Rig operator Seadrill has filed for bankruptcy protection for its Asian units as oversupply and lower demand continues to hurt the offshore drilling sector.
Seadrill said yesterday it had filed Chapter 11 cases in the Southern District of Texas for five Asian subsidiaries. The move is part of a wider restructuring effort and will not affect operations of the drilling units run by the subsidiaries, it said.
Bermuda-based Seadrill emerged from bankruptcy in 2018 but was hit hard by the oil price collapse last year. The company has been scrapping rigs and cutting operating costs as it addresses "the industry issue of too many rigs and too much debt", it said in its most recent trading update in November. "We are priming ourselves for a long period of low demand" because of the economic impact of the Covid-19 pandemic, it said at the time.
Last year's market turmoil and the impact of the energy transition on oil demand have clouded the outlook for drilling firms. The world's largest builder of offshore oil rigs, Singapore's Keppel, said late last month it would pull out of the sector to focus on cleaner forms of energy after its offshore and marine business fell to a loss of S1.19bn ($890mn) in 2020.