The depressed offshore oil industry is still waiting for a turnaround despite increasing optimisim that world oil prices have stabilized around 18 dlrs a barrel. The perception of a turnaround comes from the change in prices Charles Siess Jr vice chairman of Marathon Manufacturing Co a subsidiary of USX Corp &lt;X> and chairman of the National Ocean Industries Association said in a press briefing at the Offshore Technology Conference. From the level of industry activity there is no turnaround he added. John Huff president of Oceaneering International Inc &lt;OCER> was slightly more optimistic. We are through the low part of the cycle -- theres an increase in interest for projects he said adding whether it comes to orders who knows? The oil industry is recovering from last years dramatic fall in oil prices from 30 dlrs a barrel in late 1985 to under 10 dlrs in mid-1986. Particularly hard hit were the service companies that provide the oil rigs with keys products such as pipe and tools. Earlier in the week Secretary the Interior Donald Hodel announced -- at the Conference -- the governments new five-year offshore oil and gas leasing program proposing 38 sales including tracts in the Gulf Coast offshore California and in the Arctic National Wildlife Refuge in Alaska. For the most part the industry was disappointed with the plan with most arguing that additional areas should have been included. At the same time most were supportive of Hodel. Environmental concerns particularly in California had lobbied strenuously against offshore oil development. The (Outer Continental Shelf) leasing program fails to take into account the environmental performance of the oil industry said Bill Bradford executive vice president of Dresser Industries &lt;DI> and president of the Petroleum Equipment Suppliers Association. Huff quoted National Academy of Science figures showing offshore rigs contributed only two pct of petroleum pollution in the oceans while tankers were responsible for 47 pct and municiple dumping 31 pct. The OCS is the keystone of the domestic reserve development program said Siess adding that with oil imports rising to 50 pct of U.S. oil consumption the issue was one of national security. Looking ahead Constantine S. Nicandros president of Duponts &lt;DD> Conoco Inc subsidiary said We are more likely to see a five pct increase in spending this year than the widely-forecast five pct decrease. Other optimistic signs include the recent sale in New Orleans of offshore tracts in the Gulf of Mexico which raised 290 mln dlrs against an expected 90 mln. However Ronald Tappmeyer vice chairman of Reading and Bates Drilling Co &lt;RB> said the oversupply of rigs would continue for the near-term but added demand for technologically advanced rigs would increase in the 1990s. Much of that demand is seen coming from the move into icreasingly deeper waters with the projects becoming ever more expensive and needing five to ten years to develop. Over 50 pct of the sales in New Orleans were for deep water tracts. Ronald L. Geer a consultant with Shell Oil Co a subsidiary of Royal Dutch/Shell &lt;RD> and president of the Marine Technology Society said the technology existed to drill exploratory wells in up to 10000 feet of water. Geer said the industry was particularly interested in the Green Canyon field offshore Louisiana where a number of companies including Shell Conoco USX Corps Marathon Oil Co Standard Oil Co &lt;SRD> and Placid Oil Co are working many of them testing new deep-water technologies involving floating platforms.
OFFSHORE OIL INDUSTRY WAITING FOR TURNAROUND