Tags: US | Gulf | Oil | Spill | Transocean

Transocean Continues to Seek Cause of Rig Blast

Thursday, 06 May 2010 11:06 AM

Transocean Ltd. said Thursday it continues to investigate the blast that sank one of its rigs in the Gulf of Mexico and resulted in the deaths of 11 workers.

The rig owner also said in a conference call with investors that it's working with BP PLC, which leased the rig, to stop the flow of oil from a subsea well that is leaking into the Gulf at an estimated rate of 210,000 barrels per day.

CEO Steven Newman said the contract for the rig calls for BP to be liable for any pollution or contamination caused by the incident. He said the company expects BP to honor that contract.

Newman cautioned that it is too early to speculate on the cause of the explosion, which occurred on April 20.

"What remains to be seen is the root cause of why a cased and cemented hole would have failed so catastrophically," he said.

Ricardo H. Rosa, Transocean's chief financial officer, said the company is insured for more than the $560 million replacement cost of the rig. The company has received $481 million in insurance payments so far.

Transocean said the loss of revenue from the rig incident will begin affecting its earnings in the current quarter that ends in June. On Wednesday, the company estimated lost revenue from the Deepwater Horizon rig at more than $500 million.

The company estimated costs from the incident, including insurance deductibles and legal fees, at $200 million.

Transocean on Wednesday said earnings for the three months ended March 31 fell 28 percent.

© Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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