Transocean to give shareholders $1 billion while trying to cap its responsibility for Gulf spill at $27 million

Transocean, Ltd., the giant oil contractor that leased its Deepwater Horizon rig to BP, held a “closed-door meeting” with shareholders Friday, “just days after” executives appeared before Congress to explain the company’s role in the massive Gulf of Mexico oil spill.  As ThinkProgress noted, the meeting took place at the company’s headquarters in Zug, Switzerland, where Transocean relocated two years ago to avoid paying taxes. Though CEO Steven Newman “ignored questions from reporters,” the company said in a statement that it would distribute $1 billion in dividends to shareholders:

The revelation that Transocean is distributing a $1 billion profit to shareholders as one of its drill sites leaks millions of gallons of oil into the sea is sure to inflame an already smarting debate over offshore drilling and the company’s role.[…]

To put the distribution in perspective, the amount of profit that Transocean plans to pay out in the next year is half of what Exxon ultimately paid for the Exxon Valdez disaster off the Alaska Coast.

It’s also more than double what BP has said they’ve spent on the cleanup to date.

Meanwhile, Transocean has “passionately argued” to limit its financial responsibility for the disaster. The company filed a court request last week to cap its liability under $27 million, a paltry sum considering BP has already spent over $450 million on cleanup, and analysts estimate the effort could ultimately cost up to $8 billion. As Raw Story notes, Transocean has actually made money from the disaster, collecting over $400 million from insurers, leaving it with a profit of $270 million after the costs of the rig are subtracted. As maritime attorney Jeff Seely told NPR, “They are the only people who have been compensated for this tragedy. The decedents [of the 11 workers killed in an explosion on the rig] haven’t been the compensated. The injured people who still are suffering, all the fishermen out in the Gulf that can no longer work haven’t been compensated.”

Reposted from Think Progress.

11 Responses to Transocean to give shareholders $1 billion while trying to cap its responsibility for Gulf spill at $27 million

  1. mike roddy says:

    Maybe their next move will be to declare bankruptcy, or relocate the company to West Yemen. Greed is indeed a terrible thing. The Transocean stockholders that went to that meeting are the wealthy ones, and the rich don’t think they are ever supposed to take a loss. That’s for the little people.

    This phenomenon is especially true for fossil fuel types and their financial partners. They own several estates along with condos in New York and Paris. This doesn’t make them happy, though. Their wives and kids are on medication, and their idea of reading is picking up Vanity Fair or the Wall Street Journal. Doing good for anyone besides themselves is just not in them. For all of their servants and art collections, they emit a foul and fetid body odor, and their conversation is boring. These are the people making the key decisions about the future of the world.

  2. paulm says:

    How much is 30 pieces of silver worth nowa days?

  3. Leland Palmer says:

    Well, I was telling my wife yesterday that there was no plausible conspiracy theory to explain this disaster, because it was likely to massively and negatively affect everyone in the oil industry. The oil industry is likely to see billions of dollars in costs and will likely not get the congressional support for offshore oil drilling that they wanted.

    So, I was telling her it was a plausible accident, but was not a plausible result of a conspiracy, of the American oil corporations and their big subcontractors to target BP, for example.

    Now, I don’t know. If TransOcean makes a profit on this thing, they have a motive for causing it.

    Chances are, they won’t make a profit, no matter what motions they are filing in court.

    I was telling my wife, the way to try to investigate if this incident was the result of a conspiracy would be to look for any sign that key judges were bribed or otherwise put in positions to help the case, and limit the liability of TransOcean or Halliburton. Another thing to look for would be any sign that this event was studied using risk management software, which draws event trees and assigns probabilities to all branches of that event tree. Such a use of risk management software could easily be hidden in plain sight, as an academic study of the consequences of a blowout disaster, contracted to a corporation such as SAIC or SRI International.

    It is a little odd that the entities that apparently caused the disaster, Halliburton and TransOcean, are not the ones so far that are ultimately financially responsible. So far, it’s been all BP’s money spent to limit the disaster, and now they have to go after TransOcean (registered overseas) and Halliburton (not necessarily responsible), as a foreign corporation acting through American courts, to try to recover money already spent.

    It’s always very hard to recover money already spent in the courts, I think, and is especially hard for foreign corporations suing American corporations.

  4. Leland Palmer says:

    You know, another thing to look for is whether American corporations such as ExxonMobil are able to argue that they have higher safety standards, and are able to get BP excluded from drilling in deep waters in the Gulf. If ExxonMobil, for example, is able to step in and take over BP’s oil leases in the Gulf, after Congressional action of some sort, the plausibility of a conspiracy starts to go up, I think.

    Already, though, the Obama Administration is acting to divide regulatory authority from leasing authority within the government, an outcome the oil industry would likely not like, at all, because it limits corruption.

  5. Dave E says:

    We should get BP management out of the gulf. Find a reputable management team to manage the mess (and provide more transparency) and require BP/Transocean/Halliburton to put $5 billion in escrow to cover expenses.

  6. Raul says:

    I remember as a child, when mom came home and found I had made such a
    mess in the house. She probably 1st thought to send me out of the house.
    But she decided that I spend all my time any any moneys I would have had
    in cleaning up that mess.
    Certainly, big business will take that stance as we all have gained from
    the largess of big oil.
    But oh, so inconvient for all my time and energy to go to helping to
    solve a problem that they even don’t know how to solve.
    I counter that now “clean UP that mess” is lost from the start.

  7. Leif says:

    The old adage comes to mind: Dilution is the solution to pollution.

    In the end it looks like earth takes yet another hit below the belt.

    Oh, one more thing. The rich get richer.

    Recall that many of the rich got richer on the financial meltdown as well. I think we really need to look at the function of the capitalistic system here. We the people appear to be getting the slippery end of the stick with regularity.

  8. Doug Bostrom says:

    These folks just “don’t get it.”

    Actually, I’m wrong. They do get it. They get that we have no choice about using their products and that following decades of anti-government propaganda spewed forth by such as The Club for Growth we’ll never assert ourselves in a meaningful way to put a check on this kind of behavior.

    If we had not integrated the lie that our government is some kind of alien actor stalking amongst us, we’d intervene in a significant way in the internal operations of BP et al. Instead we’ll have an “independent commission” look into the affair, this commission making a bunch of blindingly obvious recommendations which will be ignored.

    We’re a bunch of oil-soaked chumps and these guys are thumbing their noses at us. Laughing all the way to the bank…

  9. Phil Brown says:

    Transocean had insured the rig for $560 million
    Looks like they have 400 million? It may take 900 million to build a rig and add all the equipment. There are millions of dollars of pipe and tools down hole. Who wrote the insurance? Don’t all these policies also require liability in this case to cover BP for damages/

  10. prokaryote says:

    ” – Transocean has actually made money from the disaster, collecting over $400 million from insurers, leaving it with a profit of $270 million after the costs of the rig are subtracted.”

    Sounds like a buisness model. To bad the profits made with putting all the locked fossils into our air (or ocean) and leaving a lot depleted reserviors – a more porous earth. How long will companys be allowed todo so? Maybe it is time for oil companys to transit to clean technologies?

    How many oil/natural gas/mud volcanoes we dealing with?

    New report says oil drilling behind Indonesian mud volcano

  11. Raul says:

    certainly the rooms are busy with so much changes going on, but are there
    real concerns for ground water with biofuel plants creating strange growths of microbs. We see and hear about red tides on the ocean but how
    could we see a red tide comming out of the faucet.