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Seadrill seeks more newbuild deferments in battered offshore market

Seadrill seeks more newbuild deferments in battered offshore market
Seadrill Limited is seeking more deferments for its newbuild deliveries of jack-ups and drillships, after concluding agreements to defer 11 newbuild deliveries so far this year.

“Our key priorities for the year are cost reduction, managing newbuild deferments and concluding our financing plans, while ensuring that we continue to maintain safe and efficient operations. I am pleased to say we have made good progress in all three areas during the first quarter,” said Per Wullf, ceo and president of Seadrill.

In April, Seadrill agreed with China’s Dalian shipyard to further defer the deliveries of eight jack-ups under construction, while its subsidiary Sevan Drilling and Cosco agreed to further defer the delivery of drilling rig Sevan Developer. In January, Seadrill also agreed with Daewoo Shipbuilding & Marine Engineering (DSME) to defer the delivery of two ultra-deepwater drillships.

Discussions continue to progress regarding additional deferments, Seadrill said.

Seadrill said major oil companies continue to cut activity levels for 2016 and 2017 and appear to have more rig capacity already under contract than they require, severely affecting new demand and leading to contract renegotiations and terminations.

For the floaters market, 165 floaters are currently contracted, representing 56% market utilisation. In the jack-up segment, the contracted utilisation is 60% globally, according to Seadrill.

Meanwhile, Seadrill reported a weaker set of first quarter results with net profit plunging 82.7% to $74m from $427m in the same period of 2015.

First quarter revenue dropped by 28% year-on-year to $891m primarily due to dayrate reductions.