Jim Daatland - VP, IR Alf Thorkildsen - CEO Esa Ikäheimonen - CFO Livar Voll - Group Controller

Rafi Khouri - Raymond James Lukas Daul - SEB Enskilda Fiona Maclean - Merrill Lynch Matt Conlan - Wells Fargo Phil Lindsay - RBS Ole Slorer - Morgan Stanley Kenan Najafov - Citigroup A. J. Strasser - Cooper Creek Partners Truls Olsen - Fearnleys

Good day, ladies and gentlemen, and welcome to the Seadrill quarter two 2010 results conference call. (Operator Instructions) At this time, I would now like to hand over the conference to your host today, Mr. Jim Daatland, Vice President of Investor Relations.

Thank you and welcome to our second quarter 2010 earnings call. A copy of the quarterly report has been posted on our website, seadrill.com, along with all the supporting material for this call. Joining me today, we have our CEO, Mr. Alf Thorkildsen; our new CFO, Esa Ikäheimonen; and our Group Controller, Mr. Livar Voll. Before I turn the call over to Alf, I would like to remind everyone that during the course of this call, we may make certain forward-looking statements regarding various matters related to our business and company that are not based on historical facts and could include future financial performance, operating results and the prospects of the contract and drilling business. Please note that any such statements in addition to other information discussed in this call are given within the Safe Harbor provisions provided by the federal securities regulation. For further and more detailed description of all the risks associated with our company and our industry, please see our most recent Form-20F and other filings with the U.S. Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or underlying assumptions prove incorrect, actual results should differ materially from that indicated. In order to give as many people an opportunity to ask questions, please limit your questions to one initial question and one follow-up. Thank you. That concludes the preliminary details, and I'll now turn the call over to Alf.

Thank you, Jim. I would start with some overall comments to the results and company developments through the quarter, including subsequent events. Esa, our new CFO, will then take us through the final details of our financial accounts before I revert to talk about our current operations, including the performance of our deepwater newbuilds, our contract backlog and market outlook, dividend policy, and close with some summary remarks. Next page please. Before I start, I would like to take this opportunity to thank all the employees in Seadrill who are listening for all the hard work during this reporting period. First of all, we are pleased to deliver an EBITDA of US$493 million. If we adjust for gain on asset sales in previous quarters, the second EBITDA is actually the highest in our company's history. The second quarter was characterized by higher predictability in our operations, resulting in strong contribution from our rigs in operation. We have long talked about reducing cost in our deepwater operations. We have this quarter delivered meaningful reductions on a rig-by-rig basis. Some is due to improved regularity in our operations as we have become more seasoned in deepwater in the various regions we operate, and some is due to better planning. The result is a decrease in daily OpEx for our new deepwater rigs to the extent of US$10,000 to US$15,000 per rig per day. Our net income for the quarter was US$329 million corresponding to earnings per share of $0.77, up from $0.49 in the previous quarter. We continue our payout of quarterly cash dividends and have decided to increase the payout to $0.61 per share, up from $0.60 in the first quarter. We have in effect from June 1 consolidated Scorpion Offshore into our accounts. As most of you know, we have completed the takeover of the seven jack-up rig company in mid-July and now own 99.5% of the shares. We have since then included the Scorpion operation into the Seadrill operations, and as such increased our fleet to 48 units, making us the third largest operator of offshore drilling rig, the second measured in enterprise value. The economics of the transaction will be paid some $175 million per rig, which we think is a fair price in today's market. As the Scorpion rig fleet comes to $600 million in our backlog, some contract significantly above today's market. We are convinced that this will prove itself as a good investment over the next years. On the marketing and contracting side, we have lately secured several contracts for our jack-ups and tender rigs. I will come back to these later when I walk you through our contract status. But in general, we're continuing to see healthy outlook in demand for premium jack-up rigs and improving market fundamentals for tender rigs. For the floaters, we had a huge inflow of term contracts early in the second quarter when we signed contracts worth $2.7 billion. In hindsight, that seemed to have been a very good timing. There is no doubt that the oil spill from the Macondo well has had a significant adverse impact on the demand side of ultra-deepwater market. We have luckily not been adversely impacted as we only had one rig in the U.S. Gulf that subsequent to the incident was assigned to BP. Nevertheless, the uncertainty following the drilling permit moratorium in the U.S. has made life more uncertain for owners of old assets and players with limited deepwater drilling history. In that respect, we are quite pleased to have extended the contract for the deepwater unit, West Hercules, for six months at $495,000 per day, keeping the rig employed till mid-2012. We think the fact that we do not have any open deepwater exposure puts Seadrill in a unique position. Although the Macondo spill has been stopped, there is still a bit of uncertainty regarding short-term demand. However, we continue to be optimistic on the long-term outlook for our industry and believe that the prevailing market sentiment could offer us some good opportunities to continue our strategy of growth, focusing on new assets and shareholder value. So with that, I'll turn the call over to Esa to walk us through the second quarter results. Esa Ikäheimonen: Thanks, Alf. I start with a summary of the effects of the Scorpion acquisition. That should help in following the presentation later. And please note that all numbers here presented are unaudited. The date of the Scorpion acquisition for accounting purposes was set as May 31. Therefore, the one-time impacts are all accounted for in the second quarter and all gains associated to those one-time impacts are recorded as financial items on the P&L. The total gain of $167 million can be divided into two parts; the first one is a gain on the re-measurement of the equity interest that Seadrill already held previously in Scorpion. This re-measurement or write-up also relates to an earlier write-down in December 2008, and it amounted to an impact of $111 million in Q2. The second one is the gain associated to the acquisition itself. Without going into the details of the purchase price allocation, this represents the difference between the fair value of the net assets acquired and the consideration paid for them. The gain represents a bargain purchase price or a negative goodwill. This amounted to a total gain of $56 million, also recorded as financial items on the P&L. Going forward, there will be an additional charge on quarterly EBITDA over the next couple of years, which will be in the order of $6 million per quarter as an amortization charge due to the contract value booked on the balance sheet. Next slide please. The next slide covers the EBITDA development over the last three years or so. Excluding gains from asset sales, Seadrill indeed achieved a new record in quarterly EBITDA as already pointed out by the CEO. EBITDA margin improved from 50.9% in Q1 to 55.6% in Q2. Revenue increased in all divisions and all of them also recorded an increase in EBITDA. Some $30 million of that increase came from mobile units, about $23 million from tender rigs, and some $6 million from well services. I'll cover those units separately in a little bit more detail. The biggest contributing factors to this performance were, in no particular order, the high utilization of especially our 2009 deepwater newbuilds, those eight newbuilds in total, operating with a quarterly utilization of more than 93%. The second big item had to do with the tender rig performance which was further improved, and obviously also two new rigs in full quarter operation. Performance was strong in this division, and utilization remained high. A continued and successful focus on operational excellence and costs, which is showing very encouraging results, especially in the North Sea, but also in the other areas, also pointed out by the CEO earlier. The next slide please. And I move on to cover the mobile units. This category, as you probably know, covers our drillships, semi-submersibles and jack-ups. Twenty-four rigs in total in operation during the second quarter; 28 rigs in total if the recent deliveries are all included. About half of the improvement in EBITDA came from this division, and equally, the operating profit improved from $285 million to $310 million. The operating profit margin also improved somewhat. It is encouraging to note, the progress on OpEx relative to revenue, i.e. especially in rig operations. Utilization rates were good; 92% in total for drillships and semis, actually upto 97% if adjusted for the maintenance and classification survey works for West Polaris and West Venture. The corresponding utilization rates for jack-ups were in the order of 91% in total, but up to a very high 99% if adjusted for West Triton being idle. The numbers that I referred to were the economic utilization rates. Next slide please. During the quarter, 15 rigs were in operation in tender rigs division. This division delivers another significant quarter-on-quarter improvement in profitability. The operating profit increased from $35 million to $55 million or from 38% to 44% of revenues. This improvement was mainly due to a full quarter of operations of the two new units, namely West Vencedor and T12, which started operations in late March as I believe was reported already at the end of first quarter. As the increase in operating profit percentage also shows, there are positive developments here and the focus on OpEx is delivering results. I have not included a separate presentation for well services. As you know this division in Seadrill books equal the financial results of Seawell. The well services company that was still 74% owned by Seadrill during the second quarter. Our colleagues in Seawell have been busy during the period not only because of the preparations for Allis-Chalmers deal, but also in selling their services. And as a result, revenue was up by almost 10% in comparison with Q1, and the operating profit recovered from about $12 million to about $19 million. Next slide please. The next one is a consolidated summary of the income statement as the consolidated operating profit increased by $51 million to $383 million. Financial items in total amounted to a net zero, which is a $86 million less than a quarter earlier. However, some significant variations took place. And the total gain related to the acquisition of Scorpion was significant and booked in financial items. As I covered this earlier, there will be no repeat here. Other financial items include several diverse items such as an $89 million loss on interest rates swaps when mark-to-market, and losses in other derivative instruments. The total loss on derivative instruments was $168 million including the interest rate swaps. More details can be found from our reports. Income taxes increased quite significantly from about 9% to 14% or from $29 million to $54 million. Some $20 million of this increase was due to a catch-up effect relating to a correction of Seadrill's tonnage tax position in Cyprus. Also, an adjustment related to Seadrill Norge and Seadrill Offshore following filings of tax returns in June this year was included. On an ongoing normal basis with some fluctuation, the level of income tax should remain at a range of 10% to 15%. Next slide please. Finally looking at the balance sheet, total assets on the balance sheet increased by more than $2 billion to $16.9 billion. In non-current assets, there is an increase of more than $1.2 billion in the value of drilling units that is Scorpion related almost entirely. The increase in newbuilds is due to down payments for new deepwater rigs, West Orion and West Gemini, which were both delivered soon after the second quarter end. Cash and cash equivalent including restricted cash on this slide increased by $444 million. The main reason was the availability of the funds to pay quarter one dividend in early July, but also Scorpion contributed to the increase as well as the short term restricted cash which also increased from first quarter to second quarter. Reduction in marketable securities related mainly to two things, name the decrease in the value of the shares in Pride, which has no P&L impact unless losses are realized. The other item was the $165 million part payment of Petromena also recorded in our quarterly report. Receivables increased somewhat, about half of the increase is associated with Scorpion. Next slide please. Net interest bearing debt increased from $6.7 billion to $7.4 billion between end of March and end of June. And total current liabilities increased significantly as well as a result of Scorpion debt being reclassified as short term debt due to the change of control event as Seadrill acquired the majority of Scorpion shares. Shareholders' equity increased by some $500 million, the increase was related to the issuance of 12.5 million new shares; the consolidation of Scorpion and a net income contribution for the quarter. The unrealized loss for the OCI on the marketable securities partly offset the increase. Now hand back to the CEO.

Thank you very much. As for a walk through of the financials, if we then go back to the operation side of the company, there have been a few additions to our operational fleet and geographic presence since May. We have, through the acquisition of Scorpion, made the presence of two jack-up rigs in the Middle East. We have added our first operation in Venezuela and we have taken our two jack-up operations in Brazil. The last two jack-ups acquired from Scorpion adds to our already sizable presence in the Southeast Asia that shortly will count 23 units. The ultra-deepwater semi-submersible newbuild West Orion, which in May was then transferred to Brazil, was taken through customs and the acceptance as programmed of Petrobras at record speed. The unit started operation in mid July for Petrobras, and performance have been second to none, with utilization rate exceeding 95%. We have also taken delivery of the ultra-deepwater drill ship West Gemini, which is currently undergoing an acceptance test program in Angola and is expected to commence operation for Total in mid-September. Furthermore, we have taken deliver of two new jack-up rigs that go straight on contracts. West Callisto has started operation for Premier Oil Indonesia and has laid up and is shortly mobilized to start operation for PT Pan also Indonesia. That means that at present we have 40 units in operation, four units under construction, three units on routes to the first assignment and one idle unit ie, the Tender Rig T8. In order of new contracts and/or repeat business, we are dependent on excellence in our operational performance. The combination of high technical utilization and strong HSE performance is key, not only to us, but also to our customers. In the second quarter, we delivered strong overall utilization for the rigs and operation. For our new ultra-deepwater units, the utilization rate was 92%, somewhat down from the previous quarter due in the main to the one month down-time on the drillship West Polaris, following BOP repair work as mentioned in the first quarter report. Excluding West Polaris, the new ultra-deepwater units achieved an economic utilization of 97%, which is in line with our own internal expectations. For the third quarter, we have not experienced significant down-time on any of the rigs, and the economical up-time quarter-to-date has been some 96% for our floaters. We are pleased to see that our focus on work processes, procedures and transfer of experience is translating into more stable and reliable performance for our new deepwater vessels. Furthermore, as I addressed earlier in this call, the improved performance in our day-to-day operation has helped us in our cost control and consequently we have seen $10,000 to $50,000 decrease in our daily operating expenses for our deepwater units. Next page please, as all of you are very familiar with the activity level in the oil and gas industry has since April 8, been impacted by the Macondo oil spill in the U.S. Gulf of Mexico. And the subsequent six month drilling permit moratorium that was implemented by the U.S. Department of Interior, shortly thereafter. The moratorium led to the suspension of almost all floating drilling activities in the U.S. Gulf, resulting in oil companies moving rigs to other regions, trying to sublet rigs or to assert right to terminate or change drilling contracts. The uncertainty as a consequence of the sudden stop in activity put significant short-term pressure on the supply demand balance in all ultra-deepwater markets. Luckily, we only had one unit in the Gulf during all this uncertainty. The West Sirius was initially under a sublet to Exxon when the Maconda incident occurred. As the drilling permit for Exxon was strong, BP agreed with Devon to accelerate the assignment of the drilling contract for West Sirius from Devon to BP. The West Sirius has since then worked for BP on the Macondo field performing various drilling support operations. As such, we did not suffer any direct downtime as a consequence of the withdrawal of drilling permits. Although the spill has been stopped, there is no doubt that in the aftermath of the incident there will be an enhanced regulatory focus on deepwater drillings (apathy). This will mostly increase the relative attraction of new and modern floater drilling equipment at the expense of older rigs. Focus will also be on ultra-deepwater operation skills and experience. As a result of increased complexity in operations and need for transfer of learning between rigs and rig groups, we see an increased need for scaling operations of deepwater rigs. As such, there seems to be room for further consolidation of the ultra-deepwater market going forward. Next page please. At the start of the year, we had a containing strategy that was targeted towards securing employment for the open deepwater position we had in 2010 and 2011. In hindsight, that strategy has turned out be the vector that must be contemplated. With a six-month contract extension for the West Hercules at a day rate of $495,000 per day, we have secured employment for all of our floaters well into 2012. The first open position is a newbuild, West Capricorn which is expected to be delivered at the end of 2011. We are confident of the longer-term outlook for deepwater units, as there is no need to rush a contract for West Capricorn. More so, we view our strong contract coverage as an enabler to seek new investments. Next page please. The market for premium jack-ups continues to show relative strength as the utilization for such units remain above 90%. Operators continue to favor new rigs as a more effective and suitable drilling tool for their operations than older units. We have, with the addition of the Scorpion jack-up rigs improved our overall presence and contract coverage for our jack-up fleet. We currently have all our jack-up rigs in operations following the Offshore Vigilant and the Offshore Resolute resuming operations in Venezuela and in Vietnam respectively. As you can see from the contract chart, we have some rigs nearing completion of the current assignment as we speak. We are confident that we will find new (roles) for these units at day rates in the range of $120,000 to $130,000 a day, though we cannot guarantee back-to-back contracts for all these rigs near-term. On the longer-term outlook, we see attractive opportunities for deployment of premium jack-up rigs, also outside the historically strong Southeast Asian market. Such areas would include Gulf of Mexico, Central and South America, Africa and the Middle-East. Next page please. The number of enquiries from our customers regarding tender re-capacity has developed very favorably since our last reporting. This has resulted in several new contract awards and decent contract durations and competitive day rates. We recently signed two new contracts for the 49% owned rigs, T6 and T10. T6 was extended by 28 months at $99,000 a day to Carigali, whereas T10 was contracted to Chevron for a two years at a day rate of $190,000. We are also in discussions regarding new contract for several of our other tender rigs. When it comes to the only idle rig, T8, we hope to have the rig back in operation by the end of the year. In addition to the traditional geographic markets for tender rigs i.e., West Africa and Southeast Asia, we also see interest in the concept in the Gulf of Mexico, South and Central America and Australia. Next page please. Dividend distribution is one of our key objectives. For the second quarter, we have increased the cash dividend to $0.61 per share, up from $0.60 in the first quarter. We believe this is sustainable going forward. Based on this composition of our company, we have a record order book and see improving market conditions and earnings visibility for jack-ups and tender rigs near-term. We have the offshore driller that has paid out the highest dollar amount in cash dividend to its shareholders over the last four quarters. Next page please. We know that some people question the sustainability of our dividend distribution policy. We have therefore included a slide that shows the expected development of our new interest-bearing debts in two scenarios. If we continue to distribute $0.61 per quarter, we based on the conservative assumption for our uncontracted rigs have a debt per rig of some $140 million end of 2014. That can be translated into some $250 million in debt per rig if we count in deepwater equivalents. We do not think that this is a high leverage. If you look at the revenue line for the next five years, we have already secured close to 70% through long-term contracts. We are confident that the fact that our fleet of brand new drilling rigs will be first in line to secure employment. This makes the units very suitable for secured financing as they cannot only assign value to the cash flow from contract, but also the more sustainable market value of new rigs recycles. By mixing this within optimistic long-term market view, we believe we have a good and sustainable dividend recipe. Next page please. Now let me try to sum it up. We are pleased to report a record EBITDA based on improvement in operation and cost control. We continue to add earnings visibility at the reasonable rates for all rig types, shallow and deepwater. We are relatively optimistic about the tender rig and jack-up markets near term and on the deepwater market medium to longer term. We think we are in a unique position for the fleet based on new premium rigs only. We are taking advantage of the volatility in the market by adding the Scorpion rigs and also the CJ70 jack-up to our fleet and do believe the market could present further opportunities to grow our company going forward due to the increased focus on operational track record and skills and experience. Finally, we are happy to continue our distribution of cash to our shareholders. This concludes our presentation. Operator, we are now open for the Q&A session.

(Operator Instructions) Our first question today comes from Rafi Khouri of Raymond James. Rafi Khouri - Raymond James: I know you got gain from last year and the loss for this year. I'm yet to review all the documents yet. Could you just explain that briefly please? Esa Ikäheimonen: During the quarter, we had interest swap losses of about $90 million, and we have contracts of about $15 million. And then in addition, we have other financial derivative with the loss of $57 million. Rafi Khouri - Raymond James: So you had a gain last year of $96 million in the similar quarter? Esa Ikäheimonen: You mean 2009? Yes, we have a gain in 2009. Rafi Khouri - Raymond James: As a shareholder, is there any way to project or try to understand any type of smoothing out of the gains or losses?

I think it is hard to say that. We have secured our interest rate flow with $5 billion in loans. So that process is the biggest impact. And of course, when the interest rate reduces so significantly, we have some losses. If they are coming up again, you will see some gains, because we mark-to-market them every quarter. So it's just hard to give you how we should smooth it. But a key component here is the interest rate going forward. Rafi Khouri - Raymond James: What is your risk with your interest rates swaps? What would cause them to blow up in effect if that is a fair question? What is the biggest risk with your interest rates swap policy?

If you look at swap and our fixed-income interest, we have today an average interest cost of 5%. That is the assumption for our calculation as well. And I don't think there are any other issues, and there are no chances of blowing up anything.

Our next question today comes from Lukas Daul of SEB Enskilda. Lukas Daul - SEB Enskilda: I was wondering, Alf, if you could give us a little bit more flavor on the reduction of the operating cost. How was that exactly achieved? Could you give us some more details on that?

I think the thing we have seen is that you know that we had startup issues both in Brazil, Nigeria, the Far East, and we started up eight rigs within the 12-month period. We had significant startup cost. And then also, on some of the rigs, particularly those of our prototypes, which was West Hercules, West Polaris and there is Phoenix, we had some issues when they came to the startup. We feel that we have more control over the cost. We are also having a more stringent cost control after the initial startup where the most important thing is to get the rigs going. So we can focus on two things, not only on utilization, but we are focusing both on utilization and cost when it comes to performance. Lukas Daul - SEB Enskilda: Secondly, you are mentioning Brazil in your report that you see opportunities there. I was just wondering there are a number of uncontracted newbuilds which like financing, if you were to in any way pursue these opportunities towards Brazil, would you stick to your investment criterion of five-year payback on the investment?

I think we are trying to do that. We believe we did that in the Scorpion. We believe we did that in the CJ70. Of course, we are in opportunistic position with some flexibility both short term and long term. But yes, I think over time, we will try to stick to our five-year return cash on cash. That may not be possible in the short term on the deepwater market, but the underlying assumption must be that we are able to do so over time. There is a strategic interest for us to develop the distance further in Brazil. Just to mention, we were down there last week. And of course, when Petrobras tell us that they will spend $224 billion the next years, and it's only offshore, then it becomes an extremely attractive area to be well placed.

Our next question comes from Fiona Maclean of Merrill Lynch. Fiona Maclean - Merrill Lynch: Speaking on Brazil, can you provide us with some more clarity in that sentence that you have in your statement where you say you are considering several options on how to be best positioned to take part in the Brazilian growth? I'm just not really sure what you are talking about there, because you were already pretty well positioned. Then secondly just looking at your stake in Pride, how much longer are you willing to hold on to that stake given the stockish nature of the stock market for Petrobras, especially in the U.S.? And thirdly, have you got any further update for us in terms of your European listing and whether you're going to move it out of Norway?

Let me start with the position in Brazil. You may be aware that there are and will become even more stringent regulation when it comes to local content. And that is the reflection of some of what our statement is all about. We have at the moment 4 deepwater units and two jack-ups in Brazil. We have been able to get very long term and very attractive contract for our deepwater and reasonable contracts for our jack-ups. We believe that the requirement for local content will increase and we have to find a strategy where we can encompass that and put that into our operational modus operandi. So that is a backlog for that statement. The way to do it is still under discussion internally, and we are working on that as we speak. When it comes to Pride, we have 9.4% of the Pride. We've had it for some years. I have no further comments. When it comes to European listing, there is no news on that as we speak today. And I will keep the market updated if there is breaking news on that.

We will take our next question from Matt Conlan with Wells Fargo. Matt Conlan - Wells Fargo: The tax rates in the U.S. on dividends are scheduled to go up next year, undetermined how far, but they are likely to go up next year. Does that change your opinion or your balance on dividends versus other ways of giving cash back to the shareholders?

Our clear vision is to keep the dividend high as we go forward. Yes, we have significant shareholdings in the U.S. I don't know if all of them are impacted by it, but we will judge it when we see it. But the underlying ambition for Seadrill is to keep the dividend policy as we speak today. Matt Conlan - Wells Fargo: And this may be too technical for the call, but after the $0.60 dividend, the conversion price on your converts declined by $0.88 and $0.69 from the last quarter. How was that formula calculated that the convert price declined by more than the dividend? Esa Ikäheimonen: Well, the formula is included in the loan agreement documents. It is on our website. But of course the adjustment is related to where the actual share price is on the date that you announce the dividend. The share price had been around the strike price, the reduction would have been equal, but as long as the share price is significantly below the strike price, there is this slightly higher reduction in the conversion price.

Our next question will come from Phil Lindsay of RBS. Phil Lindsay - RBS: First of all as a follow-up on the OpEx question, you could see it coming down following the difficulty in the first quarter. Is that level of saving at 10,000 to 15,000 sustainable in the near-term, or can it be improved upon? And also, how may potential new regulations impact this in the medium-term? The second question is on M&A really. I'm just trying to think about, given the operators are looking for modern equipment, but at the same time they're also looking for experienced drilling contractors. Just what kind of opportunities are you seeing out there for single unit purchases?

Let me try to answer your first one, the operating cost question. I believe that it is sustainable. So that was the first question. Can we improve it further? We will try, but I will not guarantee that in any form and shape. So I think it is sustainable where we are. I think it is sustainable where we are with our tender rigs and our jack-ups. We are very cost conscious and focused, as well as utilization and A to Z, but it comes as part of a whole package with operational excellence for Seadrill. But I believe that we are on an overall basis becoming competitive. When it comes to new regulation, yes we see that already coming. There are changes in the standards for our rigs. We believe that our rigs and particularly on the BOP side, the blow operators, we are in very good shape due to the new fleet. And at the time we ordered it, we ordered the most modern equipment available at that time. We believe that if there are changes, they will be relatively minor to the Seadrill fleet in total. When it comes to your M&A question, I think it is hard to comment any further than that there are exits, and if there are, you may be aware, we always get a chance to have a look at it. And I think that's where I would stop my comments.

We will be taking our next question today from Ole Slorer of Morgan Stanley. Ole Slorer - Morgan Stanley: Could you give us an update on what type of risk you would be willing to take in Brazil?

As I said previously, Brazil is the most coming market. In Brazil in total, the economic growth in the country is 6%. It's exponential, when it comes to deepwater and offshore. We believe that with the current experience, we are accepting the Brazilian risk outlined by Petrobras. So I think from that perspective, we are more confident that we can manage the client risk and the operation challenges that that has compared to an international standard. So from that perspective, we are more confident today that we can operate like a local player in Brazil. Ole Slorer - Morgan Stanley: How about newbuilding construction risk in Brazil, you talked about as local content and I presume that your ambition is to somehow get inside those 28 rigs to be built or additional rigs to be built in Brazil. Just to be more specific, what type of newbuilding construction risk are you willing to take in Brazil?

I think we are willing to take some newbuilding risk in Brazil. I think the easiest one to build in the new yards in Brazil would be drillships. But I think we will carefully look at that, and we are given the right setup and the right sharing of risk between the yard or as the drilling operator, and enterprises client. If we can share that in the right way, I can say that we are prepared to take some newbuild risk in Brazil. But it's not only us, but it's the free parties who have to share in a sensible way, ie., that we might not have a standard Brazilian contract that the client is maybe prepared to take some more newbuild risk combined with us. And we also share the same with the yard in question. We are reasonably experienced in this, and I think we understand some of risk as speculated and I think we understand the yard situation as well.

We will take our next question today from Kenan Najafov of Citigroup Kenan Najafov - Citigroup: I just have a question about the seven jack-ups that you are taking over as part of Scorpion. What is the cost OpEx per day compared to your existing fleet, and what's the room for improvement you see there?

If you exclude overheads on Scorpion, which we believe that we can eliminate with out total fleet exposure and our total overheads, we believe that the OpEx cost is similar to, maybe there are some small elements that I as an analyst of Seadrill I would not put that into the formula yet. I think you can assume that the cost is similar to what it has been. There are a couple of new areas where they are working, Venezuela, we are working in Northern Brazil, and that's a start up operation in Brazil. Other cost we have seen there is stable in the next quarters. Kenan Najafov - Citigroup: So the major question is it would come from eliminating the overhead, mostly.

That is correct.

(Operator Instructions) We will take our next question today from A. J. Strasser from Cooper Creek Partners. A. J. Strasser - Cooper Creek Partners: I was hoping if you could elaborate on your views of consolidation and acquisition, with several companies trading below net asset value, are you more amendable to corporate acquisition versus purchasing particular assets. And also are you more prone to consolidation in the jack-up market or the deepwater market, and why? And I just have one additional question, I was wondering if you could just tell us where you see day rates for high spec jack-ups in 2011 and current commodity environment?

Definitely, we started to say that when it comes to M&A deals and single assets, we drill through the location both in London and in Norway. We are all in the network we have it with brokers, we are always able to see entities going on in this market. I will not point you to a direction of single assets or oil company. I think we are an opportunistic company and we will judge it on an individual basis there and then if we go for a company, or if at all go for anything at all. So I will not give you any answer, but we are looking at single assets, corporate acquisitions and do nothing. But still we are optimistic about the longer-term of this business. No, we have not lost faith in our deepwater. As we have said in our board report, we have in the short-term we are uncertain, longer-to-medium term in the deepwater, we believe that we see an attractive market going forward. When it comes to the jack-ups, we have indicated that we see that our rates will be in the 120s. I don't think there will be a major shift in that into '11. We are prepared to enter contracts at that level going forward, covering to those in the level.

We will take our next question from Truls Olsen of Fearnleys. Truls Olsen - Fearnleys: Firstly, regarding the jack-ups, it is coming up for the (inaudible). You have an option not to take delivery, given the remaining cost which is underneath $5 million. What is the (inaudible) building current market, how should we think about that?

You should think about it positively. Truls Olsen - Fearnleys: And secondly, what was you capitalized interest in the quarter? Esa Ikäheimonen: $19 million.

$19 million

I think we will stop the question line there. I thank you all for participating in our call today. See you in November.

Ladies and gentlemen, that will conclude today's conference call. Thank you for your participation. You may now disconnect.