Update: RWE Dea declares force majeure on Atwood rig working offshore Egypt

By Phaedra Friend Troy

In addition to pulling all international employees from the country, RWE Dea has declared force majeure on the jackup drilling rig working for the company in the Mediterranean Sea offshore Egypt.

Political tensions, rioting and violence have erupted in the last few days, as Egyptians call for change in government. The current leader of Egypt President Mubarak has been in control for some 30 years.

On Sunday, RWE Dea flew 90 of its employees and their families from Egypt to Germany to work remotely because of the escalating violence in the country.

Additionally, rig contractor Atwood Oceanics (NYSE:ATW) reported that RWE Dea declared a force majeure on the jackup working in the country, "due to the civil unrest that has occurred in Egypt." The jackup rig Atwood Aurora had been operating for RWE in the Mediterranean Sea offshore Egypt.

The well that was being drilled has been secured, and the rig is in the process of halting offshore operations.

According to Atwood, the drilling contract provides for 70 percent of the dayrate of $133,000 to be paid the first 15 days of the force majeure and 50 percent of the rate for the next 30 days. The rig contract can be terminated after a 30-day period.

Oil prices in trading in London and New York have risen dramatically on Egyptian worries.



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