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Big rig merger


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Big rig merger

The world’s two biggest offshore drilling companies Transocean and GlobalSantaFe are merging. Both are based in Houston, Texas in the US making oil and gas rigs. Deepwater rigs particularly are in increasing demand as energy companies scour the globe for reserves. The two companies combined will own 146 rigs.They have orders worth 24 billion euros on their books and the new company will be worth 36 billion euros.

Because of the amount they can charge to lease out their rigs the companies have strong cash flow.
It now costs around 360,000 a day to hire one and rents went up 13% last year. As part of this deal they will pay back nearly 11 billion euros to their shareholders as a dividend. Transocean said the merger will give the new company a broader customer base, particularly with state-owned national oil companies, which control almost 90% of global oil reserves.

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