Offshore Technology Conference: Brazil Welcomes Foreign Oil Companies

Also, some exhibitors really put on a show, while others skip the conference altogether.
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HOUSTON -- Eighteen American oil companies are among the 41 jockeying to enter the Brazilian oil-producing arena.

In mid-June the first bidding round will be held for 27 blocks off Brazil's coast. Interested parties already have put up $300,000 each to the

Brazilian National Petroleum Agency

for initial data packs.

The bidding marks the opening to foreign oil companies of the Brazilian oil industry, which has been dominated by state-controlled

Petrobras

. The names of the bidding companies weren't disclosed.

The deep waters offshore Brazil promise to be a hot market. In a press briefing at the

Offshore Technology Conference

here an agency representative said Brazil ranks No. 1 in energy investments this year, up from No. 43 in 1994.

The acreage offered for public concessions stretches from Brazil's oil-prolific Campos Basin south to the mouth of the Amazon River. Twelve of the blocks offered are in the Campos and Santos basins in deep water.

Brazil plans to increase its oil production to 2 million barrels per day in five years from its current 1.2 million barrels per day through the opening of its oil industry. But tax issues, such as Brazil's tax on imported equipment for the oil industry, are some of the sticky points yet to be worked out.

The Dog and Pony Show

Exhibitors are pulling out all stops to lure conference attendees, also known as potential customers, to their little pieces of the Astrodome complex, a multi-building maze. Twice an hour in a theater-like setting,

Cooper Cameron

(CAM)

staged a full-fledged spoof of

60 Minutes

, entitled

CC Minutes

, replete with stopwatch motif and closing diatribe -- er, monologue -- by none other than Randy Looney. A Leslie Stahl look-alike came in the form of Penny Pincher, a tall transvestite in a purple dress and ash-blond wig.

Taped interviews with Cooper execs such as Jerry Lummus, director of marketing projects, were used to explain various aspects of Cooper's business. This was definitely an atypical sales pitch for some not-so-exciting -- to the layperson -- product lines, such as valves, marine risers (which enclose the drill pipe and transport mud to the surface in offshore operations) and blow-out preventer control systems.

Baker Hughes'

(BHI)

turf was directly across the aisle, decked in

Indianapolis 500

black and white checked flags and a sleek, low-slung Indy racecar. Before the car's retirement in 1995, it was driven by Mario Andretti.

Long Time, No See

Several offshore drillers were no-shows at this year's event.

A disagreement with the conference over its booth placement and size prompted

Diamond Offshore

(DO) - Get Report

to stay away this year, says Gary Krenek, Diamond's chief financial officer.

The conference "for us is more of a defensive move than an offensive move," Krenek says, since it's not typically a place where new drilling contracts are signed. Krenek stressed that Diamond's absence was not related to the downturn in the drilling industry; the company plans to be in attendance next year.

Noble Drilling

(NE) - Get Report

, meanwhile, has had strict cost-cutting measures in effect for months -- the reason it's a conference no-show this year. The conference is an expensive proposition.

Models of various rigs, especially new designs, are what the drillers show off at the conference. Building the models is quite costly, not to mention time-consuming. At

Global Marine's

(GLM)

booth late Monday, two workers were putting the finishing touches on a model of the Global drill ship

C.R. Luigs

, which is under construction in Ireland. Constructing the model takes three to four months, one of the workers says. As for the cost, a Global representative says it runs upwards of $40,000. Mattel cars these are not.

Transocean Offshore

(RIG) - Get Report

has taken a different strategy over the last several years come conference time. Transocean hasn't acquired space on the floor since the late '80s, says Jeffrey Chastain, director of investor relations. Rather, Transocean shares space with a company with which it's working. This year, Transocean is sharing space with

Kongsberg Simrad AS

, a Norwegian firm that supplied much of the navigational systems on Transocean's rig the

Discoverer Enterprise

.