Exhibit 10.116 


                      COLLATERAL ASSIGNMENT OF INSURANCE


      READING  & BATES  DEVELOPMENT CO.,  a Delaware  corporation (hereinafter
called  the "Assignor"), the owner of the Panamanian registered oil production
vessel Seillean (the  "Rig"), in consideration of One Dollar ($1) lawful money
of the United States of America and other good and valuable consideration, the
receipt  and sufficiency of which are hereby acknowledged, has sold, assigned,
transferred, set over, and granted a security interest, and by this instrument
does  sell, assign,  transfer, set  over  and grant  a security  interest unto
Christiania  Bank og  Kreditkasse,  New York  Branch,  not in  its  individual
capacity  but as Agent  for the Banks (as  that term is  defined in the Credit
Agreement,  as defined below) (hereinafter called the "Assignee") and unto the
Assignee's  successors and assigns,  to it and its  successors and assigns own
proper use  and benefit, and  as collateral security  for the full  and prompt
payment  when  due  (whether  at  the  stated  maturity,  by  acceleration  or
otherwise) of all obligations and liabilities of the Assignor, now existing or
hereafter incurred,  under, arising out  of or  in connection with  any Credit
Document (as that term is  defined in the Credit Agreement, as  defined below)
to which it is a party and the due performance and compliance by  the Assignor
with the terms of each such Credit Document, all right,  title and interest of
the  Assignor   under,  in  and  to  the  following  (all  of  the  following,
collectively,  the "Insurance  Collateral"):   (i) all  insurances (including,
without  limitation, all certificates of entry in protection and indemnity and
war  risks associations or  clubs) in respect of  the Rig, whether heretofore,
now  or hereafter effected, and all renewals  of or replacements for the same,
(ii)  except as hereinafter provided, all claims, returns of premium and other
moneys and claims for moneys due and to become due under or in respect of said
insurances, (iii) all other rights of the Assignor under or in respect of said
insurances  and (iv) any proceeds  of any of  the foregoing.   It is expressly
agreed that  anything herein  contained to the  contrary notwithstanding,  the
Assignor  shall remain  liable under  said  insurances to  perform all  of the
obligations assumed by it thereunder and the Assignee shall have no obligation
or liability (including, without limitation, any obligation  or liability with
respect  to  the  payment  of  premiums,  calls  or  assessments)  under  said
insurances by  reason of or arising  out of this instrument  of assignment nor
shall  the  Assignee be  required or  obligated in  any  manner to  perform or
fulfill any obligations of  the Assignor under or pursuant  to said insurances
or to make any payment or to make any inquiry as to the nature  or sufficiency
of any payment received by it or to  present or file any claim, or to take any
other action  to collect or  enforce the payment of  any amounts which  or may
have been assigned to it or to which it may be entitled hereunder at  any time
or times.

      This  Assignment is made pursuant  to the Credit  Agreement, dated April
30,  1996 (as the same  may be amended, modified  or supplemented from time to
time,  the  "Credit Agreement"),  by and  among  Reading &  Bates Corporation,
Reading & Bates Drilling Co.,  the Banks (as defined therein)  and Christiania
Bank og Kreditkasse, New York Branch, as Agent.

      The  Assignor hereby  constitutes  the Assignee  and its  successors and
assigns, the Assignor's true and lawful attorney, with full power (in the name
of the Assignor or  otherwise) to ask, require, demand,  receive, compound and
give  acquittance for  any and  all moneys and  claims for  moneys due  and to
become due  under or arising out of said  insurances, to endorse any checks or
other instruments or orders in connection therewith and to file  any claims or
to take any action or institute any proceedings which the Assignee may deem to
be  necessary  or  advisable in  the  premises;  provided,  however, that  the
Assignee  shall not  take any  action pursuant  to the  power granted  by this
paragraph unless an  Event of  Default under the  Credit Agreement shall  have
occurred and be continuing.   Such appointment of the Assignee as  attorney is
irrevocable and coupled with an interest. 

      The  Assignor hereby covenants and agrees to procure that notice of this
Assignment, in  the  form  of Annex  I  hereto, shall  be  duly given  to  all
underwriters  and  that  where the  consent  of  any  underwriter is  required
pursuant  to  any of  the insurances  assigned hereby,  such consent  shall be
obtained  and evidence thereof shall be given  to the Assignee, and that there
shall be duly endorsed upon all slips, cover notes, policies, certificates  of
entry  or other  instruments issued  or to  be issued  in connection  with the
insurances assigned hereby such clauses as to additional named assured or loss
payees  set forth in Annex I hereto.  In all cases, unless otherwise agreed in
writing by the  Assignee, such  slips, cover notes,  notices, certificates  of
entry or other instruments shall show the Assignee and the Banks as additional
named assured  and shall provide  that there will  be no recourse  against the
Assignee for payment of premiums, calls or assessments.

      The powers  and authority to the  Assignee herein have been  given for a
valuable consideration and are hereby declared to be irrevocable.

      The Assignor agrees  that at any time  and from time  to time, upon  the
written,  reasonable request of the  Assignee, the Assignor  will promptly and
duly execute and deliver any and all such further instruments and documents as
the  Assignee may reasonably  require in obtaining  the full  benefits of this
Assignment and of the rights and powers herein granted.

      The Assignor hereby  warrants and represents that it has not assigned or
pledged,  and hereby covenants that, without the prior written consent thereof
of  the Assignee,  so long as  this instrument  of assignment  shall remain in
effect, it will not assign or pledge the whole or any part of the right, title
and interest hereby assigned to anyone other than the Assignee, its successors
or assigns, and  it will not take  or omit to take  any action, the taking  or
omission of  which  might  result  in  an alteration  or  impairment  of  said
insurances or  this  Assignment, or  of  any of  the  rights created  by  said
insurances or this Assignment.

      All notices or other communications which are required to be made to the
Assignee hereunder shall be made by airmail postage prepaid letter, telefax or
by telex, confirmed by letter to:

                  Christiania Bank og Kreditkasse,
                  New York Branch
                  11 West 42nd Street
                  New York, New York 10036
                  Attn:  Hans Kjelsrud
                  Tel No.:  (212) 827-4814
                  Fax No.:  (212) 827-4888

or  at such other  address as any  such party  may designate by  notice to the
others.

      Any payments  made pursuant to  the terms hereof  shall be made  to such
account  as  may,  from  time  to time,  be  designated  by  the  Assignee for
distribution  in accordance with the  Mortgages, the Credit  Agreement and the
other Credit Documents.

      THIS  ASSIGNMENT SHALL BE GOVERNED BY THE  INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT  REFERENCE TO PRINCIPLES OF CONFLICTS OF  LAW.  THE ASSIGNOR
HEREBY IRREVOCABLY  WAIVES  ALL RIGHTS  TO  A TRIAL  BY  JURY IN  ANY  ACTION,
PROCEEDING OR COUNTERCLAIM ARISING  OUT OF OR RELATING TO THIS ASSIGNMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

      None  of the  terms and conditions  of this  Assignment may  be changed,
waived, modified  or varied in  any manner whatsoever  unless in writing  duly
signed  by  the Assignor  and the  Assignee (with  the  consent of  either the
Required Banks (as defined in the Credit Agreement) or, to the extent required
by Section 12.12 of the Credit Agreement, all of the Banks).

      In  the event that  the Insurance Collateral  or any portion  thereof is
sold  in connection  with  a sale  permitted  by Section  8.02  of the  Credit
Agreement or  is otherwise released at the direction of the Required Banks (or
all  the Banks,  to  the  extent  required  by Section  12.12  of  the  Credit
Agreement),  the Assignee, at  the request and  expense of  the Assignor, will
duly assign, transfer and deliver to the Assignor (without recourse  and with-
out  any representation  or warranty)  such of  the Insurance  Collateral (and
releases therefor)  as is then being (or has been)  so sold or released and as
may be in the possession of the Assignee and has not theretofore been released
pursuant to  this Assignment.    At any  time the  Assignor  desires that  the
Insurance Collateral  or a portion  thereof be  released as  provided in  this
paragraph, the Assignor shall deliver to the Assignee a certificate signed  by
an Authorized  Officer (as defined in  the Credit Agreement)  stating that the
release of the Insurance  Collateral or portion thereof is  permitted pursuant
to this paragraph.

      The  Assignor  hereby  authorizes  the  Assignee  to  execute  and  file
Financing  Statements  (Form UCC-1)  and  amendments  thereto as  provided  in
Article 9 of the Uniform Commercial Code.


      IN WITNESS WHEREOF, the  Assignor has caused this Assignment  to be duly
executed the 30th day of August, 1996.

                                   *   *   *


                                    READING & BATES DEVELOPMENT CO.



                                    By: ________________________
                                        Its:



                                                                ANNEX I       
                                                                  to          
                                                      Assignment of Insurances





                             NOTICE OF ASSIGNMENT


      Reading  &  Bates  Development  Co.  (the "Owner"),  the  owner  of  the
Panamanian  flag oil  production  vessel Seillean  (the  "Rig"), HEREBY  GIVES
NOTICE that  by a Collateral Assignment of Insurance dated August 30, 1996 and
made between the Owner and  Christiania Bank og Kreditkasse, New York  Branch,
as Agent (the "Assignee") for itself and certain other Banks (the "Assignee"),
the Owner  assigned  to the  Assignee  all of  the  Owner's right,  title  and
interest in  and to all  insurances and the  benefit of all insurances  now or
hereafter  taken out in respect of the Rig.  This Notice of Assignment and the
Loss Payable  Clauses attached hereto are  to be indorsed on  all policies and
certificates of entry evidencing such insurance.


                        READING & BATES DEVELOPMENT CO.



                        By                        
                           Its:



                             LOSS PAYABLE CLAUSES

                              Hull and War Risks


      Loss,  if any,  payable to  Christiania  Bank og  Kreditkasse, New  York
Branch, as  Agent for the Banks, for  distribution by it to  said Banks and to
Reading  & Bates  Development Co.,  Owner, as  their respective  interests may
appear,  or  order,  except  that,  unless  Underwriters  have been  otherwise
instructed  by notice  in writing  from the  Agent, in  the  case of  any loss
involving any damage to the Rig or liability  of the Rig, the Underwriters may
pay directly for the repair, salvage, liability or other charges  involved or,
if the  Owner of  the Rig  shall have repaired  the damage  and paid  the cost
thereof, or  discharged the  liability or paid  the salvage or  other charges,
then the  Underwriters may pay  the Owner as  reimbursement to the  extent the
Owner has paid the covered loss.

      In the event of an actual or constructive total loss or a compromised or
arranged total  loss or requisition  of title, all insurance  payment therefor
shall  be paid to  the Agent,  for distribution by  it in  accordance with the
terms of the first preferred Panamanian mortgage relating to the Rig.


                           PROTECTION AND INDEMNITY

      Loss,  if any,  payable to  Christiania  Bank og  Kreditkasse, New  York
Branch, as  Agent for the  Banks for distribution  by it to  the Banks  and to
Reading  & Bates  Development Co.,  Owner, as  their respective  interests may
appear,  or  order, except  that,  unless  and  until Underwriters  have  been
otherwise instructed by notice in writing from the Agent, any loss may be paid
directly to the  person to whom  the liability covered  by this insurance  has
been incurred, or to the Owner of the Rig to reimburse it for any loss, damage
or  expenses incurred by  it and covered  by this insurance,  provided that in
respect  of any claim  in excess  of $1,000,000,  the Underwriters  shall have
first  received  evidence   that  the  liability  insured   against  has  been
discharged.