CORPORATIONS: Rapture of the Deep

When at age 17 he ventured west from Mount Vernon, N.Y., to seek his fortune, R. Lad Handelman learned quickly that there was more money in diving than in tending a diver’s airline, as he had been doing. Says he: “I figured I was on the wrong end of the hose.” He became a diver and spent a decade combing the seabed off California for abalone. Today, at 39, Handelman is again topside: this time as president of Oceaneering International, Inc., a Houston-based company that in 6½ years has become the largest publicly owned firm in an arcane but fast-growing specialty known as underseas services.

Rat Hat. Oceaneering now has 951 employees, including 500 divers, working in 25 countries, mainly for the booming offshore oil and gas industry. The company’s skills, which earned it $7 million in 1975 on total revenues of $52 million, include surveying drilling sites, building submarine pipelines, and maintaining platforms and subsurface wellheads—all hazardous chores in a hostile environment that is unforgiving of mistakes. Handelman and Oceaneering’s co-founder and chairman, Mike Hughes, 37, met in 1964 when both were running tiny diving companies. The young entrepreneurs joined forces with a third small company, Canadian Diving Services, and formed Oceaneering. Later they expanded their reach by absorbing a fourth company, with operations in Europe, the Middle East and Africa.

Oceaneering has grown largely because of technological innovations that enable its divers to descend as far as 1,000 ft.—a depth that was rarely attempted a few years ago. It has developed, among other items, a complex fiber glass “rat hat” that warms the helium-oxygen mixture that divers must breathe at the very cold depths below 200 ft. to avoid the disabling nitrogen narcosis commonly known as “rapture of the deep.” The $2,500 hat has been successfully tested at 1,600 ft.; Oceaneering refuses to sell it to anyone—even the U.S. Navy, which has chastised the firm as “unpatriotic.”

The company has also developed techniques to decrease costly “bounce” dives—twelve hours of on-deck decompression for every half-hour on the ocean floor. Descending in a pressurized diving bell, an Oceaneering diver can work underwater shifts of four hours or more with only four days off out of every 15 for decompression. Another innovation: an experimental suit that encases a diver in normal atmospheric pressure at great depths, thus eliminating the need for decompression altogether.

The suits, pumps, lighting gear and other support equipment needed to put one diver on the bottom today can cost more than $500,000—one factor that gives a firm of Oceaneering’s size a competitive edge. Another expensive item is the diver himself. Oceaneering trains its own divers at a school in Wilmington, Calif. Students, most in their early twenties, learn the physics and physiology of diving, later advance to underwater welding, rigging, salvage, photography, even television. The divers are paid handsomely: salaries range mostly from $17,000 to $35,000 a year, and a few divers in Alaska earn more than Handelman’s salary of $53,500.

Handelman has made the future he sought; with Oceaneering stock trading at about $10 over the counter, his 346,479 shares are worth $3.5 million. At present, it seems that the only way his business can go is up. Today, about 20% of the world’s oil and gas comes from beneath the ocean floor. By 1985, according to some economists, undersea wells will account for 45% of the supply of those fuels.