Oceaneering International, Inc
Oceaneering International, Inc.
Sales: $639.25 million (2003)
Stock Exchanges: New York Pacific Philadelphia
Ticker Symbol: OII
NAIC: 213112 Support Activities for Oil and Gas Operations; 234920 Power and Communication Transmission Line Construction; 234930 Industrial Nonbuilding Structure Construction; 235990 All Other Special Trade Contractors; 334511 Search, Detection, Navigation, Guidance, Aeronautical, and Nautical System and Instrument Manufacturing; 541330 Engineering Services; 541370 Surveying and Mapping (Except Geophysical) Services; 541710 Research and Development in the Physical, Engineering, and Life Sciences
Oceaneering International, Inc. (OII) provides an array of services and equipment to customers operating in various forbidding environments, including deepwater and space. Activities include underwater drilling support and inland environmental inspection services. Hardware includes remotely operated diving vessels (ROVs) and robotic devices for the space program and amusement parks.
About half the company's revenues come from outside the United States. Oceaneering is active in the deepwater oil fields in the North Sea and off the coasts of West Africa and Brazil as well as in the Gulf of Mexico. It is a world leader in the market for umbilicals, or undersea connectors. The company is active during the exploration, development, and production phases of the oil and gas life cycle.
The company's Advanced Technologies Group applies tools and techniques from the offshore drilling support business to non-oil related industries. This unit is often called in to search for debris after high-profile air accidents over water, such as the ValuJet crash over the Everglades and the downed TWA Flight 800. It also filmed footage of the RMS Titanic at a depth of 12,500 feet. "This is a real-life Jules Verne operation," CEO John Huff told Investor's Business Daily.
Oceaneering International, Inc. grew from a Gulf of Mexico diving business founded in 1964. Combined with two other diving outfits, the company was incorporated in 1969. According to Investor's Business Daily, most of the company's work in its first four decades involved inspecting the legs of oil rigs in the Gulf of Mexico.
Oceaneering relocated its headquarters from Santa Barbara, California, to Houston in March 1980. A merger with the French firm Comex S.A. was planned in 1981 but never consummated.
Oceaneering completed a number of acquisitions during the 1980s. The Canadian offshore surveying company Marinav Corp. was acquired in 1982 for $3 million. A $37 million stock swap in 1984 gave OII a new underwater services unit, Solus Ocean Systems Inc., which was formerly owned by Enserch Corp. of Dallas.
An important acquisition was made in 1983. That year, Oceaneering acquired Steadfast Marine Inc., a marine search firm employed by the U.S. Navy. Steadfast was derived from Seaward Inc., a partnership formed in 1972. It was named Oceaneering's East Coast Division after the acquisition; it had operations in McLean, Virginia, and Fort Lauderdale, Florida.
J. Wesley Rogers was promoted to the CEO position in 1982, succeeding Edward A. Wardwell. D. Michael Hughes, one of the company's founders, was chairman from 1970 to 1978 and took the post again in 1984. Rogers died in a plane crash in 1986, and was replaced by John R. Huff, who had been chairman and president of oilfield services firm Western Oceanic, a unit of the Western Co. of North America, from 1980 to early 1986. He was elected chairman of Oceaneering in 1990.
Huff had studied civil engineering and played football at Rice University and Georgia Tech, and later attended Harvard Business School. Other early jobs included assignments with The Offshore Co. (later Sonat Offshore) and Zapata Offshore.
Revenues were $120 million in fiscal 1986 and, reports Forbes, the company had a loss of $45 million in the previous three years. During the fiscal year, the company had begun applying project management and other services and equipment to non-oilfield related markets though its Oceaneering Technologies division.
Late 1980s Recovery
Oceaneering lost $70 million between 1982 and 1987. Huff led the company through a recapitalization program in 1987. The offshore oilfield supply business was experiencing severe competition in the last half of the 1980s. The company bid for more U.S. Navy work to get by.
Oceaneering was the Navy's global contractor for marine searches. The firm conducted some high-profile underwater searches in the 1980s, seeking the wreckage of the Space Shuttle Challenger and Korean Air Lines Flight 007. Record depths of more than 17,000 feet were breached in other cases. Such searches called for state-of-the-art gathering and analysis of sonar data, and Oceaneering developed a reputation as the best of the best.
Revenues were $183.4 million in the 1990 fiscal year, producing net income of $10.3 million—nearly nine times the previous year's figure. Business benefited from large undersea construction projects in the North Sea. Oceaneering had 1,500 employees at the time, and trained divers at its own College of Oceaneering near Los Angeles. OII bought the school in 1981 and owned it until 1995. It had been launched in 1967 as the Commercial Dive Center.
In 1991, Oceaneering acquired its first tanker for gathering and storing from well off the coast of Africa. This represented the start of the company's Mobile Offshore Production Systems (MOPS) division. Oceaneering shares migrated from the NASDAQ to the New York Stock Exchange in December 1991.
Two new divisions, Oceaneering Technologies and Oceaneering Space Systems, were created to cater to non-oilfield customers. Oceaneering Technologies, based in western New York, handled such chores as inspecting bridges and aboveground structural inspections.
OII acquired Eastport International Inc., a Maryland-based producer of robotic systems, through a $10 million stock deal in August 1992. Eastport had 200 employees, revenues of about $25 million a year, and had billed itself as the world's leading undersea search and recovery firm.
Eastport was a pioneer in the development of ROVs, or remotely operated diving vessels (these were the size of small automobiles). Renamed Oceaneering's Advanced Technologies Group (ATG), this unit also was breaking into the entertainment business. One of its higher visibility projects was a leaping robotic shark for the Jaws ride at the Universal Studios theme park in Orlando. OII's revenues were $168 million in fiscal 1992. The company was profitable again, with earnings of $16 million.
Shooting for the Stars in 1993
OII acquired the assets of ILC Dover Inc.'s Space Systems division in 1993. OII already had been designing robotic tools for space applications on a small scale for several years. Space Systems also manufactured thermal protection blankets used in aircraft and space vehicles. The ILC buy brought with it important contracts with major aerospace suppliers including Lockheed. ILC Space Systems had 120 employees and revenues of $11 million.
In March 1994, OII acquired Multiflex, a leading producer of umbilicals, or connectors, for the offshore petroleum industry. It had been founded in 1977 and was acquired from Edisto Resources Corp. for $12 million.
OII employed about 2,000 people in the mid-1990s. It had 46 offices in 37 countries around the world. With 60 ROVs, the company operated the second largest fleet in the world. Utilization was increasing as oil companies turned increasingly to deepwater oil production. Sales were $290 million in the fiscal year ended March 31, 1996, producing earnings of $12.4 million.
OII's Advanced Technology Group also laid fiber optic cable on the sea floor. The division had revenues of about $25 million a year in the late 1990s.
Late 1990s Capital Projects
In 1998, the parent company had revenues of $358 million and a net income of $22 million. It employed 2,600 people in 30 countries. The company had just started a five-year capital improvement plan. From 1997 to 2002, Huff told the Wall Street Transcript, OII invested $450 million in capital projects, most of it to support its oilfield-related business.
The Multiflex umbilical operations were expanded by doubling the size of its U.K. subsidiary's facilities and established manufacturing in Brazil. Multiflex's operations also were upgraded.
The company's largest single capital investment was $90 million to build a MOPS unit off the coast of western Australia. In 2002, Oceaneering had three such units.
Oceaneering's mission is to increase the net wealth of its Stockholders by providing safe, cost-effective, quality-based technical solutions that satisfy Customers' needs in harsh environments worldwide.
OII also invested in developing its ROV business. AUVs, or autonomous underwater vehicles, accounted for only $2 million in sales in 2000, but were growing in importance. These could perform preprogrammed tasks without being tethered by control cables.
By 2002, Oceaneering dominated the ROV market with a 30 percent share. Deepwater—sometimes more than 5,000 feet deep—was becoming an attractive area for oil companies to explore. In 2000, the Advanced Technology Group was called in to lift the Hunley, a downed Confederate submarine that had been located five years earlier.
Rotator AS, a Norwegian outfit that produced valves for offshore oil and gas use, was acquired from Houston-based Grant Prideco in September 2003. It had revenues of about $16 million a year.
Oceaneering reported revenues of $639.25 million in 2003, with net income of $29.3 million. Booming oil prices in early 2004 meant more interest in exploring for oil, and great prospects for support companies such as Oceaneering. The company was relocating its Multiflex USA division from Houston to Panama City, Florida.
In early 2004, OII acquired 44 ROVs and other assets from Stolt Offshore S.A. for $48.4 million. These ROVs were based in western Africa, Brazil, and Norway.
Consolidated Launcher Technology, Inc.; Eastport International, Inc.; Gulf Coast International Inspection, Inc.; Ian Murray Engineering Ltd. (U.K.); Marine Production Systems do Brasil Ltda.; Marine Production Systems Ltd.; Marine Production Systems Servicos Ltda.; Multiflex, Inc.; Ocean Systems Engineering Ltd.; Ocean Systems Engineering, Inc.; Oceanteam UK Limited; Oil Industry Engineering, Inc.; Specialty Wire and Cable Co., Inc.; Steadfast Oceaneering, Inc.; P.T. Calmarine (50%); Smit Oceaneering Cable Systems, L.L.C. (50%); Pro-Dive Oceaneering Co. (49%); Rotator AS (Norway).
Advanced Technologies; Offshore Oil and Gas.
Principal Operating Units
Remotely Operated Vehicles (ROVs); Subsea Products; Mobile Offshore Production Systems; Other Services.
- Oceaneering is formed from three diving companies.
- Headquarters are relocated from Santa Barbara to Houston.
- Navy search contractor Steadfast Marine is acquired.
- The first MOPS unit is acquired.
- ROV pioneer Eastport International is acquired.
- ILC Space Systems is acquired.
- Multiflex umbilicals supplier is acquired.
- Five-year, $450 million capital improvement plan is launched.
- Rotator AS is acquired.
- ROV holdings are acquired from Stolt Offshore.
Alcatel S.A.; Global Industries, Ltd.; Halliburton Company; Kvaerner Oilfield Products; Saipem; Technip-Coflexip; Thales S.A.
Alva, Marilyn, "Oceaneering International Inc.: Houston, Texas Support to Oil Drillers Has Deep-Sea Expert Swimming in Profits," Investor's Business Daily, May 9, 2002, p. A9.
Boisseau, Charles, "Company Thriving on Diving; Oceaneering, Finding Calmer Waters, Continues Focus on Underwater Services Business," Houston Chronicle, The Chronicle 100/Houston's Leading Companies, May 23, 1993, p. 6.
Coghlan, Keely, "Analysts Paint Bright Picture for ROVs, But Oceaneering Takes More Cautious View," Oil Daily, May 23, 2000.
Durgin, Hillary, "Becoming Clearer: Oceaneering Sinks Money into Services; Unit's Growth Gives Strategy New Focus," Houston Chronicle, Bus. Sec., August 31, 1996, p. 1.
Fletcher, Sam, "Oceaneering to Double Manufacturing Capacity," Oil Daily, September 10, 1997, p. 4.
——, "Offshore Oil Platform Technology Blasts Off," Houston Post, September 25, 1992, p. C1.
Gallagher, Kathleen, "Demand for Gas Is Factor: Oceaneering May Offer Investment Worth Exploring," Milwaukee Journal Sentinel, Bus. Sec., May 20, 1996, p. 12.
Hamilton, Carl, "Expert Survives Swamp; The Rescue and Recovery Technician Said the ValuJet Crash Site Assignment Was His Hardest," York Daily Record (Pennsylvania), June 1, 1996, p. 1.
Harnett, Dwayne, "Oceaneering International to Bring High-Paying Jobs to Bay County, Fla.," News Herald (Panama City, Florida), December 23, 2003.
Kelly, Andrew, "Oceaneering Can Ride Oil-Price Storm—CEO," Reuters News, August 21, 1998.
Liberante, Carrie A., "Oceaneering's Inland Unit Thriving on Diving," Buffalo News, Bus. Sec., May 29, 1994, p. 7.
Mack, Toni, "Underwater Rescue," Forbes, November 9, 1992, pp. 190+.
Mintz, Bill, "Oceaneering Says It's Now on Course to Bigger Profits," Houston Chronicle, December 18, 1995, p. B6.
Neuberger, Christine, "Firm Gets to the Bottom of All Things Lost at Sea," Richmond Times-Dispatch, Bus. Sec, January 19, 1992.
Petty, John Ira, "Oceaneering's Huff Making Drive to Paydirt," Houston Post, July 2, 1990, p. C16.
Redden, Jim, "Huff Examines Diving Industry," Offshore, October 1986, pp. 32+.
Schlegel, Darrin, "Underwater Firm Goes Airborne Via Space Acquisition," Houston Business Journal, June 7, 1993, pp. 1+.
Shelsby, Ted, "Undersea Search Company OKs Takeover; Texas Rival to Buy Eastport," Sun (Baltimore), July 15, 1992, p. 9C.
Swoboda, Frank, "Getting to the Bottom of It All," Washington Post, September 21, 1998, p. F10.
—Frederick C. Ingram
"Oceaneering International, Inc." International Directory of Company Histories. . Encyclopedia.com. (December 12, 2018). https://www.encyclopedia.com/books/politics-and-business-magazines/oceaneering-international-inc
"Oceaneering International, Inc." International Directory of Company Histories. . Retrieved December 12, 2018 from Encyclopedia.com: https://www.encyclopedia.com/books/politics-and-business-magazines/oceaneering-international-inc
Encyclopedia.com gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).
Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.
Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, Encyclopedia.com cannot guarantee each citation it generates. Therefore, it’s best to use Encyclopedia.com citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:
Modern Language Association
The Chicago Manual of Style
American Psychological Association
- Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most Encyclopedia.com content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
- In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.