SEADRILL PARTNERS OIL PRODUCER FILES FOR BANKRUPTCY

Seadrill Partners, an offshore subsidiary of Seadrill Ltd, filed a petition in a US court on Tuesday asking to protect it from bankruptcy in the process of restructuring its debt - in accordance with Chapter 11 of bankruptcy law.

Experts note that the parent company Seadrill Ltd may soon follow the path of Seadrill Partners. Can the company use the bankruptcy process to build consensus and fulfill its obligations to customers, suppliers and employees?

According to market analysts, the Seadrill Ltd group of companies, founded by Norwegian investor and billionaire John Fredriksen, has become perhaps the most expensive oil and gas venture in the early 2010s.

The collapse in oil prices in 2014 made the company to start restructuring.

Seadrill Ltd currently owns 35% of Seadrill Partners. In early September, the company suspended the payments of dividends. This happened after the management had failed to agree on changes to the terms of a $ 5.7 billion bank loan.

Seadrill Partners was established as a subsidiary of the company. It owns a number of tangible assets, related to the operation of drilling rigs (4 drilling rigs, 4 semi-submersibles, 3 tender rigs). All of them are currently used by parent company Seadrill Ltd.

Several years ago, Seadrill Ltd had successfully finished bankruptcy proceedings based on Chapter 11 of bankruptcy law of the United States.

The company was then able to convert billions of dollars in bonds into equity, while retaining loan obligations to banks.

It is known that the application was filed in a court of Houston. In the application, the company cited $ 4.58 billion in assets and about $ 3.12 billion in debt. Experts point out that the company will likely have to buy its own assets for the second time in three years as the oil and gas industry faces financial pressure amid a pandemic.

It is known that Seadrill was supported by a group of creditors, who agreed to allow it to continue its work during the litigation period.