Martin A. Sullivan of Tax Analysts has another of his astonishing reports out entitled Oil Drillers Gain Billions From 'Immoral' Tax Break. It says:

There is something else not working well in the gulf: the tax system. No, we are not talking about those cash-only Cajun-country fishermen who never pay income tax and now lack records needed to receive compensation ("The Fishermen and the Tax Man," Los Angeles Times, May 30, 2010). We are talking about the two largest offshore drilling companies in the world, Transocean and Noble Corp., that are in reality headquartered in the Houston area but moved their legal domiciles first to the Cayman Islands and then to Switzerland to avoid U.S. tax. Calculations shown below indicate that those maneuvers have reduced their tax bills by more than $2 billion. ...

[W]hile the entire oil and gas extraction industry accounted for less than 1.5% of GDP (according to 2008 Commerce Department data), the oil services industry accounted for about one-fifth of all corporate inversions.

Transocean completed the reorganization that changed its place of incorporation from Delaware to the Cayman Islands on May 14, 1999. In comments to shareholders before the reorganization, Transocean's management stated: "Our expectation is that we will, over time, achieve a reduction of 10 to 20 percentage points in our effective rate." The table shows that prediction was correct. Transocean's effective tax rate before 1999 was 31.6% and after 1999 was 16.9% -- a 14.8 percentage point reduction. If the preinversion tax rate of 31.6 percent had prevailed, Transocean would have incurred $1.88 billion of additional tax expense on the $12.8 billion of profits earned from 2002 through 2009. ...

[E]liminating future tax benefits for expatriate corporations in the oil industry would be consistent with the president's goals of tilting tax benefits away from fossil fuels and of raising revenue by suppressing aggressive tax avoidance by U.S. multinationals using shell companies in tax havens.

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Hat tip to TaxProf Blog — always worth a visit.