Transocean Proxy Statement and 2010 Annual Report

An inability to obtain visas and work permits for our employees on a timely basis could hurt our operations and have an
adverse effect on our business.
Our ability to operate worldwide depends on our ability to obtain the necessary visas and work permits for our personnel to travel
in and out of, and to work in, the jurisdictions in which we operate. Governmental actions in some of the jurisdictions in which we operate
may make it difficult for us to move our personnel in and out of these jurisdictions by delaying or withholding the approval of these permits.
For example, in the past few years, we have experienced considerable difficulty in obtaining the necessary visas and work permits for our
employees to work in Angola, where we operate a number of rigs. If we are not able to obtain visas and work permits for the employees
we need to operate our rigs on a timely basis, we might not be able to perform our obligations under our drilling contracts, which could
allow our customers to cancel the contracts. If our customers cancel some of our contracts, and we are unable to secure new contracts on
a timely basis and on substantially similar terms, it could adversely affect our consolidated statement of financial position, results of
operations or cash flows.
Failure to comply with the U.S. Foreign Corrupt Practices Act and the Bribery Act 2010 recently enacted by the U.K.
could result in fines, criminal penalties, drilling contract terminations and an adverse effect on our business.
The U.S. Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery laws in other jurisdictions, including the Bribery
Act 2010 recently enacted by the U.K., generally prohibit companies and their intermediaries from making improper payments to non-U.S.
officials for the purpose of obtaining or retaining business. We operate in many parts of the world that have experienced governmental
corruption to some degree and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and
practices. If we are found to be liable for FCPA violations or, once implemented, violations under the Bribery Act 2010 (either due to our
own acts or our omissions, or due to the acts or omissions of others, including our partners in our various joint ventures), we could suffer
from civil and criminal penalties or other sanctions, which could have a material adverse effect on our business, financial condition, and
results of operations.
Civil penalties under the anti-bribery provisions of the FCPA could range up to $10,000 per violation, with a criminal fine up to the
greater of $2 million per violation or twice the gross pecuniary gain to us or twice the gross pecuniary loss to others, if larger. Civil
penalties under the accounting provisions of the FCPA can range up to $500,000 per violation and a company that knowingly commits a
violation can be fined up to $25 million per violation. In addition, both the SEC and the DOJ could assert that conduct extending over a
period of time may constitute multiple violations for purposes of assessing the penalty amounts. Often, dispositions for these types of
matters result in modifications to business practices and compliance programs and possibly the appointment of a monitor to review future
business and practices with the goal of ensuring compliance with the FCPA. On November 4, 2010, we reached a settlement with the
SEC and the DOJ with respect to certain charges relating to the anti-bribery and books and records provisions of the FCPA. In
November 2010, under the terms of the settlements, we paid a total of approximately $27 million in penalties, interest and disgorgement of
profits. We have also consented to the entry of a civil injunction in two SEC actions and have entered into a three-year deferred
prosecution agreement with the DOJ (the “DPA”). In connection with the DPA, we have agreed to implement and maintain certain internal
controls, policies and procedures. For the duration of the DPA, we are also obligated to provide an annual written report to the DOJ of our
efforts and progress in maintaining and enhancing our compliance policies and procedures. In the event the DOJ determines that we have
knowingly violated the terms of the DPA, the DOJ may impose an extension of the term of the agreement or, if the DOJ determines we
have breached the DPA, the DOJ may pursue criminal charges or a civil or administrative action against us. The DOJ may also find, in its
sole discretion, that a change in circumstances has eliminated the need for the corporate compliance reporting obligations of the DPA and
may terminate the DPA prior to the three-year term. Failure to comply with the terms of the DPA may impact our operations and any
resulting fines may have a material adverse effect on our results of operations or cash flows.
We could also face fines, sanctions and other penalties from authorities in the relevant foreign jurisdictions, including prohibition
of our participating in or curtailment of business operations in those jurisdictions and the seizure of rigs or other assets. Our customers in
those jurisdictions could seek to impose penalties or take other actions adverse to our interests. We could also face other third-party
claims by directors, officers, employees, affiliates, advisors, attorneys, agents, stockholders, debt holders, or other interest holders or
constituents of our company. In addition, disclosure of the subject matter of the investigation could adversely affect our reputation and our
ability to obtain new business or retain existing business from our current clients and potential clients, to attract and retain employees and
to access the capital markets. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Contingencies-Regulatory matters.”
Our labor costs and the operating restrictions under which we operate could increase as a result of collective
bargaining negotiations and changes in labor laws and regulations.
Some of our employees working in Angola, the U.K., Norway and Australia, are represented by, and some of our contracted
labor work under, collective bargaining agreements. Many of these represented individuals are working under agreements that are subject
to annual salary negotiation. These negotiations could result in higher personnel expenses, other increased costs or increased operational
restrictions as the outcome of such negotiations apply to all offshore employees not just the union members. Additionally, the unions in the
U.K. sought an interpretation of the application of the Working Time Regulations to the offshore sector. Although the Employment Tribunal
endorsed the unions’ position that offshore workers are entitled to 28 days of annual leave, at the subsequent appeals to date, both the
Employment Appeal Tribunal and the Court of Sessions have reversed the Employment Tribunal’s decision. However, the unions have
intimated their intention to lodge a further appeal to the Supreme Court which may not be heard until the fourth quarter of 2011 or 2012.
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