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Owner of Exploded Rig Exploits Offshore Status

Source: NY Times

Posted on 08 Jul 2010

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Transocean is the world’s largest offshore drilling company, but until its Deepwater Horizon rig exploded in the Gulf of Mexico in April, few Americans outside the energy business had heard of it. It is well known, however, in a number of other countries — for testing local laws and regulations.

Human rights advocates have called for an investigation into Transocean’s recent dealings in Myanmar. They cite its involvement in a drilling project that apparently included a company that is suspected of having ties to two men accused of laundering money for Myanmar’s repressive government, which is under United States trade sanctions.

Transocean has disclosed in Securities and Exchange Commission filings that its drilling equipment was shipped by a forwarder through Iran and that until last year it held a stake in a company that did business in Syria. The State Department says Syria and Iran sponsor terrorism.

In Norway, Transocean is the subject of a criminal investigation into possible tax fraud. The company has said in S.E.C. filings that Norwegian officials could assess it about $840 million in taxes and penalties. The filings also said that a final ruling against Transocean could have a “material impact” on the company, which has suffered a drop in its stock price of more than 40 percent since the Gulf of Mexico incident.

Tax, pollution issues
And in the United States, a federal bankruptcy judge recently found that one of Transocean’s merger partners had repeatedly abused the legal system to try to avoid potential liability in a pollution case in Louisiana. Transocean is also the target of tax inquiries in the United States and Brazil.

Transocean declined through an outside spokesman to make company officials available for comment. The company said in a statement that it had always acted appropriately and believed that it would prevail in any investigations.

It is not unusual for large multinational companies like Transocean to find themselves in legal or tax controversies around the world and Transocean has noted the issues that face it in public filings.