Transocean Ltd.

Company Overview

Business Model: Transocean Ltd. is a leading international provider of offshore contract drilling services for oil and gas wells. Its primary business involves contracting mobile offshore drilling rigs, related equipment, and work crews to drill oil and gas wells. The Company specializes in technically demanding regions of the global offshore drilling business, with a particular focus on ultra-deepwater and harsh environment drilling services.

Market Position: Transocean Ltd. is a leading international provider in the offshore contract drilling services industry, operating one of the most versatile fleets globally. The Company differentiates its service offerings through a long history of technological innovation, including pioneering the first dynamically positioned drillship, the first semisubmersible rig to drill year-round in the North Sea, the first 10,000-ft. water depth rated ultra-deepwater drillship, and the first dual-activity and eighth-generation drillships. It has also achieved numerous water depth world records.

Recent Strategic Developments:

• Proposed Acquisition: On February 9, 2026, Transocean Ltd. entered into a Business Combination Agreement to acquire all issued and outstanding common shares of Valaris Limited. The acquisition will involve an exchange ratio of 15.235 Transocean Ltd. shares for each Valaris Limited share, making Valaris Limited a wholly owned subsidiary upon completion.
• Equity Issuance: In September 2025, Transocean Ltd. issued 143.8 million shares, generating $421 million in aggregate cash proceeds, net of issue costs.
• Debt Issuance: In October 2025, the Company issued $500 million aggregate principal amount of 7.875% senior guaranteed notes due October 2032, resulting in $492 million in aggregate cash proceeds, net of issue costs.
• Debt Management:
  • In October 2025, Transocean Ltd. redeemed $655 million aggregate principal amount of 8.00% senior notes due February 2027 and $248 million aggregate principal amount of 6.875% senior secured notes due February 2027, totaling $903 million in cash payments.
  • In 2025, the Company exchanged $196 million aggregate principal amount of 4.00% senior guaranteed exchangeable bonds due December 2025 for 73.3 million Transocean Ltd. shares.
  • In October 2025, cash tender offers were completed for $89 million aggregate principal amount of 7.35% senior notes due December 2041 and $16 million aggregate principal amount of 7.00% notes due June 2028, with an aggregate cash payment of $100 million.
  • In 2025, open market repurchases of $36 million aggregate principal amount of 7.00% notes due June 2028 and $1 million aggregate principal amount of 7.35% senior notes were completed for an aggregate cash payment of $36 million.
• Asset Disposals: In 2025, Transocean Ltd. completed the sale of six ultra-deepwater floaters (Development Driller III, Discoverer Americas, Discoverer Clear Leader, Discoverer Inspiration, Discoverer Luanda, and GSF Development Driller I) for aggregate net cash proceeds of $71 million. In January 2026, the ultra-deepwater drillship Discoverer India was sold for $14 million in net cash proceeds.

Geographic Footprint: Transocean Ltd. operates in a single, global offshore drilling market, with its operations geographically dispersed across oil and gas exploration and development areas worldwide. As of February 19, 2026, its fleet was located in the U.S. Gulf of America (8 units), Brazil (6 units), the Norwegian North Sea (4 units), Greece (3 units), Australia (2 units), India (1 unit), Ivory Coast (1 unit), Mexico (1 unit), and Romania (1 unit). The Company's global workforce of approximately 5,600 individuals is distributed across 20 countries, with 38% in North America, 26% in South America, 23% in Europe, 6% in Australia, 4% in Africa, and 3% in Asia.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 39.3%
• Operating Margin: -58.9%
• Net Margin: -73.5%

Investment in Growth:

• Capital Expenditures: $123 million (2025)
• Strategic Investments:
  • Acquired a 16% ownership interest in Global Sea Mineral Resources NV in 2023 for $10 million cash and a non-cash contribution of the ultra-deepwater floater Ocean Rig Olympia (estimated fair value $85 million).
  • Acquired the remaining 67% ownership interest in Orion Holdings (Cayman) Limited in 2024 for 55.5 million Transocean Ltd. shares and $130 million aggregate principal amount of 8.00% senior notes due February 2027, with an aggregate fair value of $431 million.
  • Acquired the remaining 80% ownership interest in Liquila Ventures Ltd. in 2023 for 11.9 million Transocean Ltd. shares with an aggregate value of $99 million.

Business Segment Analysis

Ultra-deepwater floaters

Financial Performance:

• Revenue: $2,777 million (+10.3% YoY from $2,518 million in 2024)
• Key Growth Drivers: Higher average daily revenues and increased utilization across the fleet, coupled with increased activity from the newbuild ultra-deepwater drillship Deepwater Aquila. The long-term outlook for deepwater drilling activity remains positive, with oil and natural gas producers expected to increase budgets in this sector due to favorable resource potential and project economics.

Product Portfolio:

• Fleet Size: 20 units.
• Capabilities: Designed for water depths of 4,500 feet or greater, up to 12,000 feet.
• Key Features:
  • Two drillships with industry-leading 1,700 short ton hoisting capacity.
  • 18 drillships equipped with dual-activity technology for simultaneous drilling tasks.
  • Entire fleet is dynamically positioned.
  • Ten drillships outfitted with dual blowout preventers and triple liquid mud systems.
  • Six drillships designed for future upgrade to 20,000 psi blowout preventers.
  • Industry's first kinetic blowout stopper deployed on two floaters.
  • Rotary multi-tool pipe cleaner and wellbore protector installed on three floaters, with one more in progress.
  • Four ultra-deepwater drillships equipped with automated drilling control systems, with two more installations in progress.
  • Three ultra-deepwater drillships equipped with offshore robotics riser systems, with one more in progress.

Market Dynamics:

• Primary Market: Ultra-deepwater and deepwater sectors.
• Outlook: Strong long-term demand driven by energy security priorities and favorable economics of deepwater projects.
• Uncommitted Fleet Rate: 36% (2026), 52% (2027), 82% (2028), 91% (2029), 98% (2030).
• Average Contractual Dayrate: $470,000 (Total fleet average), with rates increasing from $461,000 (2026) to $635,000 (2030).

Harsh environment semisubmersibles

Financial Performance:

• Revenue: $1,188 million (+18.1% YoY from $1,006 million in 2024)
• Key Growth Drivers: Increased activity from rigs mobilizing to Romania and Australia, contributing to overall fleet utilization and revenue efficiency improvements.

Product Portfolio:

• Fleet Size: 7 units.
• Capabilities: Designed for harsh environments in water depths between 1,500 and 10,000 feet.
• Key Features:
  • Greater displacement than other semisubmersibles, offering larger variable load capacity, more usable deck space, and better motion characteristics.
  • All units have mooring capability and are equipped for year-round operations in harsh environments, such as the Norwegian continental shelf and sub-Arctic waters.
  • Two semisubmersibles are custom-designed, high-capacity rigs with dual-activity technology.
  • Five harsh environment semisubmersibles equipped with automated drilling control systems, with two more installations in progress.

Market Dynamics:

• Primary Market: Harsh environment sector, but also services midwater and deepwater sectors.
• Outlook: Demand for harsh-environment rigs is expected to remain strong through the end of the decade, primarily driven by activity in Norway and emerging opportunities in new geographies.
• Uncommitted Fleet Rate: 5% (2026), 45% (2027), 97% (2028), 100% (2029), 100% (2030).
• Average Contractual Dayrate: $449,000 (Total fleet average), with rates ranging from $447,000 (2026) to $424,000 (2028).

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: As of December 31, 2025, the Company had an authorization remaining under its share repurchase program for up to CHF 3.24 billion (equivalent to $4.09 billion). No shares were repurchased in 2025 under this program.
• Future Capital Return Commitments: Shareholders may be requested to approve a renewal and increase of the general share capital authorization at the May 2026 annual general meeting.

Balance Sheet Position (as of December 31, 2025):

• Cash and Equivalents: $620 million
• Total Debt: $5,657 million
• Net Cash Position: $(5,037) million (Net Debt)
• Credit Rating: The Company's debt is rated below investment grade.

Debt Maturity Profile (as of December 31, 2025, in millions):

• 2026: $458
• 2027: $435
• 2028: $612
• 2029: $1,277
• 2030: $411
• Thereafter: $2,493

Cash Flow Generation (2025):

• Operating Cash Flow: $749 million
• Free Cash Flow: $626 million (Operating Cash Flow less Capital Expenditures)

Operational Excellence

Production & Service Model: Transocean Ltd. provides contract drilling services by deploying its high-specification fleet of mobile offshore drilling units, including drillships and semisubmersibles. Drillships are self-propelled, highly mobile vessels with significant deck load and storage capacity, utilizing dynamic positioning. Semisubmersibles are known for stability in rough seas, maintaining position through dynamic positioning or mooring systems, and are capable of partial submersion during drilling. The Company's operational philosophy focuses on delivering safer, more efficient, and environmentally responsible drilling services.

Supply Chain Architecture: The Company relies on a significant supply of capital and consumable spare parts and equipment for fleet maintenance and repair. It also depends on ancillary services, including supply boats, helicopters, and subcontracted services like casing and managed pressure drilling. Certain critical parts and equipment may be sourced from a limited number of suppliers, or in some cases, a single supplier, which can lead to volatility in quality, prices, and availability.

Key Suppliers & Partners:

• Original Equipment Manufacturers: Long-term service agreements are in place for services and parts, particularly for pressure control and drilling systems.
• Joint Venture Partners: The Company holds partial ownership interests in companies like Global Sea Mineral Resources NV (16% ownership) and Ocean Minerals LLC (19% ownership), which are involved in developing renewable energy alternatives and research and development of technology to improve drilling efficiency, reliability, sustainability, and safety.

Facility Network:

• Offices: Principal executive offices in Steinhausen, Switzerland, and corporate offices in Houston, Texas, and Bermuda.
• Global Facilities: Additional facilities, including land bases and storage, are maintained in various countries across North America, Europe, South America, Asia, Africa, and Australia.

Operational Metrics (2025):

• Rig Utilization: 72.4% (up from 60.5% in 2024 and 49.4% in 2023)
• Revenue Efficiency: 96.5% (up from 94.5% in 2024, slightly down from 96.8% in 2023)
• Average Daily Revenue: $456,700 (up from $430,100 in 2024 and $382,300 in 2023)
• Total Recordable Incident Rate (TRIR): 0.19
• Lost Time Incident Rate (LTIR): 0.00

Market Access & Customer Relationships

Go-to-Market Strategy: Transocean Ltd. secures most of its drilling contracts through competitive bidding processes and direct negotiations with operators. Contracts are typically dayrate-based, with higher rates for optimized operations or early completion incentives, and lower or zero rates for interruptions or non-mobilization periods.

Customer Portfolio: The Company provides offshore drilling services to leading integrated energy companies, government-owned or government-controlled energy companies, and independent energy companies globally.

• Enterprise Customers (2025 Operating Revenues):
  • Petróleo Brasileiro S.A.: 22%
  • Shell plc: 22%
  • Equinor ASA: 12%
• Strategic Partnerships (as of February 19, 2026, Contract Backlog):
  • Petróleo Brasileiro S.A.: 20%
  • Equinor ASA: 16%
  • BP p.l.c.: 16%
  • Shell plc: 12%
  • Chevron Corporation: 11%
  • Woodside Energy Group Ltd.: 10%
• Customer Concentration: The Company relies heavily on a relatively small number of significant customers, posing a concentration risk.

Geographic Revenue Distribution (2025):

• U.S.: 41.2% of total revenue ($1,635 million)
• Brazil: 22.0% of total revenue ($872 million)
• Norway: 16.1% of total revenue ($639 million)
• Other countries: 20.7% of total revenue ($819 million)

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The offshore contract drilling industry operates in a single, global market characterized by high competitiveness and cyclicality, heavily influenced by volatile oil and natural gas prices. No single participant holds a dominant market share. The industry experiences periods of high demand and dayrates followed by low demand and excess rig supply. The Company's outlook remains positive, driven by long-term forecasts for hydrocarbons as a critical energy source and a global reassessment of energy strategies prioritizing energy security. Deepwater and harsh-environment fields are viewed as strategic assets due to competitive economic returns and lower carbon intensity. Demand for harsh-environment rigs is expected to remain strong through the end of the decade.

Competitive Positioning Matrix:

Direct Competitors

• Primary Competitors: The filing does not explicitly name direct competitors other than Valaris Limited, which Transocean Ltd. is in the process of acquiring. The industry is described as highly competitive with numerous participants.

Emerging Competitive Threats: Increased competition for drilling budgets from land-based energy markets and renewable energy projects worldwide. The transition to renewable or other alternative energy sources could adversely impact long-term demand for oil and natural gas and, consequently, for the Company's services.

Competitive Response Strategy: Transocean Ltd. focuses on continuous improvement and deployment of industry-leading technology to differentiate its service offerings, aiming for safer, more efficient, and environmentally responsible drilling. It also emphasizes cultivating a best-in-class workforce with innovation, local knowledge, and experience.

Risk Assessment Framework

Strategic & Market Risks

• Market Dynamics: The business is highly dependent on the volatile offshore oil and gas industry, influenced by oil and gas prices. The offshore drilling market is highly competitive and cyclical, with periods of oversupply leading to intense price competition. The Company's contract backlog may not be fully realized due to customer renegotiations, suspensions, or terminations, especially during depressed market conditions. There is a risk of inability to renew or obtain new drilling contracts for expiring, stacked, or idle rigs.
• Technology Disruption: Changes in offshore drilling technology, customer requirements, and competition may necessitate significant capital expenditures to maintain competitiveness.
• Customer Concentration: Heavy reliance on a relatively small number of significant customers (e.g., Petróleo Brasileiro S.A., Shell plc, Equinor ASA) means the loss of any major customer or a decline in payments could materially impact the business.

Operational & Execution Risks

• Supply Chain Vulnerabilities: Operations depend on a significant supply of capital and consumable spare parts, equipment, and ancillary services. Reliance on a limited number of or single suppliers for certain items, coupled with long lead times, exposes the Company to disruptions, price increases, and quality control issues, potentially leading to rig downtime and increased costs.
• Geographic Concentration: International operations are exposed to political uncertainties, customs delays, changes in laws, currency fluctuations, and geopolitical events such as war, piracy, and civil unrest.
• Capacity Constraints: Shipyard projects and operations are subject to delays and cost overruns due to factors like shipyard availability, material shortages, design problems, and labor disputes.

Financial & Regulatory Risks

• Market & Financial Risks: The Company carries a substantial amount of debt, including secured debt, and its debt ratings are below investment grade, which could limit access to capital, increase financing costs, and reduce financial flexibility. Global financial and economic conditions could restrict capital market access and reduce demand for services.
• Regulatory & Compliance Risks: Operations are subject to increasingly stringent environmental and safety laws, including those related to greenhouse gas emissions and climate change, which can lead to costly compliance, liabilities, and operational limitations. Restrictions on U.S. Outer Continental Shelf activities could adversely impact demand. Non-compliance with anti-bribery statutes (e.g., U.S. Foreign Corrupt Practices Act, U.K. Bribery Act 2010) could result in fines, penalties, and contract terminations. The Company is also subject to investigations and litigation, including asbestos and environmental claims, which, if not favorably resolved or sufficiently insured, could have a material adverse effect. Cybersecurity risks, including those related to AI, and data privacy regulations pose ongoing threats to systems and data.

Geopolitical & External Risks

• Geographic Dependencies: International operations are exposed to political and other uncertainties, including customs delays, import-export quotas, wage and price controls, changes in law, inability to move income or capital, currency exchange fluctuations, judicial proceedings, repudiation or nationalization of contracts, damage to equipment, terrorist acts, war, piracy, civil unrest, seizure or expropriation of assets, and public health threats.
• Trade Relations: Changes in foreign trade policies, including additional trade barriers and tariffs, could impact operations and procurement.
• Sanctions & Export Controls: Compliance with U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and other international trade laws and sanctions is critical, with non-compliance potentially leading to criminal sanctions or civil remedies.

Innovation & Technology Leadership

Research & Development Focus: Transocean Ltd. is committed to developing, investing in, and deploying industry-leading technology to differentiate its service offerings. The focus is on enhancing operational integrity, safety, efficiency, and environmental responsibility, including reducing fuel consumption and emissions.

• Core Technology Areas:
  • Drilling Equipment & Well Control: Innovations include the first dynamically positioned drillship, dual-activity drillships, eighth-generation drillships with 1,700-ton hoisting and 20,000-psi well-control systems, and the industry's first kinetic blowout stopper (deployed on two floaters). The Company has also installed rotary multi-tool pipe cleaners and wellbore protectors on three floaters.
  • Automated Drilling Control & Robotics: Four ultra-deepwater drillships and five harsh environment semisubmersibles are equipped with automated drilling control systems, with additional installations in progress. Three ultra-deepwater drillships feature offshore robotics riser systems for automated riser joint bolting.
  • Automated Safety & Monitoring Tools: The patented HaloGuard ℠system is deployed on ten drilling units to prevent personnel injury. A smart equipment analytics tool provides real-time data for monitoring equipment health, inferred emissions, and energy consumption to optimize maintenance and sustainability.

Innovation Pipeline: The Company is exploring AI use cases to further improve productivity in offshore drilling operations and has introduced AI tools for streamlining high-volume office and administrative tasks. An AI Governance Committee oversees tool selection, security protocols, training, and usage.

Intellectual Property Portfolio: The Company utilizes a patent strategy, exemplified by the patented HaloGuard ℠system, to maintain competitive advantages.

Technology Partnerships: Transocean Ltd. invests in companies and joint ventures, such as Global Sea Mineral Resources NV and Ocean Minerals LLC, for strategic purposes, including the development of renewable energy alternatives and research into technologies that improve drilling efficiency, reliability, sustainability, and safety.

Leadership & Governance

Executive Leadership Team (as of February 17, 2026)

Board Composition: The board of directors oversees the Company's enterprise risk register and cybersecurity program. The audit committee of the board receives regular status reports and updates from the management team on cybersecurity matters. Jeremy D. Thigpen serves as the Executive Chair, and Chadwick C. Deaton serves as the Lead Independent Director.

Human Capital Strategy

Workforce Composition: As of December 31, 2025, Transocean Ltd. had a global workforce of approximately 5,600 individuals, including about 380 contractors, representing 67 nationalities. The workforce is geographically distributed across 20 countries: 38% in North America, 26% in South America, 23% in Europe, 6% in Australia, 4% in Africa, and 3% in Asia.

Talent Management: The Company aims to cultivate a best-in-class workforce by offering regionally competitive compensation and benefits, a technically challenging work environment, global opportunities, and rotational development programs. Its wellness and benefits strategy focuses on physical, financial, emotional, and social well-being, including a globally available employee assistance program.

Diversity & Development: Transocean Ltd. invests in employee development through a rigorous competency-based training program, accredited by the Offshore Petroleum Industry Training Organization. Training formats include on-the-job, e-learning, customer-specific training, certifications, leadership, and licensing programs. Unique simulation-based education augmented by digital twin modeling is also offered.

Culture & Engagement: The Company's corporate culture is founded on its FIRST Shared Values, guiding ethical and responsible conduct, value delivery, and a safe and respectful work environment. A Code of Integrity and Human Rights Policy Statement apply to all board members, executives, employees, and business partners.

Labor Relations: Approximately 45% of the total workforce, primarily in Brazil and Norway, is represented by collective bargaining agreements, most of which are subject to annual salary negotiations.

Safety: The Company's safety vision is to achieve an incident-free workplace. In 2025, the Total Recordable Incident Rate (TRIR) was 0.19, and the Lost Time Incident Rate (LTIR) was 0.00, based on 11.5 million labor hours.

Environmental & Social Impact

Environmental Commitments: Transocean Ltd. strives to minimize its environmental impact through a global Environmental Management System (EMS), which is ISO 14001 certified. The EMS provides a framework for managing operations responsibly, with a focus on reducing greenhouse gas emissions, operational discharges, water use, and waste. The Company's smart equipment analytics tool monitors inferred emissions and energy consumption to optimize sustainability.

Supply Chain Sustainability: The Company engages with suppliers on ESG requirements and supplier diversity programs.

Social Impact Initiatives: Transocean Ltd. contributes to local communities by offering competitive compensation and benefits. Its services are designed to deliver operational integrity with safer, more efficient, and environmentally responsible drilling. The Company also invests in joint ventures involved in renewable energy alternatives and technology development to improve drilling sustainability.

Business Cyclicality & Seasonality

Demand Patterns: The Company's business and demand for its services are highly dependent on the level of activity in the offshore oil and gas industry, which is significantly affected by volatile oil and natural gas prices. The offshore drilling industry is highly cyclical, with periods of high customer demand and dayrates often followed by periods of low demand and excess rig supply. Global energy markets' transition to renewable or alternative energy sources could adversely impact long-term demand for oil and natural gas and, consequently, for the Company's services.

Industry Cycles: The industry outlook remains positive, with long-term forecasts indicating hydrocarbons will remain a critical energy source. Geopolitical instability, supply chain constraints, and limitations of renewable energy technologies are leading policymakers to prioritize energy security, viewing offshore oil and gas as a strategic asset. This is expected to support sustained, long-term demand for oil and natural gas, particularly in deepwater, where project economics are favorable.

Regulatory Environment & Compliance

Regulatory Framework: Transocean Ltd.'s operations are subject to a variety of international, national, regional, state, and local government regulations, including environmental and safety laws. Compliance with these regulations may require significant capital expenditures. U.S. federal agencies have implemented enhanced safety and environmental requirements for U.S. Gulf of America operations, increasing compliance costs. The oil and gas industry has also adopted equipment and operating standards, such as the American Petroleum Institute Standard 53.

Trade & Export Controls: The Company's international operations are subject to U.S. and non-U.S. laws and regulations governing economic and trade sanctions, import/export controls, and currency conversions. Failure to comply can result in criminal sanctions or civil remedies. Changes in foreign trade policies and the imposition of additional trade barriers or tariffs could also impact the business.

Legal Proceedings:

• Asbestos Litigation: Several subsidiaries are involved in asbestos-related lawsuits, with approximately 405 lawsuits pending against one subsidiary. The Company does not expect the ultimate liability to have a material adverse effect on its financial position, results of operations, or cash flows.
• Clean Water Act Compliance: In January 2024, Transocean Offshore Deepwater Drilling Inc. entered into a civil consent decree with the U.S. Department of Justice and the U.S. Environmental Protection Agency to resolve alleged violations of its Clean Water Act permit. The Company agreed to an immaterial monetary civil penalty and corrective actions, not expecting a material adverse effect on its financial position, results of operations, or or cash flows.
• Environmental Remediation: One subsidiary was named as a Potentially Responsible Party (PRP) for the Waste Disposal, Inc. site in Santa Fe Springs, California, with remediation completed in 2006. The Company does not expect any additional material liabilities from this or other environmental matters.

Tax Strategy & Considerations

Tax Profile: Transocean Ltd., a Swiss holding company, is subject to Swiss federal, cantonal, and communal income tax, with qualifying net dividend income and capital gains on investments in subsidiaries exempt from taxation. The Company's effective tax rate was 1.1% in 2025, 2.2% in 2024, and -1.4% in 2023. Its income tax expense or benefit does not change proportionally with income or loss before income taxes due to various factors, including the blend of income taxed on gross revenues, rig movements, and operating structures. The Company is subject to changes in tax laws, treaties, or regulations, including those related to the Organization for Economic Co-operation and Development Pillar 2 initiatives.

Tax Disputes: The Company is vigorously contesting Brazilian tax assessments from 2000-2004 and 2009-2010, totaling BRL 523 million ($95 million) for corporate income tax and BRL 96 million ($17 million) for indirect tax as of December 31, 2025. While the Company believes its returns are correct, an unfavorable outcome could have a material adverse effect on cash flows.

Insurance & Risk Transfer

Risk Management Framework: Transocean Ltd. manages operational hazards inherent in drilling and marine operations through insurance and contractual indemnities.

• Insurance Coverage: The Company maintains hull and machinery coverage for physical damage and excess liability coverage for offshore risks (personal injury, third-party property claims, wreck removal, and pollution).
• Coverage Limits: Per occurrence deductibles generally range up to $10 million for third-party liabilities. The Company self-insures up to $75 million of its $750 million excess liability coverage through a wholly owned captive insurance company and retains risk for liabilities exceeding this coverage.
• Exclusions: Hull and machinery insurance generally does not cover damages from named storms in the U.S. Gulf of America, and the Company typically does not carry insurance for loss of revenue.
• Risk Transfer Mechanisms: Consistent with industry practice, customers (operators) generally assume and indemnify the Company for subsurface and well control risks, including consequential damages and pollution from reservoir fluids. The Company indemnifies customers for pollution originating from the rig above the water surface.