Overview
Transocean Ltd.
(together with its subsidiaries and predecessors, unless the context requires
otherwise, “Transocean,” the “Company,” “we,” “us” or “our”) is a leading
international provider of offshore contract drilling services for oil and gas
wells. As of February 2, 2010, we owned, had partial ownership
interests in or operated 138 mobile offshore drilling units. As
of this date, our fleet consisted of 44 High-Specification Floaters
(Ultra-Deepwater, Deepwater and Harsh Environment semisubmersibles and
drillships), 26 Midwater Floaters, 10 High-Specification Jackups,
55 Standard Jackups and three Other Rigs. In addition, we had
five Ultra-Deepwater Floaters under construction.
We believe
our mobile offshore drilling fleet is one of the most modern and versatile
fleets in the world. Our primary business is to contract our drilling
rigs, related equipment and work crews predominantly on a dayrate basis to drill
oil and gas wells. We specialize in technically demanding segments of
the offshore drilling business with a particular focus on deepwater and harsh
environment drilling services. We also provide oil and gas drilling
management services on either a dayrate basis or a completed-project,
fixed-price (or “turnkey”) basis, as well as drilling engineering and drilling
project management services, and we participate in oil and gas exploration and
production activities.
Transocean Ltd.
is a Swiss corporation with principal executive offices located at Blandonnet
International Business Center, Chemin de Blandonnet 2, Building F, 7th
Floor, 1214 Vernier, Switzerland. Our telephone number at that
address is +41 22 930-9000. Our shares are listed on the
New York Stock Exchange (“NYSE”) under the symbol “RIG.” On
February 16, 2010, we announced our intention to list our shares on the SIX
in the second quarter of 2010, subject to the approval of the
SIX. Our shares will continue to be listed on the
NYSE. For information about the revenues, operating income, assets
and other information related to our business, our segments and the geographic
areas in which we operate, see “Item 7. Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and Notes to Consolidated
Financial Statements—Note 23—Segments, Geographical Analysis and Major
Customers.
Background
In
November 2007, we completed our merger transaction (the “Merger”) with
GlobalSantaFe Corporation (“GlobalSantaFe”). Immediately prior to the
effective time of the Merger, each of Transocean Inc.’s outstanding
ordinary shares was reclassified by way of a scheme of arrangement under Cayman
Islands law into (1) 0.6996 Transocean Inc. ordinary shares and
(2) $33.03 in cash (the “Reclassification” and together with the Merger,
the “GSF Transactions”). At the effective time of the Merger, each
outstanding ordinary share of GlobalSantaFe (the “GlobalSantaFe Ordinary
Shares”) was exchanged for (1) 0.4757 Transocean Inc. ordinary shares
(after giving effect to the Reclassification) and (2) $22.46 in
cash. Transocean Inc. issued approximately 107,752,000 of its
ordinary shares in connection with the Merger and distributed $14.9 billion
in cash in connection with the GSF Transactions. Transocean Inc.
funded the payment of the cash consideration for the GSF Transactions with
$15.0 billion of borrowings under a $15.0 billion, one-year senior
unsecured bridge loan facility (the “Bridge Loan Facility”) and has since
refinanced or repaid those borrowings and terminated the Bridge Loan
Facility. We included the financial results of GlobalSantaFe in our
consolidated financial statements beginning November 27, 2007, the date the
GlobalSantaFe Ordinary Shares were exchanged for Transocean Inc. ordinary
shares.
In
December 2008, Transocean Ltd. completed a transaction pursuant to an
Agreement and Plan of Merger among Transocean Ltd., Transocean Inc.,
which was our former parent holding company, and Transocean Cayman Ltd., a
company organized under the laws of the Cayman Islands that was a wholly owned
subsidiary of Transocean Ltd., pursuant to which Transocean Inc.
merged by way of schemes of arrangement under Cayman Islands law with Transocean
Cayman Ltd., with Transocean Inc. as the surviving company and, as a
result, a wholly owned subsidiary of Transocean Ltd. (the “Redomestication
Transaction”). In the Redomestication Transaction,
Transocean Ltd. issued one of its shares in exchange for each ordinary
share of Transocean Inc. In addition, Transocean Ltd.
issued 16 million of its shares to Transocean Inc. for future use to
satisfy Transocean Ltd.’s obligations to deliver shares in connection with
awards granted under our incentive plans or other rights to acquire shares of
Transocean Ltd. The Redomestication Transaction effectively
changed the place of incorporation of our parent holding company from the Cayman
Islands to Switzerland. As a result of the Redomestication
Transaction, Transocean Inc. became a direct, wholly owned subsidiary of
Transocean Ltd. In connection with the Redomestication
Transaction, we relocated our principal executive offices to Vernier,
Switzerland. We refer to the Redomestication Transaction and the
relocation of our principal executive offices together as the
“Redomestication.”
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Drilling
Fleet
We
principally operate three types of drilling rigs:
§
drillships;
semisubmersibles;
and
jackups.
Also
included in our fleet are barge drilling rigs and a coring
drillship.
Most of our
drilling equipment is suitable for both exploration and development drilling,
and we normally engage in both types of drilling activity. Likewise,
most of our drilling rigs are mobile and can be moved to new locations in
response to customer demand. All of our mobile offshore drilling
units are designed for operations away from port for extended periods of time
and most have living quarters for the crews, a helicopter landing deck and
storage space for pipe and drilling supplies.
We
categorize our fleet as follows: (1) “High-Specification Floaters,”
consisting of our “Ultra-Deepwater Floaters,” “Deepwater Floaters” and “Harsh
Environment Floaters,” (2) “Midwater Floaters,”
(3) “High-Specification Jackups,” (4) “Standard Jackups” and
(5) “Other Rigs.” As of February 2, 2010, our fleet of
138 rigs, excluding rigs under construction, included:
44
High-Specification Floaters, which are comprised
of:
23
Ultra-Deepwater Floaters;
16
Deepwater Floaters; and
five
Harsh Environment Floaters;
26
Midwater Floaters;
10
High-Specification Jackups;
55
Standard Jackups; and
three
Other Rigs, which are comprised of:
two
barge drilling rigs; and
one
coring drillship.
As of
February 2, 2010, our fleet was located in the Far East (25 units),
U.K. North Sea (16 units), Middle East (16 units), U.S. Gulf of Mexico
(15 units), West African countries other than Nigeria and Angola
(14 units), India (12 units), Brazil (10 units), Nigeria
(seven units), Angola (six units), Norway (five units), the
Mediterranean (four units), Trinidad (two units), Australia
(two units), Canada (two units), the Netherlands (one unit) and
the Caspian Sea (one unit).
High-Specification
Floaters are specialized offshore drilling units that we categorize into three
sub-classifications based on their capabilities. Ultra-Deepwater
Floaters have high-pressure mud pumps and a water depth capability of
7,500 feet or greater. Deepwater Floaters are generally those
other semisubmersible rigs and drillships that have a water depth capacity
between 7,500 and 4,500 feet. Harsh Environment Floaters
have a water depth capacity between 5,000 and 1,500 feet, are capable
of drilling in harsh environments and have greater displacement, resulting in
larger variable load capacity, more useable deck space and better motion
characteristics. Midwater Floaters are generally comprised of those
non-high-specification semisubmersibles with a water depth capacity of less than
4,500 feet. High-Specification Jackups consist of our harsh
environment and high-performance jackups, and Standard Jackups consist of our
remaining jackup fleet. Other Rigs consist of rigs that are of a
different type or use than those mentioned above.
Drillships
are generally self-propelled, shaped like conventional ships and are the most
mobile of the major rig types. All of our high-specification
drillships are dynamically positioned, which allows them to maintain position
without anchors through the use of their onboard propulsion and station-keeping
systems. Drillships typically have greater load capacity than early
generation semisubmersible rigs. This enables them to carry more
supplies on board, which often makes them better suited for drilling in remote
locations where resupply is more difficult. However, drillships are
typically limited to calmer water conditions than those in which
semisubmersibles can operate. Our five existing Enhanced
Enterprise-class and Enterprise-class drillships are, and four of our five
additional newbuild drillships contracted for or under construction will be,
equipped with our patented dual-activity technology. Dual-activity
technology includes structures, equipment and techniques for using two drilling
stations within a single derrick to perform drilling
tasks. Dual-activity technology allows our rigs to perform
simultaneous drilling tasks in a parallel rather than sequential
manner. Dual-activity technology reduces critical path activity and
improves efficiency in both exploration and development drilling.
Semisubmersibles
are floating vessels that can be submerged by means of a water ballast system
such that the lower hulls are below the water surface during drilling
operations. These rigs are capable of maintaining their position over
the well through the use of an anchoring system or a computer controlled dynamic
positioning thruster system. Some semisubmersible rigs are
self-propelled and move between locations under their own power when afloat on
pontoons although most are relocated with the assistance of
tugs. Typically, semisubmersibles are better suited than drillships
for operations in rougher water conditions. Our three Express-class
semisubmersibles are designed for mild environments and are equipped with the
unique tri-act derrick, which was designed to reduce overall well construction
costs. The tri-act derrick allows offline tubular and riser handling
operations to occur at two sides of the derrick while the center portion of the
derrick is being used for normal drilling operations through the rotary
table. Our three Development Driller-class semisubmersibles are
equipped with our patented dual-activity technology.
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Jackup rigs
are mobile self-elevating drilling platforms equipped with legs that can be
lowered to the ocean floor until a foundation is established to support the
drilling platform. Once a foundation is established, the drilling
platform is then jacked further up the legs so that the platform is above the
highest expected waves. These rigs are generally suited for water
depths of 400 feet or less.
We classify
certain of our jackup rigs as High-Specification Jackups. These rigs
have greater operational capabilities than Standard Jackups and are able to
operate in harsh environments, have higher capacity derricks, drawworks, mud
systems and storage, and are typically capable of drilling to deeper
depths. Typically, these jackups also have deeper water depth
capacity than Standard Jackups.
Depending on
market conditions, we may idle or stack non-contracted rigs. An idle rig is between
contracts, readily available for operations, and operating costs are typically
at or near normal levels. A stacked rig is manned by a
reduced crew or unmanned and typically has reduced operating costs and is
(a) preparing for an extended period of inactivity, (b) expected to
continue to be inactive for an extended period, or (c) completing a period
of extended inactivity. Some idle rigs and all stacked rigs require
additional costs to return to service. The actual cost, which could
fluctuate over time, depends upon various factors, including the availability
and cost of shipyard facilities, cost of equipment and materials and the extent
of repairs and maintenance that may ultimately be required. Under
certain circumstances, the cost could be significant. We consider
these factors, together with market conditions, length of contract and dayrate
and other contract terms, when deciding whether to return a stacked rig to
service. We may consider marketing stacked rigs as accommodation
units or for other alternative uses, from time to time, until drilling activity
increases and we obtain drilling contracts for these units.
As of
February 2, 2010, we owned all of the drilling rigs in our fleet noted in
the tables below, except for the following: (1) those specifically
described as being owned wholly or in part by unaffiliated parties,
(2) GSF Explorer, which is
subject to a capital lease through July 2026 (3) GSF Jack Ryan,
which is subject to a fully defeased capital lease through November 2020
and (4) Petrobras 10000, which
is subject to a capital lease through August 2029.
In the
tables presented below, the location of each rig indicates the current drilling
location for operating rigs or the next operating location for rigs in shipyards
with a follow-on contract, unless otherwise noted. In addition to the
rigs presented below, we also own or operate three Other Rigs, including two
drilling barges and a coring drillship.
Rigs
Under Construction (5)
The
following table provides certain information regarding our Ultra-Deepwater
Floaters under construction as of February 2, 2010: