Seadrill intends to push ahead with Rosneft deal, despite sanctions

|About: Seadrill Limited (SDRL)|By:, SA News Editor

Seadrill (SDRL -1.1%) CFO Rune Magnus Lundetrae says its North American Drilling (NADL +0.5%) unit can proceed with Rosneft's (OTC:RNFTF) six rig leases worth $4.25B because the contracts were signed before the latest U.S. and EU sanctions against Russia take effect.

Advocating for the business relationship and expressing doubts about the efficacy of sanctions, the CFO says "Norway and many other countries do a lot of business with Russia, and it seems a bit unrealistic to cut all ties overnight."

It is unclear how sanctions might affect SDRL and NADL, since they have roots in multiple countries; Norway is not part of the EU, though its government has signaled it probably will abide by the sanctions.

Analysts say Statoil (STO +0.5%) may be forced to cancel various deals with Rosneft to explore offshore blocks in the Barents Sea and the Sea of Okhotsk and for pilot projects for heavy oil in Siberia and shale oil in the Samara region.

Meanwhile, Weatherford (WFT -1.6%) says it closed its $500M sale of its land drilling and workover operations in Russia and Venezuela to Rosneft.