Stock Photo: HASPhotos / Shutterstock.com
By David Carnevali, Dinesh Nair and David Wethe (Bloomberg) —
Transocean Ltd. is in talks to merge with rival offshore drilling contractor Seadrill Ltd., according to people familiar with the matter, just as oil explorers around the world are returning to the sea.
Shares of Seadrill jumped about 10% after the close of regular trading in New York while Transocean’s were up about 3%.
Discussions are ongoing about the potential structure of a combination, said the people, who asked to not be identified because the details are private. A final decision on pursuing a deal hasn’t been made and the companies could opt to remain independent, they said.
Seadrill Eyes Growth via Acquisitions
A representative for Transocean didn’t respond to requests for comment. A spokesperson for Seadrill declined to comment.
Transocean, with headquarters in Switzerland, had seen its shares fall 35% this year through the close of regular trading Wednesday, giving the company a market value of about $3.6 billion. Hamilton, Bermuda-based Seadrill had been down 26% since Jan. 1, giving it a market value of $2.4 billion.
Once the world’s two biggest offshore drillers, both Transocean and Seadrill have lagged as rivals bulked up and a protracted offshore drilling downturn forced many contractors into bankruptcy. Now offshore drilling, particularly in deep water, is once again booming thanks to steady oil prices and slower production growth from US shale fields.
Transocean, which owned the Deepwater Horizon rig involved in BP Plc’s Macondo well blowout in the Gulf of Mexico, was the only major offshore rig contractor to avoid bankruptcy during the 2020 downturn.
SLB, the world’s biggest oilfield-services provider, sees the potential for more than $500 billion in commitments to offshore projects from 2023 through 2026.
Unlike the booming consolidation wave sweeping up global oil producers in the past year, offshore-driller merger activity has been far more muted. Noble Corp. became the world’s biggest offshore driller by market value after acquiring rivals Diamond Offshore Drilling Inc. this year and Maersk Drilling in 2022.
Merging with Seadrill would fit Transocean’s strategy of growing its list of backlog work, utilizing some of the world’s most advanced rigs capable of drilling in water more than two miles deep.
© 2024 Bloomberg L.P.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 109,835 members that receive our newsletter.
Have a news tip? Let us know.
The Bureau of Ocean Energy Management (BOEM) has confirmed competitive interest in two offshore wind areas (WEAs) off the southeast Texas coast, following an unsolicited lease request from Hecate Energy...
W&T Offshore, an independent driller operating in the U.S. Gulf of Mexico, has asked a federal judge to block insurance companies' demands for $250 million in additional collateral for taking apart old oil infrastructure.
Europe is starting to find the limit of a decades-long boom in offshore wind. It can be seen most acutely in the places that have been quickest to build capacity. Countries like Denmark and Sweden are beginning to hit a wall as power prices and incentives drop too low to make building projects worth it. The latest example is a Danish government auction for offshore wind that failed to attract any bids.
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 109,835 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
