Feds Investigate Transocean's Possible Ties to Burmese Drug Clan

| Thu Aug. 19, 2010 2:33 PM EDT

The world's most infamous drilling firm, Transocean, has been slapped with a subpoena by the Treasury Department's Office of Foreign Assets Control (OFAC) over one of its projects in Burma. Basically, the drilling-platform operator best known for its exploding Deepwater Horizon rig is drilling in Burmese waters co-owned by a family of drug lords (including the "Godfather of Heroin") with whom it is verboten to do business under federal sanctions. The government wants to know if any sanctioned parties are actually listed on the drilling contract, and if Transocean was aware who it was dealing with.

I want to know something different: Who cares?

Though it sounds juicy, this story entirely misses the forest for the trees. This isn't the first time Transocean has worked in Burma: It also handled exploratory drilling for Daewoo's stake in the country's giant Shwe gas reserves; but since Daewoo's not blacklisted, that was okay. And Transocean isn't the only American company with interests in Burmese energy. Chevron helps operate a pipeline that earned the dictatorship more than $1 billion in 2008 and is the single largest source of income for a regime that propagates genocide and is allegedly trying to build nukes. But that's okay because Chevron lobbyists got some big fat loopholes in the US sanctions, guaranteeing the company doesn't have to divest. All of which doesn't matter much anyhow, because the plenty of other countries profiting off Burma's resources would be happy to grab up the American companies' stakes if they had to abandon them. Even the Congressional Research Service recently released a report (pdf) saying that more than a decade of US sanctions hasn't had any demonstrable impact on the junta's finances or power.

The Transocean probe will likely end up being as inconsequential as the sanctions the company might be violating. "We do not expect the liability," Transocean has stated in company filings, "if any, resulting from these inquiries to have a material adverse effect on our consolidated statement of financial position, results of operations or cash flows." In this case, the company's rosy PR assessment probably isn't just spin.