New York: Offshore drilling contractor Transocean announced on Wednesday it will scrap four rigs it had previously planned to sell, and it will stack four others.
The Swiss firm, one of the world’s largest offshore drilling contractors, is New York listed and has its main headquarters in Houston. In its announcement Transocean said it will dismantle the four – the Deepwater Expedition, Transocean Legend, Transocean Rather, and GSF Arctic III – and sell them for scrap “in an environmentally responsible manner”.
These latest scrappings, part of ongoing woes in the deepwater drilling industry caused by plunging oil prices, should result in an estimated non-cash charge of between $300m and $325m, net of taxes, on the company’s first quarter results, the announcement said.
The latest four bring to 16 the number of rigs Transocean is planning to scrap. And it may not stop there.
The company, which has at least a part stake in 68 rigs worldwide, has been seeking a replacement for Steven Newman who stepped down as CEO in February amid concerns about the firm’s performance. Transocean had spent billions of dollars to expand its fleet just before oil prices collapsed.
It has seen its corporate credit slashed to junk by one of the three credit-rating firms with the other two indicating possible downgrades.