IRANIAN CLAIMS OF svco, INC. 1. Prior to the Iranian revolution, SEDCO wasaTong:Ithe largest oil field service contractors in Iran. Its operations included contract drilling (utilizing sixteen land drilling rigs), pipeline construction, and ship repair. These operations were managed through Iranian companies and branches of SEDCO's subsidiary and associated companies. (These companies did not carry political risk insurance) 2. Beginning in December 1978, substantially all of these operations were disrupted during the revolution and change of government in Iran. NIOC, NIGC, and OSCO stopped making payments required in existing contracts. Iranians eventually appropriated without compensation all of SEDCO's assets in Iran. 3. In November 1979, SEDCO filed actions in the United States District Court for the Southern District of New York against the National Iranian Oil Company ("NIOC") seeking damages for breach of contract and conversion of assets located in Iran. Sufficient funds of NIOC were attached in U.S. banks* to secure SEDCO's claims. In January 1981, in resolution of the hostage crisis between the United States and Iran, Executive Orders were issued contemplating the suspension and prohibition of legal proceedings in courts of the United States against Iran and its state enterprises and for the resolution of claims through international arbitration. SEDCO's litigation was suspended in accordance with said Executive Orders and the attached NIOC funds were released. /14 4. SEDCO subsequently filed claims in excess of $1440,000,000 against Iran and NIOC in international arbitration proceedings before the Iran-United States Claims Tribunal in The Hague and is vigorously prosecuting these claims. Our final hearing in our main case is scheduled to begin June 18th. In the event SEDCO wins an award from the arbitration tribunal, we expect to be paid from a security fund in The Hague of approximately one billion dollars. ILL--)Y tv+r>y- + * (NOTE: Please do not mention our attachment of NIOC funds German banks) WPC:WWC/vp 4/8/85 441128 41"1 4):11' Atm- ott .4-1k141414... lt in - to