Offshore Technology Conference Big by Any Standard

Abstract: The 35th OTC opens today in Houston, and despite symmetry with the petroleum industry's cycles, it's still the world's largest offshore conference/exhibition...and then some.

Analysis: Today marks the opener of the four-day Offshore Technology Conference (OTC) in Houston. It's the conference's 35th consecutive year in the Bayou City, all but one of them staged at the Reliant Park (né Astrodomain) complex.

Organized in 1969 by the Dallas-based Society of Petroleum Engineers (SPE), the OTC has reflected the ups and downs of the upstream petroleum industry in general, and its offshore segment in particular, in terms of attendance by petroleum industry engineers and scientists. It's billed correctly as the world's foremost event for offshore resource development, particularly in the fields of drilling, production, and environmental protection.

But the OTC is more, much more.

From the perspective of someone who's attended every OTC since the first one--a modest effort held at a downtown convention center--the conference has continued to mirror most of what's good--and even some of what was once not so good--about the culture of the offshore petroleum industry (more about that later).

The OTC's "home" for 33 years was the AstroHall, a huge conference/exhibition venue whose thinly carpeted, arch-straightening concrete flooring and freeze-or-fricassee air conditioning system are still recalled--none too fondly--by conference veterans. The hall stood cheek-by-jowl with the Astrodome, the world's first domed stadium, erected in 1965 and hailed somewhat audaciously as the "Eighth Wonder of the World." Actually, OTC expanded only one time into the stadium itself, in 1983. Today, the domed stadium exists as a sort of quaint relic, little used now except for rodeos and motocross/tractor-pull types of events. And the AstroHall itself is gone, replaced by the new, 706,000-sq-ft Reliant Center conference/exhibition facility, whose inaugural event, in fact, was OTC 2001. Today, little with "Astro" in its name remains at the complex.

But back to OTC. It was created by leading oil and gas and oilfield manufacturer and service company members of SPE, who recognized that the industry's youngish offshore segment was mushrooming with new technology, most of it aimed at a separate offshore industry division that was spreading rapidly from its Gulf of Mexico birthplace to all the oceans of the world. Also, the allure of a technical conference combined with an exhibition to showcase new equipment was not lost on SPE, which has held its own annual meeting and general industry conference/exhibition for many years. Too, a successful offshore engineering conference--OECON--was held for several years prior to 1969, and had drawn wide interest and participation from the offshore industry.

In addition to the SPE, the OTC also is influenced by the input of 12 other petroleum industry organizations as official sponsors. Several "endorsing" and "supporting" organizations are included, as well. But SPE runs the show. In its debut year, the OTC attracted just 4,200 offshore professionals and only 125 exhibitors, but the results obviously were enough to justify plans for an annual OTC. Fortunately, 1969 was a big year for the industry. Oil had been discovered in the North Sea, Gulf of Mexico operations were kicking off into deeper water, and drilling off California was in full swing. What's more, Middle Eastern producing countries were once again demanding bigger shares of oil profits, and world prices--both for oil itself and for oilfield goods and services, particularly those destined for offshore applications--were poised for takeoff.

The OTC technical program grew in size and scope during the 1970s, attracting still more engineers, scientists, entrepreneurs, and politicians, with a fast-growing contingent coming from overseas. Likewise, OTC exhibitors multiplied quickly, thanks to increased participation by companies based abroad. Subsequently, registration climbed to five-figure levels, and exhibitor totals skyrocketed past the 1,000 mark. Meanwhile, offshore regions, both in the U.S. and overseas, offered vast new E&P frontiers. Both new marine technology and offshore tool design were in constant flux as operations stepped out into deeper water and into more hostile marine environments.

The upshot was that in 1982, just 13 years after its debut, the OTC reached what even SPE describes as "extravaganza" proportions. That year, it drew some 108,000 attendees and 2,500 exhibitors who packed more than 630,000 net square feet of exhibit space, spreading from the AstroHall into the adjoining AstroArena and Astrodome, as well as outside onto the parking area. Houston hotels were totally booked, and registrants who waited too long had to commute daily from as far away as Galveston, Beaumont, and even San Antonio.

The OTCs of the late 1970s and early 1980s were indeed something to behold. Those were the industry's "go-go" years, and an unofficial competition developed among some exhibitors as to which of them would mount the most eye-catching exhibits. Some exhibits approached the bizarre. One manufacturer, for instance, had a conventional booth with their equipment on display, but added a multi-station shoeshine stand manned by buxom female models whose "décolletage" was indeed noticeable, particularly when they bowed, shine rags and brushes in hand, over registrants' shoes. Still other exhibitors furnished full-course meals and behind-the-wall cocktail service to invited guests. One year, exhibitors sidestepped official catering regulations by stationing motorhomes in the parking area, from which meals and liquid refreshments were served. That lasted only one year, thanks in part to the strong opposition of the complex's official catering company, whose union representation was strong. SPE, ever mindful of the conference's technical excellence, also vetoed the motorhome ploy.

And most of the larger service/manufacturing companies held special parties and receptions at Houston hotels and restaurants for the nighttime entertainment of invited guests, particularly folks suspected of having purchasing influence. One Houston-based publishing company even bused scores of registrants to a rodeo arena just outside town for a number of years as its annual OTC "bash."

Meanwhile, virtually all manufacturers and service companies maintained the usual hotel "hospitality suites" for the enjoyment of those attendees who stretched their evenings' fun into the wee hours.

Of course, merriment has always been a part of the off-hours atmosphere of such international get-togethers. It remains so today, even with OTC. But the seriousness of the offshore petroleum business, with its ever-lengthening string of technical challenges and already mile-high costs, lends a much more sober tone to OTC week these days. Still, those go-go years are often recalled nostalgically.

But what goes up, as they say, must come down. In 1983, just one year after OTC's extravaganza year, the world found itself with massive oil surpluses, and prices plummeted to $10/bbl or less. Consequently, oil company E&P spending, particularly offshore, was so severely curtailed that by 1984, OTC organizers decided to suspend the exposition entirely, holding only the technical sessions and other conference-related programs. While exhibitors returned the next year, show attendance fell to only fractions of its banner year, but grew marginally during the remainder of the 1980s and the 1990s. Last year, however--again, mirroring an upward surge in the oil supply/demand cycle--OTC attendance rose to 49,620, up 1,700 from the previous year, marking the second-best overall total since the 1985 conference, which drew 56,483. Conference management expects this year's attendance to equal or better last year's.

The 2003 conference features a total of 49 technical sessions with 340 individual technical papers to be presented over the four days. Additionally, two general sessions, eight Topical Luncheons, and a special Awards Luncheon will join three Industry Breakfasts to round out conferential segments. At the same time, 1,999 exhibitors representing some 30 countries will fill the Reliant Center and Reliant Arena for the exposition segment. Even Houston nonpetroleum-related business community counts OTC week as big in terms of dollars spent by OTC registrants, with local revenues totaling in the hundreds of millions.

But those who question whether offshore resources add much to U.S. energy supplies need only visit one Offshore Technology Conference in Houston. The sheer size--and scope--of OTC will astound even the most cynical of industry critics.