Oslo Court Orders Seadrill to Pay SFL US$55 Million Over Hercules Rig

The Borgarting Court of Appeal in Norway ruled in favor of SFL Corporation Ltd. in the litigation it was pursuing against subsidiaries of Seadrill Ltd. over the redelivery of the Hercules drilling rig, which took place in December 2022. The court ordered Seadrill to pay SFL's rig-owning subsidiary a total of approximately 525 million Norwegian kroner, about US$55 million.

The ruling was unanimous and found that Seadrill breached the contract at the time the rig was returned. The total amount includes compensation, default interest and legal costs, and SFL also had all of its legal expenses recognized, both at the appellate stage and before the Oslo District Court. The ruling largely upholds the decision the Oslo District Court had issued in February 2025, which had ordered Seadrill to pay approximately US$37 million plus about US$11 million in interest and costs, as reported by Splash 247. The final amount increased due to interest accrued during the proceedings.

The conflict dates back to the end of a long-term bareboat charter under which Seadrill operated the rig, which is designed for harsh environments. SFL argued that the Hercules, formerly known as West Hercules, was not returned in the condition required under the charter agreement. Seadrill had appealed the original decision in March 2025 and, while proceedings continued, reported that it had posted a guarantee of 574 million Norwegian kroner, about US$60.5 million, with Norwegian enforcement authorities to back the initial ruling.

Either party may appeal to the Supreme Court of Norway within one month of notification of the ruling, although such an appeal would only be admitted if the Supreme Court's Appeals Selection Committee grants leave, which occurs only in limited circumstances. Since regaining control of the rig, SFL has placed it under the management of Odfjell Drilling, and the Hercules is being prepared for a campaign off the coast of Canada, following a 400-day contract worth about US$170 million secured in March, with work expected to begin in the first quarter of 2027.