US offshore drilling giant Noble Corporation has confirmed that its multi-billion dollar merger with Maersk Drilling hinges on satisfying the UK competition regulator about the size of its jack-up rig fleet.

The UK Competition & Markets Authority’s (CMA) issued a phase one decision on 22 April that the transaction gave rise to the prospect of a substantial lessening of competition in the jack-up market for offshore drilling in North West Europe, covering the UK, Denmark and the Netherlands.

A remedy to address this is required to avoid a phase two investigation by the CMA.

“Offshore drilling services are critical for oil and gas producers,” said CMA senior director of mergers Colin Raftery.

“Our investigation showed that Noble and Maersk have competed closely in the past and face only limited competition.

"We’re therefore concerned that the loss of competition that this deal would bring about could result in higher prices or lower quality services, increasing operating costs for oil and gas producers in the UK North Sea."

The CMA gave Noble and Maersk five working days to offer proposals to address the competition concerns.

The CMA would then have a further five working days to consider whether to accept these in principle instead of referring the case to phase two.

Noble said in its quarterly results on 2 May that the duration and outcome of the CMA review process remained uncertain.

"If Noble is able to obtain a conditional phase one antitrust clearance from the UK CMA, the closing of the business combination is expected to occur in mid-2022," said Noble, confirming that certain jack-up rigs currently located in the UK North Sea are being considered for divestment .

The "remedy rigs" will comprise the Noble Hans Deul, Noble Sam Hartley, Noble Sam Turner, Noble Houston Colbert, and either the Maersk Innovator or the Noble Lloyd Noble, both of which are a CJ-70 design.

Noble chief executive Robert Eifler said: “As we look forward to the closing of the combination with Maersk Drilling, we remain focused on operating safely, serving the needs of our customers, and creating long-term value for our shareholders.”

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