Seadrill, through its unit Sea Dragon de Mexico, has signed an agreement with Pemex Exploracion y Produccion (Pemex) for the provision of the ultra-deepwater semi-submersible drilling rig West Pegasus in Mexico.

The company said that the five-year assignment in Mexico has a fixed operating dayrate for the first two years, and the dayrate will be adjusted annually thereafter based on market conditions.

Estimated contract value is approximately $850m (excluding mobilization fee) assuming a constant dayrate over the five year term.

West Pegasus was recently delivered from the Jurong Shipyard in Singapore and proceeded for mobilization to Mexico on 1 April.

The commencement of operations is slated for the third quarter 2011.