PROXY STATEMENT AND 2004 ANNUAL REPORT www.deepwater.com 2004 4 Greenway Plaza Houston,TX 77046 713.232.7500 Windows of Opportunity CONTENTS BOARD OF DIRECTORS CORPORATE INFORMATION Shareholders’ Letter J. MICHAEL TALBERT HOUSTON OFFICE Chairman Transocean Inc. Notice of 2005 Annual General Meeting and Proxy Statement Transocean Inc. 4 Greenway Plaza Houston,Texas Houston,Texas 77046 713.232.7500 2004 Annual Report to Shareholders VICTOR E. GRIJALVA Chairman Hanover Compressor Company TRANSFER AGENT AND REGISTRAR Houston,Texas The Bank of New York ABOUT TRANSOCEAN INC. P.O. Box 11258 ARTHUR LINDENAUER Church Street Station Retired Executive Vice President-Finance & Chief Financial Officer New York, New York 10286 W Schlumberger Limited 1.877.397.7229 e are the world’s largest offshore drilling contractor with a fleet of 93 mobile offshore drilling units. Our mobile off- New York, New York shore drilling fleet is considered one of the most modern and versatile in the world due to our emphasis on technically ROBERT L. LONG Internet Address: http://www.stockbny.com demanding sectors of the offshore drilling business. We have more than 8,500 employees worldwide. President and Chief Executive Officer E-mail Address: [email protected] Transocean Inc. Since launching the offshore drilling industry's first jackup drilling rig in 1954, we have achieved a long history of techno- Houston,Texas MARTIN B. MCNAMARA logical “firsts.” These innovations include the first dynamically positioned drillship, the first rig to drill year-round in the Partner, Gibson, Dunn & Crutcher, LLP DIRECT PURCHASE PLAN Dallas,Texas The Bank of New York, the Transfer Agent for Transocean Inc., offers a Direct Purchase and Sale North Sea, the first semisubmersible for sub-Arctic, year-round operations and the latest generation of ultra-deepwater Plan for the ordinary shares of Transocean Inc. called BuyDirect. For more information on and semisubmersible rigs and drillships. ROBERTO L. MONTI BuyDirect, including a complete enrollment package, please contact the Bank of New York at Retired Executive Vice President 1.877.397.7229.The number for persons calling from outside the United States is Exploration and Production 1.610.382.7833. We had an equity market capitalization in excess of $15 billion at February 28, 2005, the largest among all offshore Repsol YPF Buenos Aires,Argentina drilling companies. The company’s ordinary shares are traded on the New York Stock Exchange under the symbol “RIG.” INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM RICHARD A. PATTAROZZI Ernst & Young LLP Transocean:We’re never out of our depth® Retired Shell Oil Company Executive Houston,Texas Abita Springs, Louisiana STOCK EXCHANGE LISTING KRISTIAN SIEM Transocean Inc. shares are listed on the New York Stock Exchange (NYSE) under the symbol RIG. Chairman and Chief Executive Officer The following table sets forth the high and low sales prices of the company's ordinary shares for Siem Industries, Inc. the periods indicated, as reported on the NYSE Composite Tape. George Town, Cayman Islands Norway UK 1 2 1 1 2 ROBERT M. SPRAGUE E. Canada Price (in U.S. dollars) HIGH LOW 10 Caspian Retired Royal Dutch/Shell Executive 1 2003 Italy 1 London, England 2 First Quarter 24.36 19.87 IAN C. STRACHAN Second Quarter 25.90 18.40 Third Quarter 22.43 18.50 Egypt Chairman US Gulf of Mexico Fourth Quarter 24.85 18.49 1 4 UAE Instinet Group Incorporated 4 3 1 1 SE Asia New York, New York 2004 3 1 2 8 2 2 First Quarter 31.94 23.10 Venezuela Second Quarter 29.27 24.49 1 Third Quarter 36.24 25.94 India West Africa Fourth Quarter 43.25 33.70 2 8 2 1 3 2 1 EXECUTIVE OFFICERS 2 2 2 FINANCIAL INFORMATION Brazil ROBERT L. LONG Financial analysts and shareholders desiring information about Transocean Inc. should write to the 2 1 Australia President and Chief Executive Officer 1 2 Investor Relations and Corporate Communications Department or call 713.232.7694. 2 2 JEAN P. C AHUZAC Information may also be obtained by visiting the company’s website at http://www.deepwater.com. 1 Executive Vice President and Chief Operating Officer ERIC B. BROWN NYSE ANNUAL CEO CERTIFICATION AND SARBANES- Senior Vice President, General Counsel and Corporate Secretary OXLEY SECTION 302 CERTIFICATIONS We submitted the annual chief executive officer certification to the NYSE as required under the GREGORY L. CAUTHEN corporate governance rules of the NYSE. We also filed as an exhibit to our 2004 Annual Report Senior Vice President and Chief Financial Officer on Form 10-K the chief executive officer and chief financial officer certifications required under Section 302 of the Sarbanes-Oxley Act of 2002. 5th-Generation Deepwater Drillships Other Deepwater Drillships Other High-Specification Semisubmersibles Other Semisubmersibles Barges STEVEN L. NEWMAN Senior Vice President, Human Resources, Information Process 5th-Generation Deepwater Semisubmersibles Other Deepwater Semisubmersibles Other Drillships Jackups Tenders Solutions and Treasury DAVID A. TONNEL Vice President and Controller As of February 28,2005. For a complete description and listing of our fleet, please see pages A-4 to A-9. ABOUT THE COVER: Transocean is a company that has been carefully constructed for long-term performance. However, occasionally there are windows of opportunity where our assets ideally fit market conditions, potentially providing even greater value for investors. We believe we have entered one of those periods. FORWARD-LOOKING STATEMENTS: Any statements included in this Proxy Statement and 2004 Annual Report that are not historical facts, including without limitation statements regarding future market trends and results of operations are forward-looking statements within the meaning of applicable securities laws. Such statements are subject to numerous risks and uncertainties (including, but not limited to, those that can be found on pages A-51 to A-55 of this Proxy Statement and 2004 Annual Report) that could cause actual results to differ materially from those projected. A History of Leadership ••• TRANSOCEAN HAS CONSISTENTLY LED THE OFFSHORE DRILLING INDUSTRY INTO NEW FRONTIERS, CONSTANTLY PUSHING INTO DEEPER WATER AND MORE HOSTILE ENVIRONMENTS TO SET A HOST OF DRILLING RECORDS AND INDUSTRY FIRSTS. HERE ARE SIX RIGS THAT HAVE PLAYED MAJOR ROLES IN ADVANCING OUR REPUTATION FOR INNOVATION. DEEPWATER DISCOVERY This ultra-deepwater drillship has constructed POLAR PIONEER the most wells in more This high-specification than 5,000 feet of water semisubmersible was in West Africa. chosen to drill the production wells on Statoil’s SnØhvit LNG project in the Barents Sea, one of the world’s harshest offshore drilling areas. SEDCO EXPRESS This dynamically posi- tioned semisubmersible introduced the industry’s first Tri-Act derrick for DEEPWATER HORIZON conducting offshore This dynamically positioned drilling in parallel Fifth-Generation semisub- activities instead of the mersible has operated in conventional step-by-step approximately 9,600 feet of process.The addition of water in the U.S. Gulf of an off-line casing system Mexico,the deepest for any and other upgrades are semisubmersible in the world. designed to make the rig even more efficient. DISCOVERER DEEP SEAS DEEPWATER NAUTILUS This drillship,which features This semisubmersible set the Transocean’s patented dual- world water depth record activity drilling process, for a moored rig in 8,951 feet holds the current world of water in the U.S. Gulf of water depth record at 10,011 Mexico. It uses a pre-set feet of water in the U.S. Gulf mooring configuration and of Mexico. It was the first has a reputation for out- mobile offshore drilling rig standing safety performance. to surpass the 10,000-foot water depth barrier. $ L ETTER TO S HAREHOLDERS T O O UR S HAREHOLDERS A total shareholder return of almost 77%, the 14th-best performing stock among the S&P 500 companies, made 2004 a memorable year. More importantly, we successfully positioned our company to benefit significantly from the developing opportunities in our industry.While we experienced some setbacks during the year, these were far outweighed by the performance of our people in delivering outstanding service to our customers. We strengthened our longstanding leadership in deepwater drilling with some notable achievements in operational performance during 2004.We set new world records for 2004 REVENUES BY SOURCE(1) the deepest subsea completion and for water depth drilling by a moored rig, both of which were achieved by the semisubmersible rig Deepwater Nautilus for Shell in the U.S. Gulf of Mexico. In addition, the semisubmersible Sedco 601 continued to pioneer deepwater operations using a surface blowout preventer and managed pressure drilling technology for Santos in Indonesia, and the Trident 9 achieved the fastest drilling performance in the history of the Japan Vietnam Petroleum Company (JVPC). These successes were accomplished while continuing our commitment to safety and the environment. While our total recordable incident rate was up marginally, the number of serious near hits that occurred in our operations was significantly reduced, and we continue to strive for an incident-free workplace. 2004 HIGHLIGHTS ••• RANKED 14TH AMONG THE BEST-PERFORMING S&P 500 STOCKS DURING 2004 WITH A TOTAL SHAREHOLDER RETURN OF ALMOST 77%. (1)Excludes 2004 TODCO revenues. ••• REDUCED TOTAL DEBT BY MORE THAN $1 BILLION. ••• COMPLETED THE INITIAL PUBLIC OFFERING AND TWO ADDITIONAL OFFERINGS OF TODCO AS PART OF THE DIVESTITURE OF NON-STRATEGIC ASSETS. ••• POSITIONED TO BENEFIT FROM STRENGTHENING DEMAND FOR FIFTH-GENERATION FLOATERS. TOTAL DEBT CONTINUES TO DECLINE $5.0 $ Billions 5 $4.6 $4.6 $4.7 $4.7 $4.6 $3.8 4 $3.7 $3.7 $3.2 $3.1 $3.1 3 $2.5 2 1 0 4Q1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2001 2002 2003 2004 We continued our focus on cost control by achieving significant savings through planned cost reduction initiatives in various areas including shore based cost structure, offshore personnel initiatives, maintenance, procurement and insurance.