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Norways Seadrill writes down 2.9 billion on its oil rigs

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OSLO Reuters Offshore drilling rig contractor Seadrill said on Thursday it had taken an additional 2.9 billion noncash impairment on its assets due to a bleak outlook for the sector, which has reduced demand for its drilling rigs.

Seadrill, which in February filed for Chapter 11 bankruptcy protection in the United States for the second time in four years, said it expected offshore drilling demand to remain depressed well into 2021, with some degree of market recovery seen by mid2022.

The 2.9 billion impairment for the second half of 2020 comes on top of 1.2 billion taken on the assets in the first half of last year.

The extra impairment reflects the companys view that some of its coldstacked rigs an industry term for laid up rigs without crews were unlikely to return to work.

We have now impaired all longterm cold stacked units in full and all other drillships and benign environment semisubmersible rigs have been written down to their estimated fair market value, Seadrill said.

At the end of 2020, 19 out of 34 of Seadrills drilling rigs were idle.

Since the supply of rigs in the market still outweighs demand there will continue to be a dampening effect on utilization levels and dayrates across all segments in 2021, it added.

The Oslolisted group controlled by Norwegianborn billionaire John Fredriksen had 7.1 billion in total liabilities at the end of 2020, including more than 6 billion due within one year.

Its debt restructuring was expected to lead to a…

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