TAMPA - For deep-sea shipwreck explorers, finding sunken vessels with valuables and then extracting the contents are only two of the three ingredients needed for success.
And without the third, the first two mean nothing. It's about property: Explorers need to know that they can legally keep the contents they find, or at least enough to make the venture
worthwhile.
"That was the big risk you could never satisfy to yourself or investors,'' said Greg Stemm, co-founder and director of operations of Odyssey Marine Exploration Inc.
But now, the small south Tampa company has gained access to a world-class treasure chest potentially worth billions and navigated around the classic business risks.
Odyssey has signed a 20-year deal with the British government that allows Odyssey to excavate the sunken British warship HMS Sussex, and that awards Odyssey a fat share of the wealth inside.
The ship went down in 1694, laden with gold and silver coins that were meant to be a political payoff to a Spanish ally during a conflict with France.
But as the 157-foot warship sailed around Gibraltar, a peninsula on the southern coast of Spain, it encountered a bad storm. The Sussex sank, killing most of the crew of 500. The money was
never recovered.
The British government and Odyssey won't guess how much cash they can extract with 21st century technology. But observers estimate a treasure worth as much as $4 billion could be on board, and
the contract terms account for how the two parties will split amounts into the hundreds of millions. Sussex could be the richest shipwreck ever.
The project will start next year. Odyssey will spend three to six months exploring. The wreck is a half-mile down, too deep for divers to reach. Instead, the company will work the expedition
by manipulating robotic devices called remotely operated vehicles that it will send to the ocean floor from a ship based in the western Mediterranean.
A successful outcome could enrich Odyssey, a company with a core of 10 people, and stock that trades over-the-
counter at about $1.40 a share. Odyssey lost $1.6 million in its most recent fiscal year. The company has been scouting for long-term profits through several extended projects. Odyssey has
been researching the Sussex since 1996, for instance.
But it's not just the course of Odyssey that might change because of this deal.
A New Era
This pact could advance a new international standard for deep-sea explorations, Stemm said. "This signals the beginning of a new era.''
Pillaging would become a thing of the past. In the new age, as Stemm sees it, explorers talk about "cultural heritage'' and use correct archaeological methods. Property rights count.
And that matters, Stemm said, because there are potentially billions of dollars at stake on the planet's ocean floors. "It's been estimated there are over 3 million shipwrecks over 100 years
of age.''
Wrecks that aren't loaded with money still convey a cultural heritage that has to be properly managed, he said.
The doomed Sussex was the right artifact to encourage a new approach.
The Sussex sank in international waters, Stemm said, where no country claims the ocean floor.
Under the tradition that's been in place until now, if a ship went down under those conditions, a salvage company would file for rights to it in a U.S. court. The court action doesn't have the
practical power to keep other parties away from the shipwreck site, but the legal maneuver effectively keeps them from doing business in the United States.
That's been enough leverage for salvage companies to extract what they can for sale.
But such a system doesn't advance international cooperation or respect for history, Stemm said.
Then researchers, guided by witness accounts of the storm, found the Sussex.
Because it was a warship, international law considers the ship and its cargo still to be property of its home country, England, and its Ministry of Defence.
Odyssey knew with whom to negotiate, and it was only one country. Odyssey demonstrated its seriousness over years of research.
For its part, England had good reason to sign with Odyssey, according to information supplied by its Ministry of Defence. Because other parties also had figured the general location of the
Sussex, it was only a matter of time before someone else tried to excavate the ship, and another outfit might not have shown the same regard for "its cultural value,'' the Ministry said.
The result is the first public-
private partnership - and not just a contract for salvage work - of its type, said U.S. ocean policy adviser Robert Blumberg. No other model exists, said Blumberg, who works for the U.S. State
Department.
Satisfying Terms
Working with a government supplies extra security to Odyssey. The local British naval station on Gibraltar - still a British territory - can watch over the Odyssey crew and its boat while it
works on the first phase of the harvesting.
Odyssey is covering the initial costs, which might be $2 million to $5 million or more, depending on conditions. Odyssey must be careful not to scratch the coins - so if they're found
scattered, it will be more time-consuming to retrieve them than if they're found in boxes.
After the coins are harvested and cataloged, Odyssey will sell them, which could take months. England will help with the marketing.
The pact says the money will be split this way: Odyssey gets 80 percent of the first $45 million. Odyssey and England split any proceeds between $45 million and $500 million on a 50-50 basis.
Anything more than that is split with 60 percent going to England and 40 percent to Odyssey.
And museum exhibits, educational tourist attractions, books and movies are possibilities England and Odyssey can explore.
Some unanticipated event could complicate the mission, Stemm said. But Odyssey's chances are much improved now, he said.
"When the government is your partner, they want you to succeed.''
Reporter Jo-Ann Johnston can be reached at (813) 259-7804.
Watch Bob Hite's report on this story at 11 p.m. today on WFLA, News Channel 8.
Reprinted with permission.
Copyright© 2002 The Tampa Tribune