Markets
PBR

Is Transocean Connected to the Petrobras Corporate Scam? (Revised)

Transocean Ltd.RIG slipped nearly 5% on NYSE following the news that the offshore drilling giant is linked to the Petroleo Brasileiro S.A. or PetrobrasPBR corporate corruption scandal.

It is now common knowledge that Petrobras was caught red handed in a multibillion-dollar money laundering scam last year. But the latest buzz is that Transocean was also linked.

Eduardo Costa Vaz Musa, the former executive of the Brazilian state-run energy player, stated in a plea bargain testimony that he got a payment from Transocean after the drilling player won a contract from Petrobras. Musa was assisting prosecutors in Curitiba when he made this statement.

It was in 2007 that Musa was offered a bribe to let Transocean operate Petrobras 10000 ultra-deepwater rig. The ex-Petrobras executive started getting payments in 2012, when Transocean secured the Petrobras contract.

However, in a statement to Bloomberg, Transocean commented that it has always been strongly committed to comply with the utmost standard of corporate ethics.

Switzerland-based Transocean is the world's largest offshore drilling contractor and leading provider of drilling management services. As of Mar 18, 2015, the company owned, or had partial ownership interests in, and operated 68 mobile offshore drilling rigs. Its drilling fleet consists of 43 high-specification deepwater floaters, 15 mid-water floaters, and 10 high specification jackups.

Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company's activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks, as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

Currently, Transocean holds a Zacks Rank #2 (Buy) while Petrobras carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy sector are Tesoro Corporation TSO and Halcón Resources Corporation HK . While Tesoro sports a Zacks Rank #1 (Strong Buy), Halcón Resources carries Zacks Rank #2.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>

(We are reissuing this article to correct a mistake. The original article, issued on Sep 25, 2015, should no longer be relied upon.)

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

TESORO CORP (TSO): Free Stock Analysis Report

PETROBRAS-ADR C (PBR): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

HALCON RESOURCS (HK): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

PBR RIG

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More