World's largest offshore drilling contractor Transocean,
Inc. ( RIG ) has agreed to pay more than $1.4 billion
as a settlement fee, in order to resolve the federal claims that
have emerged from the Gulf of Mexico oil spill in 2010. According
to a court filing, the payment includes $400 million as criminal
penalty and $1 billion plus interest as civil penalties.
Out of the $400 million payment of criminal penalty, $150
million will be allocated for protecting the Gulf of Mexico and
another $150 million will be paid for preventing oil
The Deepwater Horizon drilling rig that sank with explosion on the
evening of April 20, 2010 while working on the Macondo exploration
well had killed 11 workers and leaked 4.9 million barrels of oil
into the Gulf over 87 days, polluting shores from Texas to Florida.
The drilling rig was leased by British energy major BP
plc ( BP ) from Transocean. The incident was a major
environmental disaster in U.S. history.
Transocean management reveals that the company has already set
aside $1.5 billion as loss contingency, and is planning to pay the
fine over a period of five years. Moreover, management expects to
pay some $1 billion by 2013 and 2014.
Switzerland-based Transocean is the leading provider of drilling
management services worldwide. As of June 30, 2012, the company
owned, had partial ownership interests in, or operated 130 mobile
offshore drilling rigs. Transocean's drilling fleet consists of 50
high-specification deepwater floaters, 25 mid-water floaters, 10
high specification jackups, 44 standard jackups, and one other rig
utilized to support offshore drilling activities worldwide.
Additionally, the company had 2 ultra-deepwater drillship and 3
high-specification jackups under construction. Transocean's fleet
is considered to be one of the most modern and versatile in the
world due to its emphasis on technically demanding segments of the
offshore drilling business.BP PLC (BP): Free Stock Analysis ReportTRANSOCEAN LTD (RIG): Free Stock Analysis
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Transocean holds a Zacks #2 Rank, which translates into a Buy
rating for a period of one to three months. For the long term, we
maintain a Neutral rating on the company.