Transocean Inc. Clarifies Status of Norwegian Tax Dispute
HOUSTON--(BUSINESS WIRE)--Jan. 8, 2007--Transocean Inc. (NYSE:RIG)today clarified the status of the previously disclosed pendingNorwegian tax dispute in response to certain reports being circulatedin Norway. In particular, a lower court in Norway ruled against theposition held by two of the Company's former subsidiaries on aprocedural point related to an ongoing criminal investigation byNorwegian tax authorities in which neither the Company, nor itssubsidiaries has been charged. We continue to cooperate with Norwegianauthorities and intend to appeal the lower court's ruling on theprocedural point.
The court's ruling focused only on the issue of the extent of theattorney/client privilege under Norwegian law relating to certaindocuments seized from the office of these subsidiaries' legal adviserin a criminal investigation. The issue relates to whether theNorwegian prosecution authorities are allowed to release those seizeddocuments to Norwegian tax authorities in connection with the ongoingtax dispute.
The ruling is not expected to have any direct implications on thesubstantive issues in the criminal investigation, nor on the possiblereassessment of the tax liability of these subsidiaries. We believethat these subsidiaries' tax filings were legal and proper, thesesubsidiaries and their employees acted appropriately, and we plan tovigorously contest any assertions or assessments by the Norwegianauthorities.
As previously disclosed in our filings with the Securities andExchange Commission, we received notice in April 2006 from theNorwegian tax authorities regarding their intent to proposeadjustments to taxable income for the tax years 1999, 2001 and 2002.The Norwegian tax authorities initiated inquiries in September 2004related to the restructuring transactions and a separate dividendpayment made during 2001. In February 2005, we filed a response tothese inquiries. The proposed assessments could result in an increasein our tax liability of approximately $260 million plus interest, andthe authorities further indicated they intend to impose penalties,which could range from 15 to 60 percent of the assessments. Theanticipated assessments relate to restructuring transactionsundertaken in 2001 and 2002. We continue to respond to informationrequests from the Norwegian authorities and filed a formal protest tothe proposed assessment in June 2006. We also believe that theNorwegian authorities are contemplating a tax assessment ofapproximately $100 million on the dividend, plus interest and apenalty, which could range from 15 to 60 percent of the assessment.Norwegian civil tax and criminal authorities continue to investigatethe restructuring transactions and dividend.
Transocean Inc. is the world's largest offshore drillingcontractor with a fleet of 82 mobile offshore drilling units. Thecompany's mobile offshore drilling fleet, consisting of a large numberof high-specification deepwater and harsh environment drilling units,is considered one of the most modern and versatile in the world due toits emphasis on technically demanding segments of the offshoredrilling business. The company's fleet consists of 33High-Specification Floaters (semisubmersibles and drillships), 20Other Floaters, 25 Jackups and other assets utilized in the support ofoffshore drilling activities worldwide. With a current equity marketcapitalization in excess of $22 billion, Transocean Inc.'s ordinaryshares are traded on the New York Stock Exchange under the symbol\"RIG.\"
CONTACT: Transocean Inc., Houston
Analyst Contact: Jeffrey L. Chastain, 713-232-7551
Media Contact: Guy A. Cantwell, 713-232-7647
SOURCE: Transocean Inc.