Bermuda registered Seadrill has signed a long-term contract with a consortium of oil companies for the long-term use of its West Alpha semi-submersible drilling unit on the Norwegian continental shelf.

In a letter of intent disclosed to the Oslo Stock Exchange the company confirmed that a consortium of oil companies consisting of BG Norge, Nexen, Centrica Energi, Norwegian Energy Company and Petro-Canada Norge had signed the award for the long-term contract to utilise West Alpha.

The contract has a firm duration of three years with an option to extend the contract length to either four or five years. Estimated contract value is approximately $504 million, $642m or $766m for the three, four or five-year alternatives, respectively.

West Alpha will mainly be drilling exploration wells. Commencement of operations is scheduled for February 2009, in direct continuation of the current contract.