Clifford Chance, Malaysian firm Abdullah Chan and Norway’s Wiersholm Law Firm are advising on a $2.9 billion merger between the tender rig businesses of Malaysian oil and gas services company SapuraKencana Petroleum Bhd. and Norwegian deepwater driller Seadrill Ltd.

According to the Financial Times, the deal will make SapuraKencana the world’s largest operator of tender rigs, which are semi-submersible barges that support the main drilling rig in exploration fields. The company will operate 16 such rigs.
The deal’s enterprise value of $2.9 billion comprises $363 million in capital expenditures for the rigs being built, as well as $800 million in debt. At the same time, Seadrill will add to its present 6.4 percent stake in SapuraKencana with another $350 million in shares. SapuraKencan plans to finance the remainder of the transaction through a mix of external borrowings, a seller’s note of up to $187 million, internally generated funds and equity, according to a statement from the two companies.
The two companies have operated part of their tender-rig operations together since 1991. The rigs have been deployed mainly in Southeast Asian waters, contracted out to companies such as Chevron, Shell, and state-owned ventures PTT EP and Petronas Carigali of Thailand and Malaysia, respectively.
These companies will need to approve the deal before it moves forward. It is expected to close early next year.
Clifford Chance Singapore partner Lee Taylor is advising SapuraKencana alongside Abdullah Chan in Kuala Lumpur. Wiersholm is acting for Seadrill.