Transocean Ltd. is in talks to merge with rival offshore drilling contractor Seadrill Ltd., according to people familiar with the matter, just as oil explorers around the world are returning to the sea.
Discussions are ongoing about the potential structure of a combination, said the people, who asked to not be identified because the details are private. A final decision on pursuing a deal hasn’t been made and the companies could opt to remain independent, they said.
A representative for Transocean didn’t respond to requests for comment. A spokesperson for Seadrill declined to comment.
Transocean, with headquarters in Switzerland, has seen its shares fall 35% this year, giving the company a market value of about $3.6 billion. Hamilton, Bermuda-based Seadrill is down 26% since Jan. 1, giving it a market value of $2.4 billion.
Once the world’s two biggest offshore drillers, both Transocean and Seadrill have lagged as rivals bulked up and a protracted offshore drilling downturn forced many contractors into bankruptcy. Now offshore drilling, particularly in deep water, is once again booming thanks to steady oil prices and slower production growth from US shale fields.
SLB, the world’s biggest oilfield services provider, sees the potential for more than $500 billion in commitments to offshore projects from 2023 through 2026.
Unlike the booming consolidation wave sweeping up global oil producers in the past year, offshore driller merger activity has been far more muted. Noble Corp. became the world’s biggest offshore driller by market value after acquiring rivals Diamond Offshore Drilling Inc. this year and Maersk Drilling in 2022.
Merging with Seadrill would fit Transocean’s strategy of growing its list of backlog work, utilizing some of the world’s most advanced rigs capable of drilling in water more than two miles deep.
Source: Mint