Transocean takes desperate steps as tumbling oil prices hit its bottom line by Reuters @FortuneMagazine February 17, 2015, 8:28 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons The chief executive of Transocean Ltd , one of the world’s top offshore drilling companies, is stepping down and the company is slashing its dividend as business slows on tumbling crude oil prices. Transocean RIG said on Sunday that Chairman Ian Strachan, who previously held executive positions at Exxon Mobil Corp XOM and Rio Tinto PLC, will serve as interim chief executive officer until a replacement is found for departing CEO Steven Newman. Transocean’s shares have fallen 76% since Newman took over as CEO in 2010. Transocean did not say when it would name a permanent successor to Newman, who also decided to quit as a director. CEOs of energy companies often retain board seats after they resign. Newman, who joined the company in 1994, led the Switzerland-based company through the deadly Deepwater Horizon oil spill in the Gulf of Mexico in 2010. Transocean owned and operated the Deepwater Horizon rig that burned and sank during the blowout of BP Plc’s BP Macondo well, the biggest offshore spill in U.S. history. His unexpected departure comes as analysts say a wave of consolidation is inevitable in the energy sector as sinking prices cause an uptick in merger activity. A Transocean official was not immediately available for comment. Transocean’s board also recommended lowering its annual dividend of $3 a share by 80% to 60 cents a share, as it tries to conserve its capital. Often seen as a last resort, companies typically are loathe to cut dividends. But the more than 50% slide in crude oil prices since June to $50 a barrel has forced oil and gas companies to trim spending on offshore exploration. The offshore sector had been struggling before the latest price downturn as exploration and production companies turned their attention to the U.S. onshore shale boom. UBS UBS had said in January that Transocean needed to trim or eliminate its dividend and this month Diamond Offshore Drilling Inc DO axed a special dividend. Noble Corp NE has halved its capital budget for 2015 but said it would maintain its dividend. Among the small universe of offshore drilling companies, analysts have said Ensco Plc’s ESV annual divided is among the safest. Transocean had reached an agreement under pressure from activist investor Carl Icahn in 2013 to boost its dividend and cut costs, ending a months-long proxy battle. At the time, big oil companies were still spending heavily on expensive deepwater exploration work. Icahn was not immediately available for comment. Exploration companies typically pay $500,000 a day or more to have rigs like those owned by Transocean look for oil thousands of feet below the ocean floor. The BP incident resulted in Transocean paying the U.S. government $1 billion in civil penalties. After the BP spill, Transocean did not invest as quickly as its competitors to build ultra-modern drillships and it fell behind, a source familiar with the company said. New rigs tend to fetch the highest prices and have the highest utilization rates. The company has 12 new offshore drilling units under construction at the moment. In January, Transocean said it owned or had stakes in 71 offshore drilling units and that it had scrapped or would scrap 12 older ones.