Transocean books $5.7 billion loss for 2011

Transocean, the world’s largest offshore drilling contractor based in Zug, has reported a net loss of $5.725 billion (SFr5.14 billion) for 2011.

This content was published on February 27, 2012 and agencies

The company, which owned the Deepwater Horizon oil rig that exploded in the Gulf of Mexico in April 2010, attributed the result to a $5.2 billion goodwill impairment charge and an estimated $1 billion loss contingency on the Deepwater Horizon incident, both of which were booked in the fourth quarter of 2011.

Transocean is locked in a bitter legal fight with BP, Halliburton and around a dozen other companies involved in the Deepwater Horizon drilling operation over liability for the disaster. Eleven people died and an estimated four billion barrels of oil spilled into the Gulf of Mexico. 

Transocean said it believed the estimated $1 billion charge for the Deepwater Horizon incident was a probable and reasonable estimate “at this time” and could be adjusted as new information comes to light.

A civil trial over the disaster in which Transocean is a co-defendant with BP was due to start in New Orleans on Monday but was delayed a week to give the parties more time to try to reach a settlement.

The company said the $5.2 billion goodwill impairment charge was primarily associated with a decline in the market valuation of the contract drilling services business.

The massive loss booked for the 2011 financial year compares with net income of $961 million reported in 2010.

Cashflow from operating activities also declined significantly on-year to $1.785 billion compared with $3.946 billion the previous year, and revenues were down to $9.142 billion compared with $9.466 billion in 2010.

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