Transocean LTD: Weathering the Financial Crisis Headquartered in Vernier, Switzerland Transocean Ltd (RIG) is the largest offshore oil drilling companies in the world. RIG is traded on the New York Stock Exchange (NYSE) and on the Swiss exchange (SIX). Its market capitalization of $5.06 billion on the NYSE makes it the largest by capitalization among its peers (Yahoo, 2015). It contracts its offshore rigs, drilling equipment and personnel to oil and gas companies around the globe. RIG specializes in “deepwater and harsh environment drilling services” with its fleet (as of October 2015) of 62 floating drilling rigs (Transocean, 2015a, p. 2). Established in 1996, Transocean was created by the acquisition of Transocean ASA by Sonat Offshore …show more content…
In response, the Federal Reserve Bank pumped large amounts of capital into the banking system. However by September 2008, Lehman Brothers, one of the largest international US banks, collapsed; the contagion quickly spread to other countries around the globe (Davies, 2014). Effects of the Credit Crisis on Transocean Transocean’s operating revenues remained strong throughout 2007 and 2008, approximately doubling year over year from 2006 to 2007and 2007 to 2008 (see Appendix A for Transocean’s 2006-2009 financial statements). Oil prices peaked in July of 2008 (see Appendix B for historical Brent Crude prices) when demand dropped due to the global economic turndown, resulting in Transocean’s revenues declining by 21.32%. However, by the fourth quarter of that year revenues had rebounded above same quarter in the previous year (Transocean, 2009). Credit access and any increase in cost of credit during the credit …show more content…
The merger was structured as an acquisition by Transocean. This merger likely helped Transocean as it would have decreased competition as well as adding additional contracts and backlog to the company (Transocean, 2009). Transaction, economic, translation, and country risk exposures faced by RIG during the global credit crisis. Transocean manages risk by invoicing in U.S. dollars (functional currency) and local currencies. The receipts of local currencies are adjusted to meet planned local expenditures, thereby reducing transactional exposure. Transactional exposure is limited to the difference between planned and actual requirements. In general Transocean reports no material effect on operating performance (Transocean, 2009). Transocean’s Current Financial Performance Current performance of Transocean Subsequent to the credit crisis demand for oil began to accelerate and supplies to decline in turn increasing global demand for drilling and exploration (see Appendix B), creating a global rush to develop oil fields. Transocean benefited from this upsurge in demand; however, by 2014 production especially in the U.S. soon out stripped demand and Transocean’s fortunes
All this panic caused many others to go to banks and withdraw their savings which caused even more banks to
These “bank runs” caused even more banks to close down, and by the end of the decade, around 9,000 banks had to close down. The surviving ones became skeptical of loans and were not willing
The American sub-prime mortgage crisis and asset-backed commercial paper (ABCP) crisis happened in Canada had huge negative impacts on the financial industry. With the bankruptcy of several major banks in North America, investors lost their faith in financial institutions and were not willing to invest their assets to those financial institutions because of extremely high risks. As a competitive player in the industry, Goodwin also faced this threat and had poor performance. Internal Analysis Strength: Goodwin was a well-diversified company with six divisions in different but related market segments.
However, the recession of 2007 was affected largely by the house bubble collapsing. The financial industries had designed complex ways for people to receive lends. There was a larger risk later that neither the investors of firms
One mistake and you could blow the place up” (Laskas 220). Along with the possibility of the place bowing up, the rig itself is a very dangerous machine. The rig is an “unforgiving steel tower, rife with peril: stuff turns, fingers get lopped off, arms, a couple of years ago a leg” (Laskas 222). Similar to the coal mine, these workers at the oil rig risk their very own lives to steal from the depths of the earth for the simple fact of fueling America further, and keeping our country up and
With a sharp increase in energy and other commodity prices, Japan experienced a economic contraction. Canadian financial system is “characterized by strong prudential regulation and supervision and a well-designed system of deposit insurance and arrangements for crisis
I've already noticed that Macondo Prospect was powered by BP, making BP the most interesting company for my research. However, there are other companies that have performed operations to establish this source of oil. BP has leased the Macondo well from Transocean so we can identify Transocean as the owner of the well. BP held only 65 percent of the Macondo prospectus and we can identify the Anadarko Petroleum Corporation and MOEX Offshore as the other owners, with a 25 percent and 10 percent stake in the Macondo oil
The US economy has seen a significant drop in oil prices over the past year. This has been very prevalent throughout the country, and consumers have been enjoying the cheapest gas prices since 2008 (Historical Price Charts). Not only does it affect the consumers, but it also has had a substantial impact on industry as well. Due to many influences, the dollar has gotten much stronger globally. This article addresses the effects of both, and which will ultimately have the largest impact on manufacturing firms in the US.
The Mexican Tequila Crisis was triggered by a combination of poorly carried out reforms, a currency peg, current account deficits, policy rate hikes in the US and social unrest, which finally led to both a currency and banking crisis. Having considered these problems, it is possible to conclude that the advantages of working with a Business Analyst could have significantly reduced loses and maybe even prevented the crisis in the long run. Their insights and analysis could have supported the government in making decisions more effectively and considering more perspectives to prevent major problems and reduce impacts around big changes or strategy
The San Diego Gas &Electric (SDG&E) is a company that provides electricity and natural gas in both Orange and San Diego counties in South West of California in the United States. This company is owned by a 500 energy services holder known as Sempra Energy which is based in San Diego. SDG&E is a public utility that is regulated and supplies energy to over 3.3 million consumers with around 1.4 million electric meters and more than 0.84 million natural gas meters in Orange and San Diego counties.it covers an area span of around 4,1oo square miles which is equivalent to 10,600 square kilometers with around 5,000 employees (San Diego Gas &Electric Company, 2009). This company first met on 18th of April 1881 at the parlor of the Consolidated Bank.
Deepwater Horizon is a Korean built oil rig platform that sat in the Gulf of Mexico. It arrived and became operation in the Gulf of Mexico in 2001 (Crandall, Parnell & Spillian, 2014). Although it functioned as a living quarters for employees, its main function was to drill for oil (Crandall, et al., 2014). The United States began using deepwater drilling as an alternative to offshore oil production in response to depleting oil reserves in more shallow waters off the United States’ coastline. Days before the well exploded, BP, Macondo, and Halliburton, the owners and builders of the well, ran tests to ensure that the well was functioning properly and did not have any leaks (Crandall, et al., 2014).
The financial crises throughout the 90’s were experienced by a number of countries such as; Mexico in 1994, East and South Asia in 1997, Russia in 1998, Brazil in 1999, and Argentina in 2002 that led to a decrease in loaning from the rest of the rest of the world. This made the currencies of suffering nations lose value as well as their stock markets and they experienced mini recessions. When their disaster was over these nations started to save and ceased borrowing foreign loans. These nations instead became the biggest lenders to the rest of the world and the United States became a huge client of them. Bernanke would argue that this reversal made the markets in fast developing nations become galvanized and become abundant with savings while searching for good
For over 70 years, Pemex started as an essential national asset but has become a national liability. Some may theorize this all happened by design so that the Mexican government can first overtake and starve Pemex of investments till the last option was to privatize the company and sell the most valuable
In the Oil & Gas Industry the competition is significantly intensive, with the market being ruled by big giants such as Exxon Mobil, Total, ConocoPhillips, British Petroleum, Chevron and the Royal Dutch Shell etc. Appendix A shows the market values of these super majors. The market is over ruled by three different types of players. 1.
Financial management “is the operational and financing activity of a business that is responsible for obtaining and utilizing the funds necessary for effective operations. Thus, Financial Management is concerned with the effective funds management in the business process. Finance is interrelated functions which deals with marketing function, production function, Human Recourse function and Research & development activities of the business concern. Financial Management is concerned with the financing, acquisition and management of assets with some overall goal in minds. There are three major areas in Financial Management decision making.