Transocean Regrets ‘Insensitive’ Wording About Safety

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April 5, 2011

HOUSTON -(Dow Jones)- Transocean Ltd. (RIG, RIGN.VX) Monday said it regretted using “insensitive” wording in a recent securities filing in which the contract driller called 2010 its “best year in safety performance” despite the deadly Deepwater Horizon disaster.

Transocean owned the Deepwater Horizon rig, which was drilling a deep-water well in the Gulf of Mexico for BP PLC (BP, BP.LN) last April when it exploded, killing 11 and unleashing the largest offshore oil spill in U.S. history. Nine of those who died were Transocean employees.

In a securities filing known as a proxy statement, the world’s largest offshore driller said Friday that its executives received two-thirds of their target safety bonus, which accounts for 25% of the formula that determines annual cash bonuses.

“Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record,” the proxy said.

Speaking in Mexico City early Monday, U.S. Interior Secretary Ken Salazar and William Reilly, co-chair of the presidential panel that investigated the disaster, criticized the company’s language. Transocean’s remarks were “embarrassing,” Reilly said.

“It’s been said with respect to the disaster that some companies just don’t get it,” Reilly told reporters during a conference call. “I think Transocean just doesn’t get it.”

Salazar said that 2010 “was probably the greatest year of pain in terms of oil and gas development in the deep water all across the world and especially in the Gulf of Mexico,” and said Transocean was “at least at some fault” in the Deepwater Horizon disaster.

Ihab Toma, Transocean’s executive vice president of global business, acknowledged in a written statement issued Monday that “some of the wording in our 2010 proxy statement may have been insensitive in light of the incident that claimed the lives of eleven exceptional men last year and we deeply regret any pain that it may have caused.”

“Nothing in the proxy was intended to minimize this tragedy or diminish the impact it has had on those who lost loved ones. Everyone at Transocean continues to mourn the loss of these friends and colleagues,” Toma said.

In the proxy, Transocean had said that, based on the total rate of incidents and their severity, Transocean “recorded the best year in safety performance in our company’s history.”

Transocean executives received no safety bonuses in 2009 when four employees died on the job.

-By Ryan Dezember, Dow Jones Newswires



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