Business: Superior Seduction

Mobil sues to protect secrets

In the bruisingly competitive oil industry, raiding a competitor's talent is a common tactic—but there are limits. Mobil Oil Corp. has charged that pesky Superior Oil has gone too far. In suits filed in Houston and in Calgary, Alberta, Mobil accuses Superior of luring away no fewer than 32 exploration and production experts to acquire top technical secrets. Mobil wants the courts to enjoin the defectors from spilling the beans and to force Superior to pay damages for any information already obtained.

It might seem a case of Goliath accusing David of dirty tricks: in 1976, Mobil's revenues were $25 billion, whereas Superior's were $441 million. But Superior has long had a brass-knuckle reputation. It was founded by William M. Keck, a flamboyant wildcatter ever on the alert for new oil, fresh profits and the main chance. In this pursuit, President Howard B. Keck, who took over at his father's death in 1964, is also relentless. Superior's success at sniffing out crude deposits has made it a darling of the New York Stock Exchange; last week its shares shot up 18 points to hit 279 and thus become the highest priced stock on the Big Board, ahead of IBM. Highly profitable (earnings were $51 million in 1976), Superior reportedly offered 100% pay increases to some Mobil runaways.

One of these, identified by Mobil in its U.S. suit, was H.R. Hirsch, formerly titled "exploration manager-technical," who left with a "specific and detailed knowledge of oil and gas prospects." That put Hirsch in a position to save Superior much time and money by telling which areas looked promising and which were duds. Mobil says he also knew its secret-bid calculation process, a complicated method of outguessing the competition in order to make bids for oil leases as low as possible, yet still win them. The Canadian suit named Arne R. Nielsen, president of Mobil Oil Canada, who was well versed in highly classified and arcane Mobil technology, including its airborne radar propane seep detector and computer graphics modeling system.

Mobil is particularly concerned about protecting information obtained from its highly expensive seismographic surveys of land and offshore sites. The company's spending for exploration tops $200 million a year. Such expenditures are beyond the reach of smaller firms, which often deal in the thriving black market for oil maps and aerial surveys. In taking its case to court, Mobil is hoping that, if nothing else, the feisty wildcatters at Superior will have second thoughts about seducing people who hold secrets. ∙