Related News:
Transocean Rises After Norway's Fredriksen Says He May Bid for Rig Owner
Transocean Ltd., owner of the oil rig that exploded while drilling BP Plc’s Macondo well in the Gulf of Mexico, rose in New York trading after billionaire John Fredriksen said his Seadrill Ltd. may bid for the company.
“We’re looking at everything that is reasonable,” Fredriksen said today in an interview in Oslo. “Transocean is reasonable these days. We’re looking at companies that are cheap and that have good equipment.”
Transocean, the world’s largest offshore driller, jumped 6.7 percent to $54.33 as of the 4 p.m. close of New York Stock Exchange composite trading. Other rig contractors, including Noble Corp. and Rowan Cos., also rose, pushing the Philadelphia Oil Service Sector Index to its biggest gain since June.
Fredriksen, a Norwegian who made his fortune in oil tankers before founding Seadrill, said stricter regulation of offshore drilling after the Gulf of Mexico oil spill may benefit his company and others with relatively modern rigs. Rig rents will probably “surprise on the upside,” he said.
The U.S. halted deepwater drilling for six months after an April 20 explosion on Vernier, Switzerland-based Transocean’s Deepwater Horizon killed 11 workers and started the country’s biggest offshore oil spill. London-based BP, which had hired Transocean to drill a well in water a mile deep, has spent more than $6 billion stopping the leak and cleaning up its damage.
Seadrill, based in Hamilton, Bermuda, rose 6.3 kroner, or 4.3 percent, to close at 153.3 kroner in Oslo trading. The closing price was Seadrill’s highest since April 29.
Biggest Driller
“We’re looking at consolidation all the time, there are a lot of opportunities on the rig side,” Fredriksen said.
Transocean has a market value of more than $17 billion, making it about 65 percent bigger than Seadrill.
“We have said that we will look at selective assets, we will look at organic growth, which means looking at building at a yard, and we are looking at M&A type of activities,” Seadrill Chief Executive Officer Alf Thorkildsen said in an interview in Oslo. “We’re looking at the whole menu, but I think Transocean would be very big step.”
Politicians from the U.K. to Russia have promised to consider tighter regulations on offshore drilling after Macondo spilled more than 4 million barrels of crude into the Gulf of Mexico.
Seadrill won’t rush to increase its 10 percent shareholding in Pride International Inc. because it would risk triggering a so-called poison-pill provision, Thorkildsen said.
Pride Stake
“We’ve had the stake for some years, we are a patient investor,” he said. “There are other transactions that are much more easy to do and that we will look at before that.”
Pride was among drilling contractors that rose more than 7 percent today. Noble jumped 7.1 percent to $33.33, and Rowan, which also announced two new drilling contracts with Saudi Arabia’s state oil company, climbed 9 percent to $28.02. Pride and Rowan are based in Houston. Noble’s headquarters is in Geneva.
The new contracts for Rowan, which said it plans to move two so-called jack-up rigs to the Middle East from the Gulf of Mexico, contributed to share gains by other drillers, said Jud Bailey, an analyst at Jefferies & Co. in Houston.
“Noble, we’re hearing, is going to get some good-sized contracts in Saudi Arabia as well,” Bailey said. “I think it’s the jack-up contracts in Saudi and just people talking consolidation.”
To contact the reporters on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net; Jonas Bergman in Oslo at jbergman@bloomberg.net.
Rate These Stories
Rate this Page