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

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

                                    FORM 10-Q

  [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
       EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2001

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

                                 ______________

           CAYMAN ISLANDS                                     N/A
    (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
                                                     ---     ---

     As  of  July  31,  2001,  318,731,548  ordinary shares, par value $0.01 per
share,  were  outstanding.

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


<PAGE>
                           TRANSOCEAN SEDCO FOREX INC.

                               INDEX TO FORM 10-Q

                           QUARTER ENDED JUNE 30, 2001

                                                                            Page
                                                                            ----

PART I - FINANCIAL INFORMATION
------------------------------

     ITEM 1. Financial Statements (Unaudited)

          Condensed Consolidated Statements of Operations
            Three and Six Months Ended June 30, 2001 and 2000. . . . . . . .   1

          Condensed Consolidated Balance Sheets
            June 30, 2001 and December 31, 2000. . . . . . . . . . . . . . .   2

          Condensed Consolidated Statements of Cash Flows
            Six Months Ended June 30, 2001 and 2000. . . . . . . . . . . . .   3

          Notes to Condensed Consolidated Financial Statements . . . . . . .   4

     ITEM 2. Management's Discussion and Analysis of Financial
            Condition and Results of Operations. . . . . . . . . . . . . . .  16

     ITEM 3. Quantitative and Qualitative Disclosures about Market Risk. . .  26

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

     ITEM 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . .  26

     ITEM 4. Submission of Matters to a Vote of Security Holders . . . . . .  27

     ITEM 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . .  28


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

     The  condensed  consolidated financial statements of Transocean Sedco Forex
Inc. and its consolidated subsidiaries (the "Company") 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 the Company's Annual Report on Form 10-K for the year ended December
31,  2000.

<TABLE>
<CAPTION>
                  TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)


                                                Three Months Ended  Six Months Ended
                                                      June 30,          June 30,
                                                 ----------------  ------------------
                                                  2001     2000      2001      2000
                                                 -------  -------  ---------  -------
                                                 (In millions, except per share data)

<S>                                              <C>      <C>      <C>        <C>
Operating Revenues                               $752.2   $299.2   $1,302.3   $600.1
-------------------------------------------------------------------------------------
Costs and Expenses
  Operating and maintenance                       394.3    184.0      745.2    369.7
  Depreciation                                    123.7     58.2      223.1    116.1
  Goodwill amortization                            41.4      6.7       71.6     13.3
  General and administrative                       14.6      9.4       29.4     22.5
-------------------------------------------------------------------------------------
                                                  574.0    258.3    1,069.3    521.6
-------------------------------------------------------------------------------------
Gain from Sale of Assets                              -      2.3       19.6      2.3
-------------------------------------------------------------------------------------
Operating Income                                  178.2     43.2      252.6     80.8
-------------------------------------------------------------------------------------
Other Income (Expense), Net
  Equity in earnings of joint ventures              4.0      2.1        5.7      5.0
  Interest income                                   4.7      2.0        8.3      2.9
  Interest expense, net of amounts capitalized    (66.8)    (0.3)    (104.0)    (0.3)
  Other, net                                       (1.0)     0.2       (1.5)     1.2
-------------------------------------------------------------------------------------
                                                  (59.1)     4.0      (91.5)     8.8
-------------------------------------------------------------------------------------
Income Before Income Taxes, Minority Interest
  and Extraordinary Item                          119.1     47.2      161.1     89.6

Income Tax Expense                                 32.2     11.1       42.3     20.8
Minority Interest                                   1.1      0.2        2.5      0.4
-------------------------------------------------------------------------------------
Income Before Extraordinary Item                   85.8     35.9      116.3     68.4

Loss on Extraordinary Item, Net of Tax            (17.3)       -      (17.3)       -
-------------------------------------------------------------------------------------

Net Income                                       $ 68.5   $ 35.9   $   99.0   $ 68.4
=====================================================================================

Basic Earnings Per Share
  Income Before Extraordinary Item               $ 0.27   $ 0.17   $   0.39   $ 0.33
  Loss on Extraordinary Item, Net of Tax          (0.05)       -      (0.06)       -
-------------------------------------------------------------------------------------

  Net Income                                     $ 0.22   $ 0.17   $   0.33   $ 0.33
=====================================================================================

Diluted Earnings Per Share
  Income Before Extraordinary Item               $ 0.26   $ 0.17   $   0.38   $ 0.32
  Loss on Extraordinary Item, Net of Tax          (0.05)       -      (0.06)       -
-------------------------------------------------------------------------------------

  Net Income                                     $ 0.21   $ 0.17   $   0.32   $ 0.32
=====================================================================================

Weighted Average Shares Outstanding
  Basic                                           318.2    210.4      299.5    210.3
-------------------------------------------------------------------------------------
  Diluted                                         325.0    211.7      305.3    211.4
-------------------------------------------------------------------------------------

Dividends Paid Per Share                         $ 0.03   $ 0.03   $   0.06   $ 0.06
-------------------------------------------------------------------------------------
</TABLE>
                             See accompanying notes.


                                        1
<PAGE>
<TABLE>
<CAPTION>
                        TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED BALANCE SHEETS
                                         (Unaudited)


                                                                      June 30,       December 31,
                                                                        2001            2000
                                                                   ---------------  ---------------
                                                                   (In millions, except share data)

<S>                                                                <C>              <C>
                                           ASSETS

Cash and Cash Equivalents                                          $         108.7  $          34.5
Accounts Receivable, net of allowance for doubtful accounts of
     $22.6 and $24.3 at June 30, 2001 and December 31, 2000,
     respectively                                                            786.0            296.0
Materials and Supplies, net of allowance for obsolescence of
     $28.8 and $23.3 at June 30, 2001 and December 31, 2000,
     respectively                                                            155.7             89.5
Deferred Income Taxes                                                         15.1             18.1
Other Current Assets                                                          48.2             10.0
---------------------------------------------------------------------------------------------------
    Total Current Assets                                                   1,113.7            448.1
---------------------------------------------------------------------------------------------------

Property and Equipment                                                    10,240.3          6,003.2
Less Accumulated Depreciation                                              1,495.5          1,308.2
---------------------------------------------------------------------------------------------------
    Property and Equipment, net                                            8,744.8          4,695.0
---------------------------------------------------------------------------------------------------

Goodwill, net                                                              6,521.4          1,037.9
Investments in and Advances to Joint Ventures                                 42.6            105.9
Other Assets                                                                 366.0             71.9
---------------------------------------------------------------------------------------------------
    Total Assets                                                   $      16,788.5  $       6,358.8
===================================================================================================

                           LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts Payable                                                   $         207.6  $         135.6
Accrued Income Taxes                                                         154.6            113.1
Debt Due Within One Year                                                     120.5             23.1
Other Current Liabilities                                                    299.0            223.4
---------------------------------------------------------------------------------------------------
    Total Current Liabilities                                                781.7            495.2
---------------------------------------------------------------------------------------------------

Long-Term Debt                                                             4,685.1          1,430.3
Deferred Income Taxes                                                        439.3            359.2
Other Long-Term Liabilities                                                  112.2             70.0
---------------------------------------------------------------------------------------------------
    Total Long-Term Liabilities                                            5,236.6          1,859.5
---------------------------------------------------------------------------------------------------

Commitments and Contingencies

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,
    318,688,185 and 210,710,363 shares issued and outstanding at
    June 30, 2001 and December 31, 2000, respectively                          3.2              2.1
Additional Paid-in Capital                                                10,600.7          3,918.7
Accumulated Other Comprehensive Income                                         3.1                -
Retained Earnings                                                            163.2             83.3
---------------------------------------------------------------------------------------------------
    Total Shareholders' Equity                                            10,770.2          4,004.1
---------------------------------------------------------------------------------------------------
    Total Liabilities and Shareholders' Equity                     $      16,788.5  $       6,358.8
===================================================================================================
</TABLE>


                             See accompanying notes.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
                              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                (Unaudited)


                                                                                                       Six Months Ended
                                                                                                           June 30,
                                                                                                     --------------------
                                                                                                        2001       2000
                                                                                                     ----------  --------
                                                                                                         (In millions)

<S>                                                                                                  <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income                                                                                         $    99.0   $  68.4
  Adjustments to reconcile net income to net cash provided by operating activities
      Depreciation                                                                                       223.1     116.1
      Goodwill amortization                                                                               71.6      13.3
      Deferred income taxes                                                                              (33.8)     19.0
      Equity in earnings of joint ventures                                                                (5.7)     (5.0)
      Net gain from disposal of assets                                                                   (18.4)     (1.4)
      Loss on sale of securities                                                                           1.8         -
      Amortization of debt related discounts/premiums, fair value adjustments and issue costs, net       (11.3)      1.9
      Deferred income, net                                                                               (30.0)    (15.6)
      Deferred expenses, net                                                                             (27.6)     (1.8)
      Extraordinary loss on debt extinguishment, net of tax                                               17.3         -
      Other, net                                                                                           6.9      (3.4)
      Changes in operating assets and liabilities, net of effects from the R&B Falcon merger
         Accounts receivable                                                                            (162.6)      2.6
         Accounts payable and other current liabilities                                                  (95.6)    (68.0)
         Income taxes receivable/payable, net                                                             30.3     (32.3)
         Other current assets                                                                            (13.8)     (9.8)
-------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities                                                                 51.2      84.0
-------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Capital expenditures                                                                                  (371.8)   (307.8)
  Proceeds from sale of coiled tubing drilling services business                                             -      24.9
  Proceeds from sale of securities                                                                        16.8         -
  Other proceeds from disposal of assets, net                                                             29.2       3.4
  Merger costs paid                                                                                      (24.5)        -
  R&B Falcon cash at acquisition                                                                         264.7         -
  Other, net                                                                                               2.7       1.8
-------------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities                                                                    (82.9)   (277.7)
-------------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Net borrowings under commercial paper program                                                           60.3         -
  Net proceeds from other debt                                                                         1,693.5     489.2
  Early repayments of debt instruments                                                                (1,457.9)        -
  Net repayments on revolving credit agreements                                                         (180.1)   (235.0)
  Other repayments of debt instruments                                                                   (20.3)    (54.6)
  Proceeds from interest rate swaps                                                                        4.1         -
  Net proceeds from issuance of ordinary shares under stock-based compensation plans                      28.8      10.4
  Proceeds from issuance of ordinary shares upon exercise of warrants                                     10.6         -
  Dividends paid                                                                                         (19.1)    (12.6)
  Financing costs                                                                                        (15.5)     (0.6)
  Other, net                                                                                               1.5       0.5
-------------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities                                                                105.9     197.3
-------------------------------------------------------------------------------------------------------------------------

Net Increase in Cash and Cash Equivalents                                                                 74.2       3.6
-------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at Beginning of Period                                                          34.5     165.7
-------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                                           $   108.7   $ 169.3
=========================================================================================================================
</TABLE>
                             See accompanying notes.


                                        3
<PAGE>
                  TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1 - PRINCIPLES OF CONSOLIDATION

     Transocean  Sedco  Forex  Inc.  (together  with  its  subsidiaries  and
predecessors, unless the context requires otherwise, the "Company") is a leading
international  provider of offshore and inland marine contract drilling services
for  oil  and  gas  wells.  As  of July 31, 2001, the Company owned, had partial
ownership  interests  in  or  operated  more  than 170 mobile offshore and barge
drilling  units  (including  one  under construction). The Company contracts its
drilling  rigs, related equipment and work crews primarily on a dayrate basis to
drill  oil  and  gas  wells.

     On  January  31,  2001,  the  Company  completed a merger transaction ("R&B
Falcon  merger")  with R&B Falcon Corporation ("R&B Falcon"). As a result of the
merger,  R&B  Falcon  became an indirect wholly owned subsidiary of the Company.
The  merger  was accounted for as a purchase, with the Company as the accounting
acquiror.

     The condensed consolidated balance sheet as of June 30, 2001 represents the
consolidated  financial  position  of  the  merged  company.  The  condensed
consolidated  statements  of  cash flows and operations for the six months ended
June  30,  2001  include five months of cash flows and operating results for R&B
Falcon.  The condensed consolidated statement of operations for the three months
ended  June  30,  2001 is that of the merged company. The condensed consolidated
balance  sheet as of December 31, 2000 and the condensed consolidated statements
of  cash  flows  and operations for the six months ended June 30, 2000 represent
the  consolidated  financial  position,  cash flows and results of operations of
Transocean  Sedco  Forex  Inc. and not those of the merged company. Intercompany
transactions  and accounts have been eliminated. The equity method of accounting
is  used  for  investments  in  joint  ventures owned 50 percent or less and for
investments  in  joint  ventures owned 50 percent or more where the Company does
not  have significant influence or control over the day-to-day operations of the
joint  venture.

NOTE 2 - GENERAL

     BASIS  OF CONSOLIDATION - The accompanying condensed consolidated financial
statements  of  the  Company 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 United
States  for  complete  financial statements. Operating results for the three and
six  months  ended  June  30, 2001 are not necessarily indicative of the results
that  may  be  expected  for the year ending December 31, 2001 or for any future
period.  In  connection  with  the  preparation  of  these financial statements,
management  was  required  to  make  estimates  and  assumptions that affect the
reported  amounts  of  assets, liabilities, revenues, expenses and disclosure of
contingent  liabilities.  Actual  results  could differ from such estimates. 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 the Company's Annual Report on Form 10-K for the
year  ended  December  31,  2000.

     SUPPLEMENTARY  CASH  FLOW  INFORMATION  -  Concurrent  with  the R&B Falcon
merger,  the  Company  removed  certain non-strategic assets from the active rig
fleet  and  categorized them as assets held for sale. This has been reflected in
the  condensed  consolidated  balance  sheets  as  a  decrease  in  Property and
Equipment  of  $178.2  million  with  a  corresponding increase in Other Assets.

     In  February 2001, the Company received a distribution from a joint venture
in the form of marketable securities held for sale valued at $19.9 million.  The
distribution  was  reflected  in the condensed consolidated balance sheets as an
increase in Other Current Assets with a corresponding decrease in Investments in
and  Advances  to  Joint  Ventures.

     Cash  payments  for interest and income taxes, net, were $158.7 million and
$46.5  million,  respectively,  for the six months ended June 30, 2001 and $45.4
million and $34.1 million, respectively, for the six months ended June 30, 2000.

     GOODWILL  -  The excess of the purchase price over the estimated fair value
of  net  assets  acquired  is  accounted  for  as goodwill and is amortized on a
straight-line  basis  over  40  years.  The  amortization period is based on the
nature  of the offshore drilling industry, long-lived drilling equipment and the
long-standing  relationships with core customers. Accumulated amortization as of
June  30,  2001  and  December  31,  2000  was  $98.3 million and $26.7 million,
respectively.


                                        4
<PAGE>
                  TRANSOCEAN SEDCO FOREX INC. AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (Unaudited)

     CAPITALIZED  INTEREST  - Interest costs for the construction and upgrade of
qualifying  assets  are  capitalized.  The Company capitalized interest costs on
construction  work  in progress of $9.4 million and $30.5 million, respectively,
for  the  three  and  six months ended June 30, 2001 and $22.8 million and $45.9
million,  respectively,  for  the  corresponding  periods  of  2000.

     CHANGE  IN  ESTIMATE  -  As  a result of the R&B Falcon merger, the Company
conformed  its  policies  relating  to  estimated  rig lives and salvage values.
Estimated  useful  lives  of  its  drilling units now range from 18 to 35 years,
reflecting  maintenance  history  and  market  demand  for these drilling units,
buildings  and improvements from 10 to 30 years and machinery and equipment from
four  to  12 years. Depreciation expense for the three and six months ended June
30, 2001 was reduced by approximately $6.4 million (net $0.02 per diluted share)
and  $10.6  million  (net $0.03 per diluted share), respectively, as a result of
conforming  these  policies.

     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.
There  is  no  expected  relationship between the provision for income taxes and
income  before  income  taxes  because the countries have taxation regimes which
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.

     COMPREHENSIVE INCOME - The components of total comprehensive income for the
three and six months ended June 30, 2001 and 2000, respectively, are as follows:

<TABLE>
<CAPTION>
                                                                Three Months Ended   Six Months Ended
                                                                     June 30,             June 30,
                                                                ------------------  ------------------
                                                                  2001      2000      2001      2000
                                                                --------  --------  --------  --------
                                                                             (In millions)

<S>                                                             <C>       <C>       <C>       <C>
Net income                                                      $  68.5   $  35.9   $  99.0   $  68.4
Unrealized gain (loss) on interest rate hedge transactions         (0.1)        -       4.0         -
Unrealized gain (loss) on foreign currency hedge transactions       0.9         -      (0.5)        -
Unrealized gain (loss) on securities available for sale             0.7         -      (0.4)        -
                                                                --------  --------  --------  --------
  Total comprehensive income                                    $  70.0   $  35.9   $ 102.1   $  68.4
                                                                ========  ========  ========  ========
</TABLE>

     The  components  of  accumulated  other comprehensive income as of June 30,
2001  are  as follows. There was no accumulated other comprehensive income as of
December  31,  2000.

                                                          June 30,
                                                            2001
                                                        -------------
                                                        (In millions)


Unrealized gain on interest rate hedge transactions     $        4.0
Unrealized loss on foreign currency hedge transactions          (0.5)
Unrealized loss on securities available for sale                (0.4)
                                                        -------------
  Accumulated other comprehensive income                $        3.1
                                                        =============

     SEGMENTS  -  The  Company's  operations  have  been  aggregated  into  two
reportable  segments:  (i)  International  and  U.S.  Floater  Contract Drilling
Services  and (ii) Gulf of Mexico Shallow and Inland Water. The Company provides
services  with  different  types  of  drilling  equipment  in several geographic
regions.  The  location  of the Company's operating assets and the allocation of
resources to build or upgrade drilling units is determined by the activities and
needs  of  customers.  See  Note  8.

     INTERIM  FINANCIAL  INFORMATION  -  The  financial  statements  reflect all
adjustments  which  are,  in  the  opinion of management, necessary for the fair
statement of results for the interim periods. Such adjustments are considered to
be  of  a  normal  recurring  nature  unless  otherwise  identified.


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

     DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - In June 1998, the Financial
Accounting  Standards  Board  ("FASB")  issued Statement of Financial Accounting
Standards  ("SFAS")  No.  133, Accounting for Derivative Instruments and Hedging
Activities,  as  amended  in  June  1999. The Company adopted SFAS No. 133 as of
January  1,  2001. Because of the Company's limited use of derivatives to manage
its  exposure  to  fluctuations  in foreign currency exchange rates and interest
rates,  the  adoption  of  the  new  statement  had  no effect on the results of
operations  or  the  consolidated financial position of the Company. See Note 7.

     NEW ACCOUNTING PRONOUNCEMENTS - In July 2001, the FASB issued SFAS No. 141,
Business  Combinations.  SFAS  No.  141  requires that all business combinations
initiated  or  completed after June 30, 2001 be accounted for using the purchase
method  of accounting. The statement provides for recognition and measurement of
intangible assets separate from goodwill. The Company will adopt SFAS No. 141 as
of  July  1,  2001. The adoption of the new statement will have no effect on the
results  of  operations  or  the consolidated financial position of the Company.

     In  July  2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets  which  becomes  effective  for fiscal years beginning after December 15,
2001. SFAS No. 142 prohibits amortization of goodwill and requires that goodwill
be tested for impairment annually.  The statement includes specific guidance for
testing  goodwill  impairment. The Company will adopt SFAS No. 142 as of January
1,  2002.  Management  is evaluating SFAS No. 142 and the impact of implementing
the  annual  goodwill  impairment  test  on the Company's consolidated financial
position  and  results  of  operations.  The Company's consolidated statement of
operations  for  the  year  ending  December  31,  2001  is  expected to include
approximately  $154.4  million  of  goodwill  amortization  expense.

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

NOTE 3 - BUSINESS COMBINATION

     On  January  31,  2001, the Company completed a merger transaction with R&B
Falcon  in  which an indirect wholly owned subsidiary of the Company merged with
and  into R&B Falcon.  As a result of the merger, R&B Falcon common shareholders
received  0.5  newly  issued  ordinary shares of the Company for each R&B Falcon
share.  The  Company  issued  approximately  106.1  million  ordinary  shares in
exchange  for  the  issued  and  outstanding  shares  of  R&B Falcon and assumed
warrants and options exercisable for approximately 13.2 million ordinary shares.
The  ordinary shares issued in exchange for the issued and outstanding shares of
R&B  Falcon  constituted  approximately  33 percent of the Company's outstanding
ordinary  shares  after  the  merger.

     The  Company  accounted  for  the  merger  using  the  purchase  method  of
accounting  with  the  Company  treated as the accounting acquiror. The purchase
price  of  $6.7  billion is comprised of the calculated market capitalization of
the  Company's  ordinary  shares issued at the time of merger with R&B Falcon of
$6.1  billion  and  the  estimated  fair  value  of R&B Falcon stock options and
warrants at the time of the merger of $0.6 billion. The market capitalization of
the  Company's  ordinary shares issued was calculated using a $57.2313 per share
average  closing price of the Company's ordinary shares for a period immediately
before  and  after  August  21,  2000,  the  date  the  merger  was  announced.

     The  purchase  price  included,  at estimated fair value, current assets of
$670.9  million,  drilling and other property and equipment of $4,103.9 million,
other  assets  of  $146.4  million  and the assumption of current liabilities of
$345.8  million,  other  net  long-term  liabilities of $185.6 million, minority
interest of $102.6 million and long-term debt of $3,205.8 million. The excess of
the  purchase  price  over  the  estimated fair value of net assets acquired was
$5,554.4  million,  which  has  been  accounted  for  as  goodwill  and is being
amortized  on  a  straight-line  basis  over  40  years.  See Note 2-General-New
Accounting  Pronouncements.

     In  conjunction  with  the  R&B  Falcon  merger,  the Company established a
liability  of $16.3 million for the estimated severance related costs associated
with  the  involuntary  termination  of  569  R&B  Falcon  employees pursuant to
management's  plan  to  consolidate  operations  and  administrative  functions
post-merger.  Through  June  30,  2001 approximately $9.9 million of these costs
were  paid.  The  Company  anticipates  that  substantially all of the remaining
amounts  will  be  paid  by  the  end  of  2001.


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

     Unaudited  pro  forma  combined  operating  results  of the Company and R&B
Falcon  assuming  the  merger  was  completed  as  of  January 1, 2001 and 2000,
respectively, are as follows:

                                                    Six Months Ended
                                                        June 30,
                                          ------------------------------------
                                                2001              2000
                                          -----------------  -----------------
                                          (In millions, except per share data)

Operating revenues                        $         1,428.1  $        1,007.2
Operating income (loss)                               252.1             (43.5)
Income (loss) from continuing operations              102.0             (80.1)
Basic earnings (loss) per share                        0.32             (0.34)
Diluted earnings (loss) per share                      0.31             (0.34)

     The  pro forma information includes adjustments for additional depreciation
based  on the fair market value of the drilling and other property and equipment
acquired,  the  amortization of goodwill arising from the transaction, increased
interest  expense  for  debt  assumed  in the merger and related adjustments for
income  taxes.  The  pro  forma information is not necessarily indicative of the
results  of  operations had the transaction been effected on the assumed date or
the  results  of  operations  for  any  future  periods.

NOTE 4 - UPGRADE AND EXPANSION OF DRILLING FLEET

     Capital  expenditures, including capitalized interest, totaled $372 million
during  the six months ended June 30, 2001 and include $33 million, $41 million,
$153  million  and  $20  million spent on the construction of the Sedco Express,
Sedco  Energy,  Deepwater Horizon and Cajun Express, respectively. A substantial
majority  of  the  capital expenditures is related to the International and U.S.
Floater  Contract  Drilling  Services  segment.

NOTE 5 - DEBT

Debt is comprised of the following:

                                                       June 30,   December 31,
                                                         2001         2000
                                                      ----------  -----------
                                                          (In millions)

6.625% Notes, due April 2011                          $    696.4  $         -
7.5% Notes, due April 2031                                 597.2            -
Zero Coupon Convertible Debentures(1) , due May 2020       504.9        497.7
Term Loan Agreement                                        400.0        400.0
1.5% Convertible Debentures, due May 2021                  400.0            -
6.75% Senior Notes, due April 2005                         355.3            -
9.5% Senior Notes, due December 2008                       351.6            -
6.95% Senior Notes, due April 2008                         252.4            -
6.5% Senior Notes, due April 2003                          251.5            -
7.375% Senior Notes, due April 2018                        250.5            -
8.00% Debentures, due April 2027                           197.9        197.9
Nautilus Class A1 Notes                                    160.9            -
9.125% Senior Notes, due December 2003                     107.0            -
7.45% Notes, due April 2027                                 94.3         94.1
Commercial Paper                                            60.3            -
Secured Rig Financing                                       59.8         68.6
Nautilus Class A2 Notes, due May 2005                       52.8            -
6.9% Notes                                                  12.8         14.9
ABN Revolving Credit Agreement                                 -        180.1
Other                                                          -          0.1
                                                      ----------  -----------

Total Debt                                               4,805.6      1,453.4
Less Debt Due Within One Year                              120.5         23.1
                                                      ----------  -----------

Total Long-Term Debt                                  $  4,685.1  $   1,430.3
                                                      ==========  ===========
(1) Net of unamortized discount and issue costs.


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

Expected maturity of the face value of the Company's debt is as follows:


                                 Years Ended
                                 December 31,
                                --------------
                                (In millions)

          Remainder of 2001     $        120.5
          2002                           162.6
          2003                           554.8
          2004                           207.9
          2005                           400.7
          Thereafter                   3,665.0
                                --------------
            Total               $      5,111.5
                                ==============

     6.625%  Notes  and  7.5%  Notes  - In April 2001, the Company issued $700.0
million aggregate principal amount of 6.625% Notes due April 15, 2011 and $600.0
million aggregate principal amount of 7.5% Notes due April 15, 2031. Interest is
payable  on  April 15 and October 15 of each year. The 6.625% Notes and the 7.5%
Notes  are  redeemable at the option of the Company at a make-whole premium with
present  values  calculated  using  a discount rate equal to the then-prevailing
yield  of U.S. treasury notes for a corresponding remaining period plus 25 basis
points and 35 basis points, respectively. The fair value of the 6.625% Notes and
7.5%  Notes  as  of  June  30,  2001 was approximately $695.2 million and $612.2
million, respectively, based on the estimated yield to maturity as of that date.
The  Company  entered  into interest rate swaps relating to the 6.625% Notes and
7.5%  Notes.  See  Note  7.

     The  indenture  and  supplemental  indentures  pursuant to which the 6.625%
Notes and the 7.5% Notes, as well as the Zero Coupon Convertible Debentures, the
1.5%  Convertible Debentures, the 7.45% Notes and the 8.00% Debentures described
below, were  issued  impose  restrictions  on  certain  actions  by the Company,
including  creating  liens, engaging in sale/leaseback transactions and engaging
in  merger,  consolidation  or  reorganization  transactions.

     Zero  Coupon  Convertible Debentures - In May 2000, the Company issued Zero
Coupon  Convertible  Debentures  due  May  2020 with a face value at maturity of
$865.0  million.  The debentures were issued at a price to the public of $579.12
per  debenture  and accrue original issue discount at a rate of 2.75 percent per
annum  compounded  semiannually  to reach a face value at maturity of $1,000 per
debenture.  The Company will pay no interest on the debentures prior to maturity
and  has  the right to redeem the debentures after three years for a price equal
to  the  issuance  price  plus  accrued  original  issue discount to the date of
redemption.  Each  holder has the right to require the Company to repurchase the
debentures  on  the  third, eighth and thirteenth anniversary of issuance at the
issuance  price  plus accrued original issue discount to the date of repurchase.
The Company may pay this repurchase price with either cash or ordinary shares or
a  combination  of cash and ordinary shares. The debentures are convertible into
ordinary  shares  of  the  Company  at the option of the holder at any time at a
ratio  of  8.1566  shares per debenture subject to adjustments if certain events
take  place. The fair value of the Zero Coupon Convertible Debentures as of June
30,  2001  was  approximately  $498.5  million  based  on the estimated yield to
maturity  as  of  that  date.

     Term  Loan Agreement - The Company is a party to a $400.0 million unsecured
five-year  term  loan  agreement  with  a  group  of banks led by SunTrust Bank,
Atlanta,  as  agent,  dated as of December 16, 1999 (the "Term Loan Agreement").
Amounts outstanding under the Term Loan Agreement bear interest at the Company's
option,  at a base rate or London Interbank Offered Rate ("LIBOR") plus a margin
(0.70 percent per annum at June 30, 2001) that varies depending on the Company's
senior  unsecured public debt rating. No principal payments are required for the
first  two years, and the Company may prepay some or all of the debt at any time
without  premium  or  penalty.  The Term Loan Agreement requires compliance with
various  restrictive covenants and provisions customary for an agreement of this
nature  including an interest coverage ratio of not less than 3 to 1, a leverage
ratio  of  not  greater  than  40 percent and limitations on mergers and sale of
substantially all assets, permitted liens, subsidiary and certain other types of
debt, transactions with affiliates and sale/leaseback transactions. The carrying
value  of  borrowings  under  the  Term  Loan Agreement approximates fair value.

     1.5%  Convertible  Debentures  -  In  May  2001,  the Company issued $400.0
million  aggregate principal amount of 1.5% Convertible Debentures due May 2021.
Interest  is payable on May 15 and November 15 of each year. The Company has the
right to redeem the debentures after five years for a price equal to 100 percent
of  the  principal  amount  plus  interest  accrued  up to but not including the
redemption  date. Each holder has the right to require the Company to repurchase
the debentures after five, ten and fifteen years at 100 percent of the principal
amount  plus  accrued  interest  up  to  and  including the repurchase date. The
Company  may  pay this repurchase price with either cash or ordinary shares or a
combination  of  cash  and  ordinary shares. The debentures are convertible into


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

ordinary  shares  of  the  Company  at the option of the holder at any time at a
ratio  of  13.8627  shares  per  $1,000 principal amount debenture (a conversion
price  of  $72.136 per ordinary share), subject to adjustments if certain events
take  place, if the closing sale price per ordinary share exceeds 110 percent of
the  conversion price for at least 20 trading days in a period of 30 consecutive
trading  days ending on the trading day immediately prior to the conversion date
or if other specified conditions are met. The fair value of the 1.5% Convertible
Debentures  as  of  June  30, 2001 was approximately $362.5 million based on the
estimated  yield  to  maturity  as  of  that  date.

     6.5%,  6.75%,  6.95%  and  7.375%  Senior Notes - In April 1998, R&B Falcon
issued  6.5%  Senior  Notes,  6.75%  Senior Notes, 6.95% Senior Notes and 7.375%
Senior  Notes  with  an  aggregate principal amount of $1.1 billion. Interest on
these notes is payable on April 15 and October 15 of each year. These notes have
maturity  dates  of  April  2003,  April  2005,  April  2008  and  April  2018,
respectively.  The  6.75%  Senior  Notes,  the 6.95% Senior Notes and the 7.375%
Senior  Notes are redeemable at the option of R&B Falcon at a make-whole premium
with  present  values  calculated  using  a  discount  rate  equal  to  the
then-prevailing  yield of U.S. treasury notes for a corresponding remaining term
plus  20  basis points for the 6.75% Senior Notes and the 6.95% Senior Notes and
25  basis  points  for  the  7.375%  Senior Notes. The 6.5% Senior Notes are not
redeemable  at  the option of R&B Falcon. At June 30, 2001, approximately $250.0
million,  $350.0  million, $250.0 million and $250.0 million principal amount of
these  notes  was  outstanding,  respectively. These notes were recorded at fair
value  on  January  31, 2001 as part of the R&B Falcon merger. The fair value of
the  6.5%,  6.75%,  6.95% and 7.375% Senior Notes as of June 30, 2001 was $254.4
million,  $358.2 million, $254.0 million and $251.3 million, respectively, based
on  the  estimated  yield  to  maturity  as  of  that  date.

     9.125%  and  9.5% Senior Notes - In December 1998, R&B Falcon issued 9.125%
Senior  Notes and 9.5% Senior Notes with an aggregate principal amount of $400.0
million.  Interest  on these notes is payable on June 15 and December 15 of each
year.  These  notes  have  maturity  dates  of  December 2003 and December 2008,
respectively.  These  notes  are  redeemable  at  the  option of R&B Falcon at a
make-whole premium with present values calculated using a discount rate equal to
the  then-prevailing  yield of U.S. treasury notes for a corresponding remaining
term  plus  50  basis points. At June 30, 2001, approximately $100.0 million and
$300.0  million  principal  amount of these notes was outstanding, respectively.
These  notes  were recorded at fair value on January 31, 2001 as part of the R&B
Falcon merger. The fair value of the 9.125% and 9.5% Senior Notes as of June 30,
2001 was $108.1 million and $349.6 million, respectively, based on the estimated
yield  to  maturity  as  of  that  date.

     The indentures pursuant to which the 6.5% Senior Notes, 6.75% Senior Notes,
6.95%  Senior  Notes,  7.375% Senior Notes, the 9.125% Senior Notes and the 9.5%
Senior  Notes  were issued impose restrictions on certain actions by R&B Falcon,
including  creating  liens, engaging in sale/leaseback transactions and engaging
in  merger,  consolidation  or  reorganization  transactions.  In  addition, the
indenture  pursuant  to  which the 9.125% Senior Notes and the 9.5% Senior Notes
were  issued  imposes  restrictions on the incurrence of additional indebtedness
and  the  payment  of  dividends  and  other  restricted payments by R&B Falcon.
However, these restrictions are suspended during the period that these notes are
rated  as  investment  grade.

     7.45% Notes and 8.00% Debentures - In April 1997, the Company issued $100.0
million  aggregate principal amount of 7.45% Notes due April 15, 2027 and $200.0
million  aggregate  principal  amount  of  8.00%  Debentures due April 15, 2027.
Holders  of  the  7.45%  Notes may elect to have all or any portion of the 7.45%
Notes repaid on April 15, 2007 at 100 percent of the principal amount. The 7.45%
Notes,  at any time after April 15, 2007, and the 8.00% Debentures, at any time,
are  redeemable  at  the  Company's  option at a make-whole premium with present
values  calculated  using  a discount rate equal to the then-prevailing yield of
U.S.  treasury  notes  for  a corresponding remaining term plus 20 basis points.
Interest  is  payable on April 15 and October 15 of each year. The fair value of
the 7.45% Notes and 8.00% Debentures as of June 30, 2001 was approximately $99.2
million  and  $212.7  million,  respectively,  based  on  the estimated yield to
maturity  as  of  that  date.

     Nautilus Class A1 and A2 Notes - In August 1999, a subsidiary of R&B Falcon
completed  a  $250.0  million  project  financing  for  the  construction of the
Deepwater  Nautilus.  The  financing  consists of two five-year notes. The first
note  is  for  $200.0  million  and bears interest at 7.31 percent, with monthly
interest  and principal payments. The second note is for $50.0 million and bears
interest at 9.41 percent, with monthly interest payments and a balloon principal
payment  which  is  due  at  maturity  of  the  loan in May 2005. Both notes are
collateralized  by  the  Deepwater  Nautilus and drilling contract revenues from
such rig and are without recourse to R&B Falcon. At June 30, 2001, approximately
$162.7  million  and  $50.0  million  principal  amount  of  these  notes  was
outstanding,  respectively.  These  notes were recorded at fair value on January
31,  2001 as part of the R&B Falcon merger. The fair value of the Nautilus Class
A1  and  A2  Notes  as  of  June  30, 2001 was $163.5 million and $56.5 million,
respectively,  based  on  the  estimated  yield  to  maturity  as  of that date.


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

     Revolving  Credit Agreement and Commercial Paper Program - The Company is a
party  to  a $550.0 million five-year revolving credit agreement (the "Five-Year
Revolver") and a $250.0 million 364-day revolving credit agreement (the "364-Day
Revolver")  with a group of banks led by SunTrust Bank, Atlanta, as agent, dated
as  of  December  29, 2000 (together the "SunTrust Revolving Credit Agreements")
under  which  the  Company  may  borrow  or  procure credit. On January 4, 2001,
borrowings under the Five-Year Revolver were used to repay debt incurred under a
$540.0  million revolving credit agreement with a group of banks led by ABN AMRO
Bank,  NV,  as  agent. Through June 2001, amounts outstanding under the SunTrust
Revolving  Credit  Agreements  bore interest, at the Company's option, at a base
rate  or  LIBOR plus a margin that was fixed at 0.45 percent per annum under the
Five-Year  Revolver  and  0.475  percent  per  annum under the 364-Day Revolver.
Subsequent  to June 2001, the margin under the Five-Year Revolver will vary from
0.180  percent to 0.700 percent and the margin on the 364-Day Revolver will vary
from  0.190 percent to 0.725 percent depending on the Company's senior unsecured
public  debt  rating.  A utilization fee fixed at 0.125 percent per annum during
the first six months of 2001, and varying thereafter from 0.075 percent to 0.150
percent,  depending  on  the  Company's  senior unsecured public debt rating, is
payable  if  amounts  outstanding  under  the  Five-Year Revolver or the 364-Day
Revolver  are  greater  than  $181.5 million or $82.5 million, respectively. The
SunTrust  Revolving Credit Agreements contain substantially the same restrictive
covenants  as  are  contained  in the Term Loan Agreement. There were no amounts
outstanding  under the SunTrust Revolving Credit Agreements as of June 30, 2001.

     On  March  29,  2001, the Company established its Commercial Paper Program.
The  borrowings  mature on an overnight to one night basis and the average yield
at  the  end  of  the quarter ended June 30, 2001 was 4.32 percent. The SunTrust
Revolving  Credit  Agreements provide liquidity for commercial paper borrowings.

     The  carrying  value  of  borrowings  under  the  SunTrust Revolving Credit
Agreements  and  the  Commercial  Paper  Program  approximates  fair  value.

     Secured Rig Financing - At June 30, 2001, the Company had outstanding $59.8
million  of  debt  secured  by  the  Trident IX and Trident 16 (the "Secured Rig
Financing").  Payments  under  these  financing  agreements  include an interest
component  of  7.95  percent for the Trident IX and 7.20 percent for the Trident
16.  The Trident IX facility expires in April 2003 while the Trident 16 facility
expires  in September 2004.  The financing arrangements provide for a call right
on  the  part of the Company to repay the financing prior to expiration of their
scheduled  terms  and in some circumstances a put right on the part of the banks
to  require  the Company to repay the financings. Under either circumstance, the
Company  would  retain  ownership of the rigs. The fair value of the Secured Rig
Financing  as  of  June  30,  2001  was approximately $65.0 million based on the
estimated  yield  to  maturity  as  of  that  date.

     6.9%  Notes  -  At June 30, 2001, the Company had outstanding $13.8 million
aggregate  principal  amount  of  unsecured  6.9%  Notes  due  February 15, 2004
originally issued in a private placement. The note purchase agreement underlying
the  6.9%  Notes  requires  compliance  with  various  restrictive covenants and
provisions  customary  for  an agreement of this nature and on substantially the
same  terms  as  those under the Term Loan Agreement. The fair value of the 6.9%
Notes  as  of  June  30,  2001 was $15.4 million based on the estimated yield to
maturity  as  of  that  date.

     Redeemed and Repurchased Debt - On March 29, 2001, the Company redeemed all
of  the  approximately  $0.4  million principal amount outstanding 8.875% Senior
Notes at a price equal to 102.2188 percent of the principal amount together with
interest  accrued  to  the  redemption  date.

     On  April  10,  2001, R&B Falcon acquired pursuant to a tender offer all of
the  approximately  $400.0  million  principal amount outstanding 11.375% Senior
Secured  Notes  due 2009 of its affiliate, RBF Finance Co., at 122.51 percent of
principal  amount,  or  $1,225.10  per $1,000 principal amount, plus accrued and
unpaid  interest.  On  April  6,  2001, RBF Finance Co. also redeemed all of the
approximately  $400.0  million  principal  amount outstanding 11% Senior Secured
Notes  due  2006  at  125.282 percent, or $1,252.82 per $1,000 principal amount,
plus  accrued  and  unpaid  interest,  and  R&B  Falcon  redeemed  all  of  the
approximately  $200.0  million  principal amount outstanding 12.25% Senior Notes
due  2006  at  130.675  percent  or  $1,306.75 per $1,000 principal amount, plus
accrued  and unpaid interest. The Company funded the acquisition and redemptions
from  the  issuance  of  the  6.625%  Notes and 7.5% Notes in April 2001. In the
second  quarter  of  2001,  the Company recognized an extraordinary loss, net of
tax,  of $18.9 million ($0.06 per diluted share) on the early retirement of this
debt.

     On  March  30,  2001,  pursuant  to  an  offer  made in connection with the
Company's  acquisition  of  R&B  Falcon, Cliffs Drilling Company, a wholly owned
subsidiary  of  R&B  Falcon  ("Cliffs  Drilling"),  acquired  approximately $0.1
million of the 10.25% Senior Notes due 2003 at an amount equal to 101 percent of
the  principal  amount.  On  May  18,  2001, Cliffs Drilling redeemed all of the


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

approximately  $200.0  million  principal amount outstanding 10.25% Senior Notes
due  2003,  at  102.5  percent,  or  $1,025.00 per $1,000 principal amount, plus
interest  accrued to the redemption date. As a result, the Company recognized an
extraordinary gain, net of tax, of $1.6 million ($0.01 per diluted share) in the
second  quarter  of  2001  relating  to  the  early extinguishment of this debt.

     Letters  of  Credit - The Company had letters of credit outstanding at June
30,  2001 totaling $81.8 million. The total includes a letter of credit relating
to  the  legal dispute with the Indian Customs Department, Mumbai valued at $5.5
million.  In addition, the total includes outstanding letters of credit of $54.2
million  under a $70.0 million letter of credit facility entered into with three
banks.  Under  this  facility,  the  Company  pays  letter of credit fees of 1.5
percent  per annum and commitment fees of 0.375 percent per annum, respectively.
This facility, which matures in April 2004, requires a collateral value ratio of
1.75 times the commitment and is secured by mortgages on five drilling rigs, the
J.W. McLean, J.T. Angel, Randolph Yost, D.R. Stewart and George H. Galloway. The
remaining  letter  of  credit  amount  outstanding  guarantees  various contract
bidding  and  insurance  activities.

NOTE 6 - OTHER CURRENT LIABILITIES

     Other current liabilities are comprised of the following:


                                           June 30,   December 31,
                                             2001        2000
                                          ----------  ------------
                                                (In millions)

  Accrued Payroll and Employee Benefits   $    121.7  $       81.2
  Accrued Interest                              48.6           7.0
  Contract Disputes and Legal Claims            44.9          36.8
  Deferred Revenue                              22.9           9.2
  Accrued Taxes, Other than Income              20.0          13.0
  Deferred Gain on Sale of Rigs                 18.3          57.7
  Other                                         22.6          18.5
                                          ----------  ------------
                                          $    299.0  $      223.4
                                          ==========  ============

NOTE 7 - FINANCIAL INSTRUMENTS

     Foreign  Exchange Risk - The Company operates internationally, resulting in
exposure  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. The Company uses a variety of techniques to
minimize  exposure to foreign exchange risk, including customer contract payment
terms  and  foreign  exchange  derivative  instruments.

     The  Company's  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. Foreign exchange
derivative  instruments, specifically foreign exchange forward contracts, may be
used  to  minimize foreign exchange risk in instances where the primary strategy
is  not attainable. A foreign exchange forward contract obligates the Company 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.

     Gains  and losses on foreign exchange derivative instruments, which qualify
as  accounting hedges, are deferred as other comprehensive income and recognized
when  the  underlying foreign exchange exposure is realized. Gains and losses on
foreign  exchange  derivative  instruments,  which  do not qualify as hedges for
accounting  purposes, are recognized currently based on the change in the market
value  of  the  derivative  instruments.

     On  January  10,  2001,  the  Company entered into foreign currency forward
contracts  relating  to the settlement agreement dated January 4, 2001, with DCN
International  ("DCN")  relating to disputes between a subsidiary of the Company
and DCN with respect to construction of the Sedco Express and Sedco Energy.  The
forward contracts are designated as a hedge of the payable to DCN of 150 million
French  francs (approximately $21 million), of which 75 million was paid on June
28,  2001  and  75  million  is due on September 27, 2001.  The objective of the
hedge  transactions  is to hedge the variability in the forecasted cash flow due
to  the  French  franc  currency  risk. No ineffectiveness is anticipated as the
notional  amount  and  the maturity dates of the forward contracts coincide with
the  payable  balance  and  due dates, respectively. Over the life of the hedge,
interest  expense  will  be  reflected in earnings based on the implied interest
rate  included  in  the forward contract; other changes in the fair value of the
forward  contracts  relate  to  the  remeasurement of the payable at the monthly
accounting  rate  and  will be recorded in earnings when the payable and related


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

forward  contract  is settled. The unrecognized losses on the hedge transactions
($0.5  million  as  of  June  30,  2001)  are  a  component of Accumulated Other
Comprehensive  Income in the condensed consolidated balance sheet as of June 30,
2001.  A  pre-tax  loss  of  $0.2  million  was  recognized  in  the  condensed
consolidated  statements  of  operations for the three and six months ended June
30,  2001.

     Interest  Rate Risk - The Company, from time to time, may use interest rate
swap  agreements to manage the effect of interest rate changes on future income.
Interest  rate  swaps  are  designated  as a hedge of underlying future interest
payments.  These  agreements  involve  the exchange of amounts based on variable
interest  rates  and amounts based on a fixed interest rate over the life of the
agreement without an exchange of the notional amount upon which the payments are
based.  The  interest  rate  differential to be received or paid on the swaps is
recognized  over  the  lives  of the swaps as an adjustment to interest expense.
Gains  and  losses on terminations of interest rate swap agreements are deferred
as  other  comprehensive  income  and  recognized  as  an adjustment to interest
expense  related  to  the  debt over the remaining term of the original contract
life  of the terminated swap agreement. In the event of the early extinguishment
of  a  designated  debt obligation, any realized or unrealized gain or loss from
the  swap  would  be  recognized  in  income.

     In  March  2001,  the  Company  entered  into interest rate swap agreements
relating  to  the  anticipated  private  placement  of  $700.0 million aggregate
principal amount of 6.625% Notes due April 15, 2011 and $600.0 million aggregate
principal  amount  of  7.5%  Notes due April 15, 2031 in the notional amounts of
$200.0  million  and  $400.0  million,  respectively.  The  objective  of  each
transaction  was  to  hedge  a  portion  of  the forecasted payments of interest
resulting  from  the anticipated issuance of fixed rate debt. Under each forward
start  date  interest  swap, the Company paid a LIBOR swap rate and received the
floating  rate  of  three-month  LIBOR.  Hedge effectiveness was assessed by the
dollar-offset  method  by  comparing the changes in expected cash flows from the
hedges  with the change in the LIBOR swap rates.  No ineffectiveness occurred as
changes  in  the expected payment under the forward start date swaps were highly
effective  in  offsetting  changes  in  the expected fair value of the debt cash
flows due to changes in the LIBOR swap rates. The hedge transactions were closed
out  on  March  30,  2001.  The  unrealized gain on the hedge transactions ($4.0
million  as  of June 30, 2001) is a component of Accumulated Other Comprehensive
Income  in  the condensed consolidated balance sheet as of June 30, 2001 and had
no  material  effect  on  the  results of operations for the three or six months
ended  June 30, 2001. This unrealized gain is being recognized as a reduction of
interest  expense  over the life of the 7.5% Notes beginning in April 2001. Over
the  next  12-month  period,  the  amount  of  gain  to  be  recognized  will be
approximately  $0.3  million.

     In June 2001, the Company entered into interest rate swap agreements with a
group  of  banks  relating  to  the  issuance  of  the  $700.0 million aggregate
principal  amount  of  6.625%  Notes  due April 15, 2011.  The objective of each
transaction  is to protect the debt against changes in fair value due to changes
in the benchmark interest rate.  Under each interest rate swap, the Company will
receive  the  fixed rate equal to the coupon of the hedged item and will pay the
floating  rate  (LIBOR)  plus  a  weighted-average spread of 49.56 basis points,
which  is  designated the benchmark interest rate, on October 15 and April 15 of
each  year  until  maturity on April 15, 2011. The hedge is considered perfectly
effective  against  changes  in the fair value of the debt due to changes in the
benchmark  interest rate over its term. As a result, the shortcut method applies
and  there  is  no  need to periodically reassess the effectiveness of the hedge
during  the  term  of  the  hedge.

NOTE 8 - SEGMENTS

     Prior  to  the  R&B  Falcon  merger,  the  Company operated in one industry
segment. As a result of acquiring shallow and inland water drilling units in the
R&B  Falcon  merger,  the  Company's  operations  have  been aggregated into two
reportable  segments:  (i)  International  and  U.S.  Floater  Contract Drilling
Services and (ii) Gulf of Mexico Shallow and Inland Water. The International and
U.S.  Floater  Contract Drilling Services segment consists of high-specification
floaters  (drillships  and  semisubmersibles), other floaters, non-U.S. jackups,
other  mobile  offshore drilling units, other assets used in support of offshore
drilling  activities  and  other  offshore support services.  The Gulf of Mexico
Shallow  and  Inland  Water  segment  consists of the Gulf of Mexico jackups and
submersible  drilling  rigs  and  the  U.S.  inland drilling barges. The Company
provides  services  with  different  types  of  drilling  equipment  in  several
geographic  regions.  The  location  of the Company's rigs and the allocation of
resources  to build or upgrade rigs is determined by the activities and needs of
customers.


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

     Operating  revenues  and  income before income taxes, minority interest and
extraordinary  item  by  segment  are  as  follows:

<TABLE>
<CAPTION>
                                                               Three Months Ended  Six Months Ended
                                                                    June 30,           June 30,
                                                               ------------------  -----------------
                                                                 2001      2000       2001     2000
                                                               --------  --------  ---------  ------
                                                                           (In millions)
<S>                                                            <C>       <C>       <C>        <C>
Operating Revenues
   International and U.S. Floater Contract Drilling Services   $ 613.6   $  299.2  $1,087.6   $600.1
   Gulf of Mexico Shallow and Inland Water                       138.9          -     220.9        -
   Elimination of intersegment revenues                           (0.3)         -      (6.2)       -
                                                               --------  --------  ---------  ------
       Total Operating Revenues                                $ 752.2   $  299.2  $1,302.3   $600.1
                                                               --------  --------  ---------  ------

Income Before Income Taxes, Minority Interest and
 Extraordinary Item
   International and U.S. Floater Contract Drilling Services   $ 160.9   $   47.2  $  236.8   $ 89.6
   Gulf of Mexico Shallow and Inland Water                        31.9          -      45.2        -
                                                               --------  --------  ---------  ------
                                                                 192.8       47.2     282.0     89.6
Unallocated general and administrative expense                   (14.6)         -     (29.4)       -
Unallocated other income (expense)                               (59.1)         -     (91.5)       -
                                                               --------  --------  ---------  ------
       Total Income Before Income Taxes, Minority Interest
       and Extraordinary Item                                  $ 119.1   $   47.2  $  161.1   $ 89.6
                                                               ========  ========  =========  ======
</TABLE>

       Total assets by segment are as follows:

<TABLE>
<CAPTION>
                                                               June 30,   December 31,
                                                                 2001         2000
                                                               ---------  ------------
                                                                    (In millions)
<S>                                                            <C>        <C>
   International and U.S. Floater Contract Drilling Services   $13,697.7  $    6,358.8
   Gulf of Mexico Shallow and Inland Water                       2,891.6             -
   Unallocated Corporate                                           199.2             -
                                                               ---------  ------------
       Total Assets                                            $16,788.5  $    6,358.8
                                                               =========  ============
</TABLE>

     Prior to the R&B Falcon merger on January 31, 2001, the Company operated in
one  industry  segment  and, as such, there were no unallocated assets or income
items  for  periods  prior  to  the  merger.

NOTE 9 - ASSET DISPOSITIONS

     In  February  2001, Sea Wolf Drilling Limited ("Sea Wolf"), a joint venture
in which the Company holds a 25 percent interest, sold two semisubmersible rigs,
the  Drill  Star  and  Sedco Explorer, to Pride International, Inc. In the first
quarter  of  2001,  the  Company  recognized the accelerated amortization of the
deferred  gain  related to the Sedco Explorer of $18.5 million which is included
in  Gain  from  Sale  of  Assets. The Company will continue to operate the Drill
Star,  which has been renamed the Pride North Atlantic, under a bareboat charter
agreement  until  approximately  September  2001.  The amortization of the Drill
Star's  deferred  gain  was  accelerated and produced incremental gains totaling
$13.7  million  and  $22.7  million  for the three and six months ended June 30,
2001,  respectively,  which  is  included  as  a  reduction  in  operating  and
maintenance  expense, and is expected to produce an estimated $13.5 million gain
in  the  third  quarter of 2001. The Company's bareboat charter with Sea Wolf on
the  Sedco  Explorer  was  terminated  effective  June  2000.

     During  the  six  months  ended  June  30,  2001,  the Company sold certain
non-strategic  assets acquired in the R&B Falcon merger and certain other assets
held for sale. The Company received net proceeds of approximately $29.2 million.
These  sales  had  no  material  effect  on the Company's results of operations.

     In  February  2000,  the  Company  sold its coiled tubing drilling services
business  to  Schlumberger  Limited.  The  net proceeds from the sale were $24.5
million  and  no gain or loss was recognized on the sale. The Company's interest
in  its  Transocean-Nabors  Drilling  Technology  LLC  and  DeepVision LLC joint
ventures  were  excluded  from  the  sale.


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

NOTE 10 - EARNINGS PER SHARE

     The  reconciliation  of  the  numerator  and  denominator  used  for  the
computation  of  basic  and  diluted  earnings  per  share  is  as  follows:

<TABLE>
<CAPTION>
                                                          Three Months Ended  Six Months Ended
                                                                June 30,         June 30,
                                                          ------------------  ----------------
                                                            2001      2000     2001     2000
                                                          --------  --------  -------  -------
                                                          (In millions, except per share data)

<S>                                                       <C>       <C>        <C>      <C>
Income Before Extraordinary Item                          $  85.8   $   35.9  $116.3   $  68.4
Loss on Extraordinary Item, Net of Tax                      (17.3)         -   (17.3)        -
                                                          --------  --------  -------  -------
Net Income                                                $  68.5   $   35.9  $ 99.0   $  68.4
                                                          ========  ========  =======  =======

Weighted Average Shares Outstanding
    Shares for basic earnings per share                     318.2      210.4   299.5     210.3
    Effect of dilutive securities:
      Employee stock options and unvested stock grants        3.9        1.3     3.4       1.1
      Warrants to purchase ordinary shares                    2.9          -     2.4         -
                                                          --------  --------  -------  -------
Adjusted weighted-average shares and assumed
  conversions for diluted earnings per share                325.0      211.7   305.3     211.4
                                                          ========  ========  =======  =======
Basic Earnings Per Share
  Income Before Extraordinary Item                        $  0.27   $   0.17  $ 0.39   $  0.33
  Loss on Extraordinary Item, Net of Tax                    (0.05)         -   (0.06)        -
                                                          --------  --------  -------  -------

Net Income                                                $  0.22   $   0.17  $ 0.33   $  0.33
                                                          ========  ========  =======  =======
Diluted Earnings Per Share
  Income Before Extraordinary Item                        $  0.26   $   0.17  $ 0.38   $  0.32
  Loss on Extraordinary Item, Net of Tax                    (0.05)         -   (0.06)        -
                                                          --------  --------  -------  -------

  Net Income                                              $  0.21   $   0.17  $ 0.32   $  0.32
                                                          ========  ========  =======  =======
</TABLE>

     Ordinary  shares subject to issuance pursuant to the conversion features of
the  convertible  debentures (See Note 5) 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.

NOTE 11 - CONTINGENCIES

     During  1997,  Kvaerner  Installasjon  a.s ("Kvaerner") in Norway performed
modification  and  refurbishment  work  on  a high-specification semisubmersible
drilling  rig,  the  Transocean Leader, and a dispute arose over the amount owed
with  respect  to  such  work.  A  letter  of credit had been posted pending the
resolution  of the dispute by agreement between the parties or by final judgment
under  the Norwegian judicial process. In September 1998, the Company instituted
an  action  in  the Norwegian courts alleging that it owed no additional amounts
and  that  the  letter  of  credit  should  be released. In March 1999, Kvaerner
commenced proceedings in the Norwegian courts seeking judgment for approximately
$33.0  million  plus  interest.  The  Company  vigorously  denied  the  material
allegations of Kvaerner's petition and the matter was tried before the Norwegian
courts  during  the fourth quarter of 2000. The Company settled the case in June
2001,  the  terms  of  which  have  been  reflected  in the Company's results of
operations  for  the  second  quarter  of  2001.  The  settlement did not have a
material  adverse  effect  on  its  business or consolidated financial position.

     The  Company  is  a defendant in Bryant, et al. v. R&B Falcon Drilling USA,
Inc.,  et  al.  in the United States District Court for the Southern District of
Texas,  Houston  Division.  R&B  Falcon  Drilling USA is a wholly owned indirect
subsidiary  of  R&B  Falcon. In this suit, the plaintiffs allege that R&B Falcon
Drilling  USA,  the  Company and a number of other offshore drilling contractors
with  operations  in  the  U.S.  Gulf  of Mexico have engaged in a conspiracy to
depress  wages  and  benefits  paid to certain of their offshore employees.  The
plaintiffs  contend that this alleged conduct violates federal antitrust law and
constitutes unfair trade practices and wrongful employment acts under state law.
The  plaintiffs  sought  treble  damages, attorneys' fees and costs on behalf of
themselves  and  an  alleged class of offshore workers, along with an injunction
against  exchanging  certain  wage  and  benefit information with other offshore


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

drilling  contractors  named  as defendants. In May 2001, the Company reached an
agreement  in  principle  with  the  plaintiffs'  counsel  to settle all claims,
pending  Court  approval  of  the settlement. In July 2001, before the Court had
considered  the  proposed settlement, the case, along with a number of unrelated
cases  also  pending  in  the  federal  court in Galveston, was transferred to a
federal judge sitting in Houston as a docket equalization measure.  The judge to
whom  the  case  was transferred has not yet indicated when he will consider the
proposed  settlement.  The  terms  of  the settlement have been reflected in the
Company's  results  of  operations for the first quarter of 2001. The settlement
did not have a material adverse effect on its business or consolidated financial
position.

     The Company has certain actions or claims pending that have been previously
discussed  and reported in the Company's Annual Report on Form 10-K for the year
ended  December 31, 2000 and Quarterly Report on Form 10-Q for the quarter ended
March  31,  2001  and  the Company's other reports filed with the Securities and
Exchange  Commission.  There  have  been  no  material  developments  in  these
previously  reported matters. The Company and its subsidiaries are involved in a
number of other lawsuits, all of which have arisen in the ordinary course of the
Company's business. The Company does not believe that the ultimate liability, if
any,  resulting  from  any  such  other  pending litigation will have a material
adverse  effect  on  its  business  or  consolidated  financial  position.

     The  Company  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 the Company's belief 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.

NOTE 12 - SUBSEQUENT EVENT

     Termination  of  Contract - In July 2001, Marathon Oil Company ("Marathon")
terminated  the  18-month  contract  for  the  Cajun Express in the U.S. Gulf of
Mexico  allegedly  because  of  downtime  relating to equipment performance. The
Company  has  initiated  arbitration proceedings against Marathon as a result of
the  contract  termination.


                                       15
<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 audited
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's  Annual  Report  on  Form  10-K  for the year ended December 31, 2000.

OVERVIEW

     Transocean  Sedco  Forex  Inc.  (together  with  its  subsidiaries  and
predecessors,  unless  the  context  requires  otherwise, the "Company", "we" or
"our")  is  a  leading  international  provider  of  offshore  and inland marine
contract  drilling  services  for  oil  and gas wells.  As of July 31, 2001, the
Company  owned,  had  partial  ownership  interests in or operated more than 170
mobile offshore and barge drilling units (including one under construction). The
Company's  active  fleet  consists  of  32 high-specification floaters, 32 other
floaters, 55 jackup rigs, 36 drilling barges, five tenders and three submersible
rigs.  In  addition,  the fleet includes three mobile offshore production units,
one  multi-purpose  service  vessel,  two  platform drilling rigs and three land
rigs.  The Company also has a fleet of land and barge drilling rigs in Venezuela
consisting  of  eight  wholly  owned and two partially owned land rigs and three
lake barges. The Company contracts its drilling rigs, related equipment and work
crews  primarily  on  a  dayrate  basis  to  drill  oil  and  gas  wells.

     On  January  31,  2001,  the  Company  completed a merger transaction ("R&B
Falcon  merger")  with R&B Falcon Corporation ("R&B Falcon"). As a result of the
merger,  R&B  Falcon  became an indirect wholly owned subsidiary of the Company.
The  merger  was accounted for as a purchase, with the Company as the accounting
acquiror.  The  condensed  consolidated  financial statements for the six months
ended  June  30,  2001 include five months of operating results for R&B Falcon.

     Prior  to  the  R&B  Falcon  merger,  the  Company operated in one industry
segment. As a result of acquiring shallow and inland water drilling units in the
R&B  Falcon  merger,  the  Company's  operations  have  been aggregated into two
reportable  segments:  (i)  International  and  U.S.  Floater  Contract Drilling
Services and (ii) Gulf of Mexico Shallow and Inland Water. The International and
U.S.  Floater  Contract Drilling Services segment consists of high-specification
floaters  (drillships  and  semisubmersibles), other floaters, non-U.S. jackups,
other  mobile  offshore drilling units, other assets used in support of offshore
drilling  activities  and  other  offshore  support services. The Gulf of Mexico
Shallow  and  Inland  Water  segment  consists of the Gulf of Mexico jackups and
submersible  drilling  rigs  and  the  U.S.  inland  drilling  barges.

OPERATING  RESULTS

     QUARTER ENDED JUNE 30, 2001 COMPARED TO QUARTER ENDED JUNE 30, 2000

     Operating  revenues  for  the  three months ended June 30, 2001 were $752.2
million  compared  to  $299.2 million for the same period in 2000. International
and  U.S.  Floater  Contract  Drilling  Services  operating revenues were $613.6
million  for the three months ended June 30, 2001 compared to $299.2 million for
the same period in 2000, an increase of $314.4 million, or 105 percent. Revenues
relating  to  former R&B Falcon operations in this segment subsequent to the R&B
Falcon  merger  totaled $213.6 million for the three months ended June 30, 2001.
Revenues  for  the  three months ended June 30, 2001 included $62.4 million from
five  rigs  that  were  under  construction  during the same period in 2000. The
increase in Gulf of Mexico Shallow and Inland Water operating revenues to $138.6
million  resulted  from  the  R&B  Falcon  merger.

     Operating  and maintenance expense for the three months ended June 30, 2001
was  $394.3  million  compared  to  $184.0  million for the same period in 2000.
International  and  U.S.  Floater  Contract Drilling Services operating expenses
were  $326.1 million for the three months ended June 30, 2001 compared to $184.0
million  for  the  same  period  in  2000,  an increase of $142.1 million, or 77
percent.  The  increase  was primarily a result of the R&B Falcon merger and the
activation  of  six  newbuild  drilling  units since the second quarter of 2000.
Operating  and  maintenance expense for the three months ended June 30, 2001 was
reduced by $13.7 million related to the accelerated amortization of the deferred
gain  on the Drill Star.  See "-Liquidity and Capital Resources-Acquisitions and
Dispositions." The increase in Gulf of Mexico Shallow and Inland Water operating
expenses  to  $68.2 million resulted from the R&B Falcon merger. A large portion
of  operating  and maintenance expense consists of employee-related costs and is
fixed or only semi-variable. Accordingly, operating and maintenance expense does
not  vary  in  direct  proportion  to  activity.

     Depreciation expense was $123.7 million for the three months ended June 30,
2001  compared  to  $58.2 million for the same period in 2000. International and
U.S.  Floater  Contract Drilling Services depreciation expense was $96.8 million
for  the three months ended June 30, 2001 compared to $58.2 million for the same
period  in  2000, an increase of $38.6 million, or 66 percent.  The increase was
primarily  due  to  the  addition  of  the R&B Falcon rigs subsequent to the R&B
Falcon  merger  and depreciation expense in 2001 for six newbuild drilling units
placed  into  service  since  the  second  quarter  of  2000.  This increase was
partially  offset  by  a  reduction  of approximately $6.4 million for the three
months  ended  June  30, 2001 as a result of the Company conforming its policies


                                       16
<PAGE>
related to estimated rig lives after the R&B Falcon merger. The increase in Gulf
of  Mexico  Shallow  and  Inland  Water  depreciation  expense  to $26.9 million
resulted  from  the  R&B  Falcon  merger.

     Goodwill  amortization expense was $41.4 million for the three months ended
June  30,  2001  compared  to  $6.7  million  for  the  same  period  in  2000.
International  and  U.S. Floater Contract Drilling Services amortization expense
was  $30.3  million  for  the  three months ended June 30, 2001 compared to $6.7
million  for  the  same  period  in 2000. This increase of $23.6 million, or 352
percent,  was due to additional goodwill amortization expense resulting from the
R&B  Falcon  merger.  The  increase  in  Gulf of Mexico Shallow and Inland Water
goodwill  amortization  expense  to  $11.1  million resulted from the R&B Falcon
merger.

     General and administrative expense for the three months ended June 30, 2001
was  $14.6  million  compared  to  $9.4  million for the same period in 2000, an
increase  of $5.2 million, or 55 percent. The increase is primarily attributable
to  the  R&B  Falcon  merger  and reflects the costs to manage a larger and more
complex  organization.

     Other  expense  was  $59.1 million for the three months ended June 30, 2001
compared to other income of $4.0 million for the same period in 2000, a decrease
in  other income of $63.1 million. Interest expense, net of amounts capitalized,
was  $66.8 million and $0.3 million for the three months ended June 30, 2001 and
2000,  respectively.  Total  interest  expense  was  $76.2 million for the three
months  ended  June  30,  2001  compared to $23.1 million for the same period in
2000, an increase of $53.1 million, or 230 percent. The increase during 2001 was
due  to  higher  debt levels arising from the additional debt assumed in the R&B
Falcon  merger  and  borrowings  to  fund  newbuild construction projects. Total
interest  capitalized relating to construction projects was $9.4 million for the
three  months  ended June 30, 2001 compared to $22.8 million for the same period
in  2000,  a  decrease  of  $13.4  million,  or  59  percent, resulting from the
completion  of  six rigs since the second quarter of 2000. Equity in earnings of
joint  ventures  increased  by  $1.9 million for the three months ended June 30,
2001  due  primarily  to  equity  in  joint  ventures acquired in the R&B Falcon
merger.  Interest  income  was  $4.7 million for the three months ended June 30,
2001  compared  to $2.0 million for the same period in 2000, an increase of $2.7
million,  or  135  percent.  The increase is primarily due to interest earned on
secured  contingent  notes  acquired as part of the R&B Falcon merger and higher
average  cash  balances for the three months ended June 30, 2001 compared to the
same  period  in  2000.

     Provision  for  income  taxes  for the three months ended June 30, 2001 was
$32.2 million compared to $11.1 million for the same period in 2000. The Company
operates internationally and provides for income taxes based on the tax laws and
rates  in  the  countries in which it operates and income is earned. There is no
expected  relationship  between the provision for income taxes and income before
income  taxes.

     During the three months ended June 30, 2001, the Company recognized a $17.3
million  extraordinary  loss, net of tax, related to the early extinguishment of
debt. See "- Liquidity and Capital Resources-Debt."

     SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

     Operating  revenues  for  the  six months ended June 30, 2001 were $1,302.3
million  compared  to  $600.1 million for the same period in 2000. International
and  U.S.  Floater  Contract  Drilling Services operating revenues were $1,087.6
million  for  the  six months ended June 30, 2001 compared to $600.1 million for
the  same period in 2000, an increase of $487.5 million, or 81 percent. Revenues
relating  to  former R&B Falcon operations in this segment subsequent to the R&B
Falcon  merger  totaled  $369.7  million for the six months ended June 30, 2001.
Revenues  for  the  six  months ended June 30, 2001 included $103.8 million from
five  rigs that were under construction during the same period in 2000. Revenues
for  the  six  months  ended  June  30, 2000 included a cash settlement of $25.1
million  relating  to  an agreement with a unit of BP to cancel the remaining 14
months  of  firm  contract  time  on  the  semisubmersible  rig,  the Transocean
Amirante.  The  increase  in  Gulf  of Mexico Shallow and Inland Water operating
revenues  to  $214.7  million  resulted  from  the  R&B  Falcon  merger.

     Operating  and  maintenance  expense for the six months ended June 30, 2001
was  $745.2  million  compared  to  $369.7  million for the same period in 2000.
International  and  U.S.  Floater  Contract Drilling Services operating expenses
were  $634.1  million  for the six months ended June 30, 2001 compared to $369.7
million  for  the  same  period  in  2000,  an increase of $264.4 million, or 72
percent.  The  increase  was primarily a result of the R&B Falcon merger and the
activation  of  six  newbuild  drilling  units since the second quarter of 2000.
Operating  and  maintenance  expense  for the six months ended June 30, 2001 was
reduced by $22.7 million related to the accelerated amortization of the deferred
gain  on the Drill Star.  See "-Liquidity and Capital Resources-Acquisitions and
Dispositions." The increase in Gulf of Mexico Shallow and Inland Water operating
expenses  to $111.0 million resulted from the R&B Falcon merger. A large portion
of  operating  and maintenance expense consists of employee-related costs and is
fixed or only semi-variable. Accordingly, operating and maintenance expense does
not  vary  in  direct  proportion  to  activity.

     Depreciation  expense  was $223.1 million for the six months ended June 30,
2001  compared  to $116.1 million for the same period in 2000. International and
U.S.  Floater Contract Drilling Services depreciation expense was $177.5 million
for  the  six months ended June 30, 2001 compared to $116.1 million for the same
period  in  2000,  an increase of $61.4 million, or 53 percent. The increase was


                                       17
<PAGE>
primarily  due  to  the  addition  of  the R&B Falcon rigs subsequent to the R&B
Falcon  merger  and depreciation expense in 2001 for six newbuild drilling units
placed  into  service  since  the  second  quarter  of  2000.  This increase was
partially  offset  by  a  reduction  of  approximately $10.6 million for the six
months  ended  June  30, 2001 as a result of the Company conforming its policies
related to estimated rig lives after the R&B Falcon merger. The increase in Gulf
of  Mexico  Shallow  and  Inland  Water  depreciation  expense  to $45.6 million
resulted  from  the  R&B  Falcon  merger.

     Goodwill  amortization  expense  was $71.6 million for the six months ended
June  30,  2001  compared  to  $13.3  million  for  the  same  period  in  2000.
International  and  U.S. Floater Contract Drilling Services amortization expense
was  $53.0  million  for  the  six  months ended June 30, 2001 compared to $13.3
million  for  the  same  period  in 2000. This increase of $39.7 million, or 298
percent,  was due to additional goodwill amortization expense resulting from the
R&B  Falcon  merger.  The  increase  in  Gulf of Mexico Shallow and Inland Water
goodwill  amortization  expense  to  $18.6  million resulted from the R&B Falcon
merger.

     General  and  administrative expense for the six months ended June 30, 2001
was  $29.4  million  compared  to  $22.5 million for the same period in 2000, an
increase  of $6.9 million, or 31 percent. The increase is primarily attributable
to  the  R&B  Falcon  merger  and reflects the costs to manage a larger and more
complex  organization.

     During  the  six  months  ended June 30, 2001, the Company recognized $18.5
million related to the accelerated amortization of the deferred gain on the sale
of  the  Sedco  Explorer (see "-Liquidity and Capital Resources-Acquisitions and
Dispositions").  There  was  no comparable item in the first six months of 2000.

     Other  expense  was  $91.5  million  for the six months ended June 30, 2001
compared to other income of $8.8 million for the same period in 2000, a decrease
in other income of $100.3 million. Interest expense, net of amounts capitalized,
was  $104.0  million  and  $0.3 for the six months ended June 30, 2001 and 2000,
respectively. Total interest expense was $134.5 million for the six months ended
June 30, 2001 compared to $46.2 million for the same period in 2000, an increase
of  $88.3  million,  or  191 percent. The increase during 2001 was due to higher
debt  levels  arising  from the additional debt assumed in the R&B Falcon merger
and  borrowings  to  fund  newbuild  construction  projects.  Total  interest
capitalized  relating  to  construction  projects  was $30.5 million for the six
months  ended  June  30,  2001  compared to $45.9 million for the same period in
2000,  a decrease of $15.4 million, or 34 percent, resulting from the completion
of  six  rigs since the second quarter of 2000. Interest income was $8.3 million
for  the  six  months  ended June 30, 2001 compared to $2.9 million for the same
period  in  2000,  an  increase of $5.4 million, or 186 percent. The increase is
primarily due to interest earned on secured contingent notes acquired as part of
the  R&B Falcon merger and higher average cash balances for the six months ended
June  30,  2001  compared  to  the  same  period  in  2000.

     Provision for income taxes for the six months ended June 30, 2001 was $42.3
million  compared  to  $20.8  million  for  the same period in 2000. The Company
operates internationally and provides for income taxes based on the tax laws and
rates  in  the  countries in which it operates and income is earned. There is no
expected  relationship  between the provision for income taxes and income before
income  taxes.

     During  the  six months ended June 30, 2001, the Company recognized a $17.3
million  extraordinary  loss, net of tax, related to the early extinguishment of
debt. See "- Liquidity and Capital Resources - Debt."

FINANCIAL  CONDITION

     JUNE 30, 2001 COMPARED TO DECEMBER 31, 2000

     Total  assets  at June 30, 2001 were $16.8 billion compared to $6.4 billion
at  December 31, 2000. International and U.S. Floater Contract Drilling Services
assets  were $13.7 billion at June 30, 2001 compared to $6.4 billion at December
31,  2000,  an  increase  of  $7.3  billion,  or  114  percent. The increase was
primarily  due  to  the addition of R&B Falcon's assets at fair value on January
31,  2001 and goodwill related to the R&B Falcon merger. The increase in Gulf of
Mexico  Shallow and Inland Water assets to $2.9 billion was primarily due to the
addition  of  R&B Falcon's assets at fair value on January 31, 2001 and goodwill
related  to  the  R&B  Falcon  merger.

RESTRUCTURING  CHARGES

     In  conjunction  with  the  R&B  Falcon  merger,  the Company established a
liability  of $16.3 million for the estimated severance related costs associated
with  the  involuntary  termination  of  569  R&B  Falcon  employees pursuant to
management's  plan  to  consolidate  operations  and  administrative  functions
post-merger.  Through  June  30, 2001, approximately $9.9 million of these costs
were  paid.  The  Company  anticipates  that  substantially all of the remaining
amounts  will  be  paid  by  the  end  of  2001.


                                       18
<PAGE>
OUTLOOK

     Fleet  utilization  and dayrates in both our International and U.S. Floater
Contract  Drilling Services and Gulf of Mexico Shallow and Inland Water business
segments  improved on an overall basis during the second quarter of 2001, driven
by  continued  general stability in world crude oil prices and an active natural
gas  market in the U.S. However, U.S. natural gas prices have recently declined,
and  we  have  seen  some weakness in the gas-driven U.S. drilling markets.  The
international  markets  on the whole improved during the recently ended quarter.
Pro  forma  utilization  measures  noted below have been calculated based on the
combined  fleet  of  Transocean  Sedco Forex and R&B Falcon for the three months
ended  March  31,  2001.

     Within  our  International  and  U.S.  Floater  Contract  Drilling Services
business,  utilization  of  our  high-specification  floaters  (drillships  and
semisubmersibles)  was 86 percent for the second quarter of 2001 compared to pro
forma  utilization of 83 percent for the first quarter of 2001.  Utilization for
the  other  floaters and non-U.S. jackups during the three months ended June 30,
2001  was  84  percent  and  85  percent,  respectively,  compared  to pro forma
utilization of 70 percent and 79 percent, respectively, during the first quarter
of  2001.  Average  dayrates for our high-specification floaters, other floaters
and  non-U.S.  jackups  during the second quarter of 2001 were $141,600, $62,600
and  $44,100,  respectively.  These  dayrates  compare  to $134,000, $59,000 and
$38,400,  respectively,  on  a  pro  forma  basis for the first quarter of 2001.

     Utilization for our jackups and submersibles included in the Gulf of Mexico
Shallow  and  Inland  Water segment was 72 percent during the three months ended
June  30,  2001,  while the inland barge utilization was 71 percent.  During the
first  quarter  of  2001,  jackup  and submersible and inland drilling barge pro
forma utilization was 74 percent and 67 percent, respectively.  Average dayrates
during the second quarter of 2001 for the segment's jackups and submersibles and
inland barges were $39,800 and $23,100, respectively.  These dayrates compare to
$35,400 and $19,100, respectively, on a pro forma basis for the first quarter of
2001.

     Scheduled  maintenance  and  repairs  affected  our  utilization during the
second  quarter of 2001.  We also expect to experience approximately 300 days of
planned  shipyard  time  (excluding  the newbuild rig under construction) in the
third quarter of 2001. The Sedco Energy was placed into service during May 2001.
The  Sedco  Express  and the Cajun Express were placed into service during April
2001.  We  expect  that  our one remaining newbuild unit, the Deepwater Horizon,
will  be  completed  and  commence  operations  in  the  third  quarter of 2001.

     We are currently witnessing reduced customer spending in the Gulf of Mexico
shallow water region and we believe that the demand for U.S. jackups will remain
soft  in  the  short  term. While the market for U.S. inland drilling barges has
been  largely  unaffected to date, demand could deteriorate if lower natural gas
prices  persist.  The  market  for  deepwater  drilling  rigs  remains stable at
present  but  we  are  witnessing  a  steady  level of rig farmout activity from
exploration  and  production  companies with existing deepwater rig contracts as
these companies re-evaluate near-term deepwater drilling equipment requirements.
This  process  could  negatively  affect  future  deepwater  rig utilization and
average  dayrates.  If  crude  prices remain stable, we expect the international
drilling  markets  for  other  floaters  and jackups to remain relatively strong
through  the  end  of  the  year.

     The  contract  drilling market historically has been highly competitive and
cyclical,  and  we  are  unable  to  predict  the extent to which current market
conditions  will  continue.  A  decline in oil or gas prices could reduce demand
for  our  contract  drilling  services and adversely affect both utilization and
dayrates.

     We  are experiencing higher levels of expenses during 2001 compared to 2000
due  to  a variety of factors, including, but not limited to, those described in
this  paragraph.  We expect to complete our remaining major construction project
by the end of the third quarter of 2001, resulting in increased interest expense
as interest on the projects completed this year is no longer capitalized.  Also,
the planned shipyard maintenance and upgrade projects are resulting in increased
expenses  during  2001.  We  also  replaced  previous employment agreements with
certain  executives  which  contained change in control provisions that had been
triggered  by  the  Sedco  Forex Holdings Limited merger ("Sedco Forex merger").
These  new agreements will require us to recognize approximately $5.8 million in
additional  compensation  expense  during  2001  (approximately $1.5 million per
quarter).  In addition, the labor market for rig workers, especially in the U.S.
Gulf  of Mexico, has tightened. If this trend continues, we will likely continue
to  incur  higher  compensation  expense  to  attract  and  retain qualified rig
personnel.  Finally,  we  may  incur  additional compensation expense due to the
harmonization  of  compensation  packages  between  the  former  R&B  Falcon and
Transocean  Sedco  Forex  workforces.

     We  are  proceeding  with  plans  to  sell  a  number of assets during 2001
(see"-Liquidity and Capital Resources-Acquisitions and Dispositions"), including
the  disposition  of our land and barge drilling business in Venezuela, although
these  sales  will be dependent upon the realization of an acceptable sale price
and  we  likely  will  not conclude all sales in the current year.  We currently
expect  the proceeds of these sales to be between $400 million and $500 million.
The  actual proceeds may differ substantially from those expectations and we may
decide  to  discontinue our sales efforts.  Most of the assets which are planned
to  be  sold  were  marked to fair value on our books in connection with the R&B
Falcon  merger  pursuant  to purchase accounting rules.  Consequently, we do not


                                       19
<PAGE>
expect  sales  of  those  assets  to  have  a  material effect on our results of
operations. During the fourth quarter of 2001, we expect to recover loss of hire
proceeds  associated  with  a  downtime  claim  on  the  Jack  Bates.

     On  August  1,  2001, approximately 52 percent of our total mobile offshore
drilling unit fleet days were committed for the remainder of 2001 and 21 percent
for  the  year  2002.

LIQUIDITY AND CAPITAL RESOURCES

     SOURCES AND USES OF CASH

     Cash  flows  provided  by  operations were $51.2 million for the six months
ended  June  30,  2001, compared to $84.0 million for the same period in 2000, a
decrease of $32.8 million.  Cash flows from net income items were $101.4 million
higher and cash used for working capital items was $134.2 million higher for the
six  months  ended  June  30,  2001  as  compared  to  the  same period in 2000.

     Cash  flows  used  in  investing  activities were $82.9 million for the six
months  ended  June  30, 2001, compared to $277.7 million for the same period in
2000,  a  decrease of $194.8 million.  During 2001, the Company received cash in
connection  with  the R&B Falcon merger of $264.7 million.  No such amounts were
received  during  2000.  Capital  expenditures  relating to rig construction and
upgrade  projects  increased  by $64.0 million and the Company paid merger costs
related to the R&B Falcon merger of $24.5 million. The Company also received net
proceeds  of  $16.8  million  from  the sale of securities and proceeds from the
disposal  of assets increased $25.8 million due to rig sales in 2001. During the
first  six  months  of  2000, the Company received net proceeds of $24.9 million
from  the  sale  of  its  coiled  tubing  drilling  services  business.

     Cash flows provided by financing activities were $105.9 million for the six
months  ended  June  30, 2001, compared to $197.3 million for the same period in
2000,  a  decrease  of $91.4 million. During 2001, the Company had a decrease in
net  repayments  under  its  revolving  credit  agreements of $54.9 million, net
borrowings of $60.3 million under its commercial paper program, early repayments
of  debt  instruments  of  $1,457.9  million and net proceeds from other debt of
$1,693.5  million  primarily due to the issuance of the 6.625% Notes, 7.5% Notes
and  1.5% Convertible Debentures in the second quarter of 2001. During the first
six  months  of  2000,  the  Company  had net proceeds from other debt of $489.2
million  from  the  issuance of the zero coupon convertible debentures partially
offset  by  the repayment of its revolving credit agreement and by repayments on
its  secured  loan  agreement.

     CAPITAL  EXPENDITURES

     Capital  expenditures, including capitalized interest, totaled $372 million
during  the  six months ended June 30, 2001. During 2001, the Company expects to
spend  approximately  $565  million  on  its  existing fleet, expanded corporate
infrastructure, completion of major construction projects, major upgrades to the
Discoverer 534 and Sedco 710 and the conversion of the Sedco 135D to an offshore
production  facility.  A  substantial  majority  of  the capital expenditures is
related  to  the  International  and  U.S.  Floater  Contract  Drilling Services
segment.

     The  following  table  summarizes  projected  expenditures  (including
capitalized  interest)  during  the  remainder  of  2001 for the Company's major
construction  projects.


                            Expenditures -        Projected          Projected
                           Six Months Ended     Expenditures -    Recorded Value
                             June 30, 2001    Remainder of 2001    At Completion
--------------------------------------------------------------------------------
(In millions)

Sedco Express                     $   33              $   14         $    396
Sedco Energy                          41                   4              398
Cajun Express                         20                   7              327
Discoverer Deep Seas                   9                   6              317
Deepwater Horizon                    153                  22              350
--------------------------------------------------------------------------------
                                  $  256              $   53         $  1,788
================================================================================

     The  Sedco Express was placed into service in April 2001. In February 2001,
a unit of TotalFinaElf terminated the six-year contract for the Sedco Express in
light  of  the rig's delayed delivery beyond December 28, 2000. The Sedco Energy
arrived in Brazil in April 2001 and began a 42-month contract with Texaco in May
2001.  The  Cajun Express was delivered in April 2001, when it began an 18-month
contract  with  Marathon  in  the  U.S.  Gulf  of Mexico. In July 2001, Marathon
terminated  the  18-month  contract  for  the Cajun Express allegedly because of
downtime  relating  to  equipment  performance.  The  Discoverer  Deep  Seas was
delivered  early in the first quarter of 2001 when it began a five-year contract
with  Chevron  in  the  U.S.  Gulf  of  Mexico.  The


                                       20
<PAGE>
Deepwater  Horizon is expected to arrive in the U.S. Gulf of Mexico in the third
quarter of 2001, when it is scheduled to begin a three-year contract with a unit
of  BP.

     As  with  any  major construction project that takes place over an extended
period  of time, the actual costs, the timing of expenditures and delivery dates
may  vary  from  estimates  based  on  numerous  factors, including engineering,
software  or  system  problems, including those relating to the commissioning of
new  designed  equipment,  shortages  of  equipment, materials or skilled labor,
unscheduled  delays  in  the  delivery  of ordered materials and equipment, work
stoppages,  shipyard  unavailability,  weather  interference, unanticipated cost
increases  and  difficulty  in  obtaining  necessary  permits  or approvals. The
Company  intends  to  fund  the  cash  requirements  relating  to  these capital
commitments  through  available  cash  balances,  borrowings  under the SunTrust
Revolving  Credit  Agreements and the Commercial Paper Program referred to below
and  other  commercial  bank  or  capital  market  financings.

     DEBT

     6.625%  Notes  and  7.5%  Notes  - In April 2001, the Company issued $700.0
million aggregate principal amount of 6.625% Notes due April 15, 2011 and $600.0
million aggregate principal amount of 7.5% Notes due April 15, 2031. Interest is
payable  on  April  15  and  October  15  of each year. The Company used the net
proceeds  of  $1,293.5  million  to  redeem the 11% Secured Notes and the 12.25%
Senior  Notes  and  to  fund the tender offer for the 11.375% Secured Notes. The
6.625% Notes and the 7.5% Notes are redeemable at the option of the Company at a
make-whole premium with present values calculated using a discount rate equal to
the  then-prevailing  yield of U.S. treasury notes for a corresponding remaining
period  plus  25  basis  points  and  35 basis points, respectively. The Company
entered  into  interest  rate swaps relating to the 6.625% Notes and 7.5% Notes.
See  Note  7 of the Condensed Consolidated Financial Statements.

     The  indenture  and  supplemental  indentures  pursuant to which the 6.625%
Notes and the 7.5% Notes, as well as the Zero Coupon Convertible Debentures, the
1.5%  Convertible Debentures, the 7.45% Notes and the 8.00% Debentures described
below, were  issued  impose  restrictions  on  certain  actions  by the Company,
including  creating  liens, engaging in sale/leaseback transactions and engaging
in  merger,  consolidation  or  reorganization  transactions.

     Zero  Coupon  Convertible Debentures - In May 2000, the Company issued Zero
Coupon  Convertible  Debentures  due  May  2020 with a face value at maturity of
$865.0  million.  The debentures were issued at a price to the public of $579.12
per  debenture  and accrue original issue discount at a rate of 2.75 percent per
annum  compounded  semiannually  to reach a face value at maturity of $1,000 per
debenture.  The Company will pay no interest on the debentures prior to maturity
and  has  the right to redeem the debentures after three years for a price equal
to  the  issuance  price  plus  accrued  original  issue discount to the date of
redemption.  Each  holder has the right to require the Company to repurchase the
debentures  on  the  third, eighth and thirteenth anniversary of issuance at the
issuance  price  plus accrued original issue discount to the date of repurchase.
The Company may pay this repurchase price with either cash or ordinary shares or
a  combination  of cash and ordinary shares. The debentures are convertible into
ordinary  shares  of  the  Company  at the option of the holder at any time at a
ratio  of  8.1566  shares per debenture subject to adjustments if certain events
take  place.

     Term  Loan Agreement - The Company is a party to a $400.0 million unsecured
five-year  term  loan  agreement  with  a  group  of banks led by SunTrust Bank,
Atlanta,  as  agent,  dated as of December 16, 1999 (the "Term Loan Agreement").
Amounts outstanding under the Term Loan Agreement bear interest at the Company's
option,  at a base rate or London Interbank Offered Rate ("LIBOR") plus a margin
(0.70 percent per annum at June 30, 2001) that varies depending on the Company's
senior  unsecured public debt rating. No principal payments are required for the
first  two years, and the Company may prepay some or all of the debt at any time
without  premium  or  penalty.  The Term Loan Agreement requires compliance with
various  restrictive covenants and provisions customary for an agreement of this
nature  including an interest coverage ratio of not less than 3 to 1, a leverage
ratio  of  not  greater  than  40 percent and limitations on mergers and sale of
substantially all assets, permitted liens, subsidiary and certain other types of
debt,  transactions  with  affiliates  and  sale/leaseback  transactions.

     1.5%  Convertible  Debentures  -  In  May  2001,  the Company issued $400.0
million  aggregate principal amount of 1.5% Convertible Debentures due May 2021.
Interest is payable on May 15 and November 15 of each year. The Company used the
net  proceeds of $400.0 million to redeem the 10.25% Senior Notes and to repay a
portion  of  borrowings  outstanding  under  the  Commercial  Paper Program. The
Company  has  the  right  to  redeem the debentures after five years for a price
equal to 100 percent of the principal amount plus interest accrued up to but not
including  the redemption date. Each holder has the right to require the Company
to repurchase the debentures after five, ten and fifteen years at 100 percent of
the  principal  amount  plus accrued interest up to and including the repurchase
date.  The  Company  may  pay this repurchase price with either cash or ordinary
shares  or  a  combination  of  cash  and  ordinary  shares.  The debentures are
convertible  into  ordinary shares of the Company at the option of the holder at
any  time  at a ratio of 13.8627 shares per $1,000 principal amount debenture (a
conversion  price  of  $72.136  per  ordinary  share), subject to adjustments if
certain  events take place, if the closing sale price per ordinary share exceeds
110  percent of the conversion price for at least 20 trading days in a period of
30  consecutive  trading days ending on the trading day immediately prior to the
conversion  date  or  if  other  specified  conditions  are  met.


                                       21
<PAGE>
     6.5%,  6.75%,  6.95%  and  7.375%  Senior Notes - In April 1998, R&B Falcon
issued  6.5%  Senior  Notes,  6.75%  Senior Notes, 6.95% Senior Notes and 7.375%
Senior  Notes  with  an  aggregate principal amount of $1.1 billion. Interest on
these notes is payable on April 15 and October 15 of each year. These notes have
maturity  dates  of  April  2003,  April  2005,  April  2008  and  April  2018,
respectively.  The  6.75%  Senior  Notes,  the 6.95% Senior Notes and the 7.375%
Senior  Notes are redeemable at the option of R&B Falcon at a make-whole premium
with  present  values  calculated  using  a  discount  rate  equal  to  the
then-prevailing  yield of U.S. treasury notes for a corresponding remaining term
plus  20  basis points for the 6.75% Senior Notes and the 6.95% Senior Notes and
25  basis  points  for  the  7.375%  Senior Notes. The 6.5% Senior Notes are not
redeemable  at  the option of R&B Falcon. At June 30, 2001, approximately $250.0
million,  $350.0  million, $250.0 million and $250.0 million principal amount of
these  notes  was  outstanding,  respectively. These notes were recorded at fair
value  on  January  31,  2001  as  part  of  the  R&B  Falcon  merger.

     9.125%  and  9.5% Senior Notes - In December 1998, R&B Falcon issued 9.125%
Senior  Notes and 9.5% Senior Notes with an aggregate principal amount of $400.0
million.  Interest  on these notes is payable on June 15 and December 15 of each
year.  These  notes  have  maturity  dates  of  December 2003 and December 2008,
respectively.  These  notes  are  redeemable  at  the  option of R&B Falcon at a
make-whole premium with present values calculated using a discount rate equal to
the  then-prevailing  yield of U.S. treasury notes for a corresponding remaining
term  plus  50  basis points. At June 30, 2001, approximately $100.0 million and
$300.0  million  principal  amount of these notes was outstanding, respectively.
These  notes  were recorded at fair value on January 31, 2001 as part of the R&B
Falcon  merger.

     The indentures pursuant to which the 6.5% Senior Notes, 6.75% Senior Notes,
6.95%  Senior  Notes,  7.375% Senior Notes, the 9.125% Senior Notes and the 9.5%
Senior  Notes  were issued impose restrictions on certain actions by R&B Falcon,
including  creating  liens, engaging in sale/leaseback transactions and engaging
in  merger,  consolidation  or  reorganization  transactions.  In  addition, the
indenture  pursuant  to  which the 9.125% Senior Notes and the 9.5% Senior Notes
were  issued  imposes  restrictions on the incurrence of additional indebtedness
and  the  payment  of  dividends  and  other  restricted payments by R&B Falcon.
However, these restrictions are suspended during the period that these notes are
rated  as  investment  grade.

     7.45% Notes and 8.00% Debentures - In April 1997, the Company issued $100.0
million  aggregate principal amount of 7.45% Notes due April 15, 2027 and $200.0
million  aggregate  principal  amount  of  8.00%  Debentures due April 15, 2027.
Holders  of  the  7.45%  Notes may elect to have all or any portion of the 7.45%
Notes repaid on April 15, 2007 at 100 percent of the principal amount. The 7.45%
Notes,  at any time after April 15, 2007, and the 8.00% Debentures, at any time,
are  redeemable  at  the  Company's  option at a make-whole premium with present
values  calculated  using  a discount rate equal to the then-prevailing yield of
U.S.  treasury  notes  for  a corresponding remaining term plus 20 basis points.
Interest  is  payable  on  April  15  and  October  15  of  each  year.

     Nautilus Class A1 and A2 Notes - In August 1999, a subsidiary of R&B Falcon
completed  a  $250.0  million  project  financing  for  the  construction of the
Deepwater  Nautilus.  The  financing  consists of two five-year notes. The first
note  is  for  $200.0  million  and bears interest at 7.31 percent, with monthly
interest  and principal payments. The second note is for $50.0 million and bears
interest at 9.41 percent, with monthly interest payments and a balloon principal
payment  which  is  due  at  maturity  of  the  loan in May 2005. Both notes are
collateralized  by  the  Deepwater  Nautilus and drilling contract revenues from
such rig and are without recourse to R&B Falcon. At June 30, 2001, approximately
$162.7  million  and  $50.0  million  principal  amount  of  these  notes  was
outstanding,  respectively.  These  notes were recorded at fair value on January
31,  2001  as  part  of  the  R&B  Falcon  merger.

     Revolving  Credit Agreement and Commercial Paper Program - The Company is a
party  to  a $550.0 million five-year revolving credit agreement (the "Five-Year
Revolver") and a $250.0 million 364-day revolving credit agreement (the "364-Day
Revolver")  with a group of banks led by SunTrust Bank, Atlanta, as agent, dated
as  of  December  29, 2000 (together the "SunTrust Revolving Credit Agreements")
under  which  the  Company  may  borrow  or  procure credit. On January 4, 2001,
borrowings under the Five-Year Revolver were used to repay debt incurred under a
$540.0  million revolving credit agreement with a group of banks led by ABN AMRO
Bank,  NV,  as  agent. Through June 2001, amounts outstanding under the SunTrust
Revolving  Credit  Agreements  bore interest, at the Company's option, at a base
rate  or  LIBOR plus a margin that was fixed at 0.45 percent per annum under the
Five-Year  Revolver  and  0.475  percent  per  annum under the 364-Day Revolver.
Subsequent  to June 2001, the margin under the Five-Year Revolver will vary from
0.180  percent to 0.700 percent and the margin on the 364-Day Revolver will vary
from  0.190 percent to 0.725 percent depending on the Company's senior unsecured
public  debt  rating.  A utilization fee fixed at 0.125 percent per annum during
the first six months of 2001, and varying thereafter from 0.075 percent to 0.150
percent,  depending  on  the  Company's  senior unsecured public debt rating, is
payable  if  amounts  outstanding  under  the  Five-Year Revolver or the 364-Day
Revolver  are  greater  than  $181.5 million or $82.5 million, respectively. The
SunTrust  Revolving Credit Agreements contain substantially the same restrictive
covenants  as  are  contained  in the Term Loan Agreement. There were no amounts
outstanding  under the SunTrust Revolving Credit Agreements as of June 30, 2001.


                                       22
<PAGE>
     On  March  29,  2001, the Company established its Commercial Paper Program.
The  borrowings  mature on an overnight to one night basis and the average yield
at  the  end  of  the quarter ended June 30, 2001 was 4.32 percent. The SunTrust
Revolving  Credit  Agreements provide liquidity for commercial paper borrowings.

     Secured Rig Financing - At June 30, 2001, the Company had outstanding $59.8
million  of  debt  secured  by  the  Trident IX and Trident 16 (the "Secured Rig
Financing").  Payments  under  these  financing  agreements  include an interest
component  of  7.95  percent for the Trident IX and 7.20 percent for the Trident
16.  The Trident IX facility expires in April 2003 while the Trident 16 facility
expires  in September 2004.  The financing arrangements provide for a call right
on  the  part of the Company to repay the financing prior to expiration of their
scheduled  terms  and in some circumstances a put right on the part of the banks
to  require  the Company to repay the financings. Under either circumstance, the
Company  would  retain  ownership  of  the  rigs.

     6.9%  Notes  -  At June 30, 2001, the Company had outstanding $13.8 million
aggregate  principal  amount  of  unsecured  6.9%  Notes  due  February 15, 2004
originally issued in a private placement. The note purchase agreement underlying
the  6.9%  Notes  requires  compliance  with  various  restrictive covenants and
provisions  customary  for  an agreement of this nature and on substantially the
same  terms  as  those  under  the  Term  Loan  Agreement.

     Redeemed and Repurchased Debt - On March 29, 2001, the Company redeemed all
of  the  approximately  $0.4  million principal amount outstanding 8.875% Senior
Notes at a price equal to 102.2188 percent of the principal amount together with
interest  accrued  to  the  redemption  date.

     On  April  10,  2001, R&B Falcon acquired pursuant to a tender offer all of
the  approximately  $400.0  million  principal amount outstanding 11.375% Senior
Secured  Notes  due 2009 of its affiliate, RBF Finance Co., at 122.51 percent of
principal  amount,  or  $1,225.10  per $1,000 principal amount, plus accrued and
unpaid  interest.  On  April  6,  2001, RBF Finance Co. also redeemed all of the
approximately  $400.0  million  principal  amount outstanding 11% Senior Secured
Notes  due  2006  at  125.282 percent, or $1,252.82 per $1,000 principal amount,
plus  accrued  and  unpaid  interest,  and  R&B  Falcon  redeemed  all  of  the
approximately  $200.0  million  principal amount outstanding 12.25% Senior Notes
due  2006  at  130.675  percent  or  $1,306.75 per $1,000 principal amount, plus
accrued  and unpaid interest. The Company funded the acquisition and redemptions
from  the  issuance  of  the  6.625%  Notes and 7.5% Notes in April 2001. In the
second  quarter  of  2001,  the Company recognized an extraordinary loss, net of
tax,  of $18.9 million ($0.06 per diluted share) on the early retirement of this
debt.

     On  March  30,  2001,  pursuant  to  an  offer  made in connection with the
Company's  acquisition  of  R&B  Falcon, Cliffs Drilling Company, a wholly owned
subsidiary  of  R&B  Falcon  ("Cliffs  Drilling"),  acquired  approximately $0.1
million of the 10.25% Senior Notes due 2003 at an amount equal to 101 percent of
the  principal  amount.  On  May  18,  2001, Cliffs Drilling redeemed all of the
approximately  $200.0  million  principal amount outstanding 10.25% Senior Notes
due  2003  at  102.5  percent,  or  $1,025.00  per $1,000 principal amount, plus
interest  accrued to the redemption date. As a result, the Company recognized an
extraordinary gain, net of tax, of $1.6 million ($0.01 per diluted share) in the
second  quarter  of  2001  relating  to  the  early extinguishment of this debt.

     Depending  on  market conditions, the Company or its affiliates may seek to
repurchase,  redeem  or  otherwise  acquire  additional  debt  securities.

     Letters  of  Credit - The Company had letters of credit outstanding at June
30,  2001 totaling $81.8 million. The total includes a letter of credit relating
to  the  legal dispute with the Indian Customs Department, Mumbai valued at $5.5
million.  In addition, the total includes outstanding letters of credit of $54.2
million  under a $70.0 million letter of credit facility entered into with three
banks.  Under  this  facility,  the  Company  pays  letter of credit fees of 1.5
percent  per annum and commitment fees of 0.375 percent per annum, respectively.
This facility, which matures in April 2004, requires a collateral value ratio of
1.75 times the commitment and is secured by mortgages on five drilling rigs, the
J.W. McLean, J.T. Angel, Randolph Yost, D.R. Stewart and George H. Galloway. The
remaining  letter  of  credit  amount  outstanding  guarantees  various contract
bidding  and  insurance  activities.

     ACQUISITIONS AND DISPOSITIONS

     The Company, from time to time, reviews 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 the Company
of  a  substantial  amount  of  cash  or the issuance of a substantial number of
additional  ordinary  shares  or other securities. The Company 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, the Company, from time to
time,  reviews  possible  dispositions  of  drilling  units.

     In  February  2001, Sea Wolf Drilling Limited ("Sea Wolf"), a joint venture
in which the Company holds a 25 percent interest, sold two semisubmersible rigs,
the  Drill  Star  and Sedco Explorer, to Pride International, Inc.  In the first
quarter  of  2001,  the  Company  recognized  the


                                       23
<PAGE>
accelerated  amortization  of the deferred gain related to the Sedco Explorer of
$18.5  million  which  is included in Gain from Sale of Assets. The Company will
continue  to  operate  the  Drill  Star,  which has been renamed the Pride North
Atlantic, under a bareboat charter agreement until approximately September 2001.
The  amortization of the Drill Star's deferred gain was accelerated and produced
incremental gains totaling $13.7 million and $22.7 million for the three and six
months  ended  June  30, 2001, respectively, which is included as a reduction in
operating and maintenance expense, and is expected to produce an estimated $13.5
million  gain  in the third quarter of 2001. The Company's bareboat charter with
Sea  Wolf  on  the  Sedco  Explorer  was  terminated  effective  June  2000.

     During  the  six  months  ended  June  30,  2001,  the Company sold certain
non-strategic  assets acquired in the R&B Falcon merger and certain other assets
held for sale. The Company received net proceeds of approximately $29.2 million.
These  sales  had  no  material  effect  on the Company's results of operations.

     On  January  31,  2001, the Company completed a merger transaction with R&B
Falcon  in  which an indirect wholly owned subsidiary of the Company merged with
and  into  R&B Falcon. As a result of the merger, R&B Falcon common shareholders
received  0.5  newly  issued  ordinary shares of the Company for each R&B Falcon
share.  The  Company  issued  approximately  106.1  million  ordinary  shares in
exchange  for  the  issued  and  outstanding  shares  of  R&B Falcon and assumed
warrants and options exercisable for approximately 13.2 million ordinary shares.
The  ordinary shares issued in exchange for the issued and outstanding shares of
R&B  Falcon  constituted  approximately  33  percent of the outstanding ordinary
shares  of  the  Company  after  the  merger.

     DERIVATIVE INSTRUMENTS

     The  Company,  from  time  to  time, may enter into a variety of derivative
financial  instruments  in  connection  with  the  management of its exposure to
fluctuations in foreign exchange rates and interest rates.  The Company does 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, which qualify
as accounting hedges, are deferred as other comprehensive income, and recognized
when  the  underlying foreign exchange exposure is realized. Gains and losses on
foreign  exchange  derivative  instruments,  which  do not qualify as hedges for
accounting  purposes,  are  recognized  currently  based on the change in market
value  of  the  derivative instruments. At June 30, 2001, the Company had a $0.5
million  unrealized loss related to foreign exchange contracts which is included
in  Accumulated Other Comprehensive Income in the condensed consolidated balance
sheet  as  of  June  30,  2001.

     The  Company,  from  time to time, may use interest rate swap agreements 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 on the swaps is recognized over the
lives  of  the swaps as an adjustment to interest expense. At June 30, 2001, the
Company  had  a  $4.0  million  unrealized  gain  related  to interest rate swap
agreements  which  is  included in Accumulated Other Comprehensive Income in the
condensed  consolidated  balance  sheet  as  of  June  30,  2001.

     SHELF REGISTRATION

     In  April  2001,  the  Securities  and Exchange Commission ("SEC") declared
effective  the  Company's  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.

     In  May  2001,  under  the shelf registration statement, the Company issued
$400.0 million aggregate principal amount of 1.5% Convertible Debentures due May
15,  2021.

     SOURCES OF LIQUIDITY

     The  Company  believes  that  its cash and cash equivalents, cash generated
from  operations,  borrowings  available  under  its  SunTrust  Revolving Credit
Agreements  and  access  to other financing sources will be adequate to meet its
anticipated short-term and long-term liquidity requirements, including scheduled
debt  repayments  and  capital expenditures for new rig construction and upgrade
projects.

NEW ACCOUNTING PRONOUNCEMENTS

     In  July  2001,  the  Financial  Accounting Standards Board ("FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  141,  Business
Combinations.  SFAS No. 141 requires that all business combinations initiated or
completed  after  June  30,  2001  be accounted for using the purchase method of
accounting. The statement provides for recognition and measurement of intangible
assets separate from goodwill. The Company will adopt SFAS No. 141 as of July 1,
2001.  The  adoption  of the new statement will have no effect on the results of
operations  or  the  consolidated  financial  position  of  the  Company.


                                       24
<PAGE>
     In  July  2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets  which  becomes  effective  for fiscal years beginning after December 15,
2001. SFAS No. 142 prohibits amortization of goodwill and requires that goodwill
be tested for impairment annually.  The statement includes specific guidance for
testing  goodwill  impairment. The Company will adopt SFAS No. 142 as of January
1,  2002.  Management  is evaluating SFAS No. 142 and the impact of implementing
the  annual  goodwill  impairment  test  on the Company's consolidated financial
position  and  results  of  operations.  The Company's consolidated statement of
operations  for  the  year  ending  December  31,  2001  is  expected to include
approximately  $154.4  million  of  goodwill  amortization  expense.

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 the Company 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 quarterly report include, but are
not  limited  to,  statements  involving  payment  of  severance costs, contract
commencements,  timing  of  delivery  of  drilling  units,  potential  revenues,
increased  expenses,  customer  drilling  programs, utilization rates, dayrates,
planned  shipyard  projects  and  associated  downtime,  deepwater  development,
planned  asset  sales,  reactivation  of  stacked units, future labor costs, the
Company's  other  expectations  with  regard to market outlook, expected capital
expenditures,  results and effects of legal proceedings, receipt of loss of hire
insurance  proceeds,  liabilities  for  tax issues, liquidity 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, worldwide
demand  for  oil  and  gas,  uncertainties  relating to the level of activity in
offshore  oil  and  gas  exploration  and  development,  exploration  success by
producers,  oil  and  gas prices (including U.S. natural gas prices), demand for
offshore  and  inland  water  rigs,  competition  and  market  conditions in the
contract drilling industry, our ability to successfully integrate the operations
of  acquired  businesses,  delays or terminations of drilling contracts due to a
number  of events, delays or cost overruns on construction and shipyard projects
and  possible  cancellation  of  drilling  contracts  as  a  result of delays or
performance,  our  ability  to enter into and the terms of future contracts, the
availability  of  qualified  personnel,  labor  relations  and  the  outcome  of
negotiations  with unions representing workers, operating hazards, political and
other  uncertainties  inherent  in  non-U.S.  operations (including exchange and
currency  fluctuations),  the  impact  of governmental laws and regulations, the
adequacy of sources of liquidity, the effect of litigation and contingencies and
other  factors  discussed  in  this  quarterly report and in the Company's 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.  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.


                                       25
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATE RISK

     The  Company's  exposure  to market risk fluctuations in interest rates has
changed  since  December  31,  2000  due  to  the debt assumed in the R&B Falcon
merger,  extinguishment  of  certain  R&B Falcon debt and issuance of additional
debt and interest rate swap agreements. See "Item 2. Management's Discussion and
Analysis  of Financial Condition and Results of Operations-Liquidity and Capital
Resources-Debt."  The  Company's exposure to market risk for changes in interest
rates  now  relates  primarily  to  the  Company's  long-term  debt obligations.

The  table  below  presents  expected  cash  flows  and related weighted-average
interest  rates  expected  by  maturity dates relating to debt obligations as of
June  30,  2001.  Weighted-average  variable  rates are based on estimated LIBOR
rates as of June 30, 2001, plus applicable margins. The fair value of fixed rate
debt  is based on the estimated yield to maturity for each debt issue as of June
30,  2001.

As of June 30, 2001:

<TABLE>
<CAPTION>
                                                  REST OF         EXPECTED MATURITY DATE                              FAIR VALUE
                                                   2001     2002     2003     2004     2005     THEREAFTER     TOTAL    6/30/01
                                                  ------------------------------------------------------------------------------
                                                                    (In millions, except interest rate percentages)

<S>                                                <C>     <C>      <C>      <C>      <C>      <C>           <C>        <C>
TOTAL DEBT
  Fixed Rate (a)                                   $60.2   $ 62.6   $404.8   $ 57.9   $400.7   $   2,965.0   $3,951.2   $3,661.1
     Average interest rate                           6.7%     6.7%     7.1%     6.4%     7.1%          5.5%       5.9%
  Variable Rate                                        -   $100.0   $150.0   $150.0        -             -   $  400.0   $  400.0
     Average interest rate                             -      4.5%     4.5%     4.5%       -             -        4.5%
  Receive Fixed/Pay Variable Swaps (b)                 -        -        -        -        -   $     700.0   $  700.0   $  695.2
     Average interest rate                             -        -        -        -        -           4.3%       4.3%
  Commercial Paper                                 $60.3        -        -        -        -             -   $   60.3   $   60.3
     Average interest rate                           4.3%       -        -        -        -             -        4.3%
<FN>

(a) Expected maturity dates are based on the face value of debt and do not reflect fair market value of debt.
(b) The 6.625% Notes are considered variable as a result of the interest rate swaps. See Note 7 of the Condensed Consolidated
Financial  Statements.
</TABLE>

FOREIGN EXCHANGE RISK

     The  Company's exposure to foreign exchange risk has not materially changed
since  December  31, 2000.  See "Item 2. Management's Discussion and Analysis of
Financial  Condition  and  Results  of  Operations-Liquidity  and  Capital
Resources-Derivative  Instruments."

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     During  1997,  Kvaerner  Installasjon  a.s ("Kvaerner") in Norway performed
modification  and  refurbishment  work  on  a high-specification semisubmersible
drilling  rig,  the  Transocean Leader, and a dispute arose over the amount owed
with  respect  to  such  work.  A  letter  of credit had been posted pending the
resolution  of the dispute by agreement between the parties or by final judgment
under  the Norwegian judicial process. In September 1998, the Company instituted
an  action  in  the Norwegian courts alleging that it owed no additional amounts
and  that  the  letter  of  credit  should  be released. In March 1999, Kvaerner
commenced proceedings in the Norwegian courts seeking judgment for approximately
$33.0  million  plus  interest.  The  Company  vigorously  denied  the  material
allegations of Kvaerner's petition and the matter was tried before the Norwegian
courts  during  the fourth quarter of 2000. The Company settled the case in June
2001,  the  terms  of  which  have  been  reflected  in the Company's results of
operations  for  the  second  quarter  of  2001.  The  settlement did not have a
material  adverse  effect  on  its  business or consolidated financial position.

     The  Company  is  a defendant in Bryant, et al. v. R&B Falcon Drilling USA,
Inc.,  et  al.  in the United States District Court for the Southern District of
Texas,  Houston  Division.  R&B  Falcon  Drilling USA is a wholly owned indirect
subsidiary  of  R&B  Falcon. In this suit, the plaintiffs allege that R&B Falcon
Drilling  USA,  the  Company and a number of other offshore drilling contractors
with  operations  in  the  U.S.  Gulf  of Mexico have engaged in a conspiracy to
depress  wages  and  benefits  paid to certain of their offshore employees.  The
plaintiffs  contend that this alleged conduct violates federal antitrust law and
constitutes unfair trade practices and wrongful employment acts under state law.
The  plaintiffs  sought  treble  damages, attorneys' fees and costs on behalf of


                                       26
<PAGE>
themselves  and  an  alleged class of offshore workers, along with an injunction
against  exchanging  certain  wage  and  benefit information with other offshore
drilling  contractors  named  as defendants. In May 2001, the Company reached an
agreement  in  principle  with  the  plaintiffs'  counsel  to settle all claims,
pending  Court  approval  of  the settlement. In July 2001, before the Court had
considered  the  proposed settlement, the case, along with a number of unrelated
cases  also  pending  in  the  federal  court in Galveston, was transferred to a
federal judge sitting in Houston as a docket equalization measure.  The judge to
whom  the  case  was transferred has not yet indicated when he will consider the
proposed  settlement.  The  terms  of  the settlement have been reflected in the
Company's  results  of  operations for the first quarter of 2001. The settlement
did not have a material adverse effect on its business or consolidated financial
position.

     The Company has certain actions or claims pending that have been previously
discussed  and reported in the Company's Annual Report on Form 10-K for the year
ended  December 31, 2000 and Quarterly Report on Form 10-Q for the quarter ended
March  31,  2001  and  the Company's other reports filed with the Securities and
Exchange  Commission.  There  have  been  no  material  developments  in  these
previously  reported matters. The Company and its subsidiaries are involved in a
number of other lawsuits, all of which have arisen in the ordinary course of the
Company's business. The Company does not believe that the ultimate liability, if
any,  resulting  from  any  such  other  pending litigation will have a material
adverse  effect  on  its  business  or  consolidated  financial  position.

     The  Company  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 the Company's belief 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     At  the  Annual  General  Meeting of Transocean Sedco Forex Inc. on May 11,
2001  there  were  represented  in  person or by proxy 270,784,101 shares out of
317,798,910  entitled  to  vote  as  of  the record date, constituting a quorum.

     The  matters submitted to a vote of shareholders were (i) the reelection of
Class II Directors as set forth in the Company's Proxy Statement relating to the
meeting  and  (ii)  the  amendment  of the Company's Long-Term Incentive Plan to
increase the annual award to continuing outside directors of options to purchase
ordinary shares from 4,000 to 6,000. With respect to the election, the following
number  of  votes  were  cast  as  to the Class II Director nominees: Richard D.
Kinder,  268,532,912 votes for and 2,251,189 votes withheld; Martin B. McNamara,
268,532,219 votes for and 2,251,882 votes withheld; and Alain Roger, 268,416,298
votes  for and 2,367,803 votes withheld. There were 2,234,109 abstentions and no
broker  non-votes in the election of directors. With respect to the amendment to
the  Company's  Long-Term  Incentive  Plan,  247,331,114 votes were cast for the
amendment  and  22,255,045  votes  were  cast  against the amendment. There were
1,193,655  abstentions  and 4,287 broker non-votes in the vote on the amendment.


                                       27
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

     The following exhibits are filed in connection with this Report:

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

*2.1      Agreement  and Plan of Merger dated as of August 19, 2000 by and among
          Transocean  Sedco  Forex  Inc., Transocean Holdings Inc., TSF Delaware
          Inc.  and R&B Falcon Corporation (incorporated by reference to Annex A
          to  the  Joint  Proxy  Statement/Prospectus  dated  October  30,  2000
          included in a 424(b)(3) prospectus filed by the Company on November 1,
          2000)

*3.1      Memorandum  of  Association of Transocean Sedco Forex 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  the  Company  on  November  1,  2000)

*3.2      Articles  of  Association  of  Transocean Sedco Forex 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  the  Company  on  November  1,  2000)

*4.1      Exchange  and Registration Rights Agreement dated April 5, 2001 by and
          between  Transocean  Sedco  Forex  Inc.  and  Goldman, Sachs & Co., as
          representatives  of  the initial purchasers (incorporated by reference
          to  the  Company's  Current  Report  on Form 8-K dated March 30, 2001)

*4.2      Officers'  Certificate  of  Transocean Sedco Forex Inc. dated April 5,
          2001  establishing the form and terms of the 6.625% Notes due 2011 and
          the  7.5%  Notes  due 2031 (incorporated by reference to the Company's
          Current  Report  on  Form  8-K  dated  March  30,  2001)

*4.3      Fourth  Supplemental  Indenture  dated  as of May 11, 2001 between the
          Company  and  The  Chase  Manhattan  Bank, as trustee (incorporated by
          reference  to  the  Company's  Quarterly  Report  on Form 10-Q for the
          quarter  ended  March  31,  2001)

+10.1     Second  Amendment to the Amended and Restated Long-Term Incentive Plan
          of  Transocean  Sedco  Forex  Inc.,  effective  May  11,  2001

*  Incorporated  by  reference  as  indicated.
+  Filed herewith.

     (b)  Reports  on  Form  8-K

     The Company filed a Current Report on Form 8-K on April 9, 2001 to disclose
     certain  matters  relating  to  a  private  placement  of $700.0 million in
     aggregate  principal amount of 6.625% Notes and $600.0 million in aggregate
     principal  amount  of 7.5% Notes, a Current Report on Form 8-K on April 30,
     2001  to  report  the  availability  of  drilling  rig  status and contract
     information  as  of  April 30, 2001, a Current Report on Form 8-K on May 8,
     2001  to  provide  updates  regarding  the  status of two legal proceedings
     involving the Company, to report the Company's anticipated idle rig days in
     2001 and to report the Company's operating results for the first quarter of
     2001,  a  Current Report on Form 8-K on May 9, 2001 to announce the pricing
     of  the  $400.0 million in aggregate principal amount of the Company's 1.5%
     Convertible  Debentures,  a  Current  Report on Form 8-K on May 11, 2001 to
     disclose  certain  matters  relating  to  the  public  offering of the 1.5%
     Convertible Debentures and a Current Report on Form 8-K on June 29, 2001 to
     report  the availability of drilling rig status and contract information as
     of  June  29,  2001.


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                                   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 August 10, 2001.

                                           TRANSOCEAN SEDCO FOREX INC.



                                     By:  /s/  Robert  L.  Long
                                          -------------------------
                                               Robert  L.  Long
                                               Executive Vice President and
                                                Chief Financial Officer
                                               (Principal Financial Officer)



                                     By:  /s/  Ricardo  H.  Rosa
                                          -------------------------
                                               Ricardo H. Rosa
                                               Vice President and Controller
                                               (Principal Accounting Officer)


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