Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2015shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | SEADRILL LTD |
Entity Central Index Key | 1,351,413 |
Current Fiscal Year End Date | --12-31 |
Current Fiscal Year End Date | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 492,759,940 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | FY |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2015 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Operating revenues | ||||
Contract revenues | $ 3,957 | $ 4,518 | $ 4,892 | |
Reimbursable revenues | 113 | 190 | 278 | |
Other revenues | [1] | 265 | 289 | 112 |
Total operating revenues | 4,335 | 4,997 | 5,282 | |
(Loss)/gain on disposals | [1] | (63) | 632 | 61 |
Contingent consideration realized | 47 | 0 | 0 | |
Operating expenses | ||||
Vessel and rig operating expenses | [1] | 1,611 | 1,938 | 1,977 |
Reimbursable expenses | 99 | 172 | 257 | |
Depreciation and amortization | 779 | 693 | 711 | |
Loss on Goodwill impairment | 563 | 232 | 0 | |
General and administrative expenses | [1] | 248 | 315 | 300 |
Total operating expenses | 3,300 | 3,350 | 3,245 | |
Operating income | 1,019 | 2,279 | 2,098 | |
Financial items and other income/(expense), net | ||||
Interest income | [1] | 67 | 63 | 24 |
Interest expense | [1] | (415) | (478) | (445) |
Share in results from associated companies (net of tax) | 190 | 34 | (223) | |
Loss on impairment of investments | (1,274) | 0 | 0 | |
(Loss)/gain on derivative financial instruments | [1] | (274) | (497) | 133 |
Net gain/(loss) on debt extinguishment | 8 | (54) | 0 | |
Foreign exchange gain | 63 | 164 | 52 | |
Gain on realization of marketable securities | 0 | 131 | 0 | |
Gain on deconsolidation of Seadrill Partners | 0 | 2,339 | 0 | |
Gain on sale of tender rig business | 22 | 0 | 1,256 | |
Other financial items and other income/(expense), net | [1] | 52 | 125 | 45 |
Total financial items and other income/(expense), net | (1,561) | 1,827 | 842 | |
(Loss)/income before income taxes | (542) | 4,106 | 2,940 | |
Income tax expense | (208) | (19) | (154) | |
Net (loss)/income | (750) | 4,087 | 2,786 | |
Net (loss)/income attributable to the non-controlling interest | (12) | 108 | 133 | |
Net (loss)/income attributable to the parent | $ (738) | $ 3,979 | $ 2,653 | |
Basic earnings per share (in USD per share) | $ (1.49) | $ 8.32 | $ 5.66 | |
Diluted earnings per share (in USD per share) | (1.49) | 8.30 | 5.47 | |
Declared regular dividend per share (in USD per share) | $ 0 | $ 2 | $ 3.72 | |
[1] | Includes transactions with related parties. Refer to Note 31. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) / INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss)/income | $ (750) | $ 4,087 | $ 2,786 |
Other comprehensive income/(loss), net of tax: | |||
Change in unrealized (loss)/gain on marketable securities, net | (427) | (982) | 333 |
Other than temporary impairment of marketable securities, reclassification to statement of operations | 741 | 0 | 0 |
Change in unrealized foreign exchange differences | (15) | (22) | 6 |
Change in actuarial gain/(loss) relating to pension | 27 | (28) | (7) |
Change in unrealized gain on interest rate swaps in VIEs and subsidiaries | 0 | 1 | 3 |
Share of other comprehensive income from associated companies | 10 | 0 | 0 |
Other comprehensive income/(loss): | 336 | (1,031) | 335 |
Total comprehensive (loss)/income for the period | (414) | 3,056 | 3,121 |
Comprehensive (loss)/income attributable to the non-controlling interest | (4) | 53 | 134 |
Comprehensive (loss)/income attributable to the parent | $ (410) | $ 3,003 | $ 2,987 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 1,044 | $ 831 |
Restricted cash | 50 | 268 |
Marketable securities | 96 | 426 |
Accounts receivables, net | 718 | 1,017 |
Amount due from related party - current | 639 | 402 |
Assets held for sale - current | 0 | 134 |
Other current assets | 395 | 222 |
Total current assets | 2,942 | 3,300 |
Non-current assets | ||
Investment in associated companies | 2,590 | 2,898 |
Marketable securities | 228 | 325 |
Newbuildings | 1,479 | 2,030 |
Drilling units | 14,930 | 15,145 |
Goodwill | 0 | 604 |
Restricted cash | 198 | 181 |
Deferred tax assets | 81 | 39 |
Equipment | 46 | 46 |
Amount due from related party - non-current | 517 | 313 |
Assets held for sale - non-current | 128 | 1,105 |
Other non-current assets | 331 | 311 |
Total non-current assets | 20,528 | 22,997 |
Total assets | 23,470 | 26,297 |
Current liabilities | ||
Current portion of long-term debt | 1,489 | 2,267 |
Trade accounts payable | 141 | 84 |
Short-term amounts to related party | 152 | 189 |
Liabilities associated with assets held for sale - current | 0 | 58 |
Other current liabilities | 1,684 | 1,934 |
Total current liabilities | 3,466 | 4,532 |
Non-current liabilities | ||
Long-term debt | 9,054 | 10,208 |
Long-term debt due to related parties | 438 | 351 |
Deferred tax liabilities | 136 | 67 |
Liabilities associated with assets held for sale - non-current | 0 | 50 |
Other non-current liabilities | 401 | 699 |
Total non-current liabilities | 10,029 | 11,375 |
Commitments and contingencies | 0 | 0 |
Equity | ||
Common shares of par value US$2.00 per share: 800,000,000 shares authorized 492,759,940 outstanding at December 31, 2015 (December 31, 2014, 492,759,938) | 985 | 985 |
Additional paid in capital | 3,275 | 3,258 |
Contributed surplus | 1,956 | 1,956 |
Accumulated other comprehensive loss | (120) | (448) |
Retained earnings | 3,275 | 4,013 |
Total Shareholder’s equity | 9,371 | 9,764 |
Non-controlling interest | 604 | 626 |
Total equity | 9,975 | 10,390 |
Total liabilities and equity | $ 23,470 | $ 26,297 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | May. 10, 2005 |
Equity | ||||
Common shares, par value (in dollars per share) | $ 2 | $ 2 | $ 2 | $ 2 |
Common shares, shares authorized (in shares) | 800,000,000 | 800,000,000 | 800,000,000 | |
Common shares, shares outstanding (in shares) | 492,759,940 | 492,759,938 | 468,978,492 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows from Operating Activities | |||
Net (loss)/income | $ (750) | $ 4,087 | $ 2,786 |
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | |||
Depreciation and amortization | 779 | 693 | 711 |
Amortization of deferred loan charges | 39 | 54 | 43 |
Amortization of unfavorable and favorable contracts | (116) | (131) | (65) |
Share of results from associated companies | (190) | (121) | 223 |
Loss on sale of investments in associated companies | 0 | 89 | 0 |
Share-based compensation expense | 7 | 10 | 7 |
Gain/(loss) on disposals and deconsolidations | 63 | (2,971) | (1,367) |
Contingent consideration realized | (47) | 0 | 0 |
Unrealized loss/(gain) related to derivative financial instruments | 42 | 197 | (249) |
Loss on Goodwill impairment | 563 | 232 | 0 |
Loss on impairment of investments | 1,274 | 0 | 0 |
Gain on realization of marketable securities | 0 | (138) | 0 |
Dividends received from associated companies | 253 | 526 | 15 |
Deferred income tax | 29 | (6) | (47) |
Unrealized foreign exchange gain on long-term debt | (95) | (165) | (47) |
Payments for long-term maintenance | (106) | (295) | (190) |
Net gain on debt extinguishment | (8) | (12) | 0 |
Other | (31) | (17) | 0 |
Changes in operating assets and liabilities, net of effect of acquisitions and disposals | |||
Trade accounts receivable | 267 | (295) | (206) |
Trade accounts payable | 58 | 21 | (29) |
Net related party balances | 1 | (247) | (114) |
Prepaid expenses/accrued revenue | (12) | 13 | (45) |
Deferred revenue | (95) | 171 | 90 |
Other assets and liabilities, net | (137) | (121) | 179 |
Net cash provided by operating activities | 1,788 | 1,574 | 1,695 |
Cash Flows from Investing Activities | |||
Additions to newbuildings | (613) | (2,508) | (3,884) |
Additions to drilling units and equipment | (322) | (365) | (389) |
Refund of yard installments | 29 | 0 | 0 |
Contingent consideration received | 27 | 0 | 0 |
Sale of rigs and equipment | 0 | 0 | 48 |
Business combinations and step acquisitions, net of cash acquired | 0 | 0 | (554) |
Sale of business, net of cash disposed | 1,214 | 1,138 | 1,958 |
Cash in deconsolidated subsidiary | 0 | (90) | 0 |
Change in restricted cash | (25) | (131) | 123 |
Investment in associated companies | (210) | (586) | (151) |
Proceeds from disposal of investments in associated companies | 0 | 373 | 0 |
Purchase of marketable securities | 0 | (150) | 0 |
Loans granted to related parties | (523) | (18) | (125) |
Payments received from loans granted to related parties | 233 | 2,096 | 10 |
Proceeds from disposal of marketable securities | 0 | 307 | 0 |
Net cash (used in)/provided by investing activities | (190) | 66 | (2,964) |
Cash Flows from Financing Activities | |||
Proceeds from debt | 1,516 | 5,072 | 7,703 |
Repayments of debt | (2,999) | (4,344) | (4,919) |
Debt fees paid | (16) | (65) | (93) |
Proceeds from debt to related party | 143 | 90 | 756 |
Repayments of debt to related party | 0 | (910) | (1,181) |
Dividends paid to non-controlling interests | (14) | (51) | (69) |
Contribution from non-controlling interests, net of issuance cost | 0 | 115 | 365 |
Proceeds relating to share forward contracts and other derivatives | 0 | 0 | 453 |
Purchase of treasury shares | 0 | (18) | (39) |
Proceeds from sale of treasury shares | 0 | 0 | 6 |
Dividends paid | 0 | (1,415) | (1,287) |
Employee stock options exercised | 0 | 5 | 0 |
Net cash (used in)/provided by financing activities | (1,370) | (1,521) | 1,695 |
Cash reclassified as held for sale | 0 | (26) | 0 |
Effect of exchange rate changes on cash and cash equivalents | (15) | (6) | 0 |
Net increase in cash and cash equivalents | 213 | 87 | 426 |
Cash and cash equivalents at beginning of the year | 831 | 744 | 318 |
Cash and cash equivalents at the end of year | 1,044 | 831 | 744 |
Supplementary disclosure of cash flow information | |||
Interest paid, net of capitalized interest | (458) | (493) | (336) |
Taxes paid | $ (136) | $ (227) | $ (109) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Millions | Total | Common shares | Additional paid in capital | Contributed surplus | Accumulated other comprehensive (loss)/income | Retained Earnings | Total equity before NCI | Non-controlling interest |
Beginning Balance, shares at Dec. 31, 2012 | 938,000,000 | |||||||
Beginning Balance at Dec. 31, 2012 | $ 6,024 | $ 2,332 | $ 1,956 | $ 194 | $ 83 | $ 5,503 | $ 521 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Sale of treasury shares | 6 | 6 | 6 | |||||
Purchase of treasury shares | (39) | (39) | (39) | |||||
Share-based compensation | 7 | 7 | 7 | |||||
Establishment of non-controlling interest in Seadrill Partners | 297 | 297 | ||||||
Issuance of common units by Seadrill Partners to public | 365 | 228 | 228 | 137 | ||||
Issuances of common units by Seadrill Partners and impact on non-controlling interest | (102) | (102) | 102 | |||||
Sale of drilling units to Seadrill Partners | 209 | 209 | (209) | |||||
Dividend to Non-controlling interests in VIEs | (223) | (223) | ||||||
Other comprehensive income (loss) | 335 | 334 | 334 | 1 | ||||
Dividends declared | (1,356) | (1,287) | (1,287) | (69) | ||||
Net income (loss) | $ 2,786 | 2,653 | 2,653 | 133 | ||||
Ending Balance, Shares at Dec. 31, 2013 | 468,978,492 | 938,000,000 | ||||||
Ending Balance at Dec. 31, 2013 | $ 8,202 | 2,641 | 1,956 | 528 | 1,449 | 7,512 | 690 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Establishment of non-controlling interest in Seadrill Partners | 4 | 4 | ||||||
Sale and purchase of treasury shares, net, shares | (1,000,000) | |||||||
Sale and purchase of treasury shares, net | (23) | (22) | (23) | |||||
Sale of drilling units to Seadrill Partners | (13) | (6) | (6) | (7) | ||||
Share-based compensation | 10 | 10 | 10 | |||||
Employee stock options issued, shares | 1,000,000 | |||||||
Employee stock options issued | 5 | 4 | 5 | |||||
Conversion of convertible bond, shares | 47,000,000 | |||||||
Conversion of convertible bond | 615 | 568 | 615 | |||||
Deconsolidation of Seadrill Partners/Sale of NCI | (115) | (115) | ||||||
Initial public offering of NADL | 115 | 63 | 63 | 52 | ||||
Other comprehensive income (loss) | (1,031) | (976) | (976) | (55) | ||||
Dividends declared | (1,466) | (1,415) | (1,415) | (51) | ||||
Net income (loss) | $ 4,087 | 3,979 | 3,979 | 108 | ||||
Ending Balance, Shares at Dec. 31, 2014 | 492,759,938 | 985,000,000 | ||||||
Ending Balance at Dec. 31, 2014 | $ 10,390 | 3,258 | 1,956 | (448) | 4,013 | 9,764 | 626 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Sale and purchase of treasury shares, net | 10 | 10 | 10 | |||||
Share-based compensation | 7 | 7 | 7 | |||||
Deconsolidation of Seadrill Partners/Sale of NCI | (4) | (4) | ||||||
Other comprehensive income (loss) | 336 | 328 | 328 | 8 | ||||
Distributions to Non-controlling interests | (14) | (14) | ||||||
Net income (loss) | $ (750) | (738) | (738) | (12) | ||||
Ending Balance, Shares at Dec. 31, 2015 | 492,759,940 | 985,000,000 | ||||||
Ending Balance at Dec. 31, 2015 | $ 9,975 | $ 3,275 | $ 1,956 | $ (120) | $ 3,275 | $ 9,371 | $ 604 |
General information
General information | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General information | General information Seadrill Limited is incorporated in Bermuda and is a publicly listed company on the New York Stock Exchange and the Oslo Stock Exchange. We provide offshore drilling services to the oil and gas industry. As of December 31, 2015 the Company owned and operated 38 offshore drilling units, had 13 offshore drilling units under construction and an additional unit classified as held for sale. Our fleet consists of drillships, jack-up rigs and semi-submersible rigs for operations in shallow and deepwater areas, as well as benign and harsh environments. Following the sale of the majority of the tender rig business to SapuraKencana, which closed on April 30, 2013, and further the deconsolidation of Seadrill Partners on January 2, 2014 we no longer operate in the tender rig segment. We also provide management services to our related parties Seadrill Partners and SeaMex, refer to Note 31 for further details. As used herein, and unless otherwise required by the context, the term “Seadrill” refers to Seadrill Limited and the terms “Company,” “we,” “Group,” “our” and words of similar import refer to Seadrill and its consolidated companies. The use herein of such terms as group, organization, we, us, our and its, or references to specific entities, is not intended to be a precise description of corporate relationships. Basis of presentation The financial statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar (U.S. dollar) rounded to the nearest million, unless otherwise stated. The accompanying consolidated financial statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which the Company controls, or directly or indirectly holds more than 50% of the voting control are consolidated in the financial statements, as well as certain variable interest entities of which the Company is deemed to be the primary beneficiary. The accounting policies set out below have been applied consistently to all periods in these consolidated financial statements, unless otherwise noted. Basis of consolidation The consolidated financial statements include the assets and liabilities of the Company, its majority owned and controlled subsidiaries and certain variable interest entities, (“VIE”s) in which the Company is deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either i) the power to direct the activities of the entity that most significantly impact on its economic success, ii) the obligation to absorb the expected losses of the entity, or iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. Investment in companies in which we hold an ownership interest of between 20% and 50% , and over which we exercise significant influence, but do not consolidate, are accounted for using the equity method and classified within “Investments in associated companies.” The Company records its share of earnings or losses from associated companies in the consolidated statements of operations as “Share in results from associated companies.” The excess, if any, of purchase price over book value of the Company’s investments in equity method investees is included in the accompanying consolidated balance sheets in “Investment in associated companies.” Investments in companies in which our ownership is less than 20% are valued at fair value and classified within “Marketable Securities” unless it is not possible to estimate fair value, then the cost method is used. Intercompany transactions and internal sales have been eliminated on consolidation. Unrealized gains and losses arising from transactions with associates are eliminated to the extent of the Company’s interest in the entity. |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Accounting policies | Accounting policies Use of estimates Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Contract revenue A substantial majority of the Company’s revenues are derived from dayrate based drilling contracts (which may include lump sum fees for mobilization and demobilization) and other service contracts. Both dayrate based and lump sum fee revenues are recognized ratably over the contract period when services are rendered. Under some contracts, the Company is entitled to additional payments for meeting or exceeding certain performance targets. Such additional payments are recognized when any contingencies are resolved or upon completion of the drilling program. In connection with drilling contracts, the Company may receive lump sum fees for the mobilization of equipment and personnel or for capital additions and upgrades prior to commencement of drilling services. These up-front fees are recognized as revenue over the contract term, excluding option periods. In some cases, the Company may receive lump sum non-contingent fees or dayrate based fees from customers for demobilization upon completion of a drilling contract. Non-contingent demobilization fees are recognized as revenue over contract term, excluding option periods not exercised by our customers. Contingent demobilization fees are recognized as earned upon completion of the drilling contract. Fees received from customers under drilling contracts for capital upgrades are deferred and recognized over the contract term, excluding option periods not exercised. In certain countries in which we operate, taxes such as sales, use, value-added, gross receipts and excise may be assessed by the local government on our revenues. We record our tax-assessed revenue transactions on a net basis in our consolidated statement of income. Reimbursables Reimbursements received for the purchases of supplies, personnel services and other services provided on behalf of and at the request of our customers in accordance with a contract or agreement are recorded as revenue. The related costs are recorded as reimbursable expenses in the same period. Other revenues In a business combination there may exist favorable and unfavorable drilling contracts which are recorded at fair value at the date of acquisition. A favorable or unfavorable drilling contract is a contract that has a dayrate which differs from prevailing market rates at the time of acquisition. The net present value of such contracts is recorded as an asset or a liability at the purchase date and subsequently recognized as revenue or reduction to revenue over the contract term. Related party revenues relate to management support and administrative services provided to our associates in which we maintain an investment. External management fees relate to the operational, administrative and support services we provide to third parties. Mobilization and demobilization expenses Mobilization costs incurred as part of a drilling contract are capitalized and recognized as expense over the contract term, excluding option periods not exercised by our customers. The costs of relocating drilling units that are not under contract are expensed as incurred. Demobilization costs are costs related to the transfer of a vessel or drilling rig to a safe harbor or different geographic area and are expensed as incurred. Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked, and include the remuneration of offshore crews and related costs, supplies, insurance costs, expenses for repairs and maintenance as well as costs related to onshore personnel in various locations where we operate the drilling units and are expensed as incurred. Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized under drilling units and amortized over the anticipated period between overhauls, which is generally 5 years. Related costs are primarily yard costs and the cost of employees directly involved in the work. Amortization costs for periodic overhauls are included in depreciation and amortization expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. Foreign currencies The Company and the majority of its subsidiaries use the U.S. dollars as their functional currency because the majority of their revenues and expenses are denominated in U.S. dollars. Accordingly, the Company’s reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, the Company uses the current method of translation whereby the statements of operations are translated using the average exchange rate for the year and the assets and liabilities are translated using the year end exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders’ equity. Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the consolidated statements of operations. Current and non-current classification Assets and liabilities (excluding deferred taxes) are classified as current assets and liabilities respectively, if their maturity is within 1 year of the balance sheet date. Otherwise, they are classified as non-current assets and liabilities. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes in a classified statement of financial position. The update require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position as opposed to the current requirement to separate these into current and non-current amounts. As permitted by ASU 2015-17, the Company early-adopted this standard as at December 31, 2015 and applied it retrospectively to all periods presented. As a result the Company has presented all deferred tax liabilities and assets, as well as any related valuation allowance, as non-current for all periods presented in this annual report. The adoption of this guidance did not have a material impact on Company’s consolidated financial statements and related disclosures. Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with original maturities of three months or less. Restricted cash Restricted cash consists of bank deposits which have been pledged as collateral for certain guarantees issued by a bank or minimum deposits which must be maintained in accordance with contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets. Equity method investments Investments in common stock are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheet under “Investment in associated companies” and its share of the investees’ earnings or losses together with other-than-temporary impairments in value and gain/loss on sale of investments under “Share in results from associated companies (net of tax)” in the consolidated statements of income. All other equity investments, which consist of investments for which the Company does not have the ability to exercise significant influence, or are not investments in common stock, are accounted for under the cost method or at fair value if readily determinable. The Company analyzes its equity method investees for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. The Company records an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. Marketable securities Marketable equity securities held by the Company which do not give the Company the ability to exercise significant influence are considered to be available-for-sale. These are remeasured at fair value each reporting period with resulting unrealized gains and losses recorded as a separate component of accumulated other comprehensive income in shareholders’ equity. Gains and losses are not realized until the securities are sold or subject to an other than temporary impairment. Gains and losses on forward contracts to purchase marketable equity securities that do not meet the definition of a derivative are accounted for as available-for-sale. The Company analyzes its available-for-sale securities for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the securities. The Company records an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the securities held as available for sale occurs. Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. The Company establishes reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, the Company considers the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. Newbuildings The carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. No charge for depreciation is made until commissioning of the newbuilding has been completed and it is ready for its intended use. The Company may have option agreements with shipyards to order new drilling units at fixed or variable prices which require some or no additional payment upon exercise. Payments for drilling unit purchase options are capitalized at the time when option contracts are acquired or entered into. The Company reviews the expected future cash flows, which would result from the exercise of each option contract on a contract by contract basis to determine whether the carrying value of the option is recoverable. Capitalized interest Interest expense is capitalized during construction of newbuildings based on accumulated expenditures for the applicable project at the Company’s current rate of borrowing. The amount of interest expense capitalized in an accounting period shall be determined by applying an interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period. The capitalization rates used in an accounting period shall be based on the rates applicable to borrowings outstanding during the period. The Company does not capitalize amounts beyond the actual interest expense incurred in the period. If the Company’s financing plans associate a specific new borrowing with a qualifying asset, the Company uses the rate on that borrowing as the capitalization rate to be applied to that portion of the average accumulated expenditures for the asset that does not exceed the amount of that borrowing. If average accumulated expenditures for the asset exceed the amounts of specific new borrowings associated with the asset, the capitalization rate to be applied to such excess shall be a weighted average of the rates applicable to other borrowings of the Company. Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of the Company’s floaters and, jack-up rigs, when new, is 30 years. Significant investments are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the consolidated balance sheet, and resulting gains or losses are included in the consolidated statement of operations. Assets held for sale Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups), an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Discontinued operations The Company will present the results of operations of a component of the Company as defined by U.S. GAAP, that either has been disposed of or is classified as held for sale, as discontinued operations, if that component represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. Equipment Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of Equipment, when new, is between 3 and 5 years depending on the type of asset. Goodwill The Company allocates the purchase price of acquired businesses to the identifiable tangible and intangible assets and liabilities acquired, with any remaining amount being recorded as goodwill. Goodwill is tested for impairment at least annually at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. The Company has determined that its reporting units are the same as its operating segments for the purpose of allocating goodwill and the subsequent testing of goodwill for impairment. The Company tests goodwill for impairment on an annual basis as of December 31 each year or when events or circumstances indicate that a potential impairment exists. The Company may first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two step goodwill impairment test. If the qualitative factors indicate possible impairment, the Company performs a quantitative assessment to estimate fair value of its reporting units compared to their carrying value. In the event that the fair value is less than carrying value, the Company must perform an exercise similar to a purchase price allocation in a business combination in order to determine the amount of the impairment charge. The quantitative goodwill impairment test for a reporting unit is based on discounted cash flows. The Company uses estimated future cash flows applying contract dayrates during the firm contract periods and estimated forecasted dayrates for the periods after expiry of firm contract periods. The estimated future cash flows will be based on remaining economic useful lives for the assets, and discounted using a weighted average cost of capital (“WACC”). Other intangible assets and liabilities Other intangible assets and liabilities are recorded at fair value on the date of acquisition less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. Other intangible assets include technology, customer relationships and favorable drilling contracts. Other intangible liabilities include unfavorable drilling contracts. Impairment of long-lived assets The carrying value of long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. The Company first assesses recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to result from the asset, including eventual disposition. If the undiscounted future net cash flows are less than the carrying value of the asset, the Company then compares the carrying value of the intangible asset with the discounted future net cash flows, using relevant WACC to determine an impairment loss to be recognized during the period. Defined benefit pension plans The Company has several defined benefit plans which provide retirement, death and early termination benefits. The Company’s net obligation is calculated separately for each plan by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to a present value, and the aggregated fair value of any plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations. The retirement benefits are generally a function of number of years of employment and amount of employees’ remuneration. The plans are primarily funded through payments to insurance companies. The Company records its pension costs in the period during which the services are rendered by the employees. Actuarial gains and losses are recognized in the statement of operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. On retirement, or when an employee leaves the Company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting U.S. GAAP requires a portion of the net unrealized actuarial gains/losses to be recognized through the statement of operations. The portion corresponds to the relative value of the obligation reduction as a result of the settlement. However settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. The Company deems the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the statement of operations. Treasury shares Treasury shares are recognized at cost as a component of equity. The purchase of treasury shares reduces the Company’s share capital by the nominal value of the acquired treasury shares. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. Derivative Financial Instruments and Hedging Activities The Company’s primary derivative instruments include interest-rate swap agreements, foreign currency options and forward exchange contracts which are recorded at fair value. Changes in the fair value of these derivatives, which have not been designated as hedging instruments, are recorded as a gain or loss as a separate line item within financial items in our consolidated statement of operations. Changes in the fair value of any derivative instrument that we have formally designated as a hedge, are recognized in Accumulated other comprehensive income in the consolidated balance sheets. Any change in fair value relating to an ineffective portion of a designated hedge is recognized, in the consolidated statement of operations. When the hedged item affects the income statement, the gain or loss included in Accumulated other comprehensive income is reported on the same line in the consolidated statements of operations as the hedged item. Income taxes Seadrill is a Bermuda company that has a number of subsidiaries and affiliates in various jurisdictions. Currently, the Company and its Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. The Company and its subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that it will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authority’s widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as of the Valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, and amortized over the term of the related loan and the amortization is included in interest expense. Convertible debt Convertible bond loans issued by the Company include both a loan component (host contract) and an option to convert the loan to shares (embedded derivative). An embedded derivative, such as a conversion option, may be separated from its host contract and accounted for separately if certain criteria are met (including if the contract that embodies both the embedded derivative and the host contract is not measured at fair value, the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract and if a separate instrument with the same terms as the embedded instrument would be a derivative). If an embedded derivative instrument is separated from its host contract, the host contract shall be accounted for based on generally accepted accounting principles applicable to instruments of that type which do not contain embedded derivative instruments. Total Return Equity Swaps From time to time, the Company enters into total return equity swaps (“TRS”) indexed to the Company’s own shares, where the counterparty acquires shares in the Company and the Company carries the risk of fluctuations in the share price of the acquired shares. The fair value of each TRS is recorded as an asset or liability, with the changes in fair value recorded in the consolidated statement of operations. The Company may, from time to time, enter into TRS arrangements indexed to shares in other companies which are accounted for in a similar manner. Share-based compensation The Company has established an employee share ownership plan under which employees, directors and officers of the Group may be allocated options to subscribe for new shares in the ultimate parent, Seadrill Limited. The compensation cost for share options is recognized as an expense over the service period based on the fair value of the options granted. The fair value of the share options issued under the Company’s employee share option plans is determined at grant date taking into account the terms and conditions upon which the options are granted, and using a valuation technique that is consistent with generally accepted valuation methodologies for pricing financial instruments, and that incorporates all factors and assumptions that knowledgeable, willing market participants would consider in determining fair value. The fair value of the share options is recognized as personnel expenses with a corresponding increase in equity over the period during which the employees become unconditionally entitled to the options. Compensation cost is initially recognized based upon options expected to vest with appropriate adjustments to reflect actual forfeitures. National insurance contributions arising from such incentive programs are expensed when the options are exercised. The Company has also established a Restricted Stock Units (“RSU”) plan where the holder of an award is entitled to receive shares if still employed at the end of the three year vesting period. There is no requirement for the holder to pay for the share on grant or vesting of the award. The fair value of the RSU award is calculated as the market share price on grant date. The fair value of the awards expected to vest is recognized as compensation cost straight-line over the vesting period. Provisions A provision is recognized in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. Earnings per share Basic earnings per share (“EPS”) is calculated based on the income/(loss) for the period available to common stockholders divided by the weighted average number of shares outstanding for basic EPS for the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments which for the Company includes share options, restricted stock units and convertible debt. The determination of dilutive earnings per share requires the Company to potentially make certain adjustments to net income and for the weighted average shares outstanding used to compute basic earnings per share unless anti-dilutive. Recently Adopted Accounting Standards The Company has adopted Accounting Standards Update (“ASU”) |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment information | Segment information Operating segments The Company provides drilling and related services to the offshore oil and gas industry. Our business has been organized into three operating segments: (1) Floaters, which includes drillships and semi-submersible rigs, (2) jack-up rigs and (3) other, which consists primarily of rig management services. The Company presents the following two reportable segments: • Floaters: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to semi-submersible rigs and drillships for harsh and benign environments in mid-, deep- and ultra-deep waters. • Jack-up rigs: Services encompassing drilling, completion and maintenance of offshore exploration and production wells. The drilling contracts relate to jack-up rigs for operations in harsh and benign environment. Segment results are evaluated on the basis of operating income, and the information given below is based on information used for internal management reporting. In prior periods, the company reported a tender rigs segment, which related to services encompassing drilling, completion and maintenance of offshore production wells in Southeast Asia, West Africa and the Americas. In these periods, the Company had drilling contracts related to self-erecting tender rigs and semi-submersible tender rigs. Following the sale of the majority of the tender rig business to SapuraKencana, which closed on April 30, 2013, and further the deconsolidation of Seadrill Partners LLC (“Seadrill Partners”) as of January 2, 2014, the Company no longer has any drilling contracts in the tender rig segment. Accordingly, the Company did not report this segment for the years ended December 31, 2015 and December 31, 2014 . The Company however provides management services to Seadrill Partners and SeaMex which are recognized within the Other segment. Revenues (In US$ millions) 2015 2014 2013 Floaters 2,906 3,360 3,698 Jack-up rigs 1,293 1,478 1,175 Tender Rigs — — 382 Other 136 159 27 Total 4,335 4,997 5,282 Depreciation and amortization (In US$ millions) 2015 2014 2013 Floaters 571 508 531 Jack-up rigs 208 185 163 Tender Rigs — — 17 Total 779 693 711 Operating income – net income (In US$ millions) 2015 2014 2013 Floaters 340 1,992 1,472 Jack-up Rigs 664 275 450 Tender Rigs — — 176 Other 15 12 — Operating income 1,019 2,279 2,098 Unallocated items: Total financial items and other (1,561 ) 1,827 842 Income tax expense (208 ) (19 ) (154 ) Net income (750 ) 4,087 2,786 Drilling Units and Newbuildings - Total assets (In US$ millions) 2015 2014 Floaters 12,189 12,849 Jack-up Rigs 4,220 4,326 Tender Rigs — — Total Drilling Units and Newbuildings 16,409 17,175 Assets held for sale 128 1,239 Investments in Associated companies 2,590 2,898 Marketable securities 324 751 Goodwill — 604 Cash and restricted cash 1,292 1,280 Other assets 2,727 2,350 Total 23,470 26,297 Goodwill (In US$ millions) 2015 2014 Floaters — 604 Total — 604 Capital expenditures – fixed assets (In US$ millions) 2015 2014 2013 Floaters 950 2,327 3,178 Jack-up Rigs 95 776 1,371 Tender Rigs — — 150 Total 1,045 3,103 4,699 Geographic segment data Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents the Company’s revenues and fixed assets by geographic area: Revenues (In US$ millions) 2015 2014 2013 Brazil 877 991 825 Norway 641 1,071 1,198 Angola 527 707 734 Nigeria 499 21 207 Others * 1,791 2,207 2,318 Total Revenue 4,335 4,997 5,282 * Other countries represents countries in which we operate that individually had revenues representing less than 10 percent of total revenues earned for any of the periods presented. Major customers In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % Fixed assets – operating drilling units (1) (In US$ millions) 2015 2014 Brazil 4,074 2,798 Norway 2,094 2,252 Angola 1,452 1,852 Others * 7,310 8,243 Total 14,930 15,145 (1) The fixed assets referred to in the table are the Company’s operating drilling units. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. * Other countries represents countries in which we operate that individually had fixed assets representing less than 10 percent of total fixed assets for any of the periods presented. |
Other revenues
Other revenues | 12 Months Ended |
Dec. 31, 2015 | |
Revenues [Abstract] | |
Other revenues | Other revenues Other revenues consist of the following: Year ended December 31 (In US$ millions) 2015 2014 2013 Amortization of unfavorable contracts 116 130 67 Amortization of favorable contracts — — (2 ) Revenues related party 119 97 2 External management fees with third parties 30 62 45 Total 265 289 112 The unfavorable contract values in 2015, 2014 and 2013 arose from our acquisitions of the Songa Eclipse and Sevan Drilling ASA, see Notes 12 and 21. Related party revenues were related to management support and administrative services during the year provided to our associates in which we maintain an investment. Refer to Note 31 for more information External management fees relate to the operational, administrative and support services we provide to SapuraKencana as part of the agreement we entered into when we sold majority of the tender rig business. Refer to Note 11 for more information. |
(Loss)_gain on disposals
(Loss)/gain on disposals | 12 Months Ended |
Dec. 31, 2015 | |
Proceeds from Sale of Productive Assets [Abstract] | |
(Loss)/gain on disposals | (Loss)/gain on disposals The Company has recognized the following (losses)/gains on disposals: (In US$ millions) Net proceeds/recoverable amount Book value on disposal (Loss)/gain Year ended December 31, 2015: Cancellation of West Mira 199 279 (80 ) West Rigel Transferred to Asset held for sale 128 210 (82 ) Sale of West Polaris 235 312 (77 ) SeaMex Limited 1,240 1,059 181 Assets written off — 5 (5 ) Total for year ended December 31, 2015 1,802 1,865 (63 ) Year ended December 31, 2014: Sale of West Auriga business 466 26 440 Sale of West Vela business 536 344 192 Total for year ended December 31, 2014 1,002 370 632 Year ended December 31, 2013: Sale of Jack-up rig West Janus 73 12 61 Total for year ended December 31, 2013 73 12 61 Cancellation of the West Mira On September 14, 2015, the Company cancelled the construction contract for the West Mira with Hyundai Samho Heavy Industries Co Ltd. (“HSHI”), due to the Shipyard’s inability to deliver the unit within the timeframe required under the contract. The carrying value of the newbuild at the date of cancellation was $315 million , which included $170 million of pre-delivery installments paid to HSHI, with the remainder relating to purchased equipment, internally capitalized construction costs and capitalized interest. Under the contract terms, the Company has the right to recoup the $170 million in pre-delivery installments, plus accrued interest. On October 12, 2015, HSHI launched arbitration proceedings under the contract. HSHI have claimed that Seadrill’s cancellation was a repudiatory breach and claim they were due various extensions of time. The Company refutes this vigorously, and believes it has the contractual right to recover the $170 million in pre-delivery installments, plus accrued interest, and legal costs. The recovery is however now not expected until the conclusion of an arbitration process under English law, which is expected to take up to two years. Based both on management’s assessment of the facts and circumstances, and advice from external counsel, who have been engaged for the arbitration process, the Company believes the recovery of the installment, plus accrued interest, and legal costs, is probable, as defined by US GAAP. As such, the Company has reclassified from “Newbuildings,” a receivable of $170 million plus accrued interest of $29 million , which is presented in “Other non-current assets” on the balance sheet. The Company will continue to assess the recoverability throughout the arbitration process. The Company will redeploy equipment, totaling $48 million , within Seadrill’s remaining fleet, and has not written off these amounts. The resulting net loss on disposal recognized was $80 million , which is included in “Loss on disposal” in the Statement of Operations. West Rigel Transferred to Asset held for sale On December 2, 2015, the West Rigel was classified as an Asset held for sale. As at the transfer date the West Rigel held assets at its book value of $210 million and a loss on disposal of $82 million was recognized. Please refer to Note 37 for more details . Sale of West Polaris On June 19, 2015, the Company sold the entities that owned and operated the West Polaris to Seadrill Operating LP, a consolidated subsidiary of Seadrill Partners LLC and 42% owned by the Company. Please refer to Note 11 for more details . SeaMex Limited During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech Advisory Inc. (“Fintech”), for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex Limited (“SeaMex”), which was previously 100% owned by the Company. As a result of the transaction the Company has deconsolidated certain entities as of March 10, 2015, and has recognized its remaining 50% investment in the joint venture at fair value. Please refer to Note 11 for more details. Sale of West Auriga business On March 21, 2014, the Company sold the entities that own and operate the West Auriga (the “Auriga business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners that is 49% owned by the Company. Please refer to Note 11 for more details . Sale of West Vela business On November 4, 2014, the Company sold the entities that own and operate the West Vela (the “Vela business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners and 49% owned by the Company. Please refer to Note 11 for more details . Sale of majority of tender rig business On April 30, 2013 we completed the sale of the entities which owned and operated the following tender rigs: T-4 , T-7 , T-11 , T-12 , West Alliance , West Berani , West Jaya , West Menang , West Pelaut , West Setia , and the newbuilds T-17 , T-18 , and West Esperanza . In addition our 49% ownership in Varia Perdana and Tioman Drilling was sold as part of this transaction, which included the following rigs: T-3 , T-6 , T-9 , T-10 , and the Teknik Berkat . This is collectively referred to as the “tender rig businesses.” Please refer to Note 11 for more details. West Janus In 2013 we sold the jack-up rig West Janus for net proceeds of $73 million , and recorded a gain on sale of $61 million . |
Interest expense
Interest expense | 12 Months Ended |
Dec. 31, 2015 | |
Interest Expense [Abstract] | |
Interest Expense | Interest expense Year ended December 31 2015 2014 2013 Gross interest expense 475 548 540 Capitalized interest (60 ) (70 ) (95 ) Net interest expense 415 478 445 |
Gain on realization of marketab
Gain on realization of marketable securities | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities, Gain (Loss) [Abstract] | |
Gain on realization of marketable securities | Gain on realization of marketable securities In April 2014, the Company sold a portion of its investment in SapuraKencana and received proceeds of $297 million , net of transaction costs. As a result of the sale, a gain of $131 million was recognized in the consolidated statement of operations within “Gain on realization of marketable securities,” including amounts which had been previously recognized in other comprehensive income. As a result of this transaction, as of December 31, 2015 , our ownership interest in SapuraKencana’s outstanding common shares was 8.18% . |
Impairment loss on marketable s
Impairment loss on marketable securities and investments in associated companies | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Impairment loss on marketable securities and investments in associated companies | Impairment loss on marketable securities and investments in associated companies Seadrill Partners - Common Units - Impairment of marketable securities Seadrill deconsolidated Seadrill Partners in January 2014, recognizing its investments in common units at market value of $30.60 . Seadrill also purchased further units in 2014 at a similar price. In October 2014, the share price began to fall below $30.60 and fell to $9.40 at September 30, 2015, as a result of deteriorating market conditions in the oil and gas industry and supply and demand conditions in the ultra-deepwater offshore drilling sector. During the period between June 30, 2015 and September 30, 2015, Seadrill Partners’ unit price fell by approximately 20% , on both a spot price and trailing three month average basis. At September 30, 2015 management determined that the investment in Seadrill Partners’ common units was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result the Company has impaired the investment, recognizing an impairment charge of $574 million within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. The amount reclassified out of Accumulated other comprehensive income into earnings was determined on the basis of average cost. Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment Whilst the investments in Seadrill Partners held under the equity method are not publicly traded, the reduction in value of the publicly traded units is considered an indicator of impairment. At September 30, 2015, the Company determined the length and severity of the reduction in value of the traded units to be representative of an other than temporary impairment. As such the Company has measured and recognized an other than temporary impairment of the subordinated units and direct ownership interests as at September 30, 2015. The fair value of these investments was derived using an income approach which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investments are primarily based on expectations around applicable dayrates, drilling unit utilization, operating costs, capital and long term maintenance expenditures and applicable tax rates. The cash flows are estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of 8.5% , which was relevant to the investee. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The implied valuation of Seadrill Partners derived from the DCF model was cross-checked against the market price of Seadrill Partners’ common units. The Company evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. The Company deems the implied control premium to be reasonable in the context of the data considered. As at September 30, 2015, the carrying value of the subordinated units was found to exceed the fair value by $125 million , and the carrying value of the direct ownership interests was found to exceed the fair value by $302 million . The company has recognized this impairment of the investments within “Loss on impairment of Investments” in the Statement of Operations. The assumptions used in the DCF model were derived from unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. Seadrill Partners - Member interest - Impairment of Cost method investments The Company also holds the Seadrill member interest, which is a 0% non-economic interest, and which holds the rights to 100% of the Incentive Distribution Rights “IDRs” of Seadrill Partners. The Seadrill Member Interest and the IDRs in Seadrill Partners are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The fair value of the Company’s interest in the Seadrill Member and the attached IDRs at deconsolidation in January 2014, was determined using a Monte Carlo simulation method (“Monte Carlo model”). The method takes into account the cash distribution waterfall, historical volatility, estimated dividend yield and share price of the common units as of the deconsolidation date. The reduction in value of the Seadrill Partners common units was determined to be an indicator of impairment of the Seadrill member interest. The fair value was determined using the Monte Carlo model, updated for applicable assumptions as at September 30, 2015. The carrying value of the investment was found to exceed the fair value by $106 million . The company has recognized this impairment within “Loss on impairment of Investments” in the Statement of Operations. The assumptions used in the Monte Carlo model were derived from both observable and unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. SapuraKencana - Impairment of marketable securities During the period since September 30, 2014, to September 30, 2015, SapuraKencana’s share price fell by approximately 45% as a result of deteriorating market conditions in the oil and gas industry. Between June 30, 2015 and September 30, 2015, the value of the investment fell by approximately 20% , as a result of the declining share price and USD:MYR exchange rate. At September 30, 2015, management determined that the investment in SapuraKencana was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result the Company has impaired the investment, recognizing an impairment charge of $167 million within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. The amount reclassified out of Accumulated other comprehensive income into earnings was determined on the basis of average cost. The table below summarizes the total impairments of investments made during the year ended December 31, 2015: (In $ millions) Year ended December 31, 2015 Impairments of Investment in associated companies Seadrill Partners - Total direct ownership investments 302 Seadrill Partners - Subordinated units 125 Seadrill Partners - Seadrill member interest and IDRs 106 Total impairment of investments in associated companies 533 Impairments of Marketable securities (refer to Note 14) Seadrill Partners - Common Units 574 SapuraKencana 167 Total impairment of marketable securities investments (reclassification from OCI) 741 Total impairment of investments 1,274 During the three months ended December 31, 2015 Seadrill Partners’ unit price has fallen further from approximately $9.40 at September 30, 2015 to $3.65 at December 31, 2015. Having assessed the length and severity of the implied fall in value and the prospects for Seadrill Partners, the Company has determined that a further other than temporary impairment of the investment has not occurred. Investment in associated companies The Company has the following investments that are or have been recorded using the equity method for the periods presented in these financial statements: Ownership percentage December 31, 2015 December 31, 2014 December 31, 2013 Archer 39.9 % 39.9 % 39.9 % Seabras Sapura Participacoes SA (”Seabras Sapura Participacoes”) 50.0 % 50.0 % 50.0 % Seabras Sapura Holding GmbH (”Seabras Sapura Holdco”) 50.0 % 50.0 % 50.0 % Itaunas Drilling B.V. (”Itaunas Drilling”) 30.0 % 30.0 % 30.0 % Camburi Drilling B.V. (”Camburi Drilling”) 30.0 % 30.0 % 30.0 % Sahy Drilling B.V. (”Sahy Drilling”) 30.0 % 30.0 % 30.0 % Seadrill Partners (”SDLP”) Note 1 Note 1 Note 1 SeaMex Ltd. (”SeaMex”) 50.0 % — % — % (1) As of the deconsolidation date of Seadrill Partners on January 2, 2014, we recognized our ownership interests in Seadrill Partners and direct ownership interests in Seadrill Partners subsidiaries, at fair value at the date of deconsolidation. Refer to Seadrill Partners paragraph below for additional information. At the year-end the book values of the Company’s investment in associated companies are as follows: (In US$ millions) December 31, 2015 December 31, 2014 Archer — — Seabras Sapura Participacoes 29 21 Seabras Sapura Holding 158 117 Itaunas Drilling 3 3 Camburi Drilling 6 6 Sahy Drilling 4 4 Seadrill Partners - Total direct ownership interests 1,767 2,091 Seadrill Partners - Subordinated Units 293 412 Seadrill Partners - Seadrill Member Interest and IDRs (1) 137 244 Seamex Ltd. 193 — Total 2,590 2,898 (1) The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. The quoted market value for the investment in Archer as at December 31, 2015 was $22 million . Quoted market prices for all our other equity investments are not available because, other than Seadrill Partners Common Units, these companies are not publicly traded. Seadrill Partners subordinated units are not tradable and hence have no quoted market price. Archer Archer is a company listed on the Oslo Stock Exchange and provides drilling and well services. Prior to February 2011, Archer was a consolidated subsidiary. In February 2011, we deconsolidated Archer and as a result, Archer is accounted for as an associated company. On February 8, 2013, we were allocated 82,003,000 shares in the private placement of Archer, amounting to a value of $98 million . In addition, as consideration for acting as an underwriter to the placement, the Company received another 2,811,793 shares, amounting to a value of $3 million . The consideration for the shares was settled against the existing $55 million loan to Archer, with the remainder of the consideration funded by a $43 million loan from Archer, which was repaid on February 27, 2013. As of December 31, 2015 we held 39.9% of the outstanding shares of Archer. For transactions and balances with Archer, please refer to Note 31 – Related party transactions. Seabras Sapura Participacoes and Seabras Sapura Holdco Seabras Sapura Participacoes SA is a company incorporated in Brazil, which is currently constructing one pipe-laying vessel. It is 50% owned by TL Offshore Sdn. Bhd., a subsidiary of SapuraKencana, and 50% owned by the Company. Seabras Sapura Holdco Ltd is a company incorporated in Bermuda, which is owns five pipe-laying vessels, of which one is under construction. It is 50% owned by TL Offshore Sdn. Bhd. and 50% owned by the Company. During 2014 Seabras Sapura Holdco Ltd was transferred into a new company Seabras Sapura Holding GmbH (a company incorporated in Austria). For transactions and balances with Seabras Sapura Participacoes and Seabras Sapura Holdco, please refer to Note 31 – Related party transactions. Itaunas Drilling, Camburi Drilling, and Sahy Drilling Itaunas Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Camburi Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Sahy Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Seadrill Partners As a result of the deconsolidation of Seadrill Partners on January 2, 2014, the Company has derecognized the assets and liabilities of Seadrill Partners and its subsidiaries, and has recognized its ownership interests in Seadrill Partners and its direct ownership interests in Seadrill Partners subsidiaries, Seadrill Capricorn Holdings LLC, Seadrill Operating LP, Seadrill Deepwater Drillship Ltd and its indirect ownership of Seadrill Mobile Units through another wholly owned subsidiary, at fair value at the date of deconsolidation. For further discussion please refer to Note 11 of the consolidated financial statements. Seadrill’s investment in Seadrill Partners accounted for under the equity method is comprised of the following: (a) Subordinated units - the Company’s holding in the subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners, but will not end before September 30, 2017 except upon removal of the Seadrill Member. Upon the expiration of the subordination period, the subordinated units will convert into common units. (b) Direct Ownership interests - Seadrill holds ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2015 : i. 42% in Seadrill Operating LP : Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. ii. 49% Seadrill Capricorn Holdings LLC : Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. iii. 39% in Seadrill Deepwater Drillship Ltd and 39% indirect interest in Seadrill Mobile Units (Nigeria) Ltd. : Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. All of the Company’s direct ownership interests are accounted for under the equity method as the Company is deemed to have significant influence over these entities through its voting rights and by virtue of Seadrill’s representation on the board of Seadrill Partners. Sale of 28% limited partner interest in Seadrill Operating LP On July 21, 2014 , the Company sold a 28% limited partner interest in Seadrill Operating LP, a subsidiary of Seadrill Partners, to Seadrill Partners for cash consideration of $373 million . This resulted in a loss on sale of investment of $88 million , which has been recognized within “share in results from associated companies” in the Company’s consolidated statement of operations. The Company will continue to account for its remaining 42.0% limited partner interest in Seadrill Operating LP under the equity method. Impairment During the year ended December 31, 2015, the Company recognized an other than temporary impairment on the equity method investments in Seadrill Partners for a total of $533 million . Refer to Note 8 for more information. For transactions and balances with Seadrill Partners, please refer to Note 31 – Related party transactions. SeaMex During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech, for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex, which was previously 50% owned by the Company, and SeaMex simultaneously purchased the jack-up drilling rigs from Seadrill Limited. As a result of the transaction the Company no longer controls the entities that own and operate these jack-up drilling units, and accordingly the Company has deconsolidated these entities as of March 10, 2015, and has recognized its remaining 50% investment in the joint venture at fair value. The fair value of the retained 50% equity interest in the SeaMex joint venture was determined by reference to the price paid by Fintech to obtain a 50% equity interest in the disposal group from Seadrill. Seadrill accounts for its 50% investment in the joint venture under the Equity Method. Refer to Note 11 for further information. During the year ended December 31, 2015 both the JV partners have each made an additional $19 million of equity investment in SeaMex while retaining their 50% share in the JV. For transactions and balances with SeaMex, please refer to Note 31 – Related party transactions. Summary financial information of the equity method investees Summarized balance sheet information of the Company’s equity method investees is as follows: As of December 31, 2015 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 363 904 319 751 — Seabras Sapura Participacoes 76 308 79 258 — Seabras Sapura Holding 133 1,183 80 1,199 — Seadrill Partners 892 5,949 847 3,897 1,133 SeaMex 218 1,157 176 799 — Total 1,682 9,501 1,501 6,904 1,133 December 31, 2014 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 633 1,171 441 817 — Seabras Sapura Participacoes 17 194 14 149 — Seabras Sapura Holding 104 690 52 730 — Seadrill Partners 762 5,585 686 3,617 1,116 SeaMex — — — — — Total 1,516 7,640 1,193 5,313 1,116 Summarized statement of operations information for the Company’s equity method investees is as follows: Year ended December 31, 2015 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 1,321 (13 ) (359 ) — Seabras Sapura Participacoes 53 3 1 — Seabras Sapura Holding 124 76 51 — Seadrill Partners 1,742 844 488 231 Seamex 238 79 24 — Total 3,478 989 205 231 Year ended December 31, 2014 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,254 29 (96 ) — Seabras Sapura Participacoes 29 (6 ) (6 ) — Seabras Sapura Holding 39 24 13 — Seadrill Partners 1,343 615 315 176 Seamex — — — — Total 3,665 662 226 176 Year ended December 31, 2013 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,041 (438 ) (519 ) — Seabras Sapura Participacoes — (2 ) (1 ) — Seabras Sapura Holding — — (1 ) — Seadrill Partners — — — — Seamex — — — — Total 2,041 (440 ) (521 ) — At the year end the share of recorded equity in the statutory accounts of the Company’s associated companies were as follows: (In US$ millions) December 31, 2015 December 31, 2014 December 31, 2013 Archer 79 218 253 Seabras Sapura Participacoes 24 24 13 Seabras Sapura Holding 19 6 — Seadrill Partners * N/A N/A — Seamex 200 — — Total 322 261 277 * The Company accounts for its direct interests in operating subsidiaries of Seadrill Partners, and its ownership of Seadrill Partners Subordinated Units, under the equity method. The Company’s share of Seadrill Partner’s recorded equity consists of the equity attributable to non-controlling interests in Seadrill Partners, and additionally a proportionate share of equity attributable to Seadrill Partners’ unitholders. The equity attributable to non-controlling interest in Seadrill Partners as at December 31, 2015 was $1,133 million . Seadrill’s holding in the subordinated units represents 18.0% of the limited partner interests in Seadrill Partners. Total equity attributable to Seadrill Partners unitholders as at December 31, 2015 was $964 million . |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Taxation | Taxation Income taxes consist of the following: Year ended December 31 (In US$ millions) 2015 2014 2013 Current tax expense: Bermuda — — — Foreign 177 23 200 Deferred tax expense/(benefit): Bermuda — — — Foreign 31 (4 ) (50 ) Tax related to internal sale of assets in subsidiary, amortized for group purposes — — 4 Total tax expense 208 19 154 Effective tax rate (38.4 )% 0.5 % 5.2 % The effective tax rate for the twelve months ended December 31, 2015 is -38.4% as compared to a rate for 2014 of 0.5% . This means that we continue to pay tax on local operations but reported an overall loss before tax inclusive of discrete items. The negative rate reflects no tax relief on the impairments or the derivative loss, as well as no tax chargeable on the disposal gains. This is due to these items largely falling within the zero tax rate Bermuda companies. This is in comparison to 2014 where there was a prior year tax benefit related to the release of an uncertain tax position. The Company, including its subsidiaries, is taxable in several jurisdictions based on its rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, the Company may pay tax within some jurisdictions even though it might have losses in others. The income taxes for the years ended December 31 2015 , 2014 and 2013 differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows: Year ended December 31 (In US$ millions) 2015 2014 2013 Income taxes at statutory rate — — — Effect of transfers to new tax jurisdictions — — 4 Effect of change on uncertain tax positions relating to prior year — (85 ) (7 ) Effect of unremitted earnings of subsidiaries 38 — — Effect of taxable income in various countries 170 104 157 Total tax expense 208 19 154 Deferred Income Taxes Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets (liabilities) consist of the following: Deferred Tax Assets: (In US$ millions) December 31, December 31, Pensions and stock options 9 19 Provisions 16 20 Net operating losses carried forward 265 291 Other 2 3 Gross deferred tax asset 292 333 Valuation allowance related to net operating losses carried forward (211 ) (280 ) Net deferred tax asset 81 53 Deferred Tax Liability: (In US$ millions) December 31, December 31, Property, plant and equipment 98 60 Unremitted Earnings of Subsidiaries 38 — Foreign exchange — 7 Gross deferred tax liability 136 67 Net deferred tax (55 ) (14 ) Net deferred taxes are classified as follows: (In US$ millions) December 31, December 31, Deferred tax asset 81 53 Deferred tax liability (136 ) (67 ) Net deferred tax (55 ) (14 ) As of December 31, 2015 , deferred tax assets related to net operating loss (“NOL”) carryforwards was $265 million , which can be used to offset future taxable income. NOL carryforwards which were generated in various jurisdictions, include $265 million that will not expire. A valuation allowance of $211 million as at December 31, 2015 ( 2014 : $280 million ; 2013 : $115 million ) on the NOL carryforwards results where we do not expect to generate future taxable income. The change in the valuation allowance in 2015 was due to a decrease of $69 million and zero utilization during the year compared to an increase of $165 million and zero utilization in 2014 and an increase of $41 million and zero utilization in 2013 . As of December 31, 2014, of the total deferred tax asset of $53 million , a total of $14 million related to the SeaMex business that was classified as held for sale at the balance sheet date. Please see Note 37 – Assets held for sale for more information. The Company has reviewed its assertion of indefinite reinvestment of unremitted earnings of subsidiaries and determined that, due to the cash needs of the Company caused by the recent industry trend in the market, the Company no longer considers such earnings to be indefinitely reinvested. The Company has recognized a deferred tax liability of $38 million in 2015 . In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes in a classified statement of financial position. The update requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position as opposed to the current requirement to separate these into current and non-current amounts. As permitted by ASU 2015-17, the Company early-adopted this standard as at December 31, 2015 and applied it retrospectively to all periods presented. As a result the Company has presented all deferred tax liabilities and assets, as well as any related valuation allowance, as non-current for all periods presented in this annual report. The adoption of this guidance did not have a material impact on Company’s consolidated financial statements and related disclosures. Uncertain tax positions As of December 31, 2015 , we had uncertain tax positions of $9 million . The changes to our uncertain tax positions, including interest and penalties that we recognize as a component of income tax expense, were as follows: Year ended December 31 (In US$ millions) 2015 2014 2013 Balance beginning of period 9 147 154 Increases as a result of positions taken in prior periods — 9 29 Increases as a result of positions taken during the current period — — 12 Decreases as a result of positions taken in prior periods — (147 ) (14 ) Decreases as a result of positions taken in the current period — — (34 ) Balance end of period 9 9 147 As of December 31, 2015 , if recognized, $9 million of our unrecognized tax benefits, including interest and penalties, would have a favorable impact on our effective tax rate. Certain of our Norwegian subsidiaries were party to an ongoing dispute to a tax reassessment issued in October 2011 by the Norwegian tax authorities in regards to the transfer of certain legal entities to a different tax jurisdiction and the principles for conversion of functional currency. In April 2014 these subsidiaries entered into a settlement agreement with the Norwegian tax authorities resulting in discontinued legal proceedings in the Oslo District Court. The terms of the settlement agreement included the Company making a cash payment to the tax authorities for settlement of revised reassessments agreed between the parties. Following settlement of the uncertainties arising from these matters, we recognized a $94 million positive impact on our 2014 effective tax rate. The parent company, Seadrill Limited, is headquartered in Bermuda where it has been granted a tax exemption until 2035. Other jurisdictions in which the Company and its subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, the Company may pay tax within some jurisdictions even though it may have an overall loss at the consolidated level. The following table summarizes the earliest tax years that remain subject to examination by the major taxable jurisdictions in which the Company operates: Jurisdiction Earliest Open Year United States 2013 Angola 2010 Australia 2011 Nigeria 2009 Norway 2013 Thailand 2005 |
(Loss)_earnings per share
(Loss)/earnings per share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
(Loss)/earnings per share | (Loss)/earnings per share The computation of basic (loss)/earnings per share (“EPS”) is based on the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments. The components of the numerator for the calculation of basic and diluted EPS are as follows: (In US$ millions) 2015 2014 2013 Net (loss)/income attributable to the parent (738 ) 3,979 2,653 Less: Allocation to participating securities — (6 ) — Net (loss)/income available to stockholders (738 ) 3,973 2,653 Effect of dilution — 117 38 Diluted net (loss)/income available to stockholders (738 ) 4,090 2,691 The components of the denominator for the calculation of basic and diluted EPS are as follows: (In US$ millions) 2015 2014 2013 Basic earnings per share: Weighted average number of common shares outstanding 492.8 478.0 469.0 Diluted earnings per share: Effect of dilutive convertible bonds — 14.0 22.0 Effect of dilutive share options* — 1.0 1.0 Weighted average number of common shares outstanding adjusted for the effects of dilution 492.8 493.0 492.0 * Certain stock options have been excluded from the calculation of diluted EPS because their exercise price exceeded Company’s average share price during the calculation period. (In US$) 2015 2014 2013 Basic EPS (1.49 ) 8.32 5.66 Diluted EPS (1.49 ) 8.30 5.47 |
Disposals of businesses and dec
Disposals of businesses and deconsolidation of subsidiaries | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposals of businesses and deconsolidation of subsidiaries | Disposals of businesses and deconsolidation of subsidiaries Disposals in 2015 Disposal of the West Polaris On June 19, 2015, the Company sold the entities that owned and operated the West Polaris (the “Polaris business”), to Seadrill Operating LP (“Seadrill Operating”), a consolidated subsidiary of Seadrill Partners LLC and 42% owned by the Company. The entities continue to be related parties subsequent to the sale. The purchase price consisted of an initial enterprise value of $540 million , less debt assumed of $336 million . The fair value of consideration recognized on disposal was $235 million , which comprised of $204 million of cash consideration, and a working capital adjustment of $31 million , due to the net working capital of the Polaris business being greater than the required working capital prescribed in the sale and purchase agreement.. Additional contingent consideration in the form of a seller’s credit of $50 million is also potentially due from Seadrill Partners in 2021, which will carry interest at a rate of 6.5% per annum. The repayment of the seller’s credit is contingent on the future re-contracted day rate. During the 3 years period following the completion of the current customer contract, the final amount payable will be adjusted downwards to the extent the average re-contracted operating day rate (net of commissions), adjusted for utilization, over the period, is less than $450 thousand per day. If the rig is off contract during this period, the reduction is equal to $450 thousand per day. In addition, the Company may be entitled to receive further contingent consideration from Seadrill Partners, consisting of (a) any day rates earned by Seadrill Partners in excess of $450 thousand per day, adjusted for daily utilization, tax and agency commission for the remainder of the ExxonMobil contract completing in March 2018 and (b) 50% of any day rate earned above $450 thousand per day, adjusted for daily utilization, tax and agency commission fee after the conclusion of the existing contract until 2025. In February 2016, the drilling contract with ExxonMobil was amended such that the day rate for the West Polaris was reduced from $653 thousand per day to $490 thousand per day, effective January 1, 2016. The Company’s accounting policy is not to recognize contingent consideration before it is considered realizable and has therefore not recognized on disposal any amounts receivable relating to the elements of consideration which are contingent on future events. From the disposal date of the West Polaris on June 19, 2015 to December 31, 2015, the Company has recognized $32 million in contingent consideration, as it became realized, within “Contingent consideration realized” included within operating income. The loss recognized at the time of disposal of the Polaris business was $77 million , after taking into account a goodwill allocation of $41 million . The loss has been presented in our consolidated statement of operations, under “ (Loss)/gain on disposals ” included within operating income and attributable to the floaters segment. As at June 19, 2015 Initial enterprise value 540 Less: Debt assumed (336 ) Initial purchase price 204 Plus: Working capital adjustment 31 Adjusted initial purchase price 235 Cash 204 Plus: Working capital receivable 31 Fair value of purchase consideration recognized on disposal 235 Less: net carrying value of assets and liabilities (271 ) Less: allocated goodwill to subsidiaries (41 ) Loss on disposal (77 ) Contingent consideration realized since disposal 32 Under the terms of various agreements between Seadrill and Seadrill Partners LLC, entered into in connection with the initial public offering of Seadrill Partners LLC, Seadrill will continue to provide management, technical and administrative services to the Polaris business. See further discussion in Note 31 to the consolidated financial statements for details of these services and agreements. The sale of the Polaris business does not qualify for reporting as a discontinued operation as the sale of the Polaris business is not considered to represent a strategic shift expected to have a major effect on the Company’s operations and financial results. SeaMex Limited During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech Advisory Inc. (“Fintech”), for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The West Oberon , West Intrepid , West Defender , West Courageous and West Titania jack-up drilling rigs (“the jack-up drilling rigs”) were included within the joint venture. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex Limited (“SeaMex”), which was previously 100% owned by the Company, and SeaMex simultaneously purchased the jack-up drilling rigs from Seadrill Limited. As a result of the transaction the Company no longer controls the entities that own and operate these jack-up drilling units (the “Disposal Group”), and accordingly the Company has deconsolidated these entities as of March 10, 2015, and has recognized its remaining 50% investment in the joint venture at fair value. The fair value of the retained 50% equity interest in the SeaMex joint venture was determined by reference to the price paid by Fintech to obtain a 50% equity interest in the disposal group from Seadrill. Seadrill accounts for its 50% investment in the joint venture under the Equity Method. Total consideration in respect of the Disposal Group was $1,077 million from SeaMex to Seadrill. This was comprised of net cash of $586 million , a Seller’s credit receivable of $250 million , short term related party receivable balances of $91 million and direct settlement of Seadrill’s debt facilities relating to the West Oberon amounting to $150 million . Subsequently, $162 million of related party balance was received when the West Titania was refinanced. The Seller’s credit bears interest at a rate of LIBOR plus a margin of 6.50% and matures in December 2019. See Note 31 to the consolidated financial statements for further details on the related party balances. Seadrill utilized the cash consideration to repay outstanding debt facilities in respect of the West Courageous, West Defender, West Intrepid and West Titania. See further details in Note 23 to the consolidated financial statements. The total recognized gain on disposal was $181 million , after taking into account a goodwill allocation of $49 million , which has been presented in our consolidated statement of operations, under “ (Loss)/gain on disposals ” included within operating income attributable to the jack-up segment. The Company has not presented this disposal group as a discontinued operation in the statement of operations as it does not represent a strategic shift that has (or will have) a major effect on the Company’s operations and financial results. (In $ millions) As at March 10, 2015 FAIR VALUE OF CONSIDERATION RECEIVED Net cash consideration received 749 Seller’s credit recognized 250 Direct repayment of debt by the JV on behalf of Seadrill 150 Consideration receivable in respect of West Titania 162 Other related party balances payable (71 ) Cash paid to acquire 50% interest in the JV (163 ) Fair value of consideration received 1,077 FAIR VALUE OF RETAINED 50% INVESTMENT IN SEAMEX LIMITED 163 CARRYING VALUE OF NET ASSETS Current assets Cash and cash equivalents 40 Deferred tax assets - short term 8 Other current assets 20 Total current assets 68 Non-current assets Drilling units 969 Deferred tax asset - long term 4 Other non-current assets 86 Goodwill 49 Total non-current assets 1,108 Total assets 1,176 LIABILITIES Current liabilities Trade accounts payable (1 ) Other current liabilities (56 ) Total current liabilities (57 ) Non-current liabilities Other non-current liabilities (60 ) Total non-current liabilities (60 ) Total liabilities (117 ) Carrying value of net assets 1,059 GAIN ON DISPOSAL 181 In connection with the JV agreement, SeaMex entered into a management support agreement with Seadrill Management, a wholly owned subsidiary of the Company, pursuant to which Seadrill Management provides SeaMex with certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee of 8% of Seadrill’s costs and expenses incurred in connection with providing these services. The agreement can be terminated by SeaMex by providing 120 days written notice. Disposals in 2014 Deconsolidation of Seadrill Partners Under the terms of the Operating Agreement of Seadrill Partners, the board of directors of Seadrill Partners has the power to oversee and direct the operations of, and manage and determine the strategies and policies of Seadrill Partners. During the period from Seadrill Partners’ IPO in October 2012 until the time of its first effective Annual General Meeting (“AGM”) on January 2, 2014 , the Company retained the sole power to appoint, remove and replace all members of Seadrill Partner’s board of directors. From the first AGM, the majority of the board members became electable by the common unitholders and accordingly, from this date the Company no longer retained the power to control the board of directors as a result of certain provisions in the Operating Agreement which limits the Company’s ability to vote its full holding of common units in an election of directors to the board of Seadrill Partners. As of January 2, 2014 , Seadrill Partners is considered to be an associated company, and a related party, and not a controlled subsidiary of the Company. As such Seadrill Partners was deconsolidated by the Company. Under the terms of various agreements between Seadrill and Seadrill Partners entered into in connection with the IPO of Seadrill Partners, Seadrill will continue to provide management, technical and administrative services to Seadrill Partners and its subsidiaries. See further discussion in Note 31 for these services and agreements. As a result of the deconsolidation the Company has derecognized the assets and liabilities of Seadrill Partners and its subsidiaries, and has recognized its ownership interests in Seadrill Partners and its direct ownership interests in Seadrill Partners subsidiaries, Seadrill Capricorn Holdings LLC, Seadrill Operating LP, Seadrill Deepwater Drillship Ltd and its indirect ownership of Seadrill Mobile Units through another wholly owned subsidiary, at fair value at the date of deconsolidation. Additionally, the external third party debt associated with the drilling units in Seadrill Partners is not derecognized from the Company on the deconsolidation date, as the external debt was not transferred to Seadrill Partners or its subsidiaries. However, the Company had entered into back to back loan agreements at the time of the IPO and upon each sale of a drilling unit to Seadrill Partners which mirror the same terms and conditions. Therefore, the Company has recognized a related party loan receivable for similar amounts. The excess of the fair value of the investments over the carrying value of Seadrill’s share of Seadrill Partners’ net assets has been recognized as a gain in the Company’s consolidated statement of operations. The gain recognized on deconsolidation, which all relates to the remeasurement of the Company’s retained interests in Seadrill Partners and its subsidiaries is as follows: (In US$ millions) As at January 2, 2014 Fair value of investment in Seadrill Partners (a) 3,724 Carrying value of the non-controlling interest in Seadrill Partners 115 Subtotal 3,839 Less: Carrying value of Seadrill Partners’ net assets 1,260 Goodwill allocated to Seadrill Partners 240 Gain on deconsolidation of Seadrill Partners 2,339 (a) Fair value of investments and continuing involvement with investees The estimated fair value of the Company’s residual interest in Seadrill Partners comprised of the following: (In US$ millions) As of January 2, 2014 Common units (i) 671 Subordinated units (ii) 427 Seadrill Member Interest and Incentive Distribution Rights ("IDRs") (iii) 244 Direct ownership interests (iv) 2,382 Total 3,724 (i) Common units (marketable securities) As of the deconsolidation date, the Company held 21.5 million common units representing 48.3% of the common units in issue as a class. The Company’s holding in the voting common units of Seadrill Partners are accounted for as marketable securities on the basis that during the subordination period the common units have preferential dividend and liquidation rights, and therefore do not represent ‘in-substance common stock’ as defined by U.S. GAAP. These securities have been recognized on January 2, 2014 at the quoted market price and are re-measured at fair value each reporting period. Any unrealized gains and losses on these securities are recognized directly in equity as a component of other comprehensive income unless an unrealized loss is considered “other-than-temporary,” in which case it is transferred to the statement of operations and realized. Dividend income from the common units is recognized in the consolidated statement of operations. (ii) Subordinated units As of the deconsolidation date the Company held 16.5 million units representing 100% of the subordinated units. The Company’s holding in the subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners, but will not end before September 30, 2017 except upon removal of the Seadrill Member. Upon the expiration of the subordination period, the subordinated units will convert into common units. The fair value of the subordinated units on January 2, 2014 , was determined based on the quoted market price of the listed common units as of the deconsolidation date, but discounted for their non-tradability and subordinated dividend and liquidation rights during the subordination period. Under the equity method the Company recognizes its share of Seadrill Partners’ earnings allocable to the subordinated units, less amortization of the basis difference (see (c) below), through the ‘share in results of associated companies’ line in the consolidated statement of operations. Dividends are recognized as a reduction in investment carrying value. (iii) Seadrill Member Interest and IDRs The Seadrill Member Interest (which is a 0% non-economic interest) holds the rights to 100% of the IDRs and is unable to trade these until the end of the subordination period without the approval of a majority of unaffiliated common unitholders. The Seadrill Member Interest and the IDRs in Seadrill Partners are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured, however they are tested annually for impairment. The fair value of the Company’s interest in the Seadrill Member and the attached IDRs as of January 2, 2014 was determined using a Monte Carlo simulation method. The method takes into account the cash distribution waterfall, historical volatility, dividend yield and share price of the common units as of the deconsolidation date. Distributions to the IDRs are recognized in the consolidated statement of operations. iv) Direct Ownership interests The Company held the following ownership interests in entities controlled by Seadrill Partners as of the date of deconsolidation: • 70% ownership in Seadrill Operating LP Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. • 49% ownership in Seadrill Capricorn Holdings LLC Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. • 39% ownership of Seadrill Deepwater Drillship Ltd. and 39% (indirect) ownership of Seadrill Mobile Units (Nigeria) Ltd. The Company held a 39% direct ownership interest in Seadrill Deepwater Drillship Ltd. and a 39% indirect ownership of Seadrill Mobile Units Ltd., through its 100% subsidiary, Seadrill UK Ltd. Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. All of the Company’s direct ownership interests are accounted for under the equity method as the Company is deemed to have significant influence over these entities through its voting rights and by virtue of Seadrill’s representation on the board of Seadrill Partners. The fair values of the four ownership interests described above have been determined using a discounted cash-flow (“DCF”) methodology, using discounted cash-flow forecasts. (b) Gain on retained investment The entire gain on deconsolidation relates to the re-measurement of the various retained investments described above. (c) Accounting for basis differences The Company’s investments that are accounted for under the equity method (subordinated units and direct ownership interests) were recognized at fair value upon deconsolidation. Basis differences therefore exist between the fair value of the investments and the underlying carrying values of the investees’ net assets at the date of deconsolidation. A valuation exercise has been performed for each separate investment accounted for under the equity method, in order to allocate these basis differences to identifiable assets and liabilities, with any residual amount recognized as goodwill. Differences have been allocated to depreciable or amortizable assets or liabilities and will be amortized over the estimated useful economic life of the underlying assets and liabilities. This amortization is recognized in the consolidated statement of operations in the ‘share in results from associated companies’ line. The total investments in Seadrill Partners recorded under the equity method of $2,809 million included the Company’s share of the basis difference between the total fair value and the total underlying book value of Seadrill Partners’ assets at the deconsolidation date are as follows: (In US$ millions) Book value Fair value Basis Difference Seadrill's share of basis difference (1) Drilling units 3,444 5,245 1,801 1,295 Drilling contracts — 170 170 142 Goodwill — 1,214 1,214 352 Total 3,444 6,629 3,185 1,789 (1) Seadrill’s share of the basis difference relates to both its investment in the subordinated units of Seadrill Partners, and its direct ownership interests in various subsidiaries of Seadrill Partners, all of which investments are accounted for under the equity method. The total basis difference has been assigned based on Seadrill’s proportional ownership interest in each investee. In the case of Seadrill’s investment in the subordinated units of Seadrill Partners, the proportional allocation to the subordinated units was based on the relative fair values of the various equity interests in Seadrill Partners. The basis difference has been accounted for as follows: (i) The basis difference assigned to drilling units is being depreciated over the remaining estimated useful lives of the units. (ii) The basis difference relating to the drilling contracts is being amortized over the remaining term of the contract. (iii) The Company will not amortize the difference assigned to goodwill, but will consider any indicators of impairment. Disposal of the West Auriga On March 21, 2014, the Company sold the entities that own and operate the West Auriga (the “Auriga business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners that is 49% owned by the Company. The entities continue to be related parties subsequent to the sale. The purchase price consisted of an enterprise value of $1.24 billion , less debt assumed of $443 million . The total consideration of $797 million was comprised of cash of $697 million and a discount note receivable of $100 million . The purchase price was subsequently adjusted by a working capital adjustment of $331 million arising from related party balances which remained with the disposed entities for the construction, equipping and mobilization of the West Auriga . The total recognized gain on sale of the Auriga business was $440 million , after taking into account a goodwill allocation of $33 million , which has been presented in our consolidated statement of operations, under “gain on disposals” included within operating income. (In US$ millions) March 21, 2014 Enterprise value 1,240 Less: Debt assumed (443 ) Purchase price 797 Less: Working capital adjustment (331 ) Adjusted purchase price 466 Cash 697 Discount note issued 100 Less: Working capital payable (331 ) Fair value of purchase consideration 466 Less: net carrying value of assets and liabilities 7 Less: allocated goodwill to subsidiaries (33 ) Gain on sale 440 Under the terms of various agreements between Seadrill and Seadrill Partners entered into in connection with the IPO of Seadrill Partners, Seadrill will continue provide management, technical and administrative services to Seadrill Partners and its subsidiaries. See further discussion in Note 31 for these services and agreements. Disposal of the West Vela On November 4, 2014, the Company sold the entities that own and operate the West Vela (the “Vela business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners and 49% owned by the Company. The entities continue to be related parties subsequent to the sale. The purchase price consisted of an enterprise value of $900 million , less debt assumed of $433 million that was outstanding under the existing facility related to West Vela. The Company is also to receive deferred consideration of $44 thousand per day for the remainder of the West Vela’s current contract with BP which runs to November 2020. In addition, the Company will receive a contingent amount of up to $40 thousand per day for the remainder of the BP contract, depending on the actual amount of contract revenue received from BP. The Company’s accounting policy is not to recognize contingent consideration before it is considered realizable. The total consideration recognized on disposal of $535 million was comprised of cash of $467 million , and deferred consideration receivable of $74 million . The purchase price was also adjusted by a working capital adjustment of $6 million . The gain recognized at the time of disposal of the Vela business was $191 million , after taking into account a goodwill allocation of $41 million . The gain has been presented in our consolidated statement of operations, under “gain on disposals” included within operating income. During the year ended December 31, 2015 , the Company also recognized $15 million related to the contingent consideration realized (year ended December 31, 2014 : $1 million ). (In US$ millions) November 4, 2014 Enterprise value 900 Deferred consideration receivable 74 Less: Debt assumed (433 ) Purchase price 541 Less: Working capital adjustment (6 ) Adjusted purchase price 535 Cash 467 Deferred consideration receivable 74 Less: Working capital payable (6 ) Fair value of purchase consideration 535 Less: net carrying value of assets and liabilities (303 ) Less: allocated goodwill to subsidiaries (41 ) Gain on sale 191 Under the terms of various agreements between Seadrill and Seadrill Partners entered into in connection with the IPO of Seadrill Partners, Seadrill will continue provide management, technical and administrative services to Seadrill Partners and its subsidiaries. See further discussion in Note 31 for these services and agreements. Disposals in 2013 Sale of majority of tender rig business On April 30, 2013 we completed the sale of the entities which owned and operated the following tender rigs: T-4 , T-7 , T-11 , T-12 , West Alliance , West Berani , West Jaya , West Menang , West Pelaut , West Setia , and the newbuilds T-17 , T-18 , and West Esperanza . In addition our 49% ownership in Varia Perdana and Tioman Drilling was sold as part of this transaction, which included the following rigs: T-3 , T-6 , T-9 , T-10 , and the Teknik Berkat . This is collectively referred to as the “tender rig businesses.” The agreed upon price was for an enterprise value of $2.9 billion . The enterprise value price is comprised of $1.2 billion in cash, $416 million in new shares in SapuraKencana (at MYR 3.18 per share), $760 million related to all the debt in the tender rigs business, future estimated non recognized capital commitments of $320 million and deferred consideration of $187 million . The deferred consideration consists of non-contingent consideration of $145 million payable in three years and contingent consideration of $42 million depending on certain specified future performance conditions. The fair value of consideration received was $2.6 billion , which is the estimated enterprise value reduced by the future non recognized estimated capital commitments, an EBITDA contribution of approximately $75 million and an adjustment for working capital balances and other miscellaneous items and deferred consideration. The fair values recognized for the deferred consideration were $135 million and $ nil for the non-contingent and contingent consideration respectively. The total recognized gain on this transaction was $1.3 billion , which has been presented in our consolidated statement of operations, under “Gain on sale of tender rig business.” The gain was calculated as follows: (In US$ millions) December 31, 2013 Fair value of consideration received 2,600 Carry value of assets and liabilities 1,324 Other related costs to sale 20 Total gain on sale 1,256 In conjunction with the sale agreement, the Company entered into an arrangement to continue to manage and supervise at the Company’s risk, the construction of three tender rig newbuilds; T-17 , T-18 , and West Esperanza . Under this arrangement the Company will incur and be reimbursed for all associated costs in accordance within an agreed upon budget to complete the construction of these rigs, except for the yard installment payments, which are paid by SapuraKencana. These rigs were delivered in 2013 and 2014. The Company will also provide operational management, administration and support services for the three tender rigs: West Jaya , West Setia , and West Esperanza which are located outside of Asia until the client contract expiry date. The Company will be reimbursed for all costs and expenses incurred and earn an agreed upon margin for these rig management services. Additionally, the Company will provide transition and separation services for certain administrative and IT functions for the tender rig business for a period of one year following the sale in which costs and expenses are reimbursed in addition to earning an agreed upon margin. While we have retained the ownership of the tender rigs T-15 and T-16 , also as part of the sale agreement, SapuraKencana have been responsible for the operational management, administration and support services for the tender rig T-15 and T-16 effective from November 1, 2013 subject to similar terms for the rigs we will continue to manage as noted above. After this transaction, the Company has ownership of 720,329,691 shares in SapuraKencana, a holding of 12.02% , representing a gross value of $1,078 million based on the closing share price of RM4.90 on December 31, 2013. This is currently held as a marketable security on the consolidated balance sheet, see Note 14 to the consolidated financial statements included herein. Additionally as a result of the sale transaction, the Company obtained board representation for SapuraKencana. We have determined that we have significant continuing involvement in the ongoing tender rig business with SapuraKencana and therefore, we have concluded that the results of the tender rig business sold should not be presented as a discontinued operation in our consolidated statement of operations. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions Acquisitions in 2015 There were no business acquisitions in the year ended December 31, 2015 . Acquisitions in 2014 There were no business acquisitions in the year ended December 31, 2014 . Acquisitions in 2013 Acquisition of Songa Eclipse On November 15, 2012 a subsidiary of the Company entered into an agreement with Songa Eclipse Ltd to acquire the ultra-deepwater semi-submersible drilling rig, “Songa Eclipse” for cash consideration of $590 million . The cash consideration also included the acquisition of the drilling contract with Total Offshore Angola that is fixed and ended December 2013 with three one year options to extend the contract. This acquisition is in line with our strategy of building a modern fleet through selective acquisitions and organic growth giving us an increased exposure to the ultra-deepwater market. A prepayment of $59 million was made before the end of 2012 and the physical delivery and final payment took place on January 3, 2013, which was considered to be the acquisition date. This purchase was considered to constitute a business combination for accounting purposes. The drilling unit has been valued at fair value separately from the attached drilling contract. Drilling unit valuations are derived from the assessment of a variety of valuation techniques and inputs. These include assessing comparable market transactions and considering implied earnings multiples, replacement values and current construction costs to arrive an estimated fair value. The fair value of the attached drilling contract has been assessed separately. The contract was valued using an ’excess earnings’ technique where the terms of the contract are assessed relative to current market conditions. The value of the contract related intangible was determined by means of calculating the incremental or decremental cash flows arising over the life of the contract compared with a contract with terms at prevailing market rates. An estimate of prevailing market rates was obtained from independent brokers and cross checked against the Company’s own view on prevailing market rates. The unfavorable contract acquired is amortized over the estimated length of the contract, including extension periods, and is presented in the Statement of Operations within other revenues. Subsequent to the acquisition, the drilling rig has been renamed the West Eclipse . The fair values of net assets acquired were as follows: (In US$ millions) January 3, 2013 Fair value of net assets acquired: Drilling units 698 Unfavorable contract – Other current liabilities (27 ) Unfavorable contract – Other non-current liabilities (81 ) Net assets acquired 590 Fair value of consideration 590 In the Consolidated Statement of Operations $194 million of West Eclipse revenue and a net income of $42 million have been included since the acquisition date up until December 31, 2013. Consolidation of Asia Offshore Drilling Ltd (AOD) On March 25, 2013, we and the other major shareholder in AOD, Mermaid Maritime Plc, signed a shareholder resolution that changed the board of directors composition in favor of the Company. Based on this change as of March 25, 2013 we obtained control of the board of directors and also own 66.18% of the outstanding shares. As a result of obtaining control, we have consolidated the results and financial position of AOD from this date. This event is considered to constitute a business combination achieved in stages in accordance with US GAAP. This acquisition is in line with our strategy of building a modern fleet through selective acquisitions and organic growth giving us an increased exposure to the high specification jack-up market. The drilling unit has been valued at fair value separately from the attached drilling contract. Drilling unit valuations are derived from the assessment of a variety of valuation techniques and inputs. These include assessing comparable market transactions and considering implied earnings multiples, replacement values and current construction costs to arrive at an estimated fair value. For newbuilds we have made an estimation of the remaining contractual payments for newbuilds under construction. The fair value of the attached drilling contract has been assessed separately. The contract was valued using an ’excess earnings’ technique where the terms of the contract are assessed relative to current market conditions. The value of the contract related intangible was determined by means of calculating the incremental or decremental cash flows arising over the life of the contract compared with a contract with terms at prevailing market rates. The contract was deemed to be at prevailing market rates and as such no intangible asset or liability was recognized. The estimated fair value of the non-controlling interest and the previously held equity investment have been determined based on the quoted share price for AOD at the time of the acquisition. The fair values of net assets acquired, the remeasurement of our previously held equity interest, measurement of the non-controlling interest and associated bargain purchase gain are as follows: (In US$ millions) March 25, 2013 Cash and cash equivalents 1 Current assets 1 Drilling units 633 Non-current assets 633 Construction obligation (316 ) Other current liabilities (8 ) Current liabilities (324 ) Non-current liabilities — Net assets acquired 310 Net book value of equity investment 185 Fair value of previously held equity investment 195 Gain on re-measurement of previously held equity investment 10 Fair value of establishment of non-controlling interest 100 Bargain purchase Fair value of establishment of non-controlling interest 100 Fair value of previously held equity investment 195 Total 295 Net assets acquired 310 Gain on bargain purchase 15 The Company recognized a bargain purchase gain on this acquisition as a result of the market capitalization of AOD being lower than the net assets at the time of acquisition. In the consolidated statement of operations $75 million of AOD revenue and a net income of $37 million have been included since the acquisition date up until December 31, 2013. Consolidation of Sevan Drilling ASA On June 26 and 27, 2013 we entered into arrangements to purchase an additional 120,065,464 shares in Sevan Drilling ASA (“Sevan”) at an average price of NOK 3.9311 , for a total of $78 million . This transaction was settled on July 2, 2013. The increased interest in Sevan allows us to expand our fleet of deepwater drilling units. Following these additional share acquisitions we obtained control of 50.1% of the total outstanding shares of Sevan through direct ownership and our existing interest in forward share purchase agreements which result in a controlling financial interest under US GAAP. As a result of obtaining a controlling financial interest, we have consolidated the results and financial position of Sevan from July 2, 2013 which has been determined to be the acquisition date. The acquisition is considered to constitute a business combination achieved in stages. The drilling unit has been valued at fair value separately from the attached drilling contract. Drilling unit valuations are derived from the assessment of a variety of valuation techniques and inputs. These include assessing comparable market transactions and considering implied earnings multiples, replacement values and current construction costs to arrive at an estimated fair value. The fair value of any attached drilling contracts has been assessed separately. The contracts were valued using an ’excess earnings’ technique where the terms of the contract are assessed relative to current market conditions. The values of the contract related intangibles were determined by means of calculating the incremental or decremental cash flows arising over the life of the contracts compared with contracts with terms at prevailing market rates. An estimate of prevailing market rates was obtained from independent brokers and cross checked against the Company’s own view on prevailing market rates. The unfavorable contracts for Sevan Driller and Sevan Brasil are amortized over the remaining contract periods resulting in approximately $20 million per quarter in total. The unfavorable contract for Sevan Louisiana will start amortizing when the contract commences with approximately $1 million per quarter for the fixed contract period. The fair value of the non-controlling interest and the previously held equity investment have been determined based on the quoted share price for Sevan at the time of the acquisition. Additionally the Company recognized a gain of $8 million as a result of measuring at fair value its 29.9% equity interest in Sevan Drilling held before obtaining a controlling financial interest. The gain is reported as a separate line “Gain on re-measurement of previously held equity interest” in the consolidated statement of operations. The fair value of trade and other receivables is $49 million and includes trade receivables with a fair value of $24 million . This amount is also the gross contractual amount for trade receivables. All other assets and liabilities book values have been estimated to equal fair values at the date of acquisition. The Company recognized a bargain purchase gain of $17 million as a result of this acquisition. The gain is reported as a separate line “Gain on bargain purchase” in the consolidated statement of operations. The bargain purchase gain is a result of the market capitalization of Sevan Drilling being lower than the net assets at the time of the acquisition. In the consolidated statement of operations $169 million of Sevan revenue and a net income of $31 million have been included since the acquisition date up until December 31, 2013. The fair values of net assets acquired including the remeasurement of our previously held equity interest, measurement of the non-controlling interest and associated bargain purchase gain are as follows: July 2, Cash and cash equivalents 54 Restricted cash 63 Trade and other receivables 49 Current assets 166 Drilling units 1,246 Newbuildings 1,227 Deferred income tax asset 76 Valuation allowance income tax asset (76 ) Other non-current assets 1 Non-current assets 2,474 Total assets 2,640 Current portion of long-term debt (112 ) Trade and other payables (115 ) Construction obligation (923 ) Unfavorable contracts (79 ) Other current liabilities (26 ) Current liabilities (1,255 ) Long-term interest bearing debt (703 ) Unfavorable contracts (257 ) Other non-current liabilities (16 ) Non-current liabilities (976 ) Total liabilities (2,231 ) Net assets acquired 409 Net book value of equity investment 109 Fair value of previously held equity investment 117 Gain on re-measurement of previously held equity investment 8 Fair value of establishment of non-controlling interest 197 Bargain purchase Fair value of consideration transferred 78 Fair value of establishment of non-controlling interest 197 Fair value of previously held equity investment 117 Total 392 Net assets acquired 409 Gain on bargain purchase 17 As a result of our increased ownership interests in Sevan during the quarter, we were required to make a mandatory offer in accordance with the Oslo Stock Exchange rules for the remaining outstanding shares in Sevan for NOK 3.95 . This mandatory offer period expired on August 23, 2013. As a result of the offer, we obtained an additional 47,394 shares, bringing our total interest in Sevan to 297,941,358 shares, or 50.11% of the total outstanding shares. |
Restricted cash
Restricted cash | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Cash and Investments [Abstract] | |
Restricted cash | Restricted cash Restricted cash includes: (In US$ millions) December 31, 2015 December 31, 2014 CIRR deposits (1) 71 124 Margin calls related to share forward agreements 170 264 Cash pledged as collateral under credit facilities — 50 Tax withholding deposits 7 11 Total restricted cash 248 449 Long-term restricted cash (related to CIRR deposits and margin calls) 198 181 Short-term restricted cash 50 268 (1) CIRR deposits are cash deposited with commercial banks, which match Commercial Interest Reference Rate (“CIRR”) loans from Eksportfinans ASA, the Norwegian export credit agency (See Note 23 to the consolidated financial statements included herein). The deposits are used to make repayments of the CIRR loans. |
Marketable securities
Marketable securities | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities [Abstract] | |
Marketable securities | Marketable securities The historic cost of marketable securities is marked to market, with changes in fair value recognized in “Other comprehensive income” (“OCI”). Marketable securities held by the Company are equity securities considered to be available-for-sale securities. The following tables summarize the carrying values of the marketable securities in the balance sheet: As at December 31, 2015 (In US$ millions) Amortized Cumulative unrealized fair value gains/(losses) Carrying Sapura Kencana 206 22 228 Seadrill Partners - Common Units 247 (151) 96 Total 453 (129) 324 As at December 31, 2014 (In US$ millions) Amortized Cumulative unrealized fair value gains/(losses) Carrying Sapura Kencana 373 (48) 325 Seadrill Partners - Common Units 821 (395) 426 Total 1,194 (443) 751 The following table summarizes the gross realized gains and losses from purchases and sales of marketable securities during the years presented: Year ended December 31, 2015 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Sapura Kencana — — — (97) — — (167) Seadrill Partners - Common Units — — — (330) — — (574) Total — — — (427) — — (741) Year ended December 31, 2014 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Petromena 6 — — — 10 — — Sapura Kencana — — — (456) 297 — 131 Seadrill Partners - Common Units — — — (395) — 821 — Total 6 — — (851) 307 821 131 Year ended December 31, 2013 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Petromena — — — — — — — Sapura Kencana — — 333 — — 416 — Total — — 333 — — 416 — SapuraKencana During 2012 we owned a 23.6% share in SapuraCrest Petroleum Bhd, which was accounted for using the equity method. On May 17, 2012 SapuraCrest Petroleum Bhd and Kencana Petroleum Bhd merged resulting in dilution of our shareholdings from 23.6% to 11.8% and therefore we recognized a gain of $169 million which is included in our consolidated statement of operations. The investment was consequently transferred from investment in associated companies to an investment accounted for at fair value as an available-for-sale security. Additionally during 2012 we further reduced our ownership share to 6.4% through a sale of shares and therefore we recognized a gain of $84 million which was included in the consolidated statement of operations. On April 30, 2013, as part of the consideration for the sale of certain tender rigs to SapuraKencana, we received 400.8 million shares in SapuraKencana, increasing our shareholding from 6.4% to 12.0% . On September 18, 2013, we entered into a financing arrangement whereby a proportion of our holding of SapuraKencana shares have been pledged as security for the contractual period which extends beyond the next 12 months. Accordingly, these pledged shares have been reclassified as long term marketable securities in the balance sheet. See Note 32 to the Consolidated Financial Statements included herein. During the year ended December 31, 2014, the Company sold a portion of its investment in SapuraKencana and received proceeds of $297 million , net of transaction costs. As a result of the sale, a gain of $131 million was recognized, including amounts which had been previously recognized in other comprehensive income, which was recognized on an average cost basis. The gain is included in the consolidated statement of operations within “Gain on realization of marketable securities.” As a result of the transactions, our ownership interest in SapuraKencana’s outstanding common shares is 8.18% as at December 31, 2015 . During the year ended December 31, 2015 the Company recognized an other than temporary impairment charge of $167 million on the investment in SapuraKencana, which is recorded within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. Refer to Note Note 8 for more information. As at December 31, 2015 accumulated unrealized gain recognized in other comprehensive income totaled $22 million had been recognized in accumulated other comprehensive income. Seadrill Partners Common Units Our holding of the voting common units of Seadrill Partners are accounted for as marketable securities on the basis that during the subordination period the common units have preferential dividend and liquidation rights, and therefore do not represent a ‘in-substance common stock’ interest as defined by US GAAP. These securities were recognized on January 2, 2014 at the quoted market price and are re-measured at fair value each reporting period at a total value of $671 million . For more details on the deconsolidation of Seadrill Partners see Note 11. In March 2014 and June 2014, the Company purchased additional common units in Seadrill Partners of 1,633,987 at $30.60 per unit and 3,183,700 at $31.41 per unit respectively, totaling $150 million . Our ownership interest in Seadrill Partners’ common units is 28.6% as of December 31, 2015 (2014: 28.6% ). Seadrill deconsolidated Seadrill Partners in January 2014, recognizing its investments in common units at market value of $30.60 . Seadrill also purchased further units in 2014 at a similar price. In October 2014, the share price began to fall below $30.60 and fell to $9.40 at September 30, 2015, as a result of deteriorating market conditions in the oil and gas industry and supply and demand conditions in the ultra-deepwater offshore drilling sector. During the period between June 30, 2015 and September 30, 2015, Seadrill Partners’ unit price fell by approximately 20% , on both a spot price and trailing three month average basis. At September 30, 2015 management determined that the investment in Seadrill Partners’ common units was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result the Company has impaired the investment, recognizing an impairment charge of $574 million within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. The amount reclassified out of Accumulated other comprehensive income into earnings was determined on the basis of average cost. As at December 31, 2015 an accumulated unrealized loss of $151 million has been recognized in accumulated other comprehensive income. We have evaluated the near term prospects of the Seadrill Partners in relation to the severity and duration of the decline in fair value. Seadrill Partners continues to make significant distributions to its common unitholders. Its drilling units are largely on long term contracts and so it has little exposure to short term movements in market conditions or dayrates. Based on that evaluation and our ability and intent to hold the investment for a reasonable period of time sufficient for a forecasted recovery of fair value, we do not consider the investment to be other-than-temporarily impaired at December 31, 2015 . Petromena In February 2014 we received the final payment related to our investment in the 81.1% of the partially redeemed Petromena NOK 2,000 million bond (“Petromena”) of $10 million . The residual $6 million after the investment was reduced has been recorded as a gain in “other financial items” in the consolidated statement of operations in 2014. Marketable securities in Seadrill Partners, with a fair value of $96 million , are in an unrealized loss position. The total cumulative unrealized holding losses as of December 31, 2015 amounted to $151 million ( December 31, 2014 : total accumulated losses of $443 million ). The loss in 2015 represents the unrealized losses on our investment Seadrill Partners common units. These securities have been in an unrealized loss position for less than 12 months. |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable, Net, Current [Abstract] | |
Accounts receivable | Accounts receivable Accounts receivable are presented net of allowances for doubtful accounts. The allowance for doubtful accounts receivables at December 31, 2015 was $39 million ( 2014 : $16 million ; 2013 : $27 million ). Accounts receivable is also presented net of customer receivables associated with Assets held for sale. The balance of accounts receivable classified as assets held for sale at December 31, 2015 is nil ( 2014 : $78 million ). Please refer to Note 37 – Assets held for sale. The Company did not recognize any bad debt expense in 2015 , 2014 , or 2013 , but has instead reduced contract revenue for the disputed amounts. |
Other current assets
Other current assets | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets [Abstract] | |
Other current assets | Other current assets Other current assets include: (In US$ millions) December 31, 2015 December 31, 2014 Prepaid expenses 42 30 Reimbursable amounts due from customers 48 79 Deferred mobilization cost 55 7 Deferred consideration (1) 166 — Taxes receivable 32 29 Other current assets 52 77 Total other current assets 395 222 (1) The deferred consideration receivable relates to the disposal of the tender rig business to SapuraKencana in 2013, and the balance includes interest accrued. Refer to Note 11 for more information. |
Investment in associated compan
Investment in associated companies | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in associated companies | Impairment loss on marketable securities and investments in associated companies Seadrill Partners - Common Units - Impairment of marketable securities Seadrill deconsolidated Seadrill Partners in January 2014, recognizing its investments in common units at market value of $30.60 . Seadrill also purchased further units in 2014 at a similar price. In October 2014, the share price began to fall below $30.60 and fell to $9.40 at September 30, 2015, as a result of deteriorating market conditions in the oil and gas industry and supply and demand conditions in the ultra-deepwater offshore drilling sector. During the period between June 30, 2015 and September 30, 2015, Seadrill Partners’ unit price fell by approximately 20% , on both a spot price and trailing three month average basis. At September 30, 2015 management determined that the investment in Seadrill Partners’ common units was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result the Company has impaired the investment, recognizing an impairment charge of $574 million within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. The amount reclassified out of Accumulated other comprehensive income into earnings was determined on the basis of average cost. Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment Whilst the investments in Seadrill Partners held under the equity method are not publicly traded, the reduction in value of the publicly traded units is considered an indicator of impairment. At September 30, 2015, the Company determined the length and severity of the reduction in value of the traded units to be representative of an other than temporary impairment. As such the Company has measured and recognized an other than temporary impairment of the subordinated units and direct ownership interests as at September 30, 2015. The fair value of these investments was derived using an income approach which discounts future free cash flows (“DCF model”). The estimated future free cash flows associated with the investments are primarily based on expectations around applicable dayrates, drilling unit utilization, operating costs, capital and long term maintenance expenditures and applicable tax rates. The cash flows are estimated over the remaining useful economic lives of the underlying assets but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of 8.5% , which was relevant to the investee. The DCF model derived an enterprise value of the investments, after which associated debt was subtracted to provide equity values. The implied valuation of Seadrill Partners derived from the DCF model was cross-checked against the market price of Seadrill Partners’ common units. The Company evaluated the difference by reviewing the implied control premium as compared to other market transactions within the industry. The Company deems the implied control premium to be reasonable in the context of the data considered. As at September 30, 2015, the carrying value of the subordinated units was found to exceed the fair value by $125 million , and the carrying value of the direct ownership interests was found to exceed the fair value by $302 million . The company has recognized this impairment of the investments within “Loss on impairment of Investments” in the Statement of Operations. The assumptions used in the DCF model were derived from unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. Seadrill Partners - Member interest - Impairment of Cost method investments The Company also holds the Seadrill member interest, which is a 0% non-economic interest, and which holds the rights to 100% of the Incentive Distribution Rights “IDRs” of Seadrill Partners. The Seadrill Member Interest and the IDRs in Seadrill Partners are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The fair value of the Company’s interest in the Seadrill Member and the attached IDRs at deconsolidation in January 2014, was determined using a Monte Carlo simulation method (“Monte Carlo model”). The method takes into account the cash distribution waterfall, historical volatility, estimated dividend yield and share price of the common units as of the deconsolidation date. The reduction in value of the Seadrill Partners common units was determined to be an indicator of impairment of the Seadrill member interest. The fair value was determined using the Monte Carlo model, updated for applicable assumptions as at September 30, 2015. The carrying value of the investment was found to exceed the fair value by $106 million . The company has recognized this impairment within “Loss on impairment of Investments” in the Statement of Operations. The assumptions used in the Monte Carlo model were derived from both observable and unobservable inputs (classified as level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. SapuraKencana - Impairment of marketable securities During the period since September 30, 2014, to September 30, 2015, SapuraKencana’s share price fell by approximately 45% as a result of deteriorating market conditions in the oil and gas industry. Between June 30, 2015 and September 30, 2015, the value of the investment fell by approximately 20% , as a result of the declining share price and USD:MYR exchange rate. At September 30, 2015, management determined that the investment in SapuraKencana was other than temporarily impaired due to the length and severity of the reduction in value below historic cost. As a result the Company has impaired the investment, recognizing an impairment charge of $167 million within “Loss on impairment of investments.” This impairment charge represents a reclassification of losses previously recognized within Other Comprehensive Income. The amount reclassified out of Accumulated other comprehensive income into earnings was determined on the basis of average cost. The table below summarizes the total impairments of investments made during the year ended December 31, 2015: (In $ millions) Year ended December 31, 2015 Impairments of Investment in associated companies Seadrill Partners - Total direct ownership investments 302 Seadrill Partners - Subordinated units 125 Seadrill Partners - Seadrill member interest and IDRs 106 Total impairment of investments in associated companies 533 Impairments of Marketable securities (refer to Note 14) Seadrill Partners - Common Units 574 SapuraKencana 167 Total impairment of marketable securities investments (reclassification from OCI) 741 Total impairment of investments 1,274 During the three months ended December 31, 2015 Seadrill Partners’ unit price has fallen further from approximately $9.40 at September 30, 2015 to $3.65 at December 31, 2015. Having assessed the length and severity of the implied fall in value and the prospects for Seadrill Partners, the Company has determined that a further other than temporary impairment of the investment has not occurred. Investment in associated companies The Company has the following investments that are or have been recorded using the equity method for the periods presented in these financial statements: Ownership percentage December 31, 2015 December 31, 2014 December 31, 2013 Archer 39.9 % 39.9 % 39.9 % Seabras Sapura Participacoes SA (”Seabras Sapura Participacoes”) 50.0 % 50.0 % 50.0 % Seabras Sapura Holding GmbH (”Seabras Sapura Holdco”) 50.0 % 50.0 % 50.0 % Itaunas Drilling B.V. (”Itaunas Drilling”) 30.0 % 30.0 % 30.0 % Camburi Drilling B.V. (”Camburi Drilling”) 30.0 % 30.0 % 30.0 % Sahy Drilling B.V. (”Sahy Drilling”) 30.0 % 30.0 % 30.0 % Seadrill Partners (”SDLP”) Note 1 Note 1 Note 1 SeaMex Ltd. (”SeaMex”) 50.0 % — % — % (1) As of the deconsolidation date of Seadrill Partners on January 2, 2014, we recognized our ownership interests in Seadrill Partners and direct ownership interests in Seadrill Partners subsidiaries, at fair value at the date of deconsolidation. Refer to Seadrill Partners paragraph below for additional information. At the year-end the book values of the Company’s investment in associated companies are as follows: (In US$ millions) December 31, 2015 December 31, 2014 Archer — — Seabras Sapura Participacoes 29 21 Seabras Sapura Holding 158 117 Itaunas Drilling 3 3 Camburi Drilling 6 6 Sahy Drilling 4 4 Seadrill Partners - Total direct ownership interests 1,767 2,091 Seadrill Partners - Subordinated Units 293 412 Seadrill Partners - Seadrill Member Interest and IDRs (1) 137 244 Seamex Ltd. 193 — Total 2,590 2,898 (1) The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. The quoted market value for the investment in Archer as at December 31, 2015 was $22 million . Quoted market prices for all our other equity investments are not available because, other than Seadrill Partners Common Units, these companies are not publicly traded. Seadrill Partners subordinated units are not tradable and hence have no quoted market price. Archer Archer is a company listed on the Oslo Stock Exchange and provides drilling and well services. Prior to February 2011, Archer was a consolidated subsidiary. In February 2011, we deconsolidated Archer and as a result, Archer is accounted for as an associated company. On February 8, 2013, we were allocated 82,003,000 shares in the private placement of Archer, amounting to a value of $98 million . In addition, as consideration for acting as an underwriter to the placement, the Company received another 2,811,793 shares, amounting to a value of $3 million . The consideration for the shares was settled against the existing $55 million loan to Archer, with the remainder of the consideration funded by a $43 million loan from Archer, which was repaid on February 27, 2013. As of December 31, 2015 we held 39.9% of the outstanding shares of Archer. For transactions and balances with Archer, please refer to Note 31 – Related party transactions. Seabras Sapura Participacoes and Seabras Sapura Holdco Seabras Sapura Participacoes SA is a company incorporated in Brazil, which is currently constructing one pipe-laying vessel. It is 50% owned by TL Offshore Sdn. Bhd., a subsidiary of SapuraKencana, and 50% owned by the Company. Seabras Sapura Holdco Ltd is a company incorporated in Bermuda, which is owns five pipe-laying vessels, of which one is under construction. It is 50% owned by TL Offshore Sdn. Bhd. and 50% owned by the Company. During 2014 Seabras Sapura Holdco Ltd was transferred into a new company Seabras Sapura Holding GmbH (a company incorporated in Austria). For transactions and balances with Seabras Sapura Participacoes and Seabras Sapura Holdco, please refer to Note 31 – Related party transactions. Itaunas Drilling, Camburi Drilling, and Sahy Drilling Itaunas Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Camburi Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Sahy Drilling BV is a company incorporated in Holland, which is currently constructing a drillship. It is 70% owned by Sete International GmbH and 30% owned by the Company. Seadrill Partners As a result of the deconsolidation of Seadrill Partners on January 2, 2014, the Company has derecognized the assets and liabilities of Seadrill Partners and its subsidiaries, and has recognized its ownership interests in Seadrill Partners and its direct ownership interests in Seadrill Partners subsidiaries, Seadrill Capricorn Holdings LLC, Seadrill Operating LP, Seadrill Deepwater Drillship Ltd and its indirect ownership of Seadrill Mobile Units through another wholly owned subsidiary, at fair value at the date of deconsolidation. For further discussion please refer to Note 11 of the consolidated financial statements. Seadrill’s investment in Seadrill Partners accounted for under the equity method is comprised of the following: (a) Subordinated units - the Company’s holding in the subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners, but will not end before September 30, 2017 except upon removal of the Seadrill Member. Upon the expiration of the subordination period, the subordinated units will convert into common units. (b) Direct Ownership interests - Seadrill holds ownership interests in the following entities controlled by Seadrill Partners as at December 31, 2015 : i. 42% in Seadrill Operating LP : Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. ii. 49% Seadrill Capricorn Holdings LLC : Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. iii. 39% in Seadrill Deepwater Drillship Ltd and 39% indirect interest in Seadrill Mobile Units (Nigeria) Ltd. : Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. All of the Company’s direct ownership interests are accounted for under the equity method as the Company is deemed to have significant influence over these entities through its voting rights and by virtue of Seadrill’s representation on the board of Seadrill Partners. Sale of 28% limited partner interest in Seadrill Operating LP On July 21, 2014 , the Company sold a 28% limited partner interest in Seadrill Operating LP, a subsidiary of Seadrill Partners, to Seadrill Partners for cash consideration of $373 million . This resulted in a loss on sale of investment of $88 million , which has been recognized within “share in results from associated companies” in the Company’s consolidated statement of operations. The Company will continue to account for its remaining 42.0% limited partner interest in Seadrill Operating LP under the equity method. Impairment During the year ended December 31, 2015, the Company recognized an other than temporary impairment on the equity method investments in Seadrill Partners for a total of $533 million . Refer to Note 8 for more information. For transactions and balances with Seadrill Partners, please refer to Note 31 – Related party transactions. SeaMex During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech, for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex, which was previously 50% owned by the Company, and SeaMex simultaneously purchased the jack-up drilling rigs from Seadrill Limited. As a result of the transaction the Company no longer controls the entities that own and operate these jack-up drilling units, and accordingly the Company has deconsolidated these entities as of March 10, 2015, and has recognized its remaining 50% investment in the joint venture at fair value. The fair value of the retained 50% equity interest in the SeaMex joint venture was determined by reference to the price paid by Fintech to obtain a 50% equity interest in the disposal group from Seadrill. Seadrill accounts for its 50% investment in the joint venture under the Equity Method. Refer to Note 11 for further information. During the year ended December 31, 2015 both the JV partners have each made an additional $19 million of equity investment in SeaMex while retaining their 50% share in the JV. For transactions and balances with SeaMex, please refer to Note 31 – Related party transactions. Summary financial information of the equity method investees Summarized balance sheet information of the Company’s equity method investees is as follows: As of December 31, 2015 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 363 904 319 751 — Seabras Sapura Participacoes 76 308 79 258 — Seabras Sapura Holding 133 1,183 80 1,199 — Seadrill Partners 892 5,949 847 3,897 1,133 SeaMex 218 1,157 176 799 — Total 1,682 9,501 1,501 6,904 1,133 December 31, 2014 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 633 1,171 441 817 — Seabras Sapura Participacoes 17 194 14 149 — Seabras Sapura Holding 104 690 52 730 — Seadrill Partners 762 5,585 686 3,617 1,116 SeaMex — — — — — Total 1,516 7,640 1,193 5,313 1,116 Summarized statement of operations information for the Company’s equity method investees is as follows: Year ended December 31, 2015 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 1,321 (13 ) (359 ) — Seabras Sapura Participacoes 53 3 1 — Seabras Sapura Holding 124 76 51 — Seadrill Partners 1,742 844 488 231 Seamex 238 79 24 — Total 3,478 989 205 231 Year ended December 31, 2014 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,254 29 (96 ) — Seabras Sapura Participacoes 29 (6 ) (6 ) — Seabras Sapura Holding 39 24 13 — Seadrill Partners 1,343 615 315 176 Seamex — — — — Total 3,665 662 226 176 Year ended December 31, 2013 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,041 (438 ) (519 ) — Seabras Sapura Participacoes — (2 ) (1 ) — Seabras Sapura Holding — — (1 ) — Seadrill Partners — — — — Seamex — — — — Total 2,041 (440 ) (521 ) — At the year end the share of recorded equity in the statutory accounts of the Company’s associated companies were as follows: (In US$ millions) December 31, 2015 December 31, 2014 December 31, 2013 Archer 79 218 253 Seabras Sapura Participacoes 24 24 13 Seabras Sapura Holding 19 6 — Seadrill Partners * N/A N/A — Seamex 200 — — Total 322 261 277 * The Company accounts for its direct interests in operating subsidiaries of Seadrill Partners, and its ownership of Seadrill Partners Subordinated Units, under the equity method. The Company’s share of Seadrill Partner’s recorded equity consists of the equity attributable to non-controlling interests in Seadrill Partners, and additionally a proportionate share of equity attributable to Seadrill Partners’ unitholders. The equity attributable to non-controlling interest in Seadrill Partners as at December 31, 2015 was $1,133 million . Seadrill’s holding in the subordinated units represents 18.0% of the limited partner interests in Seadrill Partners. Total equity attributable to Seadrill Partners unitholders as at December 31, 2015 was $964 million . |
Newbuildings
Newbuildings | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Newbuildings | Newbuildings (In US$ millions) December 31, 2015 December 31, 2014 Opening balance 2,030 3,419 Additions 601 2,433 Capitalized interest and loan related costs 60 70 Re-classified as Drilling Units (725 ) (3,892 ) Reclassification to Assets held for sale* (210 ) — Reclassification to Non-current assets** (199 ) — Disposals** (78 ) — Closing balance 1,479 2,030 * On December 2, 2015, the West Rigel was classified as an Asset held for sale. As at the transfer date the West Rigel held assets at its book value of $210.0 million . Please refer to Note 37 to the consolidated financial statements, included herein, for more details. ** On September 14, 2015, the Company cancelled the construction contract for the West Mira with HSHI Please refer to Note 5 to the consolidated financial statements, included herein, for more details. |
Drilling units
Drilling units | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Drilling units | Drilling units (In US$ millions) December 31, 2015 December 31, 2014 Cost 17,606 19,101 Accumulated depreciation (2,676 ) (2,991 ) Re-classified as assets held for sale — (965 ) Net book value 14,930 15,145 Depreciation and amortization expense was $761 million , $684 million and $703 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. On June 19, 2015, the Company sold the entities that owned and operated the West Polaris , to Seadrill Operating LP, a consolidated subsidiary of Seadrill Partners LLC and 42% owned by the Company. Please refer to Note 11 for more details . During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech, for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The West Oberon, West Intrepid, West Defender, West Courageous and West Titania jack-up drilling rigs (“the jack-up drilling rigs”) were included within the joint venture. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex, which was previously 100% owned by the Company, and SeaMex simultaneously purchased the jack-up drilling rigs from Seadrill Limited. As a result of the transaction the Company no longer controls the entities that own and operate these jack-up drilling units, and accordingly the Company has deconsolidated these entities as of March 10, 2015. Please refer to Note 11 for more details . |
Equipment
Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Equipment Equipment consists of office equipment, furniture and fittings. (In US$ millions) December 31, 2015 December 31, 2014 Cost 80 73 Accumulated depreciation (34 ) (27 ) Net book value 46 46 Depreciation and amortization expense was $18 million , $9 million and $8 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Goodwill and other intangible a
Goodwill and other intangible assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and other intangible assets | Goodwill and other intangible assets and liabilities Goodwill The goodwill balance and changes in the carrying amount is as follows: (In $ millions) Year ended December 31, Year ended December 31, Opening balance Goodwill 836 1,200 Accumulated impairment losses (232 ) — Total opening goodwill 604 1,200 Disposals and deconsolidations (see note 11) (41 ) (315 ) Impairment of goodwill (563 ) (232 ) Re-classified as assets held for sale — (49 ) Closing balance Goodwill 795 836 Accumulated impairment losses (795 ) (232 ) Total closing goodwill — 604 In 2015, the $41 million derecognized through disposals and deconsolidations relates to the $41 million of goodwill relating to the West Polaris sold to Seadrill Partners, corresponding to the Floater segment In 2014 the total derecognized was $315 million , of which $286 million related to the Floater segment and $29 million related to the Tender rig segment. The $49 million reclassified as assets held for sale at December 31, 2014 related to the Jack-up segment. For more details on the deconsolidation of Seadrill Partners and the disposal of subsidiaries see Note 11 , and details on Assets held for sale see Note 37 . For the year ended December 31, 2015 During the period between June 30, 2015 and September 30, 2015 the Company’s share price fell by 43% from $10.34 to $5.90 (based on the closing spot price), and by 34% , from $12.04 to $7.96 (based on the average trailing three month basis), partly as a result of deteriorating market conditions in the oil and gas industry and supply and demand conditions in the ultra-deepwater offshore drilling sector. As a result management determined that the Goodwill assigned to the Company’s Floaters reporting unit was likely to be impaired, and performed a quantitative impairment test as at September 30, 2015. As at September 30, 2015 an impairment test was conducted, and it resulted in the Company recognizing an impairment loss of $563 million relating to the Floaters reporting unit which represented all of the Goodwill attributable to that reporting unit. Following the impairment the Company no longer retains any Goodwill balance. The impairment is a result of deteriorating market conditions and the Company’s outlook on expected conditions through the current down-cycle. The impairment charge was allocated between the parent and non-controlling interests based upon the non-controlling interests’ share in each drilling unit within the Floater segment. The overall charge to the reporting unit was first allocated to each drilling unit based upon the relative fair values of those drilling units. The percentage non-controlling interest in each drilling unit was then applied to the allocated charge in order to determine the portion attributable to non-controlling interests. The total impairment allocated to the non-controlling interest was $95 million . The estimated fair value of the reporting unit was derived using an income approach, using discounted future free cash flows. The Company’s estimated future free cash flows are primarily based on its expectations around day rates, drilling unit utilization, operating costs, capital and long term maintenance expenditures and applicable tax rates. The cash flows are estimated over the remaining useful economic lives of the assets but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of 10% . The assumptions used in the Company’s estimated cash flows were derived from unobservable inputs (level 3) and are based on management’s judgments and assumptions available at the time of performing the impairment test. For the year ended December 31, 2014 The Company performed its annual goodwill impairment test as of December 31, 2014 for both its reporting units; Floaters and Jack-ups. The Company elected to bypass the qualitative assessment given the recent decline in market conditions in the offshore drilling industry. The annual impairment test resulted in the Company recognizing an impairment loss of $232 million relating to its Jack-up reporting unit. The impairment loss relating to the Jack-up reporting unit is primarily due to declining day rates and future market expectations for day rates in the sector. These have been trending lower as a result of the recent decline in the price of oil, which has impacted the spending plans of our customers. No impairment was recognized relating to the Floater reporting unit as the fair value estimate substantially exceeded carrying value. The impairment charge relating to the Jack-up reporting unit was allocated between the parent and non-controlling interests based upon the non-controlling interests share in each drilling unit within the Jack-up segment. The overall charge to the reporting unit was first allocated to each drilling unit based upon the relative fair values of those drilling units. The non-controlling interest in each drilling unit was then applied to the allocated charge in order to determine the portion attributable to non-controlling interests. The total impairment allocated to the non-controlling interest was $39 million . The estimated fair values of the Floater and Jack-up reporting units were derived using an income approach which estimated discounted future cash flows for each reporting unit. Our estimated future free cash flows are primarily based on our expectations around day rates, drilling unit utilization, operating costs, capital and long term maintenance expenditures and applicable tax rates. The cash flows are estimated over the remaining useful economic lives of the assets but no longer than 30 years in total, and discounted using an estimated market participant weighted average cost of capital of 9.5% . The assumptions used in the Company’s estimated cash flows were derived from unobservable inputs and are based on management’s judgments and assumptions available at the time of performing the impairment test. As of December 31, 2015 the aggregated estimated fair value of the Company’s reporting units exceeded its market capitalization. The Company evaluated the difference by reviewing the implied control premium as compared to other market transactions within our industry and considering other benchmark data and analysis prepared by offshore drilling industry analysts. The Company deems the implied control premium to be reasonable in the context of the data considered. For the year ended December 31, 2013 For the year ended December 31, 2013 the Company performed a qualitative assessment of its reporting units which determined that it was more likely than not that the fair value of its Floaters and Jack-up reporting units were not less than their carrying amount. As a result it was not considered necessary to perform the two step goodwill impairment test and no impairment losses were recognized. Intangibles Intangible assets/liabilities relate to favorable/unfavorable contracts which are recorded at fair value at the date of acquisition. The amounts recognized represent the net present value of the existing contracts at the time of acquisition compared to the current market rates at the time of acquisition, discounted at the weighted average cost of capital. The estimated unfavorable contract values have been recognized and amortized over the terms of the contracts, ranging from two to five years. The gross carrying amounts and accumulated amortization were as follows: December 31, 2015 December 31, 2014 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Unfavorable contracts - intangible liabilities Balance at beginning of period 444 (197 ) 247 444 (67 ) 377 Additions — — — — — — Amortization of unfavorable contracts — (116 ) (116 ) — (130 ) (130 ) Balance at end of period 444 (313 ) 131 444 (197 ) 247 We amortize the favorable and unfavorable contracts as revenue or reduction to revenue over the contract term. This is recognized within other revenues in the consolidated statement of operations. The table below shows the amounts relating to favorable and unfavorable contracts that is expected to be amortized over the next five years: Year ended December 31 (In US$ millions) 2016 2017 2018 2019 2020 Total Amortization of unfavorable contracts 65 43 23 — — 131 |
Other non-current assets
Other non-current assets | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Other non-current assets | Other non-current assets Other non-current assets consist of the following: (In US$ millions) December 31, 2015 December 31, 2014 Deferred tax effect of internal transfer of assets 92 102 Deferred mobilization costs 32 47 Deferred consideration — 154 Receivable from shipyard (1) 199 — Other 8 8 Total other non-current assets 331 311 (1) The Receivable from shipyard relates to the West Mira . Please see Note 5 – (Loss)/gain on disposals for more information |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Long-term debt | Long-term debt As of December 31, 2015 and 2014 , the Company had the following debt: (In US$ millions), unless stated otherwise December 31, 2015 December 31, 2014 Credit facilities: $700 facility — 420 $2,000 facility (NADL) 1,200 1,367 $400 facility 240 280 $420 facility — 351 $440 facility 224 258 $450 facility — 416 $1,450 facility 393 433 $360 facility (Asia Offshore Drilling) 273 309 $300 facility 186 210 $1,750 facility (Sevan Drilling) 1,085 1,225 $150 facility — 150 $450 Eminence facility 344 397 $1,500 facility 1,344 1,469 $1,350 facility 1,181 1,317 $950 facility 688 — $450 facility (2015) 215 — Total credit facilities 7,373 8,602 Ship Finance Loans $375 facility (SFL Hercules) 256 284 $390 facility (SFL Deepwater) 221 303 $475 facility (SFL Linus) 354 451 Total Ship Finance Loans 831 1,038 Unsecured bonds NOK1,800 million bond 203 242 $350 bond — 342 $1,000 bond 948 1,000 $500 bond 479 479 NOK1,500 million bond (NADL) 161 190 $ 600 bond (NADL) 413 413 SEK 1,500 bond 177 190 Total unsecured bonds 2,381 2,856 Other credit facilities with corresponding restricted cash deposits 76 124 Total debt principal 10,661 12,620 Less: current portion (1,526 ) (2,309 ) Long-term portion 9,135 10,311 As discussed in Note 2, the Company has adopted ASU 2015-03, Interest - Imputation of Interest, (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs as at June 30, 2015. As a result, the consolidated balance sheet as at December 31, 2014 has been represented to reflect this change in accounting principle. Details of the debt issuance costs netted against the current and long-term debt for each of the periods presented are shown below. Outstanding balance as at December 31, 2015 (In $ millions) Principal outstanding Less: Debt Issuance Costs Total Debt Current portion of long-term debt 1,526 (37 ) 1,489 Long-term debt 9,135 (81 ) 9,054 Total 10,661 (118 ) 10,543 Outstanding debt as at December 31, 2014 (In $ millions) Principal outstanding Less: Debt Issuance Costs Total Debt Current portion of long-term debt 2,309 (42 ) 2,267 Long-term debt 10,311 (103 ) 10,208 Total 12,620 (145 ) 12,475 The outstanding debt as of December 31, 2015 is repayable as follows: (In US$ millions) December 31, 2015 2016 1,526 2017 2,872 2018 2,432 2019 2,817 2020 1,014 2021 and thereafter — Total debt principal 10,661 Credit facilities $700 million senior secured term loan In October 2010, the Company entered into a $700 million senior secured loan facility with a syndicate of banks to partly fund the acquisition of seven jack-up drilling rigs, which were pledged as security. The net book value at December 31, 2015 of the units pledged as security is $1,074 million . The facility bore interest at LIBOR plus 2.50% per annum and was repayable over a term of five years . At maturity a balloon payment of $350 million was due in October 2015 . During the year ended December 31, 2015 , the facility was repaid in full. The outstanding balance as at December 31, 2015 was nil as the facility is now closed ( December 31, 2014 : $420 million ) . $2,000 million senior secured credit facility In April 2011, NADL our majority owned subsidiary, entered into a $2,000 million senior secured credit facility with a syndicate of banks to partly fund the acquisition of six drilling units from Seadrill, which have been pledged as security. The net book value at December 31, 2015 of the units pledged as security is $2,179 million . The facility has a six year term and bears interest at LIBOR plus 2.00% per annum. As of December 31, 2015 , the outstanding balance was $1,200 million , as compared to $1,367 million in 2014 . At maturity a balloon payment of $950 million is due. As of December 31, 2015 , $50 million was undrawn under this facility, which bears a commitment fee of 40% of the margin. NADL is currently restricted from using this undrawn capacity, however, due to restrictive covenants contained within the Company’s loan agreements. The facility contains a loan-to-value clause, which could require NADL, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 135% of the outstanding loan. $400 million senior secured credit facility In December 2011, the Company entered into a $400 million senior secured credit facility with a syndicate of banks. The jack-up rigs West Cressida , West Callisto , West Leda and West Triton have been pledged as security. The net book value at December 31, 2015 of the units pledged as security is $669 million . The facility has a five year term and bears interest of LIBOR plus 2.50% per annum. As of December 31, 2015 , the outstanding balance was $240 million , as compared to $280 million in 2014 . At maturity a balloon payment of $200 million is due. During the year we repaid $200 million of the revolving credit tranche, and then drew down $200 million of the revolving credit tranche by year end. We do not have any undrawn capacity on this facility as at December 31, 2015 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 150% of the outstanding loan. $420 million senior secured credit facility In December 2012, SFL West Polaris Limited, formerly a consolidated VIE, entered into a $420 million term loan facility with a syndicate of banks to refinance the existing $700 million secured term loan facility. The new facility had a term of five years and bore interest of LIBOR plus a margin of 3.00% . On February 28, 2014 the margin on the facility was reduced from 3.00% to 2.25% . On December 31, 2014 , the Company purchased SFL West Polaris Limited from Ship Finance. Please refer to note 35 for more information. In June 2015, the Company completed the sale of the entities that own and operate the West Polaris to Seadrill Partners. One of the entities sold was the sole borrower under this facility. See Note 11 to the consolidated financial statements, included herein, for further details. As at December 31, 2015 , the outstanding balance under the facility relating to Seadrill was nil ( December 31, 2014 : $351 million ). Seadrill Limited continues to act as a guarantor under the facility. The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 125% of the outstanding loan. $440 million secured credit facility In December 2012, the Company entered into a $440 million secured credit facility with a syndicate of banks to fund the delivery of two tender rigs and two jack-up drilling rigs. As of December 31, 2015 we have drawn $320 million on the facility and the T-15, T-16 , and West Telesto have been pledged as security, while the tranche for the West Oberon was cancelled due to other funding opportunities for this rig. The tender rigs T-15 and T-16 were sold to Seadrill Partners during 2013, and subsequently the Company entered into a back to back rig financing agreements with Seadrill Partners for the corresponding portions of the secured credit facility for $101 million and $98 million respectively. Under the terms of the secured credit facility agreements for the T-15 and T-16 , certain subsidiaries of the Company and Seadrill Partners are jointly and severally liable for their own debt and obligations under the relevant facility and the debt and obligations of other borrowers who are also party to such agreements. These obligations are continuing and extend to amounts payable by any borrower under the relevant agreement. See Note 31 for further details on related party transactions. The total net book values as at December 31, 2015 of all the units pledged as security was $453.5 million . The total net book value of the T-15 and T-16, which the Company no longer owns, was $252 million as at December 31, 2015 . The facility bears interest at LIBOR plus 3.25% per annum and is repayable over a term of 5 years . The outstanding balance as at December 31, 2015 was $224 million , as compared with $258 million in 2014 . At maturity a balloon payment of $173 million is due. We do not have any undrawn capacity on this facility as of December 31, 2015 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 135% of the outstanding loan. $450 million senior secured credit facility In December 2012, we entered into a $450 million senior secured credit facility with a syndicate of banks, and was drawn down on January 3, 2013. The West Eclipse semi-submersible rig was pledged as security, which has a net book value of $635 million as at December 31, 2015 . The facility was scheduled to mature within one year and bore interest of LIBOR plus 3.00% . On December 20, 2013 , we amended this facility for an additional one year, with an amended interest rate of LIBOR plus 2.00% . On December 19, 2014 , we amended this facility with a new maturity date of February 3, 2015 on the same terms. In January 2015, this facility has been repaid in full and replaced with the new $950 million facility (which is detailed below). Therefore as of December 31, 2015 , the outstanding balance was nil as compared to $416 million as at December 31, 2014 . We do not have any undrawn capacity on this facility as of December 31, 2015 . $1,450 million senior secured credit facility In March 2013, we entered into a $1,450 million senior secured credit facility with a syndicate of banks and export credit agencies. The West Auriga , West Vela , and West Tellus were pledged as security. The facility has a final maturity in 2025, with the exception of a commercial tranche of $203 million due for renewal in 2018, and bears an interest of LIBOR plus a margin in the range of 1.20% to 3.00% . In March 2014, we completed the sale of the entities that own and operate the West Auriga to Seadrill Partners of which one of the entities sold, was a borrower and a guarantor under this facility, and accordingly we have derecognized the portion of this facility relating to the West Auriga . Seadrill Partners subsequently repaid the tranches relating to the West Auriga in full. In November 2014, we completed the sale of the entities that own and operate the West Vela to Seadrill Partners, of which one of the entities sold was a borrower and a guarantor under this facility, and accordingly we have derecognized the portion of this facility relating to the West Vela . See note 11 for further details of these disposals to Seadrill Partners. Under the terms of the $1,450 million secured credit facility agreement, certain subsidiaries of Seadrill and Seadrill Partners are jointly and severally liable for their own debt and obligations under the facility and the debt and obligations of other borrowers who are also party to such agreement. These obligations are continuing and extend to amounts payable by any borrower under the facility. The total amount owed by all parties under this facility as of December 31, 2015 is $776 million (compared to $856 million as at December 31, 2014 ) of which $393 million ( $433 million as at December 31, 2014 ) relates to Seadrill and the West Tellus . Seadrill has not recognized any amounts that are related to amounts owed under the facility by other borrowers. Seadrill has provided an indemnity to Seadrill Partners for any payments or obligations related to this facility that are not related to the West Auriga or West Vela . If a balloon payment of $86 million relating to the commercial tranches of the West Vela and West Tellus do not get refinanced to the satisfaction of the remaining lenders after five years, the remaining tranches also become due after five years. As at December 31, 2015 the net book value of the West Tellus was $622 million . We do not have any undrawn capacity on this facility as of December 31, 2015 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 125% of the outstanding loan. $360 million senior secured credit facility In April 2013, our majority owned subsidiary AOD entered into a $360 million senior secured credit facility with a syndicate of banks. The facility is available in three equal tranches of $120 million , with each tranche relating to AOD 1, AOD 2 and AOD 3 , which have been pledged as security. The loan has a five year maturity from the initial borrowing date, and bears interest of LIBOR plus 2.75% . As at December 31, 2015 the rigs have a net book value of $225 million , $216 million and $223 million respectively. We do not have any undrawn capacity on this facility as of December 31, 2015 . As at December 31, 2015 the outstanding balance was $273 million as compared to $309 million as at December 31, 2014 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 120% of the outstanding loan. $300 million senior secured credit facility In July 2013, we entered into a $300 million senior secured credit facility with a syndicate of banks and export credit agencies. The West Tucana and West Castor were pledged as security. The facility bears interest of LIBOR plus a margin of 3.00% , and matures in 2023, however the facility may be come payable in full in 2018 if the commercial guarantee which expires after 5 years is not renewed. As at December 31, 2015 the net book values of the West Tucana and West Castor were $196 million and $204 million respectively. We do not have any undrawn capacity on this facility as of December 31, 2015 . As at December 31, 2015 the outstanding balance was $186 million as compared to $210 million as at December 31, 2014 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 135% of the outstanding loan. $150 million senior secured credit facility In October 2013, we entered into a $150 million secured credit facility with a bank. The West Oberon and the West Prospero were pledged as security, bears interest of LIBOR plus a margin of 0.75% , with a maturity date in June 2014. The loan was subsequently amended with a new maturity date of March 31, 2015 and revised margin of 1.0% . On March 26, 2015, this facility was repaid in full as part of the SeaMex transaction. Please refer to Note 11 to the consolidated financial statements, included herein. Therefore as at December 31, 2015 and outstanding balance was nil , compared to $150 million as at December 31, 2014 . $450 million senior secured credit facility (2013) In December 2013, we entered into a $450 million senior secured facility with a syndicate of banks. The West Eminence has been pledged as security, and bears interest of LIBOR plus a margin of 1.75% and matures in June 2016. As at December 31, 2015 the net book value of the West Eminence was $563 million . As at December 31, 2015 , the outstanding balance was $344 million as compared to $397 million as at December 31, 2014 . We do not have any undrawn capacity on this facility as of December 31, 2015 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 130% of the outstanding loan. $1,350 million senior secured credit facility In August 2014, the Company entered into a $1,350 million senior secured credit facility with a syndicate of banks. The facility consists of a term loan facility for $675 million and a revolving credit facility in an amount up to $675 million . The West Pegasus , West Gemini and West Orion were pledged as security. The total net book value at December 31, 2015 of the units pledged as security is $1,767 million . The facility bears interest at LIBOR plus a margin of 2% per annum, and is repayable in quarterly installments over a term of five years. The revolver is fully repayable at the final maturity date. The revolver facility was fully drawn and we do not have any undrawn capacity as of December 31, 2015 . As at December 31, 2015 , the outstanding balance was $1,181 million as compared to $1,317 million as at December 31, 2014 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 120% of the outstanding loan. $1,500 million senior secured credit facility (2014) In July 2014, the Company entered into a $1,500 million senior secured credit facility with a syndicate of banks to finance the three newbuilds, the West Saturn, West Neptune and West Jupiter which are pledged as security. The net book value at December 31, 2015 of the units pledged as security is $1,899 million . The facility bears interest at LIBOR plus a margin of between 1.4% and 2.5% per annum, and is repayable over a term of 12 years. The loan includes a Commercial Interest Reference Rate (CIRR) tranche with Eksportkreditt Norge ASA, the Norwegian export credit agency, that bears fixed interest at 2.38% per annum. If the commercial tranche of $300 million , which has a balloon payment of $175 million , does not get refinanced to the satisfaction of the remaining lenders after five years, the remaining tranches also become due after five years. We do not have any undrawn capacity on this facility as of December 31, 2015 . As at December 31, 2015 , the outstanding balance was $1,344 million as compared to $1,469 million as at December 31, 2014 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below an average of 122% of the outstanding loan. $1,750 million secured credit facility In September 2013 subsidiaries of Sevan Drilling entered into a $1,750 million bank facility with a syndicate of banks and export credit agencies. The facility consists of two tranches in the amounts of $1,400 million and $350 million . On October 23, 2013 the first tranche of $1,400 million was drawn and was used to repay the existing credit facilities related to Sevan Driller and Sevan Brasil and to settle the remaining installment and other amounts for the delivery of Sevan Louisiana . The Sevan Driller , Sevan Brasil and Sevan Louisiana have been pledged as security. In December 2014 the $350 million tranche relating to the Sevan Developer was cancelled at our request as a consequence of the deferral agreement made with Cosco, and the borrowing entity relating to the Sevan Developer was released from its obligations under this facility. The facility has a maturity in September 2018 and bears interest of LIBOR plus a margin of 2.90% . As at December 31, 2015 the net book values of the Sevan Driller , Sevan Brasil and Sevan Louisiana were $575 million , $584 million and $704 million respectively. We do not have any undrawn capacity on this facility as of December 31, 2015 . As at December 31, 2015 , the outstanding balance was $1,085 million as compared to $1,225 million as at December 31, 2014 . The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 110% of the outstanding loan. $950 million senior secured credit facility In January 2015 the Company entered into a $950 million senior secured credit facility with a syndicate of banks and export credit agencies to fund the delivery of the West Carina and to refinance the Company’s indebtedness related to the West Eclipse . The facility comprises of a $60 million term loan, a $250 million revolving facility and a $190 million ECA facility for the West Carina; and a $225 million term loan and a $225 million revolving facility for the West Eclipse . The term loans and revolving credit facilities bear interest at LIBOR plus 2.00% and the ECA facility has a CIRR fixed interest rate of 2.12% . The Company has entered in to a floating swap agreement to counter this fixed payment, meaning the Company pays floating on this tranche. The West Carina term loan and revolving credit facility have a 5 year maturity and a 12 year profile, with a balloon payment of $187 million in year 5 . The West Carina ECA facility has a 12 year maturity and a 12 year profile. The West Eclipse term loan has a 5 year maturity and a 5 year profile. The West Eclipse revolving credit facility has a maturity of 5 years and is non-amortizing, with a balloon payment of $225 million in year 5 . If the commercial facilities are not refinanced satisfactorily after 5 years then the ECA facility also becomes due. During the year ended December 31, 2015 we repaid $207 million of the revolving credit facility. The total outstanding balance as at December 31, 2015 was $688 million ( December 31, 2014 : nil ). As of December 31, 2015 , $197 million was undrawn under this facility, which bears a commitment fee of 40% of the margin. The Company is currently restricted from using this undrawn capacity, however, due to restrictive covenants contained within the Company’s loan agreements. The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 120% of the outstanding loan. $450 million senior secured credit facility (2015) In August 2015 the Company entered into a $450 million senior secured credit facility with a syndicate of banks and repaid the remaining balance of $21 million on the $700 million senior secured credit facility. The West Freedom, West Mischief, West Vigilant, West Resolute, West Prospero, and the West Ariel were pledged as security. The net book value of the rigs pledged as security as at December 31, 2015 is $888 million . The loan bears interest at a rate of LIBOR plus 2.5% . The loan has a 5 year maturity and an 8.5 years profile with a balloon payment at the end of year 5 . The total outstanding balance as at December 31, 2015 was $215 million ( December 31, 2014 : nil ). As of December 31, 2015 , $215 million was undrawn under this facility, which bears a commitment fee of 40% of the margin. The Company is currently restricted from using this undrawn capacity, however, due to restrictive covenants within the Company’s loan agreements. The facility contains a loan-to-value clause, which could require the Company, to post additional collateral or prepay a portion of the outstanding borrowings should the market value of the drilling units fall below 150% of the outstanding loan. Ship Finance International Limited (“Ship Finance”) Loans The following loans relate to the Ship Finance International entities that we consolidate in our financial statements as Variable Interest Entities (VIEs). Refer to Note 35 for more information. SFL Hercules Ltd In May 2013, SFL Hercules Ltd entered into a $375 million facility, with a syndicate of banks and financial institutions. The facility is secured by the West Hercules , which has a net book value of $571 million as of December 31, 2015 . The new facility has a term of six years and bears interest of LIBOR plus a margin of 2.75% . As at December 31, 2015 , the outstanding balance under the facility was $256 million , compared to $284 million as at December 31, 2014 . SFL Hercules Ltd has no undrawn capacity on this facility at December 31, 2015 . SFL Deepwater Ltd In October 2013, SFL Deepwater Ltd entered into a $390 million facility with a syndicate of banks and financial institutions. The facility is secured by the West Taurus , which has a net book value of $434 million as at December 31, 2015 . The new facility has a term of five years and bears interest of LIBOR plus a margin of 2.50% . As at December 31, 2015 , the outstanding balance under the facility was $221 million compared to $303 million as at December 31, 2014 . SFL Deepwater Ltd has no undrawn capacity on this facility as at December 31, 2015 . SFL Linus Ltd On October 17, 2013, SFL Linus Ltd entered into a $475 million secured term loan and revolving credit facility with a syndicate of banks to fund the acquisition of West Linus , which has been pledged as security and has a net book value of $559 million as at December 31, 2015 . The facility was fully drawn on February 18, 2014, on the date of delivery of West Linus . The facility bears interest of LIBOR plus 2.75% and matures in June 2019. As at December 31, 2015 , the outstanding balance under the facility was $354 million , compared to $451 million as at December 31, 2014 . SFL Linus has no undrawn capacity on this facility at December 31, 2015 . Unsecured Bonds $350 million fixed interest rate bond In October 2010, the Company raised $350 million through the issue of a five year bond which matures in October 2015 . The bond had a fixed interest rate of 6.50% per annum, which was payable semi-annually in arrears. In May 2012, we repurchased $8 million of the bonds. As at December 31, 2014 , the outstanding balance was $342 million . In October 2015, the $350 million bond was settled on maturity. $650 million 3.375% Convertible Bonds and conversion In October 2010, the Company issued at par $650 million of convertible bonds. Interest on the bonds was fixed at 3.375% , payable semi-annually in arrears. The bonds were convertible into the Company’s common shares at any time up to 10 banking days prior to October 27, 2017. The conversion price at the time of issuance was $38.92 per share, representing a 30% premium to the share price at the time. For accounting purposes $121 million was, at the time of issuance of the bonds, allocated to the bond equity component and $529 million to the bond liability component, due to the cash settlement option stipulated in the bond agreement. The bonds were due to mature in October 2017 . The bond equity component was amortized over the maturity term, and recognized within interest expense in the consolidated statement of operations. In July 2014, the Company launched a voluntary incentive payment offer to convert any and all of the $650 million principal amount of 3.375% convertible bonds. Holders of $649 million of principal amount of convertible bonds accepted the voluntary incentive offer and the Company then elected to exercise the “ 90% clean-up call” provision on the remaining $1 million outstanding. Holders converted at the contractual conversion price of $27.69 per share and received an incentive payment of $12,102.95 per $100,000 principal amount of bond held. As a result of the transaction, the number of common shares outstanding in the Company increased by 23.8 million shares, with an increase to equity of $893 million . As a result of the conversion the Company recorded a charge of $79 million related to the incentive paid for the induced conversion and a loss on debt extinguishment of $16 million . These amounts were recognized within net loss on debt extinguishment in the Company’s consolidated statement of operations. $278 million of the total consideration transferred on conversion was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of stockholders’ equity. The total cash outflow due to the incentive payments and accrued interest was $69 million . $1,000 million fixed interest bond In September 2012, the Company raised $1,000 million through the issue of a 5 year bond which matures in September 2017 . Interest on the bonds bears a fixed interest rate of 5.625% per annum, payable semi-annually in arrears. The interest rate increased to 6.125% in March 2014 as the Company remained unrated. During the year ended December 31, 2015, the Company repurchased $52 million (par value) of the $1,000 million senior unsecured bond, recognizing a gain on debt extinguishment of $8 million in the Company’s consolidated statement of operations. NOK 1,800 million floating interest rate bonds In March 2013 the Company issued a NOK 1,800 million senior unsecured bond with maturity in March 2018 . The bond bears interest of NIBOR plus a margin of 3.75% per annum, payable quarterly in arrears. The bond was subsequently swapped to US$ with a fixed rate of 4.94% per annum until maturity using a cross currency interest rate swap. $500 million senior unsecured bond On September 20, 2013, the Company issued a $500 million senior unsecured bond issue. The bond matures in September 2020 and bears interest of 6.125% per annum, payable semi-annually in arrears. The interest rate increased to 6.625% in March 2014 as the Company remained unrated. In December 2014 the Company repurchased $21 million (of par value) of the $500 million senior unsecured bond, recognizing a gain on debt extinguishment of $3 million . NOK1,500 million floating interest rate bonds In October 2013, NADL, our majority owned subsidiary, issued a NOK1,500 million senior unsecured bond issue with maturity in October 2018, and an interest rate of NIBOR plus a margin of 4.40% per annum. The bond was subsequently swapped to US$ with a fixed rate of 6.18% per annum until maturity using a cross currency interest rate swap. In December 2014, the Company purchased NOK 82 million (of par value) of the NOK1,500 million senior unsecured bond issued by NADL, recognizing a gain on debt extinguishment of $4 million . $600 million senior unsecured bond In January 2014, NADL, our majority owned subsidiary, issued a $600 million senior unsecured bond issue. The bond matures in January 2019 and bears interest of 6.25% per annum. In conjunction with the issue and subsequently in the open market we bought 27.5% of the bond, which amounted to $165 million . During June 2014, we sold a portion of the bond owned by the Company for $25 million . In December 2014 the Company purchased $47 million (of par value) of the $600 million senior unsecured bond issued by NADL, recognizing a gain on debt extinguishment of $16 million . As of December 31, 2015 we held 31.1% of the bond, which amounted to $187 million . SEK1,500 million senior unsecured bond In March 2014, we issued a SEK1,500 million senior unsecured bond. The bond matures in March 2019 and bears interest of STIBOR plus 3.25% . The bond was subsequently swapped to US$ with a fixed rate of 5.2% per annum until maturity using a cross currency interest rate swap. Unsecured bond repurchases During the year ended December 31, 2015 , the Company recognized a total gains on debt extinguishment due to the repurchases of bonds of $8 million ( 2014 : total gains on bond repurchases of $23 million ), which are presented within “Net loss on debt extinguishment” in the Company’s consolidated statement of operations. Commercial Interest Reference Rate (CIRR) Credit Facilities In April 2008, the Company entered into a CIRR term loan for NOK 850 million with Eksportfinans ASA, the Norwegian export credit agency. The loan bears fixed interest at 4.56% per annum and is repayable over a term of eight years . The outstanding balance at December 31, 2015 was $11 million (NOK 100 million ) compared to $27 million at December 31, 2014 . In June 2008, the Company entered into a CIRR term loan for NOK 904 million with Eksportfinans ASA. The loan bears fixed interest at 4.15% per annum and is repayable over a term of eight years . The outstanding balance at December 31, 2015 was $12 million (NOK 106 million ) compared to $29 million at December 31, 2014 . In July 2008, the Company entered into a CIRR term loan for NOK 1,011 million with Eksportfinans ASA. The loan bears fixed interest at 4.15% per annum and is repayable over a term of 12 years . The outstanding balance at December 31, 2015 was $53 million (NOK 421 million ) compared to $68 million at December 31, 2014 . In connection with the above three CIRR fixed interest term loans totaling $76 million (NOK 627 million ), fixed interest cash deposits equal to the total outstanding loan balances have been established with co |
Other current liabilities
Other current liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Other current liabilities | Other current liabilities Other current liabilities are comprised of the following: (In US$ millions) December 31, 2015 December 31, 2014 Taxes payable 168 160 Employee withheld taxes, social security and vacation payment 87 122 Intangible liabilities - unfavorable contracts (1) 65 116 Accrued interest expense 70 77 Liabilities relating to investment in shares (2) — 167 Deferred mobilization revenue 208 178 Derivative financial instruments (3) 424 372 Accrued expenses 173 292 Construction obligation (4) 460 428 Other current liabilities 29 22 Total other current liabilities 1,684 1,934 (1) Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Notes 12 and 21 to the consolidated financial statements included herein. (2) Liabilities relating to investment in shares primarily represents amounts owed in respect of the Company’s share forward purchase contracts for Sevan Drilling. See Note 12 to the consolidated financial statements included herein. (3) Derivative financial instruments consist of unrealized losses on various types of derivatives. (4) The construction obligation has been recognized upon the acquisition of Sevan Drilling. See Note 12 to the consolidated financial statements included herein. |
Other non-current liabilities
Other non-current liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other non-current liabilities | Other non-current liabilities Other non-current liabilities are comprised of the following: (In US$ millions) December 31, 2015 December 31, 2014 Accrued pension liabilities 37 84 Deferred mobilization revenues 128 224 Intangible liabilities - unfavorable contracts (1) 66 131 Financing secured on SapuraKencana shares (Note 32) 160 250 Other non-current liabilities 10 10 Total other non-current liabilities 401 699 (1) Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Note 12 and 21 to the consolidated financial statements included herein. |
Common Shares
Common Shares | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Common shares | Common shares 2015 2014 2013 All shares are common shares of $2.00 par value each Shares $millions Shares $millions Shares $millions Authorized share capital 800,000,000 1,600 800,000,000 1,600 800,000,000 1,600 Issued and fully paid share capital 493,078,680 986 493,078,678 986 469,250,933 939 Treasury shares held by Company (318,740 ) (1 ) (318,740 ) (1 ) (272,441 ) (1 ) Outstanding shares in issue 492,759,940 985 492,759,938 985 468,978,492 938 As of December 31, 2015 , the Company’s shares were listed on the Oslo Stock Exchange and the New York Stock Exchange. The Company was incorporated on May 10, 2005 and 6,000 ordinary shares of par value $2.00 each were issued. Since incorporation the number of issued shares has increased from 6,000 to 493,078,680 of par value $2.00 each as of December 31, 2015 . There were no new shares issued in 2015 or 2014 other than the conversion of convertible bonds in 2014, which resulted in 23.8 million shares issued, as discussed in Note 23. A share repurchase program was approved by the Board in 2007 giving the Company the authorization to buy back shares. Shares bought back under the authorization may be cancelled or held as treasury shares. Treasury shares may be held to meet the Company’s obligations relating to the share option plans. As at December 31, 2015 the Company held 318,740 treasury shares and net shares outstanding at December 31, 2015 was 492,759,940 . In November 2014 the Board authorized a share buyback program under which the Company may repurchase up to approximately 10% of shares outstanding. The Company may repurchase shares from time to time in open market transactions or private transactions in accordance with applicable securities laws. The timing and amount of any repurchases will be determined by Management of the Company based on its evaluation of market conditions, capital allocation opportunities, and other factors. The program does not require the Company to repurchase any specific number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice. In May 2015, however, as part of the amendments to the covenants contained in the Company’s senior secured credit facilities, the Company is restricted from buying back any shares during the amendment period until January 1 2017. In addition, in April 2016, as part of the amendments to the covenants contained in the Company’s senior secured credit facilities, the Company is restricted from making dividend distributions during the amendment period until June 30, 2017. Equity offerings and drilling unit sale transactions with Seadrill Partners The following table summarizes the issuances of common units for Seadrill Partners between their IPO in October 2012 until the deconsolidation of Seadrill Partners on January 2, 2014: Date Number of Common Units Issued to the Public Number of Common Units Issued to Seadrill Offering Price ($) Gross proceeds from public Net proceeds from public ($'millions) Seadrill's ownership after the offering October 24, 2012 (IPO) 10,062,500 14,752,525 22.00 221 203 75.67 % October 18, 2013 — 3,310,622 32.29 — — 77.47 % December 13, 2013 12,880,000 3,394,916 29.50 380 365 62.35 % The following table summarizes the sale of the Company’s drilling units to Seadrill Partners between its IPO until the deconsolidation of Seadrill Partners on January 2, 2014: (In US$millions) T-15 T-16 West Sirius West Leo Total Adjusted sales price * 74 68 922 729 1,793 Less net assets transferred 5 — (375 ) (116 ) (486 ) Excess of sales price over net assets transferred 79 68 547 613 1,307 Deemed contribution to Seadrill shareholders from non-controlling interest 19 16 105 69 209 * The Adjusted sales price above includes debt assumed and working capital adjustments. These transactions were deemed to be reorganizations of entities under common control and accordingly no gains or losses were recognized by the Company. On May 17, 2013, the Company sold its 100% interest in the entities that own and operate the tender rig T-15 to Seadrill Partners a total purchase price of $210 million , less approximately $101 million of debt outstanding, less $35 million of working capital adjustments. The acquisition was funded by issuance of vendor financing loan to Seadrill Partners of $110 million . On October 18, 2013, the Company sold its 100% interest in the entity that owns the tender rig T-16 , and the beneficial interest in the T-16 drilling contract (collectively, the “T-16 Business”), to Seadrill Partners for a total purchase price of $200 million , less approximately $93 million of debt outstanding, less $39 million of working capital adjustments. As part of the consideration, Seadrill Partners issued 3,310,622 common units to Seadrill as consideration for the purchase in a private placement transaction at a price of $32.29 per unit. This resulted in an increase in net assets attributable to the non-controlling interest of $19 million . On December 13, 2013, the Company sold to Seadrill Partners: (i) 51% of its interest in each of the entities that own, operate and manage the semi-submersible drilling rig, West Sirius (the “ Sirius Business”); and (ii) 30% of its interest interests in each of the entities that own and operate the semi-submersible drilling rig, West Leo (the “Leo Business”). The implied purchase prices of the Sirius Business was $1,035 million , less debt assumed of $220 million , plus working capital adjustments of $107 million . The implied purchase prices of the Leo Business was $1,250 million , less debt assumed of $486 million , less working capital adjustments of $35 million . In relation to these acquisitions, Seadrill Partners issued 12,880,000 common units to the public (including 1,680,000 common units issued to underwriters) and 3,394,916 common units to Seadrill, at a price of $29.50 per unit. The gross proceeds raised from the public was $380 million , and the net proceeds raised after issuance fees was $365 million , of which $137 million was attributable to the non-controlling interest. This resulted in an increase in net assets attributable to the non-controlling interest of $83 million . |
Non-controlling interest
Non-controlling interest | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Non-controlling interest | Non-controlling interest The Company’s consolidated statement of operations, balance sheet and statement of cash flows include the results of NADL, Asia Offshore Drilling Ltd, and Sevan Drilling ASA for the year ended, and as at December 31, 2015 . As at December 31, 2015 , the Company has the following ownership interests in these companies: 70.36% of NADL, 66.24% of Asia Offshore Drilling Ltd, and 50.11% of Sevan Drilling ASA. The amount of shareholders’ equity not attributable to the Company is included in non-controlling interests. NADL In January 2014, NADL completed its IPO in the United States of 13,513,514 common shares at $9.25 per share. The non-controlling interest recognized on the IPO was $52 million . Following NADL’s 1 for 10 reverse stock split as at December 31, 2015, there were no changes in the percentage of NADL owned by the non-controlling interest. Seadrill Partners On October 24, 2012, Seadrill Partners completed its IPO of 10,062,500 common units representing limited liability company interests in Seadrill Partners at a price of $22.00 per unit, for gross proceeds of $221 million and net proceeds after issuance costs of $203 million (including 1,312,500 common units issued in connection with the exercise of the over-allotment option). Seadrill Partners is listed on the New York stock exchange under the symbol “SDLP.” Upon completion of the offering, the Company owned 14,752,525 common units and 16,543,350 subordinated units which represents 75.67% of the limited liability company interests in Seadrill Partners. Subsequent to the IPO, in October 2013, Seadrill Partners issued 3,310,622 common units to the Company, which increased the Company’s total ownership interest to 77.47% . In December 2013, Seadrill Partners issued a further 3,394,916 common units to the Company and 12,880,000 common units to the public, which had the effect of reducing the Company’s ownership total ownership to 62.35% as of December 31, 2014 . The effect of these transactions was to increase the non-controlling interest by $239 million . During the period from Seadrill Partners’ IPO in October 2012 until the time of its first effective Annual General Meeting (“AGM”) on January 2, 2014 , the Company retained the sole power to appoint, remove and replace all members of Seadrill Partner’s board of directors. From the first AGM, the majority of the board members became electable by the common unitholders and accordingly, from this date the Company no longer retained the power to control the board of directors as a result of certain provisions in the Operating Agreement which limits the Company’s ability to vote its full holding of common units in an election of directors to the board of Seadrill Partners. As of January 2, 2014 , Seadrill Partners is considered to be an associated company and not a controlled subsidiary of the Company, and as such Seadrill Partners was deconsolidated by the Company. The non-controlling interest derecognized was $115 million . See Note 11 of the consolidated financial statements for further details. AOD On March 25, 2013, we obtained control of the Board of Asia Offshore Drilling Ltd and owned 66.18% of the outstanding shares. As a result of obtaining control we have consolidated the results and financial position of Asia Offshore Drilling Ltd from this date. The fair value of the non-controlling interest established upon obtaining a controlling financial interest was $100 million . See Note 12 to the consolidated financial statements included herein for further details. Subsequent to the date of consolidation, the Company’s percentage ownership increased to 66.21% , and then increased again to 66.24% . Sevan On July 2, 2013 we obtained a controlling financial interest in Sevan Drilling and had ownership interests in 50.1% of the outstanding shares. As a result of obtaining control we consolidated the results and financial position of Sevan Drilling from this date. The fair value non-controlling interest established upon obtaining a controlling financial interest was $197 million . See Note 12 to the consolidated financial statements included herein for further details. Ship Finance VIEs In 2007 and 2008 the Company entered into sale and leaseback arrangements for drilling units with Ship Finance International Ltd, who incorporated subsidiary companies for the sole purpose of owning and leasing the drilling units. The Company has recognized these subsidiary companies as VIEs and concluded that the Company is their primary beneficiary. Accordingly, these subsidiary companies are included in the Company’s consolidated financial statements, with the Ship Finance International Ltd equity in these companies included in non-controlling interest. In 2012, the Company acquired all the shares in one of these Ship Finance International Ltd companies, Rig Finance II Ltd for $47 million . As a consequence of this, Rig Finance II Ltd is no longer treated as a VIE but a wholly owned subsidiary. In 2013 these VIEs declared dividends of $223 million to Ship Finance International Limited. In December 2014, the Company acquired all the shares of the Ship Finance International Ltd company, SFL Polaris Ltd, for a consideration of $111 million . The non-controlling interest derecognized was $7 million . As a consequence of this, SFL Polaris Ltd is no longer treated as a VIE but a wholly owned subsidiary. See Note 35 to the consolidated financial statements included herein for further details. Changes in non-controlling interest in 2015 , 2014 and 2013 are as follows: (In US$ millions) Ship Finance International Ltd VIEs North Atlantic Drilling Ltd Seadrill Partners LLC Asia Offshore Drilling Ltd Sevan Drilling ASA Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited Total December 31, 2012 274 168 79 — — 521 Changes in 2013 (220 ) (56 ) 15 100 197 36 Net income attributable to non-controlling interest in 2013 24 61 21 11 16 133 December 31, 2013 78 173 115 111 213 — 690 Changes in 2014 (57 ) (4 ) (115 ) — — 4 (172 ) Net income attributable to non-controlling interest in 2014 11 36 — 23 38 — 108 December 31, 2014 32 205 — 134 251 4 626 Changes in 2015 — 8 — (14 ) — (4 ) (10 ) Net income attributable to non-controlling interest in 2015 (17 ) (46 ) — 20 31 — (12 ) December 31, 2015 15 167 — 140 282 — 604 |
Accumulated other comprehensive
Accumulated other comprehensive income | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income | Accumulated other comprehensive income Accumulated other comprehensive income for the years December 31, 2015 and December 31, 2014 : (In US$ millions) December 31, December 31, Unrealized (loss)/gain on marketable securities (129 ) (443 ) Unrealized gain on foreign exchange 36 51 Actuarial loss relating to pension (38 ) (57 ) Share in unrealized gains from associated companies 11 1 Accumulated other comprehensive (loss)/income (120 ) (448 ) The unrealized loss on marketable securities relates to the accumulated losses on the investments in SapuraKencana and Seadrill Partners Common units. Refer to Note 14 - Marketable securities for further information. The applicable amount of income taxes associated with each component of other comprehensive income is nil , other than noted below, due to the fact that the items relate to companies domiciled in non-taxable jurisdictions. However, for actuarial loss related to pension, the accumulated applicable amount of income taxes is $8 million ( $22 million in 2014 ) as this item is related to companies domiciled in Norway where the tax rate is 25% ( 2014 : 27% ). |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share based compensation | Share based compensation The fair value of share based compensation is recognized as personnel compensation expense, and in the year ended December 31, 2015 , $8 million ( 2014 : $10 million , 2013 : $7 million ) was included in the consolidated statement of operations. Share Options Our shareholders have authorized the Board to establish and maintain Option Schemes in order to encourage our directors, officers and other employees to hold shares in the Company. The Option Scheme for US employees will expire in December 2018, whereas the Option Scheme for international employees will expire in December 2016. The Option Schemes permit the Board, at its discretion, to grant options to acquire shares in the Company to employees and directors of the Company or its subsidiaries. The options are not transferable. The subscription price is at the discretion of the Board, provided the subscription price is never reduced below the par value of the share. The subscription price for certain options granted under the Option Schemes will be reduced by the amount of all dividends declared by the Company in the period from the date of grant until the date the option is exercised. Options granted under the Option Schemes will vest at a date determined by the board at the date of the grant. The options granted under the plan to date vest over a period of one to five years . There is no maximum number of shares authorized for awards of equity share options and authorized, unissued or treasury shares of the Company may be used to satisfy exercised options. During 2015 , 710,000 share options were granted and fair value was estimated using a Black-Scholes option pricing model. The assumptions used in estimating fair value are as follows: 1.6% risk-free interest rate, volatility of 34.8% , 0% dividend yield and an expected option term of three years, six months . The risk-free interest rates were estimated using the US Treasury yield curve in effect at the time of grant for instruments with a similar life. The dividend yield has been estimated at 0% as the exercise price is reduced by all dividends declared by the Company from the date of grant to the exercise date. It is also assumed that 100% of options granted will vest. The following table summarizes share option transactions related to the Seadrill Scheme in 2015 , 2014 and 2013 : 2015 2014 2013 Options Weighted average exercise price $ Options Weighted average exercise price $ Options Weighted average exercise price $ Outstanding at beginning of year 2,241,116 35.10 2,838,758 28.53 3,875,891 29.88 Granted 710,000 12.04 — — 270,000 45.66 Exercised — — (461,477 ) 20.19 (700,418 ) 22.60 Forfeited (935,945 ) 32.81 (136,165 ) 34.57 (606,715 ) 32.30 Outstanding at end of year 2,015,171 28.53 2,241,116 35.10 2,838,758 28.53 Exercisable at end of year 882,152 36.14 1,169,584 27.38 1,080,306 27.38 Options granted in 2008 had been re-priced with exercise prices now being NOK 90.83 ( $14.09 ) and NOK 104.64 ( $16.24 ) per share; they were exercisable one third each year beginning 12 months after they were granted, and were expired in May 2014. These same prices and dates applied to the options granted in 2009. Options granted in April 2010 had exercise price of NOK 137.40 ( $23.13 ), were exercisable one third after 12 or 15 months and expired in March/June 2015. Options granted in November 2010 had exercise prices of NOK 192.90 ( $31.40 ) for American citizens or residents and NOK 185.20 ( $31.06 ) for non-Americans. They were exercisable one fifth each year beginning 12 months after they were granted and expired in December 2015. Options granted in November 2011 had exercise prices of NOK 202.10 ( $34.68 ) and can be exercised one fourth at a time, after the first 18 , 36 , 48 and 60 months from the grant date. They expire in December 2016. Options granted during 2012 had exercise prices, ranging from NOK 202.10 to NOK 224.53 . They have the same exercise schedule as the 2011’s grant and expire between December 2016 and December 2017. Options granted in October 2013 had an exercise price of NOK273 and can be exercised one fourth at time after 13 , 25 , 37 and 49 months from the grant date. The weighted average grant-date fair value of options granted during 2015 is $3.33 ( 2014 : none granted, 2013 : $10.23 per share). As of December 31, 2015 there was $2 million in unrecognized compensation costs relating to non-vested options granted under the Options Schemes ( 2014 : $3 million , 2013 : $7 million ). This amount will be recognized as expense of $1 million in 2016 , $1 million in 2017 and less than a million in 2018 . There were 2,015,171 options outstanding at December 31, 2015 ( 2014 : 2,241,116 ). Their weighted average remaining contractual life was 22 months ( 2014 : 21 months ) and their weighted average fair value was $6.06 per option ( 2014 : $7.97 per option). The weighted average parameters used in calculating these weighted average fair values are as follows: risk-free interest rate 2.0% ( 2014 : 2.0% ), volatility 34.8% ( 2014 : 26.1% ), dividend yield 0% ( 2014 : 0% ), option holder retirement rate 0% ( 2014 : 0% ) and expected term 2 years ( 2014 : 4 years ). During 2015 the total intrinsic value of options exercised was nil ( 2014 : $9 million , 2013 : $17 million ) on the day of exercise. The intrinsic value of options fully vested but not exercised at December 31, 2015 was zero since the weighted average exercise price per share exceeded the market price of our shares as at that date. The average remaining term of the options was 22 months . Restricted Stock Units On October 1, 2013, the Board of the Company approved 373,700 awards under the Company`s Restricted Stock Units “RSU” plan. On November 7, 2013, the Board of our consolidated subsidiary, NADL, approved 278,778 awards under NADL`s RSU plan. In December 2014, the Board of the Company approved 162,560 awards under the Company’s RSU plan. In December 2015, the Board of the Company approved 909,970 awards under the Company’s RSU plan. Also in December 2015, the Board of our consolidated subsidiary, NADL, approved 1,478,500 awards under NADL`s RSU plan. Under the terms of both plans, the holder of an award is entitled to receive a share in the respective company if still employed at the end of the three year vesting period. There is no requirement for the holder to pay for the share on grant date or upon vesting of the award. In addition the holder is entitled to receive an amount equal to the ordinary dividends declared and paid on the Company and NADL shares during the vesting period. In December 2015 the shareholders of NADL in a special general meeting approved a capital reorganization including a 1-for-10 reverse stock split of the Company’s issued and outstanding common shares and reducing par value from $5.00 to $0.10 . As a result of the capital restructuring the number of RSUs has been adjusted by 1,571,250 units. The following table summarizes RSU activity for the Company for the years ended December 31, 2015 , 2014 and 2013 : Restricted Stock Units - Seadrill 2015 2014 2013 Outstanding at beginning of year 525,210 373,700 — Granted 937,970 162,560 373,700 Forfeited (60,200 ) (11,050 ) — Outstanding at end of year 1,402,980 525,210 373,700 The following table summarizes RSU activity for NADL for the years ended December 31, 2015 , 2014 and 2013 : Restricted Stock Units - NADL 2015 2014 2013 Outstanding at beginning of year 253,870 278,778 — Granted 1,587,719 — 278,778 Adjustment * (1,571,251 ) — — Forfeited (95,755 ) (24,908 ) — Outstanding at end of year 174,583 253,870 278,778 * Adjustment relates to the reverse stock split for NADL units, as discussed above The fair value of the awards are calculated based on the market share price on grant date which for 2013 awards was $46.07 and NOK 58 for the Company and NADL shares respectively. The fair value for the 2014 awards for the Company shares was $11.00 . The fair value for the 2015 awards for the Company was $3.67 and NOK 15.30 for NADL shares. The fair value of the awards expected to vest is recognized as compensation cost straight-line over the vesting period. All awards are currently expected to vest. Compensation cost related to the RSU plans of $6 million has been recognized in 2015 ( 2014 : $2 million ). As of December 31, 2015 there was $6 million in unrecognized compensation costs related to non-vested awards. |
Pension benefits
Pension benefits | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Pension benefits | Pension benefits Defined Benefit Plans The Company has several defined benefit pension plans covering substantially all Norwegian employees. All of the plans are administered by a life insurance company. For onshore employees in Norway, who are participants in the defined benefit plans, the primary benefits are a retirement pension of approximately 66 percent of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66 percent of the total of 12 times the Norwegian Social Security Base. All employees in this group may choose to retire at 62 years of age on a pre-retirement pension. Offshore employees in Norway have a retirement and long-term disability pension of approximately 60 percent of salary at retirement age of 67 . Most offshore employees on drilling units may choose to retire at 60 years of age on a pre-retirement pension. Consolidated balance sheet position (In US$ millions) 2015 2014 Non-current liabilities 37 82 Deferred tax asset (8 ) (22 ) Shareholders equity 29 60 Annual pension cost (In US$ millions) 2015 2014 2013 Service cost 12 13 14 Interest cost on prior years’ benefit obligation 4 7 7 Gross pension cost for the year 16 20 21 Expected return on plan assets (3 ) (6 ) (4 ) Administration charges 1 1 — Net pension cost for the year 14 15 17 Social security cost 2 2 2 Amortization of actuarial gains/losses 3 2 2 Impact of settlement/curtailment funded status — — (2 ) Total net pension cost 19 19 19 The funded status of the defined benefit plan (In US$ millions) December 31, 2015 December 31, 2014 Projected benefit obligations at end of period 130 186 Plan assets at market value (97 ) (114 ) Accrued pension liability exclusive social security 33 72 Social security related to pension obligations 4 10 Accrued pension liabilities 37 82 Change in benefit obligations (In US$ millions) 2015 2014 Projected benefit obligations at beginning of period 186 180 Interest cost 4 7 Service cost 12 13 Benefits paid (2 ) (2 ) Change in unrecognized actuarial gain (20 ) 23 Settlement (20 ) — Foreign currency translations (30 ) (35 ) Projected benefit obligations at end of period 130 186 Change in pension plan assets (In US$ millions) 2015 2014 Fair value of plan assets at beginning of year 114 129 Estimated return 3 2 Contribution by employer 12 17 Administration charges (1 ) (1 ) Benefits paid (2 ) (2 ) Change in unrecognized actuarial loss — (9 ) Settlement (11 ) — Foreign currency translations (18 ) (22 ) Fair value of plan assets at end of year 97 114 The accumulated benefit obligation for all defined benefit pension plans was $101 million and $146 million at December 31, 2015 and 2014 , respectively. Pension obligations are actuarially determined and are critically affected by the assumptions used, including the expected return on plan assets, discount rates, compensation increases and employee turnover rates. The Company periodically reviews the assumptions used, and adjusts them and the recorded liabilities as necessary. During the year a number of employees left the Company and as a result the defined benefit scheme transferred the pension liability for these employees to the life insurance company administering the scheme. The difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company has been recognized within “Other comprehensive income.” The settlement is not deemed to be significant in the context of the overall scheme and as such net unrecognized actuarial losses have not been recycled as a result of the settlement. The expected rate of return on plan assets and the discount rate applied to projected benefits are particularly important factors in calculating the Company’s pension expense and liabilities. The Company evaluates assumptions regarding the estimated rate of return on plan assets based on historical experience and future expectations on investment returns, utilizing the asset allocation classes held by the plan’s portfolios. The discount rate is based on the covered bond rate in Norway. Changes in these and other assumptions used in the actuarial computations could impact the projected benefit obligations, pension liabilities, pension expense and other comprehensive income. Assumptions used in calculation of pension obligations (In %) 2015 2014 2013 Rate of compensation increase at the end of year 2.50 % 2.75 % 3.75 % Discount rate at the end of year 2.70 % 2.30 % 4.00 % Prescribed pension index factor 1.20 % 1.20 % 1.40 % Expected return on plan assets for the year 3.30 % 3.20 % 4.40 % Employee turnover 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.50 % 2.50 % 3.50 % The weighted-average asset allocation of funds related to the Company’s defined benefit plan at December 31, was as follows: Pension benefit plan assets (In %) 2015 2014 Equity securities 6.1 % 7.2 % Debt securities 47.5 % 51.9 % Real estate 14.7 % 14.2 % Money market 25.2 % 23.5 % Other 6.5 % 3.20 % Total 100.0 % 100.0 % The investment policies and strategies for the pension benefit plan funds do not use target allocations for the individual asset categories. The investment objectives are to maximize returns subject to specific risk management policies. The Company diversifies its allocation of plan assets by investing in both domestic and international fixed income securities and domestic and international equity securities. These investments are readily marketable and can be sold to fund benefit payment obligations as they become payable. Cash flows - Contributions expected to be paid The table below shows the Company’s expected annual pension plans contributions under defined benefit plans for the years 2016-2025 . The expected payments are based on the assumptions used to measure the Company’s obligations at December 31, 2015 and include estimated future employee services. (In US$ millions) December 31, 2015 2016 12 2017 12 2018 12 2019 13 2020 13 2021-2025 70 Total payments expected during the next 10 years 132 Defined Contribution and Other Plans Company contributions to personal defined contribution pension and other plans totaled $29 million , $34 million and $8 million for the years to December 31, 2015 , 2014 and 2013 , respectively, and were charged to operations as they became payable. |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions The significant related parties of the Company are as follows: (i) Transactions with investees and associates, over which the Company has significant influence: • Seadrill Partners • Archer • SeaMex • Seabras Sapura (ii) Transactions with those holding significant influence over the Company: • Hemen and affiliated companies Seadrill Partners As of January 2, 2014, the date of deconsolidation, Seadrill Partners is considered to be a related party and not a controlled subsidiary of the Company. Prior to the deconsolidation, Seadrill Partners was a consolidated subsidiary of the Company, and all inter-group transactions were eliminated in the Company’s consolidated financial statements. The Net income /(expenses) with Seadrill Partners for the years ended December 31, 2015 , 2014 , and 2013 were as follows: (In US$ millions) 2015 2014 2013 Management fees charged to Seadrill Partners - Other revenues (a) and (b) 75 59 — Rig operating expenses charged to Seadrill Partners - Other revenues (c) 29 22 — Insurance premiums charged to Seadrill Partners (d) 20 21 — Rig operating costs charged by Seadrill Partners (e) (13 ) — — Bareboat charter arrangements (f) (2 ) (26 ) — Interest expenses charged to Seadrill Partners (g) 16 40 — Derivatives recharged to Seadrill Partners (h) 10 42 — Net related party income from Seadrill Partners 135 158 — Receivables /(payables) with Seadrill Partners and its subsidiaries as of December 31, 2015 and 2014 consisted of the following balances: (In US$ millions) December 31, December 31, Rig financing agreements and Loan Agreements (i) 197 237 $109.5 million Vendor financing loan (j) 110 110 Deferred consideration receivable (k) 96 74 Other receivables (l) 355 264 Other payables (l) (179 ) (77 ) The following is a summary of the related party agreements with Seadrill Partners: a) Management and administrative service agreements In connection with the IPO, subsidiaries of Seadrill Partners, entered into a management and administrative services agreement with Seadrill Management, a wholly owned subsidiary of the Company, pursuant to which Seadrill Management provides to Seadrill Partners certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee equal to 5% of Seadrill Management’s costs and expenses incurred in connection with providing these services. The agreement has an initial term for 5 years and can be terminated by providing 90 days written notice. b) Technical and administrative service agreement In connection with the IPO, subsidiaries of Seadrill Partners entered into certain advisory, technical and/or administrative services agreements with subsidiaries of the Company. The services provided by the Company’s subsidiaries are charged at cost plus service fee equal to approximately 5% of costs and expenses incurred in connection with providing these services. Income recognized under the above agreements (a) & (b) for the period ended December 31, 2015 was $75 million ( 2014 : $59 million ; 2013 : nil ). c) Rig operating costs charged to Seadrill Partners During 2015, Seadrill has recharged to Seadrill Partners certain rig operating costs in relation to costs incurred on behalf of the West Polaris and the West Vencedor operating in Angola. The total other revenues earned for the year ending December 31, 2015 was $29.0 million ( 2014 : revenues of $22 million ). d) Insurance premiums The Company negotiates insurance for drilling units on a centralized basis. The total insurance premiums related to Seadrill Partners drilling units recharged to Seadrill Partners were $20 million for the year ending December 31, 2015 ( 2014 : $21 million ). e) Rig operating costs charged by Seadrill Partners During 2015, Seadrill Partners has recharged to Seadrill, through its Nigerian service company, certain services, including the provision of onshore and offshore personnel, which was provided for the West Jupiter and West Saturn drilling rigs operating in Nigeria. The total rig operating expenses incurred for the period ending December 31, 2015 was $13 million ( 2014 : nil ; 2013 : nil ). f) Bareboat charter arrangements In connection with the transfer of the West Aquarius operations to Canada, the West Aquarius drilling contract was assigned to Seadrill Canada Ltd., a wholly owned subsidiary of Seadrill Partners, necessitating certain changes to the related party contractual arrangements relating to the West Aquarius . Seadrill China Operations Ltd, the owner of the West Aquarius and a wholly-owned subsidiary of Seadrill Partners, had previously entered into a bareboat charter arrangement with Seadrill Offshore AS, a wholly-owned subsidiary of Seadrill, providing Seadrill Offshore AS with the right to use the West Aquarius . In October 2012, this bareboat charter arrangement was replaced with a new bareboat charter between Seadrill China Operations Ltd and Seadrill Offshore AS, and at the same time, Seadrill Offshore AS entered into a bareboat charter arrangement providing Seadrill Canada Ltd. with the right to use the West Aquarius in order to perform its obligations under the drilling contract described above. For year ended December 31, 2015 the net effect to Seadrill of the bareboat charters was an expense of $1.6 million ( 2014 : net expense of $25.8 million 2013 : nil ). (g) Interest expenses The total interest income charged to Seadrill Parters for the above loan arrangements, including commitment fees and other fees, was $16 million for the period ending December 31, 2015 ( 2014 : $40 million ; 2013 : nil ). Refer to the sections below for details on the financing arrangements. (h) Derivative interest rate swap agreements The Company recharges interest rate swap agreements to Seadrill Partners on a back to back basis. The total net recharged to Seadrill Partners for the year ended December 31, 2015 was $10 million , ( 2014 : $42 million ; 2013 : nil ). (i) Rig Financing Agreements In September 2012 prior to the IPO of Seadrill Partners, each of Seadrill Partners controlled subsidiaries that owns the West Capricorn , the West Vencedor , the West Aquarius , and the West Capella , or the rig owning subsidiaries, entered into intercompany loan agreements with the Company in the amount of approximately $523 million , $115 million , $305 million and $295 million respectively, corresponding to the aggregate principal amount outstanding under the external facilities allocable to the West Capricorn , the West Vencedor , the West Aquarius , and the West Capella respectively. During 2013, the rig owning companies of the T-15 , T-16 , West Leo and West Sirius entered into intercompany loan agreements with Company in the amount of approximately $101 million , $93 million , $486 million and $220 million respectively, corresponding to the aggregate principal amount outstanding under the facilities allocable to the T-15 , T-16 , West Leo and West Sirius respectively. The Company refers to these arrangements collectively as “Rig Financing Agreements.” Pursuant to these intercompany loan agreements, each rig owning subsidiary can make payments of principal and interest to Seadrill or directly to the third party lenders under each facility, corresponding to payments of principal and interest due under each Rig Financing Agreement that are allocable to each rig. The Rig Financing Agreements related to the West Aquarius, West Capella, West Leo, West Sirius and West Capricorn were repaid during the year ended December 31, 2014 in conjunction with Seadrill Partners obtaining independent third party financing. The total outstanding principal repaid was $1.5 billion in 2014. West Vencedor Facility - In June 2014 the Company repaid the underlying $1,200 million senior secured loan relating to the West Vencedor , and as a result the West Vencedor Loan Agreement between the Company and Seadrill Partners was amended to carry on the existing loan on the same terms. The West Vencedor Loan Agreement between the Company and Seadrill Partners was scheduled to mature in June 2015 and all outstanding amounts thereunder would be due and payable, including a balloon payment of $70 million . On April 14, 2015 the Loan Agreement was amended and the maturity date was extended to June 25, 2018. The West Vencedor Loan Agreement bears a margin of 2.25% , a guarantee fee of 1.4% and a balloon payment of $21 million due at maturity in June 2018. The total amount owed by Seadrill Partners to the Company under the remaining West Vencedor Loan agreement as of December 31, 2015 , was $58 million ( December 31, 2014 : $78 million ). T-15 / T-16 Facility - The total amounts owed under the remaining Rig Financing Agreement relating to the T-15 and T-16, totaled $139 million as at December 31, 2015 ( December 31, 2014 : $159 million ). Certain subsidiaries of Seadrill Partners are guarantors under the external facilities in which these rigs are pledged as security. Under the terms of the facilities, the guarantors are jointly and severally liable for other guarantors and the borrower who are party to this facility. The Company has provided an indemnification to Seadrill Partners for any payments or obligations related to these facilities for any losses incurred which do not relate to the T-15 and T-16 . West Vela facility - Under the terms of the $1,450 million secured credit facility agreement, certain subsidiaries of Seadrill and Seadrill Partners are jointly and severally liable for their own debt and obligations under the facility and the debt and obligations of other borrowers who are also party to such agreement. These obligations are continuing and extend to amounts payable by any borrower under the facility. Seadrill has provided an indemnity to Seadrill Partners for any payments or obligations related to this facility that are not related to the West Vela. West Polaris facility - In June 2015, the Company completed the sale of the entities that own and operate the West Polaris to Seadrill Partners. One of the entities sold was the sole borrower under $420 million senior secured credit facility. See Note 11 for further details. Seadrill Limited continues to act as a guarantor under the facility. (j) $109.5 million Vendor financing loan In May, 2013, Seadrill Partners borrowed from the Company $109.5 million as vendor financing to fund the acquisition of the T-15 . The loan bears interest at a rate of LIBOR plus a margin of 5% and matures in May 2016 . The outstanding balance as at December 31, 2015 was $109.5 million ( December 31, 2014 : $109.5 million ). Revolving credit facility In October 2012 Seadrill Partners entered into a $300 million revolving credit facility with the Company. The facility is for a term of five years and bears interest at a rate of LIBOR plus 5% per annum, with an annual 2% commitment fee on the undrawn balance. In March 2014 the facility was reduced to a maximum of $100 million . The outstanding balance of $125.9 million was repaid in full in March 2014. The outstanding balance as at December 31, 2015 was nil ( December 31, 2014 : nil ). $229.9 million discount note On December 13, 2013, as part of the acquisition of the West Sirius , a subsidiary of Seadrill Partners issued a zero coupon discount note to the Company for $229.9 million . The note was repayable in June 2015 and upon maturity, the Company was due to receive $238.5 million . In February 2014, Seadrill Partners repaid this note in full. $70 million discount note In December 2013, as part of the acquisition of the West Sirius , Seadrill Partners issued a zero coupon discount note to the Company for $70 million . The note was repayable in June 2015 and upon maturity, the Company was due to receive $73 million . In February 2014, Seadrill Partners repaid this note in full. $100 million discount note In March 2014, as part of the acquisition of the West Auriga , Seadrill Partners issued a zero coupon discount note to the Company for $100 million . The note is repayable in September 2015 and upon maturity, the Company will receive $103.7 million . In June 2014, Seadrill Partners repaid this note in full. West Sirius bareboat charter financing loan In December, 2015, an operating subsidiary of Seadrill Partners borrowed from a subsidiary of the Company $143 million in order to provide sufficient immediate liquidity to meet the terms of its bareboat charter termination payment in connection with the West Sirius contract termination. The loan bears interest at a rate of LIBOR plus 0.56% and matures in July 2017. The outstanding balance as at December 31, 2015 was $143 million ( December 31, 2014 : nil ). Concurrently, the Company borrowed $143 million from a rig owning subsidiary of Seadrill Partners in order to restore its liquidity with respect to the West Sirius bareboat charter financing loan referred to above. The loan bears interest at a rate of LIBOR plus 0.56% and matures in July 2017. The outstanding balance as at December 31, 2015 was $143 million ( December 31, 2014 : nil ). Each of the loan parties understand and agree that the loan agreements act in parallel with each other. These transactions have been classified within current and long-term portions of "Amount due from related party", "Related party payable" and "Long-term related party payable". (k) Deferred consideration receivable On the disposal of the West Vela and West Polaris to Seadrill Partners, the Company recognized deferred consideration receivables. Refer to the sections below for more information. West Auriga Disposal On March 21, 2014, the Company sold the entities that own and operate the West Auriga (the “Auriga business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners that is 49% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information. Purchase of additional limited partner interest in Seadrill Operating LP On July 21, 2014 , the Company sold a 28% limited partner interest in Seadrill Operating LP, a subsidiary of Seadrill Partners, to Seadrill Partners for cash consideration of $373 million . This resulted in a loss on sale of investment of $88 million , which has been recognized within “share in results from associated companies” in the Company’s consolidated statement of operations. Refer to Note 17 - Investments in Associated Companies for more information. West Vela Disposal On November 4, 2014, the Company sold the entities that own and operate the West Vela (the “Vela business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners and 49% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information. West Polaris Disposal On June 19, 2015, the Company sold the entities that owned and operated the West Polaris (the “Polaris business”), to Seadrill Operating LP (“Seadrill Operating”), a consolidated subsidiary of Seadrill Partners LLC and 42% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information. (l) Receivables and Payables Receivables and payables with Seadrill Partners and its subsidiaries are comprised of management fees, advisory and administrative services, and other items including accrued interest. In addition, certain receivables and payables arise when the Company pays an invoice on behalf of Seadrill Partners or its subsidiaries and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances to Seadrill Partners and its subsidiaries are unsecured and are intended to be settled in the ordinary course of business. West Sirius Spare parts agreement During the year ended December 31, 2015, a subsidiary of the Company entered into an agreement with Seadrill Partners to store spare parts of Seadrill Partners’ West Sirius rig while it is stacked. The Company is responsible at its own cost for the moving and storing of the spare parts during the stacking period. The Company may use the spare parts of the West Sirius during the stacking period, but must replace them as required by Seadrill Partners at its own cost. Guarantees Seadrill provides certain guarantees on behalf of Seadrill Partners. Guarantees in favor of customers, which guarantee the performance of the Seadrill Partners drilling units, totaled $370 million as at December 31, 2015 ( 2014 : $370 million ). Guarantees in favor of banks provided on behalf of Seadrill Partners totaled $698 million as at December 31, 2015 and correspond to the outstanding credit facilities relating to the West Polaris and West Vela ( 2014 : $423 million - West Vela ). Guarantees in favor of suppliers provided on behalf of Seadrill Partners, relating to custom guarantees in Nigeria, totaled $86 million ( 2014 : $92 million ). Related parties to Hemen Holding Limited (“Hemen”) Since our formation, our largest shareholder has been Hemen, which currently holds approximately 24.2% of our shares. The Company transacts business with the following related parties, being companies in which Hemen has a significant interest: • Ship Finance International Limited (“Ship Finance”); • Metrogas Holdings Inc (“Metrogas”); • Frontline Management (Bermuda) Limited (“Frontline”); and • Seatankers Management Norway AS (“Seatankers”). Ship Finance Transactions The Company has entered into sale and lease back contracts for several drilling units, with subsidiaries of Ship Finance. The Company has determined that the Ship Finance subsidiaries, which own the units, are variable interest entities (VIEs), and that the Company is the primary beneficiary of the risks and rewards connected with the ownership of the units and the charter contracts. Accordingly, these VIEs are fully consolidated in the Company’s consolidated accounts. The equity attributable to Ship Finance in the VIEs is included in non-controlling interests in the Company’s consolidated accounts (See Note 35 to the consolidated financial statements included herein). The units that are currently leased back from Ship Finance are the West Taurus , West Hercules , and West Linus . The West Polaris was previously leased back from Ship Finance, but was repurchased in 2014, before subsequently being sold to Seadrill Partners, as described below. During the years ended December 31, 2015 , 2014 and 2013 , the Company incurred the following lease costs on units leased from the Ship Finance subsidiaries. (US$ millions) 2015 2014 2013 West Polaris * — 55 70 West Hercules 55 75 77 West Taurus 57 111 112 West Linus 81 59 — Total 193 300 259 * The West Polaris was repurchased from Ship Finance on December 30, 2014, and subsequently sold to Seadrill Partners on June 18, 2015. These lease costs are eliminated on consolidation. On December 30, 2014 we entered into a share sale and purchase agreement with Ship Finance, where we acquired 100% of the equity interests in SFL West Polaris Limited, which was the owner of West Polaris . In addition the Company purchased an outstanding loan of SFL West Polaris Limited of $97 million from Ship Finance. The acquisition price for the shares of the SFL West Polaris and the loan receivable amounted to a total of $111 million . The consideration for the shares and loan was settled on January 5, 2015 . See Note 35 for more details. On June 28, 2013, our subsidiary NADL sold the entity that owns the newbuild jack-up, West Linus , to the Ship Finance subsidiary SFL Linus Ltd. The purchase consideration for this reflected the market value of the rig as of the delivery date which was $600 million . This rig was simultaneously chartered back over a period of 15 years to NADL. Upon closing, SFL Linus Ltd received a $195 million loan from Ship Finance which bears an interest of 4.5% per annum and matures in 2029 . During 2014 the loan was reduced to $125 million , and is reported as long-term debt due to related parties in our balance sheet as of December 31, 2015 . On July 1, 2010 our consolidated VIEs, SFL Deepwater Ltd and SFL Polaris Ltd, paid a dividend of $290 million and $145 million respectively to Ship Finance. Ship Finance simultaneously granted loans to SFL Deepwater Ltd and SFL Polaris Ltd for the same amounts. The loans bear interest at 4.5% per annum and are reported as long-term debt due to related parties in our balance sheet as the loans mature in 2023 . The loan relating to SFL Polaris Ltd was repaid when the company was repurchased from Ship Finance on December 30, 2014 as described above. As at December 31, 2015 the VIEs had gross loans outstanding to Ship Finance amounting to $415 million and net loans of $387 million , due to the fact that the right of offset is established in the long-term loan agreements, and the balances are intended to be settled on a net basis (December 31, 2014: gross loans of $415 million and net loans of $351 million ). The net related party loans are disclosed as “Long-term debt due to related parties” on the balance sheet. The loans bear interest at a fixed rate of 4.5% per annum. The total interest expense of the loans for 2015 was $19 million ( 2014 : $24 million , 2013 : $20 million ). During 2013 the VIEs declared dividends totaling $223 million , which were settled against existing intercompany balances with Ship Finance. Metrogas transactions In the past we have entered into agreements with Metrogas primarily to manage short-term working capital requirements. We had the following transactions with Metrogas: On December 20, 2012, we sold the Company’s holding in a NADL unsecured bond of $500 million to Metrogas plus accrued interest of $9 million with a call option to repurchase the bond in full for a price equal to par plus unpaid accrued interest on the date of repurchase with a maturity date in June 2013. The obligation was recorded as a long term related party liability. In conjunction with this arrangement we also entered into an agreement to settle dividends payable to Metrogas in return for a short term unsecured loan of $93 million (see below). The North Atlantic bond bears a coupon of 7.75% per annum payable semi-annually in arrears. The net proceeds from these arrangements were $415 million . On May 31, 2013, the Company exercised its option to repurchase the bond from Metrogas, and as a result the bond is eliminated in the consolidated financial statements at December 31, 2015 . On December 21, 2012, we obtained a short term loan of $93 million from Metrogas. The loan bears interest of LIBOR plus a margin and was repaid in full on May 2, 2013. On December 31, 2012, we obtained a short term loan from Metrogas of NOK 140 million . The loan bears interest of NIBOR plus a margin and was repaid in full on January 2, 2013. On February 27, 2013, we obtained a short-term loan from Metrogas of NOK 300 million . The loan had an interest of NIBOR plus a margin and was repaid in full on March 12, 2013. On March 27, 2013, we obtained a short-term loan from Metrogas of NOK 700 million . The loan had an interest of NIBOR plus a margin, and was repaid in full on April 3, 2013. On July 19, 2013, we entered into a loan agreement with Metrogas of NOK 1,500 million . The loan had an interest of NIBOR plus a margin of 3.5% and was repaid in full on October 9, 2013. On September 20, 2013, we obtained a short-term loan from Metrogas of $99 million . The loan had an interest of LIBOR plus a margin of 3.0% , and was repaid in full on September 30, 2013. On December 10, 2013, the $1,121 million facility with Lloyds Bank TSB as agent was transferred to DNB Bank ASA as new agent and to Metrogas, as the lender. There have been no other changes to the facility. As Metrogas is a related party of the Company, the proportion of the facility related to Metrogas of $840 million was accordingly reclassified as debt due to related parties on the consolidated balance sheet as at December 31, 2014. On February 21, 2014, Seadrill Partners entered into a term loan B agreement for $1.8 billion due in February 2021 in which some of the proceeds were used to repay the portion of this facility that is related to the West Leo , which totaled $472.6 million as at December 31, 2013. The amount that was paid to Metrogas was $436 million . On August 26, 2014, the $1,121 million facility was repaid in full, and replaced by a new $1,350 million senior secured credit facility with a syndicate of banks and DNB Bank ASA as agent. The Company recognized a $16 million gain on debt extinguishment within other financial items in the Company’s consolidated statement of operations - see Note 23 – Long-term debt. The total interest expense of the above loans relating to Metrogas for 2015 was $0 million ( 2014 : $1 million ; 2013 : $10 million ). Frontline Management transactions Frontline provides management support and administrative services for the Company, and charged the Company fees of $4 million , $4 million and $2 million for these services in the years 2015 , 2014 and 2013 , respectively. These amounts are included in “general and administrative expenses.” Seatankers Management transactions The Company and its subsidiaries receive services from Seatankers Management Norway AS, an affiliate of Hemen. The fee was $0.6 million , nil , and nil for the years ended December 31, 2015 , 2014 and 2013 , respectively. Other related parties Archer transactions From time to time, we may enter into transactions with Archer our former consolidated subsidiary and current associate investment related to Archer’s working capital requirements and debt restructuring. Seadrill has provided a range of support for Archer including loans, guarantees and capital injections, in order to support the best interests of Archer and Seadrill. We had the following transactions with Archer for the years ended December 31, 2015 , 2014 , and 2013 : Loan agreements On June 27, 2012 , the Company granted Archer a long term unsecured credit facility of $20 million . The principal plus interest was repaid in August 2012. On November 12, 2012 , the Company granted Archer a short term unsecured loan of $55 million . The loan bears interest of LIBOR plus a margin and was settled in February 2013. On February 20, 2013 , the Company obtained a short-term unsecured loan of $43 million from Archer. The loan had an interest of LIBOR plus a margin of 5% and was repaid on February 27, 2013. On March 27, 2013 , the Company granted Archer a short term unsecured loan of $10 million . The loan had an interest of LIBOR plus a margin of 5% , and was repaid on April 2, 2013. On March 6, 2015 , the Company purchased a $50 million subordinated loan made by Metrogas, a related party, to Archer. The aggregate consideration paid for the loan by the Company to Metrogas was $51 million which is equal to the sum of the outstanding principal amount of $50 million and $1 million accrued commitment fee and interest on the loan. The loan bears interest at 7.5% per annum and has a commitment fee of 1% on any undrawn amount. As of the date of the purchase by the Company there was no undrawn amount. Interest and any commitment fee is due upon maturity of the loan on June 30, 2018. In the year ended December 31, 2015, the Company’s $50 million subordinated loan to Archer was written down to nil due to the Company’s share of net losses of Archer reducing the investment balance. The Company’s accounting policy, once its investment in the common stock of an investee has reached nil, is to apply the equity method to other investments in the investees securities, loans and or advances based on seniority and liquidity. The Company’s share of equity method losses or gains is determined based on the change in the Company’s claim on net assets of the investee. Archer’s net losses and other comprehensive income were therefore applied to the Company’s loan to Archer at its invested ownership of 39.89% . The total net interest income of the above loans relating to Archer for 2015 was $3.0 million ( 2014 : $0.0 million ; 2013 : $0.7 million ). Guarantees On March 7, 2013, the Company provided a guarantee to Archer on its payment obligations on a certain financing arrangements. The maximum liability to the Company is limited to $100 million . The guarantee fee is 1.25% per annum. On July 31, 2013, the Company provided Archer with an additional guarantee of $100 million , which was provided as part of Archer’s divestiture of a division, to support Archer’s existing bank facilities. During 2014, the guarantees above were increased to a total of $250 million . The guarantee fee is 1.25% per annum. On December 9, 2013, the Company provided Archer Topaz Limited, a wholly owned subsidiary of Archer, with a guarantee of a maximum of EUR 48.4 million ( 2014 : EUR 48.6 million ), to support Archer’s credit facilities. The guarantee fee is 1.25% per annum. On February 5, 2014, the Company provided Archer with a guarantee of a maximum of GBP 10 million , to support Archer’s leasing obligations of a warehouse for a period of 10 years . The guarantee outstanding as at December 31, 2015 was $14 million . ( 2014 : $40 million ). On July 14, 2014, we provided Archer Norge AS, a wholly owned subsidiary of Archer, with a guarantee of a maximum of $20 million , to support Archer’s bank guarantee facility. The guarantee fee is 1.25% per annum. We provide Archer Well Services, a wholly owned subsidiary of Archer, with a performance guarantee of a maximum of NOK 66.0 million , or $8.0 million to support Archer’s operations in Norway with a customer. The total guarantee fees charged to Archer for the year ended December 31, 2015 was $3.6 million ( 2014 : $3.7 million ; 2013 : nil ) respectively. These guarantee fees are included in other financial items in our consolidated statement of operations. We do not deem it probable that we will be required to honor these guarantees, and as such, we have not recognized any related loss contingency within our consolidated financial statements as at December 31, 2015 . Archer’s refinancing and and future commitments In December 2015, Archer announced that it has signed a fifth amendment and re-statement of its multi-currency revolving facility agreement (“MRCFA”) with its banking group which will provide Archer additional financial flexibility. The amendments include, among other things: • an immediate non-cash cancellation of the total commitment under the MRCFA from $750 million to $687.5 million ; • relaxation of certain financial covenants on the bank loan; and • A further repayment and cancellation of the commitment under the MRCFA from $687.5 million to $625 million by April 30, 2016 In order to ensure that Archer was able to agree these amendments with its lenders, Seadrill has also agreed to inject additional capital to Archer, in an aggregate amount of up to $75 million in the event that Archer will not have sufficient funds for the above mentioned repayment and cancellation of the commitments under the facilities by April 30, 2016. By ensuring that Archer was able to reach a solution with its lenders the Company believes it has significantly reduced the probability of its guarantees over Archer’s debt being called. We have not recognized a liability for the $75 million commitment described above, as no current obligation existed at the balance sheet date. However it is probable that we will be required to provide these funds after April 30, 2016. Engineering Services Archer provides certain engineering services for the Company, and charged the Company fees of $4.0 million for the year ended December 31, 2015 ( 2014 : $4.0 million ; 2013 : nil ) respectively. These amounts are included in vessel and rig operating expenses. SeaMex Limited As of March 10, 2015, the date of deconsolidation, SeaMex Limited is considered to be a related party and not a controlled subsidiary of the Company. Refer to Note 11 for more information regarding the deconsolidation. The following is a summary of the related party agreements/transactions with SeaMex: Management and administrative service agreements In connection with the JV agreement, SeaMex, entered into a management support agreement with Seadrill Management, a wholly owned subsidiary of the Company, pursuant to which Seadrill Management provides SeaMex certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee of 8% . The agreement can be terminated by providing 60 days written notice. Income recognized under the management and administrative ag |
Risk management and financial i
Risk management and financial instruments | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk management and financial instruments | Risk management and financial instruments The majority of gross earnings from the Company’s drilling units are receivable in U.S. dollars and the majority of the Company’s other transactions, assets and liabilities are denominated in U.S. dollars, the functional currency of the Company. However, the Company has operations and assets in a number of countries worldwide and incurs expenditures in other currencies, causing its results from operations to be affected by fluctuations in currency exchange rates, primarily relative to the U.S. dollar. The Company is also exposed to changes in interest rates on floating interest rate debt, and to the impact of changes in currency exchange rates on NOK and SEK denominated debt. There is thus a risk that currency and interest rate fluctuations will have a positive or negative effect on the value of the Company’s cash flows. The Company has entered into derivative agreements to mitigate the risk of fluctuations, as described below. Interest rate risk management The Company’s exposure to interest rate risk relates mainly to its floating interest rate debt and balances of surplus funds placed with financial institutions. This exposure is managed through the use of interest rate swaps and other derivative arrangements. The Company’s objective is to obtain the most favorable interest rate borrowings available without increasing its foreign currency exposure. Surplus funds are generally used to repay revolving credit facilities, or placed in accounts or fixed deposits with reputable financial institutions in order to maximize returns, while providing the Company with the flexibility to meet working capital and capital investments. The extent to which the Company utilizes interest rate swaps and other derivatives to manage its interest rate risk is determined by the net debt exposure. Interest rate swap agreements not qualified as hedge accounting At December 31, 2015 , the Company had interest rate swap agreements with an outstanding principal of $7,088 million ( December 31, 2014 : $7,918 million ). In addition we have an interest rate swap contract of principal $200 million , which was entered into in February 2014 with a forward start in March 2016. These agreements do not qualify for hedge accounting, and accordingly any changes in the fair values of the swap agreements are included in the consolidated statement of operations under “Gain/(loss) on derivative financial instruments.” The total fair value of the interest rate swaps outstanding at December 31, 2015 amounted to a gross liability of $143 million and a net liability of $122 million due to master netting agreements with our counterparties, and an asset of $2 million ( December 31, 2014 : a gross liability of $191 million and net liability of $134 million , and an asset of $5 million ). The fair value of the interest rate swaps are classified as other current assets and liabilities in our consolidated balance sheet as of December 31, 2015 and December 31, 2014 . The total realized and unrealized losses recognized in the consolidated statement of operations relating to interest rate swap agreements in 2015 amounted to $129 million ( 2014 : losses of $176 million , 2013 : gains of $143 million ). The Company’s interest rate swap agreements as at December 31, 2015 , were as follows: Maturity date Total outstanding principal as at December 31, 2015 Receive rate Pay rate range (In US$ millions) Expiring in 2016 1,000 3 month LIBOR 2.14% 2.24% Expiring in 2016 18 6 month LIBOR 3.83% 3.83% Expiring in 2017 1,406 3 month LIBOR 0.74% 3.8% Expiring in 2018 1,000 3 month LIBOR 2.83% 3.34% Expiring in 2019 680 3 month LIBOR 1.11% 1.36% Expiring in 2020 2,632 3 month LIBOR 1.36% 2.19% Expiring in 2021 and thereafter 352 3 month LIBOR 1.38% 2.92% Total 7,088 The counterparties to the above agreements are reputable financial institutions. Credit risk exists to the extent that the counterparties are unable to perform under the contracts, but this risk is considered remote as the counterparties are reputable financial institutions which have all provided loan finance to us and the interest rate swaps are related to those financing arrangements. Cross currency interest rate swaps not qualified as hedge accounting At December 31, 2015 the Company had outstanding cross currency interest rate swaps with principal amounts of $807 million ( December 31, 2014 : $807 million ) with maturity dates between March 2018 and March 2019 at fixed rates ranging from 4.94% to 6.1825% . These agreements do not qualify for hedge accounting and accordingly any changes in the fair values of the swap agreements are included in the consolidated statement of operations under “Gain/(loss) on derivative financial instruments.” The total fair value of cross currency interest swaps outstanding at December 31, 2015 amounted to a liability of $291 million ( December 31, 2014 : a liability of $201 million ). The fair value of the cross currency interest swaps are classified as other current liabilities in the consolidated balance sheet as at December 31, 2015 and within other current liabilities as at December 31, 2014 . The total realized and unrealized losses recognized in the consolidated statement of operations relating to cross currency interest rate swap agreements in 2015 amounted to $106 million ( 2014 : losses of $171 million , 2013 : losses of $10 million ). Interest rate hedge accounting A Ship Finance subsidiary consolidated by the Company as a variable interest entity (VIEs) (refer to Note 35 ), has entered into interest rate swaps in order to mitigate the exposure to variability in cash flows for future interest payments on the loans taken out to finance the acquisition of the West Linus . These interest rate swaps qualify for hedge accounting under US GAAP, and the instruments have been formally designated as a hedge to the underlying loan. When the hedge is effective, any changes in its fair value is included in “other comprehensive income.” The effectiveness of hedging instruments is assessed at each reporting period. The total fair value of these interest rate swaps outstanding at December 31, 2015 amounted to a liability of $2 million ( December 31, 2014 : a liability of $3 million ), which are classified as other non-current liabilities in the consolidated balance sheet. Below is a summary of the notional amount, fixed interest rate payable and duration of the outstanding principal as of December 31, 2015 . Variable interest entity Outstanding principal as at December 31, 2015 Receive rate Pay rate Length of contract (In US$ millions) SFL Linus Limited (West Linus) 4.0 1 month LIBOR 2.01% Mar 2014 - Oct 2018 SFL Linus Limited (West Linus) 4.0 2 month LIBOR 2.01% Mar 2014 - Nov 2018 SFL Linus Limited (West Linus) 191.9 3 month LIBOR 1.77% Dec 2013 - Dec 2018 In the year ended December 31, 2015 the above VIEs recorded no fair value gains/losses on interest rate swaps ( December 31, 2014 : no fair value gains/losses). Any such gains or losses are recorded by those VIEs as “other comprehensive income” but due to their ownership by Ship Finance these gains are allocated to “non-controlling interest” in our consolidated statement of changes in equity. The net interest paid on these swaps for the year ended December 31, 2015 was $3 million ( 2014 : net interest of $4 million ). Any change in fair value resulting from hedge ineffectiveness is recognized immediately in earnings. The VIEs and therefore the Company, did not recognize any gain or loss due to hedge ineffectiveness in the consolidated financial statements during the years ended December 31, 2015 , 2014 and 2013 relating to derivative financial instruments. Foreign exchange risk management The Company and the majority of its subsidiaries use the U.S. dollar as their functional currency because the majority of their revenues and expenses are denominated in U.S. dollars. Accordingly, the Company’s reporting currency is also U.S. dollars. The Company does, however, earn revenue and incur expenses in other currencies and there is thus a risk that currency fluctuations could have an adverse effect on the value of our cash flows. The Company is also exposed to changes in interest rates on floating interest rate debt, and to the impact of changes in currency exchange rates on NOK and SEK denominated debt. The Company has entered into derivative agreements to mitigate the risk of exchange rate fluctuations as described below. Foreign currency forwards not qualified as hedge accounting The Company uses foreign currency forward contracts and other derivatives to manage exposure to foreign currency risk on certain assets, liabilities and future anticipated transactions. Such derivative contracts do not qualify for hedge accounting treatment and are recorded in the consolidated balance sheet under current receivables if the contracts have a net positive fair value, and under other current liabilities if the contracts have a net negative fair value. At December 31, 2015 , the Company had no outstanding currency forward contracts. As at December 31, 2014 the total fair value of outstanding NOK currency forward contracts amounted to a liability $24 million , which are classified as other current liabilities in the consolidated balance sheet. As at December 31, 2014 the total fair value of outstanding GBP currency forward contracts amounted to a liability of $2.6 million , and are classified as other current liabilities in the consolidated balance sheet. The total realized and unrealized losses recognized in the consolidated statement of operations relating to foreign currency forward agreements in 2015 amounted to $9 million ( 2014 : losses of $58 million , 2013 : losses of $49 million ). Other arrangements The Company from time to time may enter into swap agreements, forward contracts or other derivative arrangements based on assets or equity shares of the Company which provide flexible financing alternatives at a low cost. Total Return Swap (“TRS”) Agreements During 2015 , 2014 and 2013 the Company entered into and settled various TRS agreements which are indexed to the Company’s own common shares. The settlement amount for the TRS transaction will be (A) the market value of the shares at the date of settlement plus all dividends paid by the Company between entering into and settling the contract, less (B) the reference price of the shares agreed at the inception of the contract plus the counterparty’s financing costs. Settlement will be either a payment by the counterparty to us, if (A) is greater than (B), or a payment by us to the counterparty, if (B) is greater than (A). There is no obligation for us to purchase any shares under the agreement and this arrangement has been recorded as a derivative transaction, with the fair value of the TRS recognized as an asset or liability as appropriate, and changes in fair values recognized in the consolidated statement of operations. The fair value of the TRS agreements at December 31, 2015 was a liability of $9 million ( December 31, 2014 : a liability of $5 million ). The fair values of the TRS agreements are classified as other current liabilities in the balance sheet as at December 31, 2015 and December 31, 2014 . As of December 31, 2015 we had an outstanding agreement related to 4 million shares at NOK 49.60 per share ( December 31, 2014 : 4.0 million shares at NOK 96.02 per share). We generally settle these agreements in cash, or through further rolling of the agreements. Subsequent to the year end, on March 3, 2016 , the TRS agreement related to 4 million shares was rolled over with a new expiry date of June 3, 2016 , and a new reference price of NOK 21.1611 per share. The total realized and unrealized losses recognized in the consolidated statement of operations relating to TRS agreements in 2015 amounted to $27 million ( 2014 : losses of $73 million , 2013 : gains of $19 million ). Sevan share repurchase agreements During 2013 the Company has entered into agreements in which the Company has sold its shares in Sevan Drilling to commercial banks and then entered into a share purchase agreement to repurchase the same amount of shares at a later date which is generally within three months from the date of entering into the sale agreement. As at December 31, 2014 the Company had agreements for 216,065,464 Sevan Drilling ASA shares at a strike price of NOK 4.1701 and 81,828,500 Sevan Drilling ASA shares at a strike price of NOK 4.1966 . On February 6, 2015, these forward agreements were settled and new forward agreements were entered into. The cash settlement was NOK 134 million . On May 6, 2015, the Company rolled forward the agreement and entered into a forward agreement for 216,065,464 Sevan shares expiring August 10, 2015 with a strike price of NOK 0.6247 , and a second forward agreement for 81,828,500 Drilling ASA shares expiring August 6, 2015 with a strike price of NOK 0.6243 . As part of the Sevan Drilling group’s internal reorganization program effective from June 30, 2015 the parent company of the Sevan Drilling group was migrated from Sevan Drilling ASA, a Norwegian registered entity, to Sevan Drilling Limited, a Bermudan registered entity. As part of the restructuring, shareholders on the Oslo Stock Exchange listed entity were distributed shares in the Bermudan entity on a 20 :1 basis. The Norwegian entity was then delisted from the Oslo Stock Exchange, and the Bermudan entity was listed in its place, maintaining the ticker “SEVDR.” Accordingly the outstanding share repurchase agreements mentioned above were settled for consideration paid of $4 million , and the Company completed the repurchase of the 297,893,964 shares in Sevan Drilling ASA at a value equal to the nominal value of the shares. Simultaneously new agreements were taken out to repurchase 14,894,699 shares in Sevan Drilling Limited with the same banks. On November 6, 2015, the Company settled the forward agreement for 10,803,274 shares in Sevan Drilling Limited at a strike price of NOK 8.9482 and settled the forward agreement for 4,091,425 shares for a strike price of NOK 8.5539 . The total amount paid on settlement was $16 million . As a result of these transactions, the Company maintained a controlling interest in the Sevan Drilling group, and as a result the Sevan Drilling group remains consolidated in the Company’s consolidated financial statements. Prior to the settlement the share repurchase agreements were accounted for as secured borrowings and therefore the Company had recognized the liabilities associated with these repurchases in other current liabilities of $167 million as of December 31, 2014. As at December 31, 2015 these agreements have been fully settled. SapuraKencana share agreements and financing On September 18, 2013, we entered into two derivative contract agreements with a commercial bank which enabled the Company to obtain financing against a portion of our equity investment in SapuraKencana in which the Company received $250 million upfront as prepayment for one of the agreements. The agreements have a settlement date three years from the inception date and include an interest equivalent component which is based on the prepaid amount received and LIBOR plus 1.90% per annum. On July 8, 2015, the Company amended the financing arrangement relating to its equity investment in SapuraKencana and extended the agreement to July 2018. The total financing was reduced by $90 million to $160 million , and the corresponding restricted cash held as collateral of $93 million was settled against the liability. In addition the interest rate increased to LIBOR plus 2.6% . As at December 31, 2015, the Company had associated restricted cash of $160 million due to the significant fall in the share price of SapuraKencana As part of these agreements, a number of shares in SapuraKencana were pledged as security, the value of which as at December 31, 2015 amounted to $228 million ( December 31, 2014 : $325 million ), and is presented as a long term marketable security on the consolidated balance sheet (see Note 14 to the consolidated financial statements included herein). The unrealized gains and losses resulting from measuring the fair value of these contracts at December 31, 2015 are a gross asset of $135 million , and a gross liability of $135 million which have been offset in the consolidated balance sheet and consolidated income statement as these agreements meet the criteria for offsetting ( December 31, 2014 : gross asset of $103.0 million , and a gross liability of $103 million ). The $160 million received as a prepayment to the Company is included in other long-term liabilities as at December 31, 2015 ( December 31, 2014 : $250 million ). The agreements also contain financial covenants which are similar to the Company’s bank loans, See Note 23 to the consolidated financial statements included herein. On February 24, 2016, subsequent to the period end, the Company elected to exercise the optional termination notice under the prepaid forward and equity swap agreements. Other derivative agreements Total realized and unrealized gains and losses on other derivative instruments amounted to a loss of $3 million for 2015 ( 2014 : a loss of $19 million , 2013 : gain of $30 million ). Fair values of financial instruments The carrying value and estimated fair value of the Company’s financial instruments at December 31, 2015 and December 31, 2014 are as follows: December 31, 2015 December 31, 2014 (In US$ millions) Fair value Carrying value Fair value Carrying value Assets Cash and cash equivalents 1,044 1,044 831 831 Restricted cash 248 248 449 449 Related party loans receivable - short term 371 371 69 69 Related party loans receivable - long term 464 464 311 311 Liabilities Current portion of floating rate debt 1,493 1,493 1,928 1,928 Long-term portion of floating rate debt 6,711 6,711 7,713 7,713 Current portion of fixed rate CIRR loans 33 33 39 39 Long term portion of fixed rate CIRR loans 43 43 84 84 Fixed interest bonds - short term — — 323 342 Fixed interest bonds - long term 944 1,840 1,545 1,892 Floating interest bonds - long term 283 541 483 622 Related party fixed rate debt - long term 415 415 415 415 The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, is a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy. The fair value of the related party loans receivable from Seadrill Partners, Archer and SeaMex are estimated to be equal to the carrying value. This debt is not freely tradable and cannot be recalled by the Company at prices other than specified in the loan note agreements. The loans were entered into at market rates. They are categorized as level 2 on the fair value measurement hierarchy. Other trading balances with related parties are not shown in the table above. The fair value of trading balances with related parties are assumed to be equal to to their carrying value. The fair value of the current and long-term portion of floating rate debt is estimated to be equal to the carrying value since it bears variable interest rates, which are reset regularly and usually in the range between every one to six months. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. We have categorized this at level 2 on the fair value measurement hierarchy. We have based the table above on the total carrying value of principal outstanding debt, before capitalized loan fees are deducted. Refer to Note 23 - Long term debt for more information. The fair value of the long-term portion of the fixed rate CIRR loans is equal to the carrying value, as they are matched with equal balances of restricted cash. We have categorized this at level 2 on the fair value measurement hierarchy. The fixed interest rate bonds are freely tradable and their fair value has been set equal to the price at which they were traded at on December 31, 2015 and December 31, 2014 . We have categorized this at level 1 on the fair value measurement hierarchy. The floating interest bonds are freely tradable and their fair value has been set equal to the price at which they were traded at on December 31, 2015 and December 31, 2014 . We have categorized this at level 1 on the fair value measurement hierarchy. The fair value of the loans provided by Ship Finance to the Company’s VIE’s are estimated to be equal to the carrying value as the loans were entered into at market rates. The debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance. We have categorized this at level 2 on the fair value measurement hierarchy. Financial instruments that are measured at fair value on a recurring basis: Fair value Fair value measurements at reporting date using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In US$ millions) December 31, 2015 (Level 1) (Level 2) (Level 3) Assets: Marketable securities - current and non-current assets 324 324 — — Interest rate swap contracts – non-current assets 2 — 2 — Total assets 326 324 2 — Liabilities: Interest rate swap contracts – current liabilities 124 — 124 — Interest rate swap contracts – non-current liabilities 2 — 2 — Cross currency interest rate swap contracts – current liabilities 291 — 291 — Other derivative instruments – current liabilities 9 — 9 — Total liabilities 426 — 426 — Fair value Fair value measurements at reporting date using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In US$ millions) December 31, 2014 (Level 1) (Level 2) (Level 3) Assets: Marketable securities - current and non-current assets 751 751 — — Interest rate swap contracts – non-current assets 5 — 5 — Total assets 756 751 5 — Liabilities: Interest rate swap contracts – current liabilities 139 — 139 — Interest rate swap contracts – non-current liabilities 3 — 3 — Cross currency interest rate swap contracts – current liabilities 201 — 201 — Foreign exchange forwards – current liabilities 27 — 27 — Other derivative instruments – current liabilities 5 — 5 — Total liabilities 375 — 375 — Roll forward of fair value measurements using unobservable inputs (Level 3) relating to the Petromena Bond. Please refer to Note 14 for additional information: (In US$ millions) Beginning balance January 1, 2014 4 Beginning balance Realization 6 Beginning balance Proceeds on disposal (10 ) Closing balance December 31, 2014 — Closing balance December 31, 2015 — US GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, US GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy). Level one input utilizes unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level two inputs are inputs other than quoted prices included in level one that are observable for the asset or liability, either directly or indirectly. Level two inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability, other than quoted prices, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Quoted market prices are used to estimate the fair value of marketable securities, which are valued at fair value on a recurring basis. The fair value of total return equity swaps is calculated using the closing prices of the underlying listed shares, dividends paid since inception and the interest rate charged by the counterparty. We have categorized these transactions as level 2 on the fair value measurement hierarchy. The fair values of interest rate swaps, cross currency interest rate swaps, and forward exchange contracts are calculated using well-established independent valuation techniques applied to contracted cash flows and LIBOR and NIBOR interest rates as of December 31, 2015 . The fair value of other derivative instruments is calculated using the closing prices of the underlying securities, dividends paid since inception and the interest charged by the counterparty. Retained Risk a) Physical Damage Insurance The Company retains the risk, through self-insurance, for the deductibles relating to physical damage insurance on the Company’s drilling unit fleet, currently a maximum of $5 million per occurrence. b) Loss of Hire Insurance The Company purchases insurance to cover the deepwater drilling units, one semi tender and the North Atlantic fleet for loss of revenue in the event of extensive downtime caused by physical damage, where such damage is covered under the Company’s physical damage insurance. The Company’s self-insured retentions under the loss of hire insurance are up to 60 days after the occurrence of the physical damage plus a 25% quota share on the Loss of Hire daily amount. Thereafter, under the terms of the insurance, the Company is compensated for loss of revenue for a period ranging from 210 days up to 290 days. The Company retains the risk that the repair of physical damage takes longer than the total number of days in the loss of hire policy. c) Windstorm Insurance We have elected to place an insurance policy for physical damage to rigs and equipment caused by named windstorms in the U.S. Gulf of Mexico with a Combined Single Limit of $100 million in the annual aggregate, which includes Loss of Hire. Credit risk The Company has financial assets, including cash and cash equivalents, marketable securities, other receivables and certain amounts receivable on derivative instruments, mainly forward exchange contracts and interest rate swaps. These assets expose the Company to credit risk arising from possible default by the counterparty. The Company considers the counterparties to be creditworthy financial institutions and does not expect any significant loss to result from non-performance by such counterparties. The Company, in the normal course of business, does not demand collateral. The credit exposure of interest rate swap agreements, currency option contracts and foreign currency contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements. It is the Company’s policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give the Company the legal right to discharge all or a portion of amounts owed to a counterparty by offsetting them against amounts that the counterparty owes to the Company. Concentration of risk The Company has financial assets, including cash and cash equivalents, marketable securities, other receivables and certain derivative instrument receivable amounts. These other assets expose the Company to credit risk arising from possible default by the counterparty. There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with DNB ASA, Nordea Bank Finland Plc, Danske Bank A/S, and ING Bank N.V. The Company considers these risks to be remote. In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 33 – Commitments and contingencies Legal Proceedings From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities. We believe that the resolution of such claims will not have a material impact individually or in the aggregate on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our financial statements as of December 31, 2015 . In December 2014, a purported shareholder class action lawsuit, Fuchs et al. v. Seadrill Limited et al., No. 14-cv-9642 (LGS)(KNF), was filed in US Federal District Court in the Southern District of New York, alleging, among other things, that Seadrill and certain of its executives made materially false and misleading statements in connection with the payment of dividends. In January 2015, a second purported shareholder class action lawsuit, Heron v. Seadrill Limited et al., No. 15-cv-0429 (LGS)(KNF), was filed in the same court on similar grounds. In March 2015, a third purported shareholder class action lawsuit, Glow v. Seadrill Limited et al., No. 15-cv-1770 (LGS)(KNF), was filed in the same court on similar grounds. On March 24, 2015, the court consolidated these complaints into a single action. On June 23, 2015 the court appointed co-lead plaintiffs and co-lead counsel and ordered the co-lead plaintiffs to file a single consolidated amended complaint by July 23, 2015. The amended complaint was filed on July 23, 2015 alleging, among other things, that Seadrill, North Atlantic Drilling Limited and certain of their executives made materially false and misleading statements in connection with the payment of dividends, the failure to disclose the risks to the Rosneft transaction as a result of various enacted government sanctions and the inclusion in backlog of $4.1 billion attributable to the Rosneft transaction. The defendants filed their Motion to Dismiss the Complaint on October 13, 2015. The plaintiffs, in turn, filed their Opposition to the Motion to Dismiss on November 12, 2015 and the defendants’ Reply Brief was served on December 4, 2015. Although we intend to vigorously defend this action, we cannot predict the outcome of this case, nor can we estimate the amount of any possible loss. Accordingly, no loss contingency has been recognized within the financial statements. In addition, the Company has received voluntary requests for information from the U.S. Securities and Exchange Commission concerning, among other things, statements in connection with its payment of dividends, inclusion of contracts in the Company’s backlog, and its contracts with Rosneft. Other matters On October 12, 2015, HSHI launched arbitration proceedings with regard to Seadrill’s cancellation of the West Mira construction contract. For further discussion please refer to “Note 5 - Gain / (Loss) on disposals.” Sevan Drilling is a controlled subsidiary of the Company. On June 29, 2015, Sevan Drilling disclosed that it had initiated an internal investigation into activities with an agent under certain drilling contracts with Petrobras in Brazil, which were entered prior to the separation from the Sevan Marine Group. On October 16, 2015, Sevan further disclosed that Sevan Drilling ASA had been accused of breaches of Sections 276 a and 276 b of the Norwegian Criminal Code in respect of payments made in connection with the performance during 2012 to 2015 of drilling contracts originally awarded by Petrobras to Sevan Marine ASA in the period between 2005-2008. For further details please refer to the Sevan Drilling Interim Financial Report Fourth Quarter 2015 which is publicly available. We cannot predict whether any other governmental authority will seek to investigate this matter, or if a proceeding were opened, the scope or ultimate outcome of any such investigation and as a result no loss contingency has been recognized in Seadrill’s consolidated financial statements. In February 2016, NADL was notified of certain customer claims. After an initial assessment including advice from external counsel, NADL fully refutes the validity of these claims and will take appropriate actions related to its position. The client has withheld amounts from invoice payments due in the first quarter of 2016, which total $36.2 million . No provision has been recognized in relation to these claims. North Atlantic Drilling, and all other offshore contractors that are members of the Norwegian Shipowners’ Association, lost a Norwegian court case in July 2015 concerning the pension rights of night shift compensation for offshore workers. The case has been appealed to the Supreme Court of Norway by the members of the Norwegian Shipowners’ Association, and the hearings are expected to be held in June 2016. Due to the uncertainty of the appeal we cannot predict the outcome of this case, nor can we estimate the amount of any possible loss. Accordingly, no loss contingency has been recognized within the Company’s financial statements as at December 31, 2015. Pledged assets The book value of assets pledged under mortgages and overdraft facilities at December 31, 2015 was $14,596 million ( 2014 : $17,772 million ). In addition we have $228 million of marketable securities pledged as security for certain derivative arrangements. Purchase Commitments At December 31, 2015 , the Company had contractual commitments under thirteen newbuilding contracts totaling $4,049 million ( 2014 : $5,389 million ). The contract commitments are mainly yard installments and are for the construction of one semi-submersible rigs, eight jack-up rigs and four drillships. Note that the newbuilding commitments include $447 million related to the Sevan Developer that are presented as a contractual obligation in the balance sheet in the line item “Other short term liabilities.” Sevan Drilling and Cosco Shipyard have agreed to amend the termination rights of the construction contract and defer the delivery date for the Sevan Developer . Delivery is deferred for 12 months with mutually agreed options, exercisable at 6 month intervals, to extend the delivery date for up to a total of 36 months from October 15, 2014. The agreement will terminate at the end of each deferral period, unless the option to extend is mutually agreed by both parties. If termination should occur, Sevan is entitled to a refund of its installments less any agreed costs. Cosco will complete construction and maintain the rig at the shipyard in Qidong. Sevan will continue to market the rig as part of its fleet. Payment of the construction liability and other related costs will be deferred until delivery. On October 30, 2015 Sevan Drilling and Cosco agreed to exercise the first six-month option of the delivery deferral agreement for Sevan Developer, which extends the deferral period to April 15, 2016. The final delivery installment has been amended to $447 million , representing 85% of the $526 million contract price. As part of the agreement, Cosco has refunded 5% , or $26 million , of the contract value plus interest of $3 million back to Seadrill, which Seadrill will pay back at the time of final yard installment. The table below shows the maturity schedule for the newbuilding contractual commitments, which reflects all recent deferral agreements with DSME, Samsung, Cosco and Dalian, and assumes we exercise the remaining deferral options for the Sevan Developer with Cosco: (In US$ millions) 2016 2017 2018 2019 2020 2021 and thereafter Total Newbuildings 188 2,158 1,174 529 — — 4,049 Guarantees The Company has issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee: (In US$ millions) December 31, 2015 December 31, 2014 Guarantees in favor of customers 1, 2 ,3 1,530 1,824 Guarantees in favor of banks 1, 2, 3, 4 1,632 1,254 Guarantees in favor of suppliers 1, 3, 4 2,744 3,898 Total 5,906 8,404 (1) Guarantees to Seadrill Partners - Within guarantees in favor of customers are guarantees provided on behalf of Seadrill Partners of $370 million ( 2014 : $370 million ). Guarantees in favor of banks include guarantees provided on behalf of Seadrill Partners of $698 million ( 2014 : $423 million ). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of $86 million ( 2014 : $92 million ). See Note 31 to the consolidated financial statements included herein. (2) Guarantees to SeaMex - Within guarantees in favor of customers are guarantees provided on behalf of SeaMex of $30 million ( 2014 : $0 million ). Guarantees in favor of banks includes guarantees on behalf of SeaMex of $81 million ( 2014 : $0 million ). See Note 31 to the consolidated financial statements included herein. (3) Guarantees to Archer - Within guarantees provided to customers are guarantees provided on behalf of Archer of $8 million ( 2014 : nil ). Within guarantees in favor of banks are guarantees provided on behalf of Archer of $268 million and EUR 33 million ( $36 million ) ( 2014 : $370 million and EUR 48 million ( $71.9 million )). Guarantees in favor of suppliers includes guarantees on behalf of Archer of GBP 9 million ( $14 million ) ( 2014 : GBP 26 million ( $40 million )). See Note 31 to the consolidated financial statements included herein. (4) Guarantees to Seabras Sapura - Within guarantees in favor of banks are guarantees provided on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $550 million ( 2014 : $293 million ). Within guarantees in favor of suppliers are guarantees provided in relation to our joint ventures Seabras Sapura Participacoes and Seabras Sapura Holdco of EUR 0 million ( $0 million ) and $125 million respectively ( 2014 : EUR 47 million ( $60 million ) and $375 million respectively). See Note 31 to the consolidated financial statements included herein. As of the balance sheet date, we have not recognized any liabilities for the above guarantees, as we do not consider it probable for the guarantees to be called. |
Operating leases
Operating leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases, Operating [Abstract] | |
Operating leases | Operating leases The Company has operating leases relating to premises, the most significant being its offices in London, Liverpool, Oslo, Stavanger, Singapore, Houston, Rio de Janeiro and Dubai. In the years ended December 31, 2015 , 2014 and 2013 rental expenses amounted to $23 million , $24 million and $21 million , respectively. Future minimum rental payments are as follows: Year (In US$ millions) 2016 11 2017 10 2018 8 2019 6 2020 6 2021 and thereafter 13 Total 54 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Variable Interest Entities | Variable Interest Entities As of December 31, 2015 , the Company leased two semi-submersible rigs, and a jack-up rig from VIEs under capital leases. Each of the units had been sold by the Company to single purpose subsidiaries of Ship Finance Ltd and simultaneously leased back by the Company on bareboat charter contracts for a term of 15 years . The Company has several options to repurchase the units during the charter periods, and obligations to purchase the assets at the end of the 15 years lease period. On June 19, 2013, SFL Deepwater Ltd sold the West Hercules to SFL Hercules Ltd. This transaction under common control has no net effects on our consolidated financial statements, and we will continue to consolidate all relevant VIEs. On June 28, 2013, our consolidated subsidiary NADL sold the entity that own the jack-up, the West Linus , to the Ship Finance subsidiary, SFL Linus Ltd. The purchase consideration reflected a market value of the rig as of the delivery date which was $600 million . This rig was simultaneously chartered back to the Company over a period of 15 years . Upon closing of the purchase, SFL Linus Ltd received a $195 million loan from Ship Finance which bears an interest of 4.5% per annum and matures in 2029 . During 2014 the loan was reduced to $125 million , and is reported as long-term debt due to related parties in our balance sheet as of December 31, 2015 . The following table gives a summary of the sale and leaseback arrangements and repurchase options, as of December 31, 2015 : Unit Effective from Sale value (In $ millions) First repurchase option (In $ millions) Month of first repurchase option Last repurchase option * (In $ millions) Month of last repurchase Option * West Taurus Nov 2008 850 418 February 2015 149 November 2023 West Hercules Oct 2008 850 580 August 2011 135 August 2023 West Linus June 2013 600 370 June 2018 170 June 2028 * Ship Finance has a right to require the Company to purchase the West Linus rig on the 15th anniversary for the price of $100 million if the Company doesn’t exercise the final repurchase option. The Company has determined that the Ship Finance subsidiaries, which own the units, are VIEs, and that the Company is the primary beneficiary of the risks and rewards connected with the ownership of the units and the charter contracts. Accordingly, these VIEs are fully consolidated in the Company’s consolidated financial statements. The equity attributable to Ship Finance in the VIEs is included in non-controlling interests in the Company’s consolidated financial statements. At December 31, 2015 and at December 31, 2014 the units are reported under drilling units in the Company’s balance sheet. The Company did not record any gains from the sale of the units, as they continued to be reported as assets at their original cost in the Company’s consolidated balance sheet at the time of each transaction. The investment in finance lease amounts are eliminated on consolidation against the corresponding finance lease liability held within Seadrill entities. The remainder of assets and liabilities of the VIEs are fully reflected within the consolidated financial statements. The bareboat charter rates are set on the basis of a Base LIBOR Interest Rate for each bareboat charter contract, and thereafter are adjusted for differences between the LIBOR fixing each month and the Base LIBOR Interest Rate for each contract. A summary of the average bareboat charter rates per day for each unit is given below for the respective years. (In US$ thousands) 2015 2016 2017 2018 2019 2020 West Taurus 186 165 158 158 144 143 West Hercules 190 179 170 166 143 141 West Linus 222 222 222 222 173 140 The assets and liabilities in the statutory accounts of the VIEs as at December 31, 2015 and as at December 31, 2014 are as follows: (In US$ millions) December 31, 2015 December 31, 2014 SFL SFL SFL SFL West SFL SFL SFL Name of unit West Taurus West Hercules West Linus West West and West West Hercules West Linus Investment in finance lease 394 394 530 N/A 429 426 574 Amount due from related parties 4 5 — N/A 45 5 14 Other assets 2 2 — N/A 13 10 — Total assets 400 401 530 N/A 487 441 588 Short-term interest bearing debt 23 28 51 N/A 32 28 51 Long-term interest bearing debt 198 229 302 N/A 271 256 400 Other liabilities 3 1 2 N/A 6 1 3 Short-term debt due to related parties — — 23 N/A — — — Long-term debt due to related parties 137 125 125 N/A 145 145 125 Total liabilities 361 383 503 N/A 454 430 579 Equity 39 18 27 N/A 33 11 9 Book value of units in the Company's consolidated accounts 434 571 559 N/A 450 603 581 * Refer to “West Polaris acquisition” discussion below. West Polaris acquisition On December 30, 2014 we entered into a share sale and purchase agreement with Ship Finance, where we acquired 100% of the equity interests in SFL West Polaris Limited, which was the owner of West Polaris . In addition, the Company purchased an outstanding loan of SFL West Polaris Limited of $97 million from Ship Finance. The acquisition price for the shares and the loan amounted to $111 million . This transaction was accounted for as an equity transaction and no gain or loss was recognized. Non-controlling interest of $7 million has been derecognized, with the residual $6 million recognized as a reduction in Additional Paid in Capital. As at December 31, 2014, the consideration for the shares and loan was unpaid, and was settled on January 5, 2015 . Ship Finance continued to provide a guarantee for the bank loan held by SFL West Polaris Limited, until the W est Polaris was sold to Seadrill Partners in June 2015. Historically the Company presented balances due to/from Ship Finance on a gross basis. Beginning on June 30, 2015 the Company has elected to represent this on a net basis, due to the fact that the right of offset is established in the long-term loan agreements, and the balances are intended to be settled on a net basis, providing a more appropriate description of the Company’s related party net debt position. Accordingly the Company has represented $45 million related to SFL Deepwater Ltd, $5 million related to SFL Hercules Ltd, and $14 million related to SFL Linus Ltd as at December 31, 2014, from Amounts due from related parties (current assets) and offset against long-term debt due to related parties (non-current liabilities). Similarly, the Company has presented $8 million related to SFL Deepwater Ltd and $20 million related to SFL Hercules Ltd as at December 31, 2015 from Amounts due from related parties (Current assets) and offset against Long-term debt due to related parties (Non-current liabilities). |
Equity offerings and drilling u
Equity offerings and drilling unit sale transactions with Seadrill Partners | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Equity offerings and drilling unit sale transactions with Seadrill Partners | Common shares 2015 2014 2013 All shares are common shares of $2.00 par value each Shares $millions Shares $millions Shares $millions Authorized share capital 800,000,000 1,600 800,000,000 1,600 800,000,000 1,600 Issued and fully paid share capital 493,078,680 986 493,078,678 986 469,250,933 939 Treasury shares held by Company (318,740 ) (1 ) (318,740 ) (1 ) (272,441 ) (1 ) Outstanding shares in issue 492,759,940 985 492,759,938 985 468,978,492 938 As of December 31, 2015 , the Company’s shares were listed on the Oslo Stock Exchange and the New York Stock Exchange. The Company was incorporated on May 10, 2005 and 6,000 ordinary shares of par value $2.00 each were issued. Since incorporation the number of issued shares has increased from 6,000 to 493,078,680 of par value $2.00 each as of December 31, 2015 . There were no new shares issued in 2015 or 2014 other than the conversion of convertible bonds in 2014, which resulted in 23.8 million shares issued, as discussed in Note 23. A share repurchase program was approved by the Board in 2007 giving the Company the authorization to buy back shares. Shares bought back under the authorization may be cancelled or held as treasury shares. Treasury shares may be held to meet the Company’s obligations relating to the share option plans. As at December 31, 2015 the Company held 318,740 treasury shares and net shares outstanding at December 31, 2015 was 492,759,940 . In November 2014 the Board authorized a share buyback program under which the Company may repurchase up to approximately 10% of shares outstanding. The Company may repurchase shares from time to time in open market transactions or private transactions in accordance with applicable securities laws. The timing and amount of any repurchases will be determined by Management of the Company based on its evaluation of market conditions, capital allocation opportunities, and other factors. The program does not require the Company to repurchase any specific number of shares and may be modified, suspended, extended or terminated by the Company at any time without prior notice. In May 2015, however, as part of the amendments to the covenants contained in the Company’s senior secured credit facilities, the Company is restricted from buying back any shares during the amendment period until January 1 2017. In addition, in April 2016, as part of the amendments to the covenants contained in the Company’s senior secured credit facilities, the Company is restricted from making dividend distributions during the amendment period until June 30, 2017. Equity offerings and drilling unit sale transactions with Seadrill Partners The following table summarizes the issuances of common units for Seadrill Partners between their IPO in October 2012 until the deconsolidation of Seadrill Partners on January 2, 2014: Date Number of Common Units Issued to the Public Number of Common Units Issued to Seadrill Offering Price ($) Gross proceeds from public Net proceeds from public ($'millions) Seadrill's ownership after the offering October 24, 2012 (IPO) 10,062,500 14,752,525 22.00 221 203 75.67 % October 18, 2013 — 3,310,622 32.29 — — 77.47 % December 13, 2013 12,880,000 3,394,916 29.50 380 365 62.35 % The following table summarizes the sale of the Company’s drilling units to Seadrill Partners between its IPO until the deconsolidation of Seadrill Partners on January 2, 2014: (In US$millions) T-15 T-16 West Sirius West Leo Total Adjusted sales price * 74 68 922 729 1,793 Less net assets transferred 5 — (375 ) (116 ) (486 ) Excess of sales price over net assets transferred 79 68 547 613 1,307 Deemed contribution to Seadrill shareholders from non-controlling interest 19 16 105 69 209 * The Adjusted sales price above includes debt assumed and working capital adjustments. These transactions were deemed to be reorganizations of entities under common control and accordingly no gains or losses were recognized by the Company. On May 17, 2013, the Company sold its 100% interest in the entities that own and operate the tender rig T-15 to Seadrill Partners a total purchase price of $210 million , less approximately $101 million of debt outstanding, less $35 million of working capital adjustments. The acquisition was funded by issuance of vendor financing loan to Seadrill Partners of $110 million . On October 18, 2013, the Company sold its 100% interest in the entity that owns the tender rig T-16 , and the beneficial interest in the T-16 drilling contract (collectively, the “T-16 Business”), to Seadrill Partners for a total purchase price of $200 million , less approximately $93 million of debt outstanding, less $39 million of working capital adjustments. As part of the consideration, Seadrill Partners issued 3,310,622 common units to Seadrill as consideration for the purchase in a private placement transaction at a price of $32.29 per unit. This resulted in an increase in net assets attributable to the non-controlling interest of $19 million . On December 13, 2013, the Company sold to Seadrill Partners: (i) 51% of its interest in each of the entities that own, operate and manage the semi-submersible drilling rig, West Sirius (the “ Sirius Business”); and (ii) 30% of its interest interests in each of the entities that own and operate the semi-submersible drilling rig, West Leo (the “Leo Business”). The implied purchase prices of the Sirius Business was $1,035 million , less debt assumed of $220 million , plus working capital adjustments of $107 million . The implied purchase prices of the Leo Business was $1,250 million , less debt assumed of $486 million , less working capital adjustments of $35 million . In relation to these acquisitions, Seadrill Partners issued 12,880,000 common units to the public (including 1,680,000 common units issued to underwriters) and 3,394,916 common units to Seadrill, at a price of $29.50 per unit. The gross proceeds raised from the public was $380 million , and the net proceeds raised after issuance fees was $365 million , of which $137 million was attributable to the non-controlling interest. This resulted in an increase in net assets attributable to the non-controlling interest of $83 million . |
Assets held for sale
Assets held for sale | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets held for sale | Assets held for sale As at December 31, 2015 On December 2, 2015, the Company signed an amendment with Jurong Shipyard (“Jurong”) for the deferral of the delivery of the semi-submersible drilling unit, the West Rigel (the “Unit”). The deferral period lasts until June 2016, following completion of which, the Company and Jurong have agreed to form a Joint Asset Holding Company for joint ownership of the Unit, to be owned 23% by the Company and 77% by Jurong, in the event no employment is secured for the Unit and no alternative transaction is completed. Until the end of the deferral period, the Company will continue to market the unit for an acceptable drilling contract, and the Unit will remain at the Jurong Shipyard in Singapore. The Company and Jurong may also consider other commercial opportunities for the Unit during this period. However, based on current market conditions, management deems the most probable outcome to be that the Unit will be contributed to the Joint Asset Holding Company. As a result, the Company has concluded that the West Rigel drilling unit should be classified as “Held for Sale” as at December 31, 2015. A loss has been recognized in the period of $82 million , which is the difference between the net book value of the unit of $210 million , compared to the expected recoverable value of the Company’s investment in the Joint Asset Holding Company of $128 million . The loss has been recognized in “Loss on disposal” in the Statement of Operations. (In millions of US$) As at December 31, 2015 West Rigel newbuild investment, classified as held for sale 210 Loss on disposal (82 ) Non-current assets held for sale 128 As at December 31, 2014 During the year ended December 31, 2014, the Company entered into a joint venture agreement with an investment fund controlled by Fintech, for the purpose of owning and managing certain jack-up drilling units located in Mexico under contract with Pemex. The West Oberon, West Intrepid, West Defender, West Courageous and West Titania jack-up drilling rigs (“the jack-up drilling rigs”) were included within the joint venture. The transaction was completed on March 10, 2015, when Fintech subscribed for a 50% ownership interest in the joint venture company, SeaMex, which was previously 100% owned by the Company, and SeaMex simultaneously purchased the jack-up drilling rigs from Seadrill Limited. As a result of the transaction the Company no longer controls the entities that own and operate these jack-up drilling units, and accordingly the Company has deconsolidated these entities as of March 10, 2015. Please refer to Note 11 for more details . Assets and liabilities held in the Company’s consolidated balance sheet included as held for sale are shown below: (In US$ millions) As at December 31, 2014 ASSETS Current assets Cash and cash equivalents 27 Accounts receivables, net 78 Deferred tax assets 9 Other current assets 20 Total current assets 134 Non-current assets Drilling units 965 Deferred tax assets LT 5 Goodwill 49 Other non-current assets 86 Total non-current assets 1,105 Total assets 1,239 LIABILITIES Current liabilities Trade accounts payable (2 ) Other current liabilities (56 ) Total current liabilities (58 ) Non-current liabilities Other non-current liabilities (50 ) Total non-current liabilities (50 ) Total liabilities (108 ) |
Supplementary cash flow informa
Supplementary cash flow information | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary cash flow information | Supplementary cash flow information The table below summarizes the non-cash investing and financing activities relating to the periods presented: December 31, 2015 December 31, 2014 December 31, 2013 Non-cash investing activities Disposal of subsidiaries - existing bank loan repaid (1) 150 — — Disposal of West Auriga - consideration received as a loan note (2) — 100 — Disposal of West Vela - deferred consideration receivable (2) — 74 — Disposal of tender rig business - deferred consideration received in shares (2) — 416 Disposal of tender rig business - deferred consideration in receivables (2) — 145 Acquisition of Archer shares, settled against existing related party loan (3) — — 55 Acquisition of AOD shares, settled against existing related party loan (4) — — 67 Non-cash financing activities Repayment of bank loan through disposal of subsidiaries (1) (150 ) — — Repayment relating to share forward contracts and other derivatives (5) (136 ) — — Repayment relating to SapuraKencana financing agreements (6) (93 ) — — Conversion of convertible bond into shares, decrease in long term debt (7) — 584 — Conversion of convertible bond into shares, net increase in equity (7) — 615 — Purchase of SFL Polaris, net increase in related party payables and net decrease in equity (8) — 13 — Dividend to non-controlling interests in VIEs (9) — — 223 1. Existing debt of the Company was directly settled as consideration for the disposal of certain drilling rigs to the SeaMex joint venture - see Note 5 to the consolidated financial statements included herein , for more details. 2. Disposals of the West Auriga , West Vela , in 2014 and the disposal of the tender rig business in 2013 - refer to Note 11 to the consolidated financial statements included herein , for more details. 3. Private placement of Archer shares in February 2013 was settled against related party loan receivable - refer to Note 17 to the consolidated financial statements included herein , for more details. 4. Private placement of AOD shares in March 2013 was settled against elated party loan receivable - refer to Note 17 to the consolidated financial statements included herein , for more details. - 5. During the period, Company settled Sevan share repurchase agreements using cash balances already classified as restricted. 6. During the period, the Company settled SapuraKencana financing agreements using cash balances already classified as restricted. 7. In July 2014, the Company launched a voluntary incentive payment offer to convert any and all of the $650 million principal amount of 3.375% convertible bonds. Holders converted at the contractual conversion price of $27.69 per share and received an incentive payment of $12,102.95 per $100,000 principal amount of bond held. As a result of the transaction, the number of common shares outstanding in the Company increased by 23.8 million shares, with an increase to equity of $893 million . $278 million of the total consideration transferred on conversion was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of stockholders’ equity. 8. Purchase of SFL Polaris from Ship Finance - refer to Note 35 - VIEs. 9. Dividends declared by VIEs in 2013 to Ship Finance was settled against related party balances with Ship Finance - refer to Note 27 - Non-Controlling interests. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Agreement with DSME Shipyard On January 15, 2016 Seadrill announced that an agreement with DSME shipyard had been reached to defer the delivery of 2 ultra-deepwater drillships, the West Aquila and West Libra, until the second quarter 2018 and first quarter of 2019 respectively. Under the terms of the original construction contracts, the units were to be delivered by the end of the second quarter of 2016 and the total final yard installment for both units of over $800 million was due at that time. This agreement significantly improves the Company’s near term liquidity position by deferring these capital commitments to 2018 and 2019 with no further payments to the yard until that time. Sevan Developer deferral agreement with Cosco On April 15, 2016, Sevan Drilling and Cosco agreed to exercised the second six-month deferral option for the Sevan Developer newbuilding, to extend the deferral agreement until October 15, 2016. The final delivery installment has been amended to $473.4 million , representing 90% of the $526.0 million contract price and Cosco will refund $26.3 million , or 5% of the contract price, plus other associated costs to Sevan Drilling. Agreement with Dalian Shipyard On April 18, 2016, we entered into agreements with Dalian shipyard to further the defer the deliveries of all eight jack-ups under construction. Previously one unit was due at the end of 2015, five units were due in 2016, and two units were due in 2017. Following the deferral agreement, one unit is now due at the end of 2016, four units are now due in 2017, and three units are now due in 2018. This agreement significantly improves the Company’s near term liquidity position by deferring these capital commitments with no further payments to the yard until the revised delivery date. Amendments to our secured credit facilities On April 28, 2016 the Company executed an amendment to the covenants contained within its secured credit facilities, which among other things, amend the equity ratio, leverage ratio, minimum-value-clauses, and minimum liquidity requirements. The covenant amendments are in place until June 30, 2017. In addition the maturity dates of the $450 million senior secured credit facility, related to the West Eminence, the $400 million senior secured credit facility, and the $2,000 million senior secured credit facility for our consolidated subsidiary, NADL, have been amended to December 31, 2016, May 31, 2017 and June 30, 2017 respectively. Please see “Note 23. Long-term debt—Covenants contained within our debt facilities” for more information. Sale of investment in SapuraKencana On April 27, 2016 the Company sold all of its investment in shares of SapuraKencana resulting in net cash proceeds of approximately $195 million . Drilling Contracts On February 8, 2016 , we secured a new drilling contract in Angola for the West Eclipse , which is expected to commence in the second quarter of 2016. The contract is for a firm period of 2 years and increases contract revenue backlog by approximately $285 million , inclusive of mobilization. As part of this agreement, the backlog for the West Polaris has been decreased by approximately $95 million , which reduces the contingent consideration that we receive from Seadrill Partners, following the sale of the West Polaris to Seadrill Partners in June 2015. On March 23, 2016 , we extended the contract for the West Tellus with Petrobras by 18 months , commencing in April 2018 to the end of October 2019. The total backlog for the contract extension is approximately $164 million . As part of the agreement to extend the West Tellus , we agreed to a dayrate reduction on the current contract effective from February 26, 2016, resulting in a $132 million reduction in our backlog. The resulting net effect of this agreement is an increase in contract backlog of $32 million . On March 30, 2016 , Sevan Drilling and Petrobras terminated early the Sevan Driller contract and reduced the contract dayrate on the drilling contract for the Sevan Brasil. Subsequent to the effective cancellation of the Sevan Driller contract the unit was awarded a contract by Shell in Brazil for 60 days . The combined impact of the cancellation, reduction and new award is a decrease in contract backlog of approximately $127 million . |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The financial statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar (U.S. dollar) rounded to the nearest million, unless otherwise stated. The accompanying consolidated financial statements present the financial position of Seadrill Limited, the consolidated subsidiaries and the group’s interest in associated entities. Investments in companies in which the Company controls, or directly or indirectly holds more than 50% of the voting control are consolidated in the financial statements, as well as certain variable interest entities of which the Company is deemed to be the primary beneficiary. The accounting policies set out below have been applied consistently to all periods in these consolidated financial statements, unless otherwise noted. |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the assets and liabilities of the Company, its majority owned and controlled subsidiaries and certain variable interest entities, (“VIE”s) in which the Company is deemed to be the primary beneficiary. All intercompany balances and transactions have been eliminated on consolidation. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated support; (b) equity interest holders as a group lack either i) the power to direct the activities of the entity that most significantly impact on its economic success, ii) the obligation to absorb the expected losses of the entity, or iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. U.S. GAAP requires a VIE to be consolidated by its primary beneficiary, being the interest holder, if any, which has both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. We evaluate our subsidiaries, and any other entities in which we hold a variable interest, in order to determine whether we are the primary beneficiary of the entity, and where it is determined that we are the primary beneficiary we consolidate the entity. Investment in companies in which we hold an ownership interest of between 20% and 50% , and over which we exercise significant influence, but do not consolidate, are accounted for using the equity method and classified within “Investments in associated companies.” The Company records its share of earnings or losses from associated companies in the consolidated statements of operations as “Share in results from associated companies.” The excess, if any, of purchase price over book value of the Company’s investments in equity method investees is included in the accompanying consolidated balance sheets in “Investment in associated companies.” Investments in companies in which our ownership is less than 20% are valued at fair value and classified within “Marketable Securities” unless it is not possible to estimate fair value, then the cost method is used. Intercompany transactions and internal sales have been eliminated on consolidation. Unrealized gains and losses arising from transactions with associates are eliminated to the extent of the Company’s interest in the entity. |
Use of estimates | Use of estimates Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Contract revenue | Contract revenue A substantial majority of the Company’s revenues are derived from dayrate based drilling contracts (which may include lump sum fees for mobilization and demobilization) and other service contracts. Both dayrate based and lump sum fee revenues are recognized ratably over the contract period when services are rendered. Under some contracts, the Company is entitled to additional payments for meeting or exceeding certain performance targets. Such additional payments are recognized when any contingencies are resolved or upon completion of the drilling program. In connection with drilling contracts, the Company may receive lump sum fees for the mobilization of equipment and personnel or for capital additions and upgrades prior to commencement of drilling services. These up-front fees are recognized as revenue over the contract term, excluding option periods. In some cases, the Company may receive lump sum non-contingent fees or dayrate based fees from customers for demobilization upon completion of a drilling contract. Non-contingent demobilization fees are recognized as revenue over contract term, excluding option periods not exercised by our customers. Contingent demobilization fees are recognized as earned upon completion of the drilling contract. Fees received from customers under drilling contracts for capital upgrades are deferred and recognized over the contract term, excluding option periods not exercised. In certain countries in which we operate, taxes such as sales, use, value-added, gross receipts and excise may be assessed by the local government on our revenues. We record our tax-assessed revenue transactions on a net basis in our consolidated statement of income. |
Reimbursables | Reimbursables Reimbursements received for the purchases of supplies, personnel services and other services provided on behalf of and at the request of our customers in accordance with a contract or agreement are recorded as revenue. The related costs are recorded as reimbursable expenses in the same period. |
Other revenues | Other revenues In a business combination there may exist favorable and unfavorable drilling contracts which are recorded at fair value at the date of acquisition. A favorable or unfavorable drilling contract is a contract that has a dayrate which differs from prevailing market rates at the time of acquisition. The net present value of such contracts is recorded as an asset or a liability at the purchase date and subsequently recognized as revenue or reduction to revenue over the contract term. Related party revenues relate to management support and administrative services provided to our associates in which we maintain an investment. External management fees relate to the operational, administrative and support services we provide to third parties. |
Mobilization and demobilization expenses | Mobilization and demobilization expenses Mobilization costs incurred as part of a drilling contract are capitalized and recognized as expense over the contract term, excluding option periods not exercised by our customers. The costs of relocating drilling units that are not under contract are expensed as incurred. Demobilization costs are costs related to the transfer of a vessel or drilling rig to a safe harbor or different geographic area and are expensed as incurred. |
Rig operating expenses | Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked, and include the remuneration of offshore crews and related costs, supplies, insurance costs, expenses for repairs and maintenance as well as costs related to onshore personnel in various locations where we operate the drilling units and are expensed as incurred. |
Repairs, maintenance and periodic surveys | Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized under drilling units and amortized over the anticipated period between overhauls, which is generally 5 years. Related costs are primarily yard costs and the cost of employees directly involved in the work. Amortization costs for periodic overhauls are included in depreciation and amortization expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. |
Foreign currencies | Foreign currencies The Company and the majority of its subsidiaries use the U.S. dollars as their functional currency because the majority of their revenues and expenses are denominated in U.S. dollars. Accordingly, the Company’s reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, the Company uses the current method of translation whereby the statements of operations are translated using the average exchange rate for the year and the assets and liabilities are translated using the year end exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders’ equity. Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency assets and liabilities are translated using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the consolidated statements of operations. |
Current and non-current classification | Current and non-current classification Assets and liabilities (excluding deferred taxes) are classified as current assets and liabilities respectively, if their maturity is within 1 year of the balance sheet date. Otherwise, they are classified as non-current assets and liabilities. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes in a classified statement of financial position. The update require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position as opposed to the current requirement to separate these into current and non-current amounts. As permitted by ASU 2015-17, the Company early-adopted this standard as at December 31, 2015 and applied it retrospectively to all periods presented. As a result the Company has presented all deferred tax liabilities and assets, as well as any related valuation allowance, as non-current for all periods presented in this annual report. The adoption of this guidance did not have a material impact on Company’s consolidated financial statements and related disclosures. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with original maturities of three months or less. |
Restricted cash | Restricted cash Restricted cash consists of bank deposits which have been pledged as collateral for certain guarantees issued by a bank or minimum deposits which must be maintained in accordance with contractual arrangements. Restricted cash amounts with maturities longer than one year are classified as non-current assets. |
Equity method investments | Equity method investments Investments in common stock are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control over, the investee. Significant influence is generally deemed to exist if the Company has an ownership interest in the voting stock of the investee between 20% and 50%, although other factors such as representation on the investee’s Board of Directors and the nature of commercial arrangements are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the Company records its investments in equity-method investees in the consolidated balance sheet under “Investment in associated companies” and its share of the investees’ earnings or losses together with other-than-temporary impairments in value and gain/loss on sale of investments under “Share in results from associated companies (net of tax)” in the consolidated statements of income. All other equity investments, which consist of investments for which the Company does not have the ability to exercise significant influence, or are not investments in common stock, are accounted for under the cost method or at fair value if readily determinable. The Company analyzes its equity method investees for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the investment. The Company records an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. |
Marketable securities | Marketable securities Marketable equity securities held by the Company which do not give the Company the ability to exercise significant influence are considered to be available-for-sale. These are remeasured at fair value each reporting period with resulting unrealized gains and losses recorded as a separate component of accumulated other comprehensive income in shareholders’ equity. Gains and losses are not realized until the securities are sold or subject to an other than temporary impairment. Gains and losses on forward contracts to purchase marketable equity securities that do not meet the definition of a derivative are accounted for as available-for-sale. The Company analyzes its available-for-sale securities for impairment at each reporting period to evaluate whether an event or change in circumstances has occurred in that period that may have a significant adverse effect on the value of the securities. The Company records an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date, unless there are mitigating factors that indicate impairment may not be required. If an impairment charge is recorded, subsequent recoveries in value are not reflected in earnings until sale of the securities held as available for sale occurs. |
Receivables | Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount less an allowance for doubtful accounts. The Company establishes reserves for doubtful accounts on a case-by-case basis when it is unlikely that required payments of specific amounts will occur. In establishing these reserves, the Company considers the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes. Receivable amounts determined as being unrecoverable are written off. |
Newbuildings | Newbuildings The carrying value of drilling units under construction (“Newbuildings”) represents the accumulated costs at the balance sheet date. Cost components include payments for yard installments and variation orders, construction supervision, equipment, spare parts, capitalized interest, costs related to first time mobilization and commissioning costs. No charge for depreciation is made until commissioning of the newbuilding has been completed and it is ready for its intended use. The Company may have option agreements with shipyards to order new drilling units at fixed or variable prices which require some or no additional payment upon exercise. Payments for drilling unit purchase options are capitalized at the time when option contracts are acquired or entered into. The Company reviews the expected future cash flows, which would result from the exercise of each option contract on a contract by contract basis to determine whether the carrying value of the option is recoverable. |
Capitalized interest | Capitalized interest Interest expense is capitalized during construction of newbuildings based on accumulated expenditures for the applicable project at the Company’s current rate of borrowing. The amount of interest expense capitalized in an accounting period shall be determined by applying an interest rate (“the capitalization rate”) to the average amount of accumulated expenditures for the asset during the period. The capitalization rates used in an accounting period shall be based on the rates applicable to borrowings outstanding during the period. The Company does not capitalize amounts beyond the actual interest expense incurred in the period. If the Company’s financing plans associate a specific new borrowing with a qualifying asset, the Company uses the rate on that borrowing as the capitalization rate to be applied to that portion of the average accumulated expenditures for the asset that does not exceed the amount of that borrowing. If average accumulated expenditures for the asset exceed the amounts of specific new borrowings associated with the asset, the capitalization rate to be applied to such excess shall be a weighted average of the rates applicable to other borrowings of the Company. |
Drilling units | Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of the Company’s floaters and, jack-up rigs, when new, is 30 years. Significant investments are capitalized and depreciated in accordance with the nature of the investment. Significant investments that are deemed to increase an asset’s value for its remaining useful life are capitalized and depreciated over the remaining life of the asset. Cost of property and equipment sold or retired, with the related accumulated depreciation and write-downs are removed from the consolidated balance sheet, and resulting gains or losses are included in the consolidated statement of operations. |
Assets held for sale | Assets held for sale Assets are classified as held for sale when all of the following criteria are met: Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group), the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups), an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale, within 1 year. The term probable refers to a future sale that is likely to occur, the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. |
Discontinued operations | Discontinued operations The Company will present the results of operations of a component of the Company as defined by U.S. GAAP, that either has been disposed of or is classified as held for sale, as discontinued operations, if that component represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. |
Equipment | Equipment Equipment is recorded at historical cost less accumulated depreciation and is depreciated over its estimated remaining useful life. The estimated economic useful life of Equipment, when new, is between 3 and 5 years depending on the type of asset. |
Goodwill | Goodwill The Company allocates the purchase price of acquired businesses to the identifiable tangible and intangible assets and liabilities acquired, with any remaining amount being recorded as goodwill. Goodwill is tested for impairment at least annually at the reporting unit level, which is defined as an operating segment or a component of an operating segment that constitutes a business for which financial information is available and is regularly reviewed by management. The Company has determined that its reporting units are the same as its operating segments for the purpose of allocating goodwill and the subsequent testing of goodwill for impairment. The Company tests goodwill for impairment on an annual basis as of December 31 each year or when events or circumstances indicate that a potential impairment exists. The Company may first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two step goodwill impairment test. If the qualitative factors indicate possible impairment, the Company performs a quantitative assessment to estimate fair value of its reporting units compared to their carrying value. In the event that the fair value is less than carrying value, the Company must perform an exercise similar to a purchase price allocation in a business combination in order to determine the amount of the impairment charge. The quantitative goodwill impairment test for a reporting unit is based on discounted cash flows. The Company uses estimated future cash flows applying contract dayrates during the firm contract periods and estimated forecasted dayrates for the periods after expiry of firm contract periods. The estimated future cash flows will be based on remaining economic useful lives for the assets, and discounted using a weighted average cost of capital (“WACC”). |
Other intangible assets | Other intangible assets and liabilities Other intangible assets and liabilities are recorded at fair value on the date of acquisition less accumulated amortization. The amounts of these assets and liabilities less the estimated residual value, if any, is generally amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. Other intangible assets include technology, customer relationships and favorable drilling contracts. Other intangible liabilities include unfavorable drilling contracts. |
Impairment of long-lived assets | Impairment of long-lived assets The carrying value of long-lived assets that are held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. The Company first assesses recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to result from the asset, including eventual disposition. If the undiscounted future net cash flows are less than the carrying value of the asset, the Company then compares the carrying value of the intangible asset with the discounted future net cash flows, using relevant WACC to determine an impairment loss to be recognized during the period. |
Defined benefit pension plans | Defined benefit pension plans The Company has several defined benefit plans which provide retirement, death and early termination benefits. The Company’s net obligation is calculated separately for each plan by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to a present value, and the aggregated fair value of any plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations. The retirement benefits are generally a function of number of years of employment and amount of employees’ remuneration. The plans are primarily funded through payments to insurance companies. The Company records its pension costs in the period during which the services are rendered by the employees. Actuarial gains and losses are recognized in the statement of operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. On retirement, or when an employee leaves the Company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting U.S. GAAP requires a portion of the net unrealized actuarial gains/losses to be recognized through the statement of operations. The portion corresponds to the relative value of the obligation reduction as a result of the settlement. However settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. The Company deems the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the statement of operations. |
Treasury shares | Treasury shares Treasury shares are recognized at cost as a component of equity. The purchase of treasury shares reduces the Company’s share capital by the nominal value of the acquired treasury shares. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities The Company’s primary derivative instruments include interest-rate swap agreements, foreign currency options and forward exchange contracts which are recorded at fair value. Changes in the fair value of these derivatives, which have not been designated as hedging instruments, are recorded as a gain or loss as a separate line item within financial items in our consolidated statement of operations. Changes in the fair value of any derivative instrument that we have formally designated as a hedge, are recognized in Accumulated other comprehensive income in the consolidated balance sheets. Any change in fair value relating to an ineffective portion of a designated hedge is recognized, in the consolidated statement of operations. When the hedged item affects the income statement, the gain or loss included in Accumulated other comprehensive income is reported on the same line in the consolidated statements of operations as the hedged item. |
Income taxes | Income taxes Seadrill is a Bermuda company that has a number of subsidiaries and affiliates in various jurisdictions. Currently, the Company and its Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempt companies. The Company and its subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that it will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize tax liabilities based on our assessment of whether our tax positions are more likely than not sustainable, based solely on the technical merits and considerations of the relevant taxing authority’s widely understood administrative practices and precedence. Changes in tax laws, regulations, agreements, treaties, foreign currency exchange restrictions or our levels of operations or profitability in each jurisdiction may impact our tax liability in any given year. While our annual tax provision is based on the information available to us at the time, a number of years may elapse before the ultimate tax liabilities in certain tax jurisdictions are determined. Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as of the Valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. |
Deferred charges | Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, and amortized over the term of the related loan and the amortization is included in interest expense. |
Convertible debt | Convertible debt Convertible bond loans issued by the Company include both a loan component (host contract) and an option to convert the loan to shares (embedded derivative). An embedded derivative, such as a conversion option, may be separated from its host contract and accounted for separately if certain criteria are met (including if the contract that embodies both the embedded derivative and the host contract is not measured at fair value, the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract and if a separate instrument with the same terms as the embedded instrument would be a derivative). If an embedded derivative instrument is separated from its host contract, the host contract shall be accounted for based on generally accepted accounting principles applicable to instruments of that type which do not contain embedded derivative instruments. |
Total Return Equity Swaps | Total Return Equity Swaps From time to time, the Company enters into total return equity swaps (“TRS”) indexed to the Company’s own shares, where the counterparty acquires shares in the Company and the Company carries the risk of fluctuations in the share price of the acquired shares. The fair value of each TRS is recorded as an asset or liability, with the changes in fair value recorded in the consolidated statement of operations. The Company may, from time to time, enter into TRS arrangements indexed to shares in other companies which are accounted for in a similar manner. |
Share-based compensation | Share-based compensation The Company has established an employee share ownership plan under which employees, directors and officers of the Group may be allocated options to subscribe for new shares in the ultimate parent, Seadrill Limited. The compensation cost for share options is recognized as an expense over the service period based on the fair value of the options granted. The fair value of the share options issued under the Company’s employee share option plans is determined at grant date taking into account the terms and conditions upon which the options are granted, and using a valuation technique that is consistent with generally accepted valuation methodologies for pricing financial instruments, and that incorporates all factors and assumptions that knowledgeable, willing market participants would consider in determining fair value. The fair value of the share options is recognized as personnel expenses with a corresponding increase in equity over the period during which the employees become unconditionally entitled to the options. Compensation cost is initially recognized based upon options expected to vest with appropriate adjustments to reflect actual forfeitures. National insurance contributions arising from such incentive programs are expensed when the options are exercised. The Company has also established a Restricted Stock Units (“RSU”) plan where the holder of an award is entitled to receive shares if still employed at the end of the three year vesting period. There is no requirement for the holder to pay for the share on grant or vesting of the award. The fair value of the RSU award is calculated as the market share price on grant date. The fair value of the awards expected to vest is recognized as compensation cost straight-line over the vesting period. |
Provisions | Provisions A provision is recognized in the balance sheet when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. |
Related parties | Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. |
Earnings per share | Earnings per share Basic earnings per share (“EPS”) is calculated based on the income/(loss) for the period available to common stockholders divided by the weighted average number of shares outstanding for basic EPS for the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments which for the Company includes share options, restricted stock units and convertible debt. The determination of dilutive earnings per share requires the Company to potentially make certain adjustments to net income and for the weighted average shares outstanding used to compute basic earnings per share unless anti-dilutive. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards The Company has adopted Accounting Standards Update (“ASU”) 2015-03, Interest - Imputation of Interest, (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs as at June 30, 2015, which requires the debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts and premiums. This ASU is effective for the first interim period beginning after December 15, 2015 and early adoption is permitted. The Company has chosen to early adopt this ASU in the second quarter of 2015. As a result, $42 million of debt issuance costs have been reclassified from Other current assets to a direct deduction from Current portion of long-term debt as at December 31, 2014 and $103 million of debt issuance costs have been reclassified from Other non-current assets to a direct deduction from Long-term debt as at the same date. Similarly, as at December 31, 2015, $37 million of debt issuance costs have been presented as a direct deduction from the current portion of long-term debt and $81 million of debt issuance costs have been presented as a direct deduction from long-term debt as at that date. Refer to Note 23 – Long term debt, included herein, for further details. In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity , which amends the criteria for reporting discontinued operations to include only disposals representing a strategic shift in operations. The ASU also requires expanded disclosures regarding the assets, liabilities, income, and expenses of discontinued operations. Seadrill adopted this guidance in the period, which was effective for the discontinued operations occurring after January 1, 2015. The adoption of this guidance did not have a material impact on Company’s consolidated financial statements and related disclosures. In June 2014, the FASB issued ASU 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures , which required two accounting changes. First, the amendments in this Update changed the accounting for repurchase-to-maturity transactions to secured borrowing accounting. Second, for repurchase financing arrangements, the amendments required separate accounting for a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty, which would result in secured borrowing accounting for the repurchase agreement. The ASU also requires for certain transactions comprising (1) a transfer of a financial asset accounted for as a sale and (2) an agreement with the same transferee entered into in contemplation of the initial transfer that results in the transferor retaining substantially all of the exposure to the economic return on the transferred financial asset throughout the term of the transaction. Seadrill adopted this guidance in the period. The ASU is effective periods beginning after December 15, 2014. However, the adoption of this guidance does not have a material impact on Company’s consolidated financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred income taxes in a classified statement of financial position. The update requires that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position as opposed to the current requirement to separate these into current and non-current amounts. As permitted by ASU 2015-17, the Company early-adopted this standard as at December 31, 2015 and applied it retrospectively to all periods presented. As a result the Company has presented all deferred tax liabilities and assets, as well as any related valuation allowance, as non-current for all periods presented in this annual report. The adoption of this guidance did not have a material impact on Company’s consolidated financial statements and related disclosures. Recently Issued Accounting Standards In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides new authoritative guidance on the methods of revenue recognition and related disclosure requirements. In April 2015 the FASB proposed to defer the effective date of the guidance by one year. Based on this proposal, public entities would need to apply the new guidance for annual and interim periods beginning after December 15, 2017, and shall be applied, at the Company’s option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted until periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern , which provides new authoritative guidance with regards to management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The ASU will be effective for all entities in the first annual period ending after December 15, 2016 (December 31, 2016 for calendar year-end entities) and early adoption is permitted. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis , which made targeted amendments to the current consolidation guidance that could affect all industries. The FASB issued this guidance to respond to stakeholders’ concerns about the current accounting for consolidation of certain legal entities. Financial statement users asserted that in certain situations in which consolidation is ultimately required, deconsolidated financial statements are necessary to better analyze the reporting entity’s economic and operational results. Previously, the FASB issued an indefinite deferral for certain entities to partially address those concerns. However, the amendments in this guidance rescind that deferral and address those concerns by making changes to the consolidation guidance. The ASU will be effective for public entities in the first annual period, and for interim periods therein, beginning after December 15, 2015 and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement , which provides explicit guidance about a customer’s accounting for fees paid in a cloud computing arrangement. This ASU will be effective for the first interim period beginning after December 15, 2015 and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments . The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance further requires that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The guidance will be effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures. In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which made targeted improvements to the recognition and measurement of financial assets and financial liabilities. The update changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and early adoption is permitted in some cases. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and early adoption is permitted. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures. |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Results | Segment results are evaluated on the basis of operating income, and the information given below is based on information used for internal management reporting. In prior periods, the company reported a tender rigs segment, which related to services encompassing drilling, completion and maintenance of offshore production wells in Southeast Asia, West Africa and the Americas. In these periods, the Company had drilling contracts related to self-erecting tender rigs and semi-submersible tender rigs. Following the sale of the majority of the tender rig business to SapuraKencana, which closed on April 30, 2013, and further the deconsolidation of Seadrill Partners LLC (“Seadrill Partners”) as of January 2, 2014, the Company no longer has any drilling contracts in the tender rig segment. Accordingly, the Company did not report this segment for the years ended December 31, 2015 and December 31, 2014 . The Company however provides management services to Seadrill Partners and SeaMex which are recognized within the Other segment. Revenues (In US$ millions) 2015 2014 2013 Floaters 2,906 3,360 3,698 Jack-up rigs 1,293 1,478 1,175 Tender Rigs — — 382 Other 136 159 27 Total 4,335 4,997 5,282 Depreciation and amortization (In US$ millions) 2015 2014 2013 Floaters 571 508 531 Jack-up rigs 208 185 163 Tender Rigs — — 17 Total 779 693 711 Operating income – net income (In US$ millions) 2015 2014 2013 Floaters 340 1,992 1,472 Jack-up Rigs 664 275 450 Tender Rigs — — 176 Other 15 12 — Operating income 1,019 2,279 2,098 Unallocated items: Total financial items and other (1,561 ) 1,827 842 Income tax expense (208 ) (19 ) (154 ) Net income (750 ) 4,087 2,786 Drilling Units and Newbuildings - Total assets (In US$ millions) 2015 2014 Floaters 12,189 12,849 Jack-up Rigs 4,220 4,326 Tender Rigs — — Total Drilling Units and Newbuildings 16,409 17,175 Assets held for sale 128 1,239 Investments in Associated companies 2,590 2,898 Marketable securities 324 751 Goodwill — 604 Cash and restricted cash 1,292 1,280 Other assets 2,727 2,350 Total 23,470 26,297 Goodwill (In US$ millions) 2015 2014 Floaters — 604 Total — 604 Capital expenditures – fixed assets (In US$ millions) 2015 2014 2013 Floaters 950 2,327 3,178 Jack-up Rigs 95 776 1,371 Tender Rigs — — 150 Total 1,045 3,103 4,699 |
Schedules of Concentration of Risk, by Risk Factor | In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % |
Company's Revenues and Fixed Assets by Geographic Area | Geographic segment data Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents the Company’s revenues and fixed assets by geographic area: Revenues (In US$ millions) 2015 2014 2013 Brazil 877 991 825 Norway 641 1,071 1,198 Angola 527 707 734 Nigeria 499 21 207 Others * 1,791 2,207 2,318 Total Revenue 4,335 4,997 5,282 * Other countries represents countries in which we operate that individually had revenues representing less than 10 percent of total revenues earned for any of the periods presented. Fixed assets – operating drilling units (1) (In US$ millions) 2015 2014 Brazil 4,074 2,798 Norway 2,094 2,252 Angola 1,452 1,852 Others * 7,310 8,243 Total 14,930 15,145 (1) The fixed assets referred to in the table are the Company’s operating drilling units. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. * Other countries represents countries in which we operate that individually had fixed assets representing less than 10 percent of total fixed assets for any of the periods presented. |
Other revenues (Tables)
Other revenues (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Revenues [Abstract] | |
Other revenues | Other revenues consist of the following: Year ended December 31 (In US$ millions) 2015 2014 2013 Amortization of unfavorable contracts 116 130 67 Amortization of favorable contracts — — (2 ) Revenues related party 119 97 2 External management fees with third parties 30 62 45 Total 265 289 112 |
(Loss)_gain on disposals (Table
(Loss)/gain on disposals (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Proceeds from Sale of Productive Assets [Abstract] | |
Gain on Sale of Assets | The Company has recognized the following (losses)/gains on disposals: (In US$ millions) Net proceeds/recoverable amount Book value on disposal (Loss)/gain Year ended December 31, 2015: Cancellation of West Mira 199 279 (80 ) West Rigel Transferred to Asset held for sale 128 210 (82 ) Sale of West Polaris 235 312 (77 ) SeaMex Limited 1,240 1,059 181 Assets written off — 5 (5 ) Total for year ended December 31, 2015 1,802 1,865 (63 ) Year ended December 31, 2014: Sale of West Auriga business 466 26 440 Sale of West Vela business 536 344 192 Total for year ended December 31, 2014 1,002 370 632 Year ended December 31, 2013: Sale of Jack-up rig West Janus 73 12 61 Total for year ended December 31, 2013 73 12 61 |
Interest expense (Tables)
Interest expense (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Interest Expense [Abstract] | |
Schedule of Debt | Year ended December 31 2015 2014 2013 Gross interest expense 475 548 540 Capitalized interest (60 ) (70 ) (95 ) Net interest expense 415 478 445 |
Impairment loss on marketable52
Impairment loss on marketable securities and investments in associated companies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Recorded Equity in the Statutory Accounts of Equity Method Investees | The table below summarizes the total impairments of investments made during the year ended December 31, 2015: (In $ millions) Year ended December 31, 2015 Impairments of Investment in associated companies Seadrill Partners - Total direct ownership investments 302 Seadrill Partners - Subordinated units 125 Seadrill Partners - Seadrill member interest and IDRs 106 Total impairment of investments in associated companies 533 Impairments of Marketable securities (refer to Note 14) Seadrill Partners - Common Units 574 SapuraKencana 167 Total impairment of marketable securities investments (reclassification from OCI) 741 Total impairment of investments 1,274 At the year end the share of recorded equity in the statutory accounts of the Company’s associated companies were as follows: (In US$ millions) December 31, 2015 December 31, 2014 December 31, 2013 Archer 79 218 253 Seabras Sapura Participacoes 24 24 13 Seabras Sapura Holding 19 6 — Seadrill Partners * N/A N/A — Seamex 200 — — Total 322 261 277 * The Company accounts for its direct interests in operating subsidiaries of Seadrill Partners, and its ownership of Seadrill Partners Subordinated Units, under the equity method. The Company’s share of Seadrill Partner’s recorded equity consists of the equity attributable to non-controlling interests in Seadrill Partners, and additionally a proportionate share of equity attributable to Seadrill Partners’ unitholders. The equity attributable to non-controlling interest in Seadrill Partners as at December 31, 2015 was $1,133 million . Seadrill’s holding in the subordinated units represents 18.0% of the limited partner interests in Seadrill Partners. Total equity attributable to Seadrill Partners unitholders as at December 31, 2015 was $964 million . At the year-end the book values of the Company’s investment in associated companies are as follows: (In US$ millions) December 31, 2015 December 31, 2014 Archer — — Seabras Sapura Participacoes 29 21 Seabras Sapura Holding 158 117 Itaunas Drilling 3 3 Camburi Drilling 6 6 Sahy Drilling 4 4 Seadrill Partners - Total direct ownership interests 1,767 2,091 Seadrill Partners - Subordinated Units 293 412 Seadrill Partners - Seadrill Member Interest and IDRs (1) 137 244 Seamex Ltd. 193 — Total 2,590 2,898 (1) The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of Income Taxes | Income taxes consist of the following: Year ended December 31 (In US$ millions) 2015 2014 2013 Current tax expense: Bermuda — — — Foreign 177 23 200 Deferred tax expense/(benefit): Bermuda — — — Foreign 31 (4 ) (50 ) Tax related to internal sale of assets in subsidiary, amortized for group purposes — — 4 Total tax expense 208 19 154 Effective tax rate (38.4 )% 0.5 % 5.2 % |
Income Tax Reconciliation | The income taxes for the years ended December 31 2015 , 2014 and 2013 differed from the amount computed by applying the Bermudan statutory income tax rate of 0% as follows: Year ended December 31 (In US$ millions) 2015 2014 2013 Income taxes at statutory rate — — — Effect of transfers to new tax jurisdictions — — 4 Effect of change on uncertain tax positions relating to prior year — (85 ) (7 ) Effect of unremitted earnings of subsidiaries 38 — — Effect of taxable income in various countries 170 104 157 Total tax expense 208 19 154 |
Net Deferred Tax Assets (Liabilities) | Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets (liabilities) consist of the following: Deferred Tax Assets: (In US$ millions) December 31, December 31, Pensions and stock options 9 19 Provisions 16 20 Net operating losses carried forward 265 291 Other 2 3 Gross deferred tax asset 292 333 Valuation allowance related to net operating losses carried forward (211 ) (280 ) Net deferred tax asset 81 53 Deferred Tax Liability: (In US$ millions) December 31, December 31, Property, plant and equipment 98 60 Unremitted Earnings of Subsidiaries 38 — Foreign exchange — 7 Gross deferred tax liability 136 67 Net deferred tax (55 ) (14 ) Net deferred taxes are classified as follows: (In US$ millions) December 31, December 31, Deferred tax asset 81 53 Deferred tax liability (136 ) (67 ) Net deferred tax (55 ) (14 ) |
Changes to Liabilities Related to Unrecognized Tax Benefits | The changes to our uncertain tax positions, including interest and penalties that we recognize as a component of income tax expense, were as follows: Year ended December 31 (In US$ millions) 2015 2014 2013 Balance beginning of period 9 147 154 Increases as a result of positions taken in prior periods — 9 29 Increases as a result of positions taken during the current period — — 12 Decreases as a result of positions taken in prior periods — (147 ) (14 ) Decreases as a result of positions taken in the current period — — (34 ) Balance end of period 9 9 147 |
Earliest Tax Years that Remain Subject to Examination by Major Taxable Jurisdictions | The following table summarizes the earliest tax years that remain subject to examination by the major taxable jurisdictions in which the Company operates: Jurisdiction Earliest Open Year United States 2013 Angola 2010 Australia 2011 Nigeria 2009 Norway 2013 Thailand 2005 |
(Loss)_earnings per share (Tabl
(Loss)/earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of the numerator for the calculation of basic and diluted EPS are as follows: (In US$ millions) 2015 2014 2013 Net (loss)/income attributable to the parent (738 ) 3,979 2,653 Less: Allocation to participating securities — (6 ) — Net (loss)/income available to stockholders (738 ) 3,973 2,653 Effect of dilution — 117 38 Diluted net (loss)/income available to stockholders (738 ) 4,090 2,691 The components of the denominator for the calculation of basic and diluted EPS are as follows: (In US$ millions) 2015 2014 2013 Basic earnings per share: Weighted average number of common shares outstanding 492.8 478.0 469.0 Diluted earnings per share: Effect of dilutive convertible bonds — 14.0 22.0 Effect of dilutive share options* — 1.0 1.0 Weighted average number of common shares outstanding adjusted for the effects of dilution 492.8 493.0 492.0 * Certain stock options have been excluded from the calculation of diluted EPS because their exercise price exceeded Company’s average share price during the calculation period. (In US$) 2015 2014 2013 Basic EPS (1.49 ) 8.32 5.66 Diluted EPS (1.49 ) 8.30 5.47 |
Disposals of businesses and d55
Disposals of businesses and deconsolidation of subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Investment Holdings, Schedule of Investments | The gain recognized on deconsolidation, which all relates to the remeasurement of the Company’s retained interests in Seadrill Partners and its subsidiaries is as follows: (In US$ millions) As at January 2, 2014 Fair value of investment in Seadrill Partners (a) 3,724 Carrying value of the non-controlling interest in Seadrill Partners 115 Subtotal 3,839 Less: Carrying value of Seadrill Partners’ net assets 1,260 Goodwill allocated to Seadrill Partners 240 Gain on deconsolidation of Seadrill Partners 2,339 (a) Fair value of investments and continuing involvement with investees The estimated fair value of the Company’s residual interest in Seadrill Partners comprised of the following: (In US$ millions) As of January 2, 2014 Common units (i) 671 Subordinated units (ii) 427 Seadrill Member Interest and Incentive Distribution Rights ("IDRs") (iii) 244 Direct ownership interests (iv) 2,382 Total 3,724 (i) Common units (marketable securities) As of the deconsolidation date, the Company held 21.5 million common units representing 48.3% of the common units in issue as a class. The Company’s holding in the voting common units of Seadrill Partners are accounted for as marketable securities on the basis that during the subordination period the common units have preferential dividend and liquidation rights, and therefore do not represent ‘in-substance common stock’ as defined by U.S. GAAP. These securities have been recognized on January 2, 2014 at the quoted market price and are re-measured at fair value each reporting period. Any unrealized gains and losses on these securities are recognized directly in equity as a component of other comprehensive income unless an unrealized loss is considered “other-than-temporary,” in which case it is transferred to the statement of operations and realized. Dividend income from the common units is recognized in the consolidated statement of operations. (ii) Subordinated units As of the deconsolidation date the Company held 16.5 million units representing 100% of the subordinated units. The Company’s holding in the subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners, but will not end before September 30, 2017 except upon removal of the Seadrill Member. Upon the expiration of the subordination period, the subordinated units will convert into common units. The fair value of the subordinated units on January 2, 2014 , was determined based on the quoted market price of the listed common units as of the deconsolidation date, but discounted for their non-tradability and subordinated dividend and liquidation rights during the subordination period. Under the equity method the Company recognizes its share of Seadrill Partners’ earnings allocable to the subordinated units, less amortization of the basis difference (see (c) below), through the ‘share in results of associated companies’ line in the consolidated statement of operations. Dividends are recognized as a reduction in investment carrying value. (iii) Seadrill Member Interest and IDRs The Seadrill Member Interest (which is a 0% non-economic interest) holds the rights to 100% of the IDRs and is unable to trade these until the end of the subordination period without the approval of a majority of unaffiliated common unitholders. The Seadrill Member Interest and the IDRs in Seadrill Partners are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured, however they are tested annually for impairment. The fair value of the Company’s interest in the Seadrill Member and the attached IDRs as of January 2, 2014 was determined using a Monte Carlo simulation method. The method takes into account the cash distribution waterfall, historical volatility, dividend yield and share price of the common units as of the deconsolidation date. Distributions to the IDRs are recognized in the consolidated statement of operations. iv) Direct Ownership interests The Company held the following ownership interests in entities controlled by Seadrill Partners as of the date of deconsolidation: • 70% ownership in Seadrill Operating LP Seadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. • 49% ownership in Seadrill Capricorn Holdings LLC Seadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. • 39% ownership of Seadrill Deepwater Drillship Ltd. and 39% (indirect) ownership of Seadrill Mobile Units (Nigeria) Ltd. The Company held a 39% direct ownership interest in Seadrill Deepwater Drillship Ltd. and a 39% indirect ownership of Seadrill Mobile Units Ltd., through its 100% subsidiary, Seadrill UK Ltd. Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. All of the Company’s direct ownership interests are accounted for under the equity method as the Company is deemed to have significant influence over these entities through its voting rights and by virtue of Seadrill’s representation on the board of Seadrill Partners. The fair values of the four ownership interests described above have been determined using a discounted cash-flow (“DCF”) methodology, using discounted cash-flow forecasts. |
Percentages of Ownership and Book Value of Investments Recorded Using Equity Method | The total investments in Seadrill Partners recorded under the equity method of $2,809 million included the Company’s share of the basis difference between the total fair value and the total underlying book value of Seadrill Partners’ assets at the deconsolidation date are as follows: (In US$ millions) Book value Fair value Basis Difference Seadrill's share of basis difference (1) Drilling units 3,444 5,245 1,801 1,295 Drilling contracts — 170 170 142 Goodwill — 1,214 1,214 352 Total 3,444 6,629 3,185 1,789 (1) Seadrill’s share of the basis difference relates to both its investment in the subordinated units of Seadrill Partners, and its direct ownership interests in various subsidiaries of Seadrill Partners, all of which investments are accounted for under the equity method. The total basis difference has been assigned based on Seadrill’s proportional ownership interest in each investee. In the case of Seadrill’s investment in the subordinated units of Seadrill Partners, the proportional allocation to the subordinated units was based on the relative fair values of the various equity interests in Seadrill Partners. The Company has the following investments that are or have been recorded using the equity method for the periods presented in these financial statements: Ownership percentage December 31, 2015 December 31, 2014 December 31, 2013 Archer 39.9 % 39.9 % 39.9 % Seabras Sapura Participacoes SA (”Seabras Sapura Participacoes”) 50.0 % 50.0 % 50.0 % Seabras Sapura Holding GmbH (”Seabras Sapura Holdco”) 50.0 % 50.0 % 50.0 % Itaunas Drilling B.V. (”Itaunas Drilling”) 30.0 % 30.0 % 30.0 % Camburi Drilling B.V. (”Camburi Drilling”) 30.0 % 30.0 % 30.0 % Sahy Drilling B.V. (”Sahy Drilling”) 30.0 % 30.0 % 30.0 % Seadrill Partners (”SDLP”) Note 1 Note 1 Note 1 SeaMex Ltd. (”SeaMex”) 50.0 % — % — % (1) As of the deconsolidation date of Seadrill Partners on January 2, 2014, we recognized our ownership interests in Seadrill Partners and direct ownership interests in Seadrill Partners subsidiaries, at fair value at the date of deconsolidation. Refer to Seadrill Partners paragraph below for additional information. |
Calculation of Gain (Loss) on Disposal | (In US$ millions) November 4, 2014 Enterprise value 900 Deferred consideration receivable 74 Less: Debt assumed (433 ) Purchase price 541 Less: Working capital adjustment (6 ) Adjusted purchase price 535 Cash 467 Deferred consideration receivable 74 Less: Working capital payable (6 ) Fair value of purchase consideration 535 Less: net carrying value of assets and liabilities (303 ) Less: allocated goodwill to subsidiaries (41 ) Gain on sale 191 As at June 19, 2015 Initial enterprise value 540 Less: Debt assumed (336 ) Initial purchase price 204 Plus: Working capital adjustment 31 Adjusted initial purchase price 235 Cash 204 Plus: Working capital receivable 31 Fair value of purchase consideration recognized on disposal 235 Less: net carrying value of assets and liabilities (271 ) Less: allocated goodwill to subsidiaries (41 ) Loss on disposal (77 ) Contingent consideration realized since disposal 32 (In $ millions) As at March 10, 2015 FAIR VALUE OF CONSIDERATION RECEIVED Net cash consideration received 749 Seller’s credit recognized 250 Direct repayment of debt by the JV on behalf of Seadrill 150 Consideration receivable in respect of West Titania 162 Other related party balances payable (71 ) Cash paid to acquire 50% interest in the JV (163 ) Fair value of consideration received 1,077 FAIR VALUE OF RETAINED 50% INVESTMENT IN SEAMEX LIMITED 163 CARRYING VALUE OF NET ASSETS Current assets Cash and cash equivalents 40 Deferred tax assets - short term 8 Other current assets 20 Total current assets 68 Non-current assets Drilling units 969 Deferred tax asset - long term 4 Other non-current assets 86 Goodwill 49 Total non-current assets 1,108 Total assets 1,176 LIABILITIES Current liabilities Trade accounts payable (1 ) Other current liabilities (56 ) Total current liabilities (57 ) Non-current liabilities Other non-current liabilities (60 ) Total non-current liabilities (60 ) Total liabilities (117 ) Carrying value of net assets 1,059 GAIN ON DISPOSAL 181 The gain was calculated as follows: (In US$ millions) December 31, 2013 Fair value of consideration received 2,600 Carry value of assets and liabilities 1,324 Other related costs to sale 20 Total gain on sale 1,256 (In US$ millions) March 21, 2014 Enterprise value 1,240 Less: Debt assumed (443 ) Purchase price 797 Less: Working capital adjustment (331 ) Adjusted purchase price 466 Cash 697 Discount note issued 100 Less: Working capital payable (331 ) Fair value of purchase consideration 466 Less: net carrying value of assets and liabilities 7 Less: allocated goodwill to subsidiaries (33 ) Gain on sale 440 Assets and liabilities held in the Company’s consolidated balance sheet included as held for sale are shown below: (In US$ millions) As at December 31, 2014 ASSETS Current assets Cash and cash equivalents 27 Accounts receivables, net 78 Deferred tax assets 9 Other current assets 20 Total current assets 134 Non-current assets Drilling units 965 Deferred tax assets LT 5 Goodwill 49 Other non-current assets 86 Total non-current assets 1,105 Total assets 1,239 LIABILITIES Current liabilities Trade accounts payable (2 ) Other current liabilities (56 ) Total current liabilities (58 ) Non-current liabilities Other non-current liabilities (50 ) Total non-current liabilities (50 ) Total liabilities (108 ) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Preliminary Value of Net Assets Acquired | The fair values of net assets acquired were as follows: (In US$ millions) January 3, 2013 Fair value of net assets acquired: Drilling units 698 Unfavorable contract – Other current liabilities (27 ) Unfavorable contract – Other non-current liabilities (81 ) Net assets acquired 590 Fair value of consideration 590 |
Sevan Drilling ASA | |
Business Acquisition [Line Items] | |
Purchase Price Allocation of Acquired Companies | The fair values of net assets acquired including the remeasurement of our previously held equity interest, measurement of the non-controlling interest and associated bargain purchase gain are as follows: July 2, Cash and cash equivalents 54 Restricted cash 63 Trade and other receivables 49 Current assets 166 Drilling units 1,246 Newbuildings 1,227 Deferred income tax asset 76 Valuation allowance income tax asset (76 ) Other non-current assets 1 Non-current assets 2,474 Total assets 2,640 Current portion of long-term debt (112 ) Trade and other payables (115 ) Construction obligation (923 ) Unfavorable contracts (79 ) Other current liabilities (26 ) Current liabilities (1,255 ) Long-term interest bearing debt (703 ) Unfavorable contracts (257 ) Other non-current liabilities (16 ) Non-current liabilities (976 ) Total liabilities (2,231 ) Net assets acquired 409 Net book value of equity investment 109 Fair value of previously held equity investment 117 Gain on re-measurement of previously held equity investment 8 Fair value of establishment of non-controlling interest 197 Bargain purchase Fair value of consideration transferred 78 Fair value of establishment of non-controlling interest 197 Fair value of previously held equity investment 117 Total 392 Net assets acquired 409 Gain on bargain purchase 17 |
Asia Offshore Drilling | |
Business Acquisition [Line Items] | |
Purchase Price Allocation of Acquired Companies | The fair values of net assets acquired, the remeasurement of our previously held equity interest, measurement of the non-controlling interest and associated bargain purchase gain are as follows: (In US$ millions) March 25, 2013 Cash and cash equivalents 1 Current assets 1 Drilling units 633 Non-current assets 633 Construction obligation (316 ) Other current liabilities (8 ) Current liabilities (324 ) Non-current liabilities — Net assets acquired 310 Net book value of equity investment 185 Fair value of previously held equity investment 195 Gain on re-measurement of previously held equity investment 10 Fair value of establishment of non-controlling interest 100 Bargain purchase Fair value of establishment of non-controlling interest 100 Fair value of previously held equity investment 195 Total 295 Net assets acquired 310 Gain on bargain purchase 15 |
Restricted cash (Tables)
Restricted cash (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Restricted Cash and Investments [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | Restricted cash includes: (In US$ millions) December 31, 2015 December 31, 2014 CIRR deposits (1) 71 124 Margin calls related to share forward agreements 170 264 Cash pledged as collateral under credit facilities — 50 Tax withholding deposits 7 11 Total restricted cash 248 449 Long-term restricted cash (related to CIRR deposits and margin calls) 198 181 Short-term restricted cash 50 268 (1) CIRR deposits are cash deposited with commercial banks, which match Commercial Interest Reference Rate (“CIRR”) loans from Eksportfinans ASA, the Norwegian export credit agency (See Note 23 to the consolidated financial statements included herein). The deposits are used to make repayments of the CIRR loans. |
Marketable securities (Tables)
Marketable securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Marketable Securities [Abstract] | |
Marketable Securities Held | The following tables summarize the carrying values of the marketable securities in the balance sheet: As at December 31, 2015 (In US$ millions) Amortized Cumulative unrealized fair value gains/(losses) Carrying Sapura Kencana 206 22 228 Seadrill Partners - Common Units 247 (151) 96 Total 453 (129) 324 As at December 31, 2014 (In US$ millions) Amortized Cumulative unrealized fair value gains/(losses) Carrying Sapura Kencana 373 (48) 325 Seadrill Partners - Common Units 821 (395) 426 Total 1,194 (443) 751 |
Gross Realized Gains and Losses Related to Marketable Securities | The following table summarizes the gross realized gains and losses from purchases and sales of marketable securities during the years presented: Year ended December 31, 2015 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Sapura Kencana — — — (97) — — (167) Seadrill Partners - Common Units — — — (330) — — (574) Total — — — (427) — — (741) Year ended December 31, 2014 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Petromena 6 — — — 10 — — Sapura Kencana — — — (456) 297 — 131 Seadrill Partners - Common Units — — — (395) — 821 — Total 6 — — (851) 307 821 131 Year ended December 31, 2013 (In US$ millions) Gross realized gains Gross realized losses Gross Unrealized gains Gross Unrealized losses Gross proceeds from sales Recognition and purchases Gain/(loss) reclassified into income Petromena — — — — — — — Sapura Kencana — — 333 — — 416 — Total — — 333 — — 416 — |
Other current assets (Tables)
Other current assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets [Abstract] | |
Other Current Assets | Other current assets include: (In US$ millions) December 31, 2015 December 31, 2014 Prepaid expenses 42 30 Reimbursable amounts due from customers 48 79 Deferred mobilization cost 55 7 Deferred consideration (1) 166 — Taxes receivable 32 29 Other current assets 52 77 Total other current assets 395 222 |
Investment in associated comp60
Investment in associated companies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Percentages of Ownership and Book Value of Investments Recorded Using Equity Method | The total investments in Seadrill Partners recorded under the equity method of $2,809 million included the Company’s share of the basis difference between the total fair value and the total underlying book value of Seadrill Partners’ assets at the deconsolidation date are as follows: (In US$ millions) Book value Fair value Basis Difference Seadrill's share of basis difference (1) Drilling units 3,444 5,245 1,801 1,295 Drilling contracts — 170 170 142 Goodwill — 1,214 1,214 352 Total 3,444 6,629 3,185 1,789 (1) Seadrill’s share of the basis difference relates to both its investment in the subordinated units of Seadrill Partners, and its direct ownership interests in various subsidiaries of Seadrill Partners, all of which investments are accounted for under the equity method. The total basis difference has been assigned based on Seadrill’s proportional ownership interest in each investee. In the case of Seadrill’s investment in the subordinated units of Seadrill Partners, the proportional allocation to the subordinated units was based on the relative fair values of the various equity interests in Seadrill Partners. The Company has the following investments that are or have been recorded using the equity method for the periods presented in these financial statements: Ownership percentage December 31, 2015 December 31, 2014 December 31, 2013 Archer 39.9 % 39.9 % 39.9 % Seabras Sapura Participacoes SA (”Seabras Sapura Participacoes”) 50.0 % 50.0 % 50.0 % Seabras Sapura Holding GmbH (”Seabras Sapura Holdco”) 50.0 % 50.0 % 50.0 % Itaunas Drilling B.V. (”Itaunas Drilling”) 30.0 % 30.0 % 30.0 % Camburi Drilling B.V. (”Camburi Drilling”) 30.0 % 30.0 % 30.0 % Sahy Drilling B.V. (”Sahy Drilling”) 30.0 % 30.0 % 30.0 % Seadrill Partners (”SDLP”) Note 1 Note 1 Note 1 SeaMex Ltd. (”SeaMex”) 50.0 % — % — % (1) As of the deconsolidation date of Seadrill Partners on January 2, 2014, we recognized our ownership interests in Seadrill Partners and direct ownership interests in Seadrill Partners subsidiaries, at fair value at the date of deconsolidation. Refer to Seadrill Partners paragraph below for additional information. |
Recorded Equity in the Statutory Accounts of Equity Method Investees | The table below summarizes the total impairments of investments made during the year ended December 31, 2015: (In $ millions) Year ended December 31, 2015 Impairments of Investment in associated companies Seadrill Partners - Total direct ownership investments 302 Seadrill Partners - Subordinated units 125 Seadrill Partners - Seadrill member interest and IDRs 106 Total impairment of investments in associated companies 533 Impairments of Marketable securities (refer to Note 14) Seadrill Partners - Common Units 574 SapuraKencana 167 Total impairment of marketable securities investments (reclassification from OCI) 741 Total impairment of investments 1,274 At the year end the share of recorded equity in the statutory accounts of the Company’s associated companies were as follows: (In US$ millions) December 31, 2015 December 31, 2014 December 31, 2013 Archer 79 218 253 Seabras Sapura Participacoes 24 24 13 Seabras Sapura Holding 19 6 — Seadrill Partners * N/A N/A — Seamex 200 — — Total 322 261 277 * The Company accounts for its direct interests in operating subsidiaries of Seadrill Partners, and its ownership of Seadrill Partners Subordinated Units, under the equity method. The Company’s share of Seadrill Partner’s recorded equity consists of the equity attributable to non-controlling interests in Seadrill Partners, and additionally a proportionate share of equity attributable to Seadrill Partners’ unitholders. The equity attributable to non-controlling interest in Seadrill Partners as at December 31, 2015 was $1,133 million . Seadrill’s holding in the subordinated units represents 18.0% of the limited partner interests in Seadrill Partners. Total equity attributable to Seadrill Partners unitholders as at December 31, 2015 was $964 million . At the year-end the book values of the Company’s investment in associated companies are as follows: (In US$ millions) December 31, 2015 December 31, 2014 Archer — — Seabras Sapura Participacoes 29 21 Seabras Sapura Holding 158 117 Itaunas Drilling 3 3 Camburi Drilling 6 6 Sahy Drilling 4 4 Seadrill Partners - Total direct ownership interests 1,767 2,091 Seadrill Partners - Subordinated Units 293 412 Seadrill Partners - Seadrill Member Interest and IDRs (1) 137 244 Seamex Ltd. 193 — Total 2,590 2,898 (1) The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. |
Summarized Balance Sheet Information of Equity Method Investees | Summarized balance sheet information of the Company’s equity method investees is as follows: As of December 31, 2015 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 363 904 319 751 — Seabras Sapura Participacoes 76 308 79 258 — Seabras Sapura Holding 133 1,183 80 1,199 — Seadrill Partners 892 5,949 847 3,897 1,133 SeaMex 218 1,157 176 799 — Total 1,682 9,501 1,501 6,904 1,133 December 31, 2014 (In US$ millions) Current assets Non-current assets Current liabilities Non-current liabilities Non-Controlling interest Archer 633 1,171 441 817 — Seabras Sapura Participacoes 17 194 14 149 — Seabras Sapura Holding 104 690 52 730 — Seadrill Partners 762 5,585 686 3,617 1,116 SeaMex — — — — — Total 1,516 7,640 1,193 5,313 1,116 |
Summarized Statement of Operations Information of Equity Method Investees | Summarized statement of operations information for the Company’s equity method investees is as follows: Year ended December 31, 2015 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 1,321 (13 ) (359 ) — Seabras Sapura Participacoes 53 3 1 — Seabras Sapura Holding 124 76 51 — Seadrill Partners 1,742 844 488 231 Seamex 238 79 24 — Total 3,478 989 205 231 Year ended December 31, 2014 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,254 29 (96 ) — Seabras Sapura Participacoes 29 (6 ) (6 ) — Seabras Sapura Holding 39 24 13 — Seadrill Partners 1,343 615 315 176 Seamex — — — — Total 3,665 662 226 176 Year ended December 31, 2013 (In US$ millions) Operating revenues Net operating income Net income Net income attributable to non-controlling interest Archer 2,041 (438 ) (519 ) — Seabras Sapura Participacoes — (2 ) (1 ) — Seabras Sapura Holding — — (1 ) — Seadrill Partners — — — — Seamex — — — — Total 2,041 (440 ) (521 ) — |
Newbuildings (Tables)
Newbuildings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Newbuildings | (In US$ millions) December 31, 2015 December 31, 2014 Opening balance 2,030 3,419 Additions 601 2,433 Capitalized interest and loan related costs 60 70 Re-classified as Drilling Units (725 ) (3,892 ) Reclassification to Assets held for sale* (210 ) — Reclassification to Non-current assets** (199 ) — Disposals** (78 ) — Closing balance 1,479 2,030 * On December 2, 2015, the West Rigel was classified as an Asset held for sale. As at the transfer date the West Rigel held assets at its book value of $210.0 million . Please refer to Note 37 to the consolidated financial statements, included herein, for more details. ** On September 14, 2015, the Company cancelled the construction contract for the West Mira with HSHI Please refer to Note 5 to the consolidated financial statements, included herein, for more details. |
Drilling units (Tables)
Drilling units (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Drilling Units | (In US$ millions) December 31, 2015 December 31, 2014 Cost 17,606 19,101 Accumulated depreciation (2,676 ) (2,991 ) Re-classified as assets held for sale — (965 ) Net book value 14,930 15,145 |
Equipment (Tables)
Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Equipment | Equipment consists of office equipment, furniture and fittings. (In US$ millions) December 31, 2015 December 31, 2014 Cost 80 73 Accumulated depreciation (34 ) (27 ) Net book value 46 46 |
Goodwill and other intangible64
Goodwill and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The goodwill balance and changes in the carrying amount is as follows: (In $ millions) Year ended December 31, Year ended December 31, Opening balance Goodwill 836 1,200 Accumulated impairment losses (232 ) — Total opening goodwill 604 1,200 Disposals and deconsolidations (see note 11) (41 ) (315 ) Impairment of goodwill (563 ) (232 ) Re-classified as assets held for sale — (49 ) Closing balance Goodwill 795 836 Accumulated impairment losses (795 ) (232 ) Total closing goodwill — 604 |
Other Intangible Assets | The gross carrying amounts and accumulated amortization were as follows: December 31, 2015 December 31, 2014 Gross carrying amount Accumulated amortization Net carrying amount Gross carrying amount Accumulated amortization Net carrying amount Unfavorable contracts - intangible liabilities Balance at beginning of period 444 (197 ) 247 444 (67 ) 377 Additions — — — — — — Amortization of unfavorable contracts — (116 ) (116 ) — (130 ) (130 ) Balance at end of period 444 (313 ) 131 444 (197 ) 247 |
Finite-Lived Intangible Liabilities, Future Amortization Expense | The table below shows the amounts relating to favorable and unfavorable contracts that is expected to be amortized over the next five years: Year ended December 31 (In US$ millions) 2016 2017 2018 2019 2020 Total Amortization of unfavorable contracts 65 43 23 — — 131 |
Other non-current assets (Table
Other non-current assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Assets, Noncurrent Disclosure [Abstract] | |
Other Non-current Assets | Other non-current assets consist of the following: (In US$ millions) December 31, 2015 December 31, 2014 Deferred tax effect of internal transfer of assets 92 102 Deferred mobilization costs 32 47 Deferred consideration — 154 Receivable from shipyard (1) 199 — Other 8 8 Total other non-current assets 331 311 |
Long-term debt (Tables)
Long-term debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | As of December 31, 2015 and 2014 , the Company had the following debt: (In US$ millions), unless stated otherwise December 31, 2015 December 31, 2014 Credit facilities: $700 facility — 420 $2,000 facility (NADL) 1,200 1,367 $400 facility 240 280 $420 facility — 351 $440 facility 224 258 $450 facility — 416 $1,450 facility 393 433 $360 facility (Asia Offshore Drilling) 273 309 $300 facility 186 210 $1,750 facility (Sevan Drilling) 1,085 1,225 $150 facility — 150 $450 Eminence facility 344 397 $1,500 facility 1,344 1,469 $1,350 facility 1,181 1,317 $950 facility 688 — $450 facility (2015) 215 — Total credit facilities 7,373 8,602 Ship Finance Loans $375 facility (SFL Hercules) 256 284 $390 facility (SFL Deepwater) 221 303 $475 facility (SFL Linus) 354 451 Total Ship Finance Loans 831 1,038 Unsecured bonds NOK1,800 million bond 203 242 $350 bond — 342 $1,000 bond 948 1,000 $500 bond 479 479 NOK1,500 million bond (NADL) 161 190 $ 600 bond (NADL) 413 413 SEK 1,500 bond 177 190 Total unsecured bonds 2,381 2,856 Other credit facilities with corresponding restricted cash deposits 76 124 Total debt principal 10,661 12,620 Less: current portion (1,526 ) (2,309 ) Long-term portion 9,135 10,311 |
Schedule of Debt Issuance Costs Against Current and Long-Term Debt | Details of the debt issuance costs netted against the current and long-term debt for each of the periods presented are shown below. Outstanding balance as at December 31, 2015 (In $ millions) Principal outstanding Less: Debt Issuance Costs Total Debt Current portion of long-term debt 1,526 (37 ) 1,489 Long-term debt 9,135 (81 ) 9,054 Total 10,661 (118 ) 10,543 Outstanding debt as at December 31, 2014 (In $ millions) Principal outstanding Less: Debt Issuance Costs Total Debt Current portion of long-term debt 2,309 (42 ) 2,267 Long-term debt 10,311 (103 ) 10,208 Total 12,620 (145 ) 12,475 |
Maturities of Outstanding Debt | The outstanding debt as of December 31, 2015 is repayable as follows: (In US$ millions) December 31, 2015 2016 1,526 2017 2,872 2018 2,432 2019 2,817 2020 1,014 2021 and thereafter — Total debt principal 10,661 |
Other current liabilities (Tabl
Other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Other current liabilities | Other current liabilities are comprised of the following: (In US$ millions) December 31, 2015 December 31, 2014 Taxes payable 168 160 Employee withheld taxes, social security and vacation payment 87 122 Intangible liabilities - unfavorable contracts (1) 65 116 Accrued interest expense 70 77 Liabilities relating to investment in shares (2) — 167 Deferred mobilization revenue 208 178 Derivative financial instruments (3) 424 372 Accrued expenses 173 292 Construction obligation (4) 460 428 Other current liabilities 29 22 Total other current liabilities 1,684 1,934 (1) Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Notes 12 and 21 to the consolidated financial statements included herein. (2) Liabilities relating to investment in shares primarily represents amounts owed in respect of the Company’s share forward purchase contracts for Sevan Drilling. See Note 12 to the consolidated financial statements included herein. (3) Derivative financial instruments consist of unrealized losses on various types of derivatives. (4) The construction obligation has been recognized upon the acquisition of Sevan Drilling. See Note 12 to the consolidated financial statements included herein. |
Other non-current liabilities (
Other non-current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Other Liabilities Disclosure [Abstract] | |
Other non-current liabilities | Other non-current liabilities are comprised of the following: (In US$ millions) December 31, 2015 December 31, 2014 Accrued pension liabilities 37 84 Deferred mobilization revenues 128 224 Intangible liabilities - unfavorable contracts (1) 66 131 Financing secured on SapuraKencana shares (Note 32) 160 250 Other non-current liabilities 10 10 Total other non-current liabilities 401 699 (1) Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Note 12 and 21 to the consolidated financial statements included herein |
Common Shares (Tables)
Common Shares (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Share Capital | 2015 2014 2013 All shares are common shares of $2.00 par value each Shares $millions Shares $millions Shares $millions Authorized share capital 800,000,000 1,600 800,000,000 1,600 800,000,000 1,600 Issued and fully paid share capital 493,078,680 986 493,078,678 986 469,250,933 939 Treasury shares held by Company (318,740 ) (1 ) (318,740 ) (1 ) (272,441 ) (1 ) Outstanding shares in issue 492,759,940 985 492,759,938 985 468,978,492 938 |
Non-controlling interest (Table
Non-controlling interest (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Noncontrolling Interest [Abstract] | |
Changes in Non-Controlling Interest | Changes in non-controlling interest in 2015 , 2014 and 2013 are as follows: (In US$ millions) Ship Finance International Ltd VIEs North Atlantic Drilling Ltd Seadrill Partners LLC Asia Offshore Drilling Ltd Sevan Drilling ASA Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited Total December 31, 2012 274 168 79 — — 521 Changes in 2013 (220 ) (56 ) 15 100 197 36 Net income attributable to non-controlling interest in 2013 24 61 21 11 16 133 December 31, 2013 78 173 115 111 213 — 690 Changes in 2014 (57 ) (4 ) (115 ) — — 4 (172 ) Net income attributable to non-controlling interest in 2014 11 36 — 23 38 — 108 December 31, 2014 32 205 — 134 251 4 626 Changes in 2015 — 8 — (14 ) — (4 ) (10 ) Net income attributable to non-controlling interest in 2015 (17 ) (46 ) — 20 31 — (12 ) December 31, 2015 15 167 — 140 282 — 604 The following table summarizes the sale of the Company’s drilling units to Seadrill Partners between its IPO until the deconsolidation of Seadrill Partners on January 2, 2014: (In US$millions) T-15 T-16 West Sirius West Leo Total Adjusted sales price * 74 68 922 729 1,793 Less net assets transferred 5 — (375 ) (116 ) (486 ) Excess of sales price over net assets transferred 79 68 547 613 1,307 Deemed contribution to Seadrill shareholders from non-controlling interest 19 16 105 69 209 * The Adjusted sales price above includes debt assumed and working capital adjustments. |
Accumulated other comprehensi71
Accumulated other comprehensive income (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated other comprehensive income | Accumulated other comprehensive income for the years December 31, 2015 and December 31, 2014 : (In US$ millions) December 31, December 31, Unrealized (loss)/gain on marketable securities (129 ) (443 ) Unrealized gain on foreign exchange 36 51 Actuarial loss relating to pension (38 ) (57 ) Share in unrealized gains from associated companies 11 1 Accumulated other comprehensive (loss)/income (120 ) (448 ) |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share Option Transactions Related to the Seadrill Scheme | The following table summarizes share option transactions related to the Seadrill Scheme in 2015 , 2014 and 2013 : 2015 2014 2013 Options Weighted average exercise price $ Options Weighted average exercise price $ Options Weighted average exercise price $ Outstanding at beginning of year 2,241,116 35.10 2,838,758 28.53 3,875,891 29.88 Granted 710,000 12.04 — — 270,000 45.66 Exercised — — (461,477 ) 20.19 (700,418 ) 22.60 Forfeited (935,945 ) 32.81 (136,165 ) 34.57 (606,715 ) 32.30 Outstanding at end of year 2,015,171 28.53 2,241,116 35.10 2,838,758 28.53 Exercisable at end of year 882,152 36.14 1,169,584 27.38 1,080,306 27.38 |
Restricted Stock Unit Activity | The following table summarizes RSU activity for the Company for the years ended December 31, 2015 , 2014 and 2013 : Restricted Stock Units - Seadrill 2015 2014 2013 Outstanding at beginning of year 525,210 373,700 — Granted 937,970 162,560 373,700 Forfeited (60,200 ) (11,050 ) — Outstanding at end of year 1,402,980 525,210 373,700 The following table summarizes RSU activity for NADL for the years ended December 31, 2015 , 2014 and 2013 : Restricted Stock Units - NADL 2015 2014 2013 Outstanding at beginning of year 253,870 278,778 — Granted 1,587,719 — 278,778 Adjustment * (1,571,251 ) — — Forfeited (95,755 ) (24,908 ) — Outstanding at end of year 174,583 253,870 278,778 * Adjustment relates to the reverse stock split for NADL units, as discussed above |
Pension benefits (Tables)
Pension benefits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Effect of Formerly SFAS No. 158 on the Consolidated Balance Sheet | Consolidated balance sheet position (In US$ millions) 2015 2014 Non-current liabilities 37 82 Deferred tax asset (8 ) (22 ) Shareholders equity 29 60 |
Annual Pension Cost | Annual pension cost (In US$ millions) 2015 2014 2013 Service cost 12 13 14 Interest cost on prior years’ benefit obligation 4 7 7 Gross pension cost for the year 16 20 21 Expected return on plan assets (3 ) (6 ) (4 ) Administration charges 1 1 — Net pension cost for the year 14 15 17 Social security cost 2 2 2 Amortization of actuarial gains/losses 3 2 2 Impact of settlement/curtailment funded status — — (2 ) Total net pension cost 19 19 19 |
Funded Status of the Defined Benefit Plan | The funded status of the defined benefit plan (In US$ millions) December 31, 2015 December 31, 2014 Projected benefit obligations at end of period 130 186 Plan assets at market value (97 ) (114 ) Accrued pension liability exclusive social security 33 72 Social security related to pension obligations 4 10 Accrued pension liabilities 37 82 |
Change in Benefit Obligations | Change in benefit obligations (In US$ millions) 2015 2014 Projected benefit obligations at beginning of period 186 180 Interest cost 4 7 Service cost 12 13 Benefits paid (2 ) (2 ) Change in unrecognized actuarial gain (20 ) 23 Settlement (20 ) — Foreign currency translations (30 ) (35 ) Projected benefit obligations at end of period 130 186 |
Change in Pension Plan Assets | Change in pension plan assets (In US$ millions) 2015 2014 Fair value of plan assets at beginning of year 114 129 Estimated return 3 2 Contribution by employer 12 17 Administration charges (1 ) (1 ) Benefits paid (2 ) (2 ) Change in unrecognized actuarial loss — (9 ) Settlement (11 ) — Foreign currency translations (18 ) (22 ) Fair value of plan assets at end of year 97 114 |
Assumptions Used in Calculation of Pension Obligations | Assumptions used in calculation of pension obligations (In %) 2015 2014 2013 Rate of compensation increase at the end of year 2.50 % 2.75 % 3.75 % Discount rate at the end of year 2.70 % 2.30 % 4.00 % Prescribed pension index factor 1.20 % 1.20 % 1.40 % Expected return on plan assets for the year 3.30 % 3.20 % 4.40 % Employee turnover 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.50 % 2.50 % 3.50 % |
Weighted-Average Asset Allocation of Funds Related to Defined Benefit Plan | The weighted-average asset allocation of funds related to the Company’s defined benefit plan at December 31, was as follows: Pension benefit plan assets (In %) 2015 2014 Equity securities 6.1 % 7.2 % Debt securities 47.5 % 51.9 % Real estate 14.7 % 14.2 % Money market 25.2 % 23.5 % Other 6.5 % 3.20 % Total 100.0 % 100.0 % |
Expected Annual Pension Plan Contributions Under Defined Benefit Plans | The table below shows the Company’s expected annual pension plans contributions under defined benefit plans for the years 2016-2025 . The expected payments are based on the assumptions used to measure the Company’s obligations at December 31, 2015 and include estimated future employee services. (In US$ millions) December 31, 2015 2016 12 2017 12 2018 12 2019 13 2020 13 2021-2025 70 Total payments expected during the next 10 years 132 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Receivables/(payables) with SeaMex Joint Venture as of December 31, 2015 consisted of the following: (In $ millions) December 31, 2015 December 31, Seller’s credit 250 — Short term funding 45 — Other receivables 34 — Receivables /(payables) with Seadrill Partners and its subsidiaries as of December 31, 2015 and 2014 consisted of the following balances: (In US$ millions) December 31, December 31, Rig financing agreements and Loan Agreements (i) 197 237 $109.5 million Vendor financing loan (j) 110 110 Deferred consideration receivable (k) 96 74 Other receivables (l) 355 264 Other payables (l) (179 ) (77 ) The Net income /(expenses) with Seadrill Partners for the years ended December 31, 2015 , 2014 , and 2013 were as follows: (In US$ millions) 2015 2014 2013 Management fees charged to Seadrill Partners - Other revenues (a) and (b) 75 59 — Rig operating expenses charged to Seadrill Partners - Other revenues (c) 29 22 — Insurance premiums charged to Seadrill Partners (d) 20 21 — Rig operating costs charged by Seadrill Partners (e) (13 ) — — Bareboat charter arrangements (f) (2 ) (26 ) — Interest expenses charged to Seadrill Partners (g) 16 40 — Derivatives recharged to Seadrill Partners (h) 10 42 — Net related party income from Seadrill Partners 135 158 — During the years ended December 31, 2015 , 2014 and 2013 , the Company incurred the following lease costs on units leased from the Ship Finance subsidiaries. (US$ millions) 2015 2014 2013 West Polaris * — 55 70 West Hercules 55 75 77 West Taurus 57 111 112 West Linus 81 59 — Total 193 300 259 * The West Polaris was repurchased from Ship Finance on December 30, 2014, and subsequently sold to Seadrill Partners on June 18, 2015. |
Risk management and financial75
Risk management and financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Interest Rate Swap and Cross Currency Interest Rate Swap Agreements | The Company’s interest rate swap agreements as at December 31, 2015 , were as follows: Maturity date Total outstanding principal as at December 31, 2015 Receive rate Pay rate range (In US$ millions) Expiring in 2016 1,000 3 month LIBOR 2.14% 2.24% Expiring in 2016 18 6 month LIBOR 3.83% 3.83% Expiring in 2017 1,406 3 month LIBOR 0.74% 3.8% Expiring in 2018 1,000 3 month LIBOR 2.83% 3.34% Expiring in 2019 680 3 month LIBOR 1.11% 1.36% Expiring in 2020 2,632 3 month LIBOR 1.36% 2.19% Expiring in 2021 and thereafter 352 3 month LIBOR 1.38% 2.92% Total 7,088 |
Schedule of Derivatives, by Variable Interest Entities | Below is a summary of the notional amount, fixed interest rate payable and duration of the outstanding principal as of December 31, 2015 . Variable interest entity Outstanding principal as at December 31, 2015 Receive rate Pay rate Length of contract (In US$ millions) SFL Linus Limited (West Linus) 4.0 1 month LIBOR 2.01% Mar 2014 - Oct 2018 SFL Linus Limited (West Linus) 4.0 2 month LIBOR 2.01% Mar 2014 - Nov 2018 SFL Linus Limited (West Linus) 191.9 3 month LIBOR 1.77% Dec 2013 - Dec 2018 |
Carrying Value and Estimated at Fair Value of Financial Instruments | The carrying value and estimated fair value of the Company’s financial instruments at December 31, 2015 and December 31, 2014 are as follows: December 31, 2015 December 31, 2014 (In US$ millions) Fair value Carrying value Fair value Carrying value Assets Cash and cash equivalents 1,044 1,044 831 831 Restricted cash 248 248 449 449 Related party loans receivable - short term 371 371 69 69 Related party loans receivable - long term 464 464 311 311 Liabilities Current portion of floating rate debt 1,493 1,493 1,928 1,928 Long-term portion of floating rate debt 6,711 6,711 7,713 7,713 Current portion of fixed rate CIRR loans 33 33 39 39 Long term portion of fixed rate CIRR loans 43 43 84 84 Fixed interest bonds - short term — — 323 342 Fixed interest bonds - long term 944 1,840 1,545 1,892 Floating interest bonds - long term 283 541 483 622 Related party fixed rate debt - long term 415 415 415 415 |
Financial Instruments Measured at Fair Value on a Recurring Basis | Financial instruments that are measured at fair value on a recurring basis: Fair value Fair value measurements at reporting date using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In US$ millions) December 31, 2015 (Level 1) (Level 2) (Level 3) Assets: Marketable securities - current and non-current assets 324 324 — — Interest rate swap contracts – non-current assets 2 — 2 — Total assets 326 324 2 — Liabilities: Interest rate swap contracts – current liabilities 124 — 124 — Interest rate swap contracts – non-current liabilities 2 — 2 — Cross currency interest rate swap contracts – current liabilities 291 — 291 — Other derivative instruments – current liabilities 9 — 9 — Total liabilities 426 — 426 — Fair value Fair value measurements at reporting date using Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs (In US$ millions) December 31, 2014 (Level 1) (Level 2) (Level 3) Assets: Marketable securities - current and non-current assets 751 751 — — Interest rate swap contracts – non-current assets 5 — 5 — Total assets 756 751 5 — Liabilities: Interest rate swap contracts – current liabilities 139 — 139 — Interest rate swap contracts – non-current liabilities 3 — 3 — Cross currency interest rate swap contracts – current liabilities 201 — 201 — Foreign exchange forwards – current liabilities 27 — 27 — Other derivative instruments – current liabilities 5 — 5 — Total liabilities 375 — 375 — |
Roll Forward of Fair Value Measurements Using Unobservable Inputs (Level 3) | Roll forward of fair value measurements using unobservable inputs (Level 3) relating to the Petromena Bond. Please refer to Note 14 for additional information: (In US$ millions) Beginning balance January 1, 2014 4 Beginning balance Realization 6 Beginning balance Proceeds on disposal (10 ) Closing balance December 31, 2014 — Closing balance December 31, 2015 — |
Schedules of Concentration of Risk, by Risk Factor | In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % In the years ended December 31, 2015 , 2014 and 2013 , the Company had the following customers with contract revenues greater than 10% in any of the years presented: (US$ millions) 2015 2014 2013 Petroleo Brasileiro S.A ("Petrobras") 19 % 20 % 16 % Total S.A Group ("Total") 16 % 13 % 14 % Exxon Mobil Corp ("Exxon") 14 % 10 % 12 % Statoil ASA ("Statoil") 12 % 13 % 14 % |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Maturity Schedule for Contractual Commitments | The table below shows the maturity schedule for the newbuilding contractual commitments, which reflects all recent deferral agreements with DSME, Samsung, Cosco and Dalian, and assumes we exercise the remaining deferral options for the Sevan Developer with Cosco: (In US$ millions) 2016 2017 2018 2019 2020 2021 and thereafter Total Newbuildings 188 2,158 1,174 529 — — 4,049 |
Maximum Potential Future Payment for each Type of Guarantee | The Company has issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee: (In US$ millions) December 31, 2015 December 31, 2014 Guarantees in favor of customers 1, 2 ,3 1,530 1,824 Guarantees in favor of banks 1, 2, 3, 4 1,632 1,254 Guarantees in favor of suppliers 1, 3, 4 2,744 3,898 Total 5,906 8,404 (1) Guarantees to Seadrill Partners - Within guarantees in favor of customers are guarantees provided on behalf of Seadrill Partners of $370 million ( 2014 : $370 million ). Guarantees in favor of banks include guarantees provided on behalf of Seadrill Partners of $698 million ( 2014 : $423 million ). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of $86 million ( 2014 : $92 million ). See Note 31 to the consolidated financial statements included herein. (2) Guarantees to SeaMex - Within guarantees in favor of customers are guarantees provided on behalf of SeaMex of $30 million ( 2014 : $0 million ). Guarantees in favor of banks includes guarantees on behalf of SeaMex of $81 million ( 2014 : $0 million ). See Note 31 to the consolidated financial statements included herein. (3) Guarantees to Archer - Within guarantees provided to customers are guarantees provided on behalf of Archer of $8 million ( 2014 : nil ). Within guarantees in favor of banks are guarantees provided on behalf of Archer of $268 million and EUR 33 million ( $36 million ) ( 2014 : $370 million and EUR 48 million ( $71.9 million )). Guarantees in favor of suppliers includes guarantees on behalf of Archer of GBP 9 million ( $14 million ) ( 2014 : GBP 26 million ( $40 million )). See Note 31 to the consolidated financial statements included herein. (4) Guarantees to Seabras Sapura - Within guarantees in favor of banks are guarantees provided on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $550 million ( 2014 : $293 million ). Within guarantees in favor of suppliers are guarantees provided in relation to our joint ventures Seabras Sapura Participacoes and Seabras Sapura Holdco of EUR 0 million ( $0 million ) and $125 million respectively ( 2014 : EUR 47 million ( $60 million ) and $375 million respectively). See Note 31 to the consolidated financial statements included herein. |
Operating leases (Tables)
Operating leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases, Operating [Abstract] | |
Future Minimum Rental Payments for Operating Leases | Future minimum rental payments are as follows: Year (In US$ millions) 2016 11 2017 10 2018 8 2019 6 2020 6 2021 and thereafter 13 Total 54 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entity, Measure of Activity [Abstract] | |
Summary of Sale and Leaseback Arrangements | The following table gives a summary of the sale and leaseback arrangements and repurchase options, as of December 31, 2015 : Unit Effective from Sale value (In $ millions) First repurchase option (In $ millions) Month of first repurchase option Last repurchase option * (In $ millions) Month of last repurchase Option * West Taurus Nov 2008 850 418 February 2015 149 November 2023 West Hercules Oct 2008 850 580 August 2011 135 August 2023 West Linus June 2013 600 370 June 2018 170 June 2028 * Ship Finance has a right to require the Company to purchase the West Linus rig on the 15th anniversary for the price of $100 million if the Company doesn’t exercise the final repurchase option. |
Summary of the Bareboat Charter Rates per Day Based on Base LIBOR Interest Rate for the Next Five Years | A summary of the average bareboat charter rates per day for each unit is given below for the respective years. (In US$ thousands) 2015 2016 2017 2018 2019 2020 West Taurus 186 165 158 158 144 143 West Hercules 190 179 170 166 143 141 West Linus 222 222 222 222 173 140 |
Assets and Liabilities in the Statutory Accounts of the VIEs | The assets and liabilities in the statutory accounts of the VIEs as at December 31, 2015 and as at December 31, 2014 are as follows: (In US$ millions) December 31, 2015 December 31, 2014 SFL SFL SFL SFL West SFL SFL SFL Name of unit West Taurus West Hercules West Linus West West and West West Hercules West Linus Investment in finance lease 394 394 530 N/A 429 426 574 Amount due from related parties 4 5 — N/A 45 5 14 Other assets 2 2 — N/A 13 10 — Total assets 400 401 530 N/A 487 441 588 Short-term interest bearing debt 23 28 51 N/A 32 28 51 Long-term interest bearing debt 198 229 302 N/A 271 256 400 Other liabilities 3 1 2 N/A 6 1 3 Short-term debt due to related parties — — 23 N/A — — — Long-term debt due to related parties 137 125 125 N/A 145 145 125 Total liabilities 361 383 503 N/A 454 430 579 Equity 39 18 27 N/A 33 11 9 Book value of units in the Company's consolidated accounts 434 571 559 N/A 450 603 581 * Refer to “West Polaris acquisition” discussion below. |
Equity offerings and drilling79
Equity offerings and drilling unit sale transactions with Seadrill Partners (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Issuances of Common Units Since IPO | The following table summarizes the issuances of common units for Seadrill Partners between their IPO in October 2012 until the deconsolidation of Seadrill Partners on January 2, 2014: Date Number of Common Units Issued to the Public Number of Common Units Issued to Seadrill Offering Price ($) Gross proceeds from public Net proceeds from public ($'millions) Seadrill's ownership after the offering October 24, 2012 (IPO) 10,062,500 14,752,525 22.00 221 203 75.67 % October 18, 2013 — 3,310,622 32.29 — — 77.47 % December 13, 2013 12,880,000 3,394,916 29.50 380 365 62.35 % |
Drilling Units | Changes in non-controlling interest in 2015 , 2014 and 2013 are as follows: (In US$ millions) Ship Finance International Ltd VIEs North Atlantic Drilling Ltd Seadrill Partners LLC Asia Offshore Drilling Ltd Sevan Drilling ASA Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited Total December 31, 2012 274 168 79 — — 521 Changes in 2013 (220 ) (56 ) 15 100 197 36 Net income attributable to non-controlling interest in 2013 24 61 21 11 16 133 December 31, 2013 78 173 115 111 213 — 690 Changes in 2014 (57 ) (4 ) (115 ) — — 4 (172 ) Net income attributable to non-controlling interest in 2014 11 36 — 23 38 — 108 December 31, 2014 32 205 — 134 251 4 626 Changes in 2015 — 8 — (14 ) — (4 ) (10 ) Net income attributable to non-controlling interest in 2015 (17 ) (46 ) — 20 31 — (12 ) December 31, 2015 15 167 — 140 282 — 604 The following table summarizes the sale of the Company’s drilling units to Seadrill Partners between its IPO until the deconsolidation of Seadrill Partners on January 2, 2014: (In US$millions) T-15 T-16 West Sirius West Leo Total Adjusted sales price * 74 68 922 729 1,793 Less net assets transferred 5 — (375 ) (116 ) (486 ) Excess of sales price over net assets transferred 79 68 547 613 1,307 Deemed contribution to Seadrill shareholders from non-controlling interest 19 16 105 69 209 * The Adjusted sales price above includes debt assumed and working capital adjustments. |
Assets held for sale Assets hel
Assets held for sale Assets held for sale (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Asset Held-for-sale | The loss has been recognized in “Loss on disposal” in the Statement of Operations. (In millions of US$) As at December 31, 2015 West Rigel newbuild investment, classified as held for sale 210 Loss on disposal (82 ) Non-current assets held for sale 128 |
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures | (In US$ millions) November 4, 2014 Enterprise value 900 Deferred consideration receivable 74 Less: Debt assumed (433 ) Purchase price 541 Less: Working capital adjustment (6 ) Adjusted purchase price 535 Cash 467 Deferred consideration receivable 74 Less: Working capital payable (6 ) Fair value of purchase consideration 535 Less: net carrying value of assets and liabilities (303 ) Less: allocated goodwill to subsidiaries (41 ) Gain on sale 191 As at June 19, 2015 Initial enterprise value 540 Less: Debt assumed (336 ) Initial purchase price 204 Plus: Working capital adjustment 31 Adjusted initial purchase price 235 Cash 204 Plus: Working capital receivable 31 Fair value of purchase consideration recognized on disposal 235 Less: net carrying value of assets and liabilities (271 ) Less: allocated goodwill to subsidiaries (41 ) Loss on disposal (77 ) Contingent consideration realized since disposal 32 (In $ millions) As at March 10, 2015 FAIR VALUE OF CONSIDERATION RECEIVED Net cash consideration received 749 Seller’s credit recognized 250 Direct repayment of debt by the JV on behalf of Seadrill 150 Consideration receivable in respect of West Titania 162 Other related party balances payable (71 ) Cash paid to acquire 50% interest in the JV (163 ) Fair value of consideration received 1,077 FAIR VALUE OF RETAINED 50% INVESTMENT IN SEAMEX LIMITED 163 CARRYING VALUE OF NET ASSETS Current assets Cash and cash equivalents 40 Deferred tax assets - short term 8 Other current assets 20 Total current assets 68 Non-current assets Drilling units 969 Deferred tax asset - long term 4 Other non-current assets 86 Goodwill 49 Total non-current assets 1,108 Total assets 1,176 LIABILITIES Current liabilities Trade accounts payable (1 ) Other current liabilities (56 ) Total current liabilities (57 ) Non-current liabilities Other non-current liabilities (60 ) Total non-current liabilities (60 ) Total liabilities (117 ) Carrying value of net assets 1,059 GAIN ON DISPOSAL 181 The gain was calculated as follows: (In US$ millions) December 31, 2013 Fair value of consideration received 2,600 Carry value of assets and liabilities 1,324 Other related costs to sale 20 Total gain on sale 1,256 (In US$ millions) March 21, 2014 Enterprise value 1,240 Less: Debt assumed (443 ) Purchase price 797 Less: Working capital adjustment (331 ) Adjusted purchase price 466 Cash 697 Discount note issued 100 Less: Working capital payable (331 ) Fair value of purchase consideration 466 Less: net carrying value of assets and liabilities 7 Less: allocated goodwill to subsidiaries (33 ) Gain on sale 440 Assets and liabilities held in the Company’s consolidated balance sheet included as held for sale are shown below: (In US$ millions) As at December 31, 2014 ASSETS Current assets Cash and cash equivalents 27 Accounts receivables, net 78 Deferred tax assets 9 Other current assets 20 Total current assets 134 Non-current assets Drilling units 965 Deferred tax assets LT 5 Goodwill 49 Other non-current assets 86 Total non-current assets 1,105 Total assets 1,239 LIABILITIES Current liabilities Trade accounts payable (2 ) Other current liabilities (56 ) Total current liabilities (58 ) Non-current liabilities Other non-current liabilities (50 ) Total non-current liabilities (50 ) Total liabilities (108 ) |
Supplementary cash flow infor81
Supplementary cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Disclosures | The table below summarizes the non-cash investing and financing activities relating to the periods presented: December 31, 2015 December 31, 2014 December 31, 2013 Non-cash investing activities Disposal of subsidiaries - existing bank loan repaid (1) 150 — — Disposal of West Auriga - consideration received as a loan note (2) — 100 — Disposal of West Vela - deferred consideration receivable (2) — 74 — Disposal of tender rig business - deferred consideration received in shares (2) — 416 Disposal of tender rig business - deferred consideration in receivables (2) — 145 Acquisition of Archer shares, settled against existing related party loan (3) — — 55 Acquisition of AOD shares, settled against existing related party loan (4) — — 67 Non-cash financing activities Repayment of bank loan through disposal of subsidiaries (1) (150 ) — — Repayment relating to share forward contracts and other derivatives (5) (136 ) — — Repayment relating to SapuraKencana financing agreements (6) (93 ) — — Conversion of convertible bond into shares, decrease in long term debt (7) — 584 — Conversion of convertible bond into shares, net increase in equity (7) — 615 — Purchase of SFL Polaris, net increase in related party payables and net decrease in equity (8) — 13 — Dividend to non-controlling interests in VIEs (9) — — 223 1. Existing debt of the Company was directly settled as consideration for the disposal of certain drilling rigs to the SeaMex joint venture - see Note 5 to the consolidated financial statements included herein , for more details. 2. Disposals of the West Auriga , West Vela , in 2014 and the disposal of the tender rig business in 2013 - refer to Note 11 to the consolidated financial statements included herein , for more details. 3. Private placement of Archer shares in February 2013 was settled against related party loan receivable - refer to Note 17 to the consolidated financial statements included herein , for more details. 4. Private placement of AOD shares in March 2013 was settled against elated party loan receivable - refer to Note 17 to the consolidated financial statements included herein , for more details. - 5. During the period, Company settled Sevan share repurchase agreements using cash balances already classified as restricted. 6. During the period, the Company settled SapuraKencana financing agreements using cash balances already classified as restricted. 7. In July 2014, the Company launched a voluntary incentive payment offer to convert any and all of the $650 million principal amount of 3.375% convertible bonds. Holders converted at the contractual conversion price of $27.69 per share and received an incentive payment of $12,102.95 per $100,000 principal amount of bond held. As a result of the transaction, the number of common shares outstanding in the Company increased by 23.8 million shares, with an increase to equity of $893 million . $278 million of the total consideration transferred on conversion was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of stockholders’ equity. 8. Purchase of SFL Polaris from Ship Finance - refer to Note 35 - VIEs. 9. Dividends declared by VIEs in 2013 to Ship Finance was settled against related party balances with Ship Finance - refer to Note 27 - Non-Controlling interests. |
General information (Details)
General information (Details) | 12 Months Ended |
Dec. 31, 2015drilling_unit | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of offshore drilling units owned by the Company | 38 |
Number of offshore drilling units under construction | 13 |
Percentage of voting control for certain variable interest entities (in hundredths) | 50.00% |
Accounting policies (Details)
Accounting policies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Threshold percentage for recognizing actuarial gains and losses (in hundredths) | 10.00% | |
Overhauls of drilling units | ||
Property, Plant and Equipment [Line Items] | ||
Estimated economic useful life | 5 years | |
Drilling units | ||
Property, Plant and Equipment [Line Items] | ||
Estimated economic useful life | 30 years | 30 years |
Period within which management is actively committed to a probable sale of assets classified as held for sale | 1 year | |
Equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated economic useful life | 3 years | |
Equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated economic useful life | 5 years | |
Restricted Stock Units (RSUs) | ||
Property, Plant and Equipment [Line Items] | ||
Vesting period | 3 years | |
New Accounting Pronouncement, Early Adoption, Effect | Current Portion of Long-term Debt | ||
Property, Plant and Equipment [Line Items] | ||
Debt issuance costs | $ 37 | $ 42 |
New Accounting Pronouncement, Early Adoption, Effect | Long-term Debt | ||
Property, Plant and Equipment [Line Items] | ||
Debt issuance costs | 81 | 103 |
New Accounting Pronouncement, Early Adoption, Effect | Other Current Assets | ||
Property, Plant and Equipment [Line Items] | ||
Debt issuance costs | (37) | (42) |
New Accounting Pronouncement, Early Adoption, Effect | Other Noncurrent Assets | ||
Property, Plant and Equipment [Line Items] | ||
Debt issuance costs | $ (81) | $ (103) |
Segment information (Details)
Segment information (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | segment | 3 | ||
Number of reportable segments | segment | 2 | ||
Revenues (excluding gain on sale of drilling units) | $ 4,335 | $ 4,997 | $ 5,282 |
Depreciation and amortization | 779 | 693 | 711 |
Operating Income - net income [Abstract] | |||
Operating income | 1,019 | 2,279 | 2,098 |
Unallocated items: | |||
Total financial items and other | (1,561) | 1,827 | 842 |
Income tax expense | (208) | (19) | (154) |
Net (loss)/income | (750) | 4,087 | 2,786 |
Book value on disposal | 16,409 | 17,175 | |
Assets held for sale | 128 | 1,239 | |
Investment in associated companies | 2,590 | 2,898 | |
Marketable securities | 324 | 751 | |
Goodwill | 0 | 604 | 1,200 |
Cash and restricted cash | 1,292 | 1,280 | |
Other assets | 2,727 | 2,350 | |
Total assets | 23,470 | 26,297 | |
Capital expenditures - fixed assets | 1,045 | 3,103 | 4,699 |
Floaters | |||
Segment Reporting Information [Line Items] | |||
Revenues (excluding gain on sale of drilling units) | 2,906 | 3,360 | 3,698 |
Depreciation and amortization | 571 | 508 | 531 |
Operating Income - net income [Abstract] | |||
Operating income | 340 | 1,992 | 1,472 |
Unallocated items: | |||
Book value on disposal | 12,189 | 12,849 | |
Goodwill | 0 | 604 | |
Capital expenditures - fixed assets | 950 | 2,327 | 3,178 |
Jack up Rigs | |||
Segment Reporting Information [Line Items] | |||
Revenues (excluding gain on sale of drilling units) | 1,293 | 1,478 | 1,175 |
Depreciation and amortization | 208 | 185 | 163 |
Operating Income - net income [Abstract] | |||
Operating income | 664 | 275 | 450 |
Unallocated items: | |||
Book value on disposal | 4,220 | 4,326 | |
Capital expenditures - fixed assets | 95 | 776 | 1,371 |
Tender Rigs | |||
Segment Reporting Information [Line Items] | |||
Revenues (excluding gain on sale of drilling units) | 0 | 0 | 382 |
Depreciation and amortization | 0 | 0 | 17 |
Operating Income - net income [Abstract] | |||
Operating income | 0 | 0 | 176 |
Unallocated items: | |||
Book value on disposal | 0 | 0 | |
Capital expenditures - fixed assets | 0 | 0 | 150 |
Other Rigs | |||
Segment Reporting Information [Line Items] | |||
Revenues (excluding gain on sale of drilling units) | 136 | 159 | 27 |
Operating Income - net income [Abstract] | |||
Operating income | $ 15 | $ 12 | $ 0 |
Segment Information - Geographi
Segment Information - Geographic (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | $ 4,335 | $ 4,997 | $ 5,282 | |
Machinery and Equipment, Gross | [1] | 14,930 | 15,145 | |
BRAZIL | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | 877 | 991 | 825 | |
Machinery and Equipment, Gross | [1] | 4,074 | 2,798 | |
NORWAY | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | 641 | 1,071 | 1,198 | |
Machinery and Equipment, Gross | [1] | 2,094 | 2,252 | |
ANGOLA | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | 527 | 707 | 734 | |
Machinery and Equipment, Gross | [1] | 1,452 | 1,852 | |
Nigeria | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | 499 | 21 | 207 | |
OTHER | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Revenue, Net | [2] | 1,791 | 2,207 | $ 2,318 |
Machinery and Equipment, Gross | [1],[3] | $ 7,310 | $ 8,243 | |
[1] | The fixed assets referred to in the table are the Company’s operating drilling units. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. | |||
[2] | Other countries represents countries in which we operate that individually had revenues representing less than 10 percent of total revenues earned for any of the periods presented. | |||
[3] | Other countries represents countries in which we operate that individually had fixed assets representing less than 10 percent of total fixed assets for any of the periods presented. |
Segment information - Major Cus
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Petrobras | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 19.00% | 20.00% | 16.00% |
Total | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 16.00% | 13.00% | 14.00% |
Exxon | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 14.00% | 10.00% | 12.00% |
Statoil | |||
Revenue, Major Customer [Line Items] | |||
Concentration risk percentage | 12.00% | 13.00% | 14.00% |
Other revenues (Details)
Other revenues (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Revenues [Abstract] | ||||
Amortization of unfavorable contracts | $ 116 | $ 130 | $ 67 | |
Amortization of favorable contracts | 0 | 0 | (2) | |
Revenues related party | 119 | 97 | 2 | |
External management fees with third parties | 30 | 62 | 45 | |
Total | [1] | $ 265 | $ 289 | $ 112 |
[1] | Includes transactions with related parties. Refer to Note 31. |
(Loss)_gain on disposals (Detai
(Loss)/gain on disposals (Details) - USD ($) $ in Millions | Dec. 02, 2015 | Mar. 10, 2015 | Nov. 04, 2014 | Mar. 21, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Acquisitions and Disposals [Line Items] | ||||||||
Book value on disposal | $ 16,409 | $ 17,175 | ||||||
(Loss)/gain on disposals | [1] | (63) | 632 | $ 61 | ||||
Disposal Group, Including Discontinued Operation, Property, Plant and Equipment, Current | 5 | |||||||
Assets written off | (5) | |||||||
Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Book value on disposal | 14,930 | 15,145 | 12 | |||||
West Auriga | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
(Loss)/gain on disposals | $ 440 | |||||||
West Auriga | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 199 | |||||||
Book value on disposal | 279 | |||||||
(Loss)/gain on disposals | (80) | |||||||
West Auriga | Jack-up rigs | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 466 | |||||||
Book value on disposal | 26 | |||||||
(Loss)/gain on disposals | 440 | |||||||
West Rigel | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 128 | |||||||
Book value on disposal | $ 210 | 210 | ||||||
(Loss)/gain on disposals | $ (82) | (82) | ||||||
West Vela | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
(Loss)/gain on disposals | $ 191 | |||||||
West Vela | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 235 | |||||||
Book value on disposal | 312 | |||||||
(Loss)/gain on disposals | (77) | |||||||
West Vela | Jack-up rigs | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 536 | |||||||
Book value on disposal | 344 | |||||||
(Loss)/gain on disposals | 192 | |||||||
SeaMex Limited | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
(Loss)/gain on disposals | $ 181 | |||||||
SeaMex Limited | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 1,240 | |||||||
Book value on disposal | 1,059 | |||||||
(Loss)/gain on disposals | 181 | |||||||
Total | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Net proceeds/recoverable amount | 1,802 | 1,002 | 73 | |||||
Book value on disposal | 1,865 | 370 | 12 | |||||
(Loss)/gain on disposals | $ (63) | $ 632 | $ 61 | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
(Loss)_gain on disposals - Canc
(Loss)/gain on disposals - Cancellation of West Mira (Details) - USD ($) $ in Millions | Oct. 12, 2015 | Sep. 14, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Acquisitions and Disposals [Line Items] | ||||||
Carrying value of newbuild | $ 1,479 | $ 2,030 | ||||
Arbitration period | 2 years | |||||
(Loss)/gain on disposals | [1] | $ 63 | $ (632) | $ (61) | ||
West Mira | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Carrying value of newbuild | $ 315 | |||||
Pre-delivery installments | 170 | |||||
Contingent recovery of pre-delivery installments | $ 170 | |||||
Pre-delivery installments receivable | $ 170 | |||||
Redeployed equipment amount | 48 | |||||
(Loss)/gain on disposals | 80 | |||||
Other Noncurrent Assets | West Mira | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Accrued interest related to pre-delivery installment receivable | $ 29 | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
(Loss)_gain on disposals - West
(Loss)/gain on disposals - West Rigel Transferred to Asset Held for Sale (Details) - USD ($) $ in Millions | Dec. 02, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 19, 2015 | Jul. 21, 2014 | Jan. 02, 2014 | |
Significant Acquisitions and Disposals [Line Items] | ||||||||
Book value on disposal | $ 16,409 | $ 17,175 | ||||||
(Loss)/gain on disposals | [1] | 63 | (632) | $ (61) | ||||
Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Book value on disposal | 14,930 | $ 15,145 | $ 12 | |||||
West Rigel | Exploration and Production Equipment | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Book value on disposal | $ 210 | 210 | ||||||
(Loss)/gain on disposals | $ 82 | $ 82 | ||||||
Seadrill Operating LP | ||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
(Loss)_gain on disposals - Seam
(Loss)/gain on disposals - Seamex Limited, Sale of West Auriga, and Sale of West Vela (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 10, 2015 | Nov. 04, 2014 | Mar. 21, 2014 | Jan. 02, 2014 | Apr. 30, 2013 | ||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Gain on sale | [1] | $ (63) | $ 632 | $ 61 | |||||
Seadrill Capricorn Holdings LLC | |||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Ownership interest, percentage | 49.00% | 49.00% | 49.00% | ||||||
SeaMex Limited | |||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Third party ownership interest | 50.00% | 50.00% | |||||||
Ownership interest, percentage | 50.00% | 0.00% | 0.00% | 50.00% | |||||
Varia Perdana | |||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Ownership interest, percentage | 49.00% | ||||||||
SeaMex Limited | |||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Ownership interest prior to disposal | 100.00% | ||||||||
Exploration and Production Equipment | West Janus | |||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||
Net proceeds/recoverable amount | $ 73 | ||||||||
Gain on sale | $ 61 | ||||||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Interest expense (Details)
Interest expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest Expense [Abstract] | |||
Gross interest expense | $ 475 | $ 548 | $ 540 |
Capitalized interest | (60) | (70) | (95) |
Net interest expense | $ 415 | $ 478 | $ 445 |
Gain on realization of market93
Gain on realization of marketable securities (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Apr. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 02, 2015 | Apr. 30, 2013 | Dec. 31, 2012 | |
Business Acquisition [Line Items] | |||||||
Gain/(loss) reclassified into income | $ (741) | $ 131 | $ 0 | ||||
Investment owned, ownership percentage | 23.00% | ||||||
Sapura Kencana | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from available-for-sale securities | $ 297 | ||||||
Gain/(loss) reclassified into income | $ 131 | $ (167) | $ 131 | $ 0 | |||
Investment owned, ownership percentage | 8.18% | 12.00% | 6.40% |
Impairment loss on marketable94
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Common Units (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2015 | Sep. 30, 2015 | Oct. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2015 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Loss on impairment of investments | $ 1,274 | |||||||
Seadrill Partners LLC | ||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Common units market value (in dollars per share) | $ 3.65 | $ 9.40 | $ 30.60 | $ 31.41 | $ 30.60 | $ 30.60 | ||
Increase (decrease) in price per unit, percentage | (20.00%) | |||||||
Loss on impairment of investments | 533 | |||||||
Common Unit | Seadrill Partners LLC | ||||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||||||
Loss on impairment of investments | $ 574 |
Impairment loss on marketable95
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Subordinated units and direct ownership interests - Impairment of Equity Method Investment (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | ||
Remaining economic lives of underlying assets | 30 years | |
Weighted average cost of capital | 10.00% | |
Loss on impairment of investments | $ 1,274 | |
Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Remaining economic lives of underlying assets | 30 years | |
Weighted average cost of capital | 8.50% | |
Loss on impairment of investments | $ 533 | |
Subordinated Units | Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Loss on impairment of investments | $ 125 | 125 |
Direct Ownership Interest | Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Loss on impairment of investments | $ 302 | $ 302 |
Impairment loss on marketable96
Impairment loss on marketable securities and investments in associated companies - Seadrill Partners - Member interest - Impairment of Cost method investments (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2015 |
Schedule of Equity Method Investments [Line Items] | ||
Non-economic ownership interest, percentage | 0.00% | |
IDR ownership percentage | 100.00% | |
Loss on impairment of investments | $ 1,274 | |
Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Loss on impairment of investments | 533 | |
Incentive Distribution Rights | Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Loss on impairment of investments | $ 106 | $ 106 |
Impairment loss on marketable97
Impairment loss on marketable securities and investments in associated companies - SapuraKencana - Impairment of marketable securities (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2015 | Sep. 30, 2015 | Oct. 31, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jan. 31, 2014 | Sep. 30, 2015 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Loss on impairment of investments | $ 1,274 | ||||||||||
Total impairment of marketable securities investments (reclassification from OCI) | 741 | $ 0 | $ 0 | ||||||||
Seadrill Partners LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Increase (decrease) in price per unit, percentage | (20.00%) | ||||||||||
Loss on impairment of investments | 533 | ||||||||||
Common units market value (in dollars per share) | $ 3.65 | $ 9.40 | $ 30.60 | $ 31.41 | $ 30.60 | $ 30.60 | |||||
Sapura Kencana | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Increase (decrease) in price per unit, percentage | (45.00%) | ||||||||||
Loss on impairment of investments | 167 | ||||||||||
Direct Ownership Interest | Seadrill Partners LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Loss on impairment of investments | $ 302 | 302 | |||||||||
Subordinated Units | Seadrill Partners LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Loss on impairment of investments | 125 | 125 | |||||||||
Incentive Distribution Rights | Seadrill Partners LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Loss on impairment of investments | $ 106 | 106 | |||||||||
Common Unit | Seadrill Partners LLC | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Loss on impairment of investments | $ 574 |
Taxation - Narrative (Details)
Taxation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Related Party Transaction [Line Items] | ||||
Effective tax rate | (38.40%) | 0.50% | 5.20% | |
Statutory income tax rate (in hundredths) (as a percent) | 0.00% | 0.00% | 0.00% | |
Net operating losses carried forward | $ 265 | $ 291 | ||
Deferred tax assets not subject to expiration | 265 | |||
Valuation allowance | 211 | 280 | $ 115 | |
Valuation allowance, change in amount | (69) | 165 | 41 | |
Valuation allowance, utilization | 0 | 0 | 0 | |
Deferred tax asset | 81 | 53 | ||
Unremitted earnings of subsidiaries | 38 | 0 | ||
Unrecognized tax benefits | 9 | 9 | $ 147 | $ 154 |
Unrecognized tax benefits that would have a favorable impact on effective tax rate | $ 9 | |||
Tax settlement impact on effective tax rate | 94 | |||
SeaMex Limited | ||||
Related Party Transaction [Line Items] | ||||
Deferred tax asset | $ 14 | |||
BERMUDA | ||||
Related Party Transaction [Line Items] | ||||
Statutory income tax rate (in hundredths) (as a percent) | 0.00% |
Taxation - Components of Income
Taxation - Components of Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current tax expense: | |||
Bermuda | $ 0 | $ 0 | $ 0 |
Foreign | 177 | 23 | 200 |
Deferred tax expense/(benefit): | |||
Bermuda | 0 | 0 | 0 |
Foreign | 31 | (4) | (50) |
Tax related to internal sale of assets in subsidiary, amortized for group purposes | 0 | 0 | 4 |
Total tax expense | $ 208 | $ 19 | $ 154 |
Effective tax rate | (38.40%) | 0.50% | 5.20% |
Taxation - Income Tax Reconcili
Taxation - Income Tax Reconciliation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Income taxes at statutory rate | $ 0 | $ 0 | $ 0 |
Effect of transfers to new tax jurisdictions | 0 | 0 | 4 |
Effect of change on uncertain tax positions relating to prior year | 0 | (85) | (7) |
Effect of unremitted earnings of subsidiaries | 38 | 0 | 0 |
Effect of taxable income in various countries | 170 | 104 | 157 |
Total tax expense | $ 208 | $ 19 | $ 154 |
Taxation - Deferred Income Taxe
Taxation - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Tax Assets [Abstract] | |||
Pensions and stock options | $ 9 | $ 19 | |
Provisions | 16 | 20 | |
Net operating losses carried forward | 265 | 291 | |
Other | 2 | 3 | |
Gross deferred tax asset | 292 | 333 | |
Valuation allowance related to net operating losses carried forward | (211) | (280) | $ (115) |
Net deferred tax asset | 81 | 53 | |
Deferred Tax Liability [Abstract] | |||
Property, plant and equipment | 98 | 60 | |
Unremitted Earnings of Subsidiaries | 38 | 0 | |
Foreign exchange | 0 | 7 | |
Gross deferred tax liability | 136 | 67 | |
Net deferred tax | (55) | (14) | |
Net deferred taxes, classified [Abstract] | |||
Deferred tax asset | 81 | 53 | |
Deferred tax liability | $ (136) | $ (67) |
Taxation - Changes to Liabiliti
Taxation - Changes to Liabilities Related to Unrecognized Tax Benefits, Excluding Interest and Penalties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | |||
Balance beginning of period | $ 9 | $ 147 | $ 154 |
Increases as a result of positions taken in prior periods | 0 | 9 | 29 |
Increases as a result of positions taken during the current period | 0 | 0 | 12 |
Decreases as a result of positions taken in prior periods | 0 | (147) | (14) |
Decreases as a result of positions taken in the current period | 0 | 0 | (34) |
Balance end of period | $ 9 | $ 9 | $ 147 |
Taxation - Earliest Open Tax Ye
Taxation - Earliest Open Tax Year (Details) | 12 Months Ended |
Dec. 31, 2015 | |
UNITED STATES | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,013 |
ANGOLA | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,010 |
AUSTRALIA | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,011 |
Nigeria | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,009 |
NORWAY | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,013 |
THAILAND | |
Income Tax Examination [Line Items] | |
Earliest Open Year | 2,005 |
(Loss)_earnings per share (Deta
(Loss)/earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Earnings Per Share [Abstract] | ||||
Net (loss)/income attributable to the parent | $ (738) | $ 3,979 | $ 2,653 | |
Less: Allocation to participating securities | 0 | (6) | 0 | |
Net (loss)/income attributable to the parent | (738) | 3,973 | 2,653 | |
Effect of dilution | 0 | 117 | 38 | |
Diluted net (loss)/income available to stockholders | $ (738) | $ 4,090 | $ 2,691 | |
Basic earnings per share: | ||||
Weighted average number of common shares outstanding, basic (in shares) | 492.8 | 478 | 469 | |
Diluted earnings per share: | ||||
Weighted average number of common shares outstanding (in shares) | 0 | 14 | 22 | |
Effect of dilutive share options (in shares) | [1] | 0 | 1 | 1 |
Weighted average number of common shares outstanding adjusted for the effects of dilution | 492.8 | 493 | 492 | |
Basic EPS (in USD per share) | $ (1.49) | $ 8.32 | $ 5.66 | |
Diluted EPS (in USD per share) | $ (1.49) | $ 8.30 | $ 5.47 | |
[1] | Certain stock options have been excluded from the calculation of diluted EPS because their exercise price exceeded Company’s average share price during the calculation period. |
Disposals of businesses and 105
Disposals of businesses and deconsolidation of subsidiaries - Disposal of the West Polaris (Details) - USD ($) | Jun. 19, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 29, 2016 | Jan. 01, 2016 | Jul. 21, 2014 | Jan. 02, 2014 | |
Significant Acquisitions and Disposals [Line Items] | ||||||||||
Contingent consideration realized | $ 47,000,000 | $ 0 | $ 0 | |||||||
Loss on disposal | [1] | $ (63,000,000) | $ 632,000,000 | $ 61,000,000 | ||||||
Seadrill Operating LP | ||||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | |||||||
West Polaris | ||||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||||
Enterprise value | $ 540,000,000 | |||||||||
Debt assumed | 336,000,000 | |||||||||
Consideration | 235,000,000 | |||||||||
Cash consideration | 204,000,000 | |||||||||
Working capital adjustments | 31,000,000 | |||||||||
Seller’s credit recognized | $ 50,000,000 | |||||||||
Interest rate related to sellers line of credit | 6.50% | |||||||||
Period after contract completion for potential reduction in receivable | 3 years | |||||||||
Threshold for operating day rate | $ 450,000 | |||||||||
Percentage above thresholder for operating day rate | 50.00% | |||||||||
Contingent consideration realized | $ 32,000,000 | $ 32,000,000 | ||||||||
Loss on disposal | (77,000,000) | |||||||||
Disposal group, goodwill | $ 41,000,000 | |||||||||
Subsequent Event | West Polaris | ||||||||||
Significant Acquisitions and Disposals [Line Items] | ||||||||||
Threshold for operating day rate | $ 653,000 | $ 490,000 | ||||||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 106
Disposals of businesses and deconsolidation of subsidiaries - West Polaris Consideration (Details) - USD ($) $ in Millions | Jun. 19, 2015 | Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Acquisitions and Disposals [Line Items] | ||||||
Loss on disposal | [1] | $ (63) | $ 632 | $ 61 | ||
Contingent consideration realized | $ 47 | $ 0 | $ 0 | |||
West Polaris | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Enterprise value | $ 540 | |||||
Less: Debt assumed | (336) | |||||
Purchase price | 204 | |||||
Working capital adjustments | 31 | |||||
Purchase price | 235 | |||||
Cash consideration | 204 | |||||
Less: net carrying value of assets and liabilities | (271) | |||||
Less: allocated goodwill to subsidiaries | (41) | |||||
Loss on disposal | (77) | |||||
Contingent consideration realized | $ 32 | $ 32 | ||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 107
Disposals of businesses and deconsolidation of subsidiaries - SeaMex Limited Narrative (Details) - USD ($) $ in Millions | Mar. 10, 2015 | Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Acquisitions and Disposals [Line Items] | ||||||
(Loss)/gain on disposals | [1] | $ (63) | $ 632 | $ 61 | ||
SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Third party ownership interest | 50.00% | 50.00% | ||||
Ownership interest, percentage | 50.00% | 50.00% | 0.00% | 0.00% | ||
SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Noncontrolling interest ownership percentage | 100.00% | |||||
Related Party Transaction, Due from Related Party, Threshold for Agreement Termination | 120 days | |||||
SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Consideration | $ 1,077 | |||||
Disposal Group, Including Discontinued Operation, Consideration, Net Cash Received | 586 | |||||
Seller’s credit recognized | 250 | |||||
Disposal Group, Including Discontinued Operation, Consideration, Related Party Receivable | 91 | |||||
Direct repayment of debt by the JV on behalf of Seadrill | 150 | |||||
Consideration receivable | 162 | $ 162 | ||||
(Loss)/gain on disposals | 181 | |||||
Loss on disposal | $ (49) | |||||
LIBOR | SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Interest rate related to sellers line of credit | 6.50% | |||||
Drilling units | SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
(Loss)/gain on disposals | $ 181 | |||||
Subsidiaries | SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Related Party Transaction, Due from Related Party, Management Fee, Percent | 8.00% | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 108
Disposals of businesses and deconsolidation of subsidiaries - SeaMex Limited Gain on Disposal (Details) - USD ($) $ in Millions | Mar. 10, 2015 | Jul. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Significant Acquisitions and Disposals [Line Items] | ||||||
Total current assets | $ 0 | $ 134 | ||||
Total non-current assets | 128 | 1,105 | ||||
Total assets | 128 | 1,239 | ||||
Total current liabilities | 0 | 58 | ||||
Total non-current liabilities | 0 | 50 | ||||
Gain on sale | [1] | $ (63) | 632 | $ 61 | ||
SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Net cash consideration received | $ 749 | |||||
Seller’s credit recognized | 250 | |||||
Direct repayment of debt by the JV on behalf of Seadrill | 150 | |||||
Consideration receivable in respect of West Titania | 162 | $ 162 | ||||
Other related party balances payable | (71) | |||||
Cash paid to acquire 50% interest in the JV | (163) | |||||
Consideration | 1,077 | |||||
FAIR VALUE OF RETAINED 50% INVESTMENT IN SEAMEX LIMITED | 163 | |||||
Cash and cash equivalents | 40 | 27 | ||||
Deferred tax assets - short term | 8 | 9 | ||||
Other current assets | 20 | 20 | ||||
Total current assets | 68 | 134 | ||||
Drilling units | 969 | 965 | ||||
Deferred tax asset - long term | 4 | 5 | ||||
Other non-current assets | 86 | 86 | ||||
Goodwill | 49 | 49 | ||||
Total non-current assets | 1,108 | 1,105 | ||||
Total assets | 1,176 | 1,239 | ||||
Trade accounts payable | (1) | (2) | ||||
Other current liabilities | (56) | (56) | ||||
Total current liabilities | 57 | 58 | ||||
Other non-current liabilities | (60) | (50) | ||||
Total non-current liabilities | 60 | 50 | ||||
Total liabilities | 117 | $ 108 | ||||
Carrying value of net assets | 1,059 | |||||
Gain on sale | $ 181 | |||||
SeaMex Limited | ||||||
Significant Acquisitions and Disposals [Line Items] | ||||||
Ownership interest, percentage | 50.00% | 50.00% | 0.00% | 0.00% | ||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 109
Disposals of businesses and deconsolidation of subsidiaries - Deconsolidation of Seadrill Partners Narrative (Details) shares in Millions, $ in Millions | 12 Months Ended | ||||||||||||
Dec. 31, 2015USD ($)ownership_interestclass_of_membership_interest | Dec. 02, 2015 | Jun. 19, 2015 | Dec. 31, 2014USD ($) | Nov. 04, 2014 | Jul. 21, 2014 | Mar. 21, 2014 | Jan. 02, 2014shares | Dec. 13, 2013 | Oct. 31, 2013 | Oct. 18, 2013 | Oct. 24, 2012 | ||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Investment owned, ownership percentage | 23.00% | ||||||||||||
Non-economic ownership interest, percentage | 0.00% | ||||||||||||
Investment in associated companies | $ 2,590 | $ 2,898 | |||||||||||
Number of ownership interests | ownership_interest | 4 | ||||||||||||
Seadrill Operating LP | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | ||||||||||
Seadrill Partners LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Investment owned, ownership percentage | 28.60% | 28.60% | |||||||||||
Investment in associated companies | $ 2,809 | ||||||||||||
Seadrill Capricorn Holdings LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 49.00% | 49.00% | 49.00% | ||||||||||
Number of classes of membership interest | class_of_membership_interest | 1 | ||||||||||||
SFL Deepwater Ltd | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | ||||||||||||
Seadrill Mobile Units (Nigeria) Ltd | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | ||||||||||||
Seadrill Partners LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest prior to disposal | 62.35% | 62.35% | 77.47% | 77.47% | 75.67% | ||||||||
Seadrill UK Ltd | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest prior to disposal | 100.00% | ||||||||||||
Seadrill Mobile Units (Nigeria) Ltd | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | 39.00% | |||||||||||
SFL Deepwater Ltd | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | 39.00% | |||||||||||
Common Unit | Seadrill Partners LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Common units issued to the Company | shares | 21.5 | ||||||||||||
Investment owned, ownership percentage | 48.30% | ||||||||||||
Subordinated Units | Seadrill Partners LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Common units issued to the Company | shares | 16.5 | ||||||||||||
Ownership interest, percentage | 18.00% | 100.00% | |||||||||||
Investment in associated companies | $ 293 | $ 412 | |||||||||||
Incentive Distribution Rights | Seadrill Partners LLC | |||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||
Investment owned, ownership percentage | 100.00% | ||||||||||||
Non-economic ownership interest, percentage | 0.00% | ||||||||||||
Investment in associated companies | [1] | $ 137 | $ 244 | ||||||||||
[1] | The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. |
Disposals of businesses and 110
Disposals of businesses and deconsolidation of subsidiaries - Gain on Deconsolidation and Fair Value of Investments (Details) - USD ($) $ in Millions | Jan. 02, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Investments [Line Items] | |||||
Goodwill | $ 0 | $ 604 | $ 1,200 | ||
Gain on deconsolidation of Seadrill Partners | $ 0 | $ 2,339 | $ 0 | ||
Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures | $ 1,260 | ||||
Goodwill | 240 | ||||
Gain on deconsolidation of Seadrill Partners | 2,339 | ||||
Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Fair value of investment in Seadrill Partners | [1] | 3,724 | |||
Carrying amount of non controlling interest | 115 | ||||
Investment owned, including noncontrolling interest | 3,839 | ||||
Common Unit | Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Fair value of investment in Seadrill Partners | [2] | 671 | |||
Subordinated Units | Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Fair value of investment in Seadrill Partners | [3] | 427 | |||
Incentive Distribution Rights | Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Fair value of investment in Seadrill Partners | [4] | 244 | |||
Direct Ownership Interest | Seadrill Partners LLC | |||||
Schedule of Investments [Line Items] | |||||
Fair value of investment in Seadrill Partners | [5] | $ 2,382 | |||
[1] | Fair value of investments and continuing involvement with investeesThe estimated fair value of the Company’s residual interest in Seadrill Partners comprised of the following:Common units - 671, Subordinated Units - 427, Seadrill Member Interest and Incentive Distribution Rights (“IDRs”) - 244, Direct ownership interests - 2,382, Total, 3,724 | ||||
[2] | Common units (marketable securities)As of the deconsolidation date, the Company held 21.5 million common units representing 48.3% of the common units in issue as a class. The Company’s holding in the voting common units of Seadrill Partners are accounted for as marketable securities on the basis that during the subordination period the common units have preferential dividend and liquidation rights, and therefore do not represent ‘in-substance common stock’ as defined by U.S. GAAP. These securities have been recognized on January 2, 2014 at the quoted market price and are re-measured at fair value each reporting period. Any unrealized gains and losses on these securities are recognized directly in equity as a component of other comprehensive income unless an unrealized loss is considered “other-than-temporary,” in which case it is transferred to the statement of operations and realized. Dividend income from the common units is recognized in the consolidated statement of operations. | ||||
[3] | Subordinated unitsAs of the deconsolidation date the Company held 16.5 million units representing 100% of the subordinated units. The Company’s holding in the subordinated units of Seadrill Partners are accounted for under the equity method on the basis that the subordinated units are considered to be ‘in-substance common stock’. The subordination period will end on the satisfaction of various tests as prescribed in the Operating Agreement of Seadrill Partners, but will not end before September 30, 2017 except upon removal of the Seadrill Member. Upon the expiration of the subordination period, the subordinated units will convert into common units. The fair value of the subordinated units on January 2, 2014, was determined based on the quoted market price of the listed common units as of the deconsolidation date, but discounted for their non-tradability and subordinated dividend and liquidation rights during the subordination period. Under the equity method the Company recognizes its share of Seadrill Partners’ earnings allocable to the subordinated units, less amortization of the basis difference (see (c) below), through the ‘share in results of associated companies’ line in the consolidated statement of operations. Dividends are recognized as a reduction in investment carrying value. | ||||
[4] | Seadrill Member Interest and IDRsThe Seadrill Member Interest (which is a 0% non-economic interest) holds the rights to 100% of the IDRs and is unable to trade these until the end of the subordination period without the approval of a majority of unaffiliated common unitholders. The Seadrill Member Interest and the IDRs in Seadrill Partners are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured, however they are tested annually for impairment. The fair value of the Company’s interest in the Seadrill Member and the attached IDRs as of January 2, 2014 was determined using a Monte Carlo simulation method. The method takes into account the cash distribution waterfall, historical volatility, dividend yield and share price of the common units as of the deconsolidation date. Distributions to the IDRs are recognized in the consolidated statement of operations. | ||||
[5] | Direct Ownership interestsThe Company held the following ownership interests in entities controlled by Seadrill Partners as of the date of deconsolidation:•70% ownership in Seadrill Operating LPSeadrill Operating LP is a limited partnership and is controlled by its General Partner, Seadrill Operating GP LLC, which is wholly owned by Seadrill Partners. •49% ownership in Seadrill Capricorn Holdings LLCSeadrill Capricorn Holdings LLC is a limited liability company. There is only one class of member interest which is deemed to represent voting common stock. •39% ownership of Seadrill Deepwater Drillship Ltd. and 39% (indirect) ownership of Seadrill Mobile Units (Nigeria) Ltd.The Company held a 39% direct ownership interest in Seadrill Deepwater Drillship Ltd. and a 39% indirect ownership of Seadrill Mobile Units Ltd., through its 100% subsidiary, Seadrill UK Ltd. Both entities are limited companies and only have one class of stock, which is deemed to represent voting common stock. All of the Company’s direct ownership interests are accounted for under the equity method as the Company is deemed to have significant influence over these entities through its voting rights and by virtue of Seadrill’s representation on the board of Seadrill Partners.The fair values of the four ownership interests described above have been determined using a discounted cash-flow (“DCF”) methodology, using discounted cash-flow forecasts. |
Disposals of businesses and 111
Disposals of businesses and deconsolidation of subsidiaries - Seadrill's share of basis difference (Details) - Seadrill Partners LLC $ in Millions | Jan. 02, 2014USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||
Book value | $ 3,444 | |
Fair value | 6,629 | |
Basis Difference | 3,185 | |
Seadrill's share of basis difference | 1,789 | [1] |
Drilling Units | ||
Schedule of Equity Method Investments [Line Items] | ||
Book value | 3,444 | |
Fair value | 5,245 | |
Basis Difference | 1,801 | |
Seadrill's share of basis difference | 1,295 | [1] |
Drilling Contracts | ||
Schedule of Equity Method Investments [Line Items] | ||
Book value | 0 | |
Fair value | 170 | |
Basis Difference | 170 | |
Seadrill's share of basis difference | 142 | [1] |
Goodwill | ||
Schedule of Equity Method Investments [Line Items] | ||
Book value | 0 | |
Fair value | 1,214 | |
Basis Difference | 1,214 | |
Seadrill's share of basis difference | $ 352 | [1] |
[1] | Seadrill’s share of the basis difference relates to both its investment in the subordinated units of Seadrill Partners, and its direct ownership interests in various subsidiaries of Seadrill Partners, all of which investments are accounted for under the equity method. The total basis difference has been assigned based on Seadrill’s proportional ownership interest in each investee. In the case of Seadrill’s investment in the subordinated units of Seadrill Partners, the proportional allocation to the subordinated units was based on the relative fair values of the various equity interests in Seadrill Partners. |
Disposals of businesses and 112
Disposals of businesses and deconsolidation of subsidiaries - West Auriga (Details) - USD ($) $ in Millions | Mar. 21, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 04, 2014 | Jan. 02, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Gain on sale | [1] | $ (63) | $ 632 | $ 61 | |||
West Auriga | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Enterprise value | $ 1,240 | ||||||
Less: Debt assumed | (443) | ||||||
Purchase price | 797 | ||||||
Less: Working capital adjustment | 331 | ||||||
Purchase price | 466 | ||||||
Cash | 697 | ||||||
Discount note issued | 100 | ||||||
Less: net carrying value of assets and liabilities | 7 | ||||||
Less: allocated goodwill to subsidiaries | (33) | ||||||
Gain on sale | $ 440 | ||||||
Seadrill Capricorn Holdings LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership interest, percentage | 49.00% | 49.00% | 49.00% | ||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 113
Disposals of businesses and deconsolidation of subsidiaries - West Vela (Details) - USD ($) $ in Thousands | Nov. 04, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Mar. 21, 2014 | Jan. 02, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Contingent consideration realized | $ 47,000 | $ 0 | $ 0 | ||||
(Loss)/gain on disposals | [1] | (63,000) | 632,000 | $ 61,000 | |||
West Vela | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Deferred contingent consideration per day, remainder of contract | $ 44 | ||||||
Deferred contingent consideration per day | 40 | ||||||
Contingent consideration realized | $ 15,000 | $ 1,000 | |||||
Enterprise value | 900,000 | ||||||
Deferred consideration | 74,000 | ||||||
Less: Debt assumed | (433,000) | ||||||
Purchase price | 541,000 | ||||||
Working capital adjustments | (6,000) | ||||||
Purchase price | 535,000 | ||||||
Cash | 467,000 | ||||||
Less: net carrying value of assets and liabilities | (303,000) | ||||||
Less: allocated goodwill to subsidiaries | (41,000) | ||||||
(Loss)/gain on disposals | $ 191,000 | ||||||
Seadrill Capricorn Holdings LLC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Ownership interest, percentage | 49.00% | 49.00% | 49.00% | ||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Disposals of businesses and 114
Disposals of businesses and deconsolidation of subsidiaries - Sale of Majority of Tender Rig Business Narrative (Details) $ / shares in Units, $ in Millions | Apr. 30, 2013USD ($)rig | Apr. 29, 2013USD ($) | Dec. 31, 2015USD ($)rig | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($)shares | Dec. 02, 2015 | Sep. 30, 2015$ / shares | Jun. 30, 2015$ / shares | Dec. 31, 2013MYR / shares | Apr. 30, 2013MYR / shares | Dec. 31, 2012 |
Significant Acquisitions and Disposals [Line Items] | |||||||||||
Period of administrative and IT support | 1 year | ||||||||||
Gain (loss) on disposition | $ 22 | $ 0 | $ 1,256 | ||||||||
Investment owned, ownership percentage | 23.00% | ||||||||||
Gross value of marketable securities | $ 324 | 751 | |||||||||
Share price (in MYR per share) | $ / shares | $ 5.90 | $ 10.34 | |||||||||
Varia Perdana | |||||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||||
Ownership interest, percentage | 49.00% | ||||||||||
Sapura Kencana | |||||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||||
Value of shares (in MYR per share) | MYR / shares | MYR 3.18 | ||||||||||
Investment owned, ownership percentage | 12.00% | 8.18% | 6.40% | ||||||||
Gross value of marketable securities | $ 228 | $ 325 | |||||||||
Tender Rig Business | |||||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||||
Enterprise value | $ 2,900 | ||||||||||
Cash consideration | 1,200 | ||||||||||
Values of shares received | 416 | ||||||||||
Debt assumed | 760 | ||||||||||
Capital commitments | 320 | ||||||||||
Deferred consideration | 187 | ||||||||||
Non-contingent deferred consideration | $ 145 | ||||||||||
Payable period for deferred non-contingent consideration | 3 years | ||||||||||
Deferred contingent consideration | $ 42 | ||||||||||
Fair value of consideration received | 2,600 | ||||||||||
Working capital adjustment | 75 | ||||||||||
Fair value of non-contingent deferred consideration | 135 | ||||||||||
Fair value deferred consideration | $ 0 | ||||||||||
Number of rigs under construction | rig | 3 | ||||||||||
Number of tender rigs supported | rig | 3 | ||||||||||
Gain (loss) on disposition | $ 1,300 | $ 1,256 | |||||||||
Available-for-sale Securities | Sapura Kencana | |||||||||||
Significant Acquisitions and Disposals [Line Items] | |||||||||||
Common units issued to the Company | shares | 720,329,691 | ||||||||||
Investment owned, ownership percentage | 12.02% | ||||||||||
Gross value of marketable securities | $ 1,078 | ||||||||||
Share price (in MYR per share) | MYR / shares | MYR 4.90 |
Disposals of businesses and 115
Disposals of businesses and deconsolidation of subsidiaries - Fair Value on Sale of Tender Rig Business (Details) - USD ($) $ in Millions | Apr. 29, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Significant Acquisitions and Disposals [Line Items] | ||||
Gain (loss) on disposition | $ 22 | $ 0 | $ 1,256 | |
Tender Rig Business | ||||
Significant Acquisitions and Disposals [Line Items] | ||||
Fair value of consideration received | 2,600 | |||
Carry value of assets and liabilities | 1,324 | |||
Other related costs to sale | 20 | |||
Gain (loss) on disposition | $ 1,300 | $ 1,256 |
Business Acquisitions - Narrati
Business Acquisitions - Narrative (Details) $ in Millions | Aug. 23, 2013NOK / sharesshares | Jul. 02, 2013USD ($) | Jul. 02, 2013USD ($) | Jun. 27, 2013USD ($)shares | Mar. 25, 2013USD ($) | Feb. 08, 2013 | Nov. 15, 2012USD ($) | Dec. 31, 2013option | Dec. 31, 2015USD ($) | Dec. 31, 2013USD ($)option | Jun. 27, 2013NOK / shares |
Songa Eclipse Ltd | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Fair value of consideration transferred | $ 590 | ||||||||||
Number of one year option to extend the contract | option | 3 | 3 | |||||||||
Option Period | 1 year | ||||||||||
Prepayment before the acquisition | $ 59 | ||||||||||
West Eclipse | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Operating Revenue | $ 194 | ||||||||||
Net Income | 42 | ||||||||||
Asia Offshore Drilling | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Operating Revenue | 75 | ||||||||||
Net Income | 37 | ||||||||||
Noncontrolling interest ownership percentage | 66.18% | ||||||||||
Gain on bargain purchase | $ 15 | ||||||||||
Sevan Driller and Sevan Brasil | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Below market contracts, accumulated amortization | $ 20 | ||||||||||
Sevan Louisiana | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Below market contracts, accumulated amortization | 1 | ||||||||||
Sevan Drilling ASA | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Fair value of consideration transferred | $ 78 | ||||||||||
Operating Revenue | 169 | ||||||||||
Net Income | $ 31 | ||||||||||
Additional shares purchased | shares | 47,394 | 120,065,464 | |||||||||
Per share price of shares issued (in NOK per share) | NOK / shares | NOK 3.95 | NOK 3.9311 | |||||||||
Consideration received from shares issued | $ 78 | ||||||||||
Noncontrolling interest ownership percentage | 50.11% | 50.10% | 50.10% | ||||||||
Remeasurement gain | $ 8 | ||||||||||
Percentage of equity method investment ownership (in hundredths) | 29.90% | ||||||||||
Trade and other receivables | $ 49 | $ 49 | |||||||||
Gain on bargain purchase | 17 | 17 | |||||||||
Cumulative number of shares issued | shares | 297,941,358 | ||||||||||
Trade Accounts Receivable | Sevan Drilling ASA | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Acquired receivables, fair value | $ 24 | $ 24 |
Business Acquisitions - Fair Va
Business Acquisitions - Fair Value of Net Assets Acquired, Songa Eclipse (Details) - Songa Eclipse Ltd $ in Millions | Jan. 03, 2013USD ($) |
Fair value of net assets acquired: | |
Drilling units | $ 698 |
Unfavorable contract – Other current liabilities | (27) |
Unfavorable contract – Other non-current liabilities | (81) |
Net assets acquired | 590 |
Fair value of consideration | $ 590 |
Business Acquisitions - Fair118
Business Acquisitions - Fair Value of Net Assets Acquired, AOD (Details) - Asia Offshore Drilling $ in Millions | Mar. 25, 2013USD ($) |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 1 |
Current assets | 1 |
Drilling units | 633 |
Non-current assets | 633 |
Construction obligation | (316) |
Other current liabilities | (8) |
Current liabilities | (324) |
Non-current liabilities | 0 |
Net assets acquired | 310 |
Net book value of equity investment | 185 |
Fair value of previously held equity investment | 195 |
Gain on re-measurement of previously held equity investment | 10 |
Fair value of establishment of non-controlling interest | 100 |
Bargain purchase | |
Fair value of establishment of non-controlling interest | 100 |
Fair value of previously held equity investment | 195 |
Fair value of the consideration received | 295 |
Gain on bargain purchase | $ 15 |
Business Acquisitions - Fair119
Business Acquisitions - Fair Value of Net Assets Acquired, Sevan (Details) - Sevan Drilling ASA $ in Millions | Jul. 02, 2013USD ($) | Jul. 02, 2013USD ($) |
Business Acquisition [Line Items] | ||
Cash and cash equivalents | $ 54 | $ 54 |
Restricted cash | 63 | 63 |
Trade and other receivables | 49 | 49 |
Current assets | 166 | 166 |
Deferred income tax asset | 76 | 76 |
Valuation allowance income tax asset | (76) | (76) |
Other non-current assets | 1 | 1 |
Non-current assets | 2,474 | 2,474 |
Total assets | 2,640 | 2,640 |
Current portion of long-term debt | (112) | (112) |
Trade and other payables | (115) | (115) |
Construction obligation | (923) | (923) |
Unfavorable contracts | (79) | (79) |
Other current liabilities | (26) | (26) |
Current liabilities | (1,255) | (1,255) |
Long-term interest bearing debt | (703) | (703) |
Unfavorable contracts | (257) | (257) |
Other non-current liabilities | (16) | (16) |
Non-current liabilities | (976) | (976) |
Total liabilities | (2,231) | (2,231) |
Net assets acquired | 409 | 409 |
Net book value of equity investment | 109 | |
Fair value of previously held equity investment | 117 | |
Gain on re-measurement of previously held equity investment | 8 | |
Fair value of establishment of non-controlling interest | 197 | 197 |
Bargain purchase | ||
Fair value of consideration transferred | 78 | |
Fair value of establishment of non-controlling interest | 197 | 197 |
Fair value of previously held equity investment | 117 | |
Fair value of the consideration received | 392 | |
Gain on bargain purchase | 17 | 17 |
Drilling units | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment | 1,246 | 1,246 |
Newbuildings | ||
Business Acquisition [Line Items] | ||
Property, plant and equipment | $ 1,227 | $ 1,227 |
Restricted cash (Details)
Restricted cash (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Restricted Cash [Line Items] | |||
Total restricted cash | $ 248 | $ 449 | |
Long-term restricted cash (related to CIRR deposits and margin calls) | 198 | 181 | |
Short-term restricted cash | 50 | 268 | |
CIRR Deposits | |||
Restricted Cash [Line Items] | |||
Total restricted cash | [1] | 71 | 124 |
Margin Calls Related to Share Forward Agreements | |||
Restricted Cash [Line Items] | |||
Total restricted cash | 170 | 264 | |
Cash pledged as collateral under credit facilities | |||
Restricted Cash [Line Items] | |||
Total restricted cash | 50 | ||
Tax Withholding Deposits | |||
Restricted Cash [Line Items] | |||
Total restricted cash | 7 | $ 11 | |
Secured Debt | US$1,450 facility | Cash pledged as collateral under credit facilities | |||
Restricted Cash [Line Items] | |||
Total restricted cash | $ 0 | ||
[1] | CIRR deposits are cash deposited with commercial banks, which match Commercial Interest Reference Rate (“CIRR”) loans from Eksportfinans ASA, the Norwegian export credit agency (See Note 23 to the consolidated financial statements included herein). The deposits are used to make repayments of the CIRR loans. |
Marketable securities - Carryin
Marketable securities - Carrying Value (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | $ 453 | $ 1,194 |
Cumulative unrealized fair value gains/(losses) | (129) | (443) |
Carrying value | 324 | 751 |
Sapura Kencana | ||
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | 206 | 373 |
Cumulative unrealized fair value gains/(losses) | 22 | (48) |
Carrying value | 228 | 325 |
Seadrill Partners LLC | ||
Gain (Loss) on Investments [Line Items] | ||
Amortized cost | 247 | 821 |
Cumulative unrealized fair value gains/(losses) | (151) | (395) |
Carrying value | $ 96 | $ 426 |
Marketable securities - Changes
Marketable securities - Changes in Carrying Amounts (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Gain (Loss) on Investments [Line Items] | ||||
Gross realized gains | $ 0 | $ 6 | $ 0 | |
Gross realized losses | 0 | 0 | 0 | |
Gross Unrealized gains | 0 | 0 | 333 | |
Gross Unrealized losses | (427) | (851) | 0 | |
Gross proceeds from sales | 0 | 307 | 0 | |
Recognition and purchases | 0 | 821 | 416 | |
Gain/(loss) reclassified into income | (741) | 131 | 0 | |
Petromena | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gross realized gains | 6 | 0 | ||
Gross realized losses | 0 | 0 | ||
Gross Unrealized gains | 0 | 0 | ||
Gross Unrealized losses | 0 | 0 | ||
Gross proceeds from sales | 10 | 0 | ||
Recognition and purchases | 0 | 0 | ||
Gain/(loss) reclassified into income | 0 | 0 | ||
Sapura Kencana | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gross realized gains | 0 | 0 | 0 | |
Gross realized losses | 0 | 0 | 0 | |
Gross Unrealized gains | 0 | 0 | 333 | |
Gross Unrealized losses | (97) | (456) | 0 | |
Gross proceeds from sales | 0 | 297 | 0 | |
Recognition and purchases | 0 | 0 | 416 | |
Gain/(loss) reclassified into income | $ 131 | (167) | 131 | $ 0 |
Seadrill Partners - Common Units | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gross realized gains | 0 | |||
Gross realized losses | 0 | |||
Gross Unrealized gains | 0 | |||
Gross Unrealized losses | (330) | |||
Gross proceeds from sales | 0 | |||
Recognition and purchases | 0 | |||
Gain/(loss) reclassified into income | (574) | |||
Seadrill Partners LLC | ||||
Gain (Loss) on Investments [Line Items] | ||||
Gross realized gains | 0 | |||
Gross realized losses | 0 | |||
Gross Unrealized gains | 0 | |||
Gross Unrealized losses | $ (151) | (395) | ||
Gross proceeds from sales | 0 | |||
Recognition and purchases | 821 | |||
Gain/(loss) reclassified into income | $ 0 |
Marketable Securities - Narrati
Marketable Securities - Narrative (Details) $ / shares in Units, NOK in Millions, $ in Millions | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015$ / shares | Jan. 02, 2014USD ($) | Apr. 30, 2013shares | May. 17, 2012USD ($) | Oct. 31, 2014$ / shares | Jun. 30, 2014$ / sharesshares | Apr. 30, 2014USD ($) | Mar. 31, 2014$ / sharesshares | Feb. 28, 2014USD ($) | Jan. 31, 2014$ / shares | Sep. 30, 2015 | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015 | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | Dec. 02, 2015 | Feb. 28, 2014NOK |
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Investment owned, ownership percentage | 23.00% | |||||||||||||||||||
Gain/(loss) reclassified into income | $ (741) | $ 131 | $ 0 | |||||||||||||||||
Impairment charge | (1,274) | |||||||||||||||||||
Unrealized gain (loss) on marketable securities | $ (129) | (129) | (443) | |||||||||||||||||
Purchase of common units in Seadrill Partners | 0 | 150 | 0 | |||||||||||||||||
Gross Unrealized losses | 427 | 851 | 0 | |||||||||||||||||
Gain on realization of marketable securities | 0 | 131 | 0 | |||||||||||||||||
Carrying value | 324 | 324 | 751 | |||||||||||||||||
Cumulative unrealized fair value gains/(losses) | $ (129) | $ (129) | $ (443) | |||||||||||||||||
Seadrill Partners LLC | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Investment owned, ownership percentage | 28.60% | 28.60% | 28.60% | |||||||||||||||||
Gain/(loss) reclassified into income | $ 0 | |||||||||||||||||||
Impairment charge | $ (533) | |||||||||||||||||||
Recognition of investment in Seadrill Partners - Common units | $ 671 | |||||||||||||||||||
Cumulative number of shares issued | shares | 3,183,700 | 1,633,987 | ||||||||||||||||||
Common units market value (in dollars per share) | $ / shares | $ 3.65 | $ 9.40 | $ 30.60 | $ 31.41 | $ 30.60 | $ 30.60 | ||||||||||||||
Purchase of common units in Seadrill Partners | 150 | |||||||||||||||||||
Increase (decrease) in price per unit, percentage | (20.00%) | |||||||||||||||||||
Gross Unrealized losses | 151 | 395 | ||||||||||||||||||
Carrying value | $ 96 | 96 | 426 | |||||||||||||||||
Cumulative unrealized fair value gains/(losses) | $ (151) | $ (151) | (395) | |||||||||||||||||
Sapura Kencana | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Investment owned, ownership percentage | 8.18% | 12.00% | 8.18% | 6.40% | ||||||||||||||||
Number of shares received as part of sale | shares | 400,800,000 | |||||||||||||||||||
Proceeds from available-for-sale securities | $ 297 | |||||||||||||||||||
Gain/(loss) reclassified into income | $ 131 | $ (167) | 131 | 0 | ||||||||||||||||
Impairment charge | (167) | |||||||||||||||||||
Unrealized gain (loss) on marketable securities | $ 22 | 22 | ||||||||||||||||||
Increase (decrease) in price per unit, percentage | (45.00%) | |||||||||||||||||||
Gross Unrealized losses | 97 | 456 | 0 | |||||||||||||||||
Carrying value | 228 | 228 | 325 | |||||||||||||||||
Cumulative unrealized fair value gains/(losses) | $ 22 | $ 22 | (48) | |||||||||||||||||
SapuraCrest Bhd | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Ownership interest, percentage | 23.60% | 23.60% | ||||||||||||||||||
Recognized gain | $ 169 | $ 84 | ||||||||||||||||||
Petromena | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Proceeds from available-for-sale securities | $ 10 | |||||||||||||||||||
Gain/(loss) reclassified into income | 0 | 0 | ||||||||||||||||||
Gross Unrealized losses | $ 0 | $ 0 | ||||||||||||||||||
Percentage of marketable securities held (in hundredths) | 81.10% | |||||||||||||||||||
Face amount of bond securities held | NOK | NOK 2,000 | |||||||||||||||||||
Gain on realization of marketable securities | $ 6 | |||||||||||||||||||
Minimum | Sapura Kencana | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Ownership interest, percentage | 11.80% | |||||||||||||||||||
Reclassification out of Accumulated Other Comprehensive Income [Member] | Seadrill Partners LLC | ||||||||||||||||||||
Gain (Loss) on Investments [Line Items] | ||||||||||||||||||||
Impairment charge | $ (574) |
Accounts receivable (Details)
Accounts receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable, Net, Current [Abstract] | |||
Allowance for doubtful accounts receivables | $ 39,000,000 | $ 16,000,000 | $ 27,000,000 |
Accounts receivables, net | 0 | 78,000,000 | |
Bad debt expense | $ 0 | $ 0 | $ 0 |
Other current assets (Details)
Other current assets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Other Assets [Abstract] | ||
Prepaid expenses | $ 42 | $ 30 |
Reimbursable amounts due from customers | 48 | 79 |
Deferred mobilization cost | 55 | 7 |
Deferred consideration | 166 | 0 |
Taxes receivable | 32 | 29 |
Other current assets | 52 | 77 |
Total other current assets | $ 395 | $ 222 |
Investment in associated com126
Investment in associated companies - Narrative (Details) | Jul. 21, 2014USD ($) | Feb. 08, 2013USD ($)shares | Dec. 31, 2015USD ($)class_of_stockvesselclass_of_membership_interest | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jun. 19, 2015 | Mar. 31, 2015 | Mar. 10, 2015 | Jan. 02, 2014 | Mar. 27, 2013USD ($) | Feb. 20, 2013USD ($) | Nov. 12, 2012USD ($) | Jun. 27, 2012USD ($) |
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Proceeds from disposal of investments in associated companies | $ 0 | $ 373,000,000 | $ 0 | ||||||||||
Share in results from associated companies (net of tax) | 190,000,000 | $ 34,000,000 | $ (223,000,000) | ||||||||||
Impairment charge | (1,274,000,000) | ||||||||||||
JV partner investment to retain share in JV | $ 19,000,000 | ||||||||||||
SeaMex Limited | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 50.00% | 0.00% | 0.00% | 50.00% | |||||||||
Third party ownership interest | 50.00% | 50.00% | |||||||||||
Seadrill Operating LP | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | ||||||||||
Equity method investment, percentage of investment sold | 28.00% | ||||||||||||
Proceeds from disposal of investments in associated companies | $ 373,000,000 | ||||||||||||
Share in results from associated companies (net of tax) | $ (88,000,000) | ||||||||||||
Seabras Sapura Participacoes | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | ||||||||||
Number of pipelying vessels | vessel | 1 | ||||||||||||
Ownership percentage held by equity method investee | 50.00% | ||||||||||||
Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Quoted market value for investment | $ 22,000,000 | ||||||||||||
Ownership interest, percentage | 39.90% | 39.90% | 39.90% | ||||||||||
Seabras Sapura Holding | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | ||||||||||
Number of pipelying vessels | vessel | 5 | ||||||||||||
Number of pipe-laying vessels under construction | vessel | 1 | ||||||||||||
Ownership percentage held by equity method investee | 50.00% | ||||||||||||
Itaunas Drilling | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | ||||||||||
Ownership percentage held by equity method investee | 70.00% | ||||||||||||
Camburi Drilling | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | ||||||||||
Ownership percentage held by equity method investee | 70.00% | ||||||||||||
Sahy Drilling | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | ||||||||||
Ownership percentage held by equity method investee | 70.00% | ||||||||||||
Private Placement | Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
New shares issued by equity method investment | shares | 82,003,000 | ||||||||||||
Consideration received from shares issued | $ 98,000,000 | ||||||||||||
Underwrite Placement | Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
New shares issued by equity method investment | shares | 2,811,793 | ||||||||||||
Consideration received from shares issued | $ 3,000,000 | ||||||||||||
Equity Method Investee | Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Loan to related party | $ 10,000,000 | $ 55,000,000 | $ 20,000,000 | ||||||||||
Ownership interest, percentage | 39.89% | ||||||||||||
Loans Payable | Equity Method Investee | Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Debt, face amount | $ 43,000,000 | ||||||||||||
Loans Payable | Archer | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Debt, face amount | $ 43,000,000 | ||||||||||||
Seadrill Operating LP | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 42.00% | ||||||||||||
Seadrill Capricorn Holdings LLC | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 49.00% | ||||||||||||
Number of classes of membership interest representing voting common stock | class_of_membership_interest | 1 | ||||||||||||
SFL Deepwater Ltd | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | 39.00% | |||||||||||
Seadrill Mobile Units (Nigeria) Ltd | |||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||
Ownership interest, percentage | 39.00% | 39.00% | |||||||||||
Number of classes of stock representing voting common stock | class_of_stock | 1 |
Investment in associated com127
Investment in associated companies - Percentage Ownership (Details) | Dec. 31, 2015 | Mar. 10, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Archer | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 39.90% | 39.90% | 39.90% | |
Seabras Sapura Participacoes | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | |
Seabras Sapura Holding | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | |
Itaunas Drilling | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |
Camburi Drilling | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |
Sahy Drilling | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |
SeaMex Limited | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest, percentage | 50.00% | 50.00% | 0.00% | 0.00% |
Investment in associated com128
Investment in associated companies - Book Value (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | $ 2,590 | $ 2,898 | |
Investment in associated companies | 2,590 | 2,898 | |
Archer | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 0 | 0 | |
Seabras Sapura Participacoes | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 29 | 21 | |
Seabras Sapura Holding | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 158 | 117 | |
Itaunas Drilling | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 3 | 3 | |
Camburi Drilling | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 6 | 6 | |
Sahy Drilling | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 4 | 4 | |
Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 2,809 | ||
SeaMex Limited | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 193 | 0 | |
Direct Ownership Interest | Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 1,767 | 2,091 | |
Subordinated Units | Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | 293 | 412 | |
Incentive Distribution Rights | Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Investment in associated companies | [1] | $ 137 | $ 244 |
[1] | The Seadrill Partners - Seadrill Member Interest and Incentive Distribution Rights (“IDR’s”) are accounted for as cost-method investments on the basis that they do not represent common stock interests and their fair value is not readily determinable. The investments are held at cost and not subsequently re-measured. For more details on the deconsolidation of Seadrill Partners see Note 11 for more information. |
Investment in associated com129
Investment in associated companies - Financial Information of Equity Method Investees (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 1,682 | $ 1,516 |
Non-current assets | 9,501 | 7,640 |
Current liabilities | 1,501 | 1,193 |
Non-current liabilities | 6,904 | 5,313 |
Non-Controlling interest | 1,133 | 1,116 |
Archer | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 363 | 633 |
Non-current assets | 904 | 1,171 |
Current liabilities | 319 | 441 |
Non-current liabilities | 751 | 817 |
Non-Controlling interest | 0 | 0 |
Seabras Sapura Participacoes | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 76 | 17 |
Non-current assets | 308 | 194 |
Current liabilities | 79 | 14 |
Non-current liabilities | 258 | 149 |
Non-Controlling interest | 0 | 0 |
Seabras Sapura Holding | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 133 | 104 |
Non-current assets | 1,183 | 690 |
Current liabilities | 80 | 52 |
Non-current liabilities | 1,199 | 730 |
Non-Controlling interest | 0 | 0 |
Seadrill Partners LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 892 | 762 |
Non-current assets | 5,949 | 5,585 |
Current liabilities | 847 | 686 |
Non-current liabilities | 3,897 | 3,617 |
Non-Controlling interest | 1,133 | 1,116 |
SeaMex Limited | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 218 | 0 |
Non-current assets | 1,157 | 0 |
Current liabilities | 176 | 0 |
Non-current liabilities | 799 | 0 |
Non-Controlling interest | $ 0 | $ 0 |
Investment in associated com130
Investment in associated companies - Statement of Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | $ 3,478 | $ 3,665 | $ 2,041 |
Net operating income | 989 | 662 | (440) |
Net income | 205 | 226 | (521) |
Net income attributable to non-controlling interest | (12) | 108 | 133 |
Net income attributable to non-controlling interest | 231 | 176 | 0 |
Archer | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | 1,321 | 2,254 | 2,041 |
Net operating income | (13) | 29 | (438) |
Net income | (359) | (96) | (519) |
Net income attributable to non-controlling interest | 0 | 0 | |
Net income attributable to non-controlling interest | 0 | ||
Seabras Sapura Participacoes | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | 53 | 29 | 0 |
Net operating income | 3 | (6) | (2) |
Net income | 1 | (6) | (1) |
Net income attributable to non-controlling interest | 0 | 0 | |
Net income attributable to non-controlling interest | 0 | ||
Seabras Sapura Holding | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | 124 | 39 | 0 |
Net operating income | 76 | 24 | 0 |
Net income | 51 | 13 | (1) |
Net income attributable to non-controlling interest | 0 | 0 | |
Net income attributable to non-controlling interest | 0 | ||
Seadrill Partners LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | 1,742 | 1,343 | |
Net operating income | 844 | 615 | 0 |
Net income | 488 | 315 | 0 |
Net income attributable to non-controlling interest | 176 | 0 | |
Net income attributable to non-controlling interest | 231 | ||
SeaMex Limited | |||
Schedule of Equity Method Investments [Line Items] | |||
Operating revenues | 238 | 0 | 0 |
Net operating income | 79 | 0 | 0 |
Net income | 24 | 0 | 0 |
Net income attributable to non-controlling interest | $ 0 | $ 0 | |
Net income attributable to non-controlling interest | $ 0 |
Investment in associated com131
Investment in associated companies - Recorded Equity in Statutory Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Mar. 10, 2015 | Dec. 31, 2014 | Jan. 02, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | $ 322 | $ 261 | $ 277 | |||
Non-Controlling interest | 1,133 | 1,116 | ||||
Archer | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | 79 | 218 | $ 253 | |||
Non-Controlling interest | $ 0 | $ 0 | ||||
Ownership interest, percentage | 39.90% | 39.90% | 39.90% | |||
Seabras Sapura Participacoes | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | $ 24 | $ 24 | $ 13 | |||
Non-Controlling interest | $ 0 | $ 0 | ||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | |||
Seabras Sapura Holding | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | $ 19 | $ 6 | $ 0 | |||
Non-Controlling interest | $ 0 | $ 0 | ||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | |||
Itaunas Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |||
Camburi Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |||
Sahy Drilling | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest, percentage | 30.00% | 30.00% | 30.00% | |||
Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | [1] | $ 0 | ||||
Non-Controlling interest | $ 1,133 | $ 1,116 | ||||
Equity method investment, summarized financial information, equity before noncontrolling interest | 964 | |||||
SeaMex Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity in statutory accounts | 200 | 0 | $ 0 | |||
Non-Controlling interest | $ 0 | $ 0 | ||||
Ownership interest, percentage | 50.00% | 50.00% | 0.00% | 0.00% | ||
Subordinated Units | Seadrill Partners LLC | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Ownership interest, percentage | 18.00% | 100.00% | ||||
[1] | The Adjusted sales price above includes debt assumed and working capital adjustments. |
Newbuildings (Details)
Newbuildings (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 02, 2015 | ||
Movement in Newbuildings [Roll Forward] | ||||
Opening balance | $ 17,175 | |||
Closing balance | 16,409 | $ 17,175 | ||
Book value on disposal | 17,175 | 17,175 | ||
Drilling units | ||||
Movement in Newbuildings [Roll Forward] | ||||
Opening balance | 15,145 | 12 | ||
Closing balance | 14,930 | 15,145 | ||
Book value on disposal | 15,145 | 12 | ||
Newbuildings | ||||
Movement in Newbuildings [Roll Forward] | ||||
Opening balance | 2,030 | 3,419 | ||
Additions | 601 | 2,433 | ||
Capitalized interest and loan related costs | 60 | 70 | ||
Re-classified as Drilling Units | (725) | (3,892) | ||
Disposals | [1] | (78) | 0 | |
Closing balance | 1,479 | 2,030 | ||
Book value on disposal | 2,030 | 3,419 | ||
Assets Held-for-sale | Newbuildings | ||||
Movement in Newbuildings [Roll Forward] | ||||
Re-classified as Drilling Units | [2] | (210) | 0 | |
Other Noncurrent Assets | Newbuildings | ||||
Movement in Newbuildings [Roll Forward] | ||||
Re-classified as Drilling Units | [1] | (199) | $ 0 | |
West Rigel | Drilling units | ||||
Movement in Newbuildings [Roll Forward] | ||||
Closing balance | 210 | |||
Book value on disposal | $ 210 | $ 210 | ||
[1] | On September 14, 2015, the Company cancelled the construction contract for the West Mira with HSHI Please refer to Note 5 to the consolidated financial statements, included herein, for more details. | |||
[2] | On December 2, 2015, the West Rigel was classified as an Asset held for sale. As at the transfer date the West Rigel held assets at its book value of $210.0 million. Please refer to Note 37 to the consolidated financial statements, included herein, for more details. |
Drilling units (Details)
Drilling units (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Drilling units [Line Items] | |||
Net book value | $ 16,409 | $ 17,175 | |
Drilling units | |||
Drilling units [Line Items] | |||
Cost | 17,606 | 19,101 | |
Accumulated depreciation | (2,676) | (2,991) | |
Re-classified as assets held for sale | 0 | 965 | |
Net book value | $ 14,930 | $ 15,145 | $ 12 |
Drilling units - Narrative (Det
Drilling units - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 19, 2015 | Mar. 10, 2015 | Jul. 21, 2014 | Jan. 02, 2014 | |
Drilling units | |||||||
Drilling units [Line Items] | |||||||
Depreciation and amortization expense | $ 761 | $ 684 | $ 703 | ||||
Seadrill Operating LP | |||||||
Drilling units [Line Items] | |||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | ||||
SeaMex Limited | |||||||
Drilling units [Line Items] | |||||||
Ownership interest, percentage | 50.00% | 0.00% | 0.00% | 50.00% | |||
Third party ownership interest | 50.00% | 50.00% | |||||
SeaMex Limited | |||||||
Drilling units [Line Items] | |||||||
Noncontrolling interest ownership percentage | 100.00% |
Equipment (Details)
Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | |||
Net book value | $ 16,409 | $ 17,175 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 80 | 73 | |
Accumulated depreciation | (34) | (27) | |
Net book value | 46 | 46 | |
Depreciation and amortization expense | $ 18 | $ 9 | $ 8 |
Goodwill and other intangibl136
Goodwill and other intangible assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | |
Goodwill [Line Items] | ||||||
Goodwill derecognized | $ 41,000,000 | $ 315,000,000 | ||||
Re-classified as assets held for sale | 0 | (49,000,000) | ||||
Percentage increase (decrease) in share price | (43.00%) | |||||
Share price in (USD per share) | $ 5.90 | $ 5.90 | $ 10.34 | |||
Percentage increase (decrease) in weighted average share price | (34.00%) | |||||
Weighted average share price (in USD per share) | $ 7.96 | $ 7.96 | $ 12.04 | |||
Loss on Goodwill impairment | $ (563,000,000) | (232,000,000) | $ 0 | |||
Remaining economic lives of underlying assets | 30 years | |||||
Weighted average cost of capital | 10.00% | |||||
Lower range of amortization life of unfavorable contracts | 2 years | |||||
Upper range of amortization life of unfavorable contracts | 5 years | |||||
Floaters | ||||||
Goodwill [Line Items] | ||||||
Goodwill derecognized | $ 41,000,000 | 286,000,000 | ||||
Loss on Goodwill impairment | $ 0 | |||||
Tender Rigs | ||||||
Goodwill [Line Items] | ||||||
Goodwill derecognized | 29,000,000 | |||||
Jack up Rigs | ||||||
Goodwill [Line Items] | ||||||
Loss on Goodwill impairment | (232,000,000) | |||||
Non-controlling interest | ||||||
Goodwill [Line Items] | ||||||
Loss on Goodwill impairment | $ (39,000,000) | |||||
Non-controlling interest | Floaters | ||||||
Goodwill [Line Items] | ||||||
Loss on Goodwill impairment | $ (95,000,000) | |||||
Drilling units | ||||||
Goodwill [Line Items] | ||||||
Weighted average cost of capital | 10.00% | |||||
Estimated economic useful life | 30 years | 30 years |
Goodwill and other intangibl137
Goodwill and other intangible assets - Goodwill Rollforward (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance, gross | $ 836,000,000 | $ 836,000,000 | $ 1,200,000,000 | |
Accumulated impairment losses, beginning balance | (232,000,000) | (232,000,000) | 0 | |
Goodwill, beginning balance, net | 604,000,000 | 604,000,000 | 1,200,000,000 | |
Loss on Goodwill impairment | (563,000,000) | (232,000,000) | $ 0 | |
Disposals and deconsolidations | (41,000,000) | (315,000,000) | ||
Re-classified as assets held for sale | 0 | (49,000,000) | ||
Goodwill, ending balance, gross | 795,000,000 | 836,000,000 | 1,200,000,000 | |
Accumulated impairment losses, ending balance | (795,000,000) | (232,000,000) | 0 | |
Goodwill, ending balance, net | 0 | 604,000,000 | $ 1,200,000,000 | |
Floaters | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning balance, net | 604,000,000 | 604,000,000 | ||
Loss on Goodwill impairment | $ 0 | |||
Disposals and deconsolidations | (41,000,000) | (286,000,000) | ||
Goodwill, ending balance, net | $ 0 | 604,000,000 | ||
Tender Rigs | ||||
Goodwill [Roll Forward] | ||||
Disposals and deconsolidations | $ (29,000,000) |
Goodwill and other intangibl138
Goodwill and other intangible assets - Gross Carrying Amounts and Amortization (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Finite-lived Intangible Liabilities [Roll Forward] | ||
Gross carrying amount, beginning balance | $ 444 | $ 444 |
Gross carrying amount, ending balance | 444 | 444 |
Accumulated amortization, beginning balance | (197) | (67) |
Accumulated amortization, ending balance | (313) | (197) |
Net carrying amount, beginning balance | 247 | 377 |
Net carrying amount, ending balance | 131 | 247 |
Additions, gross | 0 | 0 |
Additions, net | 0 | 0 |
Amortization of unfavorable contracts | $ (116) | $ (130) |
Goodwill and other intangibl139
Goodwill and other intangible assets - Amortization of Favorable and Unfavorable Contracts (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
2,016 | $ 65 | ||
2,017 | 43 | ||
2,018 | 23 | ||
2,019 | 0 | ||
2,020 | 0 | ||
Total | $ 131 | $ 247 | $ 377 |
Other non-current assets (Detai
Other non-current assets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Assets, Noncurrent Disclosure [Abstract] | |||
Deferred tax effect of internal transfer of assets | $ 92 | $ 102 | |
Deferred mobilization costs | 32 | 47 | |
Deferred consideration | 0 | 154 | |
Receivable from shipyard | [1] | 199 | 0 |
Other | 8 | 8 | |
Total other non-current assets | $ 331 | $ 311 | |
[1] | The Receivable from shipyard relates to the West Mira. Please see Note 5 – (Loss)/gain on disposals for more information |
Long-term debt - Long-term Debt
Long-term debt - Long-term Debt Outstanding (Details) | Dec. 31, 2015USD ($) | Dec. 31, 2015NOK | Dec. 31, 2015SEK | Oct. 31, 2015USD ($) | Aug. 31, 2015USD ($) | Feb. 28, 2015NOK | Jan. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2014NOK | Dec. 31, 2014SEK | May. 31, 2014USD ($) | Mar. 31, 2014SEK | Jan. 31, 2014USD ($) | Oct. 31, 2013NOK | Sep. 30, 2013USD ($) | Sep. 20, 2013USD ($) | Mar. 31, 2013NOK | Sep. 30, 2012USD ($) | Dec. 31, 2011USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | $ 10,661,000,000 | $ 12,620,000,000 | |||||||||||||||||
Less: current portion | (1,526,000,000) | (2,309,000,000) | |||||||||||||||||
Long-term portion | 9,135,000,000 | 10,311,000,000 | |||||||||||||||||
Total Bank Loans and Other | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 7,373,000,000 | 8,602,000,000 | |||||||||||||||||
Floating interest rate bonds | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | NOK | NOK 1,800,000,000 | NOK 1,800,000,000 | NOK 1,800,000,000 | ||||||||||||||||
$350 million fixed interest rate bond | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 350,000,000 | $ 350,000,000 | 350,000,000 | ||||||||||||||||
Total debt principal | 342,000,000 | ||||||||||||||||||
$1,000 million fixed interest bond | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 1,000,000,000 | 1,000,000,000 | $ 1,000,000,000 | ||||||||||||||||
Credit facility US$700 | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 700,000,000 | 700,000,000 | |||||||||||||||||
Total debt principal | 0 | 420,000,000 | |||||||||||||||||
US$2,000 facility (North Atlantic Drilling) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 2,000,000,000 | 2,000,000,000 | |||||||||||||||||
Total debt principal | 1,200,000,000 | 1,367,000,000 | |||||||||||||||||
US$400 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 400,000,000 | 400,000,000 | $ 400,000,000 | ||||||||||||||||
Total debt principal | 240,000,000 | 280,000,000 | |||||||||||||||||
$420 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 420,000,000 | 420,000,000 | |||||||||||||||||
Total debt principal | 0 | 351,000,000 | |||||||||||||||||
US$440 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 440,000,000 | 440,000,000 | |||||||||||||||||
Total debt principal | 224,000,000 | 258,000,000 | |||||||||||||||||
Credit facility US$450 -Eclipse | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 450,000,000 | 450,000,000 | |||||||||||||||||
Total debt principal | 0 | 416,000,000 | |||||||||||||||||
US$1,450 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 1,450,000,000 | 1,450,000,000 | |||||||||||||||||
Total debt principal | 393,000,000 | 433,000,000 | |||||||||||||||||
US$360 facility (Asia Offshore Drilling) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 360,000,000 | 360,000,000 | |||||||||||||||||
Total debt principal | 273,000,000 | 309,000,000 | |||||||||||||||||
Credit facility US$300 | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 300,000,000 | 300,000,000 | |||||||||||||||||
Total debt principal | 186,000,000 | 210,000,000 | |||||||||||||||||
$1,750 facility (Sevan Drilling) | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | $ 1,750,000,000 | ||||||||||||||||||
$1,750 facility (Sevan Drilling) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 1,750,000,000 | 1,750,000,000 | |||||||||||||||||
Total debt principal | 1,085,000,000 | 1,225,000,000 | |||||||||||||||||
$150 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 150,000,000 | 150,000,000 | |||||||||||||||||
Total debt principal | 0 | 150,000,000 | |||||||||||||||||
Credit facility US$450 -Eminence | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 450,000,000 | 450,000,000 | |||||||||||||||||
Total debt principal | 344,000,000 | 397,000,000 | |||||||||||||||||
US$1,500 facility | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 1,500,000,000 | 1,500,000,000 | |||||||||||||||||
Total debt principal | 1,344,000,000 | 1,469,000,000 | |||||||||||||||||
Credit Facility US $1,350 | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 1,350,000,000 | 1,350,000,000 | |||||||||||||||||
Total debt principal | 1,181,000,000 | 1,317,000,000 | |||||||||||||||||
Credit facility US $950 | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 950,000,000 | $ 950,000,000 | 950,000,000 | ||||||||||||||||
Total debt principal | 688,000,000 | 0 | |||||||||||||||||
Credit Facility US$450 | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 450,000,000 | $ 450,000,000 | 450,000,000 | ||||||||||||||||
Total debt principal | 215,000,000 | 0 | |||||||||||||||||
$375 facility (SFL Hercules) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 375,000,000 | 375,000,000 | |||||||||||||||||
Total debt principal | 256,000,000 | 284,000,000 | |||||||||||||||||
$390 facility (SFL Deepwater) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 390,000,000 | 390,000,000 | |||||||||||||||||
Total debt principal | 221,000,000 | 303,000,000 | |||||||||||||||||
$475 facility (SFL Linus) | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 475,000,000 | 475,000,000 | |||||||||||||||||
Total debt principal | 354,000,000 | 451,000,000 | |||||||||||||||||
Total Ship Finance Loans | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 831,000,000 | 1,038,000,000 | |||||||||||||||||
Floating interest rate bonds | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 203,000,000 | 242,000,000 | |||||||||||||||||
$350 million fixed interest rate bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 0 | 342,000,000 | |||||||||||||||||
$1,000 million fixed interest bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 948,000,000 | 1,000,000,000 | |||||||||||||||||
US $500 Million Fixed Interest Bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 479,000,000 | 479,000,000 | |||||||||||||||||
US $500 Million Fixed Interest Bond | Senior Unsecured Bond | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | 500,000,000 | 500,000,000 | $ 500,000,000 | ||||||||||||||||
NOK1,500 Million Floating Interest Rate Bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 161,000,000 | 190,000,000 | |||||||||||||||||
NOK1,500 Million Floating Interest Rate Bond | Senior Unsecured Bond | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | NOK | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | |||||||||||||||
US$600 Million Senior Unsecured Bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 413,000,000 | 413,000,000 | |||||||||||||||||
US$600 Million Senior Unsecured Bond | Senior Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 187,000,000 | $ 165,000,000 | |||||||||||||||||
SEK1,500 Million Senior Unsecured Bond | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 177,000,000 | 190,000,000 | |||||||||||||||||
SEK1,500 Million Senior Unsecured Bond | Senior Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | SEK | SEK 1,500,000,000 | SEK 1,500,000,000 | SEK 1,500,000,000 | ||||||||||||||||
Total Bonds | Unsecured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 2,381,000,000 | 2,856,000,000 | |||||||||||||||||
Other credit facilities with corresponding restricted cash deposit | Secured Debt | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Total debt principal | 76,000,000 | 124,000,000 | |||||||||||||||||
North Atlantic Drilling | US$600 Million Senior Unsecured Bond | Senior Notes | |||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||
Debt, face amount | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 |
Long-term debt - Outstanding De
Long-term debt - Outstanding Debt, Long-term and Debt Issuance Costs (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
Current portion of long-term debt | $ 1,526 | $ 2,309 |
Principal outstanding, noncurrent portion | 9,135 | 10,311 |
Principal outstanding, debt outstanding | 10,661 | 12,620 |
Debt issuance costs, current portion | (37) | (42) |
Debt issuance costs, noncurrent portion | (81) | (103) |
Debt issuance costs, gross | (118) | (145) |
Total debt, current portion | 1,489 | 2,267 |
Total debt, noncurrent portion | 9,054 | 10,208 |
Total debt, net of debt issuance costs | $ 10,543 | $ 12,475 |
Long-term debt - Debt Maturity
Long-term debt - Debt Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,016 | $ 1,526 | |
2,017 | 2,872 | |
2,018 | 2,432 | |
2,019 | 2,817 | |
2,020 | 1,014 | |
2021 and thereafter | 0 | |
Total debt principal | $ 10,661 | $ 12,620 |
Long-term debt - Credit Facilit
Long-term debt - Credit Facilities (Details) | Feb. 28, 2014 | Dec. 20, 2013 | Aug. 31, 2015USD ($) | Jan. 31, 2015USD ($) | Aug. 31, 2014USD ($) | Jul. 31, 2014USD ($)drilling_unit | Dec. 31, 2013USD ($) | Oct. 31, 2013USD ($) | Sep. 30, 2013USD ($) | Jul. 31, 2013 | Apr. 30, 2013USD ($)tranche | Mar. 31, 2013 | Dec. 31, 2012USD ($)rig | Dec. 31, 2011USD ($) | Apr. 30, 2011USD ($)drilling_unit | Oct. 31, 2010USD ($)drilling_unit | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Oct. 23, 2013USD ($) | Jul. 16, 2013USD ($) | Mar. 20, 2013USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||||||||
Commercial guarantee term | 5 years | ||||||||||||||||||||||
Debt outstanding | $ 10,661,000,000 | $ 12,620,000,000 | |||||||||||||||||||||
$1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,750,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 110.00% | ||||||||||||||||||||||
Credit facility US $950 - West Carina [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Balloon payment to be paid | $ 187,000,000 | ||||||||||||||||||||||
Debt instrument, interest rate | 2.12% | ||||||||||||||||||||||
Credit facility US $950 - West Carina [Member] | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||||||||||||
$150 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt outstanding | $ 150,000,000 | ||||||||||||||||||||||
US$1,450 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,450,000,000 | ||||||||||||||||||||||
Debt outstanding | 393,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 125.00% | ||||||||||||||||||||||
Secured Debt | $420 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 420,000,000 | 420,000,000 | |||||||||||||||||||||
Debt outstanding | 0 | 351,000,000 | |||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 125.00% | ||||||||||||||||||||||
Secured Debt | Credit Facility US$450 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 450,000,000 | 450,000,000 | 450,000,000 | ||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||||
Debt outstanding | 215,000,000 | 0 | |||||||||||||||||||||
Remaining borrowing capacity | $ 215,000,000 | ||||||||||||||||||||||
Commitment fee (percentage) | 40.00% | ||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Debt collateral amount | $ 888,000,000 | ||||||||||||||||||||||
Profile period | 8 years 6 months | ||||||||||||||||||||||
Secured Debt | Credit facility US$300 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 300,000,000 | 300,000,000 | |||||||||||||||||||||
Debt outstanding | 186,000,000 | 210,000,000 | |||||||||||||||||||||
Secured Debt | $150 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 150,000,000 | 150,000,000 | |||||||||||||||||||||
Debt outstanding | 0 | 150,000,000 | |||||||||||||||||||||
Secured Debt | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 360,000,000 | 360,000,000 | |||||||||||||||||||||
Debt outstanding | 273,000,000 | 309,000,000 | |||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 450,000,000 | 450,000,000 | |||||||||||||||||||||
Debt outstanding | 344,000,000 | 397,000,000 | |||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eclipse | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 450,000,000 | 450,000,000 | |||||||||||||||||||||
Debt outstanding | 0 | 416,000,000 | |||||||||||||||||||||
Secured Debt | US$440 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 440,000,000 | 440,000,000 | |||||||||||||||||||||
Debt outstanding | 224,000,000 | 258,000,000 | |||||||||||||||||||||
Secured Debt | US$400 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 400,000,000 | 400,000,000 | 400,000,000 | ||||||||||||||||||||
Assets pledged | $ 669,000,000 | ||||||||||||||||||||||
Maturity of debt | 5 years | ||||||||||||||||||||||
Payment due at maturity of debt | $ 200,000,000 | ||||||||||||||||||||||
Debt outstanding | 240,000,000 | 280,000,000 | |||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 150.00% | ||||||||||||||||||||||
Repayment of debt | 200,000,000 | ||||||||||||||||||||||
Draw on credit facility | 200,000,000 | ||||||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 2,000,000,000 | 2,000,000,000 | |||||||||||||||||||||
Debt outstanding | 1,200,000,000 | 1,367,000,000 | |||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 135.00% | ||||||||||||||||||||||
Secured Debt | Credit facility US$700 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 700,000,000 | 700,000,000 | |||||||||||||||||||||
Debt outstanding | 0 | 420,000,000 | |||||||||||||||||||||
Secured Debt | US$1,500 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 1,500,000,000 | 1,500,000,000 | |||||||||||||||||||||
Debt outstanding | 1,344,000,000 | 1,469,000,000 | |||||||||||||||||||||
Secured Debt | Credit facility US $950 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 950,000,000 | 950,000,000 | 950,000,000 | ||||||||||||||||||||
Debt outstanding | 688,000,000 | 0 | |||||||||||||||||||||
Remaining borrowing capacity | $ 197,000,000 | ||||||||||||||||||||||
Commitment fee (percentage) | 40.00% | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 150.00% | 120.00% | |||||||||||||||||||||
Profile period | 12 years | ||||||||||||||||||||||
Repayment of long-term debt | $ 207,000,000 | ||||||||||||||||||||||
Secured Debt | US$1,450 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,450,000,000 | 1,450,000,000 | |||||||||||||||||||||
Debt outstanding | 393,000,000 | 433,000,000 | |||||||||||||||||||||
Secured Debt | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 1,750,000,000 | 1,750,000,000 | |||||||||||||||||||||
Debt outstanding | 1,085,000,000 | 1,225,000,000 | |||||||||||||||||||||
Outstanding balance | $ 1,085,000,000 | 1,225,000,000 | |||||||||||||||||||||
Secured Debt | Credit facility US $950 - West Carina [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 60,000,000 | ||||||||||||||||||||||
Secured Debt | Credit facility US $950 - West Eclipse [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 225,000,000 | ||||||||||||||||||||||
Credit facility US$450 -Eclipse | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 450,000,000 | ||||||||||||||||||||||
Maturity of debt | 1 year | 1 year | |||||||||||||||||||||
Debt collateral amount | $ 635,000,000 | ||||||||||||||||||||||
US$440 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 440,000,000 | ||||||||||||||||||||||
Number of jack up drilling rigs in an acquisition | rig | 2 | ||||||||||||||||||||||
Maturity of debt | 5 years | ||||||||||||||||||||||
Payment due at maturity of debt | $ 173,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 135.00% | ||||||||||||||||||||||
Number of tender rigs in an acquisition | rig | 2 | ||||||||||||||||||||||
Amount drawn from the facility | 320,000,000 | ||||||||||||||||||||||
US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 2,000,000,000 | ||||||||||||||||||||||
Assets pledged | $ 2,179,000,000 | ||||||||||||||||||||||
Maturity of debt | 6 years | ||||||||||||||||||||||
Payment due at maturity of debt | $ 950,000,000 | ||||||||||||||||||||||
Number of drilling rigs in an acquisition | drilling_unit | 6 | ||||||||||||||||||||||
Credit facility US$700 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 700,000,000 | ||||||||||||||||||||||
Number of jack up drilling rigs in an acquisition | drilling_unit | 7 | ||||||||||||||||||||||
Assets pledged | $ 1,074,000,000 | ||||||||||||||||||||||
Maturity of debt | 5 years | ||||||||||||||||||||||
Payment due at maturity of debt | $ 350,000,000 | ||||||||||||||||||||||
Credit facility US$450 -Eminence | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | 563,000,000 | ||||||||||||||||||||||
Term Loan Facility | Credit Facility $1,350 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt outstanding | $ 675,000,000 | ||||||||||||||||||||||
Tranche 1 | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Amount drawn from the facility | $ 120,000,000 | ||||||||||||||||||||||
Tranche 1 | US$1,450 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 203,000,000 | ||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Balloon payment to be paid | $ 86,000,000 | ||||||||||||||||||||||
Balloon payment refinancing period | 5 years | ||||||||||||||||||||||
Tranche 1 | Credit Facility $1,500 - 2014 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt outstanding | 300,000,000 | ||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Balloon payment to be paid | $ 175,000,000 | ||||||||||||||||||||||
Debt instrument, interest rate | 2.38% | ||||||||||||||||||||||
Tranche 1 | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,400,000,000 | ||||||||||||||||||||||
Outstanding balance | $ 1,400,000,000 | ||||||||||||||||||||||
Tranche 1 | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | $ 225,000,000 | ||||||||||||||||||||||
Secured Debt | US$101 Million and US$98 Million Senior Secured Credit Facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt collateral amount | 454,000,000 | ||||||||||||||||||||||
Pledged assets not owned by reporting entity | $ 252,000,000 | ||||||||||||||||||||||
Secured Debt | Credit Facility $1,350 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,350,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 120.00% | ||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Debt collateral amount | $ 1,767,000,000 | ||||||||||||||||||||||
Outstanding balance | $ 1,317,000,000 | ||||||||||||||||||||||
Secured Debt | Credit Facility $1,350 | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | Credit facility US$300 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 300,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 135.00% | ||||||||||||||||||||||
Outstanding balance | $ 186,000,000 | 210,000,000 | |||||||||||||||||||||
Secured Debt | Credit facility US$300 | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.00% | 1.00% | |||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | $150 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Outstanding balance | $ 0 | 150,000,000 | |||||||||||||||||||||
Secured Debt | $150 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 0.75% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 360,000,000 | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 120.00% | ||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Number of tranches | tranche | 3 | ||||||||||||||||||||||
Outstanding balance | 273,000,000 | 309,000,000 | |||||||||||||||||||||
Secured Debt | US$360 facility (Asia Offshore Drilling) | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.75% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 130.00% | ||||||||||||||||||||||
Outstanding balance | $ 344,000,000 | 397,000,000 | |||||||||||||||||||||
Maximum borrowing capacity | 450,000,000 | ||||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.00% | 1.75% | |||||||||||||||||||||
Description of variable rate basis | LIBOR | LIBOR | |||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eclipse | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.00% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | US$440 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.25% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | US$101 Million Secured Credit Facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 100,500,000 | ||||||||||||||||||||||
Secured Debt | Ship Finance International Loans, $700 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.25% | 3.00% | |||||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 2,000,000,000 | ||||||||||||||||||||||
Remaining borrowing capacity | $ 50,000,000 | ||||||||||||||||||||||
Commitment fee (percentage) | 40.00% | ||||||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | Credit facility US$700 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Repayment of long-term debt | $ 21,000,000 | ||||||||||||||||||||||
Secured Debt | Credit facility US$700 | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 700,000,000 | ||||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||||
Secured Debt | US$98 Million Secured Credit Facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 98,000,000 | ||||||||||||||||||||||
Secured Debt | US$1,450 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt collateral amount | 622,000,000 | ||||||||||||||||||||||
Secured Debt | US$1,450 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Secured Debt | Credit Facility $1,500 - 2014 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 1,500,000,000 | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Debt covenant, collateral to outstanding loan value percentage | 122.00% | ||||||||||||||||||||||
Debt instrument term | 12 years | ||||||||||||||||||||||
Debt collateral amount | $ 1,899,000,000 | ||||||||||||||||||||||
Outstanding balance | $ 1,344,000,000 | 1,469,000,000 | |||||||||||||||||||||
Number of newbuild jack-ups under finance lease arrangements | drilling_unit | 3 | ||||||||||||||||||||||
Secured Debt | $1,750 facility (Sevan Drilling) | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.90% | ||||||||||||||||||||||
Secured Debt | Secured Debt | US$400 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||||||||||
Tranche 2 | Credit Facility $1,500 - 2014 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Tranche 2 | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 350,000,000 | ||||||||||||||||||||||
Tranche 2 | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | $ 216,000,000 | ||||||||||||||||||||||
Tranche 3 | US$360 facility (Asia Offshore Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | $ 223,000,000 | ||||||||||||||||||||||
Revolving Credit Facility | Credit Facility $1,350 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt outstanding | $ 675,000,000 | ||||||||||||||||||||||
Revolving Credit Facility | Line of Credit | Credit facility US $950 - West Carina [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 250,000,000 | ||||||||||||||||||||||
Revolving Credit Facility | Line of Credit | Credit facility US $950 - West Eclipse [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 225,000,000 | ||||||||||||||||||||||
Balloon payment to be paid | $ 225,000,000 | ||||||||||||||||||||||
ECA Facility [Member] | Credit facility US $950 - West Carina [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument term | 12 years | ||||||||||||||||||||||
Profile period | 12 years | ||||||||||||||||||||||
ECA Facility [Member] | Secured Debt | Credit facility US $950 - West Carina [Member] | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 190,000,000 | ||||||||||||||||||||||
Minimum | Secured Debt | US$1,450 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 1.20% | ||||||||||||||||||||||
Minimum | Secured Debt | Credit Facility $1,500 - 2014 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 1.40% | ||||||||||||||||||||||
Maximum | Secured Debt | US$1,450 facility | LIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.00% | ||||||||||||||||||||||
Maximum | Secured Debt | Credit Facility $1,500 - 2014 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||||
SFL West Polaris Limited | Ship Finance International Loans, $700 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 420,000,000 | $ 700,000,000 | $ 420,000,000 | ||||||||||||||||||||
Debt instrument term | 5 years | ||||||||||||||||||||||
Seadrill Limited and Seadrill Partners LLC | US$1,450 facility | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt outstanding | $ 776,000,000 | $ 856,000,000 | |||||||||||||||||||||
Seadrill Tucana Ltd. | Credit facility US$300 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | 196,000,000 | ||||||||||||||||||||||
Seadrill Castor Ltd. | Credit facility US$300 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Assets pledged | 204,000,000 | ||||||||||||||||||||||
Sevan Drilling Pte Ltd. | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt collateral amount | 575,000,000 | ||||||||||||||||||||||
Sevan Drilling Rig II Pte Ltd. | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt collateral amount | 584,000,000 | ||||||||||||||||||||||
Sevan Drilling Rig V Pte Ltd. | $1,750 facility (Sevan Drilling) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt collateral amount | $ 704,000,000 |
Long-term debt - Ship Finance I
Long-term debt - Ship Finance International Limited ("Ship Finance") Loans (Details) - USD ($) | Oct. 17, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Oct. 31, 2013 | May. 31, 2013 |
Debt Instrument [Line Items] | |||||
Debt outstanding | $ 10,661,000,000 | $ 12,620,000,000 | |||
Credit facility, International Loans, 1 | |||||
Debt Instrument [Line Items] | |||||
Debt, face amount | $ 475,000,000 | ||||
Pledged assets | 559,000,000 | ||||
Outstanding balance | $ 354,000,000 | 451,000,000 | |||
West Taurus | Ship Finance International Loans, $1,400 facility | |||||
Debt Instrument [Line Items] | |||||
Debt, face amount | $ 390,000,000 | ||||
Maturity of debt | 5 years | ||||
Debt outstanding | $ 221,000,000 | 303,000,000 | |||
Assets pledged | $ 434,000,000 | ||||
West Hercules | Ship Finance International Loans, $1,400 facility | |||||
Debt Instrument [Line Items] | |||||
Debt, face amount | $ 375,000,000 | ||||
Maturity of debt | 6 years | ||||
Debt outstanding | $ 256,000,000 | $ 284,000,000 | |||
Assets pledged | $ 571,000,000 | ||||
Secured Debt | Credit facility, International Loans, 1 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Description of variable rate basis | LIBOR | ||||
Basis spread on variable rate | 2.75% | ||||
Secured Debt | West Taurus | Ship Finance International Loans, $1,400 facility | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Description of variable rate basis | LIBOR | ||||
Basis spread on variable rate | 2.50% | ||||
Secured Debt | West Hercules | Ship Finance International Loans, $1,400 facility | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Description of variable rate basis | LIBOR | ||||
Basis spread on variable rate | 2.75% |
Long-term debt - Unsecured Bond
Long-term debt - Unsecured Bonds (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 4 Months Ended | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014USD ($) | Dec. 31, 2014NOK | Jul. 31, 2014USD ($)$ / sharesshares | Jun. 30, 2014USD ($) | Mar. 31, 2014SEK | Oct. 31, 2013NOK | Mar. 31, 2013NOK | Sep. 30, 2012USD ($) | Oct. 31, 2010USD ($)$ / shares | May. 31, 2014USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015NOK | Dec. 31, 2015SEK | Oct. 31, 2015USD ($) | Feb. 28, 2015NOK | Dec. 31, 2014NOK | Dec. 31, 2014SEK | Jan. 31, 2014USD ($) | Sep. 20, 2013USD ($) | May. 31, 2012USD ($) | ||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Original amount of debt converted | [1] | $ 0 | $ 584,000,000 | $ 0 | |||||||||||||||||||
Debt outstanding | $ 12,620,000,000 | 10,661,000,000 | 12,620,000,000 | ||||||||||||||||||||
Conversion of convertible bond | 615,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | 8,000,000 | (54,000,000) | $ 0 | ||||||||||||||||||||
Senior Unsecured Bond | US $500 Million Fixed Interest Bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 500,000,000 | 500,000,000 | 500,000,000 | $ 500,000,000 | |||||||||||||||||||
Debt instrument, interest rate | 6.625% | 6.125% | |||||||||||||||||||||
Debt repurchased | $ 21,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | 3,000,000 | ||||||||||||||||||||||
Senior Unsecured Bond | Floating interest rate bonds | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt instrument, interest rate | 4.94% | 4.94% | 4.94% | ||||||||||||||||||||
Senior Unsecured Bond | Floating interest rate bonds | Norwegian Interbank Offered Rate (NIBOR) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.75% | ||||||||||||||||||||||
Description of variable rate basis | NIBOR | ||||||||||||||||||||||
Senior Unsecured Bond | NOK1,500 Million Floating Interest Rate Bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | NOK | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | |||||||||||||||||||
Debt instrument, interest rate | 6.18% | 6.18% | 6.18% | ||||||||||||||||||||
Extinguishment of debt, amount | NOK | NOK 82,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | 4,000,000 | ||||||||||||||||||||||
Senior Unsecured Bond | NOK1,500 Million Floating Interest Rate Bond | Norwegian Interbank Offered Rate (NIBOR) | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 4.40% | ||||||||||||||||||||||
Description of variable rate basis | NIBOR | ||||||||||||||||||||||
$350 million fixed interest rate bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 350,000,000 | $ 350,000,000 | 350,000,000 | $ 350,000,000 | |||||||||||||||||||
Maturity of debt | 5 years | ||||||||||||||||||||||
Maturity date of debt | October 2,015 | ||||||||||||||||||||||
Basis spread on variable rate | 6.50% | ||||||||||||||||||||||
Debt repurchased | $ 8,000,000 | ||||||||||||||||||||||
Debt outstanding | 342,000,000 | ||||||||||||||||||||||
Convertible bonds due 2017 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 650,000,000 | $ 650,000,000 | |||||||||||||||||||||
Maturity date of debt | October 2,017 | ||||||||||||||||||||||
Fixed interest rate | 3.375% | 3.375% | |||||||||||||||||||||
Original amount of debt converted | $ 649,000,000 | ||||||||||||||||||||||
Debt outstanding | $ 1,000,000 | ||||||||||||||||||||||
Number of banking days | 10 days | ||||||||||||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 27.69 | $ 38.92 | |||||||||||||||||||||
Percentage of common shares premium | 30.00% | ||||||||||||||||||||||
Convertible bonds allocated to bond equity | $ 121,000,000 | ||||||||||||||||||||||
Convertible bonds allocated to bond liability | $ 529,000,000 | ||||||||||||||||||||||
Incentive payment per $100,000 of principal | $ 12,102.95 | ||||||||||||||||||||||
Number of shares issued due to conversion of convertible debt instruments (in shares) | shares | 23.8 | ||||||||||||||||||||||
Conversion of convertible bond | $ 893,000,000 | ||||||||||||||||||||||
Gains (Losses) on incentive payment offer | 79,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | (16,000,000) | ||||||||||||||||||||||
Loss on conversion of debt in APIC | $ (278,000,000) | 278,000,000 | |||||||||||||||||||||
Payments for incentive payment offer | 69,000,000 | ||||||||||||||||||||||
Convertible Bond | Convertible bonds due 2017 | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt Instrument, Cleanup Call Provision, Percent of Principal Repaid | 90.00% | ||||||||||||||||||||||
Floating interest rate bonds | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | NOK | NOK 1,800,000,000 | NOK 1,800,000,000 | NOK 1,800,000,000 | ||||||||||||||||||||
$1,000 million fixed interest bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | 1,000,000,000 | $ 1,000,000,000 | 1,000,000,000 | 1,000,000,000 | |||||||||||||||||||
Maturity of debt | 5 years | ||||||||||||||||||||||
Maturity date of debt | September 2,017 | ||||||||||||||||||||||
Fixed interest rate | 6.125% | 5.625% | |||||||||||||||||||||
Debt repurchased | 52,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | 8,000,000 | ||||||||||||||||||||||
Senior Notes | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | 8,000,000 | 23,000,000 | |||||||||||||||||||||
Senior Notes | US$600 Million Senior Unsecured Bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Percent of principal amount of debt purchased | 27.50% | ||||||||||||||||||||||
Debt repurchased | NOK | NOK 47,000,000 | ||||||||||||||||||||||
Debt outstanding | $ 165,000,000 | 187,000,000 | |||||||||||||||||||||
Repayment of long-term debt | $ 25,000,000 | ||||||||||||||||||||||
Net gain/(loss) on debt extinguishment | $ 16,000,000 | ||||||||||||||||||||||
Percent of principal amount of debt owned | 31.10% | 31.10% | 31.10% | ||||||||||||||||||||
Senior Notes | SEK1,500 Million Senior Unsecured Bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | SEK | SEK 1,500,000,000 | SEK 1,500,000,000 | SEK 1,500,000,000 | ||||||||||||||||||||
Senior Notes | SEK1,500 Million Senior Unsecured Bond | STIBOR | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Basis spread on variable rate | 3.25% | ||||||||||||||||||||||
Description of variable rate basis | STIBOR | ||||||||||||||||||||||
Debt instrument, interest rate | 5.20% | 5.20% | 5.20% | ||||||||||||||||||||
North Atlantic Drilling | Senior Notes | US$600 Million Senior Unsecured Bond | |||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||
Debt, face amount | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | $ 600,000,000 | |||||||||||||||||||
Debt instrument, interest rate | 6.25% | ||||||||||||||||||||||
[1] | In July 2014, the Company launched a voluntary incentive payment offer to convert any and all of the $650 million principal amount of 3.375% convertible bonds. Holders converted at the contractual conversion price of $27.69 per share and received an incentive payment of $12,102.95 per $100,000 principal amount of bond held. As a result of the transaction, the number of common shares outstanding in the Company increased by 23.8 million shares, with an increase to equity of $893 million. $278 million of the total consideration transferred on conversion was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of stockholders’ equity. |
Long-term debt - Commercial Int
Long-term debt - Commercial Interest Reference Rate (CIRR) Credit Facilities (Details) | 1 Months Ended | ||||||
Jul. 31, 2008USD ($) | Jun. 30, 2008NOK | Apr. 30, 2008NOK | Dec. 31, 2015USD ($) | Dec. 31, 2015NOK | Dec. 31, 2014USD ($) | Dec. 31, 2014NOK | |
Debt Instrument [Line Items] | |||||||
Debt outstanding | $ | $ 10,661,000,000 | $ 12,620,000,000 | |||||
Commercial Interest Reference Rate Term Loan 1 | |||||||
Debt Instrument [Line Items] | |||||||
Debt, face amount | NOK 850,000,000 | ||||||
Fixed interest rate | 4.56% | ||||||
Maturity of debt | 8 years | ||||||
Debt outstanding | 11,000,000 | NOK 100,000,000 | 27,000,000 | ||||
Commercial Interest Reference Rate Term Loan 2 | |||||||
Debt Instrument [Line Items] | |||||||
Debt, face amount | NOK 904,000,000 | ||||||
Fixed interest rate | 4.15% | ||||||
Maturity of debt | 8 years | ||||||
Debt outstanding | 12,000,000 | 29,000,000 | NOK 106,000,000 | ||||
Commercial Interest Reference Rate Term Loan 3 | |||||||
Debt Instrument [Line Items] | |||||||
Debt, face amount | $ | $ 1,011,000,000 | ||||||
Fixed interest rate | 4.15% | ||||||
Maturity of debt | 12 years | ||||||
Debt outstanding | $ 53,000,000 | 421,000,000 | $ 68,000,000 | ||||
Other credit facilities with corresponding restricted cash deposit | |||||||
Debt Instrument [Line Items] | |||||||
Debt outstanding | NOK 627,000,000 |
Long-term debt - Debt Covenants
Long-term debt - Debt Covenants (Details) | Apr. 28, 2016USD ($)credit_facility | Jul. 01, 2015 | Dec. 20, 2013 | May. 31, 2015 | Dec. 31, 2013 | Oct. 31, 2010 | Dec. 31, 2015USD ($) | Dec. 31, 2015NOK | Oct. 31, 2015USD ($) | Feb. 28, 2015NOK | Dec. 31, 2014USD ($) | Dec. 31, 2014NOK | Jan. 31, 2014USD ($) | Oct. 31, 2013NOK | Oct. 17, 2013USD ($) | Sep. 20, 2013USD ($) | Mar. 20, 2013USD ($) | Dec. 31, 2012USD ($) | Sep. 30, 2012USD ($) | Dec. 31, 2011USD ($) | Apr. 30, 2011USD ($) |
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, net debt to EBITDA | 6 | ||||||||||||||||||||
Debt service coverage ratio | 1.15 | ||||||||||||||||||||
Percentage increase allowed for secured debt to fair market value | 75.00% | ||||||||||||||||||||
Senior Unsecured Bond | US $500 Million Fixed Interest Bond | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 500,000,000 | $ 500,000,000 | $ 500,000,000 | ||||||||||||||||||
Senior Unsecured Bond | NOK1,500 Million Floating Interest Rate Bond | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | NOK | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | NOK 1,500,000,000 | |||||||||||||||||
Credit facility, International Loans, 1 | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 475,000,000 | ||||||||||||||||||||
$1,000 million fixed interest bond | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | 1,000,000,000 | 1,000,000,000 | $ 1,000,000,000 | ||||||||||||||||||
$350 million fixed interest rate bond | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 350,000,000 | $ 350,000,000 | 350,000,000 | ||||||||||||||||||
Basis spread on variable rate | 6.50% | ||||||||||||||||||||
Bonds | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Equity ratio (in hundredths) | 30.00% | ||||||||||||||||||||
US$1,450 facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 1,450,000,000 | ||||||||||||||||||||
Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Permitted leverage ratio for period one | 6 | ||||||||||||||||||||
Permitted leverage ratio for period two | 5.5 | ||||||||||||||||||||
Permitted leverage ratio for period three | 4.5 | ||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 450,000,000 | 450,000,000 | |||||||||||||||||||
Secured Debt | US$400 facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | 400,000,000 | 400,000,000 | $ 400,000,000 | ||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | 2,000,000,000 | 2,000,000,000 | |||||||||||||||||||
US$440 facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 440,000,000 | ||||||||||||||||||||
Bank Loans | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, cash and cash equivalents | $ 150,000,000 | ||||||||||||||||||||
Debt covenant, EBITDA to interest expense ratio | 2.5 | ||||||||||||||||||||
Debt covenant, current assets to current liabilities ratio | 1 | ||||||||||||||||||||
Debt covenant, percentage of shares in listed companies owned | 20.00% | ||||||||||||||||||||
Equity ratio (in hundredths) | 30.00% | ||||||||||||||||||||
Debt covenant, net debt to EBITDA | 4.5 | ||||||||||||||||||||
North Atlantic Drilling | Senior Notes | US$600 Million Senior Unsecured Bond | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 600,000,000 | 600,000,000 | $ 600,000,000 | ||||||||||||||||||
Ship Finance Variable Interest Entities | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, cash and cash equivalents | $ 25,000,000 | ||||||||||||||||||||
Debt covenant, total liabilities to total assets | 0.8 | 0.8 | |||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||||||||||||||||
Secured Debt | Credit facility US$450 -Eminence | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Basis spread on variable rate | 2.00% | 1.75% | |||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 2,000,000,000 | ||||||||||||||||||||
Secured Debt | US$2,000 facility (North Atlantic Drilling) | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Basis spread on variable rate | 2.00% | ||||||||||||||||||||
Secured Debt | Secured Debt | US$400 facility | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||
Scenario One, Leverage Ratio 4.50 to 4.99 | Secured Debt | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Additional margin payable as a percent | 0.125% | ||||||||||||||||||||
Scenario One, Leverage Ratio 5.00 to 5.49 | Secured Debt | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Additional margin payable as a percent | 0.25% | ||||||||||||||||||||
Scenario One, Leverage Ratio 5.50 to 6.00 | Secured Debt | LIBOR | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Additional margin payable as a percent | 0.75% | ||||||||||||||||||||
Minimum | Scenario One, Leverage Ratio 4.50 to 4.99 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 4.5 | ||||||||||||||||||||
Minimum | Scenario One, Leverage Ratio 5.00 to 5.49 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 5 | ||||||||||||||||||||
Minimum | Scenario One, Leverage Ratio 5.50 to 6.00 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 5.50 | ||||||||||||||||||||
Maximum | Scenario One, Leverage Ratio 4.50 to 4.99 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 4.99 | ||||||||||||||||||||
Maximum | Scenario One, Leverage Ratio 5.00 to 5.49 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 5.49 | ||||||||||||||||||||
Maximum | Scenario One, Leverage Ratio 5.50 to 6.00 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Leverage ratio | 6 | ||||||||||||||||||||
Subsequent Event | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, net debt to EBITDA | 6.5 | ||||||||||||||||||||
Subsequent Event | Bank Loans | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, cash and cash equivalents | $ 250,000,000 | ||||||||||||||||||||
Equity ratio (in hundredths) | 30.00% | ||||||||||||||||||||
Subsequent Event | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Number of credit facilities maturing in near term | credit_facility | 3 | ||||||||||||||||||||
Subsequent Event | Secured Debt | Senior Notes | Credit facility US$450 -Eminence | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||||||||||||||||
Basis spread on variable rate | 2.50% | ||||||||||||||||||||
Subsequent Event | Secured Debt | Senior Notes | US$400 facility | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 400,000,000 | ||||||||||||||||||||
Subsequent Event | Secured Debt | Senior Notes | US$2,000 facility (North Atlantic Drilling) | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt, face amount | $ 2,000,000,000 | ||||||||||||||||||||
Subsequent Event | Maximum | Scenario One, Leverage Ratio 5.50 to 6.00 | Secured Debt | |||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||
Debt covenant, net debt to EBITDA | 6 |
Other current liabilities (Deta
Other current liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |||
Taxes payable | $ 168 | $ 160 | |
Employee withheld taxes, social security and vacation payment | 87 | 122 | |
Intangible liabilities - unfavorable contracts | [1] | 65 | 116 |
Accrued interest expense | 70 | 77 | |
Liabilities relating to investment in shares | [2] | 0 | 167 |
Deferred mobilization revenue | 208 | 178 | |
Derivative financial instruments | [3] | 424 | 372 |
Accrued expenses | 173 | 292 | |
Construction obligation | [4] | 460 | 428 |
Other current liabilities | 29 | 22 | |
Total other current liabilities | $ 1,684 | $ 1,934 | |
[1] | Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Notes 12 and 21 to the consolidated financial statements included herein. | ||
[2] | Liabilities relating to investment in shares primarily represents amounts owed in respect of the Company’s share forward purchase contracts for Sevan Drilling. See Note 12 to the consolidated financial statements included herein. | ||
[3] | Derivative financial instruments consist of unrealized losses on various types of derivatives. | ||
[4] | The construction obligation has been recognized upon the acquisition of Sevan Drilling. See Note 12 to the consolidated financial statements included herein. |
Other non-current liabilitie150
Other non-current liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Liabilities Disclosure [Abstract] | |||
Accrued pension liabilities | $ 37 | $ 84 | |
Deferred mobilization revenues | 128 | 224 | |
Intangible liabilities - unfavorable contracts | [1] | 66 | 131 |
Derivative financial instruments | 160 | 250 | |
Other non-current liabilities | 10 | 10 | |
Total other non-current liabilities | $ 401 | $ 699 | |
[1] | Intangible liabilities represent the estimated fair values of acquired unfavorable drilling contracts. See Note 12 and 21 to the consolidated financial statements included herein. |
Common Shares (Details)
Common Shares (Details) - USD ($) $ / shares in Units, $ in Millions | May. 10, 2005 | Jul. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||||||
Authorized share capital, shares (in shares) | 800,000,000 | 800,000,000 | 800,000,000 | |||
Authorized share capital | $ 1,600 | $ 1,600 | $ 1,600 | |||
Issued and fully paid share capital, shares (in shares) | 493,078,680 | 493,078,678 | 469,250,933 | |||
Issued and fully paid share capital | $ 986 | $ 986 | $ 939 | |||
Treasury shares held by Company, shares (in shares) | (318,740) | (318,740) | (272,441) | |||
Treasury shares held by Company | $ (1) | $ (1) | $ (1) | |||
Outstanding shares in issue, shares (in shares) | 492,759,940 | 492,759,938 | 468,978,492 | |||
Outstanding shares in issue | $ 985 | $ 985 | $ 938 | |||
Number of shares issued (in shares) | 6,000 | 0 | 0 | |||
Common shares, par value (in dollars per share) | $ 2 | $ 2 | $ 2 | $ 2 | ||
Percent of outstanding shares authorized to be repurchased | 10.00% | |||||
Convertible bonds due 2017 | ||||||
Class of Stock [Line Items] | ||||||
Number of shares issued due to conversion of convertible debt instruments (in shares) | 23,800,000 |
Non-controlling interest - Narr
Non-controlling interest - Narrative (Details) $ / shares in Units, $ in Millions | Dec. 31, 2015 | Dec. 30, 2014USD ($) | Jan. 02, 2014USD ($) | Dec. 13, 2013USD ($)$ / sharesshares | Oct. 18, 2013USD ($)$ / sharesshares | Mar. 25, 2013USD ($) | Oct. 24, 2012USD ($)$ / sharesshares | Oct. 24, 2012USD ($)$ / sharesshares | Dec. 31, 2015 | Dec. 31, 2014USD ($) | Jan. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013shares | Oct. 31, 2013shares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($)company | Jan. 02, 2014USD ($) | Jul. 02, 2013USD ($) | Mar. 26, 2013 |
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest, increase from subsidiary equity issuance | $ 4 | $ 297 | ||||||||||||||||||
Deconsolidation of Seadrill Partners | $ (4) | (115) | ||||||||||||||||||
Dividend paid to non controlling interest in VIE | 223 | |||||||||||||||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 13 | $ 209 | ||||||||||||||||||
Ship Finance | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Number of Ship Finance companies acquired | company | 1 | |||||||||||||||||||
Acquisition of remaining equity shares of former VIE | $ 47 | |||||||||||||||||||
North Atlantic Drilling | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest ownership percentage | 70.36% | 70.36% | 70.36% | |||||||||||||||||
Reverse stock split conversion ratio | 0.10 | 0.10 | ||||||||||||||||||
Seadrill Partners LLC | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest ownership percentage | 62.35% | 77.47% | 75.67% | 75.67% | 62.35% | 77.47% | 62.35% | |||||||||||||
Common units representing liability entity's interests (in shares) | shares | 10,062,500 | 10,062,500 | ||||||||||||||||||
Common unit price representing liability entity's interests (in USD per share) | $ / shares | $ 29.5 | $ 32.29 | $ 22 | $ 22 | ||||||||||||||||
Gross proceeds from completion of IPO | $ 380 | $ 0 | $ 221 | $ 221 | ||||||||||||||||
Consideration received from shares issued | $ 365 | $ 0 | $ 203 | $ 203 | ||||||||||||||||
Common units issued in connection with an over allotment option (in shares) | shares | 1,312,500 | 1,312,500 | ||||||||||||||||||
Common units owned upon completion of IPO (in shares) | shares | 14,752,525 | 14,752,525 | ||||||||||||||||||
Subordinated units owned upon completion of IPO (in shares) | shares | 16,543,350 | 16,543,350 | ||||||||||||||||||
Asia Offshore Drilling | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest ownership percentage | 66.24% | 66.24% | 66.24% | 66.21% | ||||||||||||||||
Sevan Drilling ASA | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest ownership percentage | 50.11% | 50.11% | 50.11% | |||||||||||||||||
Ownership interest, percentage | 50.10% | |||||||||||||||||||
Fair value of non-controlling interest | $ 197 | |||||||||||||||||||
Non-controlling interest | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest, increase from subsidiary equity issuance | $ 4 | 297 | ||||||||||||||||||
Deconsolidation of Seadrill Partners | $ (4) | (115) | ||||||||||||||||||
Dividend paid to non controlling interest in VIE | 223 | |||||||||||||||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 7 | $ 209 | ||||||||||||||||||
IPO | North Atlantic Drilling | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
New shares issued by equity method investment | shares | 13,513,514 | |||||||||||||||||||
Sale of stock (in USD per share) | $ / shares | $ 9.25 | |||||||||||||||||||
Noncontrolling interest, increase from subsidiary equity issuance | $ 52 | |||||||||||||||||||
Stock Issued to Reporting Entity | Seadrill Partners LLC | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
New shares issued by equity method investment | shares | 3,394,916 | 3,310,622 | 14,752,525 | 3,394,916 | 3,310,622 | |||||||||||||||
Stock Issued to Public | Seadrill Partners LLC | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
New shares issued by equity method investment | shares | 12,880,000 | 0 | 10,062,500 | 12,880,000 | ||||||||||||||||
Noncontrolling interest, increase from subsidiary equity issuance | $ 239 | |||||||||||||||||||
SFL West Polaris Limited | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Total acquisition price | $ 111 | $ 111 | ||||||||||||||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 7 | |||||||||||||||||||
Asia Offshore Drilling | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Noncontrolling interest ownership percentage | 66.18% | |||||||||||||||||||
Fair value of establishment of non-controlling interest | $ 100 | |||||||||||||||||||
Total acquisition price | $ 295 | |||||||||||||||||||
Seadrill Partners LLC | ||||||||||||||||||||
Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Deconsolidation of Seadrill Partners | $ (115) |
Non-controlling interest - Chan
Non-controlling interest - Changes in Non-controlling Interest (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | $ 626 | $ 690 | $ 521 |
Changes during period | (10) | (172) | 36 |
Net income attributable to non-controlling interest | (12) | 108 | 133 |
Balance, end of period | 604 | 626 | 690 |
Ship Finance | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 32 | 78 | 274 |
Changes during period | 0 | (57) | (220) |
Net income attributable to non-controlling interest | (17) | 11 | 24 |
Balance, end of period | 15 | 32 | 78 |
North Atlantic Drilling | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 205 | 173 | 168 |
Changes during period | 8 | (4) | (56) |
Net income attributable to non-controlling interest | (46) | 36 | 61 |
Balance, end of period | 167 | 205 | 173 |
Seadrill Partners LLC | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 0 | 115 | 79 |
Changes during period | 0 | (115) | 15 |
Net income attributable to non-controlling interest | 0 | 0 | 21 |
Balance, end of period | 0 | 0 | 115 |
Asia Offshore Drilling | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 134 | 111 | 0 |
Changes during period | (14) | 0 | 100 |
Net income attributable to non-controlling interest | 20 | 23 | 11 |
Balance, end of period | 140 | 134 | 111 |
Sevan Drilling ASA | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 251 | 213 | 0 |
Changes during period | 0 | 0 | 197 |
Net income attributable to non-controlling interest | 31 | 38 | 16 |
Balance, end of period | 282 | 251 | $ 213 |
Seadrill Offshore Nigeria Limited and Seadrill Nigeria Operations Limited | |||
Changes in non-controlling interest [Roll Forward] | |||
Balance, beginning of period | 4 | 0 | |
Changes during period | (4) | 4 | |
Net income attributable to non-controlling interest | 0 | 0 | |
Balance, end of period | $ 0 | $ 4 | $ 0 |
Accumulated other comprehens154
Accumulated other comprehensive income (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Unrealized (loss)/gain on marketable securities | $ (129,000,000) | $ (443,000,000) |
Unrealized gain on foreign exchange | 36,000,000 | 51,000,000 |
Actuarial loss relating to pension | (38,000,000) | (57,000,000) |
Share in unrealized gains from associated companies | 11,000,000 | 1,000,000 |
Accumulated other comprehensive (loss)/income | (120,000,000) | (448,000,000) |
Other comprehensive income taxes | 0 | |
Actuarial loss related to pension, tax effect | $ 8,000,000 | $ 22,000,000 |
Tax rate in Norway (in hundredths) | 25.00% | 27.00% |
Share based compensation - Shar
Share based compensation - Share Options Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||||||||||||
Oct. 31, 2013NOK / shares | Nov. 30, 2011$ / shares | Nov. 30, 2011NOK / shares | Nov. 30, 2010$ / shares | Nov. 30, 2010NOK / shares | Apr. 30, 2010$ / shares | Apr. 30, 2010NOK / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013USD ($)$ / sharesshares | Dec. 31, 2012$ / sharesshares | Dec. 31, 2012NOK / sharesshares | Dec. 31, 2009$ / shares | Dec. 31, 2009NOK / shares | Dec. 31, 2008$ / shares | Dec. 31, 2008NOK / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Share options granted recognized as personnel expenses | $ 8 | $ 10 | $ 7 | |||||||||||||
Tranche One | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 13 months | 18 years | 18 years | |||||||||||||
Tranche Two | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 25 months | 36 years | 36 years | |||||||||||||
Tranche Three | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 37 months | 48 years | 48 years | |||||||||||||
Tranche Four | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 49 months | 60 years | 60 years | |||||||||||||
Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights (percentage) | 25.00% | 25.00% | ||||||||||||||
Granted (in shares) | shares | 710,000 | |||||||||||||||
Risk-free interest rate (in hundredths) | 2.00% | 2.00% | ||||||||||||||
Volatility (in hundredths) | 34.80% | 26.10% | ||||||||||||||
Dividend yield (in hundredths) | 0.00% | 0.00% | ||||||||||||||
Expected option term | 2 years | 4 years | ||||||||||||||
Options, exercise price range, lower range limit (in currency per share) | (per share) | NOK 202.10 | $ 14.09 | NOK 90.83 | $ 14.09 | NOK 90.83 | |||||||||||
Options, exercise price range, upper range limit (in currency per share) | (per share) | $ 224.53 | $ 16.24 | NOK 104.64 | $ 16.24 | NOK 104.64 | |||||||||||
Options, exercise price (in currency per share) | (per share) | NOK 273 | $ 34.68 | NOK 202.10 | $ 23.13 | NOK 137.40 | |||||||||||
Options granted to Americans, exercise price (in currency per share) | (per share) | $ 31.40 | NOK 192.90 | ||||||||||||||
Options granted to non-Americans, exercise price (in currency per share) | (per share) | $ 31.06 | NOK 185.20 | ||||||||||||||
Weighted average grant-date fair value of options granted (in USD per share) | $ / shares | $ 3.33 | $ 0 | $ 10.23 | |||||||||||||
Unrecognized compensation costs relating to non-vested options granted under the Options Schemes | $ 2 | $ 3 | $ 7 | |||||||||||||
Share based compensation to be recognized in expense in 2016 | 1 | |||||||||||||||
Share based compensation to be recognized in expense in 2017 | 1 | |||||||||||||||
Share based compensation to be recognized in expense in 2018 (less than) | $ 1 | |||||||||||||||
Options, weighted average remaining contractual life (in months) | 22 months | 21 months | ||||||||||||||
Options, weighted average fair value (in USD per share) | $ / shares | $ 6.06 | $ 7.97 | ||||||||||||||
Option holder retirement rate (in hundredths) | 0.00% | 0.00% | ||||||||||||||
Total intrinsic value of options exercised | $ 9 | $ 17 | ||||||||||||||
Intrinsic value of options fully vested but not exercised | $ 0 | |||||||||||||||
Average remaining term of options fully vested but not exercised | 22 months | |||||||||||||||
Stock Options | Tranche One | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights (percentage) | 25.00% | 25.00% | 25.00% | 20.00% | 20.00% | 33.33% | 33.33% | 33.33% | 33.33% | |||||||
Stock Options | Tranche Two | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights (percentage) | 25.00% | 25.00% | 25.00% | 33.33% | 33.33% | |||||||||||
Stock Options | Tranche Three | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights (percentage) | 25.00% | 25.00% | 25.00% | |||||||||||||
Stock Options | Tranche Four | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Award vesting rights (percentage) | 25.00% | 25.00% | 25.00% | |||||||||||||
Seadrill Scheme | Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Granted (in shares) | shares | 0 | 270,000 | ||||||||||||||
Vesting of options granted (in hundredths) | 100.00% | |||||||||||||||
Options outstanding (in shares) | shares | 2,015,171 | 2,241,116 | 2,838,758 | 3,875,891 | 3,875,891 | |||||||||||
Seadrill Scheme | Stock Options | Minimum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 1 year | |||||||||||||||
Seadrill Scheme | Stock Options | Maximum | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Vesting period | 5 years | |||||||||||||||
2011 Program | Stock Options | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||
Risk-free interest rate (in hundredths) | 1.60% | |||||||||||||||
Volatility (in hundredths) | 34.80% | |||||||||||||||
Dividend yield (in hundredths) | 0.00% | |||||||||||||||
Expected option term | 3 years 6 months |
Share based compensation - Opti
Share based compensation - Options Outstanding (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Granted (in shares) | 710,000 | ||
Seadrill Scheme | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning of year (in shares) | 2,241,116 | 2,838,758 | 3,875,891 |
Granted (in shares) | 0 | 270,000 | |
Exercised (in shares) | 0 | (461,477) | (700,418) |
Forfeited (in shares) | (935,945) | (136,165) | (606,715) |
Outstanding at end of year (in shares) | 2,015,171 | 2,241,116 | 2,838,758 |
Exercisable at end of year (in shares) | 882,152 | 1,169,584 | 1,080,306 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding at beginning of year (in US dollars per share) | $ 35.10 | $ 28.53 | $ 29.88 |
Granted (in US dollars per share) | 12.04 | 0 | 45.66 |
Exercised (in US dollars per share) | 0 | 20.19 | 22.60 |
Forfeited (in US dollars per share) | 32.81 | 34.57 | 32.30 |
Outstanding at end of year (in US dollars per share) | 28.53 | 35.10 | 28.53 |
Exercisable at end of year (in US dollars per share) | $ 36.14 | $ 27.38 | $ 27.38 |
Share based compensation - Rest
Share based compensation - Restricted Stock Units Narrative (Details) $ / shares in Units, $ in Millions | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2013$ / sharesNOK / shares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesNOK / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Dec. 31, 2013$ / sharesshares | Nov. 30, 2015$ / shares | Nov. 07, 2013shares | Oct. 01, 2013shares | May. 10, 2005$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Common shares, par value (in dollars per share) | $ / shares | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | ||||
Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares authorized | 909,970 | 909,970 | 909,970 | 909,970 | 162,560 | 373,700 | ||||||
Vesting period | 3 years | |||||||||||
Adjustment (in shares) | [1] | (1,571,250) | ||||||||||
Weighted average grant date fair value (in currency per share) | (per share) | $ 46.07 | $ 3.67 | $ 11 | |||||||||
Compensation cost, RSU plans | $ | $ 6 | $ 2 | ||||||||||
Unrecognized compensation costs | $ | $ 6 | $ 6 | $ 6 | $ 6 | ||||||||
North Atlantic Drilling | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Reverse stock split conversion ratio | 0.10 | 0.10 | ||||||||||
Common shares, par value (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 | $ 5 | |||||||
Adjustment (in shares) | (1,571,251) | |||||||||||
North Atlantic Drilling | Restricted Stock Units (RSUs) | ||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||
Number of shares authorized | 1,478,500 | 1,478,500 | 1,478,500 | 1,478,500 | 278,778 | |||||||
Adjustment (in shares) | 0 | 0 | ||||||||||
Weighted average grant date fair value (in currency per share) | NOK / shares | $ 58 | $ 15.30 | ||||||||||
[1] | Adjustment relates to the reverse stock split for NADL units, as discussed above |
Share based compensation - R158
Share based compensation - Restricted Stock Unit Activity (Details) - shares | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||||
Outstanding at beginning of year (in shares) | 525,210 | 373,700 | 0 | ||
Granted (in shares) | 937,970 | 162,560 | 373,700 | ||
Adjustment (in shares) | [1] | 1,571,250 | |||
Forfeited (in shares) | (60,200) | (11,050) | 0 | ||
Outstanding at end of year (in shares) | 1,402,980 | 1,402,980 | 525,210 | 373,700 | |
North Atlantic Drilling | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||||
Adjustment (in shares) | 1,571,251 | ||||
North Atlantic Drilling | Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||||
Outstanding at beginning of year (in shares) | 253,870 | 278,778 | 0 | ||
Granted (in shares) | 1,587,719 | 0 | 278,778 | ||
Adjustment (in shares) | 0 | 0 | |||
Forfeited (in shares) | (95,755) | (24,908) | 0 | ||
Outstanding at end of year (in shares) | 174,583 | 174,583 | 253,870 | 278,778 | |
[1] | Adjustment relates to the reverse stock split for NADL units, as discussed above |
Pension benefits (Details)
Pension benefits (Details) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Defined Contribution Plan [Line Items] | ||||||
Total company contributions | $ 29 | $ 34 | $ 8 | |||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Accumulated benefit obligation | $ 101 | $ 146 | ||||
Contributions expected to be paid [Abstract] | ||||||
2,016 | 12 | |||||
2,017 | 12 | |||||
2,018 | 12 | |||||
2,019 | 13 | |||||
2,020 | 13 | |||||
2021-2025 | 70 | |||||
Total payments expected during the next 10 years | 132 | |||||
Defined Benefit Pension Plan | ||||||
Effect of formerly SFAS No. 158 on the consolidated balance sheet [Abstract] | ||||||
Non-current liabilities | 37 | 82 | ||||
Deferred tax asset | (8) | (22) | ||||
Shareholders equity | 29 | 60 | ||||
Annual pension cost [Abstract] | ||||||
Service cost | 12 | 13 | 14 | |||
Interest cost on prior years’ benefit obligation | 4 | 7 | 7 | |||
Gross pension cost for the year | 16 | 20 | 21 | |||
Expected return on plan assets | (3) | (6) | (4) | |||
Administration charges | 1 | 1 | 0 | |||
Net pension cost for the year | 14 | 15 | 17 | |||
Social security cost | 2 | 2 | 2 | |||
Amortization of actuarial gains/losses | 3 | 2 | 2 | |||
Impact of settlement/curtailment funded status | 0 | 0 | (2) | |||
Total net pension cost | 19 | 19 | 19 | |||
The funded status of the defined benefit plan [Abstract] | ||||||
Projected benefit obligations at end of period | 186 | 180 | 180 | 130 | 186 | $ 180 |
Plan assets at market value | (114) | (129) | (129) | (97) | (114) | $ (129) |
Accrued pension liability exclusive social security | 33 | 72 | ||||
Social security related to pension obligations | 4 | 10 | ||||
Accrued pension liabilities | $ 37 | $ 82 | ||||
Change in benefit obligations [Roll Forward] | ||||||
Projected benefit obligations at beginning of period | 186 | 180 | ||||
Interest cost | 4 | 7 | 7 | |||
Service cost | 12 | 13 | 14 | |||
Benefits paid | (2) | (2) | ||||
Change in unrecognized actuarial gain | (20) | 23 | ||||
Settlement | (20) | 0 | ||||
Foreign currency translations | (30) | (35) | ||||
Projected benefit obligations at end of period | 130 | 186 | 180 | |||
Change in pension plan assets [Roll Forward] | ||||||
Fair value of plan assets at beginning of year | 114 | 129 | ||||
Estimated return | 3 | 2 | ||||
Contribution by employer | 12 | 17 | ||||
Administration charges | (1) | (1) | 0 | |||
Benefits paid | (2) | (2) | ||||
Change in unrecognized actuarial loss | 0 | (9) | ||||
Settlement | (11) | 0 | ||||
Foreign currency translations | (18) | (22) | ||||
Fair value of plan assets at end of year | $ 97 | $ 114 | $ 129 | |||
Assumptions used in calculation of pension obligations [Abstract] | ||||||
Rate of compensation increase at the end of year (in hundredths) | 2.50% | 2.75% | 3.75% | |||
Discount rate at the end of year (in hundredths) | 2.70% | 2.30% | 4.00% | |||
Prescribed pension index factor (in hundredths) | 1.20% | 1.20% | 1.40% | |||
Expected return on plan assets for the year (in hundredths) | 3.30% | 3.20% | 4.40% | |||
Employee turnover (in hundredths) | 4.00% | 4.00% | 4.00% | |||
Expected increases in Social Security Base (in hundredths) | 2.50% | 2.50% | 3.50% | |||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 100.00% | 100.00% | ||||
Defined Benefit Pension Plan | Equity Securities | ||||||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 6.10% | 7.20% | ||||
Defined Benefit Pension Plan | Debt Securities | ||||||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 47.50% | 51.90% | ||||
Defined Benefit Pension Plan | Real Estate | ||||||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 14.70% | 14.20% | ||||
Defined Benefit Pension Plan | Money Market | ||||||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 25.20% | 23.50% | ||||
Defined Benefit Pension Plan | Other | ||||||
Pension benefit plan assets [Abstract] | ||||||
Weighted-average asset allocation of funds related to defined benefit plan (in hundredths) | 6.50% | 3.20% | ||||
Defined Benefit Pension Plan | Onshore Employees | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Retirement pension as a percent of salary (in hundredths) | 66.00% | |||||
Retirement age | 67 years | |||||
Retirement pension cap (in hundredths) | 66.00% | |||||
Multiple of base | 12 | |||||
Retirement age to receive pre-retirement pension | 62 years | |||||
Defined Benefit Pension Plan | Offshore Employees | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Retirement pension as a percent of salary (in hundredths) | 60.00% | |||||
Retirement age | 67 years | |||||
Defined Benefit Pension Plan | Offshore Employees, Mobile Units | ||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||
Retirement age to receive pre-retirement pension | 60 years |
Related party transactions - Se
Related party transactions - Seadrill Partners Related Party Net Income (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Related Party Transaction [Line Items] | ||||
Management fees charged to Seadrill Partners - Other revenues | $ 119 | $ 97 | $ 2 | |
Bareboat charter arrangements | [1] | (1,611) | (1,938) | (1,977) |
Seadrill Partners LLC | Subsidiaries | ||||
Related Party Transaction [Line Items] | ||||
Management fees charged to Seadrill Partners - Other revenues | [2],[3] | 75 | 59 | 0 |
Rig operating expenses recharged - Other revenues | [4] | 29 | 22 | 0 |
Operating Insurance and Claims Costs, Production | [5] | 20 | 21 | 0 |
Rig operating expenses recharged by Seadrill Partners | [6] | (13) | 0 | 0 |
Bareboat charter arrangements | [7] | (2) | (26) | 0 |
Interest expenses charged to Seadrill Partners | [8] | 16 | 40 | 0 |
Derivatives recharged to Seadrill Partners | [9] | 10 | 42 | 0 |
Net related party income from Seadrill Partners | $ 135 | $ 158 | $ 0 | |
[1] | Includes transactions with related parties. Refer to Note 31. | |||
[2] | Management and administrative service agreementsIn connection with the IPO, subsidiaries of Seadrill Partners, entered into a management and administrative services agreement with Seadrill Management, a wholly owned subsidiary of the Company, pursuant to which Seadrill Management provides to Seadrill Partners certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee equal to 5% of Seadrill Management’s costs and expenses incurred in connection with providing these services. The agreement has an initial term for 5 years and can be terminated by providing 90 days written notice. | |||
[3] | Technical and administrative service agreement In connection with the IPO, subsidiaries of Seadrill Partners entered into certain advisory, technical and/or administrative services agreements with subsidiaries of the Company. The services provided by the Company’s subsidiaries are charged at cost plus service fee equal to approximately 5% of costs and expenses incurred in connection with providing these services. Income recognized under the above agreements (a) & (b) for the period ended December 31, 2015 was $75 million (2014: $59 million; 2013: nil). | |||
[4] | Rig operating costs charged to Seadrill PartnersDuring 2015, Seadrill has recharged to Seadrill Partners certain rig operating costs in relation to costs incurred on behalf of the West Polaris and the West Vencedor operating in Angola. The total other revenues earned for the year ending December 31, 2015 was $29.0 million (2014: revenues of $22 million). | |||
[5] | Insurance premiumsThe Company negotiates insurance for drilling units on a centralized basis. The total insurance premiums related to Seadrill Partners drilling units recharged to Seadrill Partners were $20 million for the year ending December 31, 2015 (2014: $21 million). | |||
[6] | Rig operating costs charged by Seadrill PartnersDuring 2015, Seadrill Partners has recharged to Seadrill, through its Nigerian service company, certain services, including the provision of onshore and offshore personnel, which was provided for the West Jupiter and West Saturn drilling rigs operating in Nigeria. The total rig operating expenses incurred for the period ending December 31, 2015 was $13 million (2014: nil; 2013: nil). | |||
[7] | Bareboat charter arrangementsIn connection with the transfer of the West Aquarius operations to Canada, the West Aquarius drilling contract was assigned to Seadrill Canada Ltd., a wholly owned subsidiary of Seadrill Partners, necessitating certain changes to the related party contractual arrangements relating to the West Aquarius. Seadrill China Operations Ltd, the owner of the West Aquarius and a wholly-owned subsidiary of Seadrill Partners, had previously entered into a bareboat charter arrangement with Seadrill Offshore AS, a wholly-owned subsidiary of Seadrill, providing Seadrill Offshore AS with the right to use the West Aquarius. In October 2012, this bareboat charter arrangement was replaced with a new bareboat charter between Seadrill China Operations Ltd and Seadrill Offshore AS, and at the same time, Seadrill Offshore AS entered into a bareboat charter arrangement providing Seadrill Canada Ltd. with the right to use the West Aquarius in order to perform its obligations under the drilling contract described above. For year ended December 31, 2015 the net effect to Seadrill of the bareboat charters was an expense of $1.6 million (2014: net expense of $25.8 million 2013: nil). | |||
[8] | Interest expensesThe total interest income charged to Seadrill Parters for the above loan arrangements, including commitment fees and other fees, was $16 million for the period ending December 31, 2015 (2014: $40 million; 2013: nil). Refer to the sections below for details on the financing arrangements. | |||
[9] | Derivative interest rate swap agreementsThe Company recharges interest rate swap agreements to Seadrill Partners on a back to back basis. The total net recharged to Seadrill Partners for the year ended December 31, 2015 was $10 million, (2014: $42 million; 2013: nil). |
Related party transactions - Re
Related party transactions - Receivables (payables) with Seadrill Partners (Details) - Seadrill Partners LLC - Equity Method Investee - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Rig Financing Agreements | |||
Related Party Transaction [Line Items] | |||
Due from (to) related party | [1] | $ 197 | $ 237 |
Vendor Financing Loan | |||
Related Party Transaction [Line Items] | |||
Due from (to) related party | [2] | 110 | 110 |
Deferred Consideration Receivable, Disposals | |||
Related Party Transaction [Line Items] | |||
Due from (to) related party | [3] | 96 | 74 |
Other Related Party Receivables | |||
Related Party Transaction [Line Items] | |||
Due from (to) related party | [4] | 355 | 264 |
Other Related Party Payables | |||
Related Party Transaction [Line Items] | |||
Due from (to) related party | [4] | $ (179) | $ (77) |
[1] | Rig Financing Agreements In September 2012 prior to the IPO of Seadrill Partners, each of Seadrill Partners controlled subsidiaries that owns the West Capricorn, the West Vencedor, the West Aquarius, and the West Capella, or the rig owning subsidiaries, entered into intercompany loan agreements with the Company in the amount of approximately $523 million, $115 million, $305 million and $295 million respectively, corresponding to the aggregate principal amount outstanding under the external facilities allocable to the West Capricorn, the West Vencedor, the West Aquarius, and the West Capella respectively. During 2013, the rig owning companies of the T-15, T-16, West Leo and West Sirius entered into intercompany loan agreements with Company in the amount of approximately $101 million, $93 million, $486 million and $220 million respectively, corresponding to the aggregate principal amount outstanding under the facilities allocable to the T-15, T-16, West Leo and West Sirius respectively. The Company refers to these arrangements collectively as “Rig Financing Agreements.” Pursuant to these intercompany loan agreements, each rig owning subsidiary can make payments of principal and interest to Seadrill or directly to the third party lenders under each facility, corresponding to payments of principal and interest due under each Rig Financing Agreement that are allocable to each rig. The Rig Financing Agreements related to the West Aquarius, West Capella, West Leo, West Sirius and West Capricorn were repaid during the year ended December 31, 2014 in conjunction with Seadrill Partners obtaining independent third party financing. The total outstanding principal repaid was $1.5 billion in 2014.West Vencedor Facility - In June 2014 the Company repaid the underlying $1,200 million senior secured loan relating to the West Vencedor, and as a result the West Vencedor Loan Agreement between the Company and Seadrill Partners was amended to carry on the existing loan on the same terms. The West Vencedor Loan Agreement between the Company and Seadrill Partners was scheduled to mature in June 2015 and all outstanding amounts thereunder would be due and payable, including a balloon payment of $70 million. On April 14, 2015 the Loan Agreement was amended and the maturity date was extended to June 25, 2018. The West Vencedor Loan Agreement bears a margin of 2.25%, a guarantee fee of 1.4% and a balloon payment of $21 million due at maturity in June 2018. The total amount owed by Seadrill Partners to the Company under the remaining West Vencedor Loan agreement as of December 31, 2015, was $58 million (December 31, 2014: $78 million).T-15 / T-16 Facility - The total amounts owed under the remaining Rig Financing Agreement relating to the T-15 and T-16, totaled $139 million as at December 31, 2015 (December 31, 2014: $159 million). Certain subsidiaries of Seadrill Partners are guarantors under the external facilities in which these rigs are pledged as security. Under the terms of the facilities, the guarantors are jointly and severally liable for other guarantors and the borrower who are party to this facility. The Company has provided an indemnification to Seadrill Partners for any payments or obligations related to these facilities for any losses incurred which do not relate to the T-15 and T-16.West Vela facility - Under the terms of the $1,450 million secured credit facility agreement, certain subsidiaries of Seadrill and Seadrill Partners are jointly and severally liable for their own debt and obligations under the facility and the debt and obligations of other borrowers who are also party to such agreement. These obligations are continuing and extend to amounts payable by any borrower under the facility. Seadrill has provided an indemnity to Seadrill Partners for any payments or obligations related to this facility that are not related to the West Vela.West Polaris facility - In June 2015, the Company completed the sale of the entities that own and operate the West Polaris to Seadrill Partners. One of the entities sold was the sole borrower under $420 million senior secured credit facility. See Note 11 for further details. Seadrill Limited continues to act as a guarantor under the facility. | ||
[2] | $109.5 million Vendor financing loanIn May, 2013, Seadrill Partners borrowed from the Company $109.5 million as vendor financing to fund the acquisition of the T-15. The loan bears interest at a rate of LIBOR plus a margin of 5% and matures in May 2016. The outstanding balance as at December 31, 2015 was $109.5 million (December 31, 2014: $109.5 million).Revolving credit facilityIn October 2012 Seadrill Partners entered into a $300 million revolving credit facility with the Company. The facility is for a term of five years and bears interest at a rate of LIBOR plus 5% per annum, with an annual 2% commitment fee on the undrawn balance. In March 2014 the facility was reduced to a maximum of $100 million. The outstanding balance of $125.9 million was repaid in full in March 2014. The outstanding balance as at December 31, 2015 was nil (December 31, 2014: nil).$229.9 million discount note On December 13, 2013, as part of the acquisition of the West Sirius, a subsidiary of Seadrill Partners issued a zero coupon discount note to the Company for $229.9 million. The note was repayable in June 2015 and upon maturity, the Company was due to receive $238.5 million. In February 2014, Seadrill Partners repaid this note in full.$70 million discount note In December 2013, as part of the acquisition of the West Sirius, Seadrill Partners issued a zero coupon discount note to the Company for $70 million. The note was repayable in June 2015 and upon maturity, the Company was due to receive $73 million. In February 2014, Seadrill Partners repaid this note in full.$100 million discount note In March 2014, as part of the acquisition of the West Auriga, Seadrill Partners issued a zero coupon discount note to the Company for $100 million. The note is repayable in September 2015 and upon maturity, the Company will receive $103.7 million. In June 2014, Seadrill Partners repaid this note in full.West Sirius bareboat charter financing loanIn December, 2015, an operating subsidiary of Seadrill Partners borrowed from a subsidiary of the Company $143 million in order to provide sufficient immediate liquidity to meet the terms of its bareboat charter termination payment in connection with the West Sirius contract termination. The loan bears interest at a rate of LIBOR plus 0.56% and matures in July 2017. The outstanding balance as at December 31, 2015 was $143 million (December 31, 2014: nil). Concurrently, the Company borrowed $143 million from a rig owning subsidiary of Seadrill Partners in order to restore its liquidity with respect to the West Sirius bareboat charter financing loan referred to above. The loan bears interest at a rate of LIBOR plus 0.56% and matures in July 2017. The outstanding balance as at December 31, 2015 was $143 million (December 31, 2014: nil). | ||
[3] | Deferred consideration receivableOn the disposal of the West Vela and West Polaris to Seadrill Partners, the Company recognized deferred consideration receivables. Refer to the sections below for more information.West Auriga DisposalOn March 21, 2014, the Company sold the entities that own and operate the West Auriga (the “Auriga business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners that is 49% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information.Purchase of additional limited partner interest in Seadrill Operating LPOn July 21, 2014, the Company sold a 28% limited partner interest in Seadrill Operating LP, a subsidiary of Seadrill Partners, to Seadrill Partners for cash consideration of $373 million. This resulted in a loss on sale of investment of $88 million, which has been recognized within “share in results from associated companies” in the Company’s consolidated statement of operations. Refer to Note 17 - Investments in Associated Companies for more information.West Vela DisposalOn November 4, 2014, the Company sold the entities that own and operate the West Vela (the “Vela business”) to Seadrill Capricorn Holdings LLC, a consolidated subsidiary of Seadrill Partners and 49% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information.West Polaris DisposalOn June 19, 2015, the Company sold the entities that owned and operated the West Polaris (the “Polaris business”), to Seadrill Operating LP (“Seadrill Operating”), a consolidated subsidiary of Seadrill Partners LLC and 42% owned by the Company. The entities continue to be related parties subsequent to the sale. Refer to Note 11 - Disposals of businesses for more information. | ||
[4] | Receivables and PayablesReceivables and payables with Seadrill Partners and its subsidiaries are comprised of management fees, advisory and administrative services, and other items including accrued interest. In addition, certain receivables and payables arise when the Company pays an invoice on behalf of Seadrill Partners or its subsidiaries and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances to Seadrill Partners and its subsidiaries are unsecured and are intended to be settled in the ordinary course of business. |
Related party transactions -162
Related party transactions - Related Party Agreements with Seadrill Partners Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Oct. 31, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | ||
Related Party Transaction [Line Items] | |||||
Revenues related party | $ 119 | $ 97 | $ 2 | ||
Vessel and rig operating expenses | [1] | $ 1,611 | 1,938 | 1,977 | |
Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Management fee, percentage | 8.00% | ||||
Seadrill Partners LLC | Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Technical and administrative service agreement fee, percentage | 5.00% | ||||
Seadrill Partners LLC | Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Revenues related party | [2],[3] | $ 75 | 59 | 0 | |
Other revenues | [4] | 29 | 22 | 0 | |
Operating Insurance and Claims Costs, Production | [5] | (20) | (21) | 0 | |
Oil and Gas Production Expense | [6] | 13 | 0 | 0 | |
Vessel and rig operating expenses | [7] | 2 | 26 | 0 | |
Interest income, related party | [8] | 16 | 40 | 0 | |
Derivatives recharged to Seadrill Partners | [9] | 10 | 42 | 0 | |
Seadrill Management | Seadrill Partners LLC | Equity Method Investee | |||||
Related Party Transaction [Line Items] | |||||
Management fee, percentage | 5.00% | ||||
Management service agreement period | 5 years | ||||
Management service agreement termination notice period | 90 days | ||||
Interest Rate Swap | Seadrill Partners LLC | Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Derivatives recharged to Seadrill Partners | 10 | 42 | 0 | ||
Rig Financing Agreements | Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Interest income, related party | $ 16 | $ 40 | $ 0 | ||
[1] | Includes transactions with related parties. Refer to Note 31. | ||||
[2] | Management and administrative service agreementsIn connection with the IPO, subsidiaries of Seadrill Partners, entered into a management and administrative services agreement with Seadrill Management, a wholly owned subsidiary of the Company, pursuant to which Seadrill Management provides to Seadrill Partners certain management and administrative services. The services provided by Seadrill Management are charged at cost plus management fee equal to 5% of Seadrill Management’s costs and expenses incurred in connection with providing these services. The agreement has an initial term for 5 years and can be terminated by providing 90 days written notice. | ||||
[3] | Technical and administrative service agreement In connection with the IPO, subsidiaries of Seadrill Partners entered into certain advisory, technical and/or administrative services agreements with subsidiaries of the Company. The services provided by the Company’s subsidiaries are charged at cost plus service fee equal to approximately 5% of costs and expenses incurred in connection with providing these services. Income recognized under the above agreements (a) & (b) for the period ended December 31, 2015 was $75 million (2014: $59 million; 2013: nil). | ||||
[4] | Rig operating costs charged to Seadrill PartnersDuring 2015, Seadrill has recharged to Seadrill Partners certain rig operating costs in relation to costs incurred on behalf of the West Polaris and the West Vencedor operating in Angola. The total other revenues earned for the year ending December 31, 2015 was $29.0 million (2014: revenues of $22 million). | ||||
[5] | Insurance premiumsThe Company negotiates insurance for drilling units on a centralized basis. The total insurance premiums related to Seadrill Partners drilling units recharged to Seadrill Partners were $20 million for the year ending December 31, 2015 (2014: $21 million). | ||||
[6] | Rig operating costs charged by Seadrill PartnersDuring 2015, Seadrill Partners has recharged to Seadrill, through its Nigerian service company, certain services, including the provision of onshore and offshore personnel, which was provided for the West Jupiter and West Saturn drilling rigs operating in Nigeria. The total rig operating expenses incurred for the period ending December 31, 2015 was $13 million (2014: nil; 2013: nil). | ||||
[7] | Bareboat charter arrangementsIn connection with the transfer of the West Aquarius operations to Canada, the West Aquarius drilling contract was assigned to Seadrill Canada Ltd., a wholly owned subsidiary of Seadrill Partners, necessitating certain changes to the related party contractual arrangements relating to the West Aquarius. Seadrill China Operations Ltd, the owner of the West Aquarius and a wholly-owned subsidiary of Seadrill Partners, had previously entered into a bareboat charter arrangement with Seadrill Offshore AS, a wholly-owned subsidiary of Seadrill, providing Seadrill Offshore AS with the right to use the West Aquarius. In October 2012, this bareboat charter arrangement was replaced with a new bareboat charter between Seadrill China Operations Ltd and Seadrill Offshore AS, and at the same time, Seadrill Offshore AS entered into a bareboat charter arrangement providing Seadrill Canada Ltd. with the right to use the West Aquarius in order to perform its obligations under the drilling contract described above. For year ended December 31, 2015 the net effect to Seadrill of the bareboat charters was an expense of $1.6 million (2014: net expense of $25.8 million 2013: nil). | ||||
[8] | Interest expensesThe total interest income charged to Seadrill Parters for the above loan arrangements, including commitment fees and other fees, was $16 million for the period ending December 31, 2015 (2014: $40 million; 2013: nil). Refer to the sections below for details on the financing arrangements. | ||||
[9] | Derivative interest rate swap agreementsThe Company recharges interest rate swap agreements to Seadrill Partners on a back to back basis. The total net recharged to Seadrill Partners for the year ended December 31, 2015 was $10 million, (2014: $42 million; 2013: nil). |
Related party transactions - Ri
Related party transactions - Rig Financing Agreements (Details) - USD ($) | Apr. 14, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2012 | Sep. 30, 2012 | Oct. 31, 2010 |
Related Party Transaction [Line Items] | |||||||||
Payments received from loans granted to related parties | $ 233,000,000 | $ 2,096,000,000 | $ 10,000,000 | ||||||
Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 139,000,000 | 159,000,000 | |||||||
Payments received from loans granted to related parties | 1,500,000,000 | ||||||||
West Capricorn | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 523,000,000 | ||||||||
West Vencedor | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 58,000,000 | 78,000,000 | 115,000,000 | ||||||
West Aquarius | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 305,000,000 | ||||||||
West Capella | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 295,000,000 | ||||||||
T-15 | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 101,000,000 | ||||||||
T-16 | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 93,000,000 | ||||||||
West Leo | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | 486,000,000 | ||||||||
West Sirius | Affiliated Entity | Rig Financing Agreements | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 220,000,000 | ||||||||
Secured Debt | US$1,200 facility | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum borrowing capacity | $ 1,200,000,000 | ||||||||
Ship Finance International Loans, $700 facility | SFL West Polaris Limited | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt, face amount | $ 420,000,000 | $ 420,000,000 | $ 700,000,000 | ||||||
Secured Debt | West Vencedor Loan Agreement | Seadrill Partners LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Balloon payment to be paid | $ 21,000,000 | 70,000,000 | |||||||
Basis spread on variable rate | 2.25% | ||||||||
Guarantee fee percentage | 1.40% | ||||||||
Secured Debt | US$1,450 facility | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt, face amount | 1,450,000,000 | 1,450,000,000 | |||||||
Vendor Financing Loan | Credit Facility $143 million, Charter Financing Loan | Seadrill Partners LLC | |||||||||
Related Party Transaction [Line Items] | |||||||||
Due from related parties | $ 143,000,000 | $ 0 |
Related party transactions - De
Related party transactions - Debt Arrangements and Deferred Consideration Receivable (Details) - USD ($) $ in Millions | Jul. 21, 2014 | Dec. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 | Jun. 19, 2015 | Nov. 04, 2014 | Mar. 21, 2014 | Jan. 02, 2014 | Dec. 13, 2013 | May. 31, 2013 |
Related Party Transaction [Line Items] | ||||||||||||||
Revenues related party | $ 119 | $ 97 | $ 2 | |||||||||||
Proceeds from disposal of investments in associated companies | 0 | 373 | 0 | |||||||||||
Share in results from associated companies (net of tax) | $ 190 | 34 | (223) | |||||||||||
Shareholders' ownership percentage | 24.20% | 24.20% | ||||||||||||
Seadrill Partners LLC | Equity Method Investee | Vendor Financing Loan | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Loans receivable, related parties | $ 109.5 | $ 109.5 | 109.5 | $ 109.5 | ||||||||||
Seadrill Partners LLC | Revolving Credit Facility | Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Remaining borrowing capacity | $ 100 | $ 300 | ||||||||||||
Debt instrument term | 5 years | |||||||||||||
Commitment fee (as a percent) | 2.00% | |||||||||||||
Repayments of long-term lines of credit | 125.9 | |||||||||||||
Outstanding balance | 0 | 0 | 0 | |||||||||||
Seadrill Partners LLC | LIBOR | Equity Method Investee | Vendor Financing Loan | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Loan receivable basis spread on variable rate | 5.00% | |||||||||||||
Seadrill Partners LLC | LIBOR | Revolving Credit Facility | Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Description of variable rate basis | LIBOR | |||||||||||||
Basis spread on variable rate | 5.00% | |||||||||||||
US$229.9 Million Notes Receivable | Seadrill Partners LLC | Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Receivable with imputed interest, net amount | $ 229.9 | |||||||||||||
Receivable with Imputed Interest, face amount | $ 238.5 | |||||||||||||
US$70 Million Notes Receivable | Seadrill Partners LLC | Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Receivable with imputed interest, net amount | $ 70 | |||||||||||||
Receivable with Imputed Interest, face amount | $ 73 | |||||||||||||
US$100 Million Notes Receivable | Seadrill Partners LLC | Equity Method Investee | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Receivable with imputed interest, net amount | 100 | |||||||||||||
Receivable with Imputed Interest, face amount | $ 103.7 | |||||||||||||
Credit Facility $143 million, Charter Financing Loan | Vendor Financing Loan | Seadrill Partners LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Due from related parties | $ 143 | 143 | 0 | |||||||||||
Interest rate on related party debt | 0.56% | |||||||||||||
Due to related parties | $ 143 | $ 143 | 0 | |||||||||||
Debt instrument, interest rate | 0.56% | 0.56% | ||||||||||||
Seadrill Capricorn Holdings LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership interest, percentage | 49.00% | 49.00% | 49.00% | |||||||||||
Seadrill Operating LP | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Ownership interest, percentage | 42.00% | 42.00% | 70.00% | |||||||||||
Equity method investment, percentage of investment sold | 28.00% | |||||||||||||
Proceeds from disposal of investments in associated companies | $ 373 | |||||||||||||
Share in results from associated companies (net of tax) | $ (88) | |||||||||||||
Performance Guarantee | Seadrill Partners LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Guarantees | $ 370 | $ 370 | 370 | |||||||||||
Financial Guarantee | Seadrill Partners LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Guarantees | 698 | 698 | 423 | |||||||||||
Custom Guarantee | Nigeria | Seadrill Partners LLC | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Guarantees | $ 86 | $ 86 | $ 92 |
Related party transactions - Sh
Related party transactions - Ship Finance Transactions (Details) - USD ($) | Dec. 30, 2014 | Jun. 28, 2013 | Jul. 01, 2010 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||||||||
Payments of ordinary dividends, noncontrolling Interest | $ 14,000,000 | $ 51,000,000 | $ 69,000,000 | |||||
Long-term debt due to related parties | $ 351,000,000 | 438,000,000 | 351,000,000 | |||||
Interest expense | [1] | 415,000,000 | 478,000,000 | 445,000,000 | ||||
Dividend paid to non controlling interest in VIE | 223,000,000 | |||||||
Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease costs on leased units | $ 193,000,000 | 300,000,000 | 259,000,000 | |||||
SFL Deepwater Ltd | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments of ordinary dividends, noncontrolling Interest | $ 290,000,000 | |||||||
SFL West Polaris Limited | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Payments of ordinary dividends, noncontrolling Interest | $ 145,000,000 | |||||||
Variable Interest Entity, Primary Beneficiary | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate on related party debt | 4.50% | |||||||
North Atlantic Drilling | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Contingent consideration arrangements, maximum | $ 600,000,000 | |||||||
Lease term | 15 years | |||||||
SFL West Polaris Limited | ||||||||
Related Party Transaction [Line Items] | ||||||||
Percentage of voting interests acquired | 100.00% | |||||||
Loans assumed | $ 97,000,000 | |||||||
Total acquisition price | $ 111,000,000 | 111,000,000 | ||||||
Non-controlling interest | ||||||||
Related Party Transaction [Line Items] | ||||||||
Dividend paid to non controlling interest in VIE | 223,000,000 | |||||||
Ship Finance | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate on related party debt | 4.50% | |||||||
Long-term debt due to related parties | 351,000,000 | $ 387,000,000 | 351,000,000 | |||||
Gross loans outstanding | $ 415,000,000 | 415,000,000 | 415,000,000 | |||||
Interest expense | 19,000,000 | 24,000,000 | 20,000,000 | |||||
Ship Finance | North Atlantic Drilling | Affiliated Entity | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest rate on related party debt | 4.50% | |||||||
Long-term debt due to related parties | $ 195,000,000 | 125,000,000 | ||||||
West Polaris | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease costs on leased units | 0 | 55,000,000 | 70,000,000 | |||||
West Hercules | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease costs on leased units | 55,000,000 | 75,000,000 | 77,000,000 | |||||
West Taurus | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease costs on leased units | 57,000,000 | 111,000,000 | 112,000,000 | |||||
West Linus | Ship Finance | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease costs on leased units | $ 81,000,000 | $ 59,000,000 | $ 0 | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Related party transactions - Me
Related party transactions - Metrogas, Frontline, and Seatankers Transactions (Details) NOK in Millions | Mar. 06, 2015 | Aug. 26, 2014USD ($) | Feb. 21, 2014USD ($) | Sep. 20, 2013USD ($) | Jul. 19, 2013NOK | Dec. 20, 2012USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2012NOK | Dec. 10, 2013USD ($) | Mar. 27, 2013NOK | Feb. 27, 2013NOK | Dec. 21, 2012USD ($) | |
Related Party Transaction [Line Items] | |||||||||||||||
Short-term amounts to related party | $ 152,000,000 | $ 189,000,000 | |||||||||||||
Proceeds from debt to related party | 143,000,000 | 90,000,000 | $ 756,000,000 | ||||||||||||
Long-term debt | 10,661,000,000 | 12,620,000,000 | |||||||||||||
Repayments of debt to related party | 0 | 910,000,000 | 1,181,000,000 | ||||||||||||
Net gain/(loss) on debt extinguishment | 8,000,000 | (54,000,000) | 0 | ||||||||||||
Interest expense | [1] | 415,000,000 | 478,000,000 | 445,000,000 | |||||||||||
Credit facility US$1,121 | West Leo | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Long-term debt | 472,600,000 | ||||||||||||||
Term Loan B | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Debt, face amount | $ 1,800,000,000 | ||||||||||||||
Secured Debt | Credit Facility US $1,350 | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Maximum borrowing capacity | $ 1,350,000,000 | ||||||||||||||
Seatankers Management Norway AS | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Related party expense | 600,000 | 0 | 0 | ||||||||||||
Frontline | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Related party expense | 4,000,000 | 4,000,000 | 2,000,000 | ||||||||||||
Metrogas | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Proceeds from sale of unsecured bond | $ 500,000,000 | ||||||||||||||
Accrued interest on sale of unsecured bond | $ 9,000,000 | ||||||||||||||
Short-term amounts to related party | $ 93,000,000 | ||||||||||||||
Interest rate on related party debt | 7.50% | 7.75% | |||||||||||||
Proceeds from debt to related party | $ 415,000,000 | ||||||||||||||
Due to related parties | $ 840,000,000 | ||||||||||||||
Interest expense | $ 0 | $ 1,000,000 | $ 10,000,000 | ||||||||||||
Metrogas | Loans Payable | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Short-term amounts to related party | NOK 140 | NOK 700 | NOK 300 | $ 93,000,000 | |||||||||||
Debt, face amount | $ 99,000,000 | NOK 1,500 | |||||||||||||
Metrogas | Norwegian Interbank Offered Rate (NIBOR) | Loans Payable | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Description of variable rate basis | NIBOR | NIBOR | |||||||||||||
Basis spread on variable rate | 3.50% | ||||||||||||||
Metrogas | LIBOR | Loans Payable | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Description of variable rate basis | LIBOR | ||||||||||||||
Basis spread on variable rate | 3.00% | ||||||||||||||
Metrogas | Credit facility US$1,121 | Affiliated Entity | |||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||
Debt, face amount | 1,121,000,000 | ||||||||||||||
Repayments of debt to related party | $ 436,000,000 | ||||||||||||||
Net gain/(loss) on debt extinguishment | $ 16,000,000 | ||||||||||||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Related party transactions - Ar
Related party transactions - Archer Transactions (Details) £ in Millions | Mar. 06, 2015USD ($) | Feb. 05, 2014GBP (£) | Sep. 20, 2013USD ($) | Mar. 27, 2013USD ($) | Feb. 20, 2013USD ($) | Dec. 20, 2012 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Apr. 30, 2016USD ($) | Dec. 31, 2015NOK | Dec. 31, 2015EUR (€) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014EUR (€) | Jul. 14, 2014USD ($) | May. 31, 2014 | Dec. 09, 2013EUR (€) | Jul. 31, 2013USD ($) | Jul. 19, 2013NOK | Mar. 07, 2013USD ($) | Nov. 12, 2012USD ($) | Jun. 27, 2012USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Investment income, net | [1] | $ 67,000,000 | $ 63,000,000 | $ 24,000,000 | ||||||||||||||||||||
Maximum potential future payment | 5,906,000,000 | 8,404,000,000 | ||||||||||||||||||||||
Revenues related party | 119,000,000 | 97,000,000 | 2,000,000 | |||||||||||||||||||||
Sapura | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Loan receivable basis spread on variable rate | 3.40% | |||||||||||||||||||||||
Maximum potential future payment | 51,000,000 | € 47,000,000 | ||||||||||||||||||||||
Metrogas | Affiliated Entity | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Subordinated loan from related party | $ 50,000,000 | 50,000,000 | ||||||||||||||||||||||
Payments to acquire loans receivable | $ 51,000,000 | |||||||||||||||||||||||
Accrued commitment fee and interest | $ 1,000,000 | |||||||||||||||||||||||
Interest rate on related party debt | 7.50% | 7.75% | ||||||||||||||||||||||
Commitment fee (as a percent) | 1.00% | |||||||||||||||||||||||
Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Loan to related party | $ 10,000,000 | $ 55,000,000 | $ 20,000,000 | |||||||||||||||||||||
Ownership interest, percentage | 39.89% | |||||||||||||||||||||||
Investment income, net | $ 3,000,000 | 0 | 700,000 | |||||||||||||||||||||
Maximum potential future payment | 250,000,000 | $ 100,000,000 | ||||||||||||||||||||||
Guarantee fee percentage | 1.25% | 1.25% | 1.25% | |||||||||||||||||||||
SG&A expenses from transactions with related party | $ 4,000,000 | 4,000,000 | 0 | |||||||||||||||||||||
Loans Payable | Metrogas | Affiliated Entity | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Debt, face amount | $ 99,000,000 | NOK 1,500,000,000 | ||||||||||||||||||||||
Loans Payable | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Debt, face amount | $ 43,000,000 | |||||||||||||||||||||||
LIBOR | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Loan receivable basis spread on variable rate | 5.00% | |||||||||||||||||||||||
LIBOR | Loans Payable | Metrogas | Affiliated Entity | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Description of variable rate basis | LIBOR | |||||||||||||||||||||||
Basis spread on variable rate | 3.00% | |||||||||||||||||||||||
LIBOR | Loans Payable | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Description of variable rate basis | LIBOR | LIBOR | ||||||||||||||||||||||
Basis spread on variable rate | 5.00% | |||||||||||||||||||||||
Financial Guarantee | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Maximum potential future payment | 8,000,000 | NOK 66,000,000 | € 48,600,000 | $ 20,000,000 | € 48,400,000 | |||||||||||||||||||
Guarantee fee percentage | 1.25% | 1.25% | 1.25% | |||||||||||||||||||||
Maximum additional potential future payment | $ 100,000,000 | |||||||||||||||||||||||
Property Lease Guarantee | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Maximum potential future payment | £ | £ 10 | |||||||||||||||||||||||
Guarantee period | 10 years | |||||||||||||||||||||||
Guarantee outstanding | 14,000,000 | 40,000,000 | ||||||||||||||||||||||
Archer | Revolving Credit Facility | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Maximum borrowing capacity | 687,500,000 | $ 750,000,000 | ||||||||||||||||||||||
Additional capital available to related party | 75,000,000 | |||||||||||||||||||||||
Archer | Scenario, Forecast | Revolving Credit Facility | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Maximum borrowing capacity | $ 625,000,000 | |||||||||||||||||||||||
Guarantee Fees Reimbursed [Member] | Archer | Equity Method Investee | ||||||||||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||||||||||
Revenues related party | $ 3,600,000 | $ 3,700,000 | $ 0 | |||||||||||||||||||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Related party transactions -168
Related party transactions - SeaMex Limited (Details) | Mar. 10, 2015USD ($) | Jul. 31, 2015USD ($) | Mar. 31, 2015USD ($) | Mar. 31, 2014facility | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015EUR (€) | May. 31, 2014 |
Related Party Transaction [Line Items] | |||||||||
Debt outstanding | $ 10,661,000,000 | $ 12,620,000,000 | |||||||
Additional investment in equity method investment | 210,000,000 | 586,000,000 | $ 151,000,000 | ||||||
Maximum guarantee | $ 5,906,000,000 | 8,404,000,000 | |||||||
Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Management fee, percentage | 8.00% | 8.00% | |||||||
Frontline | Affiliated Entity | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party expense | $ (4,000,000) | (4,000,000) | (2,000,000) | ||||||
Sapura | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Loan receivable basis spread on variable rate | 3.40% | ||||||||
Interest income, related party | 1,500,000 | 300,000 | 0 | ||||||
Maximum guarantee | $ 51,000,000 | € 47,000,000 | |||||||
Seadrill Jack Up Operations De Mexico | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Management fee, percentage | 5.00% | 5.00% | |||||||
Cumulative percentage ownership | 100.00% | ||||||||
Fintech | |||||||||
Related Party Transaction [Line Items] | |||||||||
Ownership interest, percentage | 50.00% | 50.00% | |||||||
Percentage of funding and cost recovery | 50.00% | ||||||||
Fintech | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Additional investment in equity method investment | $ 19,000,000 | ||||||||
Ownership interest, percentage | 50.00% | 50.00% | |||||||
SeaMex Limited | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Management service agreement termination notice period | 60 days | ||||||||
Other revenues | $ 11,000,000 | 0 | 0 | ||||||
Debt, face amount | $ 250,000,000 | ||||||||
Number of credit facilities | facility | 2 | ||||||||
Debt outstanding | 250,000,000 | 0 | |||||||
Additional short term funding to related party | 76,000,000 | ||||||||
Repayment of short term funding | 31,000,000 | ||||||||
SeaMex Limited | Revolving Credit Facility | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt, face amount | 20,000,000 | ||||||||
SeaMex Limited | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest income, related party | 17,000,000 | 0 | 0 | ||||||
Maximum guarantee | $ 30,000,000 | ||||||||
Guarantee period | 90 days | ||||||||
Outstanding balance | $ 51,000,000 | ||||||||
SeaMex Limited | Unsecured Debt | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Loans receivable, related parties | $ 20,000,000 | ||||||||
Percentage contribution of facility to related party | 50.00% | ||||||||
Loan receivable basis spread on variable rate | 6.50% | 6.50% | |||||||
Drilling units | SeaMex Limited | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Maximum guarantee | $ 30,000,000 | ||||||||
General and Administrative | Seadrill Jack Up Operations De Mexico | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related party expense | $ (10,000,000) | $ 0 | $ 0 | ||||||
Medium-term Notes | SeaMex Limited | Equity Method Investee | |||||||||
Related Party Transaction [Line Items] | |||||||||
Debt, face amount | $ 230,000,000 | ||||||||
Basis spread on variable rate | 6.50% | ||||||||
SeaMex Limited | |||||||||
Related Party Transaction [Line Items] | |||||||||
Consideration receivable | $ 162,000,000 | $ 162,000,000 |
Related party transactions -169
Related party transactions - SeaMex Receivables and Payables (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Related Party Transaction [Line Items] | ||
Seller’s credit | $ 517 | $ 313 |
SeaMex Limited | Equity Method Investee | ||
Related Party Transaction [Line Items] | ||
Interest on related party balances | 1.50% | |
Seller’s credit | $ 250 | 0 |
Short term funding | 45 | 0 |
SeaMex Limited | Equity Method Investee | Other Related Party Receivables | ||
Related Party Transaction [Line Items] | ||
Other receivables | $ 34 | $ 0 |
Related party transactions - Sa
Related party transactions - Sapura and Other Transactions (Details) | Mar. 06, 2015 | Dec. 20, 2012 | Apr. 30, 2015USD ($) | Jan. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015EUR (€) | Sep. 30, 2015USD ($) | May. 31, 2014USD ($) | May. 31, 2014EUR (€) | Nov. 30, 2012USD ($) |
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | $ 5,906,000,000 | $ 8,404,000,000 | ||||||||||
Revenues related party | $ 119,000,000 | 97,000,000 | $ 2,000,000 | |||||||||
Metrogas | Affiliated Entity | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Interest rate on related party debt | 7.50% | 7.75% | ||||||||||
Seabras Sapura Joint Venture | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum exposure ratio | 50.00% | |||||||||||
Sapura | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | $ 51,000,000 | € 47,000,000 | ||||||||||
Maximum exposure ratio | 50.00% | |||||||||||
Notes receivable | $ 11,000,000 | € 3,250,000 | ||||||||||
Loan receivable basis spread on variable rate | 3.40% | 3.40% | ||||||||||
Interest income, related party | $ 1,500,000 | $ 300,000 | $ 0 | |||||||||
Seabras Sapura Participacoes | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||
Ownership percentage held by equity method investee | 50.00% | 50.00% | ||||||||||
Seabras Sapura Holding | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ownership interest, percentage | 50.00% | 50.00% | 50.00% | 50.00% | ||||||||
Ownership percentage held by equity method investee | 50.00% | 50.00% | ||||||||||
Secured Debt | Seabras Sapura Joint Venture | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | $ 256,000,000 | |||||||||||
Maximum exposure ratio | 50.00% | 50.00% | ||||||||||
Maximum borrowing capacity | $ 543,000,000 | |||||||||||
Guarantee period for debt service coverage | 6 months | |||||||||||
Guarantee period for operating expenses | 3 months | |||||||||||
Financial Guarantee | Seabras Sapura Holding | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum additional potential future payment | $ 125,000,000 | $ 375,000,000 | ||||||||||
Seabras Sapura, May 2014 Loan One | Seabras Sapura Joint Venture | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | 11,000,000 | 11,000,000 | ||||||||||
Seabras Sapura, May 2014 Loan Two | Seabras Sapura Joint Venture | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | $ 14,000,000 | 3,000,000 | 5,000,000 | |||||||||
Seabras Sapura, January 2015 Loan | Seabras Sapura Joint Venture | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | $ 18,000,000 | 18,000,000 | 0 | |||||||||
Interest rate on related party debt | 3.40% | |||||||||||
Seabras Sapura, April 2015 Loan | Seabras Sapura Joint Venture | Equity Method Investee | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | 14,000,000 | $ 0 | ||||||||||
Interest rate on related party debt | 3.99% | |||||||||||
Sapura Diamante and Sapura Topazio | Secured Debt | Seabras Sapura Joint Venture | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | 242,000,000 | 267,000,000 | ||||||||||
Sapura Onix, Sapura Jade, and Supra Rubi | Secured Debt | Seabras Sapura Joint Venture | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | 52,000,000 | 26,000,000 | ||||||||||
Maximum borrowing capacity | 780,000,000 | |||||||||||
Sapura Esmeralda | Secured Debt | Seabras Sapura Joint Venture | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Maximum guarantee | $ 170,000,000 | $ 117,000,000 | ||||||||||
Maximum borrowing capacity | $ 179,000,000 |
Risk management and financia171
Risk management and financial instruments - By Maturity (Details) - Interest Rate Swap - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative [Line Items] | ||
Outstanding principal amount | $ 7,088 | $ 7,918 |
2,016 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 1,000 | |
Pay rate, lower limit | 2.14% | |
Pay rate, upper limit | 2.24% | |
2,017 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 18 | |
Pay rate, lower limit | 3.83% | |
Pay rate, upper limit | 3.83% | |
2,018 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 1,406 | |
Pay rate, lower limit | 0.74% | |
Pay rate, upper limit | 3.80% | |
2,019 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 1,000 | |
Pay rate, lower limit | 2.83% | |
Pay rate, upper limit | 3.34% | |
2,020 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 680 | |
Pay rate, lower limit | 1.11% | |
Pay rate, upper limit | 1.36% | |
2,021 | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 2,632 | |
Pay rate, lower limit | 1.36% | |
Pay rate, upper limit | 2.19% | |
Expiring in 2021 and thereafter | ||
Derivative [Line Items] | ||
Outstanding principal amount | $ 352 | |
Minimum | Expiring in 2021 and thereafter | ||
Derivative [Line Items] | ||
Pay rate, lower limit | 1.38% | |
Maximum | Expiring in 2021 and thereafter | ||
Derivative [Line Items] | ||
Pay rate, upper limit | 2.92% |
Risk management and financia172
Risk management and financial instruments - Derivatives with Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary - Interest Rate Swap $ in Millions | Dec. 31, 2015USD ($) |
Swap 32 | |
Derivative [Line Items] | |
Outstanding principal | $ 4 |
Derivative, fixed interest rate | 2.014% |
Swap 33 | |
Derivative [Line Items] | |
Outstanding principal | $ 4 |
Derivative, fixed interest rate | 2.014% |
Swap 34 | |
Derivative [Line Items] | |
Outstanding principal | $ 191.9 |
Derivative, fixed interest rate | 1.7725% |
Risk management and financia173
Risk management and financial instruments - Fair Value of Financial Instruments Table (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | $ 1,044 | $ 831 |
Restricted cash | 248 | 449 |
Related party loans receivable - short term | 371 | 69 |
Related party loans receivable - long term | 464 | 311 |
Current portion of floating rate debt | 1,493 | 1,928 |
Long-term portion of floating rate debt | 6,711 | 7,713 |
Current portion of fixed rate CIRR loans | 33 | 39 |
Long term portion of fixed rate CIRR loans | 43 | 84 |
Fixed interest bonds - short term | 0 | 323 |
Fixed interest bonds - long term | 944 | 1,545 |
Floating interest bonds - long term | 283 | 483 |
Related party fixed rate debt - long term | 415 | 415 |
Carrying value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents | 1,044 | 831 |
Restricted cash | 248 | 449 |
Related party loans receivable - short term | 371 | 69 |
Related party loans receivable - long term | 464 | 311 |
Current portion of floating rate debt | 1,493 | 1,928 |
Long-term portion of floating rate debt | 6,711 | 7,713 |
Current portion of fixed rate CIRR loans | 33 | 39 |
Long term portion of fixed rate CIRR loans | 43 | 84 |
Fixed interest bonds - short term | 0 | 342 |
Fixed interest bonds - long term | 1,840 | 1,892 |
Floating interest bonds - long term | 541 | 622 |
Related party fixed rate debt - long term | $ 415 | $ 415 |
Risk management and financia174
Risk management and financial instruments - Fair Value Measurements of Recurring Assets and Liabilities (Details) - Fair value, recurring basis - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - current and non-current assets | $ 324 | $ 751 |
Total assets | 326 | 756 |
Total liabilities | 426 | 375 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - current and non-current assets | 324 | 751 |
Total assets | 324 | 751 |
Total liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - current and non-current assets | 0 | 0 |
Total assets | 2 | 5 |
Total liabilities | 426 | 375 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities - current and non-current assets | 0 | 0 |
Total assets | 0 | 0 |
Total liabilities | 0 | 0 |
Interest Rate Swap | Short-term payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 124 | 139 |
Interest Rate Swap | Short-term payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Interest Rate Swap | Short-term payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 124 | 139 |
Interest Rate Swap | Short-term payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Interest Rate Swap | Long-term payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 2 | 3 |
Interest Rate Swap | Long-term payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Interest Rate Swap | Long-term payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 2 | 3 |
Interest Rate Swap | Long-term payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Cross Currency Interest Rate Contract | Short-term payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 291 | 201 |
Cross Currency Interest Rate Contract | Short-term payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Cross Currency Interest Rate Contract | Short-term payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 291 | 201 |
Cross Currency Interest Rate Contract | Short-term payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts, payable | 0 | 0 |
Forward Contracts | Short-term payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forwards – current liabilities | 27 | |
Forward Contracts | Short-term payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forwards – current liabilities | 0 | |
Forward Contracts | Short-term payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forwards – current liabilities | 27 | |
Forward Contracts | Short-term payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign exchange forwards – current liabilities | 0 | |
Other Contract | Short-term payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other derivative instruments – current liabilities | 9 | 5 |
Other Contract | Short-term payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other derivative instruments – current liabilities | 0 | 0 |
Other Contract | Short-term payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other derivative instruments – current liabilities | 9 | 5 |
Other Contract | Short-term payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other derivative instruments – current liabilities | 0 | 0 |
Short-term receivable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts – non-current assets | 2 | 5 |
Short-term receivable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts – non-current assets | 0 | 0 |
Short-term receivable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts – non-current assets | 2 | 5 |
Short-term receivable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap contracts – non-current assets | $ 0 | $ 0 |
Risk management and financia175
Risk management and financial instruments - Rollforward of Level 3 Activity (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Beginning balance | $ 4 |
Realization | 6 |
Proceeds on disposal | (10) |
Ending balance | $ 0 |
Risk management and financia176
Risk management and financial instruments - Loss Contingencies (Details) | 12 Months Ended |
Dec. 31, 2015USD ($)rig | |
Uninsured Risk | |
Loss Contingencies [Line Items] | |
Loss contingency, range of possible loss, maximum | $ 5,000,000 |
Number of semi tenders insured | rig | 1 |
Self insured retention period | 60 days |
Self insurance, quota share on loss of hire daily amount, percent | 25.00% |
Loss from Catastrophes | |
Loss Contingencies [Line Items] | |
Insurance combined single limit | $ 100,000,000 |
Minimum | Uninsured Risk | |
Loss Contingencies [Line Items] | |
Compensation period | 210 days |
Maximum | Uninsured Risk | |
Loss Contingencies [Line Items] | |
Compensation period | 290 days |
Risk management and financia177
Risk management and financial instruments - Concentration Risk (Details) - Contract Revenues - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Petrobras | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 19.00% | 20.00% | 16.00% |
Total | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.00% | 13.00% | 14.00% |
Exxon | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.00% | 10.00% | 12.00% |
Statoil | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 12.00% | 13.00% | 14.00% |
Risk management and financia178
Risk management and financial instruments - Narrative (Details) | Mar. 03, 2016USD ($)NOK / sharesshares | Jul. 08, 2015USD ($) | May. 06, 2015NOK / sharesshares | Dec. 31, 2014USD ($)NOK / sharesshares | Sep. 18, 2013USD ($)contract | Jul. 02, 2013USD ($) | Dec. 31, 2015USD ($)shares | Dec. 31, 2015USD ($)NOK / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2014USD ($)NOK / sharesshares | Dec. 31, 2013USD ($) | Feb. 06, 2015NOK |
Derivative [Line Items] | ||||||||||||
Interest paid, net of capitalized interest | $ 458,000,000 | $ 493,000,000 | $ 336,000,000 | |||||||||
Option indexed to issuer's equity, settlement alternatives, cash, at fair value | NOK | NOK 134,000,000 | |||||||||||
Restructuring and related activities, ratio of distributed shares from previous to current entity | 2000.00% | |||||||||||
Derivative, collateral, right to reclaim cash | $ 93,000,000 | |||||||||||
Cash and restricted cash | $ 449,000,000 | $ 248,000,000 | $ 248,000,000 | 449,000,000 | $ 449,000,000 | |||||||
Marketable securities pledged as collateral | 325,000,000 | 228,000,000 | 228,000,000 | 325,000,000 | 325,000,000 | |||||||
Derivative financial instruments | 250,000,000 | 160,000,000 | 160,000,000 | 250,000,000 | 250,000,000 | |||||||
Total Return Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gross liability | $ (5,000,000) | (9,000,000) | $ (9,000,000) | (5,000,000) | $ (5,000,000) | |||||||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ (27,000,000) | $ (73,000,000) | 19,000,000 | |||||||||
Option agreement, shares | shares | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | 4,000,000 | |||||||
Option agreement, strike price | NOK / shares | $ 49.6 | $ 96.02 | ||||||||||
Other Contract | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ (3,000,000) | $ (19,000,000) | 30,000,000 | |||||||||
SapuraKencana Share Agreements | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gross liability | $ (103,000,000) | (135,000,000) | $ (135,000,000) | (103,000,000) | $ (103,000,000) | |||||||
Derivative, fixed interest rate | 2.60% | |||||||||||
Number of instruments held | contract | 2 | |||||||||||
Proceeds from derivative instrument, financing activities | $ 250,000,000 | |||||||||||
Derivative, term of contract (in years) | 3 years | |||||||||||
Description of variable rate basis | LIBOR | |||||||||||
Derivative, basis spread on variable rate | 1.90% | |||||||||||
Proceeds from derivative instrument, financing activities, reduction in proceeds received | $ 90,000,000 | |||||||||||
Cash and restricted cash | 160,000,000 | |||||||||||
Gross asset | 103,000,000 | 135,000,000 | 135,000,000 | 103,000,000 | 103,000,000 | |||||||
Interest Rate Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Outstanding principal amount | 7,918,000,000 | 7,088,000,000 | 7,088,000,000 | 7,918,000,000 | 7,918,000,000 | |||||||
Gross liability | (191,000,000) | (143,000,000) | (143,000,000) | (191,000,000) | (191,000,000) | |||||||
Net liability | (134,000,000) | (122,000,000) | (122,000,000) | (134,000,000) | (134,000,000) | |||||||
Derivative asset | 5,000,000 | 2,000,000 | 2,000,000 | 5,000,000 | 5,000,000 | |||||||
Gain (Loss) on interest rate derivative instruments, not designated as hedging instruments | (129,000,000) | (176,000,000) | 143,000,000 | |||||||||
Cross Currency Interest Rate Contract | ||||||||||||
Derivative [Line Items] | ||||||||||||
Outstanding principal amount | 807,000,000 | 807,000,000 | 807,000,000 | 807,000,000 | 807,000,000 | |||||||
Gross liability | (201,000,000) | (291,000,000) | (291,000,000) | (201,000,000) | (201,000,000) | |||||||
Gain (Loss) on interest rate derivative instruments, not designated as hedging instruments | (106,000,000) | (171,000,000) | (10,000,000) | |||||||||
Forward Contracts | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gain (Loss) on interest rate derivative instruments, not designated as hedging instruments | (9,000,000) | (58,000,000) | $ (49,000,000) | |||||||||
Forward Contracts | Forward Contracts | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gross liability | (24,000,000) | $ 0 | $ 0 | (24,000,000) | (24,000,000) | |||||||
Forward Contract 2 | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gross liability | (2,600,000) | (2,600,000) | (2,600,000) | |||||||||
Sevan Drilling | ||||||||||||
Derivative [Line Items] | ||||||||||||
Stock repurchase program, number of shares authorized to be repurchased | shares | 14,894,699 | 14,894,699 | ||||||||||
Minimum | Cross Currency Interest Rate Contract | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative maturity date | Mar. 1, 2018 | |||||||||||
Derivative, fixed interest rate | 4.94% | 4.94% | ||||||||||
Maximum | Cross Currency Interest Rate Contract | ||||||||||||
Derivative [Line Items] | ||||||||||||
Derivative maturity date | Mar. 1, 2019 | |||||||||||
Derivative, fixed interest rate | 6.1825% | 6.1825% | ||||||||||
Variable Interest Entity, Primary Beneficiary | Interest Rate Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Other comprehensive income, unrealized gain (loss) on interest rate swaps in VIEs | $ 0 | 0 | ||||||||||
Interest paid, net of capitalized interest | 3,000,000 | 4,000,000 | ||||||||||
Variable Interest Entity, Primary Beneficiary | Ship Finance Variable Interest Entities | Interest Rate Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Gross liability | $ (3,000,000) | $ (2,000,000) | $ (2,000,000) | $ (3,000,000) | $ (3,000,000) | |||||||
Strike Price 1 | Sevan Drilling | ||||||||||||
Derivative [Line Items] | ||||||||||||
Option agreement, shares | shares | 10,803,274 | 10,803,274 | ||||||||||
Option agreement, strike price | NOK / shares | $ 8.9482 | |||||||||||
Strike Price 1 | Sevan Drilling ASA | ||||||||||||
Derivative [Line Items] | ||||||||||||
Option agreement, shares | shares | 216,065,464 | 216,065,464 | 216,065,464 | 216,065,464 | ||||||||
Option agreement, strike price | NOK / shares | NOK 0.6247 | $ 4.1701 | ||||||||||
Strike Price 2 | Sevan Drilling | ||||||||||||
Derivative [Line Items] | ||||||||||||
Option agreement, shares | shares | 4,091,425 | 4,091,425 | ||||||||||
Option agreement, strike price | NOK / shares | NOK 0.6243 | $ 8.5539 | ||||||||||
Strike Price 2 | Sevan Drilling ASA | ||||||||||||
Derivative [Line Items] | ||||||||||||
Option agreement, shares | shares | 81,828,500 | 81,828,500 | 81,828,500 | 81,828,500 | ||||||||
Option agreement, strike price | NOK / shares | $ 4.1966 | |||||||||||
Other Current Liabilities | Sevan Share Repurchase Agreement | ||||||||||||
Derivative [Line Items] | ||||||||||||
Associated liabilities | $ 167,000,000 | $ 16,000,000 | $ 16,000,000 | $ 167,000,000 | $ 167,000,000 | |||||||
Other Noncurrent Liabilities | SapuraKencana Share Agreements | ||||||||||||
Derivative [Line Items] | ||||||||||||
Proceeds from derivative instrument, financing activities | $ 160,000,000 | |||||||||||
Derivative financial instruments | $ 250,000,000 | $ 160,000,000 | $ 160,000,000 | $ 250,000,000 | $ 250,000,000 | |||||||
Subsequent Event | Total Return Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Option agreement, shares | shares | 4,000,000 | |||||||||||
Option agreement, strike price | NOK / shares | NOK 21.1611 | |||||||||||
Subsequent Event | Interest Rate Swap | ||||||||||||
Derivative [Line Items] | ||||||||||||
Outstanding principal amount | NOK 200,000,000 | |||||||||||
Sevan Drilling ASA | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair value of the consideration received | $ 392,000,000 | |||||||||||
Stock repurchase program, number of shares authorized to be repurchased | shares | 297,893,964 | 297,893,964 | ||||||||||
Sevan Drilling | ||||||||||||
Derivative [Line Items] | ||||||||||||
Fair value of the consideration received | $ 4,000,000 |
Commitments and contingencies -
Commitments and contingencies - Legal Proceedings and Purchase Commitments (Details) | Jul. 23, 2015USD ($) | Feb. 29, 2016USD ($) | Dec. 31, 2015USD ($)rigdrillshipcontract | Apr. 15, 2016USD ($) | Oct. 29, 2015USD ($) | Dec. 31, 2014USD ($) |
Purchase Commitment [Line Items] | ||||||
Assets pledged under mortgages and overdraft facilities | $ 14,596,000,000 | $ 17,772,000,000 | ||||
Marketable securities pledged as collateral | $ 228,000,000 | 325,000,000 | ||||
Number of newbuilding contracts | contract | 13 | |||||
Number of new building contracts for semi submersible rigs | rig | 1 | |||||
Number of new building contracts for jack up rigs | rig | 8 | |||||
Number of newbuilding contracts for drillships | drillship | 4 | |||||
Maturity schedule for contractual commitments [Abstract] | ||||||
2,016 | $ 188,000,000 | |||||
2,017 | 2,158,000,000 | |||||
2,018 | 1,174,000,000 | |||||
2,019 | 529,000,000 | |||||
2,020 | 0 | |||||
2021 and thereafter | 0 | |||||
Purchase commitments | 4,049,000,000 | $ 5,389,000,000 | ||||
North Atlantic Drilling | ||||||
Purchase Commitment [Line Items] | ||||||
Loss contingency recognized | $ 0 | |||||
Sevan Drilling ASA | ||||||
Purchase Commitment [Line Items] | ||||||
Purchase obligation, minimum deferred delivery period | 12 months | |||||
Purchase obligation, exercisable interval period | 6 months | |||||
Purchase obligation, maximum deferred delivery period | 36 months | |||||
Purchase obligation, percentage of contract price | 85.00% | |||||
Interest receivable | $ 3,000,000 | |||||
Maturity schedule for contractual commitments [Abstract] | ||||||
Purchase commitments | $ 447,000,000 | |||||
Sevan Drilling | ||||||
Purchase Commitment [Line Items] | ||||||
Purchase obligation, amended amount | $ 447,000,000 | |||||
Purchase obligation, refund, percentage | 5.00% | |||||
Purchase obligation, refund | $ 26,000,000 | |||||
Maturity schedule for contractual commitments [Abstract] | ||||||
Purchase commitments | $ 526,000,000 | |||||
Rosneft Transaction | ||||||
Purchase Commitment [Line Items] | ||||||
Loss contingency, estimated backlog of transaction | $ 4,100,000,000 | |||||
Subsequent Event | North Atlantic Drilling | ||||||
Purchase Commitment [Line Items] | ||||||
Amounts invoiced not paid | $ 36,200,000 | |||||
Recorded provision | $ 0 | |||||
Subsequent Event | Sevan Drilling | ||||||
Purchase Commitment [Line Items] | ||||||
Purchase obligation, amended amount | $ 473,400,000 | |||||
Purchase obligation, percentage of contract price | 90.00% | |||||
Purchase obligation, refund, percentage | 5.00% | |||||
Purchase obligation, refund | $ 26,300,000 |
Commitments and contingencie180
Commitments and contingencies - Guarantees (Details) | Dec. 31, 2015USD ($) | Dec. 31, 2015GBP (£) | [2] | Dec. 31, 2015EUR (€) | Dec. 31, 2014USD ($) | Dec. 31, 2014GBP (£) | Dec. 31, 2014EUR (€) | ||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | $ 5,906,000,000 | $ 8,404,000,000 | |||||||
Performance Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | [1],[2],[3] | 1,530,000,000 | 1,824,000,000 | ||||||
Guarantee in favor of banks | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | [1],[2],[3],[4] | 1,632,000,000 | 1,254,000,000 | ||||||
Guarantee in favor of suppliers | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | [1],[3],[4] | 2,744,000,000 | 3,898,000,000 | ||||||
Seadrill Partners LLC | Performance Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guarantee outstanding | 370,000,000 | 370,000,000 | |||||||
Seadrill Partners LLC | Financial Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guarantee outstanding | 698,000,000 | 423,000,000 | |||||||
SeaMex Limited | Performance Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guarantee outstanding | 30,000,000 | 0 | |||||||
SeaMex Limited | Financial Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guarantee outstanding | 81,000,000 | 0 | |||||||
Nigeria | Seadrill Partners LLC | Custom Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Guarantee outstanding | 86,000,000 | 92,000,000 | |||||||
Seabras Sapura Holding | Guarantee in favor of suppliers | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 125,000,000 | $ 375,000,000 | |||||||
Archer Limited | Performance Guarantee | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 8,000,000 | ||||||||
Archer Limited | Guarantee in favor of banks | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 268,000,000 | € 33,000,000 | $ 370,000,000 | € 48,000,000 | |||||
Archer Limited | Guarantee in favor of suppliers | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 14,000,000 | [2] | £ 9,000,000 | 40,000,000 | £ 26,000,000 | ||||
Seabras Sapura Participacoes and Seabras Sapura Holdco [Member] | Guarantee in favor of banks | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 550,000,000 | 293,000,000 | |||||||
Seabras Sapura Participacoes | Guarantee in favor of suppliers | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | 0 | € 0 | 60,000,000 | € 47,000,000 | |||||
Euro Member Countries, Euro | Archer Limited | Guarantee in favor of banks | |||||||||
Guarantor Obligations [Line Items] | |||||||||
Maximum guarantee | $ 36,000,000 | $ 71,900,000 | |||||||
[1] | Guarantees to Archer - Within guarantees provided to customers are guarantees provided on behalf of Archer of $8 million (2014: nil). Within guarantees in favor of banks are guarantees provided on behalf of Archer of $268 million and EUR 33 million ($36 million) (2014: $370 million and EUR 48 million ($71.9 million)). Guarantees in favor of suppliers includes guarantees on behalf of Archer of GBP 9 million ($14 million) (2014: GBP 26 million ($40 million)). See Note 31 to the consolidated financial statements included herein. | ||||||||
[2] | Guarantees to SeaMex - Within guarantees in favor of customers are guarantees provided on behalf of SeaMex of $30 million (2014: $0 million). Guarantees in favor of banks includes guarantees on behalf of SeaMex of $81 million (2014: $0 million). See Note 31 to the consolidated financial statements included herein. | ||||||||
[3] | Guarantees to Seadrill Partners - Within guarantees in favor of customers are guarantees provided on behalf of Seadrill Partners of $370 million (2014: $370 million). Guarantees in favor of banks include guarantees provided on behalf of Seadrill Partners of $698 million (2014: $423 million). Guarantees in favor of suppliers includes guarantees on behalf of Seadrill Partners of $86 million (2014: $92 million). See Note 31 to the consolidated financial statements included herein. | ||||||||
[4] | Guarantees to Seabras Sapura -Within guarantees in favor of banks are guarantees provided on behalf of Seabras Sapura Participacoes and Seabras Sapura Holdco totaling $550 million (2014: $293 million). Within guarantees in favor of suppliers are guarantees provided in relation to our joint ventures Seabras Sapura Participacoes and Seabras Sapura Holdco of EUR 0 million ($0 million) and $125 million respectively (2014: EUR 47 million ($60 million) and $375 million respectively). See Note 31 to the consolidated financial statements included herein. |
Operating leases (Details)
Operating leases (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Leases, Operating [Abstract] | |||
Rent expense | $ 23 | $ 24 | $ 21 |
Operating leases, future minimum payments due, fiscal year maturity [Abstract] | |||
2,016 | 11 | ||
2,017 | 10 | ||
2,018 | 8 | ||
2,019 | 6 | ||
2,020 | 6 | ||
2021 and thereafter | 13 | ||
Total | $ 54 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) | Dec. 30, 2014USD ($) | Jun. 28, 2013USD ($) | Jun. 28, 2013USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($)rig | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Jan. 02, 2014USD ($) |
Sale Leaseback Transaction [Line Items] | ||||||||
Number of semi submersible rigs under sale leaseback arrangements | rig | 2 | |||||||
Term of lease contracts | 15 years | |||||||
Long-term debt due to related parties | $ 351,000,000 | $ 438,000,000 | $ 351,000,000 | |||||
Deemed contribution to Seadrill shareholders from non-controlling interest | 13,000,000 | $ 209,000,000 | ||||||
Amount due from related party - current | 402,000,000 | 639,000,000 | 402,000,000 | |||||
Short-term amounts to related party | 189,000,000 | 152,000,000 | 189,000,000 | |||||
Variable Interest Entity, Primary Beneficiary | North Atlantic Drilling | West Linus | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Contingent consideration arrangements, maximum | $ 600,000,000 | |||||||
Lease term | 15 years | |||||||
SFL West Polaris Limited | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Percentage of voting interests acquired | 100.00% | |||||||
Loans assumed | $ 97,000,000 | |||||||
Total acquisition price | 111,000,000 | 111,000,000 | ||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 7,000,000 | |||||||
Additional paid in capital | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | 6,000,000 | $ (209,000,000) | ||||||
Additional paid in capital | SFL West Polaris Limited | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Deemed contribution to Seadrill shareholders from non-controlling interest | 6,000,000 | |||||||
Affiliated Entity | West Linus | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Amount due from related party - current | 14,000,000 | 14,000,000 | ||||||
Affiliated Entity | Ship Finance | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Long-term debt due to related parties | 351,000,000 | $ 387,000,000 | 351,000,000 | |||||
Interest rate on related party debt | 4.50% | |||||||
Affiliated Entity | Ship Finance | North Atlantic Drilling | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Long-term debt due to related parties | $ 195,000,000 | $ 195,000,000 | $ 125,000,000 | |||||
Interest rate on related party debt | 4.50% | |||||||
Affiliated Entity | SFL Deepwater Ltd | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Amount due from related party - current | 45,000,000 | 45,000,000 | ||||||
Short-term amounts to related party | 8,000,000 | |||||||
Affiliated Entity | SFL Hercules Ltd | ||||||||
Sale Leaseback Transaction [Line Items] | ||||||||
Amount due from related party - current | $ 5,000,000 | $ 5,000,000 | ||||||
Short-term amounts to related party | $ 20,000,000 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Sale and Leaseback Arrangements (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2015USD ($) | ||
West Taurus | ||
Variable Interest Entity [Line Items] | ||
Effective from | Nov 2,008 | |
Sale value (In $ millions) | $ 850 | |
First repurchase option (In $ millions) | $ 418 | |
Month of first repurchase option | February 2,015 | |
Last repurchase option (In $ millions) | $ 149 | [1] |
Last repurchase option (In $ millions) | November 2,023 | [1] |
West Hercules | ||
Variable Interest Entity [Line Items] | ||
Effective from | Oct 2008 | |
Sale value (In $ millions) | $ 850 | |
First repurchase option (In $ millions) | $ 580 | |
Month of first repurchase option | August 2,011 | |
Last repurchase option (In $ millions) | $ 135 | [1] |
Last repurchase option (In $ millions) | August 2,023 | [1] |
West Linus | ||
Variable Interest Entity [Line Items] | ||
Effective from | June 2,013 | |
Sale value (In $ millions) | $ 600 | |
First repurchase option (In $ millions) | $ 370 | |
Month of first repurchase option | June 2,018 | |
Last repurchase option (In $ millions) | $ 170 | [1] |
Last repurchase option (In $ millions) | June 2,028 | [1] |
Repurchase obligation | $ 100 | |
[1] | Ship Finance has a right to require the Company to purchase the West Linus rig on the 15th anniversary for the price of $100 million if the Company doesn’t exercise the final repurchase option. |
Variable Interest Entities -184
Variable Interest Entities - Summary of Bareboat Charter Rates per Day (Details) $ / d in Thousands | Dec. 31, 2015$ / d |
West Taurus | |
Sale Leaseback Transaction [Line Items] | |
2,015 | 186 |
2,016 | 165 |
2,017 | 158 |
2,018 | 158 |
2,019 | 144 |
2,020 | 143 |
West Hercules | |
Sale Leaseback Transaction [Line Items] | |
2,015 | 190 |
2,016 | 179 |
2,017 | 170 |
2,018 | 166 |
2,019 | 143 |
2,020 | 141 |
West Linus | |
Sale Leaseback Transaction [Line Items] | |
2,015 | 222 |
2,016 | 222 |
2,017 | 222 |
2,018 | 222 |
2,019 | 173 |
2,020 | 140 |
Variable Interest Entities - As
Variable Interest Entities - Assets and Liabilities in Statutory Accounts of VIEs (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Variable Interest Entity [Line Items] | |||
Book value of units in the Company's consolidated accounts | [1] | $ 14,930 | $ 15,145 |
SFL Deepwater Ltd | |||
Variable Interest Entity [Line Items] | |||
Investment in finance lease | 394 | 429 | |
Amount due from related parties | 4 | 45 | |
Other assets | 2 | 13 | |
Total assets | 400 | 487 | |
Short-term interest bearing debt | 23 | 32 | |
Long-term interest bearing debt | 198 | 271 | |
Other liabilities | 3 | 6 | |
Long-term debt due to related parties | 137 | 145 | |
Total liabilities | 361 | 454 | |
Equity | 39 | 33 | |
Book value of units in the Company's consolidated accounts | 434 | 450 | |
West Hercules | |||
Variable Interest Entity [Line Items] | |||
Investment in finance lease | 394 | 426 | |
Amount due from related parties | 5 | 5 | |
Other assets | 2 | 10 | |
Total assets | 401 | 441 | |
Short-term interest bearing debt | 28 | 28 | |
Long-term interest bearing debt | 229 | 256 | |
Other liabilities | 1 | 1 | |
Long-term debt due to related parties | 125 | 145 | |
Total liabilities | 383 | 430 | |
Equity | 18 | 11 | |
Book value of units in the Company's consolidated accounts | 571 | 603 | |
West Linus | |||
Variable Interest Entity [Line Items] | |||
Investment in finance lease | 530 | 574 | |
Amount due from related parties | 0 | 14 | |
Other assets | 0 | 0 | |
Total assets | 530 | 588 | |
Short-term interest bearing debt | 51 | 51 | |
Long-term interest bearing debt | 302 | 400 | |
Other liabilities | 2 | 3 | |
Short-term debt due to related parties | 23 | ||
Long-term debt due to related parties | 125 | 125 | |
Total liabilities | 503 | 579 | |
Equity | 27 | 9 | |
Book value of units in the Company's consolidated accounts | $ 559 | $ 581 | |
[1] | The fixed assets referred to in the table are the Company’s operating drilling units. Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. |
Equity offerings and drillin186
Equity offerings and drilling unit sale transactions with Seadrill Partners - Sale of Seadrill Partners Equity (Details) - Seadrill Partners LLC - USD ($) $ / shares in Units, $ in Millions | Dec. 13, 2013 | Oct. 18, 2013 | Oct. 24, 2012 | Oct. 24, 2012 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2014 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Common unit price representing liability entity's interests (in USD per share) | $ 29.5 | $ 32.29 | $ 22 | $ 22 | |||
Gross proceeds from completion of IPO | $ 380 | $ 0 | $ 221 | $ 221 | |||
Net proceeds from public | $ 365 | $ 0 | $ 203 | $ 203 | |||
Noncontrolling interest ownership percentage | 62.35% | 77.47% | 75.67% | 75.67% | 77.47% | 62.35% | |
Stock Issued to Public | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of common units issued (in shares) | 12,880,000 | 0 | 10,062,500 | 12,880,000 | |||
Stock Issued to Reporting Entity | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of common units issued (in shares) | 3,394,916 | 3,310,622 | 14,752,525 | 3,394,916 | 3,310,622 |
Equity offerings and drillin187
Equity offerings and drilling unit sale transactions with Seadrill Partners - Sale of Company Drilling Units to Seadrill Partners (Details) - USD ($) $ in Millions | 12 Months Ended | 14 Months Ended | |
Dec. 31, 2014 | Jan. 02, 2014 | ||
Redeemable Noncontrolling Interest [Line Items] | |||
Adjusted sales price | [1] | $ 1,793 | |
Less net assets transferred | (486) | ||
Excess of sales price over net assets transferred | 1,307 | ||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 13 | 209 | |
T15 | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Adjusted sales price | [1] | 74 | |
Less net assets transferred | 5 | ||
Excess of sales price over net assets transferred | 79 | ||
Deemed contribution to Seadrill shareholders from non-controlling interest | 19 | ||
T16 | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Adjusted sales price | [1] | 68 | |
Less net assets transferred | 0 | ||
Excess of sales price over net assets transferred | 68 | ||
Deemed contribution to Seadrill shareholders from non-controlling interest | 16 | ||
West Sirius | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Adjusted sales price | [1] | 922 | |
Less net assets transferred | (375) | ||
Excess of sales price over net assets transferred | 547 | ||
Deemed contribution to Seadrill shareholders from non-controlling interest | 105 | ||
West Leo | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Adjusted sales price | [1] | 729 | |
Less net assets transferred | (116) | ||
Excess of sales price over net assets transferred | 613 | ||
Deemed contribution to Seadrill shareholders from non-controlling interest | $ 69 | ||
[1] | The Adjusted sales price above includes debt assumed and working capital adjustments. |
Equity offerings and drillin188
Equity offerings and drilling unit sale transactions with Seadrill Partners - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 13, 2013 | Oct. 18, 2013 | Oct. 18, 2013 | May. 17, 2013 | Oct. 24, 2012 | Oct. 24, 2012 | Dec. 31, 2013 | Oct. 31, 2013 | Dec. 31, 2013 |
Seadrill Partners LLC | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Offering Price (in USD per share) | $ 29.5 | $ 32.29 | $ 32.29 | $ 22 | $ 22 | ||||
Gross proceeds from public | $ 380 | $ 0 | $ 0 | $ 221 | $ 221 | ||||
Net proceeds from public | 365 | 0 | $ 203 | $ 203 | |||||
Non-controlling interest | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Issuances of common units by Seadrill Partners and impact on non-controlling interest | 83 | $ 19 | $ 102 | ||||||
Issuance of common units by Seadrill Partners LLC to public | $ 137 | ||||||||
West Leo | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Ownership percentage disposed | 30.00% | ||||||||
Sale price | $ 1,250 | ||||||||
Debt assumed | (486) | ||||||||
Working capital adjustments | $ 35 | ||||||||
West Sirius | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Ownership percentage disposed | 51.00% | ||||||||
Sale price | $ 1,035 | ||||||||
Debt assumed | (220) | ||||||||
Working capital adjustments | $ 107 | ||||||||
T16 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Ownership percentage disposed | 100.00% | ||||||||
Sale price | 200 | $ 200 | |||||||
Debt assumed | (93) | (93) | |||||||
Working capital adjustments | $ 39 | $ 39 | |||||||
T15 | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Ownership percentage disposed | 100.00% | ||||||||
Sale price | $ 210 | ||||||||
Debt assumed | (101) | ||||||||
Working capital adjustments | 35 | ||||||||
T-15 | Seadrill Partners LLC | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Loans receivable, related parties | $ 110 | ||||||||
Stock Issued to Reporting Entity | Seadrill Partners LLC | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Number of common units issued (in shares) | 3,394,916 | 3,310,622 | 14,752,525 | 3,394,916 | 3,310,622 | ||||
Underwrite Placement | Seadrill Partners LLC | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Number of common units issued (in shares) | 1,680,000 | ||||||||
Stock Issued to Public | Seadrill Partners LLC | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Number of common units issued (in shares) | 12,880,000 | 0 | 10,062,500 | 12,880,000 |
Assets held for sale (Details)
Assets held for sale (Details) - USD ($) $ in Millions | Dec. 02, 2015 | Mar. 10, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Investment owned, ownership percentage | 23.00% | |||||
Loss on disposal | [1] | $ (63) | $ 632 | $ 61 | ||
Book value on disposal | 16,409 | 17,175 | ||||
Current assets | ||||||
Accounts receivables, net | 0 | 78 | ||||
Total current assets | 0 | 134 | ||||
Non-current assets | ||||||
Total non-current assets | 128 | 1,105 | ||||
Total assets | 128 | 1,239 | ||||
Current liabilities | ||||||
Total current liabilities | 0 | (58) | ||||
Non-current liabilities | ||||||
Total non-current liabilities | $ 0 | (50) | ||||
SeaMex Limited | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal | $ 181 | |||||
Current assets | ||||||
Cash and cash equivalents | 40 | 27 | ||||
Accounts receivables, net | 78 | |||||
Deferred tax assets | 8 | 9 | ||||
Other current assets | 20 | 20 | ||||
Total current assets | 68 | 134 | ||||
Non-current assets | ||||||
Drilling units | 969 | 965 | ||||
Deferred tax assets LT | 4 | 5 | ||||
Goodwill | 49 | 49 | ||||
Other non-current assets | 86 | 86 | ||||
Total non-current assets | 1,108 | 1,105 | ||||
Total assets | 1,176 | 1,239 | ||||
Current liabilities | ||||||
Trade accounts payable | (1) | (2) | ||||
Other current liabilities | (56) | (56) | ||||
Total current liabilities | (57) | (58) | ||||
Non-current liabilities | ||||||
Other non-current liabilities | (60) | (50) | ||||
Total non-current liabilities | (60) | (50) | ||||
Total liabilities | $ (117) | $ (108) | ||||
SeaMex Limited | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Third party ownership interest | 50.00% | 50.00% | ||||
SeaMex Limited | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Ownership interest prior to disposal | 100.00% | |||||
Jurong Shipyard | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Investment owned, ownership percentage | 77.00% | |||||
Exploration and Production Equipment | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Book value on disposal | $ 14,930 | $ 15,145 | $ 12 | |||
Exploration and Production Equipment | West Rigel | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal | $ (82) | (82) | ||||
Book value on disposal | $ 210 | 210 | ||||
Net proceeds/recoverable amount | 128 | |||||
Exploration and Production Equipment | SeaMex Limited | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal | 181 | |||||
Book value on disposal | 1,059 | |||||
Net proceeds/recoverable amount | 1,240 | |||||
Exploration and Production Equipment | Gain (Loss) on Disposal | West Rigel | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Loss on disposal | (82) | |||||
Book value on disposal | 210 | |||||
Net proceeds/recoverable amount | $ 128 | |||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Assets held for sale - Rigel Sa
Assets held for sale - Rigel Sale (Details) - USD ($) $ in Millions | Dec. 02, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Book value on disposal | $ 16,409 | $ 17,175 | |||
Loss on disposal | [1] | (63) | 632 | $ 61 | |
Drilling units | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Book value on disposal | 14,930 | $ 15,145 | $ 12 | ||
Drilling units | West Rigel | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Book value on disposal | $ 210 | 210 | |||
Loss on disposal | $ (82) | (82) | |||
Non-current assets held for sale | 128 | ||||
Drilling units | Gain (Loss) on Disposal | West Rigel | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Book value on disposal | 210 | ||||
Loss on disposal | (82) | ||||
Non-current assets held for sale | $ 128 | ||||
[1] | Includes transactions with related parties. Refer to Note 31. |
Supplementary cash flow info191
Supplementary cash flow information (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 31, 2010 | ||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Disposal of subsidiaries - existing bank loan repaid | [1] | $ 150,000,000 | $ 0 | $ 0 | ||
Noncash Financing Activities, Repayment of Loan | [1] | (150,000,000) | 0 | 0 | ||
Noncash Financing Activities, Repayment of Forward Contracts and Other Derivatives | [2] | (136,000,000) | 0 | 0 | ||
Repayment relating to SapuraKencana financing agreements | (2,999,000,000) | (4,344,000,000) | (4,919,000,000) | |||
Conversion of convertible bond into shares, decrease in long term debt | [3] | 0 | 584,000,000 | 0 | ||
Conversion of convertible bond into shares, net increase in equity | [3] | 0 | 615,000,000 | 0 | ||
Purchase of SFL Polaris, net increase in related party payables and net decrease in equity | [4] | 0 | 13,000,000 | 0 | ||
Dividend to non-controlling interests in VIEs | [5] | 0 | 0 | 223,000,000 | ||
Conversion of convertible bond | 615,000,000 | |||||
West Auriga | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Disposal of West Auriga - consideration received as a loan note | [6] | 0 | 100,000,000 | 0 | ||
West Vela | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Deferred consideration receivable | [6] | 0 | 74,000,000 | 0 | ||
Tender Rig Business | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Deferred consideration receivable | [6] | 0 | 145,000,000 | |||
Disposal of tender rig business - deferred consideration received in shares | [6] | 0 | 416,000,000 | |||
Archer | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Settled against existing related party loan | [7] | 0 | 0 | 55,000,000 | ||
Asia Offshore Drilling | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Settled against existing related party loan | [8] | 0 | 0 | 67,000,000 | ||
Sapura Kencana | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Repayment relating to SapuraKencana financing agreements | [9] | (93,000,000) | $ 0 | $ 0 | ||
Convertible bonds due 2017 | ||||||
Schedule of Supplemental Cash Flow Elements [Line Items] | ||||||
Conversion of convertible bond into shares, decrease in long term debt | $ 649,000,000 | |||||
Principal amount | $ 650,000,000 | $ 650,000,000 | ||||
Fixed interest rate | 3.375% | 3.375% | ||||
Conversion price (in dollars per share) | $ 27.69 | $ 38.92 | ||||
Incentive payment per $100,000 of principal | $ 12,102.95 | |||||
Number of shares issued due to conversion of convertible debt instruments (in shares) | 23.8 | |||||
Conversion of convertible bond | $ 893,000,000 | |||||
Consideration transferred on conversion | $ 278,000,000 | $ (278,000,000) | ||||
[1] | Existing debt of the Company was directly settled as consideration for the disposal of certain drilling rigs to the SeaMex joint venture - see Note 5 to the consolidated financial statements included herein, for more details. | |||||
[2] | During the period, Company settled Sevan share repurchase agreements using cash balances already classified as restricted. | |||||
[3] | In July 2014, the Company launched a voluntary incentive payment offer to convert any and all of the $650 million principal amount of 3.375% convertible bonds. Holders converted at the contractual conversion price of $27.69 per share and received an incentive payment of $12,102.95 per $100,000 principal amount of bond held. As a result of the transaction, the number of common shares outstanding in the Company increased by 23.8 million shares, with an increase to equity of $893 million. $278 million of the total consideration transferred on conversion was allocated to the reacquisition of the embedded conversion option and recognized as a reduction of stockholders’ equity. | |||||
[4] | Purchase of SFL Polaris from Ship Finance - refer to Note 35 - VIEs. | |||||
[5] | Dividends declared by VIEs in 2013 to Ship Finance was settled against related party balances with Ship Finance - refer to Note 27 - Non-Controlling interests. | |||||
[6] | Disposals of the West Auriga, West Vela, in 2014 and the disposal of the tender rig business in 2013 - refer to Note 11 to the consolidated financial statements included herein, for more details. | |||||
[7] | Private placement of Archer shares in February 2013 was settled against related party loan receivable - refer to Note 17 to the consolidated financial statements included herein, for more details. | |||||
[8] | Private placement of AOD shares in March 2013 was settled against elated party loan receivable - refer to Note 17 to the consolidated financial statements included herein, for more details. | |||||
[9] | During the period, the Company settled SapuraKencana financing agreements using cash balances already classified as restricted. |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 27, 2016USD ($) | Apr. 18, 2016jackup_rig | Mar. 30, 2016USD ($) | Mar. 23, 2016USD ($) | Feb. 08, 2016USD ($) | Jan. 15, 2016USD ($)drillship | Dec. 31, 2015USD ($)jackup_rig | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Apr. 28, 2016USD ($) | Apr. 15, 2016USD ($) | Oct. 29, 2015USD ($) | Apr. 30, 2011USD ($) |
Subsequent Event [Line Items] | |||||||||||||
Purchase commitments | $ 4,049,000,000 | $ 5,389,000,000 | |||||||||||
Proceeds from disposal of investments in associated companies | $ 0 | 373,000,000 | $ 0 | ||||||||||
Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 8 | ||||||||||||
DSME Shipyard | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of ultra-deepwater drillships | drillship | 2 | ||||||||||||
Due to related parties | $ 800,000,000 | ||||||||||||
Sevan Drilling | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Purchase obligation, amended amount | $ 447,000,000 | ||||||||||||
Purchase commitments | 526,000,000 | ||||||||||||
Purchase obligation, refund | $ 26,000,000 | ||||||||||||
Purchase obligation, refund, percentage | 5.00% | ||||||||||||
Sevan Drilling | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Purchase obligation, amended amount | $ 473,400,000 | ||||||||||||
Purchase obligation, percentage of contract price | 90.00% | ||||||||||||
Purchase obligation, refund | $ 26,300,000 | ||||||||||||
Purchase obligation, refund, percentage | 5.00% | ||||||||||||
Year One | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 1 | ||||||||||||
Year One | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 1 | ||||||||||||
Year Two | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 5 | ||||||||||||
Year Two | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 4 | ||||||||||||
Year Three | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 2 | ||||||||||||
Year Three | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Number of jack-up units to be delivered | jackup_rig | 3 | ||||||||||||
Seadrill Partners LLC | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Contract period | 2 years | ||||||||||||
Petrobras | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Contract period | 18 months | ||||||||||||
Contract receivable backlog | $ 164,000,000 | ||||||||||||
Increase (decrease) in backlog due to dayrate reduction | (132,000,000) | ||||||||||||
Increase (decrease) in contracts receivable | $ 32,000,000 | ||||||||||||
Shell | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Contract period | 60 days | ||||||||||||
Increase (decrease) in contracts receivable | $ (127,000,000) | ||||||||||||
West Eclipse | Seadrill Partners LLC | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Increase (decrease) in contracts receivable | $ 285,000,000 | ||||||||||||
West Polaris | Seadrill Partners LLC | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Increase (decrease) in contracts receivable | $ (95,000,000) | ||||||||||||
Sapura Kencana | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Proceeds from disposal of investments in associated companies | $ 195,000,000 | ||||||||||||
Credit facility US$450 -Eminence | Secured Debt | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||||||||
Credit facility US$450 -Eminence | Secured Debt | Senior Notes | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||||||||
US$400 facility | Secured Debt | Senior Notes | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt, face amount | 400,000,000 | ||||||||||||
US$2,000 facility (North Atlantic Drilling) | Secured Debt | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt, face amount | $ 2,000,000,000 | ||||||||||||
US$2,000 facility (North Atlantic Drilling) | Secured Debt | Senior Notes | Subsequent Event | |||||||||||||
Subsequent Event [Line Items] | |||||||||||||
Debt, face amount | $ 2,000,000,000 |