November 4, 2010 / 6:49 PM / 9 years ago

Transocean sees $200 million Q4 hit from drilling halt

SAN FRANCISCO (Reuters) - Transocean (RIG.N) said on Thursday that it sees the effects of the U.S. offshore drilling moratorium knocking about $200 million off revenue this quarter due to downtime for rig retrofits and special rates negotiated with its clients.

The BP Plc (BP.L) disaster in April, which destroyed the Transocean rig drilling the well and killed 11 workers, halted most activity in the Gulf of Mexico because of tighter regulations and the moratorium, which only ended last month.

Transocean said third-quarter revenue was $118 million lower due to the special rates put in place while rigs in the Gulf of Mexico were unable to work.

Late on Wednesday, the world’s largest offshore rig contractor reported a lower third-quarter profit that fell short of many Wall Street estimates.

Shares of Transocean were 0.3 percent lower at $63.79 in early afternoon trading on Thursday, but the Philadelphia Stock Exchange oil service index .OSX was 2.5 percent higher on the back of a big rise in crude oil prices.

Transocean is mildly optimistic about pricing for its most advanced rigs. Terry Bonno, vice president of marketing, said any move by Petrobras (PETR4.SA) next year to deploy a few dozen rigs to tap its huge deepwater oil reserves could give a boost to the currently flat ultra-deepwater rates.

“There is a dynamic that could change very quickly with that type of positive news,” Bonno told analysts on a conference call on Thursday.

The Switzerland-based company has had its dividend payment held up by local Swiss authorities who are concerned about the nearly 300 U.S. court actions it is facing related to the April disaster, but Transocean has appealed the decision in the local court and expects a decision in the next few months.

“If we are unsuccessful at this level, we will evaluate our options, including a further appeal at the federal level,” Chief Executive Steven Newman said, adding that the company would also consider a different avenue of dividend payment in early 2011 once Swiss tax law changes to allow for it.

Reporting by Braden Reddall; Editing by Tim Dobbyn

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