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Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions

Related Party Transactions

Note 24—Related Party Transactions

Quantum Pacific Management Limited—We hold a 50 percent interest in TPDI, a consolidated British Virgin Islands joint venture company formed to own and operate Dhirubhai Deepwater KG1 and Dhirubhai Deepwater KG2. Quantum holds the remaining 50 percent interest. Quantum has the unilateral right to exchange its interest in the joint venture for our shares or cash, at an amount based on an appraisal of the fair value of the drillships, subject to certain adjustments.

As of December 31, 2011 and 2010, TPDI had outstanding promissory notes in the aggregate amount of $296 million, of which $148 million was due to Quantum and was included in long-term debt of consolidated variable interest entities on our consolidated balance sheets.

Angco Cayman Limited—We hold a 65 percent interest in ADDCL, a consolidated Cayman Islands joint venture company formed to own and operate Discoverer Luanda. Angco Cayman holds the remaining 35 percent interest in ADDCL. Beginning January 31, 2016, Angco Cayman will have the right to exchange its interest in the joint venture for cash at an amount based on the appraisal of the fair value of the drillship, subject to certain adjustments.

Overseas Drilling Limited—We held a 50 percent interest in ODL, an unconsolidated Cayman Islands joint venture company, which owns Joides Resolution, a coring drillship that was adapted for scientific research. Under a management services agreement with ODL, we provided certain operational and management services through the date of the sale of our interest. We earned $1 million and $2 million for these services in each of the years ended December 31, 2011 and 2010, respectively.

During the year ended December 31, 2011, we completed the sale of our 50 percent ownership interest in ODL to Siem Offshore Inc. In connection with the sale, we received net proceeds of $22 million and recognized a net gain of $13 million ($0.04 per diluted share from continuing operations), recorded in other, net, which had no tax effect.

This element may be used for the entire related party transactions disclosure as a single block of text. Disclosure may include: the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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