Leases or otherwise to impose any consent fee, break fee, termination payments, penalties or similar liabilities as a result of such change in ownership or control.
|
4.
|
Tender process
|
5.
|
Compliance with Clause 8 (Rosneft Actions Pending Completion)
|
6.
|
Rosneft approval
|
(A)
|
a resolution of the Rosneft Board of Directors to approve the Rosneft Approval Documents (other than this Agreement); and
|
(B)
|
a resolution of the Rosneft Board of Directors or a Management Board (as applicable) to approve this Agreement,
|
(C)
|
a resolution to approve the Rosneft Approval Documents at a duly convened and held general meeting of the shareholders of Rosneft.
|
7.
|
NYSE Listing
|
8.
|
Compliance with Clause 9 (NADL Actions Pending Completion)
|
(A)
|
any creation, allotment or issue or any grant of any option over or other right to subscribe or purchase, or any redemption or purchase of, any share or loan capital or securities of any member of the Sale Group or securities convertible into any of the foregoing;
|
(B)
|
any alteration of the constitutional documents of any member of the Sale Group, or the adopting or passing of any further regulations or resolutions inconsistent with them unless required by applicable law;
|
(C)
|
the passing of any resolutions in general meeting or by way of written resolution for winding up of any member of the Sale Group;
|
(D)
|
any change to the accounting reference date of any member of the Sale Group or any of the accounting practices, bases, methodologies, formulae, techniques or principles by which the management accounts and accounting records of the Sale Group are drawn up;
|
(E)
|
the making of any capital commitment which individually exceeds US$5,000,000 or which, together with all other capital commitments entered into between the Signing Date and the Completion Date, exceeds the sum of US$10,000,000 in aggregate;
|
(F)
|
any acquisition or disposal (not being a disposal in the ordinary course of business or on normal arm’s length terms) or creation or grant of any option, security or Encumbrance in respect of: (i) any interest in any material part of the business and undertaking of any member of the Sale Group; (ii) any asset or business which individually exceeds US$5,000,000; or (iii) any material Intellectual Property owned by the Sale Group;
|
(G)
|
the making of any loan which individually exceeds US$5,000,000 or which in aggregate exceed US$10,000,000 (other than the granting of trade credit in the ordinary course of business in accordance with the relevant member of the Sale Group’s normal practice) to any person (other than between members of the Sale Group);
|
(H)
|
any borrowing which individually exceeds US$5,000,000 or which in aggregate exceed US$10,000,000 (other than the receipt of trade credit in the ordinary course of business or pursuant to and in accordance with the limits subsisting at the Signing Date);
|
(I)
|
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into:
|
(i)
|
any drilling programme commitments or drilling contracts which would result in any of the Land Rigs being unavailable for use pursuant to the Onshore Drilling Contracts from the anticipated date of commencement (as agreed between the parties);
|
(ii)
|
any guarantee or indemnity for the obligations of any person (other than any member of the Sale Group) which if called would result in a cost to any member of the Sale Group of US$5,000,000 or more;
|
(iii)
|
any transaction with any member of the Retained Group other than in the normal course of business or on arm’s length terms;
|
(iv)
|
any contract or commitment that is or would, if it were in written form, be a Material Contract;
|
(J)
|
any failure to take any action required to maintain any of the insurances in force as at the Signing Date or knowingly do anything to make any such policy of insurance void or voidable;
|
(K)
|
making any substantial change in the nature or organisation of the business of any member of the Sale Group or discontinuing or ceasing to operate all or a material part of the business of any member of the Sale Group;
|
(L)
|
the commencement, compromise, settlement, withdrawal or abandonment of any Dispute Resolution Process involving a claim or liability in excess of US$1,000,000;
|
(M)
|
any offer by any member of the Sale Group to engage:
|
(i)
|
a new General Director or any of the General Director's direct reports or a new Region Manager (or its equivalent) or any of the Region Manager's (or such equivalent's) direct reports, in each case, of the Company or Orenburg; or
|
(ii)
|
any new employee or consultant at an annual salary or fee per employee or consultant (on the basis of full time employment or consultancy) in excess of US$200,000 per annum;
|
(N)
|
any dismissal of:
|
(i)
|
the General Director or any of the General Director's director reports or the Region Manager or any of the Region Manager's direct reports, in each case, of the Company, Orenburg or any division of the Sale Group; or
|
(ii)
|
any employee earning in excess of US$200,000 per annum by any member of the Sale Group, other than for cause or unless not to do so would damage the business of the Sale Group;
|
(O)
|
any amendment, including any increase in emoluments (including pension contributions, bonuses, commissions and benefits in kind), to the terms of employment of any category of employees of any member of the Sale Group which would increase the aggregate remuneration of such category by more than 5% (five per cent.) save for increases in emoluments made in accordance with the normal practice of the Sale Group;
|
(P)
|
the acquisition or disposal of any interest in real property which individually exceeds US$1,000,000 or which in aggregate exceed US$5,000,000;
|
(Q)
|
the changing of the residence of any member of the Sale Group for Tax purposes; and
|
(R)
|
the entering into of any agreement (conditional or otherwise) to do any of the foregoing.
|
(A)
|
except for the ordinary established dividend capped to US$0.235 per calendar quarter, any declaration, authorisation, making or payment of a dividend (in cash or in specie) or other distribution of a similar nature or taxed in the same way as a dividend or any reduction of capital (other than lawfully made by any member of the NADL Group to NADL);
|
(B)
|
any creation, allotment or issue or any grant of any option over or other right to subscribe or purchase, or any redemption or purchase of, any share or loan capital or securities of any member of the NADL Group or securities convertible into any of the foregoing;
|
(C)
|
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into any drilling programme commitments or drilling contracts or any disposal which would result in the Offshore Rigs being unavailable for use pursuant to the Offshore Drilling Contracts from the anticipated date of commencement;
|
(D)
|
any material acquisition or material disposal (not being a disposal: (i) in the ordinary course of business; or (ii) on normal arm’s length terms;) by any member of the NADL Group which individually exceeds US$10,000,000;
|
(E)
|
any disposal of any drilling unit;
|
(F)
|
any material amendment, variation, waiver, termination (or giving of a notice of termination) of, or entry into any guarantee, security arrangement or indemnity for the obligations of any person (other than any member of the NADL Group) which if called would result in a cost to any member of the NADL Group of US$10,000,000 or more, other than any guarantee, security arrangement or indemnity for the obligations of any member of the Seadrill Group where the benefit received by NADL as a result of such amendment, variation, waiver, termination or entry is proportionate to the guarantee, security arrangement or indemnity provided;
|
(G)
|
changing the jurisdiction of incorporation of any member of the NADL Group;
|
(H)
|
any alteration of the constitutional documents of any member of the NADL Group, or the adopting or passing of any further bye-laws or resolutions inconsistent with them unless required by applicable law;
|
(I)
|
the passing of any resolutions in general meeting or by way of written resolution for winding up, or to capitalise any profits or any sum standing to the credit of any reserve, of any member of the NADL Group;
|
(J)
|
making any substantial change in the nature or organisation of the business of any member of the NADL Group or discontinuing or ceasing to operate all or a material part of the business of any member of the NADL Group; and
|
(K)
|
the entering into of any agreement (conditional or otherwise) to do any of the foregoing in Paragraphs (A) to (J).
|
1.
|
execute, in the presence of the Notary, three (3) counterparts of the Russian SPA;
|
2.
|
execute, in the presence of the Notary, one (1) counterpart of the Transfer Application Form in relation to the Russian SPA;
|
3.
|
procure that the Russian SPA and the Transfer Application Form in relation to the Russian SPA are duly notarised and provide or procure to be provided any documents necessary or reasonably requested by the Notary for the purposes of notarising the Russian SPA and the Transfer Application Form in relation to the Russian SPA in accordance with applicable Russian laws (to the extent such documents relate to Rosneft or the Company);
|
4.
|
deliver to NADL or Seadrill’s Solicitors:
|
(A)
|
duly notarised certified original counterpart of a pre-emption right waiver in the agreed form by the Company in respect of transfer of the Shares to NADL;
|
(B)
|
as evidence of the authority of each person executing the Rosneft Approval Documents and any other documents referred to in this Schedule 4 on behalf of Rosneft or the relevant member of the Retained Group or the relevant member of the Sale Group (as applicable):
|
(i)
|
originals of the written resolutions of the competent management bodies authorising the execution, delivery and performance of such Transaction Documents and each such other documents and all transactions contemplated therein, including, if applicable, as a major transaction (in Russian –
крупная сделка
) and/or related party transaction (in Russian –
сделка, в совершении которой имеется заинтересованность
) or, if not applicable, original confirmation letters from the general director of the respective companies in the agreed form that the respective documents and transactions contemplated therein do not constitute a major transaction (in Russian – крупная сделка) and related party transaction (in Russian –
сделка, в совершении которой имеется заинтересованность
) for such companies, and, if applicable, the issue of powers of attorney in favour of such person signing any of the foregoing on behalf of Rosneft, the relevant member of the Retained Group or the relevant member of the Sale Group; and
|
(ii)
|
originals of each power of attorney referred to in Paragraph (B)(i) above in the agreed form (if applicable).
|
5.
|
deliver to NADL an extract from the Register recording, and a copy of the relevant Russian law share purchase agreement effecting, the transfer by RN-Innostrannye Proyekty of the participatory interest in Orenburg not currently held by a member of the Sale Group to a member of the Sale Group;
|
6.
|
deliver to Seadrill a counterpart of the Shareholders’ Agreement duly executed by Rosneft;
|
7.
|
deliver to NADL a counterpart of each of the Onshore Drilling Contracts duly executed by Rosneft or other relevant member of the Retained Group and the relevant member of the Sale Group;
|
8.
|
deliver to NADL a signed letter of consent from each of the Rosneft directors who will be appointed to the board of directors of NADL from Completion in accordance with the Shareholders’ Agreement agreeing to act as a director of NADL;
|
9.
|
make available to NADL at the registered office of the relevant member of the Sale Group (to the extent not already there):
|
(A)
|
the statutory books (which shall be written up to but not including the Completion Date), the certificate of incorporation (and any certificate of incorporation on change of name) and common seal (if any) of each member of the Sale Group, constitutional documents and all amendments thereto, and all registration certificates of the Sale Group members with relevant Authorities, including certificates of registration appearing on the register, Tax registration, and registration with state funds and statistics authorities, as well as all papers, books, banking books, records, cheque books, corporate bank cards, stamps, accounting records (including 1-S-bookkeeping data), contracts, correspondence with Authorities and counterparties, tax declarations, balance sheets and forms, tax registers/ledgers, accounting registers/ledgers, all other documents construing (as per RAS) the accounting primary documents, ledgers and records of promissory notes (or any other kind of document of the same kind) issued and/or received by a Sale Group member, ledgers and records of all powers of attorneys issued by a Sale Group member, all electronic data (including: accounting database, electronic registers of any kind, software of any kind licensed for the use by a Sale Group member) and information needed for access to and use of (including all keys, codes, logins and passwords) all electronic data of the Sale Group members, including accounts, internet banking systems, bank accounts and any web-based data, all minutes of (decisions by) management bodies and staff lists;
|
(B)
|
the Books and Records referred to in Clause 21;
|
(C)
|
originals of the Material Contracts;
|
(D)
|
originals of the Accounts;
|
(E)
|
originals of the title documents for the Relevant Properties which will include ownership certificates with respect to each of the Relevant Properties;
|
10.
|
deliver to NADL:
|
(A)
|
an original decision (in the agreed form) of Rosneft as the sole participant of the Company evidencing the approval by Rosneft as the sole participant of the Company of the resignation of the existing general director of the Company with effect as of the Completion Date and the appointment of the person designated by NADL;
|
(B)
|
an original minutes (in the agreed form) of the general participants’ meeting of Orenburg evidencing the approval of the general participants’ meeting of Orenburg of the resignation of the existing general director of Orenburg with effect as of Completion Date and appointment of the person designated by NADL;
|
(C)
|
an original decision (in the agreed form) of the sole participant of Orenburg Subsidiary evidencing the approval by sole participant of Orenburg Subsidiary of the resignation of the existing general director of Orenburg Subsidiary with effect as of Completion Date and appointment of the person designated by NADL;
|
(D)
|
an original minutes (in the agreed form) of the general participants’ meeting of Orenburg approving the termination of powers of the board of directors of Orenburg with effect as of Completion Date and appointment of the board of directors comprising the persons designated by NADL in writing 15 calendar days prior to Completion;
|
(E)
|
two (2) executed original agreements in the agreed form between the Company and the general director of the Company providing for the mutual termination of the employment agreement of the general director of the Company;
|
(F)
|
two (2) executed original agreements in the agreed form between Orenburg and the general director of Orenburg providing for the mutual termination of the employment agreement of the general director of Orenburg;
|
(G)
|
two (2) executed original agreements in the agreed form between Orenburg Subsidiary and the general director of Orenburg Subsidiary providing for the mutual termination of the employment agreement of the general director of Orenburg Subsidiary;
|
(H)
|
originals of statements in the agreed form from each of the resigning general directors of the Company, Orenburg and Orenburg Subsidiary to the following banks informing the respective bank about his/her resignation and requesting and authorising the bank not to accept or act upon any request, order or instruction from him/her with regard to any bank account of the Company, Orenburg and Orenburg Subsidiary opened with such respective bank or any funds on such bank account:
|
(i)
|
the Company:
|
(a)
|
OJSC Russian Regional Development Bank (Moscow)
|
(b)
|
OJSC Far Eastern Bank, Krasnoyarsk branch (Krasnoyarsk)
|
(c)
|
OJSC Far Eastern Bank (Vladivostok)
|
(d)
|
OJSC Russian Regional Development Bank, Nefteyugansk branch (Nefteyugansk)
|
(e)
|
OJSC Far Eastern Bank, Sakhalin branch (Nogliki village)
|
(f)
|
OJSC Russian Regional Development Bank, Nefteyugansk branch (Gubkinskiy)
|
(g)
|
OJSC Russian Regional Development Bank, Krasnodar branch (Krasnodar)
|
(h)
|
OJSC Russian Regional Development Bank, Usinsk branch (Usinsk)
|
(i)
|
OJSC Far Eastern Bank, Irkutsk branch (Irkutsk)
|
(ii)
|
Orenburg:
|
(a)
|
OJSC Sberbank of Russia, Orenburg branch (Orenburg)
|
(b)
|
OJSC Sberbank of Russia, Saratov branch (Stepnoe)
|
(c)
|
OJSC VTB, Nizhniy Novgorod branch (Orenburg)
|
(d)
|
CJSC UniCredit Bank (Moscow)
|
(e)
|
OJSC Alfa Bank, Nizhegorodskiy branch (Orenburg)
|
(f)
|
OJSC Bank of Moscow, Nizhegorodskiy branch (Orenburg)
|
(g)
|
OJSC Bank of Moscow (Moscow)
|
(h)
|
OJSC OJSC Russian Regional Development Bank (Moscow)
|
(iii)
|
the Orenburg Subsidiary:
|
(a)
|
OJSC VTB (Orenburg)
|
(b)
|
OJSC Alfa Bank, Nizhegorodskiy branch (Orenburg)
|
(c)
|
OJSC OJSC Russian Regional Development Bank (Moscow); and
|
(I)
|
originals of the notarised power of attorneys in the agreed form issued by each resigning general director of the Company, Orenburg and Orenburg Subsidiary to the persons designated by NADL.
|
11.
|
deliver to NADL a counterpart of the registration rights agreement substantially in the form set out in Schedule 12 duly executed by Rosneft.
|
1.
|
At Completion, Seadrill shall:
|
(A)
|
deliver (or shall procure that the relevant member of the Seadrill Group shall deliver) to Rosneft a counterpart of the Shareholders’ Agreement duly executed by Seadrill; and
|
(B)
|
deliver to Rosneft or Rosneft’s Solicitors a copy of the minutes of duly held meetings or unanimous written resolutions of the directors of Seadrill authorising the execution of each of the Transaction Documents to which it is a party (such copy minutes or unanimous written resolutions being certified as true and correct by the secretary);
|
(C)
|
deliver to Rosneft a legal opinion in the agreed form in respect of the valid issuance of the Consideration Shares and the Subscription Shares and the future issuance of the Contract Shares; and
|
(D)
|
deliver (or shall procure that NADL delivers) to Rosneft a copy of the minutes of duly held meetings or written resolutions of the members of NADL approving the changes to the board of directors of NADL to reflect the terms of the Shareholders’ Agreement.
|
2.
|
At Completion, NADL shall:
|
(A)
|
execute, in the presence of the Notary, three (3) counterparts of the Russian SPA;
|
(B)
|
provide or procure to be provided to the Notary any documents necessary or reasonably requested by the Notary for the purposes of notarising the Russian SPA in accordance with applicable Russian laws (to the extent such documents relate to NADL);
|
(C)
|
deliver to Rosneft a copy of the FAS Approval and the BMA Consent; and
|
(D)
|
deliver a share certificate for the Consideration Shares and the Subscription Shares in the name of Rosneft (and at Completion or on the Business Day immediately following the Completion Date a certified copy of the updated register of members of NADL showing Rosneft as the registered holder of the Consideration Shares and the Subscription Shares);
|
(E)
|
deliver to Rosneft or Rosneft’s Solicitors a copy of the minutes of duly held meeting of the directors of NADL and the NADL Conflicts Committee authorising the execution of each of the NADL Approval Documents and the allotment and issue of the Consideration Shares, the Subscription Shares and the Contract Shares (such copy minutes or written resolutions being certified as true and correct by the secretary) and approving the changes to be made to the board of directors of NADL to reflect the terms of the Shareholders’ Agreement; and
|
(F)
|
deliver to Rosneft a counterpart of the registration rights agreement substantially in the form set out in Schedule 12 duly executed by NADL.
|
1.
|
Ownership of the Shares and shares in other members of the Sale Group
|
(A)
|
Rosneft is the sole legal and beneficial owner of the Shares. The Shares constitute the entire charter capital of the Company.
|
(B)
|
The Company's (and each other member of the Sale Group’s) charter capital has been fully paid up within the time periods established by Russian law.
|
(C)
|
There
is no option, right to acquire, pledge or other form of security or encumbrance or equity on, over or affecting the Shares or shares held by any member of the Sale Group in any other member of the Sale Group or any of them and there is no agreement or commitment to give or create any and no claim has been made by any person to be entitled to any.
|
(D)
|
Neither Rosneft’s rights to the Shares or any part thereof nor any other member of the Sale Group’s rights to any shares in any other member of the Sale Group are being challenged either out-of-court or in court proceedings.
|
(E)
|
The Shares and all shares held by any member of the Sale Group in any other member of the Sale Group have been validly issued and allotted and are fully paid up, excluding for the avoidance of doubt shares in Orenburg and the Orenburg Subsidiary.
|
(F)
|
There is no agreement or commitment outstanding which calls for the allotment, issue or transfer of, or accords to any person the right to call for the allotment, issue or transfer of, any shares (including the Shares) or debentures in or securities of any member of the Sale Group.
|
(G)
|
None of the Shares nor any shares held by any member of the Sale Group in any other member of the Sale Group are subject to any rights of pre-emption or restrictions on transfer.
|
(H)
|
The information given in Part A of Attachment 1 (Basic information about the Company) and Part B of Attachment 1 (Basic information about the Subsidiaries) is true and accurate in all material respects and no member of the Sale Group has any interest in any other body corporate, unincorporated body, undertaking or association which is not a member of the Sale Group and so listed.
|
(I)
|
No member of the Sale Group has given any power of attorney or other authority (express, implied or ostensible) which is still outstanding or effective.
|
(J)
|
The copies of the constitutional documents of each member of the Sale Group which are attached to the Current Rosneft Disclosure Letter are complete and accurate in all respects, have attached to them copies of all resolutions and other documents required by law to be so attached and fully set out the rights and restrictions attaching to each class of share capital of the member of the Sale Group to which they relate. Each member of the Sale Group has complied with its constitutional documents in all material respects.
|
(K)
|
The statutory books (including all registers and minute books) of each member of the Sale Group have been properly kept in all material respects and contain an accurate and complete record of the matters which should be dealt with in those books and no notice or allegation that any of them is incorrect or should be rectified has been received.
|
(L)
|
There are no circumstances which are reasonably likely to give, or reasonably likely to have given, grounds to any person or authority to make any claims or initiate any proceedings or any other acts seeking to challenge Rosneft's ownership of the Shares or any other member of the Sale Group’s ownership of the shares in any other member of the Sale Group.
|
(M)
|
All transactions with participatory interests in the charter capital of the Company and each other member of the Sale Group have been concluded in accordance with Russian law (including civil, corporate, antimonopoly and family law) and the obligations under such transactions have been properly performed by the respective parties thereto.
|
(N)
|
Each member of the Sale Group is validly existing and is a company duly incorporated, and registered under the laws of the Russian Federation and has full power and authority under its constitutional documents and Russian law to conduct its business as it is presently carried on and to own, lease and operate its assets and properties.
|
(O)
|
No member of the Sale Group has repaid, redeemed or purchased any of its own participatory interest, reduced its charter capital, or agreed to do any of such actions.
|
(P)
|
No member of the Sale Group:
|
(i)
|
is the owner of, or has agreed to acquire, any shares, securities or other interests in any company (other than the participatory interest of a member of the Sale Group);
|
(ii)
|
is or has agreed to become a member of any partnership or other unincorporated association, joint venture or consortium (other than recognised trade associations);
|
(iii)
|
is a party to any profit sharing agreement; or
|
(iv)
|
is a party to or the subject of any shareholders' agreement (in Russian –
договор об осуществлении прав участников общества
).
|
(Q)
|
No member of the Sale Group has any branch, agency or permanent establishment in any foreign jurisdiction outside the Russian Federation.
|
1.
|
Company Accounts
|
(A)
|
The Company Accounts:
|
(i)
|
were prepared in all material respects in accordance with applicable law and accounting principles and practices generally accepted in the Russian Federation at the time they were audited;
|
(ii)
|
comply with RAS in force on the date they were prepared (for the avoidance of any doubt, the Company Accounts were prepared in accordance with RAS on a consistent basis subject only to applicable changes caused by changes in accounting standards);
|
(iii)
|
subject to Paragraph 2(A)(i) and (A)(ii), were prepared on the same basis and in accordance with the same accounting principles and practices, consistently applied, as the audited financial statements for the previous three financial periods; and
|
(iv)
|
show in all material respects a true view of the assets and liabilities, including all contingent liabilities (if required pursuant to RAS) and the state of affairs of the Company and of the profits or losses of the Company for the accounting period to which the Company Accounts relate.
|
2.
|
Company Management Information
|
3.
|
Events since the Accounts Date
|
(A)
|
there has been no material adverse change in the financial or trading position or prospects of any member of the Sale Group and so far as Rosneft is aware no circumstance has arisen which will give rise to any such change;
|
(B)
|
the business of each member of the Sale Group has been carried on in the ordinary and usual course and in the same manner (including nature and scope) as in the past in all material respects;
|
(C)
|
no resolution in general meeting or written resolution of shareholders of any member of the Sale Group has been passed;
|
(D)
|
no change in the accounting reference period of any member of the Sale Group has been made;
|
(E)
|
save for the Orenburg Acquisition, no member of the Sale Group has acquired or disposed of or agreed to acquire or dispose of any business or any material asset other than in the ordinary course of business and no contract involving material expenditure by it on capital account has been entered into by any member of the Sale Group; and
|
(F)
|
no material debtor has been released by any member of the Sale Group on terms that he pays materially less than the book value of any debt and no material debt has been written off or has proved to be irrecoverable to any extent.
|
4.
|
Contracts and commitments
|
(A)
|
Copies of all Material Contracts are in Folders 1.2.8, 1.2.15.4.1 to 1.2.15.4.3 (inclusive), 1.2.15.5.1 to 1.2.15.5.6 (inclusive), 2.2.3.4 and 3.2.5.4 in the Rosneft Data Room and those copies are accurate and complete in all respects. Each such agreement was entered into in the ordinary course of business.
|
(B)
|
Rosneft is not aware of any breach, invalidity, or grounds for determination, rescission, avoidance or repudiation of any Material Contract or of any allegation of such a thing and no notice of termination or intention to terminate has been received by Rosneft (or any member of the Sale Group) in respect thereof.
|
(C)
|
Other than the Material Contracts referred to in Paragraph 5 (A), no member of the Sale Group is a party to or has any material actual or contingent liability under:
|
(i)
|
any guarantee, indemnity, surety relationship, promissory note, bill of exchange or letter of credit;
|
(ii)
|
any material contract for rent, lease, hire, hire purchase, credit sale, conditional sale or purchase by instalments;
|
(iii)
|
any material agency, distributorship or management agreement;
|
(iv)
|
any contract or arrangement which, directly or indirectly, restricts its freedom to carry on its business in a material respect in any part of the world in such manner as it may think fit or the ability to transfer the whole or any part of its business;
|
(v)
|
any joint venture agreement or arrangement, partnership or any other agreement or arrangement under which it participates with any other person in any business in a material respect;
|
(vi)
|
any material contract or arrangement which relates to matters not within the ordinary business of that member or constitutes a commercial transaction or arrangement deviant from the usual pattern for that member or is not entirely on arm’s length terms;
|
(vii)
|
any contract or arrangement which is of three years’ or greater duration; or
|
(viii)
|
any contract or arrangement which can be terminated in the event of any change in the underlying ownership or control of that member.
|
5.
|
Insurances
|
(A)
|
Full details of the insurance policies in respect of which any member of the Sale Group has an interest are included in Folders 1.2.15.6, 2.2.3.5 and 3.2.5.5 in the Rosneft Data Room and all such policies are written in the name of the relevant member of the Sale Group, are in full force and effect and are not void or voidable, and no claims are outstanding and, so far as Rosneft is aware, no event has occurred which might give rise to any claim other than included in the Folders in the Rosneft Data Room.
|
(B)
|
Each member of the Sale Group has maintained adequate insurance cover:
|
(i)
|
against all risks normally insured against by companies carrying on a similar business in Russia, and in particular has maintained all insurance required by statute (including civil liability insurance under Federal Law of the Russian Federation No. 225-FZ of 27 July 2010 “On Compulsory Insurance of Civil Liability of the Owner of a Hazardous Object for Inflicting Damage as a Result of an Accident at the Hazardous Object”) and adequate environmental liability insurance;
|
(ii)
|
for the full residual value of their assets (free from any deduction or excess) and for such amount in respect of their businesses as would in the circumstances be prudent.
|
6.
|
Arrangements between the Sale Group and Rosneft
|
(A)
|
Full details of any material goods and services (including management and other head office services) supplied by any member of the Retained Group to any member of the Sale Group, or properties provided by any member of the Retained Group for the use by any member of the Sale Group, or supplied or provided (as the case may be) by any member of the Sale Group to or for the use of any member of the Retained Group are contained in Folders 1.2.15.7.1 to 1.2.15.7.3 (inclusive) and 2.2.3.6.1 of the Rosneft Data Room.
|
(B)
|
Save for the Inter-Company Payables details of which are set out in the Current Rosneft Disclosure Letter, no financial indebtedness (actual or contingent) and no contract or arrangement (in particular, but without limitation, any contract or arrangement in connection with loans or borrowings, Property, Intellectual Property, Business Information, supply arrangements or seconded employees) is outstanding between any member of the Sale Group and any member of the Retained Group.
|
(C)
|
No member of the Sale Group has agreed to guarantee or provide any securities or indemnities in relation to any debt or obligation of any member of the Retained Group.
|
7.
|
Bank accounts and borrowings
|
(A)
|
Full details of all bank accounts maintained by each member of the Sale Group are set out in the Current Rosneft Disclosure Letter.
|
(B)
|
Full details of all overdraft, loan and other financial facilities available to any member of the Sale Group and the amounts outstanding under them are set out in the Current Rosneft Disclosure Letter and, so far as Rosneft is aware, neither Rosneft nor any member of the Sale Group has done anything whereby the continuance of any of those facilities might be affected or prejudiced. Details of all debentures, charges, guarantees and indemnities given to secure those facilities are set out in the Current Rosneft Disclosure Letter.
|
(C)
|
The total amount borrowed by each member of the Sale Group from its bankers does not exceed its financial facilities and the total amount borrowed from whatsoever source does not exceed any limitation on its borrowing contained in the relevant member’s constitutional documents.
|
(D)
|
So far as Rosneft is aware, no event which is or, with the passing of any time or the giving of any notice, certificate, declaration or demand, would become an event of default under or any breach of any of the terms of any loan capital, borrowing, debenture or financial facility of any member of the Sale Group or would entitle any third party to call for repayment prior to normal maturity has occurred or been alleged or is continuing.
|
(E)
|
No member of the Sale Group has lent or agreed to lend any money which has not been repaid to it or has the benefit of any debt present or future (other than debts due to it in respect of the sale of trading stock in the normal course of trading).
|
8.
|
Insolvency
|
(A)
|
No order has been made, no petition has been presented, no meeting has been convened to consider a resolution and no resolution has been passed for the winding up of any member of the Sale Group.
|
(B)
|
There is no action or request pending to declare any member of the Sale Group bankrupt or insolvent. No member of the Sale Group is subject to any order, petition or resolution with respect to insolvency or bankruptcy proceedings, or any similar actions or proceedings, and, so far as Rosneft is aware, there is no fact, matter, event or circumstance which could give rise to any of the foregoing.
|
(C)
|
No administration order has been made or petition presented or application made for such an order and no administrator has been appointed or notice given or filed or, so far as Rosneft is aware, step taken or procedure commenced with a view to the appointment of an administrator in respect of any member of the Sale Group.
|
(D)
|
No administrator (in Russian –
арбитражный управляющий
) has been appointed in respect of any member of the Sale Group or all or any of its assets.
|
(E)
|
No member of the Sale Group is insolvent, or has failed to pay, secure or compound for any sum exceeding US$500,000 so as to entitle any of its creditors to initiate insolvency proceedings, or is unable to pay or has stopped paying its debts as they fall due and the value of the assets of any member of the Sale Group is not less than the amount of its liabilities, taking into account its contingent and prospective liabilities.
|
(F)
|
No unsatisfied judgment is outstanding against any member of the Sale Group.
|
(G)
|
No Insolvency Event has occurred in relation to any member of the Sale Group, and there are no circumstances which are likely to result in an Insolvency Event in relation to any member of the Sale Group.
|
9.
|
Licences
|
(A)
|
So far as Rosneft is aware, all material licences, permits, consents and other permissions and approvals required for the carrying on of the business now being carried on by each member of the Sale Group have been obtained and remain in full force and effect, are not subject to onerous conditions and have at all times been complied with in all material respects.
|
(B)
|
All reports, returns and information required by law or as a condition of any licence, consent, permit permission or approval to be made or given to any person or authority in connection with the business of any member of the Sale Group have been made or given to the appropriate person or authority.
|
(C)
|
So far as Rosneft is aware, there is no circumstance which indicates that any licence, consent, permit, permission or approval is reasonably likely to be varied, revoked or not renewed, or which is reasonably likely to confer a right of variation or revocation.
|
10.
|
Ownership of assets
|
(A)
|
The particulars of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) are true, complete and accurate in all respects.
|
(B)
|
Each of the assets included in the Company Accounts or acquired by any member of the Sale Group since the Accounts Date (other than current assets sold, realised or applied in the normal course of trading) and each of the Land Rigs set out in Part A of Attachment 3 (Land Rigs) is owned or in the case of the Leased Rigs leased by a member of the Sale Group free from any Encumbrances and any third party rights other than as disclosed, and each of those assets capable of possession is in the possession of a member of the Sale Group.
|
(C)
|
Subject to normal wear and tear, all plant and machinery (including fixed plant and machinery and Land Rigs set out in Part A of Attachment 3 (Land Rigs)), vehicles and office equipment used by any member of the Sale Group in connection with its business are capable of being efficiently and properly used in connection with the business of the relevant member of the Sale Group.
|
(D)
|
No member of the Sale Group has any actual or contingent liability in respect of any activities of the Sale Group which do not form part of or are not related or ancillary to the Drilling Business.
|
11.
|
Property
|
(A)
|
The particulars of the Relevant Properties set out in Attachment 2 (Relevant Properties) are true, complete and accurate in all respects.
|
(B)
|
In relation to each Relevant Property, the relevant member of the Sale Group is the sole and absolute owner of such Relevant Property and has good and marketable title to it. There are no leases, servitudes, rights or means of access, mortgages (or agreements to grant any of the foregoing) or agreements for sale or other disposal, affecting any of the Relevant Properties and, so far as Rosneft is aware, no person has or claims to have any right in respect of any of the Relevant Properties.
|
(C)
|
There are no outstanding disputes, actions, claims, demands or complaints in respect of any Relevant Property.
|
(D)
|
No notices, complaints or requirements have been issued or made by any third party or by any competent authority or undertaking exercising statutory or delegated powers in respect of the Relevant Properties and where such notices, complaints or requirements may have a material adverse effect on the business of the Company.
|
(E)
|
No member of the Sale Group has any actual or contingent liability in respect of any estate or interest in real property whether arising as original tenant, assignee, guarantor or otherwise, other than in respect of the Relevant Properties.
|
(F)
|
All title documentation relating to the Relevant Properties is in the possession of the relevant Sale Group members.
|
12.
|
Environmental and Health and Safety
|
(A)
|
In this Paragraph:
|
“
EHS Claim
”
|
means any investigation, inquiry, warning, notice, order, action, proceedings, litigation, claim or complaint by any regulatory body or any person under EHS Laws or in relation to EHS Matters that relate or apply to the activities, business or assets of the Sale Group;
|
“
EHS Laws
”
|
means all applicable laws of the Russian Federation (including all international treaties ratified by the Russian Federation or which apply in the Russian Federation) insofar as they relate to or apply to EHS Matters and apply to the activities, business or assets of the Sale Group;
|
“
EHS Matters
”
|
means:
(i) pollution or contamination;
(ii) the disposal, release, spillage, deposit, escape, discharge, leak or emission of, Hazardous Materials or Waste;
(iii) exposure of any person to Hazardous Materials or Waste;
(iv) abstraction of water;
(v) matters related to health and safety at work;
(vi) the creation or existence of any noise, vibration, radiation, common law or statutory nuisance, or other adverse impact on the Environment; and/or
(vii) any other matters relating to human health and safety or the condition, protection, maintenance, restoration or replacement of the Environment or any part of it;
|
“
EHS Permits
”
|
means any permit, agreement, exemption, approval, registration, certification, licence, consent, declaration, franchise, surcharge, credit, allowance or authorisation in relation to EHS Matters or required by EHS Laws to carry on the business of any member of the Sale Group or in relation to any Relevant Properties or other assets of any member of the Sale Group;
|
“
Environment
”
|
means all or any part of the air (including the air within buildings and the air within other natural or man-made structures above or below ground), water and land and any living organisms or systems supported by those media;
|
“
Hazardous Material
”
|
means anything which alone or in combination with other things is capable of causing harm or damage to the Environment, property or to man or to any other organism supported by the Environment including any hazardous or toxic substances or pollutants, or which is regulated, controlled, prohibited or restricted by law or regulation relating to the Environment or EHS Matters; and
|
“
Waste
”
|
means any substance or material which is regulated, controlled, prohibited or restricted by law or regulation as “waste” including anything which is abandoned, unwanted or surplus irrespective of whether it is capable of being recovered or recycled or has any value; and
|
“
Works
”
|
means the carrying out of:
(i) inspection, investigation, sampling and monitoring works; and
(ii) any works, including the installation, operation, repair or replacement of plant or equipment, in order to manage, remove, remediate or contain any EHS Matter or in order to prevent an EHS Matter from arising.
|
(B)
|
All material EHS Permits which are required under EHS Laws for the carrying on of the business of any member of the Sale Group have been obtained in the name of such member of the Sale Group and are valid, subsisting and in full force and effect.
|
(C)
|
So far as Rosneft is aware, each member of the Sale Group has complied with EHS Law and the EHS Permits at all times in all material respects.
|
(D)
|
So far as Rosneft is aware:
|
(i)
|
there have been no acts or omissions of any member of the Sale Group in relation to EHS Matters; and
|
(ii)
|
no EHS Matters exist or have arisen at or about any of the Relevant Properties;
|
(E)
|
No material capital expenditure is proposed in relation to EHS Matters or is likely to be required in order to comply with, extend, renew or obtain any EHS Permit or obtain any new or additional EHS Permit or comply with EHS Laws during the period ending five years from the Signing Date in relation to the carrying on of the business of the Sale Group substantially as it is presently carried on.
|
(F)
|
So far as Rosneft is aware:
|
(i)
|
there has been no landfilling or burial of Hazardous Materials or Waste at any Relevant Property; and
|
(ii)
|
there are no underground storage tanks at any Relevant Property.
|
(G)
|
So far as Rosneft is aware, there has been no transfer, treatment or disposal of Hazardous Materials or Waste by or on behalf of any member of the Sale Group in circumstances which could give rise to any EHS Claim or any material fines, penalties, losses, damages, costs, expenses or liabilities or could require any material Works.
|
(H)
|
No member of the Sale Group is currently involved in or subject to any EHS Claim, none is threatened and, so far as Rosneft is aware, none is reasonably likely to arise. No member of the Sale Group has received any notice, communication or information alleging any material liability in relation to EHS Matters or that any material Works are required or stating or suggesting that there is or might be any pollution, contamination or nuisance at or from any Relevant Property.
|
(I)
|
Complete and accurate copies of all audits, assessments, surveys, searches, reviews, reports and compliance, liability or remediation cost studies or estimates in the possession or control of Rosneft or any member of the Sale Group which relate to:
|
(i)
|
an outstanding material breach of EHS Law or an EHS Permit by a member of the Sale Group; and/or
|
(ii)
|
an outstanding material liability or potential material liability for a member of the Sale Group under EHS Law, an EHS Permit or otherwise in respect of EHS Matters;
|
(J)
|
So far as Rosneft is aware, no member of the Sale Group has any material liability in respect of EHS Matters arising out of or in connection with (i) any act or omission of any former subsidiary, subsidiary undertaking or affiliate or any former or predecessor business or any formerly owned, occupied or used property; or (ii) any contract or other agreement whether relating to the sale or other disposal or grant of any interest or rights in relation to any shares, land or other asset or otherwise.
|
13.
|
Litigation
|
(A)
|
Except as claimant in the collection of debts arising in the ordinary course of business, no member of the Sale Group (or any of its directors in connection with the business of the Sale Group) is engaged in any litigation, arbitration or other dispute resolution process, or administrative or criminal proceedings, whether as claimant, defendant or otherwise. No litigation, arbitration or other dispute resolution process, or administrative or criminal proceedings by or against any member of the Sale Group (or any of its directors in connection with the business of the Sale Group) is pending, threatened or expected. So far as Rosneft is aware, there is no fact or circumstance likely to give rise to any litigation, arbitration, mediation or administrative or criminal proceedings.
|
(B)
|
No member of the Sale Group has received notification that any investigation or inquiry is being or has been conducted by any Authority or other body in respect of the affairs of any member of the Sale Group. Rosneft is not aware of any circumstances which would give rise to such investigation or inquiry.
|
(C)
|
No member of the Sale Group (or any of its directors in connection with the business of the Sale Group) has committed or is liable for any criminal, illegal, unlawful or unauthorised act or breach of any material obligation or duty whether imposed by or pursuant to statute, contract or otherwise, and no claim that it has or is remains outstanding against any such member.
|
(D)
|
No inducement (financial or otherwise) has been given to any person by or on behalf of any member of the Sale Group with a view to that member of the Sale Group entering into any contract or other arrangement or obtaining any benefit.
|
14.
|
Data Protection
|
(A)
|
Each member of the Sale Group complies in all material respects with all applicable laws, guidelines and industry standards relating to the processing of personal data and privacy, including provisions of the Russian Civil Code and Federal Law of the Russian Federation No. 152-FZ of 27 July 2006 “On Personal Data”.
|
15.
|
Employment
|
(A)
|
Save as disclosed in the Current Rosneft Disclosure Letter, no trade union, works council, staff association or other body representing employees is recognised in any way for bargaining, information or consultation purposes in relation to their respective employees by either the Company or any Subsidiary and there are no agreements for collective bargaining or recognition with any such representative body.
|
(B)
|
No employee or former employee of either the Company or any Subsidiary has brought any existing, or threatened to bring any material claims against them in respect of their employment or any other matter arising from their employment and so far as Rosneft is aware there are no facts or matters which could give rise to such claims.
|
(C)
|
Each of the Company and the Subsidiaries has complied in all material respects with the terms of all relevant contracts of employment, policies, benefits and applicable laws, codes of conduct, collective agreements and orders and declarations relevant to its respective employees.
|
(D)
|
Since the Accounts Date no material change has been made or proposed to the remuneration or other terms of employment of any Key Employee or to employees which in aggregate for those employees could have a material effect and no such change and no request for such change is due or expected within 6 months from the Signing Date.
|
(E)
|
There is no material obligation or material amount due to any employee of the Company or the Subsidiaries in connection with or arising from his employment (or to any other relevant third party in respect of any such employee) which is in arrears or unsatisfied at the Signing Date (other than his normal salary for part of the month current).
|
(F)
|
Full details of any (i) non-cash benefits or (ii) variable pay arrangements including bonus and commission arrangements or (iii) long term incentive or share option arrangements which in each case are provided to employees of the Company and the Subsidiaries have been disclosed.
|
(G)
|
No Key Employee has given or received a notice in writing terminating his/her employment or engagement or is entitled (without giving prior notice) to terminate his/her employment or engagement with the relevant member of the Sale Group or will become so entitled by reason of the contribution of the Shares under this Agreement.
|
(H)
|
No employee of either the Company or any Subsidiary is a party to or entitled to become a party to any agreement or arrangement that entitles such employee to receive from any member of the Sale Group any compensation on termination of employment or service other than as prescribed by mandatory provisions of the Russian law.
|
16.
|
Pensions
|
(A)
|
Other than any compulsory state pension scheme and the disclosed arrangements in relation to Neftegarant, there is no arrangement to which either the Company or the Subsidiaries contribute or may be liable to contribute under which benefits of any kind are payable to or in respect of any of their employees or former employees on retirement, death, disability, the attainment of a specified age or on the completion of a specified number of years’ service.
|
(B)
|
All contributions by the Company or the Subsidiaries or by any of their employees in respect of any state pension scheme, Neftegarant or any other pension arrangement to which it has or may be liable to contribute have at all times been made in accordance with the relevant provisions of the relevant scheme and those which fall due for payment before Completion will have been paid by that date.
|
(C)
|
The pension schemes for the employees of the Company and the Subsidiaries have been operated in all material respects in accordance with all applicable laws, their terms and have all applicable governmental and regulatory approvals which are necessary.
|
(D)
|
Any pension schemes for the employees of the Company and the Subsidiaries are appropriately funded in accordance with local laws and have sufficient assets to meet their liabilities in accordance with the applicable accounting standards’ valuation principles.
|
(E)
|
There are not in respect of any pension arrangements to which the Company or any Subsidiary contributes or has contributed or may become liable to contribute any material actions, suits or claims existing or, so far as Rosneft is aware, pending or threatened.
|
17.
|
Tax
|
(A)
|
The Company does not have any liability in respect of Tax (whether actual or contingent) in respect of the accounting period of the Company to which the Company Accounts relate that is not fully disclosed and provided for in the Company Accounts in each case as prepared in accordance with the accounting standards relevant for such Accounts.
|
(B)
|
Each member of the Sale Group has duly filed all Tax returns, forms and/or reports which are required under applicable law to be filed within the applicable time limits and such returns, forms and/or reports are correct and duly account for all transactions carried out by the Sale Group which are required under applicable law to be disclosed in such returns, forms and/or reports.
|
(C)
|
All Tax (including any interest, penalties and surcharges) due and payable by each member of the Sale Group in accordance with applicable law (including those required to have been paid by way of withholding of Tax) prior to Completion Date have been paid on time and in full.
|
(D)
|
There is no dispute or disagreement outstanding nor is any contemplated at the date of this Agreement with any Tax Authority regarding the Tax affairs of any member of the Sale Group and there are no circumstances which make it likely that any such dispute or disagreement will commence.
|
(E)
|
Each member of the Sale Group has kept and maintained all records relevant to its Tax affairs as required by applicable law. However no claim may be made under this warranty in respect of any unavailability of Tax Relief.
|
(F)
|
Each member of the Sale Group has duly submitted all claims and disclaimers or withdrawals of claims relating to Tax which have been assumed to have been made for the purposes of its Accounts.
|
(G)
|
The amount of Tax chargeable on any member of the Sale Group under any return or assessment that remains open to audit or enquiry as at the Completion Date has not, to any material extent, depended on any concession, agreement or other formal or informal arrangement with any Tax Authority. No transaction in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was required to be sought from any Tax Authority has been entered into or carried out by any member of the Sale Group without such ruling having first been properly obtained and all transactions in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was obtained from any Tax Authority were carried out in accordance with the terms prescribed by such ruling.
|
(H)
|
No member of the Sale Group has received any notice from any Tax Authority which requires or will or may require such member to withhold Tax from any payment made since the Accounts Date or which will or may be made after the date of this Agreement.
|
(I)
|
No member of the Sale Group benefits from any preferential Tax regime, granted by law or by special authorisation issued by any Tax Authority or by any other authority, which could in whole or in part be affected by the signature of this Agreement.
|
(J)
|
No member of the Sale Group is party to any transaction which is fraudulent or a sham or which has as its main purpose or one of its main purposes the avoidance of a liability to Tax.
|
(K)
|
No member of the Sale Group has violated, breached or infringed any anti-abuse or similar rule in relation to Tax in any jurisdiction where any relief from Tax has been claimed for the benefit of any member of the Sale Group under domestic laws or any applicable double taxation treaty.
|
(L)
|
Each member of the Sale Group has complied in all material respects with its obligations relating to VAT. Each member of the Sale Group that is required to be registered for the purposes of VAT has been so registered at all times that it has been so required, and such registration is not subject to any conditions imposed by or agreed with the relevant Tax Authority.
|
(M)
|
Full, complete, correct and up-to-date records, invoices and other documents relating to VAT have been made, given, obtained and kept in each case in accordance with applicable law.
|
(N)
|
All VAT, import and export duties, royalties and other taxes or charges payable by any member of the Sale Group to any Tax Authority relating to the production of hydrocarbons or the importation or export of goods and assets and all excise duties payable to any Tax Authority in respect of any assets (including trading stock) imported, exported, produced, owned or used by any member of the Sale Group have been duly declared and paid in full.
|
(O)
|
Each member of the Sale Group has made all deductions in respect, or on account, of any Tax from any payments made by it which it is obliged to make under applicable law and has accounted in full to the appropriate authority for all amounts so deducted.
|
(P)
|
Each member of the Sale Group is resident for Tax purposes in the Russian Federation and the Russian Federation is the only jurisdiction whose Tax Authorities seek to charge Tax on the worldwide profits or gains of such member. No member of the Sale Group has any agency, branch or permanent establishment in any jurisdiction except as the same are branches or representative offices as specified in Attachment 1 (Sale Group Information) in relation to such member.
|
(Q)
|
Except as provided in its Accounts, no member of the Sale Group is, nor will it be, under any obligation to make any payment to anyone (including but not limited to members of the Retained Group but excluding any member of the Sale Group) under any Tax grouping, Tax sharing, fiscal consolidation or similar arrangements.
|
(R)
|
No member of the Sale Group is or has been a party to any transaction or arrangement under which it may be required to pay for any asset or services or facilities of any kind an amount which is in excess of the market value of that asset or services or facilities or will receive any payment for any asset or services or facilities of any kind that it has supplied or provided or is liable to supply or provide which is less than the market value of that asset or services or facilities and in consequence of which it is or will be liable to Tax in relation to such excess or undervalue, and for the purposes of this warranty, market value shall be taken to mean market value determined for the purposes of and in accordance with any requirements of applicable transfer pricing legislation and this warranty shall apply only to any transaction or arrangement which falls under the transfer pricing regulation.
|
18.
|
Intellectual Property
|
(A)
|
Details of all registered Intellectual Property and material unregistered Intellectual Property owned or used by any member of the Sale Group are set out in the Current Rosneft Disclosure Letter and the specified member of the Sale Group:
|
(i)
|
is the sole legal and beneficial owner of such Intellectual Property; or
|
(ii)
|
uses such Intellectual Property pursuant to and within the terms and provisions of a valid, subsisting written contractual agreement or licence to which it is a party.
|
(B)
|
All renewal, application and other official registry fees and steps required for the maintenance, protection and enforcement of the Intellectual Property owned by any member of the Sale Group have been paid or taken.
|
(C)
|
Copies of all material licences, agreements and arrangements relating to Intellectual Property entered into by any member of the Sale Group are set out in Folders 1.2.15.19 and 2.2.3.11 of the Rosneft Data Room and no such material licences, agreements or arrangements are capable of termination as a result of the change in the underlying ownership or control of any member of the Sale Group.
|
(D)
|
No member of the Sale Group nor, so far as Rosneft is aware, any other party is in material breach of any of the licences, agreements and arrangements disclosed pursuant to Paragraph 19(A).
|
(E)
|
So far as Rosneft is aware, no third party is infringing or making unauthorised use of any Intellectual Property or rights in Business Information owned by any member of the Sale Group (or owned by any member of the Retained Group and relating to the business of any member of the Sale Group).
|
(F)
|
So far as Rosneft is aware, the activities of the Sale Group do not infringe or make unauthorised use of, and have not infringed or made unauthorised use of, the Intellectual Property of any third party.
|
(G)
|
No member of the Retained Group owns or is licensed to use any Intellectual Property or information which is also used by any member of the Sale Group.
|
(H)
|
None of the Intellectual Property is the subject of any litigation, dispute, claim, opposition or administrative proceeding and, so far as Rosneft is aware, no such litigation, dispute, claim, opposition or administrative proceeding is expected or reasonably likely.
|
19.
|
Information Technology
|
(A)
|
Details of all material Information Technology which is owned by any member of the Sale Group or which is used by, or on behalf of, any member of the Sale Group are set out in the Current Rosneft Disclosure Letter and the specified member of the Sale Group:
|
(i)
|
is the sole legal and beneficial owner of such Information Technology free from all Encumbrances; or
|
(ii)
|
uses such Information Technology pursuant to and within the terms and provisions of a valid, subsisting written contractual arrangement or licence to which it is a party.
|
(B)
|
Copies of all material agreements relating to Information Technology entered into by any member of the Sale Group are set out in Folders 1.2.15.19 and 2.2.3.11 in the Rosneft Data Room and no such material agreements are capable of termination as a result of the change in the underlying ownership or control of any member of the Sale Group.
|
(C)
|
No member of the Sale Group nor, so far as Rosneft is aware, any other party is in material breach of any of the agreements disclosed pursuant to Paragraph 20(B).
|
(D)
|
None of the Information Technology is the subject of any litigation, dispute, claim, opposition or administrative proceeding and, so far as Rosneft is aware, no such litigation, dispute, claim, opposition or administrative proceeding is expected or reasonably likely.
|
(E)
|
There has been no material disruption to the commercial activities of the Sale Group (taken as a whole) in the six months prior to the Signing Date which has been caused only by any failure or breakdown of any Information Technology used by the Sale Group.
|
20.
|
Anti-corruption
|
21.1
|
For the purposes of this Paragraph 21:
|
21.2
|
Except as disclosed in the Current Rosneft Disclosure Letter, none of the members of the Sale Group, their respective officers, directors or employees has, and so far as Rosneft is aware, none of the Sale Group’s other associated persons has, at any time directly or indirectly:
|
(A)
|
offered, given, promised or paid any unlawful financial or other advantage to any person; or
|
(B)
|
requested, agreed to receive or accepted any unlawful financial or other advantage or acted or omitted to act (or influenced another to act or omit to act) in anticipation or in consequence of doing so; or
|
(C)
|
made or offered to make any payment, or given or offered to give anything of value, to any government official or public official, in order to secure any improper advantage or to obtain or retain business for the Sale Group.
|
21.3
|
The Sale Group has such systems and controls as are necessary to ensure compliance by it and its associated persons with Anti-Corruption Rules and, so far as Rosneft is aware, there has been no breach by the Sale Group or any of its associated persons of any such systems or controls.
|
21.4
|
Except as disclosed in the Current Rosneft Disclosure Letter, neither Rosneft nor any member of the Sale Group has within the last six years received any enquiry regarding or report or complaint of, or initiated any investigation or disciplinary proceedings in connection with, any breach or possible breach of Anti-Corruption Rules by any member of the Sale Group or any of its associated persons.
|
21.5
|
Except as disclosed in the Current Rosneft Disclosure Letter, neither Rosneft nor any member of the Sale Group has within the last six years, been subject to any investigation, inquiry, enforcement proceedings or sanction relating to any member of the Sale Group by any Authority relating to Anti-Corruption Rules.
|
21.
|
Broker fees
|
22.
|
Effect of the acquisition
|
(A)
|
result in any member of the Sale Group losing the benefit of any of the Relevant Properties, any Land Rig or any other material asset or material right or privilege which it now enjoys;
|
(B)
|
conflict with, or result in a breach of, or give rise to an event of default under, or require the consent of any person under any agreement, contract, arrangement, judgment, order, decree, award, demand, ruling, injunction or decision to which any member of the Sale Group is subject or bound; or
|
(C)
|
result in any payment or other benefit to any employee of any member of the Sale Group.
|
23.
|
Compliance with Laws
|
24.
|
Competition
|
25.1
|
So far as Rosneft is aware, no member of the Sale Group is or has over the course of the last five years:
|
(A)
|
insofar as it may materially affect the business of the Sale Group, the NADL Group or the Seadrill Group, been a party to or is or has been concerned in any agreement or arrangement or is conducting or has conducted itself (whether by omission or otherwise) in a manner which:
|
(i)
|
infringes any anti-trust legislation in any jurisdiction in which any member of the Sale Group has assets or carries or intends to carry on business or where its activities may have an effect; or
|
(ii)
|
is unenforceable or void (whether in whole or in part) or renders any other member of the Sale Group or any Key Employees liable to civil, criminal or administrative proceedings by virtue of any anti-trust legislation or any undertakings given or orders made under such legislation in any jurisdiction in which any member of the Sale Group has assets or carries on business;
|
(B)
|
given an undertaking to, or is subject to any order of or investigation by, or has received any request for information from, any court or Authority (including any national competition authority and any sectoral regulator) under any anti-trust legislation in any jurisdiction in which any member of the Sale Group has assets or carries on business; or
|
(C)
|
received notice that any enforcement actions by any Authority are in progress or contemplation relating to any breach of any relevant statutory or licence requirements or conditions of the Sale Group.
|
1.
|
The Company is the sole owner of the Orenburg Shares, the Orenburg Shares have been lawfully acquired and there are no Encumbrances existing or threatening to occur with respect to the Orenburg Shares.
|
2.
|
The waivers of all members of Orenburg, other than the Orenburg Sellers (and of Orenburg, as appropriate), from their pre-emptive rights to purchase the Orenburg Shares or part thereof in connection with the Orenburg Acquisition were duly obtained and were not revoked before the Orenburg Completion Date.
|
3.
|
Orenburg is the sole owner of 100% (one hundred per cent.) of the shares in the Orenburg Subsidiary (hereinafter, the “
Orenburg
Subsidiary Shares
”), the Orenburg Subsidiary Shares have been lawfully acquired and there are no Encumbrances existing or threatening to occur with respect to the Orenburg Subsidiary Shares and there are no agreements, understandings or commitments creating such Encumbrances.
|
4.
|
As at the Orenburg Completion Date, the Orenburg Sellers had full right and authority to sell the Orenburg Shares.
|
5.
|
Orenburg and the Orenburg Subsidiary are duly incorporated and existing and there are no grounds for winding up or dissolution of Orenburg or the Orenburg Subsidiary.
|
6.
|
All applicable tax obligations of Orenburg and the Orenburg Subsidiary have been duly satisfied by Orenburg or the Orenburg Subsidiary, in due time, to the extent required by applicable law and in all jurisdictions.
|
7.
|
All accounting books, records and other statements of Orenburg and the Orenburg Subsidiary are up-to-date and are kept in accordance with applicable law in all material respects.
|
8.
|
The financial statements and tax returns of Orenburg and the Orenburg Subsidiary are kept and filed in accordance with applicable law in all material respects.
|
9.
|
There are no current guarantees, warranties, or indemnities other than indemnities made under drilling contracts in the normal course of business, or security obligations made by Orenburg or the Orenburg Subsidiary with respect to the obligations of any person, other than Orenburg, the amount of which in each case (separately or jointly under several interrelated obligations) exceeds RUB 15,000,000.
|
10.
|
There are no actual obligations of Orenburg or the Orenburg Subsidiary that have occurred in the normal course of business the amount of which, in each case, exceeds RUB 15,000,000 (separately or jointly under several interrelated obligations) and there are no other actual obligations of Orenburg or the Orenburg Subsidiary the amount of which, in each case, exceeds RUB 15,000,000 (separately or jointly under several interrelated obligations) other than those disclosed.
|
11.
|
Orenburg and the Orenburg Subsidiary have no accounts payable the amount of which, in each case, exceeds RUB 15,000,000 (separately or jointly under several interrelated obligations) other than those disclosed.
|
12.
|
Orenburg’s and the Orenburg Subsidiary’s assets constitute all assets necessary to efficiently operate the business of Orenburg and the Orenburg Subsidiary in all material respects.
|
13.
|
Each agreement with respect to a transaction the value of which exceeds RUB 25,000,000, to which any of Orenburg or the Orenburg Subsidiary is a party, is valid and enforceable and is complied with by Orenburg or the Orenburg Subsidiary and, to the best of Rosneft’s knowledge, by its counterparty in all material respects.
|
14.
|
There are no agreements entered into by Orenburg or the Orenburg Subsidiary with any member of the Retained Group, other than as disclosed.
|
15.
|
There are no current proceedings with respect to Orenburg or the Orenburg Subsidiary the amount of which exceeds RUB 15,000,000 and there are no written notices of pending proceedings with respect to Orenburg or the Orenburg Subsidiary the amount of which exceeds RUB 15,000,000 other than those disclosed.
|
16.
|
Orenburg and the Orenburg Subsidiary are solvent and do not qualify for insolvency as defined by Russian law.
|
17.
|
All immovable property and Material Orenburg Movable Property is owned by Orenburg or the Orenburg Subsidiary (as applicable) under full unencumbered ownership title or lease (and there are no agreements, understandings or commitments creating such Encumbrances) other than disclosed and/or otherwise lawfully operated and is suitable for use for its intended purposes and is in good repair and technical condition subject to normal depreciation.
|
18.
|
The total amount payable by Orenburg and the Orenburg Subsidiary under all agreements entered into with any employees or other natural persons does not exceed RUB 15,000,000 for any period of 12 months (other than salaries payable to such employees in the normal course of business).
|
19.
|
Each of Orenburg and the Orenburg Subsidiary has all licenses and other permits required to carry out its business in all material respects.
|
20.
|
Orenburg and the Orenburg Subsidiary have complied and continue to comply with environment protection laws in all material respects and Orenburg and the Orenburg Subsidiary have no environmental obligations such as fines and penalties assessed by environmental authorities in the course of inspections or outstanding orders of inspecting environmental authorities.
|
21.
|
Orenburg and the Orenburg Subsidiary have made no guarantees or indemnities other than indemnities made under drilling contracts in the normal course of business, warranties or other securities with respect to the obligations of their subsidiaries or third parties, under which outstanding indebtedness exists.
|
22.
|
The value of Orenburg’s assets comprising immovable property located in the Russian Federation constitutes no more than 50% (fifty per cent.) of the Orenburg asset value.
|
23.
|
Orenburg and the Orenburg Subsidiary have not disposed of or Encumbered any property after 1 January 2014 (other than any property disposable in the normal course of business).
|
24.
|
Lease Agreements No. ДА-212/32-14/250 and No. ДА-212/33-14/251 entered into by Orenburg with respect to drilling rigs, the lease agreements with respect to which (No. ДЛ212/01-12 and No. ДЛ212/02-12) were terminated in 2014, have been made on the terms and conditions not less favourable than the terms and conditions of other lease agreements entered into by Orenburg and the Orenburg Subsidiary effective as at 1 January 2014.
|
25.
|
Orenburg Seller 1 obtained conditional consent of the FAS No. ЦА/12008/14 dated March 31, 2014 to effect the Orenburg Acquisition.
|
26.
|
Since the Orenburg Completion Date no facts, circumstances or events have arisen or occurred and nothing has been done or omitted to be done in relation to Orenburg, the Orenburg Subsidiary or their respective operations, assets and businesses which would have given rise to a breach of any of the Company Warranties had the Company Warranties been given in respect of or applied to Orenburg, the Orenburg Subsidiary or their respective operations, assets and businesses for the period starting from the Orenburg Completion Date.
|
27.
|
No facts, circumstances or events have arisen or occurred and nothing has been done or omitted to be done by or in relation to Orenburg, the Orenburg Subsidiary or their respective operations, assets and businesses which would give rise to a breach of any of the Company Warranties set out in paragraphs 12(D), 14(C), 15, 16(C), 17(C) or (D), 18, 21, 23(B), 24 or 25 of Part A of Schedule 5 insofar as such warranties relate to compliance in all material respects with applicable law or regulation.
|
1.
|
Consideration Shares and the Subscription Shares
|
(S)
|
The Consideration Shares and the Subscription Shares will be validly allotted and issued and will on issue be credited as fully paid, with the same rights and ranking pari passu in all respects with the existing fully paid common shares of par value US$5 each in the share capital of NADL.
|
(T)
|
The issue of the Consideration Shares and the Subscription Shares as well as the entry into and consummation of the Transactions will comply with all agreements to which any member of the NADL Group is a party or by which it or any of them or any of their respective properties or assets is bound and will not infringe any restrictions or the terms of any contract, obligation or commitment of any member of the NADL Group.
|
(U)
|
NADL has the power to allot and issue the Consideration Shares and the Subscription Shares in the manner contemplated by this Agreement without any sanction or consent by members of NADL or any class of them and, subject to the passing of the resolutions of the board of directors of NADL referred to in Schedule 3 and Part B of Schedule 4 authorising the allotment and issue of the Consideration Shares and the Subscription Shares, and (save for the BMA Consent which will be outstanding as at the Signing Date and subject to customary conditions as at the Completion Date), there are no consents or approvals required by NADL for the allotment and issue of the Consideration Shares and the Subscription Shares which have not been irrevocably and unconditionally obtained.
|
2.
|
NADL
|
(A)
|
The information given in Attachment 5 (Basic information about NADL) is true and accurate in all material respects.
|
3.
|
Assets; Intellectual Property
|
(A)
|
NADL has full legal title (including ownership and lease rights) to or otherwise has the right to use, free from any current Encumbrances (or Encumbrances which, so far as Seadrill is aware, will come into effect after Completion) in relation to the real estate and material moveable assets used by NADL and there is no agreement, arrangement or obligation to create such Encumbrances and no claim has been received by NADL in respect of any such Encumbrance.
|
(B)
|
Subject to normal wear and tear, all of the Offshore Rigs owned by the NADL Group are capable of being efficiently and properly used in connection with the NADL business.
|
(C)
|
The assets of NADL comprise all such assets necessary for the carrying out of the business of NADL in all material respects in the manner in, and the extent to, which it is presently conducted. The ownership or use by NADL of the Offshore Rigs does not infringe the Intellectual Property of any third party to a material extent.
|
4.
|
Tax
|
(A)
|
No member of the NADL Group has any liability in respect of Tax (whether actual or contingent) in respect of its last accounting period ended prior to the Completion Date that is not fully disclosed and provided for in the accounts relating to such period, in each case as prepared in accordance with the accounting standards relevant for such accounts.
|
(B)
|
Each member of the NADL Group has duly filed all Tax returns, forms and/or reports which are required under applicable law to be filed within the applicable time limits and such returns, forms and/or reports are correct and duly account for all transactions carried out by the NADL Group which are required under applicable law to be disclosed in such returns, forms and/or reports.
|
(C)
|
All Tax (including any interest, penalties and surcharges) due and payable by each member of the NADL Group in accordance with applicable law (including those required to have been paid by way of withholding of Tax) prior to Completion Date have been paid on time and in full.
|
(D)
|
There is no dispute or disagreement outstanding nor is any contemplated at the date of this Agreement with any Tax Authority regarding the Tax affairs of any member of the NADL Group and there are no circumstances which make it likely that any such dispute or disagreement will commence.
|
(E)
|
The amount of Tax chargeable on any member of the NADL Group under any return or assessment that remains open to audit or enquiry as at the Completion Date has not, to any material extent, depended on any concession, agreement or other formal or informal arrangement with any Tax Authority. No transaction in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was required to be sought from any Tax Authority has been entered into or carried out by any member of the NADL Group without such ruling having first been properly obtained and all transactions in respect of which any consent, ruling, advanced agreement, confirmation or clearance (each a ruling) was obtained from any Tax Authority were carried out in accordance with the terms prescribed by such ruling.
|
(F)
|
No member of the NADL Group benefits from any preferential Tax regime, granted by law or by special authorisation issued by any Tax Authority or by any other authority, which could in whole or in part be affected by the signature of this Agreement.
|
(G)
|
No member of the NADL Group is party to any transaction which is fraudulent or a sham or which has as its main purpose or one of its main purposes the avoidance of a liability to Tax.
|
(H)
|
No member of the NADL Group has violated, breached or infringed any anti-abuse or similar rule in relation to Tax in any jurisdiction where any relief from Tax has been claimed for the benefit of any member of the NADL Group under domestic laws or any applicable double taxation treaty.
|
(I)
|
Each member of the NADL Group has complied in all material respects with its obligations relating to VAT. Each member of the NADL Group that is required to be registered for the purposes of VAT has been so registered at all times that it has been so required, and such registration is not subject to any conditions imposed by or agreed with the relevant Tax Authority.
|
(J)
|
Full, complete, correct and up-to-date records, invoices and other documents relating to VAT have been made, given, obtained and kept in each case in accordance with applicable law.
|
(K)
|
All VAT, import and export duties, royalties and other taxes or charges payable by any member of the NADL Group to any Tax Authority relating to the production of hydrocarbons or the importation or export of goods and assets and all excise duties payable to any Tax Authority in respect of any assets (including trading stock) imported, exported, produced, owned or used by any member of the NADL Group have been duly declared and paid in full.
|
(L)
|
Each member of the NADL Group has made all deductions in respect, or on account, of any Tax from any payments made by it which it is obliged to make under applicable law and has accounted in full to the appropriate authority for all amounts so deducted.
|
(M)
|
Each member of the NADL Group is resident for Tax purposes in the jurisdiction of its incorporation, which is the only jurisdiction whose Tax Authorities seek to charge Tax on the worldwide profits or gains of such member. No member of the NADL Group has any agency, branch or permanent establishment in any jurisdiction except that North Atlantic Norway Ltd has a branch in Norway and North Atlantic Drilling UK Ltd has branches in the Republic of Ireland and in the Russian Federation.
|
(N)
|
Except as provided in its Accounts, no member of the NADL Group is, nor will it be, under any obligation to make any payment to anyone (including but not limited to members of the Seadrill Group but excluding any member of the NADL Group) under any Tax grouping, Tax sharing, fiscal consolidation or similar arrangements.
|
(O)
|
No member of the NADL Group is or has been a party to any transaction or arrangement under which it may be required to pay for any asset or services or facilities of any kind an amount which is in excess of the market value of that asset or services or facilities or will receive any payment for any asset or services or facilities of any kind that it has supplied or provided or is liable to supply or provide which is less than the market value of that asset or services or facilities and in consequence of which it is or will be liable to Tax in relation to such excess or undervalue, and for the purposes of this warranty, market value shall be taken to mean market value determined for the purposes of and in accordance with any requirements of applicable transfer pricing legislation and this warranty shall apply only to any transaction or arrangement which falls under the transfer pricing regulation.
|
5.
|
Financial Position
|
(A)
|
NADL has not agreed to guarantee or provide any security or indemnity in relation to any debt or obligation of any person who is not a member of the NADL Group in each case or collectively exceeding US$10,000,000.
|
(B)
|
NADL is not insolvent, and no insolvency or administration proceedings of any kind have been instituted in respect of NADL and, NADL is not aware of any reasons for initiating any procedures under applicable law which may result in NADL being insolvent.
|
6.
|
Contracts
|
(A)
|
NADL is not aware of any material breach, invalidity, or grounds for determination, rescission, avoidance or repudiation of any NADL Material Contract to which NADL is a party or of any allegation of such a thing and no notice of termination or intention to terminate has been received by NADL (or any member of the NADL Group) in respect thereof.
|
(B)
|
Save as disclosed in the Current NADL Disclosure Letter, there are no material contracts between NADL and Seadrill or any member of the Seadrill Group or any NADL contract or arrangement in which any director of any member of the Seadrill Group or any person connected with any such director is interested, either directly or indirectly.
|
(C)
|
Save as disclosed in the Current NADL Disclosure Letter, since the Accounts Date, NADL has not (unless in all material respects in the ordinary course of business) (i) entered into any material contract, (ii) acquired or disposed of any material asset; (iii) changed any material terms of employment of, or dismissed, any NADL Key Employee; or (iv) taken any other material action with respect to NADL's business.
|
7.
|
Compliance with Law
|
(D)
|
So far as NADL is aware, NADL has complied and is in compliance with environmental laws applicable to it, in each case in all material respects. So far as NADL is aware, NADL is not obliged to pay any material fines or penalties for any violation of such environmental laws.
|
(E)
|
So far as NADL is aware, all material licences, permits, consents and other permissions and approvals required for the carrying on of the business now being carried on by NADL in all material respects have been obtained and remain in full force and effect, are not subject to onerous conditions and have at all times been complied with in all material respects. So far as NADL is aware, there is no circumstance which indicates that any such licence, permit, consent, permission or approval is reasonably likely to be varied, revoked or not renewed, or which is reasonably likely to confer a right of variation or revocation.
|
8.
|
No litigation
|
9.
|
Securities Laws
|
(A)
|
The Prospectus and Bonds Prospectus contained all of the information required to be included in it by applicable law and regulation. Since 29 January 2014, NADL has made all filings it has been required to make under, and complied with, all applicable rules of the New York Stock Exchange, the Bermuda Monetary Authority and any other securities exchange whose rules apply to NADL.
|
(B)
|
NADL’s common shares are registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (“
Exchange Act
”) and NADL has taken no action that is likely to have the effect of terminating the registration of the common shares under the Exchange Act. NADL has filed all material reports, forms and other documents (“
SEC Documents
”) required to be filed by it with the U.S. Securities and Exchange Commission (“
SEC
”) under the Securities Act of 1933 (“
Securities Act
”) and the Exchange Act. Such SEC Documents (a) were filed on a timely basis; (b) at the time filed, were in compliance in all material respects with the applicable requirements of the Securities Act, the Exchange Act and the rules of the SEC thereunder; and (c) did not at the time they were filed contain any untrue statement of a material fact or omit to state a material fact in order to make the statements in such SEC Documents, in the light of the circumstances under which they were made, not misleading.
|
(C)
|
The offer, sale and issuance of the Consideration Shares does not require registration under the Securities Act, any state securities laws or any foreign securities laws.
|
10.
|
Share options
|
1.
|
Limitation on quantum and general
|
1.3
|
Rosneft shall not be liable under this Agreement in respect of any individual claim (except under Clauses 2.1, 2.5, 2.11, 3.5(A), 3.6(B), 3.7(A), 5.7(A), 5.8(B), 5.9(A), 5.16(A), 5.17(B), 5.23, 5.29 to 5.33 (inclusive), 10.8, 11, 16.9, 17.1 to 17.3 (inclusive), 19, 20.1 and 29.1 to 29.5 (inclusive)):
|
(A)
|
for less than ***** (excluding interest and costs); and
|
(B)
|
unless and until the aggregate amount of all such individual claims exceeds *****, in which case Rosneft shall be liable for the whole amount, and not only in respect of the excess over such sum.
|
1.4
|
The aggregate liability of Rosneft in respect of all claims made under this Agreement (but excluding any Orenburg Warranty Claim and any claim in respect of a Fundamental Rosneft Warranty and claims under Clauses 2.1, 2.5, 2.11, 3.5(A), 3.6(B), 3.7(A), 4, 5.7(A), 5.8(B), 5.9(A), 5.16(A), 5.17(B), 5.23, 5.29 to 5.33 (inclusive), 10.8, 11, 16.9, 17.1 to 17.3 (inclusive), 19 and 20.1) shall not in any event exceed an amount equal to 50% (fifty per cent.) of the Consideration.
|
1.5
|
The aggregate liability of Rosneft in respect of all Orenburg Warranty Claims shall not in any event exceed:
|
(A)
|
in respect of all claims under Paragraph 1 of Part B of Schedule 5, *****; and
|
(B)
|
in respect of all other claims, *****.
|
1.6
|
The aggregate liability of Rosneft in respect of all claims made in respect of a Fundamental Rosneft Warranty and claims under Clauses 2.1, 2.5, 2.11, 4, 5.23, 10.8, 11, 16.9 and 19 shall not in any event exceed an amount equal to 100% (one hundred per cent.) of the Consideration.
|
1.7
|
The aggregate liability of Rosneft in respect of all claims made under Clauses 17.1 to 17.3 (inclusive) shall not in any event exceed *****.
|
1.8
|
Each provision of this Part A of Schedule 7 shall be read and construed without prejudice to each of the other provisions of this Part A of Schedule 7.
|
1.9
|
Nothing in this Schedule shall or shall be deemed to relieve or abrogate any member of the Seadrill Group or any member of the NADL Group of any common law or other duty to mitigate any loss or damage.
|
1.10
|
The financial limitations contained in Paragraphs 1.1, 1.3 and 1.5 above shall not apply in the event of any fraudulent act or omission on the part of Rosneft.
|
2.
|
Time limits for bringing claims
|
2.12
|
No claim shall be brought against Rosneft under this Agreement (other than Clauses 3, 5, 16.9, 20, 21, 24, 27 and 29) unless a member of the Seadrill Group or a member of the NADL Group shall have given to Rosneft written notice of such claim specifying (in reasonable detail) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect thereof (if known) and a reasonable estimate of the loss thereby alleged to have been suffered by it:
|
(F)
|
subject to Paragraphs 2.1(B), 2.1(C), 2.1(D) and 2.1(E) below, on or before the second (2
nd
) anniversary of the Completion Date;
|
(G)
|
in respect of any claims under the Fundamental Rosneft Warranties, Environmental Warranties or the Anti-Corruption Warranties, on or before the third (3rd) anniversary of the Completion Date;
|
(H)
|
in respect of any Orenburg Warranty Claim, on or before the first (1st) anniversary of the Completion Date, save for any Orenburg Warranty Claim under the Orenburg Warranty set out in Paragraph 27 of Part B of Schedule 5;
|
(I)
|
in respect of any claims under the Rosneft Tax Warranties on or before the later of the third (3rd) anniversary of the Completion Date and the date following three months after the expiry of the period specified by applicable law during which an assessment of the relevant liability to Tax may be issued by the relevant Tax Authority;
|
(J)
|
in respect of any claims under Clause 28 (Confidentiality), on or before the third (3rd) anniversary of the Completion Date;
|
(K)
|
in respect of any claims under Clauses 17.1 to 17.3 (inclusive), on or before the seventh (7th) anniversary of the Completion Date;
|
(L)
|
in respect of any claims under Clauses 20.4 to 20.14 (inclusive), on or before the earlier of: (i) the first (1st) anniversary of the exercise of the Weatherford Option; and (ii) the third (3rd) anniversary of the Completion Date,
|
3.
|
Exclusion of liability for disclosed matters
|
4.
|
No liability if loss is otherwise compensated for
|
4.5
|
No liability shall attach to Rosneft under this Agreement to the extent that:
|
(A)
|
the same loss has been recovered by Seadrill or NADL (as the case may be) under a claim pursuant to any other Rosneft Warranty or term of this Agreement or any other document entered into pursuant hereto and accordingly Seadrill or NADL (as the case may be) may only recover once in respect of the same loss;
|
(B)
|
the amount of the liability has been specifically allowed, provided for or reserved for in respect of the matter giving rise to the loss in the Accounts;
|
(C)
|
the liability is taken into account (including by the increase of any liability or outgoing or the reduction of any asset or receipt) in calculating the Completion Accounts; or
|
(D)
|
after Completion, the same loss has been recovered by the Company from one or more of the Orenburg Sellers.
|
4.6
|
No liability shall attach to Rosneft in respect of a claim under Part A of Schedule 5 in respect of any litigation, arbitration or other dispute resolution process, or administrative or criminal proceedings (a “
Litigation Claim
”) if any liability in respect of that same claim is taken into account (including by the increase of any liability or outgoing or the reduction of any asset or receipt) in calculating the Completion Accounts and notwithstanding that the amount of the liability that has been taken into account in calculating the Completion Accounts is less than the value of the Litigation Claim.
|
5.
|
Insurance
|
6.
|
No liability unless Rosneft given opportunity to remedy breaches
|
7.
|
No liability if Company sold by NADL
|
8.
|
No right of set-off
|
9.
|
Third party claims
|
9.4
|
Upon Seadrill, NADL or any member of the Sale Group becoming aware of any matter which is likely, in the reasonable opinion of Seadrill or NADL, to give rise to any claim against Rosneft under this Agreement, Seadrill or NADL (as the case may be) shall and shall procure (if relevant) that the Sale Group shall:
|
(B)
|
notify Rosneft by written notice as soon as reasonably practicable (save that any failure to give such notice shall not preclude Seadrill or NADL from making a claim against Rosneft, but Rosneft shall not be liable to Seadrill or NADL in respect of such claim to the extent that the amount of it is increased, or is not reduced, as a result of such failure);
|
(C)
|
consult with Rosneft regarding the conduct of any such claim and shall make (and shall procure that the Sale Group makes) no admission of liability, agreement, settlement or compromise with any third party in relation to any such claim or adjudication without the prior written consent of Rosneft (such consent not to be unreasonably withheld);
|
(D)
|
subject to being fully indemnified to its reasonable satisfaction by Rosneft, take such action as Rosneft may reasonably request to avoid, dispute, resist, appeal, compromise or defend such third party claim or any adjudication in respect of that third party claim; and
|
(E)
|
subject to being fully indemnified to its reasonable satisfaction by Rosneft, if so required by Rosneft in writing, place Rosneft in a position to take on or take over the conduct of all proceedings and/or negotiations of whatsoever nature arising in connection with the third party claim in question and provide such information and assistance as Rosneft may reasonably require in connection with the preparation for and conduct of such proceedings and/or negotiations.
|
9.5
|
Where Rosneft wishes the NADL Group to apply for interim measures ("
obespechitelnye mery
") to the Russian arbitrage court (an “
Interim Measures Application
”) in respect of the said matter and the provision of a bank guarantee or deposit is required or desirable in connection with such an Interim Measures Application, then Rosneft's rights under Paragraph 9.1 (other than Paragraph 9.1(A)) shall be conditional upon Rosneft, within the applicable time period required by the relevant Russian arbitrage court, notifying NADL in writing that it wishes the NADL Group to make an Interim Measures Application and providing funds to the NADL Group:
|
(M)
|
to meet such costs as the NADL Group shall reasonably incur from time to time in order to obtain a bank guarantee for provision to the Russian arbitrage court and to maintain such guarantee; or
|
(N)
|
in the form of a loan for payment of a deposit to the Russian arbitrage court,
|
9.6
|
Notwithstanding any other provision of this Paragraph 9, Seadrill and NADL shall not be required to take, permit or omit, or procure the taking, permitting or omission of, any step or action in relation to any third party claim, action or demand if and to the extent that Seadrill or NADL reasonably believes that the taking, permitting or omission of the relevant step or action would have an adverse effect on the reputation or goodwill of any member of the Seadrill Group or NADL Group.
|
10.
|
Recovery from third parties
|
10.9
|
Where any member of the Seadrill Group or NADL Group is at any time entitled to recover from some other person any sum in respect of any matter giving rise to a claim under this Agreement (whether by payment, discount, credit, relief or otherwise), Seadrill or NADL shall, or shall procure that the relevant member of the Seadrill Group or NADL Group (as the case may be) shall, take reasonable steps to enforce such recovery. In the event that the Seadrill Group or NADL Group shall recover any amount from such other person, the amount of the claim against Rosneft shall be reduced by the amount so recovered less all reasonable costs of recovery and any Tax thereon.
|
10.10
|
If under Clause 16.9 Rosneft settles at any time to the Seadrill Group or the NADL Group an amount pursuant to a claim under this Agreement and the Seadrill Group or NADL Group (as the case may be) subsequently recovers from some other person any sum in respect of any matter giving rise to such claim (whether by payment, discount, credit, relief or otherwise), the Seadrill Group or NADL Group (as the case may be) shall repay to Rosneft the lesser of: (i) the amount settled by Rosneft to the Seadrill Group or the NADL Group (as the case may be); and (ii) the sum recovered from such other person less all reasonable costs of recovery and any Tax thereon.
|
11.
|
Losses
|
12.
|
Matters arising subsequent to this Agreement
|
(A)
|
any matter or thing done or omitted to be done pursuant to and in compliance with this Agreement, at the request in writing or with the approval in writing of any of Seadrill or NADL;
|
(B)
|
any act, omission or transaction of Seadrill or NADL or any member of the Seadrill Group or any member of the NADL Group or any member of the Sale Group, or their respective directors, officers, employees or agents or successors in title, after Completion (unless in the ordinary course of business or pursuant to a legally binding obligation to which a member of the Sale Group is subject);
|
(C)
|
the passing of, or any change in, after Completion, any law, rule, regulation or administrative practice of any relevant practice of any relevant jurisdiction or Authority including (without prejudice to the generality of the foregoing) any increase in the rates of taxation or any imposition of taxation or any withdrawal of relief from tax not actually (or prospectively) in effect at Completion or any change after Completion of any generally accepted interpretation or application of any legislation; or
|
(D)
|
any change in accounting or taxation policy, bases or practice of any member of the Sale Group introduced or having effect after Completion save for any change approved by Rosneft prior to Completion where such change has effect after Completion.
|
13.
|
Right to recover
|
14.
|
No liability for Rosneft Warranty Claims unless brought under relevant Rosneft Warranty
|
15.
|
Reduction of Consideration
|
16.
|
Orenburg Tax
|
1.
|
Limitation on quantum and general
|
1.11
|
NADL shall not be liable under this Agreement in respect of any individual claim (except under Clauses 2.1, 2.3, 2.5, 2.7, 3.1, 3.2, 3.3, 3.6(A), 3.7(B), 3.8, 5.4, 5.5, 5.8(A), 5.9(B), 5.21, 5.24, 5.29 to 5.33 (inclusive), 10.8, 11, 20.1 and 29.1 to 29.5 (inclusive)):
|
(D)
|
for less than ***** (excluding interest and costs); and
|
(E)
|
unless and until the aggregate amount of all such individual claims exceeds *****, in which case NADL shall be liable for the whole amount, and not only in respect of the excess over such sum.
|
1.12
|
Seadrill shall not be liable under this Agreement in respect of any individual claim (except under Clauses 2.3, 2.7, 5.13, 5.14, 5.17(A), 10.8, 11, 16.8 and 29.1 to 29.5 (inclusive)):
|
(F)
|
for less than ***** (excluding interest and costs); and
|
(G)
|
unless and until the aggregate amount of all such individual claims under the Seadrill Warranty exceeds *****, in which case Seadrill shall be liable for the whole amount, and not only in respect of the excess over such sum.
|
1.13
|
The aggregate liability of Seadrill and NADL in respect of all claims made under this Agreement (but excluding any claim in respect of any Fundamental NADL Warranty and claims under Clauses 2.1, 2.2, 2.3, 2.5, 2.7, 3.1, 3.2, 3.3, 3.6(A), 3.7(B), 3.8, 5.4, 5.5, 5.8(A), 5.9(B), 5.13, 5.14, 5.17(A), 5.21, 5.24, 5.29 to 5.33 (inclusive), 10.8, 11, 16.8 and 20.1) shall not in any event exceed an amount equal to 50% (fifty per cent.) of the Consideration.
|
1.14
|
The aggregate liability of Seadrill and NADL in respect of all claims made in respect of any Fundamental NADL Warranty and under Clauses 2.1, 2.2, 2.3, 2.5, 2.7, 5.21, 5.24, 10.8, 11 and 16.8 shall not in any event exceed an amount equal to 100% (one hundred per cent.) of the Consideration.
|
1.15
|
Each provision of this Part B of Schedule 7 shall be read and construed without prejudice to each of the other provisions of this Part B of Schedule 7.
|
1.16
|
Nothing in this Schedule 7 shall or shall be deemed to relieve or abrogate Rosneft or any member of the Retained Group of any common law or other duty to mitigate any loss or damage.
|
1.17
|
The financial limitations contained in Paragraphs 1.1 and 1.2 above shall not apply in the event of any fraudulent act or omission on the part of NADL in the giving of the NADL Warranties.
|
2.
|
Time limits for bringing claims
|
2.13
|
No claim shall be brought against Seadrill or NADL under this Agreement (other than Clauses 3, 5, 16.9, 19, 20, 21, 24, 27 and 29) unless Rosneft shall have given to Seadrill or NADL written notice of such claim specifying (in reasonable detail) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect thereof (if known) and Rosneft’s reasonable estimate of the loss thereby alleged to have been suffered by it:
|
(A)
|
subject to Paragraph 2.1(B),2.1(C) and 2.1(D) below, on or before the second (2
nd
) anniversary of the Completion Date;
|
(B)
|
in respect of any claim under the Fundamental NADL Warranties, on or before the third (3rd) anniversary of the Completion Date;
|
(C)
|
in respect of the NADL Tax Warranties on or before the later of the third (3rd) anniversary of the Completion Date and the date following three months after the expiry of the period specified by applicable law during which an assessment of the relevant liability to Tax may be issued by the relevant Tax Authority;
|
(D)
|
in respect of any claims under Clause 28 (Confidentiality), on or before the third (3rd) anniversary of the Completion Date;
|
(E)
|
in respect of any claims under Clauses 20.4 to 20.14 (inclusive), on or before the earlier of: (i) the first (1st) anniversary of the exercise of the Weatherford Option; and (ii) the third (3rd) anniversary of the Completion Date,
|
3.
|
Exclusion of liability for disclosed matters
|
4.
|
No liability if loss is otherwise compensated for
|
4.7
|
No liability shall attach to Seadrill or NADL under this Agreement to the extent that:
|
(A)
|
the same loss has been recovered by Rosneft under a claim pursuant to any other NADL Warranty, Seadrill Warranty or term of this Agreement or any other document entered into pursuant hereto and accordingly Rosneft may only recover once in respect of the same loss; or
|
(B)
|
the amount of the liability has been specifically allowed, provided for or reserved for in respect of the matter giving rise to the loss in the NADL Accounts.
|
5.
|
Insurance
|
6.
|
No liability unless NADL/Seadrill given opportunity to remedy breaches
|
7.
|
No right of set-off
|
8.
|
Third party claims
|
8.4
|
Upon Rosneft or any member of the Retained Group becoming aware of any matter which is likely, in the reasonable opinion of Rosneft, to give rise to any claim against Seadrill or NADL under this Agreement, Rosneft shall and shall procure that the Retained Group shall:
|
(F)
|
notify Seadrill or NADL (as the case may be) by written notice as soon as reasonably practicable (save that any failure to give such notice shall not preclude Rosneft from making a claim against Seadrill or NADL, but Seadrill and NADL shall not be liable to Rosneft in respect of such claim to the extent that the amount of it is increased, or is not reduced, as a result of such failure);
|
(G)
|
consult with NADL and Seadrill regarding the conduct of any such claim and shall make (and shall procure that the Retained Group makes) no admission of liability, agreement, settlement or compromise with any third party in relation to any such claim or adjudication without the prior written consent of NADL and Seadrill (such consent not to be unreasonably withheld);
|
(H)
|
subject to being fully indemnified to its reasonable satisfaction by NADL and Seadrill, take such action as NADL and Seadrill may reasonably request to avoid, dispute, resist, appeal, compromise or defend such third party claim or any adjudication in respect of that third party claim; and
|
(I)
|
subject to being fully indemnified to its reasonable satisfaction by NADL and Seadrill, if so required by NADL and Seadrill in writing, place NADL and Seadrill in a position to take on or take over the conduct of all proceedings and/or negotiations of whatsoever nature arising in connection with the third party claim in question and provide such information and assistance as NADL and Seadrill may reasonably require in connection with the preparation for and conduct of such proceedings and/or negotiations.
|
8.5
|
Notwithstanding any other provision of this Paragraph
8
, Rosneft shall not be required to take, permit or omit, or procure the taking, permitting or omission of, any step or action in relation to any third party claim, action or demand if and to the extent that Rosneft reasonably believes that the taking, permitting or omission of the relevant step or action would have an adverse effect on the reputation or goodwill of any member of the Retained Group.
|
9.
|
Recovery from third parties
|
9.7
|
Where Rosneft (or any member of the Retained Group) is at any time entitled to recover from some other person any sum in respect of any matter giving rise to a claim under this Agreement (whether by payment, discount, credit, relief or otherwise), Rosneft shall, or shall procure that the relevant member of the Retained Group shall, take reasonable steps to enforce such recovery. In the event that Rosneft (or any member of the Retained Group) shall recover any amount from such other person, the amount of the claim against Seadrill and NADL shall be reduced by the amount so recovered less all reasonable costs of recovery and any Tax thereon.
|
9.8
|
If Seadrill or NADL (or any member of the Seadrill Group or any member of the NADL Group) pays at any time to Rosneft an amount pursuant to a claim under this Agreement and Rosneft (or any member of the Retained Group) subsequently recovers from some other person any sum in respect of any matter giving rise to such claim (whether by payment, discount, credit, relief or otherwise), Rosneft shall repay to Seadrill or NADL (or the relevant member of the Seadrill Group or NADL Group (as the case may be)) the lesser of: (i) the amount paid to Rosneft; and (ii) the sum recovered from such other person less all reasonable costs of recovery and any Tax thereon.
|
10.
|
Losses
|
11.
|
Matters arising subsequent to this Agreement
|
11.7
|
Without prejudice to the provisions of Clause 13 (NADL Warranties and Covenants), none of Seadrill or NADL shall be liable under this Agreement in respect of any matter, act, omission or circumstance (or any combination thereof), including the aggravation of a matter or circumstance, and any losses arising therefrom, to the extent that the same would not have occurred but for:
|
(A)
|
any matter or thing done or omitted to be done pursuant to and in compliance with this Agreement, at the request in writing or with the approval in writing of Rosneft;
|
(B)
|
any act, omission or transaction of Rosneft or any member of the Retained Group, or their respective directors, officers, employees or agents or successors in title, after Completion; or
|
(C)
|
the passing of, or any change in, after Completion, any law, rule, regulation or administrative practice of any relevant practice of any relevant jurisdiction or Authority including (without prejudice to the generality of the foregoing) any increase in the rates of taxation or any imposition of taxation or any withdrawal of relief from tax not actually (or prospectively) in effect at Completion or any change after Completion of any generally accepted interpretation or application of any legislation.
|
12.
|
Right to recover
|
13.
|
Reduction of Consideration
|
1.
|
Preparation of Draft Completion Accounts
|
1.18
|
NADL shall procure the preparation by the Sale Group of stand-alone balance sheets of each of the Company, Orenburg and the Orenburg Subsidiary prepared as at immediately prior to Completion on the Completion Date and aggregation of these balance sheets into an aggregated balance sheet in accordance with this Schedule 8 and in the form set out in Part D (Balance Sheet) of this Schedule 8 and including a completion statement specifying:
|
(A)
|
the Completion Working Capital Amount;
|
(B)
|
the Completion Cash Amount;
|
(C)
|
the Completion Debt Amount;
|
(D)
|
the Net Cash / Debt Amount,
|
1.19
|
The Draft Completion Accounts shall be prepared in accordance with those accounting policies, principles, practices, bases and methodologies set out in Part B (Accounting policies, principles, practices, bases and methodologies) of this Schedule 8.
|
1.20
|
Rosneft shall, and shall procure that the Retained Group, provide without charge such reasonable access to their personnel (who shall be instructed to give information and explanations promptly), Books and Records as NADL or NADL’s Accountants and advisers may request in connection with the preparation of the Draft Completion Accounts.
|
1.21
|
Save in accordance with the provisions of Paragraph 4.2, no amendment shall be made to the Draft Completion Accounts after their delivery to Rosneft in accordance with Paragraph 1.1.
|
1.22
|
No amendment to the Draft Completion Accounts shall be made, and no Dispute Notice shall be served under Paragraph 3 below, if the amendment would result in a Consideration Deficit of less than US$250,000 under Clause 2.10 but if such amount is exceeded, the amendment shall be for the whole amount, and not only in respect of the excess over such amount.
|
2.
|
Review
of Draft Completion Accounts
|
3.
|
Dispute mechanism
|
3.12
|
Subject to Paragraph 1.5 above, Rosneft may dispute the Draft Completion Accounts by notice in writing (in this Paragraph, the “
Dispute Notice
”) delivered to NADL in accordance with Clause 26 (Notices) within 25 calendar days or 15 Business Days (whichever greater) of receiving the Draft Completion Accounts.
|
3.13
|
The Dispute Notice shall specify (a) which items of the Draft Completion Accounts are disputed, (b) the reasons therefor and, to the extent practicable, (c) the effect that Rosneft believes that the items in dispute have on:
|
(A)
|
the Completion Working Capital Amount;
|
(B)
|
the Completion Cash Amount;
|
(C)
|
the Completion Debt Amount;
|
(D)
|
the Net Cash / Debt Amount; and
|
(E)
|
the Completion Adjustment Amount,
|
3.14
|
Only the Disputed Items shall be treated as being in dispute and no amendment may be made by either party, or any Expert appointed pursuant to Paragraph 4.2 below, to any items or amounts which are not Disputed Items.
|
3.15
|
Notwithstanding the other provisions of this Paragraph 3, if in preparing the Draft Completion Accounts NADL has:
|
(D)
|
included in the calculation of the Completion Working Capital Amount a category of liability which was not included in the calculation of the Minimum Working Capital Amount as evidenced by Part E of this Schedule 8; and/or
|
(E)
|
excluded from the calculation of the Completion Working Capital Amount a category of asset which was not excluded in the calculation of the Minimum Working Capital Amount as evidenced by Part E of this Schedule 8,
|
4.
|
Finalisation of Completion Accounts
|
4.8
|
If Rosneft does not serve the Dispute Notice under Paragraph 3.1 above, the Draft Completion Accounts shall constitute the Completion Accounts.
|
4.9
|
If Rosneft does serve the Dispute Notice under Paragraph 3.1 above, then NADL and Rosneft shall use their reasonable endeavours to resolve the Disputed Items and either:
|
(H)
|
if Rosneft and NADL reach agreement on all Disputed Items within 20 Business Days of the Dispute Notice being served (or such longer period as Rosneft and NADL may agree in writing), the Draft Completion Accounts shall be amended to reflect such agreement and shall then constitute the Completion Accounts; or
|
(I)
|
if Rosneft and NADL do not reach agreement in accordance with Paragraph (A) above, Rosneft or NADL may refer the dispute in respect of only the Disputed Items still remaining in dispute (and not those items of the Draft Completion Accounts that have been agreed between Rosneft and NADL in accordance with Paragraph (A) above) to such individual at one of KPMG or Ernst & Young as Rosneft and NADL may agree or, failing such agreement within 10 calendar days of expiry of the period described in Paragraph (A) above, to such independent firm of international standing as the President of the Institute of Chartered Accountants in England and Wales may, on the application of either Rosneft or NADL, nominate (the “
Expert
”), on the basis that the Expert is to make a decision on the dispute and notify Rosneft and NADL of its decision within 60 Business Days of receiving the reference or such longer reasonable period as the Expert may determine.
|
4.10
|
Each party shall bear its own costs with respect to the finalisation of the Completion Accounts. The costs of the Expert shall be borne by Rosneft and NADL as set out in Paragraph 4.4 below.
|
4.11
|
In any reference to the Expert in accordance with Paragraph 4.2 above:
|
(F)
|
the Expert shall act as an expert and not as an arbitrator and shall be directed to determine any dispute by reference to the accounting policies, principles, practices bases and methodologies set out in Part B (Accounting policies, principles, practices, bases and methodologies) of this Schedule 8;
|
(G)
|
the decision of the Expert shall, in the absence of fraud or manifest error, be final and binding on Rosneft and NADL and the Completion Accounts shall be the Draft Completion Accounts amended as necessary to reflect the decision of the Expert and, as amended, signed by the Expert;
|
(H)
|
the costs of the Expert shall be paid by Rosneft and NADL equally or as otherwise determined by the Expert; and
|
(I)
|
each of Rosneft and NADL shall respectively provide or procure the provision to the Expert of all such information as the Expert shall reasonably require including:
|
(i)
|
by their respective accountants and advisers;
|
(ii)
|
in the case of NADL, the Books and Records and personnel of the Sale Group; and
|
(iii)
|
in the case of Rosneft, the Books and Records and personnel of the Retained Group.
|
5.
|
Following determination of the Completion Accounts
|
5.34
|
Following determination of the Completion Accounts, the amount of the:
|
(A)
|
the Completion Working Capital Amount;
|
(B)
|
the Completion Cash Amount;
|
(C)
|
the Completion Debt Amount; and
|
(D)
|
the Net Cash / Debt Amount
|
1.
|
be prepared in accordance with the specific accounting principles, practices and policies set out in Part C of this Schedule 8;
|
2.
|
to the extent not inconsistent with Paragraph 1 above, be prepared in accordance with the accounting principles, policies, procedures, assets recognition bases, methods, practices and estimation techniques (including in respect of the exercise of management judgment in respect of the same or similar underlying fact patterns or circumstances) adopted in the Company Accounts (for the Company), in the audited RAS accounts of Orenburg as at the Accounts Date (for Orenburg) and in the audited RAS accounts of Orenburg Subsidiary as at the Accounts Date (for the Orenburg Subsidiary) (the “
Reference Accounts
”), (the “
Consistent Policies
”) (Orenburg and the Orenburg Subsidiary, together “
OBK
”); and
|
3.
|
subject to Paragraphs 1 and 2 above, be prepared in accordance with RAS as in force at the Accounts Date.
|
1.
|
on the basis of the trial balances of the Company, Orenburg and Orenburg Subsidiary as at immediately prior to Completion on the Completion Date (the “
Effective Tim
e”). No account shall be taken of events taking place after the Effective Time, except that Adjusting Events as defined in ПБУ7/98 (“PBU 7/98”) (
“Events after the Reporting Date”
) shall be taken into account up until the time NADL delivers the Draft Completion Accounts to Rosneft (the “
Cut-off Time
”);
|
2.
|
in RUB, rounded to the nearest million;
|
3.
|
subject to Paragraphs 30.a, 30.b, 30.d, 30.e and 30.g of Part C of Schedule 8, on the basis that the Sale Group is a going concern and shall exclude the effect of change of control or ownership of the Sale Group and shall not take into account the effects of any post-Completion reorganisations or the post-Completion intentions or obligations of the Seadrill Group or the NADL Group, including any change in management strategy, direction or priority or possible closure of any business (or part thereof) which results from the change of ownership (provided that the valuation of a business, and its assets, shall be conducted in the context of the relevant business at Completion without taking into account any change of ownership thereof or the Seadrill Group or the NADL Group’s intentions with respect to the conduct of any business after Completion);
|
4.
|
so that the Completion Date is treated as an accounting and tax year-end;
|
5.
|
so that no item may be included in the Draft Completion Accounts more than once or in a manner which results in double-counting (and the provisions of this Schedule 8 shall be interpreted so as to avoid double-counting);
|
6.
|
so that none of the following categories of assets, liabilities or equity (as reported in the Reference Accounts) shall be included in the Completion Cash Amount, the Completion Debt Amount or the Completion Working Capital Amount: intangible assets, research and development, intangible exploration assets, tangible exploration assets, fixed assets, investment property and equipment, long-term financial investments, deferred tax assets, long-term trade and other receivables, other non-current assets, deferred tax liabilities, share capital, treasury shares, reserve for the revaluation of non-current assets, additional paid-in capital, reserve capital and retained earnings;
|
7.
|
subject to Paragraphs 6 and 12 on the basis that corporate profit tax which shall be included in the Draft Completion Accounts and classified within the Completion Debt Amount, shall be limited to amounts which, as at Completion, have been incurred or are required to be recognised as a liability on the balance sheet less any prepayments of such corporate profit tax made prior to Completion or amounts receivable in relation to corporate profit tax already paid, provided in all cases consistent with Tax law in force at Completion. Notwithstanding the previous sentence, the corporate profit tax should include corporate profit tax amounts calculated by reference to revenue and expenses recognised in the Draft Completion Accounts up to the Effective Time which otherwise would not qualify for recognition for current corporate profit tax purposes due to acts of acceptance and/or other documents being outstanding from customers and/or suppliers as at Draft Completion Accounts date;
|
8.
|
subject to Paragraph 30.d of Part C of Schedule 8 so as to take no account of the costs of the Seadrill Group or the NADL Group, in each case in relation to the preparation, negotiation, execution or carrying into effect of any of the Transaction Documents (including the costs of the preparation, delivery, review and resolution of the Completion Accounts);
|
9.
|
so as to include no provision with respect to any matter which is the subject of an indemnity claim, in favour of the Seadrill Group or the NADL Group under the terms of this Agreement or any of the other Transaction Documents;
|
10.
|
so as to include no provision or accrual or other liability created for any amount that is recovered by the Seadrill Group or the NADL Group under a Rosneft Warranty Claim made between the Completion Date and the date when Rosneft has served a Dispute Notice under Paragraph 3.1 of this Schedule 8;
|
11.
|
so that balances between legal entities comprising the Sale Group shall be reconciled and any unreconciled differences shall be investigated and eliminated;
|
12.
|
so that no amounts shall be included in the Net Cash / Debt Amount or the Completion Working Capital Amount in relation to deferred tax assets or deferred tax liabilities;
|
13.
|
so that an amount shall be included in the Completion Working Capital Amount in relation to prepayments made by the Sale Group for fixed assets or assets under construction not yet received or constructed as at the Effective Time;
|
14.
|
so that no amounts shall be included in the Completion Working Capital Amount in respect of trade and other receivables or assets of the Sale Group in relation to trade and other receivables or assets that are collectable or recoverable in over 365 days from the Completion Date or which are otherwise in the nature of, or classified in the Reference Accounts as, fixed assets or intangible assets;
|
15.
|
so that a liability of the Sale Group shall be included in the Completion Working Capital Amount in relation to fixed assets, assets under construction or similar non-current assets acquired or constructed but not paid for or otherwise settled as at the Effective Time. If such capital expenditure of the Sale Group (including an acquisition or construction of fixed assets, assets under construction or similar non-current assets) is formally agreed between the parties in writing (such agreement to reference this Paragraph 15 of Part C of Schedule 8) no liability shall be included in the Draft Completion Accounts in relation to such capital expenditure;
|
16.
|
so that no item shall be included in, or excluded from, the Draft Completion Accounts solely on the grounds of materiality;
|
17.
|
so that a provision shall be accrued in the Draft Completion Accounts and included in the Completion Debt Amount for any loss-making contracts (other than the Onshore Drilling Contracts) of the Sale Group;
|
18.
|
so that a liability in relation to amounts received by the Sale Group shall be recognised in the Completion Working Capital Amount equal to such amounts received by the Sale Group (including contract advances) to the extent that no revenue has been recognised by the Effective Time in relation to such amounts received;
|
19.
|
so that no provision shall be made in the Draft Completion Accounts for trade and other receivables to the extent they have been collected in cash by the Sale Group or otherwise settled prior to the Review Date;
|
20.
|
so that full provision shall be made (without duplication) against the following receivables outstanding as at the Effective Time (other than those due to the Sale Group by the Retained Group) to the extent that they have not been collected in cash by the Sale Group or otherwise settled prior to the Review Date:
|
a.
|
amounts due from counterparties in administration, liquidation or receivership, or bankrupt as of the Cut-off Time and which remain being in administration, liquidation or receivership, or bankrupt or have been liquidated as at the Review Date;
|
b.
|
amounts due to the Company from Intaneft to the extent that such amounts are overdue as at the Effective Time;
|
c.
|
amounts due to the Company from TransServis to the extent that such amounts are overdue as at the Effective Time;
|
d.
|
amounts due to the Company from OOO Novator to the extent that such amounts are overdue as at the Effective Time;
|
e.
|
amounts due to the Company from OAO Tyumenenergobank to the extent that such amounts are overdue as at the Effective Time;
|
f.
|
amounts due to the Company from OOO Uralneftemash to the extent that such amounts are overdue as at the Effective Time;
|
g.
|
amounts due to the Company from ZAO GlobalTel to the extent that such amounts are overdue as at the Effective Time;
|
h.
|
amounts due to Orenburg from SANEKO to the extent that such amounts are overdue as at the Effective Time;
|
i.
|
amounts due to the Orenburg Subsidiary which are overdue at the Effective Time by more than 90 days;
|
21.
|
so that a provision shall be made within the Completion Working Capital Amount for work in progress of the Sale Group that is not recoverable from customers;
|
22.
|
so that a provision shall be made within the Completion Working Capital Amount for defective or damaged or obsolete materials;
|
23.
|
so that a provision shall be included in the Completion Working Capital Amount for any unrealised profit margin accrued as a result of a sale and purchase of inventory between the companies of the Sale Group to the extent that such inventory remains on the balance sheet of the purchasing company of the Sale Group as at the Effective Time;
|
24.
|
so that a full provision shall be included in the Completion Working Capital Amount for any receivable, accrued income or work in progress in each case due from, or incurred in favour of, Severneft-Urengoy as at the Effective Time in relation to the Severneft-Urengoy master contract (and any related contracts or work orders with Severneft-Urengoy), except to the extent formally accepted by the customer prior to the Review Date;
|
25.
|
so that the Completion Cash Amount shall comprise amounts at the Effective Time which are available to be lent, spent, or distributed by the Sale Group in the ordinary course of business at the Effective Time or which subsequently become freely available prior to the Review Date;
|
26.
|
so that prepayments issued by the Sale Group shall comprise amounts paid by the Sale Group prior to the Effective Time in respect of goods and services, other assets and benefits receivable by the Sale Group after the Effective Time. To the extent that after Completion the Sale Group will not be eligible to benefit from the prepayments made by the Sale Group prior to the Effective Time, but would be eligible to receive a refund or rebate in relation to such prepayments, an asset shall be included in the Completion Working Capital Amount in the amount of such rebate or refund;
|
27.
|
so that an accrual for liability shall be made in the Completion Working Capital Amount for goods and services delivered to the Sale Group on or before the Effective Time which have not been paid for or otherwise settled by the Effective Time;
|
28.
|
so that no leases classified as operating leases in the Reference Accounts shall be reclassified as finance or capital leases. No leases classified as finance or capital leases in the Reference Accounts shall be reclassified as operating leases. Lease agreements entered into after 31 December 2013 shall be accounted for in accordance with the Consistent Policies and subject thereto, RAS and subject always to the agreed treatment of any Rig Leases as stated in the definition of Debt. For the avoidance of doubt, if lease agreements entered by the Sale Group prior to or on 31 December 2013 have been subsequently (but up to Completion) amended, including a revision of the underlying leasing terms and conditions which require a reclassification of a lease from operating to financial or vice versa, then such amendment or modification of the lease agreement shall be considered a new lease agreement for the purposes of the Draft Completion Accounts;
|
29.
|
so that a liability shall be included in the Completion Working Capital Amount for any unpaid costs incurred by the Sale Group (or which are required to be recognised as a liability on the balance sheet) in relation to employee or contractor related costs, including salaries and overtime payable, bonuses, severance costs, insurance and holiday pay (including any such amounts arising on or as a consequence of Completion);
|
30.
|
so that a liability or an asset shall be included in the Completion Debt Amount or Completion Cash Amount, as appropriate (to the extent not already included in the Completion Working Capital Amount) in respect of the following:
|
a.
|
intercompany non-trading balances owed by the Sale Group to the Retained Group or by the Retained Group to the Sale Group, including all dividends and distributions payable (but excluding any such balances that are converted into equity or are waived prior to or at the Effective Time and hence are no longer payable or receivable by the Sale Group on or after Completion);
|
b.
|
any penalties or early termination fees payable on the termination of the following contracts only:
|
(i)
|
contracts in relation to indebtedness or borrowings of the Sale Group; and
|
(ii)
|
drilling contracts of the Sale Group with Gazpromneft-Noyabrskneftegaz and Gazpromneft Orenburg
|
c.
|
a provision shall be made for any claims
payable by the Sale Group as at the Effective Time that shall be recognised on the balance sheet on the basis consistent with the provisions of Paragraph 2 of Part B of this Schedule 8 and subject thereto, in accordance with RAS;
|
d.
|
any transaction bonuses, costs and advisory fees (including taxes thereon) to the extent incurred by the Sale Group (or incurred by the Retained Group and recharged to the Sale Group) before or on Completion that remain unpaid as at the Effective Time in relation to the transaction contemplated by this Agreement;
|
e.
|
any unpaid costs incurred by the Sale Group before Completion that remain unpaid as at the Effective Time in relation to the acquisition of Orenburg from the Orenburg Sellers;
|
f.
|
a liability in respect of any shortfall in
|
(i)
|
actual capital expenditure (other than in respect of the acquisition of new rigs) incurred from 1 January 2014 to Completion inclusive either in the form of cash payments or the accrual of liabilities within the Completion Working Capital Amount or the Completion Debt Amount,
|
(ii)
|
budgeted capital expenditure (other than in respect of the acquisition of new rigs) (the “
Capex Budget
”).
|
(i)
|
*****
for the period from 1 January 2014 to 31 October 2014, if Completion occurs on or before 31 October 2014,
|
(ii)
|
if Completion occurs after 31 October 2014 but on or before 30 November 2014,
*****
plus an amount of
*****
for each calendar day between 31 October 2014 (excluding day of 31 October 2014) and Completion (including day of Completion),
|
(iii)
|
if Completion occurs after 30 November 2014 but on or before 31 December 2014,
*****
plus an amount of
*****
for each calendar day between 30 November 2014 (excluding day of 30 November 2014) and Completion (including day of Completion);
|
g.
|
any liabilities of the Sale Group in respect of derivatives, hedging arrangements or other financial instruments entered into prior to Completion and measured at the amount that would be required to settle these at Completion; and
|
31.
|
for the avoidance of doubt in the event of a conflict between various provisions of this Part C of Schedule 8, so that a more specific accounting policy shall prevail over a less specific accounting policy.
|
Settlement Period
|
Estimated Drilling Revenue
|
*****
|
*****
|
Settlement Period
|
Estimated Drilling Revenue
|
|||||
West Navigator
|
West Alpha
|
West Rigel
|
Energy Endeavour
|
CJ-54 I
|
CJ-54 II
|
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
CONTRIBUTION AGREEMENT
|
договор о внесении вклада в уставный капитал
|
[●] 2014
|
[●] 2014
|
OJSC ROSNEFT OIL COMANY
,
an open joint stock company incorporated and existing under the laws of the Russian Federation, having its main state registration number 1027700043502 and located at Russian Federation, 115035 Moscow, 26/1 Sofiyskaya embankment, hereinafter referred to as “
Rosneft
”
, represented by [●] (passport issued on [●] by [●], whose residence is at [●]), acting on the basis of [●],
|
ОАО «НК «РОСНЕФТЬ»
, открытое акционерное общество, созданное и действующее в соответствии с законодательством Российской Федерации, имеющее основной государственный регистрационный номер 1027700043502 и находящееся по адресу: Россия, 115035, Москва, Софийская набережная, 26/1, именуемое в дальнейшем «
Роснефть
», в лице [
•
] (паспорт [
•
], выдан [
•
] [
•
], зарегистрирован по адресу [
•
]), действующего на основании [
•
],
|
and
|
и
|
NORTH ATLANTIC DRILLING LTD.
, an exempted limited company incorporated and existing under the laws of the Islands of Bermuda, having its official number 45094 and located at Par-la-Ville Place, 14 Par-la-ville Road, Hamilton HM08, Bermuda, hereinafter referred to as “
NADL
”, represented by [●] (passport issued on [●] by [●], whose residence is at [●]), acting on the basis of [●],
|
НОРТ АТЛАНТИК ДРИЛЛИНГ ЛТД. (NORTH ATLANTIC DRILLING LTD.)
,
компания с ограниченной ответственностью, созданная и действующая в соответствии с законодательством Бермудских островов, имеющая официальный номер 45094 и находящаяся по адресу: Бермудские острова, Гамильтон НМ08, Пар-ла-вилль Роуд 14, Пар-ла-Вилль Плейс, в дальнейшем именуемая «
НАДЛ
», в лице [
•
] (паспорт [
•
], выдан [
•
] [
•
], зарегистрирован по адресу [
•
]), действующего на основании [
•
],
|
each a “
Party
” and together the “
Parties
”, have entered into this contribution agreement (the “
Agreement
”) and agreed on transfer of the participation interest in the charter capital of the Company (as defined below) by making a contribution to the share capital of NADL under the following conditions:
|
каждая из которых далее именуется «
Сторона
», а при совместном именовании «
Стороны
», заключили настоящий договор о внесении вклада в уставный капитал (далее - «
Договор
») и согласились передать долю в уставном капитале Общества (как определено ниже) путем внесения вклада в уставный капитал НАДЛ на следующих условиях:
|
1.
SUBJECT MATTER OF THE AGREEMENT
|
1.
ПРЕДМЕТ ДОГОВОРА
|
6.6.
All state duties and notary fees chargeable for the notary certification of the Agreement and for other notary actions effectuated by a Russian notary and pertaining to the Agreement (including for the notary actions to transfer the application referred to in clause 2.1.1 and a copy thereof) are payable in equal proportions by NADL and Rosneft.
|
6.6.
Все расходы по уплате государственной пошлины или нотариального тарифа за нотариальное удостоверение Договора и за иные нотариальные действия, совершаемые российским нотариусом в связи с заключением Договора (в том числе за нотариальные действия по передаче заявления, указанного в пункте 2.1.1, и его копии) Роснефть и НАДЛ несут в равных долях.
|
6.7.
All transfer taxes, stamp duties, registration charges and other similar taxes, duties and charges (as the case may be) chargeable for the issuance, allotment and transfer of Shares are payable by NADL.
|
6.7.
Все расходы по уплате налогов, связанных с передачей имущества, регистрационных сборов и пошлин или других схожих налогов, сборов или пошлин (в зависимости от того, что применимо) за выпуск, размещение и передачу Акций несет НАДЛ.
|
6.8.
The Agreement is executed in 3 copies in the Russian and English languages each. One of them shall be kept in folder of a notary. In the case of discrepancy between the English and Russian versions the Russian version shall prevail.
|
6.8.
Настоящий Договор совершен в 3 экземплярах на русском и английском языках каждый. Один из них хранится в делах нотариуса. В случае противоречия между текстами на русском и английском языках русский текст будет иметь преимущество.
|
Signatures / Подписи Сторон
|
|
OJSC Rosneft Oil Company / ОАО «НК «Роснефть»
|
North Atlantic Drilling Ltd. / Норт Атлантик Дриллинг Лтд.
|
Name / Имя:
|
Name / Имя:
|
Title / Должность:
|
Title / Должность:
|
Signature / Подпись
|
Signature / Подпись
|
___________________________________
|
___________________________________
|
1.
|
Services
|
1.1
|
Rosneft (the “
Provider
”) shall provide or procure the provision of (i) the Transitional Services; (ii) the Turnkey Services and Turnkey Materials; and (iii) the Operational Services and Operational Materials (together, the “
Services
” and the “
Materials
”, respectively) to NADL (the “
Recipient
”) or such members of the Recipient’s Group as the Recipient may direct.
|
2.
|
Term
|
2.14
|
The Provider shall provide or procure the provision of the Transitional Services for a period of 24 months from Completion (or for such other period as may be agreed between the Provider and the Recipient).
|
2.15
|
The Recipient may notify the Provider at any time during the 24 month period that certain Transitional Services (or certain components of a Transitional Service) are no longer required (the “
Redundant Services
”). Within 20 days of receipt of such notification, the Provider shall notify the Recipient (the “Increase Notice”) of any actual increase in the cost the Provider will incur (the “
Actual Cost Increase
”) as a result of the termination of the Redundant Services (the “Related Services”), and any adverse impact that it envisages on its ability to perform the Related Services (an “
Adverse Impact
”) as a result of the Redundant Services being terminated, and shall provide such information and evidence as the Recipient may reasonably require to evidence such increase and impact. The Provider shall use reasonable endeavours to mitigate the Actual Cost Increase as a result of the termination of the Redundant Services.
|
2.16
|
If the Recipient wishes to terminate the Redundant Services it may do so on 30 days’ written notice from the date on which the Increase Notice is required to be served under Paragraph 2.2, whereupon the Provider shall cease to provide or procure the provision of the Redundant Services and its charges shall be reduced accordingly. However, the Provider shall be entitled to increase its charges for the Related Services by the amount of the Actual Cost Increase (provided this shall not be more than the amount notified in the Increase Notice) plus such amount (not being greater than 5% of the Actual Cost Increase) as shall be necessary to comply with Russian transfer pricing regulations. The Provider shall not be liable to the Recipient for any Adverse Impact on the Related Services that results from termination of the Redundant Services.
|
2.17
|
The Provider shall provide or procure the provision of the Operational Services and Operational Materials in relation to each Onshore Drilling Contract for such period as the relevant Onshore Drilling Contracts remains in effect or, if shorter, for a period of 5 (five) years from the Completion Date.
|
2.18
|
The provisions of Paragraphs 2.2 and 2.3 above shall apply,
mutatis mutandis
, in relation to any Operational Services or Operational Materials (or components thereof) that the Recipient no longer requires during the period in which Operational Services or Operational Materials are being provided.
|
2.19
|
The Provider shall provide or procure the provision of the relevant Turnkey Services and Turnkey Materials in relation to each Turnkey Contract (in addition to the Operational Services and Operational Materials) for such period as the relevant contract remains a Turnkey Contract for the purposes of this Schedule.
|
2.20
|
The provisions of Paragraphs 2.2 and 2.3 above shall apply,
mutatis mutandis
, in relation to any Turnkey Services or Turnkey Materials (or components thereof) that the Recipient no longer requires during the period in which Turnkey Services or Turnkey Materials are being provided.
|
3.
|
Service Levels
|
3.16
|
The Provider shall procure that the Services and Materials are provided with all reasonable skill and care on the terms and conditions set out in this Schedule and in the SLAs.
|
3.17
|
In the event of any conflict between this Schedule and the SLAs, including as to the term of any such arrangements, this Schedule shall prevail. The Provider and the Recipient respectively shall procure that members of the Retained Group and members of the Recipient’s Group give effect to the terms of this Schedule. The Provider shall procure that the Services and Materials shall be provided under this Schedule and (subject to the previous sentence) on the terms set out in the SLAs for the periods referred to in Paragraph 2 above notwithstanding the earlier expiry of any of the SLAs provided that if the Recipient’s Group is in material breach of its obligations under an SLA and such breach has not been remedied within a reasonable period of time, then the Provider shall be entitled to terminate the relevant SLA in accordance with its terms and shall not be liable to the Recipient as a result of such termination.
|
3.18
|
The Provider may amend some or all of the SLAs between the date of this Agreement and Completion in order to incorporate into such SLAs the terms of this Schedule, but shall not otherwise amend or terminate any SLA without the Recipient’s prior written consent.
|
3.19
|
If either the Provider or the Recipient can establish prior to Completion to the reasonable satisfaction of the other that the historic performance of the Retained Group under any SLA has been consistently higher or consistently lower than the standard required under the relevant SLA, the Provider and the Recipient shall discuss in good faith and make appropriate amendments to the relevant SLA to reflect the higher or lower historic standard of performance, PROVIDED THAT no such amendments shall be made to the extent they could reasonably be expected to compromise the Recipient’s Group’s ability to perform its contractual
obligations under the Onshore
Drilling Contracts or Turnkey Contracts or comply with applicable Russian law. The Provider shall, upon reasonable notice and subject to the receipt of such undertakings as to confidentiality as the Provider shall reasonably require, provide the Recipient with such information and access to books, records and employees of the Retained Group as the Recipient may reasonably request for the purpose of assessing historic performance levels and any differences between those levels and the standard of performance required under the SLAs provided that the provision of such information and access shall not cause undue disruption to the Provider’s business and activities.
|
3.20
|
The Provider and the Recipient agree that, to the extent that the Provider and the Recipient agree to make any changes to the Services and Materials and the terms on which they will be provided in accordance with this Schedule, the Recipient and the Provider shall procure that the SLAs shall be amended in order to incorporate into such SLAs any such changes.
|
4.
|
Third Party Consents
|
4.12
|
The Provider shall promptly obtain from Third Party Providers (in each case, to the extent not already obtained) and shall maintain such consents, licences, permits and approvals as are required by the Provider under the Third Party Contracts for the performance of its obligations set out in this Schedule and to permit the Recipient to obtain the full benefit of the Services and Materials (the “
Provider Third Party Consents
”).
|
4.13
|
The Recipient shall provide all such reasonable assistance in obtaining the Provider Third Party Consents as the Provider may reasonably request from time to time.
|
4.14
|
The costs of obtaining and maintaining any Provider Third Party Consents shall be borne by the Provider.
|
5.
|
Fees
|
5.35
|
The fees payable by the Recipient for the Transitional Services shall be: (i) during the period of up to 18 months from Completion, on the same terms as prevailed during the 12 months prior to the Signing Date, provided that the such fees shall increase in line with the annual level of cost inflation permitted under clause 5.1, Section 4 of the Onshore Drilling Contracts and shall be adjusted to the extent necessary to comply with the Russian transfer pricing regulations but shall not, in any event, be greater than the actual cost to the Provider plus 5%; and (ii) during the period from 18 months up to 24 months from Completion, an amount equal to the actual cost to the Provider of providing the relevant services plus 7%.
|
5.36
|
The Operational Services and the Operational Materials shall be provided on the same basis and under the same terms and conditions as regards fees and charges which applied in respect of the provision of those services pursuant to the SLAs in the 12 months prior to the Signing Date provided that such fees, charges or underlying costs for the Operational Services or Operational Materials (or any component thereof) after 31 December 2013 shall increase in line with the annual level of cost inflation permitted under clause 5.1, Section 4 of the Onshore Drilling Contracts.
|
5.37
|
The Turnkey Services and the Turnkey Materials shall be provided on the same basis and under the same terms and conditions as regards fees and charges which applied in respect of the provision of those services pursuant to the Turnkey Contracts in the 12 months prior to the Signing Date provided that such fees, charges or underlying costs for the Turnkey Services or Turnkey Materials (or any component thereof) after 31 December 2013 shall increase in line with the annual level of cost inflation permitted under clause 5.1, Section 4 of the Onshore Drilling Contracts.
|
5.38
|
Notwithstanding the foregoing provisions of this Paragraph 5, where Services or Materials comprise components that are sourced from outside the Retained Group as at the date of this Agreement, the actual cost of such components shall be recharged to the Recipient on a pass-through basis (subject to the Provider acting in a commercially prudent way), with the intention that the Recipient shall bear a proportionate share of any increase or decrease in the underlying cost.
|
5.39
|
The Provider shall be permitted to:
|
(A)
|
outsource any components of the Services or Materials which are provided to the Sale Group and are not sourced from outside the Retained Group as at the date of this Agreement with the prior written consent of the Recipient (not to be unreasonably withheld or delayed);
|
(B)
|
outsource any components of the Services or Materials which are not provided or outsourced by the Retained Group as at the date of this Agreement (the “
New Services
”) without the prior consent of the Recipient PROVIDED that:
|
(i)
|
Rosneft shall notify NADL in writing promptly upon the outsourcing of such New Services (which notice shall include full details of any such New Services and the terms on which such New Services are provided);
|
(ii)
|
no later than three Business Days prior to Completion, NADL shall notify Rosneft in writing whether it wishes such New Services (or any part of them) to be provided to the Sale Group following Completion;
|
(iii)
|
if NADL does not serve a notice or notifies Rosneft that it does not wish the New Services (or any part of them) to be provided to the Sale Group following Completion, Rosneft shall terminate the relevant New Services on or before Completion and Rosneft shall ensure that such termination shall not result in any cost implications or any break fees, termination payments, penalties or other similar liabilities for NADL or the Sale Group; and/or
|
(C)
|
transfer the provision of any components of the Services or Materials which are provided to the Sale Group and which are outsourced by the Retained Group as at the date of this Agreement to any other provider without the prior consent of the Recipient provided that any such change of provider does not result in a material change in the cost of such components or the quality of the service provided to the Sale Group.
|
5.40
|
The Provider shall procure that the allocation or apportionment of underlying costs between the Materials and Services provided to the Recipient’s Group on the one hand, and the other activities and operations to which such costs relate on the other hand, is done on a fair and proportionate basis and that the Recipient’s Group receives a fair and proportionate share of any rebates, refunds, credits or other benefits received by the Retained Group in respect thereof.
|
6.
|
Liability
|
6.19
|
The maximum aggregate liability of the Provider and any member of the Retained Group arising out of or in connection with any breach of this Schedule in any period from 1 January to 31 December shall be an amount equal to:
|
(A)
|
in the case of the Transitional Services, 5 times (5x) the aggregate amount of fees payable by the Recipient Group in respect of such services in such 12 month period;
|
(B)
|
in the case of the Operational Services, 5 times (5x) the aggregate amount of fees payable by the Recipient Group in respect of such services in such 12 month period;
|
(C)
|
in the case of the Operational Materials, 5 times (5x) the aggregate amount of fees payable by the Recipient Group in respect of such materials in such 12 month period;
|
(D)
|
in the case of the Turnkey Services, 5 times (5x) the aggregate amount of fees payable by the Recipient Group in respect of such services in such 12 month period;
|
(E)
|
in the case of the Turnkey Materials, 5 times (5x) the aggregate amount of fees payable by the Recipient Group in respect of such materials in such 12 month period;
|
6.20
|
The Provider does not exclude or limit its liability for fraud or for death or personal injury caused by its negligence or that of its employees or agents.
|
6.21
|
Neither the Recipient nor any member of the Recipient’s Group shall be liable for any breach of the Onshore Drilling Contracts to the extent that such liability is caused by, or attributable to, the Provider’s failure to provide or procure the provision of any of the Services or Materials or by any negligence or default of the Provider or any member of the Provider’s Group or any breach of applicable law (a “
Provider Default
”) and the Provider shall procure that no member of the Provider’s Group brings any claim against a member of the Recipient’s Group in respect of any loss, liability, cost, claim, matter or event to the extent caused by or attributable to a Provider Default. The Recipient and the Provider agree that liability under the Onshore Drilling Contracts and the SLAs in this regard shall be assessed and determined under the terms of those agreements including the relevant dispute resolution clauses.
|
7.
|
Pensions
|
8.
|
Access and Documentation
|
8.6
|
The Provider will, upon reasonable notice (accompanied by full details regarding the nature and reasons for the request) and subject to the receipt of such undertakings as to confidentiality as the Provider shall reasonably require, provide the Recipient (and the Recipient’s professional advisers) with access to books, records and personnel in connection with the provision of the Services and Materials to the extent strictly necessary to enable the Recipient to comply with its regulatory obligations (including any SEC filing requirements).
|
8.7
|
The Provider will provide, and procure that members of the Provider’s Group provide, upon reasonable notice (accompanied by full details regarding the nature and reasons for the request) and subject to the receipt of such undertakings as to confidentiality as the Provider shall reasonably require, the Recipient with reasonable supporting documents and access to books, records and personnel in respect of all costs incurred and fees charge in respect of the Services and Materials and the Recipient shall have the right to audit the costs of the Provider and members of the Provider’s Group at its own cost. Save in the case of fraud, any such access or audit shall be limited to matters relating to or arising in the then current calendar year, and the preceding calendar year.
|
8.8
|
In order to allow the Recipient to exercise its rights under this Paragraph 8, the Provider shall retain all relevant data for a period of 1 year and thereafter deliver such data to the Recipient who shall be entitled to retain such data for such period as it wishes.
|
8.9
|
The Provider shall not be liable to comply with its obligations under Paragraphs 8.1 and/or 8.2 if to do so would cause undue disruption to the Provider’s business and activities.
|
9.
|
Transition and Separation
|
9.9
|
Within 5 Business Days of the Signing Date, the Provider and the Recipient shall form a committee which shall be tasked with formulating a plan for the separation of the Sale Group from the Retained Group and the later transition of the services covered by this Schedule to the Recipient and the Recipient’s Group (the “
Transition and Separation Plan
”). Each of the Provider and the Recipient shall use its best endeavours to finalise the Transition and Separation Plan by Completion.
|
9.10
|
The Provider and the Recipient will appoint people to act as project leaders and function heads to lead the process of agreeing, implementing and monitoring the operation of the Transition and Separation Plan in the following areas:
|
9.11
|
Relevant employees of the Sale Group will also be co-opted to assist in the process.
|
9.12
|
The Transition and Separation Plan will cover: (i) the actions which need to be taken to ensure that the Recipient is able to properly conduct the operations of the Sale Group from Completion, including changes to approval, accounting and other processes and procedures that will need to be implemented from Closing (“
Pre-day 1 Actions
”); and (ii) the actions which are required to ensure that the Recipient is able to transition off the Transitional Services during the 24 month period following Completion.
|
9.13
|
The Provider shall provide such reasonable assistance as the Recipient may require to implement the Pre-day 1 Actions.
|
9.14
|
If the Provider and the Recipient cannot reach agreement in respect of any aspect of the Transition and Separation Plan, then either the Provider or the Recipient may refer the matter to the project leaders who shall use all reasonable endeavours to reach an agreement. If the project leaders do not reach agreement within 10 Business Days of the matter being referred to them, the matter shall be referred, in the case of the Provider, to the representative of the Rosneft Group appointed as the Company Representative (as defined in and appointed in accordance with the Onshore Drilling Contracts) and, in the case of the Recipient, to the representative of the Recipient’s Group appointed as the Contractor Representative (as defined in and appointed in accordance with the Onshore Drilling Contracts).
|
10.
|
Intellectual Property
|
11.
|
Recipient Group Information
|
11.8
|
The Provider shall procure that controls and processes are put in place which ensure that the entities and persons providing the Services and/or Materials to the Recipient’s Group only have access to such information relating to the Recipient’s Group as is necessary to be able to provide the relevant Services and/or Materials.
|
11.9
|
The Provider shall procure that, subject to Paragraph 11.1 above, no information relating to the Recipient’s Group is disseminated through the Provider’s Group without the prior written consent of the Recipient.
|
12.
|
Additional Definitions
|
(i)
|
the Provider, the Provider, its subsidiaries and subsidiary undertakings from time to time and any other persons controlled by the Provider (but excluding any member of the Sale Group); and
|
(ii)
|
the Recipient, the Recipient, its subsidiaries and subsidiary undertakings from time to time and shall include the Sale Group from the Completion Date;
|
On behalf of Rosneft Oil Company
|
|
Name:
K.A. Zielicki
|
|
Title:
Attorney
|
|
Signature:
/s/ K.A. Zielicki
|
|
On behalf of Seadrill Limited
|
|
Name:
Tor Troim
|
|
Title:
Director
|
|
Signature:
/s/ Tor Troim
|
|
On behalf of North Atlantic Drilling Ltd.
|
|
Name:
Tor Troim
|
|
Title:
Authorized Signatory
|
|
Signature:
/s/ Tor Troim
|
|
(1)
|
Registered number
(OGRN) |
:
|
*****
|
(2)
|
Date of incorporation
|
:
|
*****
|
(3)
|
Place of incorporation
|
:
|
Russian Federation
|
(4)
|
Address of registered office
|
:
|
*****
|
(5)
|
Company form
|
:
|
Limited Liability Company
|
(6)
|
Registered charter capital amount
|
:
|
*****
|
(7)
|
Ownership of participatory interest
|
:
|
*****
|
(8)
|
Accounting reference date
|
:
|
31 December
|
(9)
|
Auditors
|
:
|
*****
|
(10)
|
Tax residence
|
:
|
Russian Federation
|
(11)
|
Braches and representative offices
|
:
|
*****
|
(1)
|
Registered number (OGRN)
|
:
|
*****
|
(2)
|
Date of incorporation
|
:
|
*****
|
(3)
|
Place of incorporation
|
:
|
Russian Federation
|
(4)
|
Address of registered office
|
:
|
*****
|
(5)
|
Company form
|
:
|
Limited Liability Company
|
(6)
|
Registered charter capital amount
|
:
|
*****
|
(7)
|
Ownership of participatory interest
|
:
|
*****
|
(8)
|
Accounting reference date
|
:
|
31 December
|
(9)
|
Auditors
|
:
|
*****
|
(10)
|
Tax residence
|
:
|
Russian Federation
|
(11)
|
Branches and representative offices
|
:
|
*****
|
(1)
|
Registered number (OGRN)
|
:
|
*****
|
(2)
|
Date of incorporation
|
:
|
*****
|
(3)
|
Place of incorporation
|
:
|
Russian Federation
|
(4)
|
Address of registered office
|
:
|
*****
|
(5)
|
Company form
|
:
|
Limited Liability Company
|
(6)
|
Registered charter capital amount
|
:
|
*****
|
(7)
|
Ownership of participatory interest
|
:
|
*****
|
(8)
|
Accounting reference date
|
:
|
31 December
|
(9)
|
Auditors
|
:
|
*****
|
(10)
|
Tax residence
|
:
|
Russian Federation
|
(11)
|
Branches and representative offices
|
:
|
*****
|
No.
|
Object
|
Identification number
|
Book value (Rubles)
|
Depreciation (amortization) (Rubles)
|
Depreciated cost (Rubles)
|
Certificate No. and date
|
Cadastral No.
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
No.
|
Object
|
Identification number
|
Book value (Rubles)
|
Depreciation (amortization) (Rubles)
|
Depreciated cost (Rubles)
|
Certificate No. and date
|
Cadastral No.
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
*****
|
No.
|
Rig Type
|
Number, works number
|
Year of manufacture
|
*****
|
*****
|
*****
|
*****
|
No.
|
Rig Type
|
Works number
|
Year of manufacture
|
*****
|
*****
|
*****
|
*****
|
1.
|
Registered number
|
:
|
45094
|
2.
|
Date of incorporation
|
:
|
10 February 2011
|
3.
|
Place of incorporation
|
:
|
Bermuda
|
4.
|
Address of registered office
|
:
|
Par-la-Ville Place, 4th Floor, 14
Par-la-Ville Road, Hamilton, HMGX
|
5.
|
Class of company
|
:
|
Exempted
|
6.
|
Authorised share capital
(if any)
|
:
|
$2 billion
|
7.
|
Issued share capital (excluding treasury shares)
|
:
|
241,142,651
|
8.
|
Treasury shares
|
|
2,373,683
|
No.
|
Name
|
Position
|
Company
|
||
*****
|
*****
|
*****
|
Orenburg
|
||
*****
|
*****
|
*****
|
|
|
TOTAL
|
||
|
|
RUB
thousands |
USD
thousands |
Rig data
|
Description (Russian)
|
Description (English)
|
|||
|
|
|
|
|
*****
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
*****
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
*****
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
*****
|
*****
|
*****
|
*****
|
|
|
|
|
|
|
*****
|
*****
|
|
|
*****
|
*****
|
*****
|
|
|
*****
|
From:
|
Rosneft Oil Company
Russian Federation 115035 Moscow 26/1 Sofiyskaya embankment |
To :
|
Seadrill Limited
Par-la-Ville Place 14 Par-la-ville Road Hamilton HM08 Bermuda |
1.
|
We refer to the framework agreement (the "
Framework
Agreement
") dated 20 August 2014 between Rosneft Oil Company ("
Rosneft
"), Seadrill Limited ("
Seadrill
") and North Atlantic Drilling Ltd. ("
NADL
" and together with Rosneft and Seadrill, the "
Parties
" and each a "
Party
") in relation to,
inter alia
, the issuance by NADL of a certain number of NADL shares to Rosneft in consideration of the transfer by Rosneft to NADL of the 100% participatory interest in limited liability company "RN Burenie" and the issuance by NADL of certain additional NADL shares to Rosneft in consideration of a cash payment.
|
2.
|
In this letter, unless the context requires otherwise, terms defined in the Framework Agreement and not otherwise defined herein, shall have the same meanings in this letter. The principles of interpretation in Clause 1 (Interpretation) of the Framework Agreement shall also apply to this letter. References in the Framework Agreement to the “Agreement” and the “Key Agreements” include this letter and the Framework Agreement as amended by the terms of this letter.
|
3.
|
In accordance with Clause 25.6 of the Framework Agreement, the Parties have agreed to vary the Framework Agreement on the terms of paragraph 4 of this letter. The provisions of Clauses 23 to 36 of the Framework Agreement shall apply to this letter as though incorporated herein
mutatis mutandis
.
|
4.
|
The Parties agree that the Framework Agreement shall be amended as follows:
|
(A)
|
the definition of the "Long Stop Date" in Clause 1.1 shall be deleted and replaced with:
|
""
Long Stop Date
"
|
means 31 May 2015 (or such other date as the parties shall mutually agree);";
|
(B)
|
Clause 10.1 shall be deleted and replaced with:
|
"10.1
|
Completion shall take place on the last Business Day of the month in which all of the Conditions shall have been satisfied or waived in accordance with this Agreement, but in any event, subject to Clause 7.1, Completion shall not take place any later than the Long Stop Date. The target date for Completion shall be 31 May 2015 (or such other date as the parties shall mutually agree).”;
|
(C)
|
the following new clause shall be added to Clause 7:
|
(D)
|
the following definitions in Clause 1.1 shall be deleted:
|
(i)
|
"Intended Completion Date";
|
(ii)
|
"NADL Break Fee";
|
(iii)
|
"NADL Legal Opinions";
|
(iv)
|
"Rosneft Break Fee";
|
(v)
|
"Rosneft Legal Opinions";
|
(vi)
|
"Sanctions"; and
|
(vii)
|
"Sanctions Matter";
|
(E)
|
the reference in the first sentence of Clause 7.7 to "but without prejudice to Clauses 6.13 to 6.18 (inclusive)" shall be deleted; and
|
(F)
|
Clauses 6.13 to 6.18 (inclusive) shall be deleted.
|
5.
|
We also refer to the master agreement in relation to each of the six Offshore Rigs dated 30 July 2014 (the "
Master Agreement
") between Rosneft and NADL. Rosneft and NADL agree that the 100 day period referred to in Clause 13.3 of the Master Agreement shall be extended to 31 May 2015 and, accordingly, Clause 13.3 shall have effect as follows:
|
6.
|
The variations provided for in this letter shall, save where expressly provided to the contrary, come into force upon the countersignature of this letter by NADL and Seadrill. Other than as provided in: (i) paragraph 4 above, the Framework Agreement shall continue in full force and effect, and (ii) paragraph 5 above, the Master Agreement shall continue in full force and effect.
|
7.
|
Please confirm your agreement to the terms of this letter by countersigning below and returning one copy to us. This letter may be executed in any number of counterparts and by the Parties on separate counterparts, but shall not be effective unless each Party has executed at least one counterpart. Each counterpart shall constitute an original of this letter, but all the counterparts shall together constitute but one and the same instrument.
|
|
|
/s/ Alf Ragnar Løvdal
North Atlantic Drilling Ltd. |
7 Nov 2014
Date |
|
|
/s/ Per Wullf
Seadrill Limited |
7 Nov 2014
Date |
From:
|
Rosneft Oil Company
Russian Federation 115035 Moscow 26/1 Sofiyskaya embankment |
To :
|
Seadrill Limited
Par-la-Ville Place 14 Par-la-ville Road Hamilton HM08 Bermuda |
1.
|
We refer to the framework agreement (the "
Framework
Agreement
") dated 20 August 2014 as amended on 7 November 2014 between Rosneft Oil Company ("
Rosneft
"), Seadrill Limited ("
Seadrill
") and North Atlantic Drilling Ltd. ("
NADL
" and together with Rosneft and Seadrill, the "
Parties
" and each a "
Party
") in relation to,
inter alia
, the issuance by NADL of a certain number of NADL shares to Rosneft in consideration of the transfer by Rosneft to NADL of the 100% participatory interest in limited liability company "RN Burenie" and the issuance by NADL of certain additional NADL shares to Rosneft in consideration of a cash payment.
|
2.
|
In this letter, unless the context requires otherwise, terms defined in the Framework Agreement and not otherwise defined herein, shall have the same meanings in this letter. The principles of interpretation in Clause 1 (Interpretation) of the Framework Agreement shall also apply to this letter. References in the Framework Agreement to the “Agreement” and the “Key Agreements” include this letter and the Framework Agreement as amended by the terms of this letter and the letter dated 7 November 2014.
|
3.
|
In accordance with Clause 25.6 of the Framework Agreement, the Parties have agreed to vary the Framework Agreement on the terms of paragraph 4 of this letter. The provisions of Clauses 23 to 36 of the Framework Agreement shall apply to this letter as though incorporated herein
mutatis mutandis
.
|
4.
|
The Parties agree that the Framework Agreement shall be amended as follows:
|
(G)
|
the definition of the "Long Stop Date" in Clause 1.1 shall be deleted and replaced with:
|
""
Long Stop Date
"
|
means 31 May 2017 (or such other date as the parties shall mutually agree);";
|
(H)
|
Clause 10.1 shall be deleted and replaced with:
|
"10.1
|
Completion shall take place on the last Business Day of the month in which all of the Conditions shall have been satisfied or waived in accordance with this Agreement, but in any event, subject to Clause 7.1, Completion shall not take place any later than the Long Stop Date. The target date for Completion shall be 31 May 2017 (or such other date as the parties shall mutually agree).”;
|
6.
|
We also refer to the master agreement in relation to each of the six Offshore Rigs dated 30 July 2014 as amended on 7 November 2014 (the "
Master Agreement
") between Rosneft and NADL. The Parties acknowledge that the Service Orders for the West Navigator and Energy Endeavour Offshore Rigs have been terminated by Rosneft in accordance with Clause 13.3 of the Master Agreement. Rosneft and NADL agree that the 100 day period referred to in Clause 13.3 of the Master Agreement shall be extended to 31 May 2017 and, accordingly, Clause 13.3 shall have effect as follows:
|
6.
|
The variations provided for in this letter shall, save where expressly provided to the contrary, come into force upon the countersignature of this letter by NADL and Seadrill. Other than as provided in: (i) paragraph 4 above, the Framework Agreement shall continue in full force and effect, and (ii) paragraph 5 above, the Master Agreement shall continue in full force and effect.
|
7.
|
The Parties agree to use their reasonable endeavours to renegotiate not later than the Long Stop Date the characteristics of the Transaction and the terms of the Transaction Documents and the Offshore Drilling Contracts based on current macroeconomic indicators.
|
8.
|
Notwithstanding the terms of the Framework Agreement, Master Agreement and Service Orders, the Parties agree that Seadrill and NADL (and the owners of the Offshore Rigs that remain subject to Service Orders (the "
Remaining Offshore Rigs
")) shall be entitled to (i) market the Remaining Offshore Rigs, (ii) enter into binding contracts with third parties in respect of the Remaining Offshore Rigs (iii) delay the mobilisation of the Remaining
|
9.
|
Please confirm your agreement to the terms of this letter by countersigning below and returning one copy to us. This letter may be executed in any number of counterparts and by the Parties on separate counterparts, but shall not be effective unless each Party has executed at least one counterpart. Each counterpart shall constitute an original of this letter, but all the counterparts shall together constitute but one and the same instrument.
|
|
|
/s/ Alf Ragnar Løvdal
North Atlantic Drilling Ltd. |
15 April 2015
Date |
|
|
/s/ Per Wullf
Seadrill Limited |
16-4-2015
Date |
Name of company
|
Country of Incorporation
|
Principal activities
|
Percent owned
|
|
|
|
|
Drilling unit owning companies
|
|
|
|
|
|
|
|
Asia Offshore Rig 1 Ltd
|
Bermuda
|
Owner of AOD 1
|
66.23%
|
Asia Offshore Rig 2 Ltd
|
Bermuda
|
Owner of AOD 2
|
66.23%
|
Asia Offshore Rig 3 Ltd
|
Bermuda
|
Owner of AOD 3
|
66.23%
|
Sevan Brasil Ltd
|
Bermuda
|
Owner of Sevan Brasil
|
50.11%
|
Sevan Drilling Rig VI Pte Ltd
|
Singapore
|
Owner of Sevan Developer no. 4
|
50.11%
|
Sevan Driller Ltd
|
Bermuda
|
Owner of Sevan Driller
|
50.11%
|
Sevan Louisiana Hungary KFT
|
Hungary
|
Owner of Sevan Louisiana
|
50.11%
|
North Atlantic Alpha Ltd
|
Bermuda
|
Owner of West Alpha
|
70.36%
|
Seadrill Aquila Ltd
|
Bermuda
|
Owner of West Aquila
|
100.00%
|
Seadrill Ariel Ltd.
|
Liberia
|
Owner of West Ariel
|
100.00%
|
Seadrill Callisto Ltd
|
Bermuda
|
Owner of West Calisto
|
100.00%
|
Seadrill Carina Ltd
|
Bermuda
|
Owner of West Carina
|
100.00%
|
Seadrill Castor Ltd
|
Bermuda
|
Owner of West Castor
|
100.00%
|
Seadrill Courageous (S) Pte Ltd
|
Singapore
|
Owner of West Courageous
|
100.00%
|
Seadrill Cressida Ltd
|
Bermuda
|
Owner of West Cressida
|
100.00%
|
Seadrill Defender (S) Pte Ltd
|
Singapore
|
Owner of West Defender
|
100.00%
|
Seadrill Dione Ltd
|
Bermuda
|
Owner of West Dione
|
100.00%
|
Seadrill Dorado Ltd
|
Bermuda
|
Owner of West Dorado
|
100.00%
|
Seadrill Draco Ltd
|
Bermuda
|
Owner of West Draco
|
100.00%
|
Seadrill Eclipse Ltd
|
Bermuda
|
Owner of West Eclipse
|
100.00%
|
North Atlantic Elara Ltd
|
Bermuda
|
Owner of West Elara
|
70.36%
|
Seadrill Eminence Ltd
|
Bermuda
|
Owner of West Eminence
|
100.00%
|
North Atlantic Epsilon Ltd
|
Bermuda
|
Owner of West Epsilon
|
70.36%
|
Seadrill Freedom Ltd
|
Bermuda
|
Owner of West Freedom
|
100.00%
|
Seadrill Gemini Ltd
|
Bermuda
|
Owner of West Gemini
|
100.00%
|
Seadrill Hyperion Ltd
|
Bermuda
|
Owner of West Hyperion
|
100.00%
|
Seadrill Intrepid (S) Pte Ltd
|
Singapore
|
Owner of West Intrepid
|
100.00%
|
Seadrill Jupiter Ltd.
|
Bermuda
|
Owner of West Jupiter
|
100.00%
|
Seadrill Indonesia Ltd
|
Bermuda
|
Owner of West Leda
|
100.00%
|
Seadrill Libra Ltd
|
Bermuda
|
Owner of West Libra
|
100.00%
|
Seadrill Mimas Ltd
|
Bermuda
|
Owner of West Mimas
|
100.00%
|
Seadrill Mira Ltd
|
Bermuda
|
Owner of West Mira
|
100.00%
|
Scorpion Rigs Ltd
|
Bermuda
|
Owner of West Mischief
|
100.00%
|
North Atlantic Navigator Ltd
|
Bermuda
|
Owner of West Navigator
|
70.36%
|
Seadrill Neptune Hungary KFT
|
Bermuda
|
Owner of West Neptune
|
100.00%
|
Seadrill Oberon (S) Pte Ltd
|
Singapore
|
Owner of West Oberon
|
100.00%
|
Seadrill Orion Ltd
|
Bermuda
|
Owner of West Orion
|
100.00%
|
Seadrill Pegasus Pte Ltd
|
Singapore
|
Owner of West Pegasus
|
100.00%
|
North Atlantic Pheonix Ltd
|
Bermuda
|
Owner of West Phoenix
|
70.36%
|
SFL Polaris Ltd
|
Bermuda
|
Owner of West Polaris
|
100.00%
|
Seadrill Prospero Ltd
|
Bermuda
|
Owner of West Prospero
|
100.00%
|
Seadrill Proteus Ltd
|
Bermuda
|
Owner of West Proteus
|
100.00%
|
Scorpion Resolute Ltd
|
Bermuda
|
Owner of West Resolute
|
100.00%
|
Seadrill Rhea Ltd
|
Bermuda
|
Owner of West Rhea
|
100.00%
|
North Atlantic Rigel Ltd
|
Bermuda
|
Owner of West Rigel
|
70.36%
|