Exhibit 10.98 


                      COLLATERAL ASSIGNMENT OF INSURANCE


      READING &  BATES  BORNEO DRILLING  CO.,  LTD., an  Oklahoma  corporation
(hereinafter called the  "Assignor"), the owner  of the Panamanian  registered
offshore  drilling rig  CHARLEY GRAVES  (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 April, 1996.


                                    READING & BATES BORNEO DRILLING CO., LTD.


                                    By: ________________________
                                        Title:



                                                                ANNEX I       
                                                                  to          
                                                      Assignment of Insurances





                             NOTICE OF ASSIGNMENT


      Reading & Bates Borneo Drilling Co. Ltd. (the "Owner"), the owner of the
Panamanian flag offshore drilling rig Charley Graves (the "Rig"), HEREBY GIVES
NOTICE that by  a Collateral Assignment of Insurance dated  April 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 BORNEO DRILLING CO., LTD.

                        By                        
                           Title:


                             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 Borneo Drilling Co. Ltd., 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  Borneo  Drilling  Co., Ltd.,  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  Agenty, 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.