ZUG, Switzerland, Aug. 26 (UPI) -- Offshore rig company Transocean said it plans to cancel issuance of stock dividends and record $2.1 billion in impairments because of the weak market.
The company, which has headquarters in Switzerland, announced plans to hold an emergency general meeting of shareholders in October to consider the cancellation of the third and fourth installments of its dividend.
The company noted "the deterioration of the offshore drilling market and concerns regarding the timing of the market's recovery" where behind that proposal and the expected impairment of more around $2.1 billion.
The steady decline in crude oil prices, off more than 50 percent from last year, has forced most major oil and gas companies to cut back on spending in exploration and production, leading in turn to a decline in the volume of rig activity.
For the week ending Aug. 21, oil services company Baker Hughes found 32 rigs actively exploring for or producing offshore oil and gas reserves in the United States alone. That's down three from the previous week and half the total year-on-year.
Transocean in March said it was scrapping four of its rigs for sale. Of the four rigs slated for scrap, only Transocean Legend was active this year. It was last leased by ConocoPhillips for exploration off the coast of Australia, with a day rate of $415,000.
Transocean has lost more than half its value in the past year. Rival rig company Hercules Offshore announced in mid-August it filed for bankruptcy as part of a financial restructuring effort in an era of lower crude oil prices.
