================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ----------------------

                                    FORM 10-Q
(Mark One)
[X]   QUARTERLY  REPORT  PURSUANT  TO  SECTION  13  OR 15(d) OF THE SECURITIES
      EXCHANGE  ACT  OF  1934

                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

[ ]   TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE  ACT  OF  1934

                FOR THE TRANSITION PERIOD FROM        TO       .
                                               ------    ------

                        COMMISSION FILE NUMBER 333-75899

                             ----------------------

                                 TRANSOCEAN INC.
             (Exact name of registrant as specified in its charter)

                             ----------------------

            CAYMAN ISLANDS                                     66-0582307
     (State or other jurisdiction                           (I.R.S. Employer
   of incorporation or organization)                       Identification No.)

           4 GREENWAY PLAZA
             HOUSTON, TEXAS                                      77046
 (Address of principal executive offices)                      (Zip Code)

       Registrant's telephone number, including area code: (713) 232-7500
                             ----------------------

     Indicate  by  check  mark  whether the registrant (1) has filed all reports
required  to  be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12  months  (or  for  such shorter period that the
registrant  was required to file such reports), and (2) has been subject to such
filing  requirements  for  the  past  90  days.  Yes  X  No
                                                    -----  -----

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes  X  No
                                               -----  -----

     As of April 30, 2004, 320,805,763 ordinary shares, par value $0.01 per
share, were outstanding.

================================================================================


<PAGE>
<TABLE>
<CAPTION>
                                 TRANSOCEAN INC.

                               INDEX TO FORM 10-Q

                          QUARTER ENDED MARCH 31, 2004

                                                                       Page
                                                                       ----
<S>                                                                    <C>
PART I - FINANCIAL INFORMATION
------------------------------

  ITEM 1. Financial Statements (Unaudited)

    Condensed Consolidated Statements of Operations
      Three Months Ended March 31, 2004 and 2003 . . . . . . . . . . . .  1

    Condensed Consolidated Statements of Comprehensive Income
      Three Months Ended March 31, 2004 and 2003 . . . . . . . . . . . .  2

    Condensed Consolidated Balance Sheets
      March 31, 2004 and December 31, 2003 . . . . . . . . . . . . . . .  3

    Condensed Consolidated Statements of Cash Flows
      Three Months Ended March 31, 2004 and 2003 . . . . . . . . . . . .  4

    Notes to Condensed Consolidated Financial Statements . . . . . . . .  5

  ITEM 2. Management's Discussion and Analysis of Financial
    Condition and Results of Operations. . . . . . . . . . . . . . . . . 18

  ITEM 3. Quantitative and Qualitative Disclosures about Market Risk . . 36

  ITEM 4. Controls and Procedures. . . . . . . . . . . . . . . . . . . . 37

  ITEM 5. Other Information. . . . . . . . . . . . . . . . . . . . . . . 37

PART II - OTHER INFORMATION
---------------------------

  ITEM 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . 38

  ITEM 2. Changes In Securities, Use of Proceeds and Issuer
          Purchases of Equity Securities . . . . . . . . . . . . . . . . 38

  ITEM 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . 38
</TABLE>


<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS)
                                   (Unaudited)

                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

     The  condensed consolidated financial statements of Transocean Inc. and its
consolidated  subsidiaries  ("Transocean,"  "we," "us" or "our") included herein
have  been prepared, without audit, pursuant to the rules and regulations of the
Securities  and  Exchange  Commission.  Certain  information  and notes normally
included  in  financial  statements  prepared  in  accordance  with  accounting
principles  generally  accepted  in  the  United  States  have been condensed or
omitted  pursuant  to  such  rules  and  regulations. These financial statements
should be read in conjunction with the audited consolidated financial statements
and  the  notes  thereto included in our Annual Report on Form 10-K for the year
ended  December  31,  2003.

<TABLE>
<CAPTION>
                        TRANSOCEAN INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                      (In millions, except per share data)
                                   (Unaudited)

                                                      Three Months Ended March 31,
                                                  ----------------------------------
                                                        2004              2003
                                                  -----------------  ---------------
<S>                                               <C>                <C>
Operating Revenues
  Contract drilling revenues                      $          597.5   $        587.5
  Other revenues                                              54.5             28.5
-------------------------------------------------------------------  ---------------
                                                             652.0            616.0
-------------------------------------------------------------------  ---------------
Costs and Expenses
  Operating and maintenance                                  412.4            374.1
  Depreciation                                               131.5            126.8
  General and administrative                                  15.1             13.9
  Impairment loss on long-lived assets                           -              1.0
  Gain from sale of assets, net                               (3.8)            (1.4)
  Gain from TODCO initial public offering                    (39.4)               -
-------------------------------------------------------------------  ---------------
                                                             515.8            514.4
-------------------------------------------------------------------  ---------------

Operating Income                                             136.2            101.6

Other Income (Expense), net
  Equity in earnings of joint ventures                         2.3              3.6
  Interest income                                              2.1              6.9
  Interest expense                                           (47.4)           (52.6)
  Loss on retirement of debt                                 (28.1)               -
  Other, net                                                   1.4             (0.6)
-------------------------------------------------------------------  ---------------
                                                             (69.7)           (42.7)
-------------------------------------------------------------------  ---------------

Income Before Income Taxes and Minority Interest              66.5             58.9
Income Tax Expense                                            48.0             11.8
Minority Interest                                             (4.2)            (0.1)
-------------------------------------------------------------------  ---------------

Net Income                                        $           22.7   $         47.2
===================================================================  ===============

Earnings Per Share
  Basic and Diluted                               $           0.07   $         0.15
===================================================================  ===============

Weighted Average Shares Outstanding
  Basic                                                      320.6            319.7
-------------------------------------------------------------------  ---------------
  Diluted                                                    324.1            321.6
-------------------------------------------------------------------  ---------------
</TABLE>


                            See accompanying notes.
                                        1
<PAGE>
<TABLE>
<CAPTION>
                        TRANSOCEAN INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                  (In millions)
                                   (Unaudited)


                                                              Three Months Ended March 31,
                                                           ----------------------------------
                                                                 2004              2003
                                                           ----------------  ----------------
<S>                                                        <C>               <C>

Net Income                                                 $          22.7   $          47.2
---------------------------------------------------------------------------  ----------------
Other Comprehensive Income (Loss), net of tax
  Amortization of gain on terminated interest rate swaps              (0.1)              -
  Change in share of unrealized loss in unconsolidated
    joint venture's interest rate swaps                                 -               (0.3)
  Minimum pension liability adjustments (net of tax of
    $0.4 for the three months ended March 31, 2003)                     -                0.7
---------------------------------------------------------------------------  ----------------
Other Comprehensive Income (Loss)                                     (0.1)              0.4
---------------------------------------------------------------------------  ----------------
Total Comprehensive Income                                 $          22.6   $          47.6
===========================================================================  ================
</TABLE>


                            See accompanying notes.
                                        2
<PAGE>
<TABLE>
<CAPTION>
                               TRANSOCEAN INC. AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In millions, except share data)


                                                                       March 31,     December 31,
                                                                          2004           2003
                                                                      ------------  --------------
<S>                                                                   <C>           <C>
                                                                       (Unaudited)
                                             ASSETS

Cash and Cash Equivalents                                             $     397.9   $       474.0
Accounts Receivable, net of allowance for doubtful accounts of $12.1
  and $29.1 at March 31, 2004 and December 31, 2003, respectively           450.5           480.3
Materials and Supplies, net of allowance for obsolescence of $17.5
  at March 31, 2004 and December 31, 2003                                   151.8           152.0
Deferred Income Taxes                                                        25.3            41.0
Other Current Assets                                                         56.3            31.6
--------------------------------------------------------------------------------------------------
    Total Current Assets                                                  1,081.8         1,178.9
--------------------------------------------------------------------------------------------------

Property and Equipment                                                   10,644.2        10,673.0
Less Accumulated Depreciation                                             2,765.6         2,663.4
--------------------------------------------------------------------------------------------------
    Property and Equipment, net                                           7,878.6         8,009.6
--------------------------------------------------------------------------------------------------

Goodwill                                                                  2,230.8         2,230.8
Investments in and Advances to Joint Ventures                                 6.2             5.5
Deferred Income Taxes                                                        28.2            28.2
Other Assets                                                                216.8           209.6
--------------------------------------------------------------------------------------------------
    Total Assets                                                      $  11,442.4   $    11,662.6
==================================================================================================

                                LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                                      $     144.6   $       146.1
Accrued Income Taxes                                                         52.5            57.2
Debt Due Within One Year                                                     47.2            45.8
Other Current Liabilities                                                   280.8           262.0
--------------------------------------------------------------------------------------------------
    Total Current Liabilities                                               525.1           511.1
--------------------------------------------------------------------------------------------------

Long-Term Debt                                                            3,199.2         3,612.3
Deferred Income Taxes                                                        58.3            42.8
Other Long-Term Liabilities                                                 304.2           299.4
--------------------------------------------------------------------------------------------------
    Total Long-Term Liabilities                                           3,561.7         3,954.5
--------------------------------------------------------------------------------------------------

Commitments and Contingencies
Minority Interest                                                           121.5             4.4

Preference Shares, $0.10 par value; 50,000,000 shares authorized,
  none issued and outstanding                                                   -               -
Ordinary Shares, $0.01 par value; 800,000,000 shares authorized,
  320,759,263 and 319,926,500 shares issued and outstanding at
  March 31, 2004 and December 31, 2003, respectively                          3.2             3.2
Additional Paid-in Capital                                               10,662.7        10,643.8
Accumulated Other Comprehensive Loss                                        (20.3)          (20.2)
Retained Deficit                                                         (3,411.5)       (3,434.2)
--------------------------------------------------------------------------------------------------
    Total Shareholders' Equity                                            7,234.1         7,192.6
--------------------------------------------------------------------------------------------------
    Total Liabilities and Shareholders' Equity                        $  11,442.4   $    11,662.6
==================================================================================================
</TABLE>


                            See accompanying notes.
                                        3
<PAGE>
<TABLE>
<CAPTION>
                        TRANSOCEAN INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


                                                                 Three Months Ended March 31,
                                                             ----------------------------------
                                                                   2004              2003
                                                             ----------------  ----------------
<S>                                                          <C>               <C>
Cash Flows from Operating Activities
  Net income                                                 $          22.7   $          47.2
  Adjustments to reconcile net income to
    net cash provided by operating activities
      Depreciation                                                     131.5             126.8
      Deferred income taxes                                             31.3              27.6
      Equity in earnings of joint ventures                              (2.3)             (3.6)
      Net gain from disposal of assets                                  (1.9)             (0.7)
      Gain from TODCO initial public offering                          (39.4)                -
      Loss on retirement of debt                                        28.1                 -
      Amortization of debt-related discounts/premiums, fair
        value adjustments and issue costs, net                          (7.6)             (1.8)
      Deferred income, net                                              (3.3)              6.4
      Deferred expenses, net                                            (1.9)             (4.8)
      Other long-term liabilities                                        2.3               6.9
      Other, net                                                         6.2               1.7
      Changes in operating assets and liabilities
          Accounts receivable                                           29.8              17.6
          Accounts payable and other current liabilities                23.6              42.4
          Income taxes receivable/payable, net                          (2.4)            (40.7)
          Other current assets                                         (24.5)            (34.5)
-----------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                              192.2             190.5
-----------------------------------------------------------------------------------------------

Cash Flows from Investing Activities
  Capital expenditures                                                 (18.5)            (24.4)
  Proceeds from disposal of assets, net                                 10.5               2.2
  Proceeds from TODCO initial public offering                          155.7                 -
  Joint ventures and other investments, net                              1.5               1.4
-----------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Investing Activities                    149.2             (20.8)
-----------------------------------------------------------------------------------------------

Cash Flows from Financing Activities
  Repayments on revolving credit agreements                            (50.0)                -
  Net borrowings from issuance of debt                                   1.1                 -
  Repayments on other debt instruments                                (381.6)            (47.8)
  Cash from termination of interest rate swaps                             -             173.5
  Net proceeds from issuance of ordinary shares under
    stock-based compensation plans                                      14.0              10.9
  Other, net                                                            (1.0)             (0.1)
-----------------------------------------------------------------------------------------------
Net Cash Provided by (Used in) Financing Activities                   (417.5)            136.5
-----------------------------------------------------------------------------------------------

Net Increase (Decrease) in Cash and Cash Equivalents                   (76.1)            306.2
-----------------------------------------------------------------------------------------------
Cash and Cash Equivalents at Beginning of Period                       474.0           1,214.2
-----------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                   $         397.9   $       1,520.4
===============================================================================================
</TABLE>


                            See accompanying notes.
                                        4
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE 1 - NATURE OF BUSINESS AND PRINCIPLES OF CONSOLIDATION

     Transocean  Inc.  (together  with our subsidiaries and predecessors, unless
the  context requires otherwise, "Transocean," "we," "us" or "our") is a leading
international  provider  of  offshore contract drilling services for oil and gas
wells.  As  of  March  31, 2004, we owned, had partial ownership interests in or
operated  95  mobile  offshore  and barge drilling units, excluding the fleet of
TODCO  (together  with  its  subsidiaries  and  predecessors, unless the context
requires  otherwise,  "TODCO"), a publicly traded company as of February 2004 in
which  we  own  a  majority  interest.  We  contract  our drilling rigs, related
equipment  and  work  crews  primarily  on  a dayrate basis to drill oil and gas
wells.  We  also provide additional services, including integrated well services
and  management  of  third  party  well  service  activities.

     On  January  31,  2001,  we completed a merger transaction (the "R&B Falcon
merger")  with R&B Falcon Corporation ("R&B Falcon"). At the time of the merger,
R&B  Falcon  owned,  had  partial  ownership interests in, operated or had under
construction  more  than  100  mobile  offshore  drilling  units  consisting  of
drillships,  semisubmersibles, jackup rigs and other units including the Gulf of
Mexico  Shallow  and  Inland Water segment fleet. As a result of the merger, R&B
Falcon became our indirect wholly owned subsidiary. The merger was accounted for
as  a  purchase  and  we  were  the  accounting  acquiror.

     In  July  2002,  we  announced plans to pursue a divestiture of our Gulf of
Mexico  Shallow  and  Inland Water business, which was a part of R&B Falcon. R&B
Falcon's  overall  business  was  considerably  broader  than the Gulf of Mexico
Shallow and Inland Water business. In preparation for this divestiture, we began
the  transfer of all assets and businesses out of R&B Falcon that were unrelated
to  the  Gulf of Mexico Shallow and Inland Water business. In December 2002, R&B
Falcon  changed  its  name  to  TODCO  and,  in January 2004, the Gulf of Mexico
Shallow  and Inland Water business segment became known as the TODCO segment. In
February  2004, TODCO completed an initial public offering ("IPO") (see Note 3).
Before  the  closing  of  the IPO, TODCO completed the transfer of all unrelated
assets  and  businesses  to  us.

     For  investments  in joint ventures and other entities that do not meet the
criteria  of  a  variable  interest entity and where we are not deemed to be the
primary  beneficiary  for  accounting  purposes  of those entities that meet the
variable  interest  entity criteria, the equity method of accounting is used for
investments  in  joint ventures where our ownership is between 20 percent and 50
percent  and  for investments in joint ventures owned more than 50 percent where
we  do not have significant influence over the joint venture. The cost method of
accounting is used for investments in joint ventures where our ownership is less
than 20 percent and we do not have significant influence over the joint venture.
For  investments in joint ventures that meet the criteria of a variable interest
entity where we are deemed to be the primary beneficiary for accounting purposes
and  for  entities  in which we have majority voting interest, such entities are
consolidated.  Intercompany  transactions  and  accounts  are  eliminated.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Basis  of  Presentation - Our accompanying condensed consolidated financial
statements  have  been  prepared  without  audit  in  accordance with accounting
principles  generally  accepted  in  the  United  States  for  interim financial
information  and with the instructions to Form 10-Q and Article 10 of Regulation
S-X  of  the  Securities  and Exchange Commission. Accordingly, pursuant to such
rules and regulations, these financial statements do not include all disclosures
required  by  accounting  principles generally accepted in the U.S. for complete
financial  statements.  Operating  results  for the three months ended March 31,
2004  are not necessarily indicative of the results that may be expected for the
year  ending  December  31,  2004  or  for  any  future period. The accompanying
condensed  consolidated financial statements and notes thereto should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the year ended December 31, 2003.


                                        5
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Accounting  Estimates  -  The  preparation  of  financial  statements  in
conformity  with  accounting  principles generally accepted in the U.S. requires
management to make estimates and assumptions that affect the reported amounts of
assets,  liabilities, revenues, expenses and disclosure of contingent assets and
liabilities.  On  an  ongoing  basis, we evaluate our estimates, including those
related  to  bad  debts,  materials  and  supplies  obsolescence,  investments,
intangible  assets  and  goodwill,  property  and equipment and other long-lived
assets,  income  taxes,  financing  operations, workers' insurance, pensions and
other  postretirement  benefits,  other  employment  benefits  and  contingent
liabilities. We base our estimates on historical experience and on various other
assumptions  we  believe  are reasonable under the circumstances, the results of
which  form  the  basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results
could  differ  from  such  estimates.

     Supplementary Cash Flow Information - Cash payments for interest and income
taxes,  net,  were  $10.5 million and $19.2 million, respectively, for the three
months  ended  March 31, 2004 and $14.8 million and $24.3 million, respectively,
for  the  three  months  ended  March  31,  2003.

     Goodwill  -  In  accordance with the Financial Accounting Standards Board's
("FASB")  Statement of Financial Accounting Standards ("SFAS") 142, Goodwill and
Other  Intangible  Assets,  goodwill  is  no  longer amortized and is tested for
impairment at the reporting unit level, which is defined as an operating segment
or  a  component  of  an operating segment that constitutes a business for which
financial  information  is  available  and  is regularly reviewed by management.
Management has determined that our reporting units are the same as our operating
segments  for  the  purpose of allocating goodwill and the subsequent testing of
goodwill  for  impairment.  Goodwill  resulting  from  the R&B Falcon merger was
allocated  to our two reporting units, Transocean Drilling and TODCO, at a ratio
of  68 percent and 32 percent, respectively. The allocation was determined based
on  the  percentage  of  each reporting unit's assets at fair value to the total
fair  value  of  assets  acquired  in  the R&B Falcon merger. The fair value was
determined  from  a  third  party  valuation.  Goodwill  resulting from previous
mergers  was  allocated entirely to the Transocean Drilling reporting unit.  The
remaining  goodwill balance at March 31, 2004 relates to our Transocean Drilling
segment.

     Impairment  of Long-Lived Assets - The carrying value of long-lived assets,
principally  property  and  equipment, is reviewed for potential impairment when
events  or  changes  in  circumstances indicate that the carrying amount of such
assets  may  not  be  recoverable.  For property and equipment held for use, the
determination  of  recoverability  is made based upon the estimated undiscounted
future  net  cash flows of the related asset or group of assets being evaluated.
Property and equipment held for sale are recorded at the lower of net book value
or  net  realizable  value.  See  Note  4.

     Income  Taxes - Income taxes have been provided based upon the tax laws and
rates  in  the countries in which operations are conducted and income is earned.
The  income  tax  rates  imposed by these taxing authorities vary substantially.
Taxable income may differ from pre-tax income for financial accounting purposes,
particularly  in  countries  with  revenue-based  taxes.  There  is  no expected
relationship  between  the  provision  for income taxes and income before income
taxes  because the countries in which we operate have different taxation regimes
that  vary  not  only  with  respect  to  nominal  rate but also in terms of the
availability  of  deductions,  credits and other benefits. Variations also arise
because  income  earned  and  taxed  in  any particular country or countries may
fluctuate  from  period  to  period.  Deferred  tax  assets  and liabilities are
recognized  for  the  anticipated  future  tax  effects of temporary differences
between  the  financial  statement  basis  and  the  tax basis of our assets and
liabilities  using  the  applicable tax rates in effect at year end. A valuation
allowance  for  deferred  tax assets is recorded when it is more likely than not
that  some  or  all  of  the  benefit  from  the  deferred tax asset will not be
realized.  See  Note  6.


                                        6
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Comprehensive  Income  -  The components of accumulated other comprehensive
loss  at  March  31,  2004 and December 31, 2003, net of tax, are as follows (in
millions):

<TABLE>
<CAPTION>
                                                               Unrealized
                                                 Gain on        Loss on                    Accumulated
                                               Terminated      Available-     Minimum         Other
                                              Interest Rate     for-Sale      Pension     Comprehensive
                                                  Swap         Securities    Liability        Loss
                                             ---------------  ------------  -----------  ---------------
<S>                                          <C>              <C>           <C>          <C>

Balance at December 31, 2003                 $          3.4   $      (0.4)  $    (23.2)  $        (20.2)
  Change in other comprehensive income, net
    of tax                                             (0.1)            -            -             (0.1)
                                             ---------------  ------------  -----------  ---------------
Balance at March 31, 2004                    $          3.3   $      (0.4)  $    (23.2)  $        (20.3)
                                             ===============  ============  ===========  ===============
</TABLE>

     Segments  -  Our  operations  are  aggregated  into two reportable business
segments:  (i)  Transocean  Drilling  and  (ii)  TODCO. We provide services with
different  types  of  drilling  equipment  in  several  geographic  regions. The
location  of  our  operating  assets and the allocation of resources to build or
upgrade  drilling units are determined by the activities and needs of customers.
See  Note  10.

     Interim  Financial  Information  -  The  condensed  consolidated  financial
statements  reflect  all  adjustments,  which are, in the opinion of management,
necessary for a fair statement of results of operations for the interim periods.
Such  adjustments  are  considered  to  be  of  a normal recurring nature unless
otherwise  identified.

     Stock-Based Compensation - Through December 31, 2002 and in accordance with
the  provisions  of  SFAS  123,  Accounting for Stock-Based Compensation, we had
elected to follow the Accounting Principles Board Opinion ("APB") 25, Accounting
for Stock Issued to Employees, and related interpretations in accounting for our
employee stock-based compensation plans. Stock-based compensation awards granted
prior  to  January  1,  2003,  if not subsequently modified, will continue to be
accounted  for  under  the  recognition  and  measurement  provisions of APB 25.
Effective  January  1, 2003, we adopted the fair value recognition provisions of
SFAS  123  using  the  prospective method proscribed in SFAS 148, Accounting for
Stock-Based  Compensation  -  Transition  and  Disclosure. Under the prospective
method,  all  future  employee  stock-based  compensation  awards  granted on or
subsequent  to January 1, 2003 are expensed over the vesting period based on the
fair  value of the underlying awards on the date of grant. The fair value of the
stock  options is determined using the Black-Scholes option pricing model, while
the fair value of nonvested stock grants is determined based on the market price
of  our  stock on the date of grant. Additionally, stock appreciation rights are
recorded  at  fair  value  with  the  changes  in  fair  value being recorded as
compensation  expense  as  incurred.


                                        7
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     If  compensation  expense  for  grants  to  employees  under  our long-term
incentive  plan  and  employee  stock purchase plan prior to January 1, 2003 was
recognized  using the fair value method of accounting under SFAS 123 rather than
the intrinsic value method under APB 25, net income and earnings per share would
have  been reduced to the pro forma amounts indicated below (in millions, except
per  share  data):

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                              March 31,
                                                            --------------
                                                             2004    2003
                                                            ------  ------
<S>                                                         <C>     <C>
Net Income as Reported                                      $22.7   $47.2
  Add back: Stock-based compensation expense included in
    reported net income, net of related tax effects           7.3     1.2

  Deduct: Total stock-based compensation expense
    determined under the fair value method for all awards,
    net of related tax effects
      Long-Term Incentive Plan                               (9.7)   (4.6)
      Employee Stock Purchase Plan                           (0.6)   (0.9)

                                                            ------  ------
  Pro Forma Net Income                                      $19.7   $42.9
                                                            ======  ======

Basic Earnings Per Share
  As Reported                                               $0.07   $0.15
  Pro Forma                                                  0.06    0.13

Diluted Earnings Per Share
  As Reported                                               $0.07   $0.15
  Pro Forma                                                  0.06    0.13
</TABLE>

     Reclassifications  -  Certain  reclassifications  have  been  made to prior
period  amounts  to  conform  with  the  current  period's  presentation.

NOTE 3 - TODCO INITIAL PUBLIC OFFERING

     In February 2004, we completed the TODCO IPO, in which we sold 13.8 million
shares of TODCO's class A common stock, representing approximately 23 percent of
TODCO's  total outstanding shares, at $12.00 per share. We received net proceeds
of  $155.7  million  from  the  IPO and recognized a gain of approximately $39.4
million  ($0.12  per  diluted  share)  in  the  first  quarter  of  2004,  which
represented  the  excess of net proceeds received over the net book value of the
shares  of  TODCO sold in the IPO. We hold an approximate 77 percent interest in
TODCO,  represented  by 46.2 million shares of class B common stock, and we have
approximately 94 percent of the outstanding voting interest in TODCO. Each share
of  our  class  B common stock has five votes per share compared to one vote per
share  of class A common stock. We consolidate TODCO in our financial statements
as  a  business  segment.

     We  entered  into various agreements with TODCO to set forth our respective
rights  and  obligations relating to our businesses and to effect the separation
of  our  two companies. These agreements included a master separation agreement,
tax sharing agreement, employee matters agreement, transition services agreement
and  registration  rights  agreement.

     As  a  result  of  the  deconsolidation  of  TODCO  from  our  other  U.S.
subsidiaries  for  U.S. federal income tax purposes in conjunction with the IPO,
we  established  an  initial  valuation allowance of approximately $31.0 million
($0.09  per diluted share) against the estimated deferred tax assets of TODCO in
excess  of  its  deferred  tax  liabilities,


                                        8
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

taking into account prudent and feasible planning strategies as required by SFAS
109,  Accounting  for  Income  Taxes.  The  ultimate  amount  of  such valuation
allowance could vary significantly depending upon a number of factors, including
the  final  allocation  of tax benefits between TODCO and our other subsidiaries
under  applicable  law, taxable income for calendar year 2004 and our ability to
implement  planning  strategies  under  SFAS  109.

     In  conjunction  with the closing of the TODCO IPO, TODCO granted nonvested
restricted  stock  and  stock  options  to  certain  of  its employees under its
long-term  incentive  plan  and  certain  of  these awards vested at the time of
grant. In accordance with the provisions of SFAS 123, TODCO expects to recognize
as  compensation expense approximately $17.0 million over the vesting periods of
the  awards. TODCO recognized approximately $6.0 million ($0.02 per Transocean's
diluted share) in the first quarter of 2004 as a result of the immediate vesting
of  certain  awards.  TODCO  will amortize the remaining amount of approximately
$11.0  million  to  compensation  expense  over  the  next  three  years  with
approximately  $5.0  million  over  the remainder of 2004 and approximately $5.0
million and $1.0 million in 2005 and 2006, respectively. In addition, certain of
TODCO's employees held options that were granted prior to the IPO to acquire our
ordinary  shares.  In  accordance  with  the  employee  matters agreement, these
options were modified at the IPO date, which resulted in the accelerated vesting
of the options and the extension of the term of the options through the original
contractual  life.  In  connection with the modification of these options, TODCO
recognized  approximately  $1.5  million  additional compensation expense in the
first  quarter  of  2004.

NOTE 4 - ASSET DISPOSITIONS, RETIREMENTS AND IMPAIRMENTS

     Asset  Dispositions  and  Retirements - During the three months ended March
31,  2004,  we  settled  insurance  claims  and sold a marine support vessel and
certain  other  assets  for  net  proceeds  of  approximately  $10.5 million and
recorded net gains of $0.7 million, net of tax of $0.4 million, and $2.7 million
($0.01  per  diluted share), which had no tax effect, in our Transocean Drilling
and  TODCO  segments,  respectively.

     In  January 2003, in our Transocean Drilling segment, we completed the sale
of a jackup rig, the RBF 160, for net proceeds of $13.1 million and recognized a
gain  of $0.2 million, net of tax of $0.1 million. The proceeds were received in
December  2002.

     During the three months ended March 31, 2003, we settled an insurance claim
and sold certain other assets for net proceeds of approximately $2.2 million and
recorded  net gains of $1.2 million, net of tax benefit of $0.01 million, in our
Transocean  Drilling  segment.

     Impairments  - During the three months ended March 31, 2003, we recorded an
after-tax, non-cash impairment charge of $1.0 million in our Transocean Drilling
segment as a result of our decision to discontinue the leases on our oil and gas
properties.  The  impairment  was determined and measured based on the remaining
book  value  of  the assets and management's assessment of the fair value at the
time  the  decision  was  made.

NOTE 5 - ASSETS HELD FOR SALE

     In  March  2004,  in  our  Transocean  Drilling  segment we entered into an
agreement  to  sell a semisubmersible rig, the Sedco 602, in connection with our
efforts  to  dispose of certain non-strategic assets. The sale of the Sedco 602,
which  has  been  idle  since  February 2003, is expected to close in the second
quarter  of  2004 and has met the remaining held for sale criteria in accordance
with  SFAS 144, Accounting for Impairment and Disposal of Long-Lived Assets. The
rig  was  classified  as an asset held for sale in March 2004 and is included in
other  assets in our condensed consolidated balance sheet at March 31, 2004. The
estimated  fair  value  less  selling  costs exceeds the rig's carrying value of
approximately  $6.7  million  and,  as such, no loss has been recognized for the
three  months ended March 31, 2004. We had no assets classified as held for sale
at  December  31,  2003.


                                        9
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE 6 - INCOME TAXES

     As  a result of anticipated 2004 earnings, the annual effective tax rate is
estimated  to be approximately 27.3 percent during 2004 on earnings before TODCO
IPO  related  items  and  loss  on  debt  retirements.

     During the quarter ended March 31, 2004 and in conjunction with the IPO, we
established  a  valuation  allowance  of  approximately $31.0 million ($0.09 per
diluted  share)  against  the  deferred  tax  assets  of  TODCO in excess of its
deferred  tax  liabilities.  See  Note  3.

NOTE 7 - DEBT

     Debt, net of unamortized discounts, premiums and fair value adjustments, is
comprised  of  the  following  (in  millions):

<TABLE>
<CAPTION>
                                                                              March 31,   December 31,
                                                                                2004         2003
                                                                             ----------  -------------
<S>                                                                          <C>         <C>

6.75% Senior Notes, due April 2005                                           $    359.1  $       361.2
7.31% Nautilus Class A1 Amortizing Notes - final maturity May 2005                 52.9           63.6
6.95% Senior Notes, due April 2008                                                268.5          269.5
9.5% Senior Notes, due December 2008                                               11.3          357.3
800 Million Revolving Credit Agreement - final maturity December 2008             200.0          250.0
6.625% Notes, due April 2011                                                      794.4          797.3
7.375% Senior Notes, due April 2018                                               250.4          250.4
Zero Coupon Convertible Debentures, due May 2020 (put options exercisable
  May 2008 and May 2013)                                                           16.7           16.5
1.5% Convertible Debentures, due May 2021 (put options exercisable May
  2006, May 2011 and May 2016)                                                    400.0          400.0
8% Debentures, due April 2027                                                     198.1          198.1
7.45% Notes, due April 2027 (put options exercisable April 2007)                   94.9           94.8
7.5% Notes, due April 2031                                                        597.5          597.5
Other                                                                               2.6            1.9
                                                                             ----------  -------------
Total Debt                                                                      3,246.4        3,658.1
Less Debt Due Within One Year                                                      47.2           45.8
                                                                             ----------  -------------
  Total Long-Term Debt                                                       $  3,199.2  $     3,612.3
                                                                             ==========  =============
</TABLE>

     The scheduled maturity of our debt, at face value, assumes the bondholders
exercise  their  options  to  require  us  to  repurchase  the  1.5% Convertible
Debentures,  7.45%  Notes  and  Zero  Coupon Convertible Debentures in May 2006,
April  2007  and  May  2008,  respectively,  and  is  as  follows (in millions):

<TABLE>
<CAPTION>
                          Twelve Months
                              Ending
                             March 31,
                          --------------
<S>                       <C>

2005                      $         47.2
2006                               358.8
2007                               400.0
2008                               100.0
2009                               479.2
Thereafter                       1,750.0
                          --------------
  Total                   $      3,135.2
                          ==============
</TABLE>


                                       10
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Commercial  Paper Program - We have a revolving credit agreement, described
below,  which,  together  with  previous  revolving  credit agreements, provided
liquidity  through  commercial paper borrowings during 2003. Because we believed
our  current  cash  balances  and the revolving credit agreement described below
provided  us with adequate liquidity, we terminated our Commercial Paper Program
during  the  first  quarter  of  2004.

     Revolving  Credit  Agreements - We are party to an $800.0 million five-year
revolving credit agreement (the "Revolving Credit Agreement") dated December 16,
2003.  The  Revolving  Credit Agreement bears interest, at our option, at a base
rate or London Interbank Offered Rate ("LIBOR") plus a margin that can vary from
0.350  percent  to  0.950  percent  depending  on our non-credit enhanced senior
unsecured public debt rating. At March 31, 2004, the applicable margin was 0.500
percent. A facility fee varying from 0.075 percent to 0.225 percent depending on
our  non-credit enhanced senior unsecured public debt rating, is incurred on the
daily  amount  of  the underlying commitment, whether used or unused, throughout
the  term  of  the  facility. At March 31, 2004, the applicable facility fee was
0.125  percent.  A  utilization  fee  of  0.125  percent  is  payable if amounts
outstanding  under  the  Revolving  Credit  Agreement  are  greater  than $264.0
million.  At  March 31, 2004, $200.0 million was outstanding under the Revolving
Credit  Agreement.

     The  Revolving  Credit Agreement requires compliance with various covenants
and  provisions  customary  for  agreements  of  this nature, including earnings
before  interest,  taxes,  depreciation  and amortization ("EBITDA") to interest
coverage  ratio,  as  defined by the credit agreement, of not less than three to
one, a debt to total tangible capital ratio, as defined by the credit agreement,
of  not  greater  than  50 percent, and limitations on creating liens, incurring
debt,  transactions with affiliates, sale/leaseback transactions and mergers and
sale  of  substantially  all  assets.

     In  December  2003,  TODCO  entered into a $75.0 million two-year revolving
credit  agreement (the "TODCO Revolving Credit Agreement"), which will reduce to
$60.0  million  in  December  2004.  The  TODCO Revolving Credit Agreement bears
interest,  at  TODCO's  option,  at a base rate plus a margin of 2.50 percent or
LIBOR plus a margin of 3.50 percent. Utilization of the facility is limited by a
borrowing  base.  Commitment fees on the unused portion of the facility are 1.50
percent  of  the  average  daily balance and are payable quarterly. At March 31,
2004,  there  were no borrowings under the TODCO Revolving Credit Agreement. The
TODCO  Revolving Credit Agreement requires compliance with various covenants and
provisions  customary for similar agreements of non-investment grade facilities.
TODCO's  Revolving  Credit  Agreement  is  not  guaranteed  by  us.

     6.75%,  6.95%,  7.375%  and 9.5% Senior Notes and Exchange Offer - In March
2002,  we completed exchange offers and consent solicitations for TODCO's 6.75%,
6.95%,  7.375%  and 9.5% Senior Notes (the "Exchange Offer"). As a result of the
Exchange Offer, approximately $342.3 million, $247.8 million, $246.5 million and
$289.8  million principal amount of TODCO's outstanding 6.75%, 6.95%, 7.375% and
9.5%  Senior  Notes,  respectively,  were  exchanged for our newly issued 6.75%,
6.95%,  7.375%  and 9.5% Senior Notes having the same principal amount, interest
rate,  redemption terms and payment and maturity dates (see "-Debt Redemption").
Because the holders of a majority in principal amount of each of these series of
notes  consented to the proposed amendments to the applicable indenture pursuant
to  which  the  notes  were  issued,  some covenants, restrictions and events of
default  were  eliminated  from  the  indentures with respect to these series of
notes.  After the Exchange Offer, approximately $7.7 million, $2.2 million, $3.5
million  and  $10.2  million  principal  amount of the outstanding 6.75%, 6.95%,
7.375%  and 9.5% Senior Notes, respectively, not exchanged remain the obligation
of  TODCO.  These  notes are combined with our notes of the corresponding series
issued  by  us  in the above table. In connection with the Exchange Offer, TODCO
paid  $8.3  million  in consent payments to holders of TODCO's notes whose notes
were  exchanged.  The  consent  payments  are  being amortized as an increase to
interest  expense  over  the  remaining term of the respective notes. The 6.75%,
6.95%, 7.375% and 9.5% Senior Notes are redeemable at our option at a make-whole
premium.

     Debt  Redemption - In March 2004, we completed the redemption of our $289.8
million  principal amount outstanding 9.5% Senior Notes due December 2008 at the
make-whole  premium  price provided in the indenture. We redeemed these notes at
127.796%  of  face value or $370.3 million, plus accrued and unpaid interest. We
recognized  an


                                       11
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

after-tax  loss  on the redemption of debt of approximately $28.1 million ($0.09
per diluted share) in the first quarter of 2004, which reflected adjustments for
fair  value  of  the  debt  at  the  R&B  Falcon  merger  and the premium on the
termination  of  the  related  interest rate swap. We funded the redemption with
existing  cash  balances,  which  included  proceeds  from  the  TODCO  IPO. The
redemption  did  not  affect  the  9.5% Senior Notes due December 2008 of TODCO.

NOTE 8 - FINANCIAL INSTRUMENTS AND RISK CONCENTRATION

     Foreign  Exchange  Risk - Our international operations expose us to foreign
exchange  risk.  This  risk  is  primarily  associated  with  compensation costs
denominated  in  currencies  other  than the U.S. dollar and with purchases from
foreign  suppliers.  We  use  a  variety  of  techniques to minimize exposure to
foreign  exchange  risk,  including  customer contract payment terms and foreign
exchange  derivative  instruments.

     Our  primary foreign exchange risk management strategy involves structuring
customer  contracts  to  provide  for  payment  in  both  U.S. dollars and local
currency.  The  payment  portion  denominated  in  local  currency  is  based on
anticipated  local  currency requirements over the contract term. Due to various
factors,  including  local  banking  laws,  other  statutory requirements, local
currency  convertibility  and  the  impact  of  inflation on local costs, actual
foreign  exchange  needs  may  vary  from  those  anticipated  in  the  customer
contracts,  resulting in partial exposure to foreign exchange risk. Fluctuations
in  foreign  currencies  typically  have  minimal  impact on overall results. In
situations  where  payments  of  local  currency  do  not  equal  local currency
requirements,  foreign  exchange  derivative  instruments,  specifically foreign
exchange  forward  contracts,  or spot purchases may be used. A foreign exchange
forward  contract  obligates  us  to exchange predetermined amounts of specified
foreign  currencies at specified exchange rates on specified dates or to make an
equivalent  U.S.  dollar  payment  equal  to  the  value  of  such  exchange.

     We  do  not enter into derivative transactions for speculative purposes. At
March 31, 2004, we had no material open foreign exchange contracts.

NOTE 9 - INTEREST RATE SWAPS

     In  June  2001,  we  entered  into  interest  rate  swap  agreements in the
aggregate  notional  amount  of $700.0 million with a group of banks relating to
our $700.0 million aggregate principal amount of 6.625% Notes due April 2011. In
February  2002,  we  entered  into interest rate swap agreements with a group of
banks  in the aggregate notional amount of $900.0 million relating to our $350.0
million  aggregate principal amount of 6.75% Senior Notes due April 2005, $250.0
million  aggregate  principal  amount  of  6.95% Senior Notes due April 2008 and
$300.0  million  aggregate  principal  amount  of 9.5% Senior Notes due December
2008.  The objective of each transaction was to protect the debt against changes
in fair value due to changes in the benchmark interest rate. Under each interest
rate swap, we received the fixed rate equal to the coupon of the hedged item and
paid  LIBOR plus a margin of 50 basis points, 246 basis points, 171 basis points
and  413  basis  points,  respectively,  which were designated as the respective
benchmark  interest  rates, on each of the interest payment dates until maturity
of  the respective notes. The hedges were considered perfectly effective against
changes  in  the fair value of the debt due to changes in the benchmark interest
rates over their term. As a result, the shortcut method applied and there was no
requirement  to periodically reassess the effectiveness of the hedges during the
term  of  the  swaps.

     In  January  2003, we terminated the swaps with respect to our 6.75%, 6.95%
and  9.5%  Senior  Notes. In March 2003, we terminated the swaps with respect to
our  6.625% Notes. As a result of these terminations, we received cash proceeds,
net  of accrued interest, of approximately $173.5 million that was recognized as
a  fair value adjustment to long-term debt in our consolidated balance sheet and
is  being  amortized  as  a  reduction  to interest expense over the life of the
underlying  debt.  During  the  three months ended March 31, 2004 and 2003, such
reduction amounted to $6.7 million (or $0.02 per diluted share) and $3.5 million
(or $0.01 per diluted share), respectively. As a result of the redemption of our
9.5%  Senior  Notes  in  March 2004, we recognized the remaining swap premium of
$22.0  million  on the termination of the related interest rate swap against the
loss  on  retirement  of  debt  (see  Note  7).


                                       12
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     At  March  31,  2004  and December 31, 2003, we had no outstanding interest
rate  swaps.

NOTE  10  -  SEGMENTS

     Our  operations are aggregated into two reportable segments: (i) Transocean
Drilling  and  (ii) TODCO. The Transocean Drilling segment consists of floaters,
jackups  and  other  rigs  used  in  support of offshore drilling activities and
offshore  support services. The TODCO segment consists of our interest in TODCO,
which  conducts  jackup,  drilling  barge,  land  rig,  submersible  and  other
operations  located  in  the  U.S.  Gulf  of  Mexico  and inland waters, Mexico,
Trinidad  and  Venezuela.  We  provide services with different types of drilling
equipment  in  several  geographic  regions.  The  location  of our rigs and the
allocation of resources to build or upgrade rigs is determined by the activities
and  needs  of  customers.  Accounting  policies of the segments are the same as
those  described  in Note 2. We account for intersegment revenue and expenses as
if  the  revenue  or  expenses  were  to third parties at current market prices.

     Operating  revenues and income before income taxes and minority interest by
segment  were  as  follows  (in  millions):

<TABLE>
<CAPTION>
                                                               Three Months Ended March 31,
                                                            ----------------------------------
                                                                  2004              2003
                                                            ----------------  ----------------
<S>                                                         <C>               <C>
Operating Revenues
  Transocean Drilling                                       $         578.2   $         562.7
  TODCO                                                                73.8              53.3
                                                            ----------------  ----------------
    Total Operating Revenues                                $         652.0   $         616.0
                                                            ----------------  ----------------

Operating Income (Loss) Before General and Administrative
    Expense
  Transocean Drilling (a)                                   $         178.2   $         144.0
  TODCO (b)                                                           (26.9)            (28.5)
                                                            ----------------  ----------------
                                                                      151.3             115.5
Unallocated general and administrative expense                        (15.1)            (13.9)
Unallocated other expense, net                                        (69.7)            (42.7)
                                                            ----------------  ----------------
  Income Before Income Taxes and Minority Interest          $          66.5   $          58.9
                                                            ================  ================
<FN>

----------------------
(a)  The  three  months  ended March 31, 2004 includes a $39.4 million gain from
     the  TODCO  initial  public  offering.
(b)  The  three  months  ended March 31, 2004 and 2003 include $12.4 million and
     $4.6 million, respectively, of operating and maintenance expense that TODCO
     classifies  as  general  and  administrative  expense.
</TABLE>

<TABLE>
<CAPTION>
     Depreciation expense by segment was as follows (in millions):

                                Three Months Ended March 31,
                              --------------------------------
                                    2004             2003
                              -----------------  -------------
<S>                           <C>                <C>

Transocean Drilling           $           107.3  $       103.6
TODCO                                      24.2           23.2
                              -----------------  -------------
  Total Depreciation Expense  $           131.5  $       126.8
                              =================  =============
</TABLE>


                                       13
<PAGE>
<TABLE>
<CAPTION>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

     Total assets by segment were as follows (in millions):

                      March 31,   December 31,
                        2004         2003
                     ----------  -------------
<S>                  <C>         <C>

Transocean Drilling  $ 10,675.7  $    10,874.0
TODCO                     766.7          788.6
                     ----------  -------------
  Total Assets       $ 11,442.4  $    11,662.6
                     ==========  =============
</TABLE>

     Total capital expenditures by segment were as follows (in millions):

<TABLE>
<CAPTION>
                                Three Months Ended March 31,
                              --------------------------------
                                   2004             2003
                              ---------------  ---------------
<S>                           <C>              <C>

Transocean Drilling           $          15.5  $          22.8
TODCO                                     3.0              1.6
                              ---------------  ---------------
  Total Capital Expenditures  $          18.5  $          24.4
                              ===============  ===============
</TABLE>

NOTE  11  -  EARNINGS  PER  SHARE

     The  reconciliation  of  the  numerator  and  denominator  used  for  the
computation  of basic and diluted earnings per share is as follows (in millions,
except  per  share  data):

<TABLE>
<CAPTION>
                                                                    Three Months Ended March 31,
                                                                  --------------------------------
                                                                        2004             2003
                                                                  ----------------  --------------
<S>                                                               <C>               <C>

NUMERATOR FOR BASIC AND DILUTED EARNINGS PER SHARE
Net Income for basic and diluted earnings per share               $           22.7  $         47.2
                                                                  ================  ==============

DENOMINATOR FOR DILUTED EARNINGS PER SHARE
Weighted-average shares outstanding for basic earnings per share             320.6           319.7
  Effect of dilutive securities:
    Employee stock options and unvested stock grants                           2.1             1.3
    Warrants to purchase ordinary shares                                       1.4             0.6
                                                                  ----------------  --------------
Adjusted weighted-average shares and assumed
    conversions for diluted earnings per share                               324.1           321.6
                                                                  ================  ==============

BASIC AND DILUTED EARNINGS PER SHARE
  Net Income                                                      $           0.07  $         0.15
                                                                  ================  ==============
</TABLE>

     Ordinary  shares subject to issuance pursuant to the conversion features of
the  convertible  debentures  are  not  included  in the calculation of adjusted
weighted-average  shares  and assumed conversions for diluted earnings per share
because  the  effect  of  including  those shares is anti-dilutive for the three
months  ended  March  31,  2004  and  2003.

NOTE  12  -  CONTINGENCIES

     Legal  Proceedings  - One of our subsidiaries is involved in an action with
respect  to customs penalties relating to the Sedco 710 semisubmersible drilling
rig. Prior to our merger with Sedco Forex Holdings Limited ("Sedco Forex"), this
drilling  rig,  which  was working for Petrobras in Brazil at the time, had been
admitted  into  the  country  on  a temporary basis under authority granted to a
Schlumberger  entity.  Prior  to the merger with Sedco Forex at the end of


                                       14
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

1999,  the drilling contract was moved to an entity that would become one of our
subsidiaries.  In  early  2000,  the  drilling contract was extended for another
year.  On  January  10,  2000,  the  temporary  import  permit  granted  to  the
Schlumberger  entity expired, and renewal filings were not made until later that
January.  In  April 2000, the Brazilian customs authorities cancelled the import
permit.  The  Schlumberger entity filed an action in the Brazilian federal court
of  Campos  for  the  purpose  of  extending  the  temporary  admission.  Other
proceedings were also initiated in order to secure the transfer of the temporary
admission to our subsidiary. Ultimately, the court permitted the transfer to our
entity  but has not ruled that the temporary admission could be extended without
the  payment  of  a  financial  penalty.  During  the first quarter of 2004, the
customs  office  renewed  its  efforts  to collect a penalty and issued a second
assessment  for  this  penalty  but  has now done so against our subsidiary. The
assessment  is  for approximately $50 million. We believe that the amount of the
assessment,  even  if  it  were  appropriate,  should only be approximately $7.6
million  and should in any event be assessed against the Schlumberger entity. We
and  Schlumberger  are  contesting  our  respective  assessments.  We  have  put
Schlumberger  on notice that we consider any assessment to be the responsibility
of  Schlumberger. We do not expect the ultimate outcome of this matter to have a
material  adverse  effect  on  our  business or consolidated financial position.

     We  have  certain other actions or claims pending that have been previously
discussed  and  reported  in  our  Annual Report on Form 10-K for the year ended
December  31,  2003 and our other reports filed with the Securities and Exchange
Commission.  There  have  been  no  material  developments  in  these previously
reported  matters.  We  are involved in a number of other lawsuits, all of which
have  arisen  in  the  ordinary  course  of our business. We do not believe that
ultimate  liability,  if  any;  resulting from any such other pending litigation
will  have  a  material adverse effect on our business or consolidated financial
position.

     Letters  of  Credit and Surety Bonds - We had letters of credit outstanding
at  March  31,  2004  totaling $190.7 million. These letters of credit guarantee
various  contract  bidding and insurance activities under various lines provided
by  several  banks.

     As  is  customary  in  the contract drilling business, we also have various
surety  bonds  totaling  $121.8  million  in place at March 31, 2004 that secure
customs  obligations  relating  to  the  importation  of  our  rigs  and certain
performance  and  other  obligations.

NOTE 13 - SALE/LEASEBACK TRANSACTION

     We  lease the drillship M. G. Hulme, Jr. from Deep Sea Investors, L.L.C., a
special  purpose  entity  formed by several leasing companies to acquire the rig
from  one  of our subsidiaries in November 1995 in a sale/leaseback transaction.
We  are  obligated  to  pay  rent  of approximately $13 million per year through
November  2005.  At  the termination of the lease, we may purchase the rig for a
maximum  amount  of  approximately  $35.7 million. Effective September 2002, the
lease  neither  requires  that  collateral be maintained nor contains any credit
rating  triggers.

     We  adopted  and  applied the provisions of FASB Interpretation ("FIN") 46,
Consolidation  of  Variable  Interest  Entities,  as  revised December 31, 2003,
effective  December 31, 2003 for all variable interest entities. FIN 46 requires
the consolidation of variable interest entities in which an enterprise absorbs a
majority  of  the  entity's expected losses, receives a majority of the entity's
expected  residual  returns,  or  both, as a result of ownership, contractual or
other financial interests in the entity. Because the sale/leaseback agreement is
with  an  entity  in  which we have no direct investment, we are not entitled to
receive the financial statements of the leasing entity and the equity holders of
the leasing company will not release the financial statements or other financial
information  to  us  in  order  for  us to make the determination of whether the
entity  is  a  variable  interest  entity.  In  addition,  without the financial
statements,  we are unable to determine if we are the primary beneficiary of the
entity  and,  if so, what we would consolidate. We have no exposure to loss as a
result  of  the  sale/leaseback agreement. We currently account for the lease of
this  semisubmersible  drilling  rig  as  an  operating  lease.


                                       15
<PAGE>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

NOTE 14 - RELATED PARTY TRANSACTIONS

     Delta Towing - In January 2003, Delta Towing LLC ("Delta Towing") failed to
make  its  scheduled  quarterly  interest  payment  of $1.7 million on the notes
receivable.  We  signed  a  90-day  waiver  of  the  terms  requiring payment of
interest.  During  the  three  months  ended  March 31, 2003, we earned interest
income  related  to  the  notes  receivable  and the three-year revolving credit
facility  of  $1.5  million  and  $0.1  million,  respectively.

     As  a  result  of the adoption of FIN 46 and a determination that TODCO was
the  primary  beneficiary  for  accounting  purposes  of  Delta  Towing,  TODCO
consolidated  Delta  Towing  effective  December  31,  2003  and  intercompany
transactions  and  accounts  have  been  eliminated.

NOTE 15 - RESTRUCTURING CHARGES

     In  September  2002,  we  committed  to  restructuring  plans in France and
Norway.  We  established  a  liability  of  approximately  $4.0  million for the
estimated severance-related costs associated with the involuntary termination of
24  employees  pursuant to these plans. The charge was reported as operating and
maintenance  expense in our consolidated statements of operations related to the
Transocean  Drilling segment. Through March 31, 2004, approximately $3.6 million
had  been  paid  to  24 employees representing full or partial payments. In June
2003,  we  released  the expected surplus liability of $0.3 million to operating
and maintenance expense in the Transocean Drilling segment. Substantially all of
the  remaining  liability is expected to be paid by the end of the first quarter
in  2005.

NOTE 16 - RETIREMENT PLANS AND OTHER POSTEMPLOYMENT BENEFITS

     Defined  Benefit  Pension  Plans  - We have several defined benefit pension
plans,  both  funded  and  unfunded,  covering  substantially all U.S. employees
except  for  TODCO  employees.  We  also have various defined benefit plans that
cover  Norway  employees,  Nigeria  employees,  and  various  current and former
employees covered under certain frozen plans acquired in the connection with the
R&B  Falcon  merger. Net periodic benefit cost for these defined benefit pension
plans  included  the  following  components  (in  millions):

<TABLE>
<CAPTION>
                                               Three Months Ended
                                                    March 31,
                                             ------------------------
                                                2004         2003
                                             -----------  -----------
<S>                                          <C>          <C>
COMPONENTS OF NET PERIODIC BENEFIT COST (A)
Service cost                                 $      3.9   $      4.2
Interest cost                                       4.2          4.6
Expected return on plan assets                     (4.8)        (4.9)
Amortization of transition obligation               0.1          0.1
Amortization of prior service cost                  0.1          0.3
Recognized net actuarial losses                     0.6          0.2
                                             -----------  -----------
   Benefit cost                              $      4.1   $      4.5
                                             ===========  ===========

---------------------------
<FN>
(a)  Amounts are before income tax effect.
</TABLE>


                                       16
<PAGE>
<TABLE>
<CAPTION>
                        TRANSOCEAN INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


     Postretirement  Benefits  Other  Than  Pensions  - We have several unfunded
contributory  and  noncontributory  postretirement  benefit  plans  covering
substantially  all  of  our  Transocean  Drilling  segment  U.S.  employees. Net
periodic  benefit  cost  for  these  other  postretirement  plans  included  the
following  components  (in  millions):

                                                Three Months Ended
                                                     March 31,
                                             ------------------------
                                                2004         2003
                                             -----------  -----------
<S>                                          <C>          <C>
COMPONENTS OF NET PERIODIC BENEFIT COST (a)
Service cost                                 $      0.3   $      0.5
Interest cost                                       0.5          0.9
Amortization of prior service cost                 (0.6)         0.1
Recognized net actuarial losses                     0.4          0.3
SFAS 88 settlements/curtailments                      -         (0.6)
                                             -----------  -----------
  Benefit cost                               $      0.6   $      1.2
                                             ===========  ===========

----------------------------
<FN>
     (a)  Amounts are before income tax effect.
</TABLE>

     On  December  8,  2003,  the  Medicare  Prescription  Drug, Improvement and
Modernization  Act of 2003 (the "Act") was signed into law. The Act introduced a
prescription  drug  benefit  under  Medicare  as  well  as  a federal subsidy to
sponsors  of  retiree  health  care  benefit  plans  that  currently  provide  a
prescription  drug  benefit that is equivalent to the expanded Medicare benefit.
Employers  have  the  option  to either receive the subsidy or to supplement the
Medicare  paid  prescription  drug  benefit  on  a  secondary  payor  basis.  In
accordance  with  SFAS 106, employers are required to consider presently enacted
changes  in  relevant  laws  in  current  period  measurements of postretirement
benefit  costs  and  the  accumulated  postretirement  benefit  obligation. As a
result,  the  accumulated  postretirement  benefit  obligation  and net periodic
postretirement  benefit  costs  for future periods should reflect the effects of
the  Act.

     In  January  2004, the FASB staff issued FASB Staff Position ("FSP") 106-1,
Accounting  and  Disclosure  Requirements  Related  to the Medicare Prescription
Drug,  Improvement and Modernization Act of 2003. FSP 106-1 permits a sponsor of
a  postretirement  health care plan that provides a prescription drug benefit to
make  a  one-time  election  to defer accounting for the effects of the Act. The
deferral  will  continue to apply until authoritative guidance on the accounting
for  the  federal  subsidy  is  issued  or a significant event occurs that would
ordinarily call for remeasurement of a plan's assets and obligations. We elected
to  defer accounting for the Act and will continue to assess the effects the Act
will  have on our postretirement benefit plan costs. As a result of the deferral
election,  the  disclosures  above  relating  to the net periodic postretirement
benefit  costs  do  not  reflect  the  effects  of the Act on our postretirement
benefit  plans. The finalization of pending authoritative guidance could require
restatement  of  previously  reported  information.


                                       17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The  following information should be read in conjunction with the unaudited
condensed  consolidated  financial  statements included under "Item 1. Financial
Statements"  herein  and  the  audited consolidated financial statements and the
notes  thereto  and  "Item  7. Management's Discussion and Analysis of Financial
Condition  and Results of Operations" included in our Annual Report on Form 10-K
for  the  year  ended  December  31,  2003.

OVERVIEW

     Transocean  Inc.  (together  with our subsidiaries and predecessors, unless
the  context requires otherwise, "Transocean," "we," "us" or "our") is a leading
international  provider  of  offshore contract drilling services for oil and gas
wells.  As  of  April  30, 2004, we owned, had partial ownership interests in or
operated  95  mobile  offshore  and barge drilling units, excluding the fleet of
TODCO  (together  with  its  subsidiaries  and  predecessors, unless the context
requires  otherwise,  "TODCO"),  a  publicly  traded  company  in which we own a
majority  interest.  As  of  this date, our fleet included 32 High-Specification
semisubmersibles  and drillships ("floaters"), 25 Other Floaters, 26 Jackup Rigs
and  12  Other  Rigs. As of April 30, 2004, TODCO's fleet consisted of 24 jackup
rigs,  30  drilling  barges, nine land rigs, three submersible drilling rigs and
four  other  drilling  rigs.

     Our mobile offshore drilling fleet is considered one of the most modern and
versatile  fleets  in  the  world.  Our  primary  business  is to contract these
drilling  rigs, related equipment and work crews primarily on a dayrate basis to
drill  oil and gas wells. We specialize in technically demanding segments of the
offshore  drilling  business  with  a  particular  focus  on deepwater and harsh
environment  drilling  services.  We also provide additional services, including
integrated  well services and management of third party well service activities.

     Certain  key  measures  of  our  total  company  results  of operations and
financial  condition  are  as  follows:

<TABLE>
<CAPTION>
                                          Three Months Ended March 31,
                                       -----------------------------------
                                              2004               2003            Change
                                       -------------------  --------------  -----------------
                                            (In millions, except dayrates and percentages)
<S>                                    <C>                  <C>             <C>
Average dayrate (a)                    $           71,600   $      69,100   $          2,500
Utilization (b)                                        56%             55%               N/A
STATEMENT OF OPERATIONS
Operating revenue                      $            652.0   $       616.0   $           36.0
Operating and maintenance expense                   412.4           374.1               38.3
Operating income                                    136.2           101.6               34.6
Net income                                           22.7            47.2              (24.5)

                                             March 31,         December 31,
                                               2004               2003           Change
                                       -------------------  ---------------  ----------------
                                                             (In millions)
BALANCE SHEET DATA (AT END OF PERIOD)
Cash                                   $            397.9   $       474.0   $          (76.1)
Total Assets                                     11,442.4        11,662.6             (220.2)
Debt                                              3,246.4         3,658.1             (411.7)

----------------------------
<FN>
"N/A" means not applicable.

(a)  Average  dayrate is defined as contract drilling revenue earned per revenue
     earning day. Average dayrates for the period ended March 31, 2004 have been
     adjusted  from  those  previously reported in our press release dated April
     27,  2004  to reflect the adjustment of $13.7 million from other revenue to
     contract  drilling  revenue.
(b)  Utilization  is  the  total  actual  number  of  revenue  earning days as a
     percentage  of  the  total  number  of  calendar  days  in  the  period.
</TABLE>


                                       18
<PAGE>
     Our  revenue  and  operating  and maintenance expenses increased due to the
addition  of  the  drillships  Deepwater  Pathfinder and Deepwater Frontier as a
result of the 2003 acquisitions of the portions of the Deepwater Drilling L.L.C.
("DD  LLC")  and  Deepwater  Drilling  II  L.L.C.  ("DDII  LLC")  joint ventures
previously  held  by  ConocoPhillips  and the subsequent payoff of the synthetic
lease  financing  arrangements  in  late  December  2003. In addition, operating
revenue  and  operating  and  maintenance  expense  increased  due  to the riser
separation  incident  on  the drillship Discoverer Enterprise (see "-Significant
Events"),  as well as from integrated services provided to our client. Our first
quarter  2004  financial  results  included the recognition of a non-cash charge
pertaining  to  a  loss  on retirement of debt. We also recognized a gain on the
TODCO  initial  public  offering  ("IPO")  that  was  partially  offset by a tax
valuation  allowance  and  stock  option expense recorded in relation to the IPO
(see  "-Significant  Events").  Debt  and cash decreased during the three months
ended  March 31, 2004 primarily as a result of repayments on debt instruments as
we  continue to maintain our focus on debt reduction, which was partially offset
by  proceeds  received  from  the  TODCO  IPO.

     Our  operations are aggregated into two reportable segments: (i) Transocean
Drilling  and  (ii) TODCO. The Transocean Drilling segment consists of floaters,
jackups  and  other  rigs  used  in  support of offshore drilling activities and
offshore  support services. The TODCO segment consists of our interest in TODCO,
which  conducts  jackup,  drilling  barge,  land  rig,  submersible  and  other
operations  in  the  U.S. Gulf of Mexico and inland waters, Mexico, Trinidad and
Venezuela.  We  provide  services  with different types of drilling equipment in
several  geographic  regions.  The  location  of  our rigs and the allocation of
resources  to build or upgrade rigs is determined by the activities and needs of
our  customers.

     We  have  categorized  our  Transocean  Drilling  segment  fleet  into  a
"High-Specification  Floaters"  category,  consisting  of  our "Fifth-Generation
Deepwater  Floaters,"  "Other  Deepwater Floaters" and "Other High-Specification
Floaters,"  an  "Other  Floaters"  category,  a "Jackups" category and an "Other
Rigs" category. Within our High-Specification Floaters category, we consider our
Fifth-Generation  Deepwater  Floaters  to  be  the  semisubmersibles  Deepwater
Horizon,  Cajun  Express, Deepwater Nautilus, Sedco Energy and Sedco Express and
the  drillships  Deepwater  Discovery, Deepwater Expedition, Deepwater Frontier,
Deepwater  Millennium,  Deepwater  Pathfinder,  Discoverer Deep Seas, Discoverer
Enterprise,  and  Discoverer  Spirit.  These  rigs  were  built  in  the  last
construction cycle and have high-pressure mud pumps and a water depth capability
of 7,500 feet or greater. The Other Deepwater Floaters are generally those other
semisubmersible rigs and drillships that have a water depth capacity of at least
4,500  feet.  The  Other  High-Specification  Floaters are those rigs capable of
drilling  in harsh environments that were built as fourth-generation rigs in the
mid-  to  late-1980's  and have greater displacement than previously constructed
rigs  resulting  in  larger  variable load capacity, more useable deck space and
better  motion  characteristics.  The  Other  Floaters  category  is  generally
comprised  of  those non-high-specification floaters with a water depth capacity
of  less than 4,500 feet. The Jackups category consists of this segment's jackup
fleet,  and  the  Other  Rigs  category  consists  of  other  rigs that are of a
different  type  or use. We believe these categories better reflect how we view,
and  how  we believe our investors and the industry view, our fleet in an effort
to  better reflect our strategic focus on the ownership and operation of premium
high-specification  floating  rigs  and  jackups.

SIGNIFICANT EVENTS

Transocean Drilling Segment

     Debt  Redemption - In March 2004, we completed the redemption of our $289.8
million  principal amount outstanding 9.5% Senior Notes due December 2008 at the
make-whole  premium  price provided in the indenture. We redeemed these notes at
127.796%  of  face value or $370.3 million, plus accrued and unpaid interest. We
recognized  an  after-tax  loss on the redemption of debt of approximately $28.1
million in the first quarter of 2004, which reflected adjustments for fair value
of  the  debt  at  the  merger ("R&B Falcon merger") with R&B Falcon Corporation
("R&B  Falcon")  and the premium on the termination of the related interest rate
swap.  We  funded  the  redemption  with  existing cash balances, which included
proceeds from the TODCO IPO. The redemption did not affect the 9.5% Senior Notes
due  December  2008  of  TODCO.


                                       19
<PAGE>
     Operational  Incident - In May 2003, we announced that a drilling riser had
separated  on our deepwater drillship Discoverer Enterprise and that the rig had
temporarily  suspended  drilling  operations  for  our customer. The rig resumed
operations  in  July  2003  and  we  have  been  engaged in discussions with our
customer to resolve a disagreement with respect to the incident. We resolved the
disagreement  in  April  2004,  the result of which had no significant effect on
our  results  of operations. We remain in discussions with our insurers relating
to  an  insurance claim for a portion of our losses stemming from this incident.

TODCO Segment

     IPO  -  In February 2004, we completed the TODCO IPO, in which we sold 13.8
million  shares  of  TODCO's class A common stock, representing approximately 23
percent  of  TODCO's  total outstanding shares, at $12.00 per share. We received
net  proceeds  of  $155.7  million  from  the  IPO  and  recognized  a  gain  of
approximately  $39.4  million in the first quarter of 2004, which represents the
excess  of  net proceeds received over the net book value of the shares of TODCO
sold  in the IPO. Additionally, as a result of the deconsolidation of TODCO from
our  other U.S. subsidiaries for U.S. federal income tax purposes in conjunction
with  the  IPO,  we  established an initial valuation allowance of approximately
$31.0  million  against  the estimated deferred tax assets of TODCO in excess of
its  deferred tax liabilities, taking into account prudent and feasible planning
strategies  as  required  by  Financial  Accounting  Standards  Board's ("FASB")
Statement  of Financial Accounting Standards ("SFAS") 109, Accounting for Income
Taxes.  The ultimate amount of such valuation allowance could vary significantly
depending  upon  a  number  of  factors,  including  the final allocation of tax
benefits  between TODCO and our other subsidiaries under applicable law, taxable
income  for  calendar  year  2004  and  our  ability  to  implement tax planning
strategies  under  SFAS  109.

     In  conjunction  with the closing of the TODCO IPO, TODCO granted nonvested
restricted  stock  and  stock  options  to  certain  of  its employees under its
long-term  incentive  plan  and  certain  of  these awards vested at the time of
grant.  In  accordance  with  the  provisions  of  the  SFAS 123, Accounting for
Stock-Based  Compensation,  TODCO  expects  to recognize as compensation expense
approximately  $17.0  million  over  the  vesting  periods  of the awards. TODCO
recognized  approximately  $6.0 million in the first quarter of 2004 as a result
of  the  immediate  vesting of certain awards. TODCO will amortize the remaining
amount  of  approximately  $11.0  million  to compensation expense over the next
three  years  with  approximately  $5.0  million  over the remainder of 2004 and
approximately  $5.0  million and $1.0 million in 2005 and 2006, respectively. In
addition,  certain  of TODCO's employees held options that were granted prior to
the  IPO to acquire our ordinary shares. In accordance with the employee matters
agreement,  these  options  were  modified,  which  resulted  in the accelerated
vesting  of the options and the extension of the term of the options through the
original contractual life. In connection with the modification of these options,
TODCO  recognized  approximately $1.5 million additional compensation expense in
the  first  quarter  of  2004.

     As  of  March 1, 2004, we held an approximate 77 percent interest in TODCO,
represented  by  46.2  million  shares  of  class  B  common  stock, and we have
approximately 94 percent of the outstanding voting interest in TODCO. Each share
of  our  class  B common stock has five votes per share compared to one vote per
share  of  the  class  A  common  stock.  We  consolidate TODCO in our financial
statements  as a separate business segment and expect to continue to consolidate
TODCO  in  our  financial  statements  until  we no longer own a majority voting
interest. TODCO was formerly known as R&B Falcon. Before the closing of the IPO,
TODCO transferred to us all assets and businesses unrelated to TODCO's business.
R&B  Falcon's  business was previously considerably broader than TODCO's ongoing
business.

     Our  current  long-term  intent  is to dispose of our remaining interest in
TODCO,  which  could  be  achieved  through  a  number  of possible transactions
including  additional  public offerings, open market sales, sales to one or more
third  parties,  a  spin-off  to  our  shareholders,  split-off offerings to our
shareholders  that  would  allow  for the opportunity to exchange our shares for
shares  of  TODCO  class  A common stock or a combination of these transactions.

     Delta  Towing  - As a result of the adoption of FASB Interpretation ("FIN")
46  and  a  determination  that TODCO was the primary beneficiary for accounting
purposes  of  our  joint  venture,  Delta Towing Holdings, LLC ("Delta Towing"),
TODCO  consolidated  Delta Towing at December 31, 2003. Due to the consolidation
of  Delta


                                       20
<PAGE>
Towing, operating revenue and operating and maintenance expense increased during
the  three  months  ended  March  31,  2004  by  $6.8  million and $6.3 million,
respectively.

OUTLOOK

     Drilling  Market  -  During  the  first  quarter  of 2004, commodity prices
remained  at historically strong levels. While commodity prices may decline from
current  levels,  we  expect  them  to remain strong in historical terms. Future
commodity  price  expectations  have historically been a key driver for offshore
drilling  demand,  although  recent price levels have not necessarily translated
into  increased  rig  demand.  The  availability  of quality drilling prospects,
exploration  success,  relative  production  costs,  the  stage  of  reservoir
development and political and regulatory environments also affect our customers'
drilling  programs.

     Prospects for our High-Specification Floaters appear to be gaining strength
over the next six to nine months. However, a number of these units will conclude
contracts  in 2004 and, as a result, intermittent idle time is probable for some
of  these  rigs.  Since the commencement of 2004, five of our High-Specification
rigs  have received new contracts with durations of 12 to 36 months. We continue
to  believe  that  over  the  long  term,  deepwater exploration and development
drilling  opportunities  in  the  Gulf  of  Mexico, West Africa and other market
sectors  represent a significant source of future deepwater rig demand, although
the risk of project delays remains, especially in Nigeria and Angola.

     The  outlook for activity for the non-U.S. jackup market sector is expected
to remain relatively strong in 2004. There remains a current overcapacity in the
West  Africa  jackup  market  sector, with three 300 foot capable rigs currently
idle,  but  this excess capacity is expected to dissipate during the second half
of  2004. The Middle East and India are both expected to see increases in jackup
demand  in  2004.

     The  outlook  for  our  Other Floaters that operate in the mid-water market
sector  remains  weak  as this sector continues to be significantly oversupplied
globally.  We  expect  overall North Sea industry fleet utilization to remain at
current  levels  until  the  expected  normal seasonal increase in demand in the
summer  months.  Demand in the U.S. Gulf of Mexico market sector continues to be
dampened  by  competition  from  deepwater rigs operating below their full water
depth  capability.

     TODCO expects the declining jackup rig supply in the U.S. Gulf Coast region
to  result  in  increased  utilization  and  ultimately higher dayrates in 2004.
Although  TODCO  has  seen  a slight improvement in this region beginning in the
fourth quarter of 2003, utilization of their inland barge fleet has not risen to
previous  levels.

     Our  operations are geographically dispersed in oil and gas exploration and
development  areas  throughout  the  world. Rigs can be moved from one region to
another, but the cost of moving a rig and the availability of rig-moving vessels
may  cause  the  supply  and  demand  balance  to vary somewhat between regions.
However,  significant  variations between regions do not tend to exist long-term
because  of  mobility.  Consequently,  we  operate  in a single, global offshore
drilling  market.

     The  offshore  contract  drilling  market  remains  highly  competitive and
cyclical,  and  it  has  been  historically  difficult to forecast future market
conditions.  Extraneous  risks  include  declines  in oil and/or gas prices that
reduce  rig demand and adversely affect utilization and dayrates. Major operator
and national oil company capital budgets are key drivers of the overall business
climate,  and  these  may  change  within a fiscal year depending on exploration
results  and  other  factors.  Additionally,  increased  competition  for  our
customers'  drilling  budgets  could  come  from,  among other areas, land-based
energy  markets in Russia, other former Soviet Union states and the Middle East.

     As  of  April 27, 2004, approximately 50 percent of our Transocean Drilling
segment fleet days were committed for the remainder of 2004 and approximately 26
percent  for  the  year  2005.

     Tax Matters - As a result of our reorganization in 1999, we became a Cayman
Islands  company  in  a  transaction  commonly  referred  to  as an "inversion."
Legislation  in  various  forms  has  been  introduced  in  the  U.S.  House  of
Representatives and Senate that would change the tax law applicable to companies
that  have  completed  inversion  transactions. Some of the proposals would have
retroactive  application  and  would  treat  us  as  a  U.S.


                                       21
<PAGE>
corporation.  Other  proposals  would  impose  additional  limitations  on  the
deductibility,  for  U.S.  federal income tax purposes, of intercompany interest
expense  and  could  also  make  it  more  difficult  to integrate acquired U.S.
businesses  with  existing operations or to undertake internal restructuring. We
cannot  provide  any  assurance  as to what form, if any, final legislation will
take  or  the  impact  such  legislation  will  ultimately  have.

     Our income tax returns are subject to review and examination in the various
jurisdictions  in  which  we  operate.  The  U.S.  Internal  Revenue  Service is
currently auditing our tax returns for calendar years 1999, the year we became a
Cayman  Islands  company,  and  2000.  In  addition,  other tax authorities have
examined  the amounts of income and expense subject to tax in their jurisdiction
for prior periods. We are currently contesting various non-U.S. assessments that
have  been  asserted  and  would  expect  to contest any future U.S. or non-U.S.
assessments.  While  we  cannot  predict  or  provide  assurance as to the final
outcome  of  existing or future assessments, we do not believe that the ultimate
resolution of these asserted income tax liabilities will have a material adverse
effect  on  our  business  or  consolidated  financial  position.

     As  a  result  of  the  deconsolidation  of  TODCO  from  our  other  U.S.
subsidiaries  for  U.S. federal income tax purposes in conjunction with the IPO,
we  established  an  initial  valuation allowance of approximately $31.0 million
against the estimated deferred tax assets of TODCO in excess of its deferred tax
liabilities,  taking  into  account  prudent and feasible planning strategies as
required  by  SFAS  109.  See  "-Significant  Events."

     Stock-Based  Compensation  Expense - As a result of the adoption in January
2003  of  the  fair  value  recognition  provisions  of SFAS 123, Accounting for
Stock-Based  Compensation, using the  prospective method prescribed by SFAS 148,
Accounting  for  Stock-Based  Compensation - Transition   and   Disclosure,  our
stock-based  compensation  expense is expected to increase in 2004. The increase
will  result  from  the  impact  of  a  full year of expense related to our 2003
awards,  compared  to  six months of expense in 2003, and expense related to our
2004  awards,  expected  to  occur in July 2004. Future periods will continue to
have  increases  in  stock-based  compensation  expense  until the impact of the
layering  effect  of  future  awards is normalized. In addition, TODCO now has a
long-term  incentive  plan  in  which  it  grants  stock  options  and nonvested
restricted  stock to certain key employees (see "-Significant Events") that will
also  result  in  an  increase  in  stock-based  compensation  expense  in 2004.


                                       22
<PAGE>
PERFORMANCE AND OTHER KEY INDICATORS

     Fleet  Utilization  and  Dayrates  -  The following table shows our average
dayrate and utilization for the quarterly periods ended on or prior to March 31,
2004. Average dayrate is defined as contract drilling revenue earned per revenue
earning  day  in  the  period.  Utilization in the table below is defined as the
total actual number of revenue earning days in the period as a percentage of the
total  number of calendar days in the period for all drilling rigs in our fleet.
Average  dayrates  for  the  period ended March 31, 2004 have been adjusted from
those  previously  reported in our press release dated April 27, 2004 to reflect
the adjustment of $13.7 million from other revenue to contract drilling revenue.

<TABLE>
<CAPTION>
                                                       Three Months Ended
                                         ----------------------------------------------
                                            March 31,     December 31,      March 31,
                                              2004            2003            2003
                                         --------------  --------------  --------------
<S>                                      <C>             <C>             <C>
Average Dayrates

Transocean Drilling Segment:
  High-Specification Floaters
    Fifth-Generation Deepwater Floaters  $     191,800   $     186,500   $     183,800
    Other Deepwater Floaters             $     101,300   $     101,400   $     113,600
    Other High-Specification Floaters    $     115,200   $     117,900   $     123,300
  Total High-Specification Floaters      $     143,500   $     141,800   $     144,600
  Other Floaters                         $      62,800   $      60,600   $      67,000
  Jackups                                $      51,400   $      53,700   $      56,900
  Other Rigs                             $      44,200   $      45,200   $      43,200
                                         --------------  --------------  --------------
Segment Total                            $      90,200   $      87,900   $      91,600
                                         --------------  --------------  --------------

                                         --------------  --------------  --------------
TODCO Segment                            $      25,700   $      21,500   $      18,500
                                         --------------  --------------  --------------

Total Drilling Fleet                     $      71,600   $      67,400   $      69,100
                                         ==============  ==============  ==============
Utilization

Transocean Drilling Segment:
  High-Specification Floaters
    Fifth-Generation Deepwater Floaters             92%             91%             97%
    Other Deepwater Floaters                        78%             69%             76%
    Other High-Specification Floaters               73%             74%             75%
  Total High-Specification Floaters                 83%             78%             83%
  Other Floaters                                    42%             47%             50%
  Jackups                                           83%             81%             87%
  Other Rigs                                        54%             53%             36%
                                         --------------  --------------  --------------
Segment Total                                       69%             68%             69%
                                         --------------  --------------  --------------

                                         --------------  --------------  --------------
TODCO Segment                                       38%             40%             38%
                                         --------------  --------------  --------------

Total Drilling Fleet                                56%             56%             55%
                                         ==============  ==============  ==============
</TABLE>

     Contract  Drilling  Revenue  -  Our  contract  drilling  revenues are based
primarily  on  dayrates  received  for  our  drilling services and the number of
operating  days  during the relevant periods. The level of our contract drilling
revenue  depends on dayrates, which in turn are primarily a function of industry
supply  and demand for drilling units in the markets in which we operate. During
periods  of  high  demand,  our  rigs  typically  achieve higher utilization and
dayrates  than during periods of low demand. Some of our drilling contracts also
enable  us  to  earn  mobilization,  contract  preparation,  capital


                                       23
<PAGE>
upgrade,  bonus  and  demobilization revenue. Mobilization, contract preparation
and  capital  upgrade  revenue earned on a lump sum basis is recognized over the
original  contract  term.  Bonus  and  demobilization revenue is recognized when
earned.

     Other  Revenue  -  Beginning  with  the  first  quarter  of  2004, we began
classifying  our revenues into two categories: (1) contract drilling revenue and
(2)  other  revenue.  Our  other revenue represents client reimbursable revenue,
integrated services revenue and other miscellaneous revenue. Other miscellaneous
revenue  typically  consists  of  management  service  revenues,  revenues  from
operation  of  Delta  Towing's  fleet  of  marine  support  vessels  and  other
miscellaneous  revenues.

     Operating  and  Maintenance  Costs  -  Our  operating and maintenance costs
represent  all  direct  and  indirect  costs  associated  with the operation and
maintenance  of  our  drilling  rigs.  The principal elements of these costs are
direct  and indirect labor and benefits, repair and maintenance, insurance, boat
and  helicopter  rentals,  professional  and  technical  fees,  freight  costs,
communications,  customs  duties,  tool  rentals  and  services, fuel and water,
general  taxes  and  licenses. Labor, repair and maintenance and insurance costs
represent  the  most  significant  components  of  our operating and maintenance
costs.

     We  do  not  expect  operating  and  maintenance  expenses  to  necessarily
fluctuate in proportion to changes in operating revenues. Operating revenues may
fluctuate  as  a  function of changes in dayrate. However, costs for operating a
rig  are  generally  fixed or only semi-variable regardless of the dayrate being
earned.  In  addition,  should  our  rigs  incur idle time between contracts, we
typically  do  not de-man those rigs because we will use the crew to prepare the
rig for its next contract. During times of reduced activity, reductions in costs
may not be immediate as portions of the crew may be required to prepare our rigs
for  stacking,  after which time the crew members are assigned to active rigs or
dismissed.  In  general,  labor  costs  increase  primarily due to higher salary
levels  and  inflation.  Equipment maintenance expenses fluctuate depending upon
the  type  of  activity  the unit is performing and the age and condition of the
equipment. While our per occurrence deductible levels for our hull and machinery
and  our  protection  and indemnity policies remained unchanged from 2003 at $10
million,  we  increased our additional aggregate annual insurance deductible for
the  current policy year in an effort to reduce costs. This additional aggregate
annual  deductible of $20 million is applied after the per occurrence deductible
is  met  until it is fully utilized at which time the $10 million per occurrence
applies  for  all  remaining  claims  during  the  year.

     Depreciation  Expense  -  Our  depreciation  expense is based on estimates,
assumptions  and  judgments  relative  to  capitalized  costs,  useful lives and
salvage  values  of  our  assets.  We  generally  compute depreciation using the
straight-line  method  after  allowing  for  salvage  values.

     General  and  Administrative  Expense  - General and administrative expense
includes  all  costs  related  to  our corporate executives, directors, investor
relations,  corporate accounting and reporting, information technology, internal
audit,  legal,  tax,  treasury,  risk  management  and human resource functions.

     Interest  Expense  -  Interest expense consists of interest associated with
our  senior  notes  and  other  debt  and  related  financing cost amortization.
Interest  expense  is  partially offset by the amortization of gains on interest
rate  swaps terminated during 2003. We expect the amortization of these gains to
continue  over  the  life  of  the  related  debt  instruments (see "-Derivative
Instruments").

     Income  Taxes  -  Provisions for income taxes are based on expected taxable
income,  statutory  rates  and tax planning opportunities available to us in the
various  jurisdictions  in  which  we  operate.  Taxable  income may differ from
pre-tax income for financial accounting purposes, particularly in countries with
revenue-based taxes. There is no expected relationship between the provision for
income  taxes  and  income before income taxes because the countries in which we
operate  have  different  taxation regimes. We provide a valuation allowance for
deferred  tax  assets  when  it  is more likely than not that some or all of the
benefit  from  the  deferred  tax  asset  will  not  be realized. See "-Critical
Accounting  Policies."


                                       24
<PAGE>
FINANCIAL CONDITION

     MARCH 31, 2004 COMPARED TO DECEMBER 31, 2003

<TABLE>
<CAPTION>
                         March 31,  December 31,
                           2004        2003       Change     % Change
                       ------------  ---------  -----------  ---------
<S>                    <C>           <C>        <C>          <C>
                              (In millions, except % change)
TOTAL ASSETS
  Transocean Drilling  $   10,675.7  $10,874.0  $   (198.3)       (2)%
  TODCO                       766.7      788.6       (21.9)       (3)%
                       ------------  ---------  -----------  ---------
                       $   11,442.4  $11,662.6  $   (220.2)       (2)%
                       ============  =========  ===========  =========
</TABLE>

     The  decrease in Transocean Drilling segment assets was mainly due to asset
depreciation ($107.3 million) and a decrease in cash and cash equivalents ($76.9
million)  that  resulted  primarily  from the repayment of debt of approximately
$431.0  million  during  the first quarter of 2004, partially offset by proceeds
received  from  the  TODCO  IPO  ($155.7  million) and cash from operations. The
decrease  in  TODCO  segment  assets  was  primarily  due to depreciation ($24.2
million).

LIQUIDITY AND CAPITAL RESOURCES

     SOURCES AND USES OF CASH

<TABLE>
<CAPTION>
                                           Three Months Ended
                                                March 31,
                                            -----------------
                                              2004     2003     Change
                                            -------  --------  ---------
<S>                                         <C>      <C>       <C>
                                                   (In millions)
NET CASH PROVIDED BY OPERATING ACTIVITIES
  Net income                                $  22.7  $  47.2   $  (24.5)
  Depreciation                                131.5    126.8        4.7
  Other non-cash items                         11.5     31.7      (20.2)
  Working capital                              26.5    (15.2)      41.7
                                            -------  --------  ---------
                                            $ 192.2  $ 190.5   $    1.7
                                            =======  ========  =========
</TABLE>

     Net  cash  provided  by  operating  activities increased slightly due to an
increase  in cash provided by working capital items of $41.7 million offset by a
decrease  in cash generated from net income items adjusted for non-cash activity
of  $40.0  million  during  the  quarter ended March 31, 2004 as compared to the
corresponding  prior  year  period.

<TABLE>
<CAPTION>
                                                       Three Months Ended
                                                            March 31,
                                                      --------------------
                                                         2004       2003     Change
                                                      ---------  ---------  --------
<S>                                                   <C>        <C>        <C>
                                                                (In millions)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
  Capital expenditures                                $  (18.5)  $  (24.4)  $    5.9
  Proceeds from disposal of assets                        10.5        2.2        8.3
  Proceeds from TODCO IPO                                155.7          -      155.7
  Other, net                                               1.5        1.4        0.1
                                                      ---------  ---------  --------
                                                      $  149.2   $  (20.8)  $  170.0
                                                      =========  =========  ========
</TABLE>

     Net  cash  provided  by investing activities increased approximately $170.0
million  for  the three months ended March 31, 2004 as compared to net cash used
in investing activities in the same period in the previous year. The increase is
primarily  the  result of the proceeds from the TODCO IPO of $155.7 million (see
"-Significant  Events")  combined  with an increase in proceeds from asset sales
and  a  reduction in capital expenditures as compared to the corresponding prior
year  period.


                                       25
<PAGE>
<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                               March 31,
                                                          -------------------
                                                            2004       2003       Change
                                                          ---------  ---------  ----------
<S>                                                       <C>        <C>        <C>
                                                                   (In millions)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
  Net borrowings from issuance of debt                    $    1.1   $      -   $     1.1
  Repayments on revolving credit agreements                  (50.0)         -       (50.0)
  Cash received from termination of interest rate swaps          -      173.5      (173.5)
  Repayments on other debt instruments                      (381.6)     (47.8)     (333.8)
  Other, net                                                  13.0       10.8         2.2
                                                          ---------  ---------  ----------
                                                          $ (417.5)  $  136.5   $  (554.0)
                                                          ---------  ---------  ----------
</TABLE>

     The  increase  in  net  cash  used  in  financing  activities  is primarily
attributable  to  the early redemption of our 9.5% Senior Notes during the first
quarter  of 2004 coupled with payments made on our $800 million revolving credit
facility,  partially  offset by a decrease in scheduled debt payments due to the
maturity  of our 6.5% Senior Notes and 9.125% Senior Notes, as well as the early
repayment  of  our  Amortizing  Term  Loan  in  2003.  Additionally, we received
interest  rate  swap  termination  proceeds  of $173.5 million (see "-Derivative
Instruments")  during  the  first  quarter  of  2003,  for  which  there  was no
comparable  activity  during  the  first  quarter  of  2004.

     CAPITAL  EXPENDITURES

     Capital  expenditures  totaled  $18.5 million during the three months ended
March 31, 2004 of which $15.5 million and $3.0 million related to the Transocean
Drilling  and  TODCO  segments,  respectively.

     During  2004, we expect to spend approximately $103 million on our existing
fleet,  corporate infrastructure and major upgrades, excluding upgrades required
and  funded by our drilling contracts, which we anticipate will be approximately
$30 million to $40 million. These amounts are dependent upon the actual level of
operational  and contracting activity. Excluding upgrades required and funded by
our  drilling  contracts,  we  expect  to spend approximately $96 million and $7
million  on  capital  expenditures  related to the Transocean Drilling and TODCO
segments,  respectively. We intend to fund the cash requirements relating to our
capital  expenditures  through  available  cash  balances,  cash  generated from
operations  and  asset  sales. We also have available credit under our revolving
credit  agreements  (see  "-Sources  of  Liquidity")  and  may  engage  in other
commercial  bank  or  capital  market  financings.

     ACQUISITIONS  AND  DISPOSITIONS

     From  time  to  time,  we  review  possible  acquisitions of businesses and
drilling  units  and  may in the future make significant capital commitments for
such  purposes.  Any  such  acquisition  could  involve  the  payment by us of a
substantial amount of cash or the issuance of a substantial number of additional
ordinary  shares  or  other securities. We would likely fund the cash portion of
any such acquisition through cash balances on hand, the incurrence of additional
debt,  sales  of  assets,  ordinary  shares or other securities or a combination
thereof.  In  addition,  from  time  to time, we review possible dispositions of
drilling  units.

     Dispositions  -  In  February  2004,  we  completed  the  TODCO  IPO.  See
"-Significant  Events."

     In  March  2004,  in  our  Transocean  Drilling  segment  we  entered  into
agreements  to  sell  two semisubmersible rigs, the Sedco 600 and Sedco 602, for
net  proceeds  of  $52.7  million,  in connection with our efforts to dispose of
certain  non-strategic  assets.  The  sale of the Sedco 602, which has been idle
since  February 2003, is expected to close in the second quarter of 2004 and has
met the remaining held for sale criteria in accordance with SFAS 144, Accounting
for  Impairment  and Disposal of Long-Lived Assets. The Sedco 602 was classified
as  an  asset held for sale in March 2004 and is included in other assets in our
condensed consolidated balance sheet at March 31, 2004. The estimated fair value
less  selling  costs  exceeds  the  rig's  carrying  value of approximately $6.7
million  and,  as  such,  no  loss  has  been


                                       26
<PAGE>
recognized  for the three months ended March 31, 2004. The sale of the Sedco 600
is  expected  to  close  during the fourth quarter of 2004 after completion of a
drilling  project.

     During  the  three months ended March 31, 2004, we settled insurance claims
and  sold  a  marine support vessel and certain other assets for net proceeds of
approximately  $10.5  million and recorded net gains of $0.7 million, net of tax
of  $0.4  million,  and $2.7 million, which had no tax effect, in our Transocean
Drilling  and  TODCO  segments,  respectively.

     SOURCES  OF  LIQUIDITY

     Our primary sources of liquidity in the first quarter of 2004 were our cash
flows  from  operations, proceeds from the TODCO IPO and existing cash balances.
Our  primary uses of cash were debt repayment and capital expenditures. At March
31,  2004,  we  had  $397.9  million  in  cash  and  cash  equivalents.

     We  expect  to  rely  primarily  upon existing cash balances and internally
generated  cash  flows  to  maintain  liquidity  in  2004,  as  cash  flows from
operations  are  expected  to  be  positive  and,  together  with  existing cash
balances,  adequate  to  fulfill  anticipated obligations such as scheduled debt
maturities,  capital  expenditures and working capital needs. From time to time,
we  may  also use bank lines of credit to maintain liquidity for short-term cash
needs.

     Excluding  the  acquisition  of  the  Deepwater  Pathfinder  and  Deepwater
Frontier  in  December  2003,  we  have  significantly  reduced  our  capital
expenditures  compared  to  prior  years  due  to the completion of our newbuild
program  in  2001 and ongoing efforts to contain capital expenditures. We expect
capital  expenditures  for  the  fleet to be approximately $103 million in 2004,
excluding those upgrades required and funded by our drilling contracts, which we
anticipate  will  be  approximately  $30  million  to  $40  million.

     When  cash  on hand, cash flows from operations, proceeds from asset sales,
including additional sales of our interest in TODCO, and committed bank facility
availability  exceed  our expected liquidity needs, we may use a portion of such
cash to reduce debt prior to scheduled maturity through repurchases, redemptions
or  tender  offers,  or  make  repayments  on  bank  borrowings.

     At  March  31,  2004  and  December  31,  2003, our total debt was $3,246.4
million and $3,658.1 million, respectively. During the first quarter of 2004, we
reduced  net  debt, a non-GAAP financial measure defined as total debt less swap
receivables  and cash and cash equivalents, by $335.6 million. The components of
net  debt  at  carrying  value  were  as  follows  (in  millions):

<TABLE>
<CAPTION>
                                  March 31,    December 31,
                                    2004           2003
                                 -----------  --------------
<S>                              <C>          <C>
Total Debt                       $  3,246.4   $     3,658.1
Less: Cash and cash equivalents      (397.9)         (474.0)
</TABLE>

     We  believe net debt provides useful information regarding the level of our
indebtedness  by  reflecting  the  amount  of  indebtedness  assuming  cash  and
investments  are  used  to repay debt. Net debt has been reduced each year since
2001 due to the fact that cash flows, primarily from operations and asset sales,
have  been  greater  than  that  needed  for  capital  expenditures.

     Our  internally generated cash flow is directly related to our business and
the  market sectors in which we operate. Should the drilling market deteriorate,
or  should  we  experience  poor  results  in  our  operations,  cash  flow from
operations  may be reduced. However, we have continued to generate positive cash
flow  from  operating  activities  over  recent  years and expect cash flow will
continue  to be positive over the next year. Also, as a result of the TODCO IPO,
we  do  not  have  access  to  TODCO's cash flows as we do with our wholly owned
subsidiaries.


                                       27
<PAGE>
     We  have  access  to  a bank line of credit under an $800 million five-year
revolving  credit  agreement  expiring  in  December 2008. As of March 31, 2004,
$600.0  million  remained  available under this credit line. Because our current
cash  balances  and  this  revolving  credit  agreement provide us with adequate
liquidity,  we  terminated our commercial paper program during the first quarter
of  2004.

     The  bank  credit  line  requires  compliance  with  various  covenants and
provisions  customary  for  agreements of this nature, including earnings before
interest,  taxes,  depreciation and amortization ("EBITDA") to interest coverage
ratio  and  debt  to  tangible  capital  ratio,  both  as  defined by the credit
agreement,  of  not  less  than  three  to  one and not greater than 50 percent,
respectively.  Other  provisions of the credit agreement includes limitations on
creating  liens,  incurring  debt,  transactions with affiliates, sale/leaseback
transactions and mergers and sale of substantially all assets. Should we fail to
comply  with these covenants, we would be in default and may lose access to this
facility. We are also subject to various covenants under the indentures pursuant
to  which  our public debt was issued, including restrictions on creating liens,
engaging in sale/leaseback transactions and engaging in merger, consolidation or
reorganization  transactions.  A  default  under our public debt could trigger a
default under our credit line and cause us to lose access to this facility.

     TODCO  has  access  to  a  bank line of credit under a $75 million two-year
revolving  credit agreement (the "TODCO Revolving Credit Agreement"), which will
reduce to $60 million in December 2004 and expires in December 2005. As of March
31,  2004,  $75  million remained available under this line of credit. The TODCO
Revolving  Credit  Agreement  requires  compliance  with  various  covenants and
provisions  customary for similar agreements of non-investment grade facilities.
TODCO's  Revolving  Credit  Agreement  is  not  guaranteed  by  us.

     In  April  2001,  the  Securities  and Exchange Commission ("SEC") declared
effective our shelf registration statement on Form S-3 for the proposed offering
from  time  to  time  of  up  to  $2.0  billion  in  gross proceeds of senior or
subordinated debt securities, preference shares, ordinary shares and warrants to
purchase  debt  securities,  preference  shares,  ordinary  shares  or  other
securities.  At  March  31,  2004,  $1.6 billion in gross proceeds of securities
remained  unissued  under  the  shelf  registration  statement.

     Our access to debt and equity markets may be reduced or closed to us due to
a variety of events, including, among others, downgrades of ratings of our debt,
industry  conditions,  general economic conditions, market conditions and market
perceptions  of  us  and  our  industry.

     DERIVATIVE  INSTRUMENTS

     We have established policies and procedures for derivative instruments that
have  been  approved  by  our  board of directors. These policies and procedures
provide  for the prior approval of derivative instruments by our Chief Financial
Officer.  From time to time, we may enter into a variety of derivative financial
instruments in connection with the management of our exposure to fluctuations in
foreign  exchange  rates  and  interest  rates.  We do not enter into derivative
transactions for speculative purposes; however, for accounting purposes, certain
transactions  may  not  meet  the  criteria  for  hedge  accounting.

     Gains and losses on foreign exchange derivative instruments that qualify as
accounting  hedges  are  deferred  as accumulated other comprehensive income and
recognized  when the underlying foreign exchange exposure is realized. Gains and
losses  on foreign exchange derivative instruments that do not qualify as hedges
for  accounting  purposes are recognized currently based on the change in market
value  of the derivative instruments. At March 31, 2004, we had no material open
foreign  exchange  derivative  instruments.

     From  time  to time, we may use interest rate swaps to manage the effect of
interest  rate changes on future income. Interest rate swaps are designated as a
hedge  of underlying future interest payments. The interest rate differential to
be received or paid under the swaps is recognized over the lives of the swaps as
an  adjustment  to interest expense. If an interest rate swap is terminated, the
gain  or  loss  is  amortized  over  the  life  of  the  underlying  debt.

     In  January  2003, we terminated the swaps with respect to our 6.75% Senior
Notes  due  April  2005, 6.95% Senior Notes due April 2008 and 9.5% Senior Notes
due  December  2008.  In  March  2003,  we  terminated  the  swaps


                                       28
<PAGE>
with  respect  to  our  6.625%  Notes  due  April  2011.  As  a  result of these
terminations,  we  received  cash  proceeds,  net  of  accrued  interest,  of
approximately  $173.5  million that was recognized as a fair value adjustment to
long-term  debt  in  our  consolidated balance sheet and is being amortized as a
reduction  to  interest  expense  over  the  life  of  the  underlying  debt. We
previously  reported  that  we expected such reduction to be approximately $27.2
million in 2004. As a result of the redemption of our 9.5% Senior Notes in March
2004,  we  recognized  the  remaining  swap  premium  of  $22.0  million  on the
termination  of  the  related  interest  rate  swap  as  a  reduction to loss on
retirement  of  debt (see "-Operating Results"). Based on the premiums remaining
on  the  terminated  interest  rate  swaps, such reduction is now expected to be
approximately  $24.0  million  in  2004.

OPERATING  RESULTS

     THREE  MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE MONTHS ENDED MARCH 31,
2003

     Following  is  an  analysis  of  our  Transocean Drilling segment and TODCO
segment  operating  results,  as  well  as  an  analysis  of  income and expense
categories  that  we  have  not  allocated  to  our  two  segments.

Transocean  Drilling  Segment

<TABLE>
<CAPTION>
                                                                 Three Months Ended
                                                                     March 31,
                                                             -------------------------
                                                                  2004         2003          Change          % Change
                                                             ------------  ------------  ---------------  ---------------
<S>                                                          <C>           <C>           <C>              <C>
                                                                  (In millions, except day amounts and percentages)

Operating days                                                     5,937         5,882               55                1%
Utilization (a)                                                      69%           69%              N/A               N/M
Average dayrate (b)                                          $    90,200   $    91,600   $       (1,400)             (2)%

Contract drilling revenues                                   $     535.5   $     539.0   $         (3.5)             (1)%
Other revenues                                                      42.7          23.7             19.0               80%
                                                             ------------  ------------  ---------------  ---------------
                                                                   578.2         562.7             15.5                3%
Operating and maintenance expense                                  333.2         315.5             17.7                6%
Depreciation                                                       107.3         103.6              3.7                4%
Impairment loss on long-lived assets                                   -           1.0             (1.0)              N/M
Gain from sale of assets, net                                       (1.1)         (1.4)             0.3             (21)%
Gain from TODCO initial public offering                            (39.4)            -            (39.4)              N/M
                                                             ------------  ------------  ---------------  ---------------
Operating income before general and administrative expense   $     178.2   $     144.0   $         34.2               24%
                                                             ============  ============  ===============  ===============
<FN>

----------------------------
"N/A"  means  not  applicable
"N/M"  means  not  meaningful

(a)  Utilization  is  defined as the total actual number of revenue earning days
     as  a  percentage  of  total  number  of  calendar  days  in  the  period.
(b)  Average  dayrate is defined as contract drilling revenue earned per revenue
     earning  day.
</TABLE>

     The  contract  drilling  and  other revenues for the period ended March 31,
2004  have  been  adjusted  from that  previously reported in our earnings press
release dated April 27, 2004 by $13.7 million, which was reclassified from other
revenues  to  contract  drilling  revenues.

     This  segment's  contract  drilling  revenues  were  negatively impacted by
approximately  $39.0  million  due  to  a decline in average dayrates and by the
release  of  a  provision  of  $3.3  million  due to a favorable settlement of a
contract  dispute  related  to  penalties  on  the  Peregrine I during the first
quarter  of  2003 with no comparable activity for the same period in 2004. These
decreases  were  partially  offset  by  approximately  $38.6 million of contract
drilling  revenues  from  the release of a provision during the first quarter of
2004  for  the  Discoverer Enterprise riser separation incident that occurred in
May  2003


                                       29
<PAGE>
and  from  the  Deepwater  Frontier  and Deepwater Pathfinder as a result of the
consolidation  of  DDII  LLC  and DD LLC late in the second and fourth quarters,
respectively,  of  2003.

     Other revenues for the three months ended March 31, 2004 included increases
of $24.8 million primarily related to integrated services, partially offset by a
decrease  of  $5.0  million  from  client  reimbursable  revenue.

     The  increase  in  this  segment's  operating  and  maintenance expense was
primarily  related  to  approximately $38.1 million of costs associated with the
riser  separation  incident  on  the Discoverer Enterprise, integrated services,
Deepwater  Frontier and Deepwater Pathfinder as a result of the consolidation of
DDII  LLC  and  DD  LLC late in the second and fourth quarters, respectively, of
2003  and  loss  on  retirement  during  the  first  quarter  of 2004. Partially
offsetting  these increases were decreased operating and maintenance expenses of
approximately $9.5 million related to an estimated loss contract during 2003 and
the  favorable  settlement  of  litigation  during  2004.

     The increase in this segment's depreciation expense resulted primarily from
$3.2  million  of  additional  depreciation  expense  related  to  the Deepwater
Frontier  and  Deepwater Pathfinder as a result of the late December 2003 payoff
of  the  synthetic  lease  financing  arrangements  by  DDII  LLC  and  DD  LLC,
respectively,  which  were  consolidated late in the second and fourth quarters,
respectively,  of  2003.

     During  the  three  months  ended  March  31, 2003, this segment recorded a
pre-tax  non-cash  impairment  charge  of  $1.0 million, which resulted from the
Company's  decision to discontinue its leases on its oil and gas properties. The
impairment  was determined and measured based on the remaining book value of the
assets  at  the  time  the  decision  was  made  to  discontinue  the  leases.

TODCO Segment

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                                   March 31,
                                                           -------------------------
                                                               2004         2003          Change        % Change
                                                           ------------  ------------  --------------  ------------
                                                               (In millions, except day amounts and percentages)
<S>                                                        <C>           <C>           <C>             <C>
Operating days                                                   2,414         2,622            (208)          (8)%
Utilization (a)                                                    38%           38%             N/A            N/M
Average dayrate (b)                                        $    25,700   $    18,500   $       7,200            39%

Contract drilling revenues                                 $      62.0   $      48.5   $        13.5            28%
Other revenues                                                    11.8           4.8             7.0            N/M
                                                           ------------  ------------  --------------  ------------
                                                                  73.8          53.3            20.5            38%
Operating and maintenance                                         79.2          58.6            20.6            35%
Depreciation                                                      24.2          23.2             1.0             4%
Gain from sale of assets, net                                     (2.7)            -            (2.7)           N/M
                                                           ------------  ------------  --------------  ------------
Operating loss before general and administrative expense.  $     (26.9)  $     (28.5)  $         1.6             6%
                                                           ============  ============  ==============  ============
<FN>
_________________
"N/A" means not applicable
"N/M" means not meaningful

(a)  Utilization  is  defined as the total actual number of revenue earning days
     as  a  percentage  of  total  number  of  calendar  days  in  the  period.
(b)  Average  dayrate is defined as contract drilling revenue earned per revenue
     earning  day.
</TABLE>

     The  increase in this segment's contract drilling revenue was due primarily
to  approximately  $13.9  million  from  the  contract  of  three jackup rigs in
Venezuela  (THE  156)  and  Mexico  (THE  205  and  THE  206).


                                       30
<PAGE>
     Other revenues for the three months ended March 31, 2004 included increases
of  approximately  $6.8 million related to the operation of Delta Towing's fleet
of  marine  support  vessels resulting from the consolidation of Delta Towing at
December  31,  2003.

     The  increase  in  this  segment's  operating  and  maintenance expense was
primarily  due  to  approximately  $20.7  million  of  costs  associated  with
compensation  expense  related  to  stock options vesting on the TODCO IPO date,
costs  associated  with the contract of three jackup rigs in Venezuela (THE 156)
and  Mexico  (THE  205 and THE 206) and the consolidation of Delta Towing, which
occurred  at  December  31,  2003.

     The increase in this segment's depreciation expense resulted primarily from
$1.3  million of additional depreciation expense related to the consolidation of
Delta  Towing.

     During  the  three months ended March 31, 2004, this segment recognized net
gains  of  $2.7  million  primarily related to the settlement of an October 2000
insurance  claim  for  one  of  our jackup rigs and the sale of a marine support
vessel  by  Delta  Towing.

Total  Company  Results  of  Operations

<TABLE>
<CAPTION>
                                         Three Months Ended
                                              March 31,
                                        -------------------
                                           2004      2003     Change   % Change
                                        ----------  -------  --------  ---------
<S>                                     <C>         <C>      <C>       <C>
                                              (In millions, except % change)

General and Administrative Expense      $    15.1   $ 13.9   $   1.2          9%
Other (Income) Expense, net
  Equity in earnings of joint ventures       (2.3)    (3.6)      1.3       (36)%
  Interest income                            (2.1)    (6.9)      4.8       (70)%
  Interest expense                           47.4     52.6      (5.2)      (10)%
  Loss on retirement of debt                 28.1        -      28.1       N/M
  Other, net                                 (1.4)     0.6      (2.0)      N/M
Income Tax Expense                           48.0     11.8      36.2       N/M
Minority Interest                            (4.2)    (0.1)     (4.1)      N/M

----------------------------
<FN>
"N/M" means not meaningful
</TABLE>

     The  increase  in  general  and  administrative  expense  was  primarily
attributable  to  $0.7  million  of costs related to employee benefits for 2004.

     Equity  in  earnings of joint ventures decreased approximately $3.3 million
primarily  related  to  our  consolidation of DD LLC and DDII LLC in 2003, which
resulted  from  the  completion  of  the  buyout  of Conoco's share of the joint
ventures.  Offsetting  these  decreases was an increase in equity in earnings of
$1.0  million related to our 50 percent share of earnings from Overseas Drilling
Limited,  which  owns  the  drillship Joides Resolution, and an increase of $0.9
million  resulting  from  our  share  of  losses  from Delta Towing in the first
quarter of 2003 due to the consolidation of Delta Towing at December 31, 2003 as
a  result  of  the  adoption  of  FIN  46.

     The  decrease in interest income was primarily due to a decrease in average
cash balances for 2004 compared to 2003 primarily due to the utilization of cash
for  debt  reduction  and capital expenditures, which resulted in a reduction of
interest  income  of  $2.6 million, combined with the absence of $1.6 million of
interest  earned in the first quarter of 2003 on the notes receivable from Delta
Towing,  which was consolidated at December 31, 2003 as a result of the adoption
of  FIN  46.

     The decrease in interest expense was attributable to reductions in interest
expense  of  $12.8  million  associated with debt that was refinanced, repaid or
retired  subsequent  to  the  first  quarter of 2003. Partially offsetting these
decreases  was  the  termination of our fixed to floating interest rate swaps in
the  first quarter of 2003, which resulted in


                                       31
<PAGE>
a  net  increase  in  interest  expense  of  $4.8  million  (see  "-Derivative
Instruments")  and  the  issuance  of new debt in the fourth quarter of 2003 and
first quarter of 2004, which resulted in an increase in interest expense of $1.9
million.  In  addition, we received a refund of interest from a taxing authority
that  resulted  in  a reduction of interest expense of $0.8 million in the first
quarter of 2003 with no comparable activity for the same period in 2004.

     During the three months ended March 31, 2004, we recognized a $28.1 million
loss  related  to  the  redemption  of  $289.8  million  face  value  debt  (see
"-Significant  Events").

     We  recognized  a $1.5 million gain in other, net primarily relating to the
effect  of  foreign  currency  exchange  rate  changes  in the U.K. pound on our
monetary  assets  and  liabilities.

     We  operate  internationally  and provide for income taxes based on the tax
laws and rates in the countries in which we operate and earn income. There is no
expected  relationship  between the provision for income taxes and income before
income  taxes.  During  the  three  months  ended  March 31, 2004, we recorded a
valuation allowance of approximately $31.0 million related to the TODCO IPO (see
"-Significant  Events").

     The increase in minority interest was attributable to the minority interest
owners'  share  of  TODCO  resulting  from  the  IPO.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Our  discussion  and  analysis  of  our  financial condition and results of
operations  are based upon our condensed consolidated financial statements. This
discussion  should be read in conjunction with disclosures included in the notes
to  our  condensed  consolidated  financial  statements  related  to  estimates,
contingencies and new accounting pronouncements. Significant accounting policies
are  discussed  in  Note  2  to  our condensed consolidated financial statements
included elsewhere and in Note 2 to our consolidated financial statements in our
Annual Report on Form 10-K for the year ended December 31, 2003. The preparation
of  these  financial statements requires us to make estimates and judgments that
affect  the  reported  amounts  of  assets,  liabilities, revenues, expenses and
related  disclosure  of contingent assets and liabilities. On an on-going basis,
we  evaluate  our estimates, including those related to bad debts, materials and
supplies  obsolescence,  investments,  property and equipment, intangible assets
and  goodwill,  income taxes, financing operations, workers' insurance, pensions
and other post-retirement and employment benefits and contingent liabilities. We
base  our  estimates  on  historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form  the  basis  for  making  judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ  from  these  estimates  under  different  assumptions  or  conditions.

     For  a discussion of the critical accounting policies and estimates that we
use  in  the preparation of our condensed consolidated financial statements, see
"Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations" in our Annual Report on Form 10-K for the year ended December 31,
2003.  There  have  been  no material changes to these policies during the three
months  ended  March  31, 2004. These policies require significant judgments and
estimates  used  in  the  preparation  of our consolidated financial statements.
Management  has  discussed  each  of  these  critical  accounting  policies  and
estimates  with  the  audit  committee  of  the  board  of  directors.

RESTRUCTURING  CHARGES

     In  September  2002,  we  committed  to  restructuring  plans in France and
Norway.  We  established  a  liability  of  approximately  $4.0  million for the
estimated severance-related costs associated with the involuntary termination of
24  employees  pursuant to these plans. The charge was reported as operating and
maintenance  expense in our consolidated statements of operations related to the
Transocean  Drilling segment. Through March 31, 2004, approximately $3.6 million
had  been  paid  to  24 employees representing full or partial payments. In June
2003,  we  released  the expected surplus liability of $0.3 million to operating
and maintenance expense in the Transocean Drilling segment. Substantially all of
the  remaining  liability is expected to be paid by the end of the first quarter
in  2005.


                                       32
<PAGE>
RETIREMENT PLANS AND OTHER POSTEMPLOYMENT BENEFITS

     Defined  Benefit  Pension  Plans  - We have several defined benefit pension
plans,  both  funded  and  unfunded,  covering  substantially all U.S. employees
except  for  TODCO  employees.  We also have several defined benefit plans, both
funded and unfunded, that cover Norway employees, Nigeria employees, and various
current  and  former  employees  covered  under certain frozen plans acquired in
connection  with  the  R&B  Falcon  merger.

     For  the  funded plans, our funding policy consists of reviewing the funded
status  of these plans annually and contributing an amount at least equal to the
minimum  contribution required under the Employee Retirement Income Security Act
of  1974 (ERISA) or other applicable funding regulations. Employer contributions
to  the  funded  plan  are  based  on  actuarial computations that establish the
minimum  contribution  required  under  ERISA  and  the  maximum  deductible
contribution  for  income  tax  purposes.

     We  expect to contribute approximately $10.0 million to our defined benefit
pension  plans  in  2004 and that the required contributions will be funded from
cash flow from operations. As of March 31, 2004, no contributions have been made
to  the  defined  benefit  pension  plans.

     Postretirement  Benefits  Other  Than  Pensions  - We have several unfunded
contributory  and  noncontributory  postretirement  benefit  plans  covering
substantially all of our Transocean Drilling segment U.S. employees. Funding for
these  plans  is  to  cover  benefit  payments of plan participants, as they are
incurred.

     We  expect  to  contribute $1.8 million to our other postretirement benefit
plans  in  2004.  As  of  March 31, 2004, no contributions have been made to the
other  postretirement  benefit  plans.

     On  December  8,  2003,  the  Medicare  Prescription  Drug, Improvement and
Modernization  Act of 2003 (the "Act") was signed into law. The Act introduced a
prescription  drug  benefit  under  Medicare  as  well  as  a federal subsidy to
sponsors  of  retiree  health  care  benefit  plans  that  currently  provide  a
prescription  drug  benefit that is equivalent to the expanded Medicare benefit.
Employers  have  the  option  to either receive the subsidy or to supplement the
Medicare  paid  prescription  drug  benefit  on  a  secondary  payor  basis.  In
accordance  with  SFAS 106, employers are required to consider presently enacted
changes  in  relevant  laws  in  current  period  measurements of postretirement
benefit  costs  and  the  accumulated  postretirement  benefit  obligation. As a
result,  the  accumulated  postretirement  benefit  obligation  and net periodic
postretirement  benefit  costs  for future periods should reflect the effects of
the  Act.

     In  January  2004, the FASB staff issued FASB Staff Position ("FSP") 106-1,
Accounting  and  Disclosure  Requirements  Related  to the Medicare Prescription
Drug,  Improvement and Modernization Act of 2003. FSP 106-1 permits a sponsor of
a  postretirement  health care plan that provides a prescription drug benefit to
make  a  one-time  election  to defer accounting for the effects of the Act. The
deferral  will  continue to apply until authoritative guidance on the accounting
for  the  federal  subsidy  is  issued  or a significant event occurs that would
ordinarily call for remeasurement of a plan's assets and obligations. We elected
to  defer accounting for the Act and will continue to assess the effects the Act
will  have on our postretirement benefit plan costs. As a result of the deferral
election,  the  disclosures  above  relating  to the net periodic postretirement
benefit  costs  do  not  reflect  the  effects  of the Act on our postretirement
benefit  plans. The finalization of pending authoritative guidance could require
restatement  of  previously  reported  information.

SALE/LEASEBACK  TRANSACTION

     We  lease the drillship M. G. Hulme, Jr. from Deep Sea Investors, L.L.C., a
special  purpose  entity  formed by several leasing companies to acquire the rig
from  one  of our subsidiaries in November 1995 in a sale/leaseback transaction.
We  are  obligated  to  pay  rent  of approximately $13 million per year through
November  2005.  At  the termination of the lease, we may purchase the rig for a
maximum  amount  of  approximately  $35.7 million. Effective September 2002, the
lease  neither  requires  that  collateral be maintained nor contains any credit
rating  triggers.

     We  adopted and applied the provisions of FIN 46, Consolidation of Variable
Interest Entities, as revised December 31, 2003, effective December 31, 2003 for
all  variable  interest  entities.  FIN  46  requires  the  consolidation  of


                                       33
<PAGE>
variable  interest  entities  in  which  an enterprise absorbs a majority of the
entity's  expected losses, receives a majority of the entity's expected residual
returns,  or  both,  as  a  result  of ownership, contractual or other financial
interests  in the entity. Because the sale/leaseback agreement is with an entity
in  which  we  have  no  direct  investment,  we are not entitled to receive the
financial statements of the leasing entity and the equity holders of the leasing
company will not release the financial statements or other financial information
to  us  in  order  for  us  to make the determination of whether the entity is a
variable  interest entity. In addition, without the financial statements, we are
unable  to determine if we are the primary beneficiary of the entity and, if so,
what  we  would  consolidate.  We  have  no  exposure to loss as a result of the
sale/leaseback  agreement.  We  currently  account  for  the  lease  of  this
semisubmersible  drilling  rig  as  an  operating  lease.


                                       34
<PAGE>
FORWARD-LOOKING INFORMATION

     The statements included in this quarterly report regarding future financial
performance  and  results  of  operations  and  other  statements  that  are not
historical  facts  are  forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of  1934.  Statements  to  the  effect  that  we  or  management  "anticipates,"
"believes,"  "budgets," "estimates," "expects," "forecasts," "intends," "plans,"
"predicts,"  or "projects" a particular result or course of events, or that such
result  or  course  of  events  "could," "might," "may," "scheduled" or "should"
occur,  and  similar  expressions, are also intended to identify forward-looking
statements.  Forward-looking  statements  in this annual report include, but are
not  limited  to,  statements  involving  payment  of  severance costs, contract
commencements,  potential  revenues,  increased  expenses,  commodity  prices,
customer  drilling  programs,  supply  and  demand, utilization rates, dayrates,
planned  shipyard projects, expected downtime, future activity in the deepwater,
mid-water  and  the  shallow  and  inland water markets, market outlooks for our
various  geographical  operating  sectors,  the  U.S.  gas  drilling market, rig
classes  and  business  segments,  plans to dispose of our remaining interest in
TODCO,  the  valuation  allowance for deferred net tax assets of TODCO, intended
reduction  of  debt,  planned  asset sales, timing of asset sales, including the
Sedco  600 and Sedco 602, proceeds from asset sales, our other expectations with
regard  to market outlook, operations in international markets, expected capital
expenditures,  results  and effects of legal proceedings and governmental audits
and  assessments, adequacy of insurance, renewal and structure of directors' and
officers'  insurance,  increase in overall insurance deductible, liabilities for
tax  issues,  liquidity, positive cash flow from operations, the exercise of the
option  of  holders  of Zero Coupon Convertible Debentures, the 1.5% Convertible
Debentures  or  the  7.45%  Notes  to  require  us  to  repurchase the notes and
debentures,  and  the  satisfaction of such obligation in cash, adequacy of cash
flow  for  2004  obligations,  effects of accounting changes, and the timing and
cost  of completion of capital projects. Such statements are subject to numerous
risks,  uncertainties  and  assumptions,  including,  but  not limited to, those
described  in  "Item  7.  Management's  Discussion  and  Analysis  of  Financial
Condition  and Results of Operations Risk Factors" included in our Annual Report
on  Form  10-K  for the year ended December 31, 2003, the adequacy of sources of
liquidity,  the  effect  and results of litigation, audits and contingencies and
other  factors discussed in this annual report and in our other filings with the
SEC,  which  are  available  free of charge on the SEC's website at www.sec.gov.
Should  one  or  more  of  these  risks  or uncertainties materialize, or should
underlying  assumptions prove incorrect, actual results may vary materially from
those  indicated.  All  subsequent  written  and oral forward-looking statements
attributable to us or to persons acting on our behalf are expressly qualified in
their  entirety  by  reference  to these risks and uncertainties. You should not
place  undue  reliance  on  forward-looking  statements.  Each  forward-looking
statement  speaks  only  as  of  the  date  of  the particular statement, and we
undertake  no  obligation  to  publicly  update  or  revise  any forward-looking
statements.


                                       35
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST  RATE  RISK

     Our exposure to market risk for changes in interest rates relates primarily
to  our  long-term  and  short-term  debt  obligations. The table below presents
scheduled  debt  maturities and related weighted-average interest rates for each
of  the  twelve-month periods ending March 31 relating to debt obligations as of
March  31,  2004.  Weighted-average variable rates are based on London Interbank
Offered  Rate  in  effect  at  March  31,  2004,  plus  applicable  margins.

     At March 31, 2004 (in millions, except interest rate percentages):

<TABLE>
<CAPTION>
                                Scheduled Maturity Date (a) (b)                                 Fair Value
                           -------------------------------------------------------------------  ----------
                            2005    2006     2007     2008     2009     Thereafter     Total     03/31/04
                           ------  -------  -------  -------  -------  ------------  ---------  ----------
<S>                        <C>     <C>      <C>      <C>      <C>      <C>           <C>        <C>
Total debt
  Fixed Rate               $47.2   $358.8   $400.0   $100.0   $279.2   $   1,750.0   $2,935.2   $  3,328.4
    Average interest rate    7.4%     6.8%     1.5%     7.5%     6.8%          7.2%       6.3%
  Variable Rate                -        -        -        -   $200.0             -   $  200.0   $    200.0
    Average interest rate      -        -        -        -     1.61%            -       1.61%

-----------------------------
<FN>
(a)  Maturity dates of the face value of our debt assume the put options on 1.5%
     Convertible  Debentures,  7.45%  Notes  and  the  Zero  Coupon  Convertible
     Debentures  will  be  exercised  in  May  2006,  April  2007  and May 2008,
     respectively.
(b)  Expected maturity amounts are based on the face value of debt.
</TABLE>

     At  March  31,  2004, we had approximately $200.0 million of variable rate
debt at face value (approximately 6.4 percent of total debt at face value). This
variable  rate  debt  represented  revolving credit bank debt. Given outstanding
amounts as of that date, a one percent rise in interest rates would result in an
additional  $1.5  million in interest expense per year. Offsetting this, a large
part  of  our cash investments would earn commensurately higher rates of return.
Using  March 31, 2004 cash investment levels, a one percent increase in interest
rates  would  result in approximately $4.0 million of additional interest income
per  year.

FOREIGN  EXCHANGE  RISK

     Our  international operations expose us to foreign exchange risk. We use a
variety  of  techniques  to  minimize the exposure to foreign exchange risk. Our
primary  foreign exchange risk management strategy involves structuring customer
contracts  to  provide for payment in both U.S. dollars, which is our functional
currency,  and local currency. The payment portion denominated in local currency
is  based on anticipated local currency requirements over the contract term. Due
to  various factors, including local banking laws, other statutory requirements,
local currency convertibility and the impact of inflation on local costs, actual
foreign  exchange  needs  may  vary  from  those  anticipated  in  the  customer
contracts,  resulting in partial exposure to foreign exchange risk. Fluctuations
in  foreign  currencies  typically  have  minimal  impact on overall results. In
situations  where  payments  of  local  currency  do  not  equal  local currency
requirements,  foreign  exchange  derivative  instruments,  specifically foreign
exchange  forward contracts or spot purchases, may be used. We do not enter into
derivative  transactions  for speculative purposes. At March 31, 2004, we had no
material  open  foreign  exchange  contracts.


                                       36
<PAGE>
ITEM 4. CONTROLS AND PROCEDURES

     In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an
evaluation,  under  the  supervision  and  with the participation of management,
including  our  Chief  Executive  Officer  and  Chief  Financial Officer, of the
effectiveness  of  our  disclosure  controls and procedures as of the end of the
period  covered  by  this  report. Based on that evaluation, our Chief Executive
Officer  and  Chief Financial Officer concluded that our disclosure controls and
procedures  were  effective as of March 31, 2004 to provide reasonable assurance
that  information  required  to  be  disclosed in our reports filed or submitted
under  the  Exchange  Act is recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commission's rules and
forms.

     There has been no change in our internal controls over financial reporting
that  occurred  during the three months ended March 31, 2004 that has materially
affected,  or  is  reasonably likely to materially affect, our internal controls
over  financial  reporting.

ITEM  5.  OTHER  INFORMATION

     Fees  Paid  to  Ernst & Young LLP - Ernst & Young LLP has billed us fees as
set  forth  in the table below for services rendered in 2003 and 2002. The audit
fees  and  audit-related  fees have been reclassified from that reflected in our
proxy  statement  dated  March  19,  2004.

<TABLE>
<CAPTION>
                                Audit-Related                    Total of
                   Audit Fees       Fees       Tax Fees (a)   All Other Fees
                  -----------  --------------  -------------  ---------------
<S>               <C>          <C>             <C>            <C>

Fiscal year 2003  $ 1,885,166  $    1,080,696  $   1,928,942  $         8,000
Fiscal year 2002  $ 1,303,294  $      919,766  $   1,076,321  $        22,318

---------------
<FN>
(a)  Includes  approximately  $1  million and $0.6 million of tax compliance and
     preparation  fees  for  the  years  2003  and  2002,  respectively.
</TABLE>

     The  audit  fees include those associated with our annual audit, reviews of
our  quarterly  reports  on  Form  10-Q,  statutory  audits of our subsidiaries,
services  associated  with  documents  filed  with  the  Securities and Exchange
Commission, and audit consultations. The audit-related fees include TODCO audits
and related accounting consultations, other non-statutory audits of subsidiaries
or  companies in which we have an investment, other accounting consultations and
employee  benefit plan audits. Tax fees were for tax preparation, compliance and
tax  advice,  and  "all  other  fees"  were those for the provision of temporary
offices  and  office  services.

     The  audit  committee pre-approves all auditing services, review or attest
engagements  and permitted non-audit services to be performed by our independent
auditor,  subject to some de minimis exceptions for non-audit services which are
approved  by the audit committee prior to the completion of the annual audit. No
non-audit  services  were  performed under the de minimis exception during 2003.
The audit committee has considered whether the provision of services rendered in
2003  other  than the audit of our financial statements and reviews of quarterly
financial statements was compatible with maintaining the independence of Ernst &
Young LLP and determined that the provision of such services was compatible with
maintaining  such  independence.

     The  audit committee has adopted a policy and procedures for pre-approving
all  audit  and  non-audit  services  performed  by the independent auditor. The
policy  requires  advance  approval  by  the  audit  committee  of all audit and
non-audit  work.  Unless  the  specific service has been previously pre-approved
with  respect  to  the 12 month period following the advance approval, the audit
committee  must  approve  a service before the independent auditor is engaged to
perform  the  service.  The  audit  committee  has  given  advance  approval for
specified  audit, audit-related and tax services for 2004. Requests for services
that  have  received  this  pre-approval  are subject to specified fee or budget
restrictions  and  internal  management  controls  as  well.


                                       37
<PAGE>
PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     One  of  our  subsidiaries is involved in an action with respect to customs
penalties  relating  to the Sedco 710 semisubmersible drilling rig. Prior to our
merger  with  Sedco  Forex  Holdings Limited ("Sedco Forex"), this drilling rig,
which  was  working  for Petrobras in Brazil at the time, had been admitted into
the  country  on  a  temporary  basis  under authority granted to a Schlumberger
entity.  Prior  to  the merger with Sedco Forex at the end of 1999, the drilling
contract  was  moved  to an entity that would become one of our subsidiaries. In
early  2000, the drilling contract was extended for another year. On January 10,
2000,  the  temporary  import permit granted to the Schlumberger entity expired,
and  renewal  filings were not made until later that January. In April 2000, the
Brazilian  customs  authorities  cancelled  the  import permit. The Schlumberger
entity  filed an action in the Brazilian federal court of Campos for the purpose
of  extending  the temporary admission. Other proceedings were also initiated in
order  to  secure  the  transfer  of  the temporary admission to our subsidiary.
Ultimately,  the  court  permitted  the transfer to our entity but has not ruled
that  the  temporary  admission  could  be  extended  without  the  payment of a
financial  penalty. During the first quarter of 2004, the customs office renewed
its efforts to collect a penalty and issued a second assessment for this penalty
but  has now done so against our subsidiary. The assessment is for approximately
$50  million.  We  believe  that  the  amount of the assessment, even if it were
appropriate,  should  only be approximately $7.6 million and should in any event
be  assessed against the Schlumberger entity. We and Schlumberger are contesting
our  respective assessments. We have put Schlumberger on notice that we consider
any  assessment  to  be the responsibility of Schlumberger. We do not expect the
ultimate  outcome  of  this  matter  to  have  a  material adverse effect on our
business  or  consolidated  financial  position.

     We  have  certain other actions or claims pending that have been previously
discussed  and  reported  in  our  Annual Report on Form 10-K for the year ended
December  31,  2003 and our other reports filed with the Securities and Exchange
Commission.  There  have  been  no  material  developments  in  these previously
reported  matters.  We  are involved in a number of other lawsuits, all of which
have  arisen  in  the  ordinary  course  of our business. We do not believe that
ultimate  liability,  if  any,  resulting from any such other pending litigation
will  have  a  material adverse effect on our business or consolidated financial
position.  We  cannot predict with certainty the outcome or effect of any of the
litigation  matters  specifically  described  above or of any such other pending
litigation. There can be no assurance that our beliefs or expectations as to the
outcome  or  effect of any lawsuit or other litigation matter will prove correct
and  the  eventual  outcome  of  these  matters  could  materially  differ  from
management's  current  estimates.

ITEM  2.  CHANGES  IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
SECURITIES

<TABLE>
<CAPTION>
                                 ISSUER PURCHASES OF EQUITY SECURITIES

                                                      (c) TOTAL NUMBER OF       (d) MAXIMUM NUMBER
                                                      SHARES PURCHASED AS     (OR APPROXIMATE DOLLAR
               (a) TOTAL NUMBER                         PART OF PUBLICLY    VALUE) OF SHARES THAT MAY
                   OF SHARES      (b) AVERAGE PRICE    ANNOUNCED PLANS OR     YET BE PURCHASED UNDER
   PERIOD        PURCHASED (1)      PAID PER SHARE        PROGRAMS (2)      THE PLANS OR PROGRAMS (2)
-------------  -----------------  ------------------  --------------------  --------------------------
<S>            <C>                <C>                 <C>                   <C>
January 2004                   -                   -         N/A                      N/A
February 2004                327  $            29.21         N/A                      N/A
March 2004                     -                   -         N/A                      N/A
               -----------------  ------------------  --------------------  --------------------------
Total                        327  $            29.21         N/A                      N/A
               =================  ==================  ====================  ==========================
<FN>

__________
(1)  The  issuer  purchase  during  the period covered by this report represents
     shares  withheld  by  us  in satisfaction of withholding taxes due upon the
     vesting  of  restricted  stock granted to our employees under our Long-Term
     Incentive  Plan  to  pay withholding taxes due upon vesting of a restricted
     stock  award.

(2)  In  connection  with  the  vesting  of  restricted  stock  awards under our
     Long-Term  Incentive  Plan,  we  generally  withhold  shares  to  satisfy
     withholding  taxes  upon  vesting.
</TABLE>

ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

     (a)     Exhibits

<TABLE>
<CAPTION>
The following exhibits are filed in connection with this Report:

NUMBER  DESCRIPTION
------  -----------

<S>     <C>
*3.1    Memorandum of Association of Transocean Inc., as amended (incorporated by reference to Annex E to the
        Joint Proxy Statement/Prospectus dated October 30, 2000 included in a 424(b)(3) prospectus filed by us on
        November 1, 2000)

*3.2    Articles of Association of Transocean Inc., as amended (incorporated by reference to Annex F to the Joint
        Proxy Statement/Prospectus dated October 30, 2000 included in a 424(b)(3) prospectus filed by us on
        November 1, 2000)

*3.3    Certificate of Incorporation on Change of Name to Transocean Inc. (incorporated by reference to Exhibit 3.3
        to our Form 10-Q for the quarter ended June 30, 2002)


                                       38
<PAGE>
*10.1   Master Separation Agreement dated February 4, 2004 by and among Transocean Inc., Transocean Holdings
        Inc. and TODCO (incorporated by reference to Exhibit 99.2 to the Company's Current Report on Form 8-K
        dated March 2, 2004)

*10.2   Tax Sharing Agreement dated February 4, 2004 between Transocean Holdings Inc. and TODCO (incorporated
        by reference to Exhibit 99.3 to the Company's Current Report on Form 8-K dated March 2, 2004)

*10.3   Transition Services Agreement dated February 4, 2004 between Transocean Holdings Inc. and TODCO
        (incorporated by reference to Exhibit 99.4 to the Company's Current Report on Form 8-K dated March 2,
        2004)

*10.4   Employee Matters Agreement dated February 4, 2004 by and among Transocean Inc., Transocean Holdings
        Inc. and TODCO (incorporated by reference to Exhibit 99.5 to the Company's Current Report on Form 8-K
        dated March 2, 2004)

*10.5   Registration Rights Agreement dated February 4, 2004 between Transocean Inc. and TODCO (incorporated
        by reference to Exhibit 99.6 to the Company's Current Report on Form 8-K dated March 2, 2004)

+31.1   CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

+31.2   CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

+32.1   CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

+32.2   CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

----------------------------
<FN>
*  Incorporated  by  reference  as  indicated.
+  Filed  herewith.
</TABLE>

     (b)     Reports  on  Form  8-K

     We  filed  a  Current  Report  on Form 8-K on February 3, 2004 (information
furnished  not  filed)  announcing  fourth  quarter and full year 2003 financial
results, a Current Report on Form 8-K on February 9, 2004 (information furnished
not  filed)  announcing  financial  information  pertaining  to  our  Transocean
Drilling  segment's  operating  and maintenance expense and cash operating costs
for  the  third  and fourth quarters of 2003, the fourth quarter of 2002 and the
years ended December 31, 2003 and 2002, a Current Report on Form 8-K on March 3,
2004  announcing  the  closing  of  the  initial  public offering of TODCO and a
Current  Report  on Form 8-K on March 29, 2004 (information furnished not filed)
announcing  our  "Monthly  Fleet  Update"  report  as  of  March  29,  2004.


                                       39
<PAGE>
SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  hereunto  duly  authorized,  on  May  10,  2004.

TRANSOCEAN  INC.



By:  /s/ Gregory L. Cauthen
     ----------------------
     Gregory L. Cauthen
     Senior Vice President and Chief Financial Officer
     (Principal Financial and Accounting Officer)


                                       40
<PAGE>