Transocean Board Urges Rejection of Icahn Plan

Directors of Transocean Ltd. are urging shareholders to reject a campaign by activist investor Carl C. Icahn to increase the offshore-oil-rig company's dividend and name three new members to the board.

In a statement Sunday, Transocean's board described Mr. Icahn's demand that the company raise its annual dividend to $4 a share as shortsighted, saying it did not take into account the cyclical nature of the offshore-drilling business or its capital-intensive demands.

The board also criticized the new board members proposed by Mr. Icahn, who owns roughly 5.6% of Transocean's shares, saying the nominees lack the requisite energy-industry experience and were put forth because they are longtime employees or associates of the investor.

"The board believes Mr. Icahn is pursuing a highly flawed agenda focused exclusively on potentially generating temporary returns at the expense of the company's ability to operate successfully and create sustainable value over the long term," the board said in a statement.

Mr. Icahn made the demands for change in an open letter to shareholders and filings with the company earlier this month. Shareholders would vote on the proposals during the company's annual meeting, which is set for May 17.

Earlier this month, Transocean said it would reinstate its dividend at $2.24 a share after withdrawing it a year ago in the face of threats to its credit rating. The company also said it would repay about $1 billion in debt.

Mr. Icahn previously called the renewed dividend offer "meager" and said the company was making questionable financial choices by paying down low-interest debt and investing in projects with relatively low returns.

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Washington Post: Keystone XL Rejection Has ‘Little Rational Basis’

More on the Keystone XL pipeline. The Washington Post editorializes:

“President Obama’s refusal so far to authorize Keystone XL has little rational basis. … Attracting foreign investment in projects that will create U.S. jobs requires predictable regulatory procedures. The way to encourage the efficient extraction and delivery of the oil that the United States will require for decades is to make clear that government won’t use the issue as a political football.”

The editorial makes a couple of other points:

Opponents of Canadian oil sands (and the Keystone XL) are mistaken to believe that stopping the pipeline will keep 170 billion barrels of oil in the ground – because Canada has other means to get the oil to market, as well as other markets willing to buy it.Political skirmishing in Washington has been detrimental to overall progress on the project.

Meanwhile, POLITICO has this guest opinion piece by Karl Rove, pointing to the administration’s Keystone XL rejection as a prime example of a self-inflicted inability to create jobs:

“Exhibit A is the Keystone XL pipeline. It would have brought oil from Canada’s tar sands and North Dakota’s prolific Bakken field to Gulf Coast refineries, factories and chemical plants. This would have created tens of thousands of private-sector jobs and reduced U.S. dependence on [imports]. … No matter. Extreme environmentalists opposed this vital infrastructure project. Rather than offend them, President Barack Obama blocked the pipeline’s construction.”

The two pieces help underscore the point that there are no good reasons to hold up the Keystone XL project, and that the administration is squandering a great opportunity to create jobs and help strengthen U.S. energy security. As the Post says, the president’s refusal to approve this shovel-ready project makes little rational sense.

An all-of-the-above energy approach must include oil and natural gas because it is our primary energy source now and into the future. The Keystone XL pipeline would be an integral part of such a strategy, which could see all of our liquid fuel needs met domestically and from Canada by 2024.

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