Noble Drilling A/S

Ledelsesberetning

Particular risks
Operating risks
Currency risks
Interest rate risks
Human rights and assessment of results
Anti-corruption and anti-bribery
Our business depends on the level of activity in the oil and gas industry. Adverse developments affecting the industry, including a decline in the price of oil or gas, reduced demand for oil and gas products and increased regulation of drilling and production, have in the past had and may in the future have a material adverse effect on our business, financial condition and results of operations.
The Company's functional currency is the US Dollar. However, a portion of our expenses are incurred in local currencies. Therefore, when the US Dollar weakens (strengthens) in relation to the currencies of the countries in which we operate, our expenses reported in US Dollars will increase (decrease). We are exposed to risks on future cash flows to the extent that foreign currency expenses exceed revenues denominated in the same foreign currency. Company is monitoring the foreign exchange risk and may act accordingly, entering into derivative instruments to manage its net exposure to fluctuations in currency exchange rates.
The Company are subject to market risk exposure related to changes in interest rates on borrowings and may be subject to similar exposure on future borrowing arrangements. Future cash flows for financial instruments will fluctuate because of changes in market interest rates.
Noble is first and foremost a people business, focused on acting with integrity and respect, and keeping people safe. With operations globally, Noble recognizes the risk of safety and its responsibility with regard to the impact it has on people on many levels, including employees, partners, customers, and the local communities where we operate.
By maintaining a structured approach and actively pursuing procedural discipline, we maintain our focus on the health, safety, and social wellbeing of our personnel, and support our goal to advance the development and retention of our diverse and talented workforce.
Noble is committed to operating with excellent health, safety, and environmental (“HSE”) performance as part of our business strategy in order to add further value for employees, customers, and shareholders. All personnel, regardless of job or position onboard our vessels or at any Noble facility, has the authorisation and obligation to immediately stop any unsafe act, practice, or job that poses an unaddressed or unreasonable risk or danger to people or the environment.
Noble’s pursuit of exceptional HSE performance begins with our strong corporate culture and by starting SAFE every day: one tour, one task and one person at a time. SAFE is an acronym for the phrase: follow Standards, be Accountable, stay Focused, achieve Excellence. Daily, the crew onboard each rig works together to achieve specific safety and environmental objectives and if all objectives are met, then the day is counted as a SAFE Day. Under our SAFE Day programme, in 2023, our rigs achieved the SAFE objectives 98.7% of available days, which is a slight improvement over 2022 performance.
Noble Corporation and each of its wholly owned subsidiaries (“Noble Group”) are committed to acting ethically and responsible in carrying out our business. This includes complying with applicable anti-slavery and human trafficking laws and implementing policies to mitigate the risk related to human rights violation in the supply chain.
The Board confirms that it has acted in a way that it considers, in good faith, would be most likely to promote the success of Noble for the benefit of its members as a whole and, in so doing, has had regard (amongst other matters) to:
(a) the likely consequences of any decision in the long term, (b) the interests of the employees of Noble plc, (c) the need to foster the business relationships of Noble plc with suppliers, customers, and others, (d) the impact of the operations of Noble plc on the community and the environment, (e) the desirability for maintaining the Noble plc’s reputation for high standards of business conduct, and (f) the need to act fairly between members of the Noble.
We respect the human rights of all those working for or with us and of the people in the communities where we operate.
The Company is committed to respect and adhere to human and labor rights. Human and labor rights assessment parameters are integrated into the strategic pre-market entry risk picture. Legal compliance risk assessments for potential new jurisdictions cover, among other things, corruption, exposure to financial and trade sanctions, level of protection of personal data, the general rule of law and internationally accepted reports regarding the observance of human rights. We require that all third parties doing work for Noble commit to follow the principles of the Noble Code, either by having a code that encompasses these principles or by adopting the Noble Code, including a commitment to help ensure that slavery and human trafficking do not occur in any part of the business or supply chain. We subject our third parties to screening for international trade and human rights issues, health and safety compliance, and financial security. In 2023, Noble implemented a new master services agreement and purchase order, which requires all suppliers to commit to upholding human rights consistent with UN guiding principles on human rights. Another focus area in 2023 was a review and risk assessment of a supplier group known as agents, acting on Noble’s behalf. Screening and re-assessment processes for this supplier group have been reviewed and updated to prioritize high-risk agents and help reduce the risk of non-ethical behavior in our supply chains. Training in how to engage with agents was delivered to more than 70 employees within marketing and supply chain functions to further strengthen our approach to agents.
The Company reviews its policies each year and anticipates expanding its commitment to human rights by implementing more comprehensive policies and practices across all operations. Future efforts will focus on enhancing transparency, ensuring accountability, and fostering partnerships with relevant stakeholders to uphold and promote human rights standards globally.
Our commitment to conducting business with honesty and integrity is reflected in the Code of Conduct, which sets out the basic principles for how we expect our business to be conducted. The Code applies to all Noble employees, including executives, officers, and members of our Board of Directors, and it impacts those we do business with, including customers, contractors, suppliers, and agents. We regularly review the Code and reassess compliance processes to determine relevancy and consistency with regulatory requirements and the organization’s structure and update it accordingly.
Policies on anti-corruption and bribery & action-assessment
The Code of Conduct is available in nine languages and can be found on the Noble Corporate Governance Documents page.
New employees are required to undertake online mandatory training on our Code of Conduct and complete and sign an acknowledgement statement that the employee fully understands the Company’s policy with respect to anti-corruption and anti-bribery, the FCPA, UKBA and acknowledges commitment to adhere to the Code and its related policies when they join the Company. All employees are required to complete an annual self-certification on their understanding of the anticorruption and anti-bribery programs and compliance with laws against financial crimes and requirements to communicate any information of concerns or possible violation of applicable polices. To help ensure that all employees are thoroughly familiar with the Company’s policies and applicable laws, all Company personnel are required to complete mandatory ethics and compliance trainings. The Chief Compliance Officer, in cooperation with the General Counsel, is responsible for helping ensure that educational materials are developed and provided to appropriate persons.
In 2023, to enhance ethics education the Company launched a complete in-person compliance training program targeting 800 employees across major onshore locations. Internal live training sessions covered a range of compliance topics, including anti-corruption, export controls, competition law, and data protection for functions most sensitive to these compliance risks.
Human and labor rights assessment parameters are integrated into the strategic pre-market entry risk picture. Legal compliance risk assessments for potential new jurisdictions cover, among other things, corruption, exposure to financial and trade sanctions, level of protection of personal data, the general rule of law and internationally accepted reports regarding the observance of human rights.
Any violation of anti-bribery or anti-corruption laws, including the Foreign Corrupt Practices Act, the United Kingdom Bribery Act, or similar laws and regulations could result in significant expenses, divert management attention, and otherwise have a negative impact on the company. Increasing attention and expanding requirements relating to environmental, social, and governance (“ESG”) matters compounded by the varied and expansive scope of ESG standards, ESG rating criteria, our sustainability and ESG disclosures, and the perception and expectations of the public, may negatively impact our business and financial results.
Going forward, we continue to be committed to conducting business responsibly and prohibit bribery in the conduct of all our business, all over the world.

Beskrivelse af virksomhedens væsentligste aktiviteter

The Company and its subsidiaries and parent companies (the Group) are a leading global operator of high-technology drilling rigs and provide offshore drilling services to oil and gas companies and have one of the world’s youngest and most advanced fleets.

Beskrivelse af usikkerhed ved indregning eller måling

When preparing the annual report, Management undertakes a number of accounting estimates and judgements to recognise, measure and classify the assets and liabilities. The only significant accounting estimate and judgement relates to the assessment of impairment of property, plant and investment in and receivables from subsidiaries.
Following the revised assumptions to the fair value for the rig Noble Explorer, Management has recognized USD 21 million of impairment reversal on Rig Explorer. Further, Management has recognized impairment on investment in group entities with total amounting to USD 622 million which comprise of impairment of the cost of the investment and additional losses for subsidiaries with negative equity.

Beskrivelse af udviklingen i virksomhedens aktiviteter og økonomiske forhold

The Company's income statement for 2023 shows a loss of USD 647,310 thousand as against a loss of USD 131,785 thousand in 2022. Equity in the Company's balance sheet at 31 December 2023 stood at USD 2,180,775 thousand as against USD 2,821,858 thousand at 31 December 2022.
The result of loss for the year is mainly due to the impairment on investment in group entities with total amounting to 622 million which comprise of impairment of the cost of the investment and additional losses for subsidiaries with negative equity.
The results for the year 2023 are impacted by merge with Noble Group, when many of corporate functions performed by the Company in 2022, were taken over by Houston in 2023. Nevertheless, The Company still is acting as a supporting function for the other group entities.
The Company result for the 2023 is different from what expected by the end of 2022. Nevertheless, it was foreseen, that the actual development may materially differ from the expectations, due to the uncertainties of various factors, many of which are beyond of the company’s control.

Beskrivelse af virksomhedens forventede udvikling

Outlook for 2024 and Beyond
During 2023, oil prices generally remained at levels that were supportive of offshore exploration and development activity. While ongoing geopolitical crises and related sanctions, inflationary pressures, and recession concerns did create some uncertainty relating to future global energy demand, global rig demand increased in 2023. Results for 2024 are continued subject to risks and uncertainties as various factors, many of which are beyond the company’s control, may cause the actual development and results to differ materially from expectations. The result for 2024 are primarily sensitive to the level of contracting of additional days to the current backlog and the day rates hereon. Capital expenditures are sensitive to final scheduling and scoping of rig upgrades and yard stays, which are subject to commercial and operational planning. Under current circumstances and excluding the potential impact on the Company and its subsidiaries from impairments, reversal of prior year impairments and gains/losses from the disposal of non-current assets, management expects to reach a result for 2024 in the range of USD 0 – 5 million. This increase in global rig demand has been the result of the combination of growing confidence in commodity prices remaining at or above current levels, heightened focus on energy security, recent multi-year underinvestment in the development and exploration of hydrocarbons, and relative attractiveness of offshore plays with respect to both cost and a carbon emissions perspective. This had a positive impact on both utilisation and dayrates for certain of our rig classes. The global rig supply has come down from historic highs as Noble and other offshore drilling contractors have retired less capable and idle assets. Concurrently, the incoming supply of newbuild offshore drilling rigs has diminished materially, with several newbuild rigs stranded in shipyards. However, we expect many of these stranded newbuild rigs may continue to make their way into the global market over the next few years. Although the market outlook in our business varies by geographical region and water depth, we remain encouraged by the outlook in the ultra-deepwater floater market, with overall demand having increased from 2020 lows. Our customers continue to focus on the highest specification floaters, which represents the majority of our floater fleet. We have also experienced an overall demand increase in the global jackup market, with the Middle East being the largest component of this increase. While we remain encouraged about increasing overall rig demand, to the extent global macroeconomic concerns become more prevalent, we could experience downward pressure on oil and gas prices as well as overall rig demand for both floaters and jackups.