Transocean CEO confident of winning Brazil appeal
NEW YORK (AP) — Transocean Ltd. CEO Steven L. Newman said Wednesday that he is confident of overturning a ban on his company's drilling and transportation operations in Brazil.
Last month, a federal court gave Chevron Corp. and Transocean 30 days to suspend oil drilling and transportation operations in Brazil until investigations are completed into two oil spills off the coast of Rio de Janeiro.
Newman told participants at the 2012 Barclays CEO Energy/Power Conference that the offshore drilling rig contractor will ask the court to stay the suspension until the appeal is heard by the court. If that request is denied, Transocean will have to suspend its operations, he said.
Thousands of gallons of oil seeped from cracks in the ocean floor in November at the site of a Chevron appraisal well. The National Petroleum Agency said the seepage was under control two weeks later but oil started leaking again in March. Chevron voluntarily suspended production in the field.
Newman said Wednesday that the 30-day time period allocated by the court will not begin until Transocean receives the official court order. He said he is confident the company will be exonerated.
Newman reiterated that the Zug, Switzerland, company is evaluating several possibilities for shedding aging lower-specification rigs, including a spinoff or an initial public stock offering. Another option is the sale of a package of assets.
The rigs, typically referred to as standard jack-ups, were built primarily in the 1980s. They lack the power and modern equipment of Transocean's high-specification rigs.
The majority of Transocean's revenue is generated by its ultra-deepwater high-specification fleet so the company is focusing on developing that business.
Shares of Transocean fell $1.54, or 3.2 percent, to end at $46.60. In the past 52 weeks, the price has ranged from $38.21 to $60.09 per share.