EXHIBIT 10.7
                     EMPLOYMENT AGREEMENT


     THIS   EMPLOYMENT   AGREEMENT   (the  "Agreement"),  dated
effective  as  of  May  15,  1997, is by and  between  American
Oilfield Divers, Inc., a Louisiana corporation (the "Company"),
and Kevin Peterson (the "Employee").


                          WITNESSETH:

     WHEREAS,  the  Company wishes  to  assure  itself  of  the
services of Employee for the period provided in this Agreement,
and Employee desires to serve in the employ of the Company on a
full-time  basis  for such  period,  and  upon  the  terms  and
conditions hereinafter provided;

     NOW, THEREFORE,  in  consideration  of the premises and of
the respective representations and warranties  hereinafter  set
forth and of the mutual covenants herein contained, the parties
hereto hereby agree as follows:

     I.  Employment  and Capacity.  (a).  Subject to the terms
and  conditions  of this  Agreement  and  applicable  law,  the
Company hereby agrees  to  employ Employee, and Employee agrees
to serve for an initial period, as Executive Vice President and
President - Technology Group  of the Company during the term of
this Agreement.  In such capacity,  Employee's  primary  duties
and responsibilities shall be those assigned from time to  time
by the Company's President and Chief Executive Officer, to whom
Employee  shall  report  directly, or by the Company's Board of
Directors  including,  without  limitation,  those  duties  and
responsibilities set forth  in  Appendix  A attached hereto and
made a part hereof.

          (b). In  performing  his  duties  as  Executive  Vice
President and President - Technology Group of  the  Company  or
other position hereunder, Employee shall devote his entire full
time,  attention,  energies and business efforts to the Company
and shall not, without  the  consent  of the Company's Board of
Directors,  during the term of this Agreement,  engage  in  any
other business  activity, whether or not such business activity
is pursued for profit;  provided,  however,  this  Section 1(b)
shall  not prohibit Employee from (i) being a passive  investor
in a business  enterprise  (other than an enterprise engaged in
the Company Business, as defined  in  Section 8), provided such
investment  will  not unduly interfere or  materially  conflict
with his obligations  hereunder and will not require any active
services whatsoever on  his part in the management or operation
of  the  affairs  of such enterprise,  or  (ii)  serving  as  a
director  or  trustee   of   any  civic,  charitable  or  other
eleemosynary organization, provided  that such service does not
unduly interfere with Employee's performance  of his duties and
responsibilities  hereunder.  Notwithstanding anything  to  the
contrary herein, Employee  shall  be  entitled  to remain as an
owner or director of or otherwise be involved in  the  business
enterprises set forth in Appendix B attached hereto and  made a
part hereof.

          (c). In connection with Employee's employment by  the
Company,  except for reasonable travel necessary to the conduct
of the business  of  the  Company or its subsidiaries, Employee
shall be based at the Houston, Texas headquarters office of the
Company or such other location  as  may  be  determined  by the
President and Chief Executive Officer or Board of Directors  of
the  Company.   Subject  to  the  execution  of this Agreement,
Company  shall  pay  a  lump  sum  of  $35,0000  to  cover  the
reasonable  and  necessary  cost  of  travel (economy class  or
equivalent)   and   transportation  of  household   goods   and
furnishings  and vehicles  of  the  Employee,  his  spouse  and
dependent children (if any) from Jupiter, Florida,  to Houston,
Texas, subject  to  the  terms  and conditions of the Company's
corporate moving policy.  In the  event  of termination of this
Agreement by Employee for Good Reason or by  the  Company for a
reason  other  than Cause, as defined herein, on or before  the
second  anniversary   of   this  Agreement  the  Company  shall
immediately pay the reasonable  and  necessary  cost  of travel
(economy  class  or  equivalent) and cost of transportation  of
household goods, furnishings  and vehicles of the Employee, his
spouse  and  dependent children from  the  location  where  the
Employee is employed  at  the  time  that  employment ceases to
Jupiter, Florida.

          (d). For  purposes  of  this  Agreement,   Employee's
employment  shall  begin  on,  and be effective as of the  date
hereof and, notwithstanding anything  to  the  contrary herein,
the   date   hereof  shall  be  considered  as  the  Employee's
anniversary date of employment hereunder.

     II. Term   of  Employment.   Subject  to  the  terms  and
conditions hereof,  Employee's  employment under this Agreement
shall commence on the date hereof and shall end at the close of
business on the fifth anniversary  of  the  date hereof, unless
sooner  terminated  pursuant  to  Section  4.   The   term   of
Employee's  employment  under  this  Agreement  is  referred to
herein as the "Employment Term" and the date of termination  of
such  employment  as  the  "Termination  Date."  All provisions
herein governing the parties' rights and obligations  upon  the
termination   of   Employee's   employment  shall  survive  the
termination of this Agreement.

     III.Compensation   and   Other    Benefits.    (a).    In
consideration of all services to be rendered by Employee in any
capacity  to  the  Company  and  any  of  its  subsidiaries  or
affiliates under this Agreement, the Company shall pay Employee
the compensation and benefits described below:

               (i). An annual salary ("Annual Salary")  in  the
amount  of not less than $220,000, or in such greater amount as
may from  time  to  time  be  fixed  by  the Company's Board of
Directors. The Annual Salary shall be reviewed  by  the Board's
Compensation  Committee  at  the  end  of each of the Company's
fiscal years.

               (ii).Employee shall be eligible  for  an  annual
     bonus  of  up  to  60%  of  his Annual Salary upon (A) the
     attainment  of  such Company-wide  performance  goals,  in
     accordance with such  terms  and  conditions,  as shall be
     established  by  the Company's Board of Directors  or  the
     Compensation  Committee   thereof   and   (B)  any  annual
     evaluation  of  Employee's  individual  performance/merit.
     Employee shall have the right to provide  input  and  make
     recommendations  with  respect  to  the  establishment  of
     reasonable  Company-wide  performance goals prior to their
     finalization and adoption by  the  Compensation Committee.
     Notwithstanding  anything  to  the  contrary  herein,  the
     payment of such bonus shall be in the  sole  discretion of
     the  Company's  Board  of  Directors  or  the Compensation
     Committee thereof.

               (iii).Promptly  after the first meeting  of  the
     Board  of  Directors of the Company  or  the  Compensation
     Committee thereof  following  execution of this Agreement,
     pursuant to the Company's 1993 Incentive Compensation Plan
     (the "Plan"), the Company will  grant  to Employee options
     to  purchase  200,000  shares  of its common  stock  at  a
     purchase price equal to "fair market value," as defined in
     the Plan, on the date of issuance  of  such  options;  the
     grant  of the option to purchase 200,000 shares  shall  be
     subject  to  approval by the Company's shareholders, which
     matter  shall  be   placed  on  the  next  annual  Company
     shareholder's meeting in calendar year 1997.  Such options
     (A)  will vest and become  exercisable  in  increments  of
     40,000  per  year  of the Employment Term, and (B) will be
     subject  to  such  other   reasonable   restrictions   and
     limitations  as  may  be  determined  by  the Compensation
     Committee.     In   the  event  of  a  change  in  control
     transaction involving  the Company such as the acquisition
     of 50% of the Company's  outstanding  Common  Stock or the
     change  in a majority of the Company's Board of  Directors
     after within  one  calendar  year, all outstanding options
     will  vest  and become immediately  exercisable.   If  the
     Company does  not  obtain  shareholder  approval  for  the
     Employee's  options  granted hereunder, the Company agrees
     to place the Employee in the same or substantially similar
     economic position as if  the  options  had  been  approved
     (i.e., in the form of a cash payment, etc.)

               (iv).During  each  year of Employee's employment
     hereunder, Employee shall be entitled to three weeks' paid
     vacation and six paid days sick  leave,  which  shall  not
     cumulate  from year to year; no vacation/sick pay shall be
     payable with  respect  to  vacation/sick  leave not taken.
     Notwithstanding  the  foregoing,  if  Employee  delays  or
     disrupts a previously scheduled vacation at the request of
     the Company to handle Company business,  then  the Company
     shall  accommodate  the  Employee  to  make  up  for  such
     delayed/disrupted vacation.

               (v). Employee  shall  be entitled to participate
     in  and  receive  benefits ("Other Benefits")  under  each
     employee  benefit plan  and  incentive  compensation  plan
     maintained by the Company on the same basis and subject to
     the   same  eligibility   and   other   requirements   and
     limitations as other Company employees similarly situated.

               (vi).Employee  shall  entitled  to an automobile
     allowance  of $600 per month and to reimbursement  of  the
     cost of fuel,  fluids,  batteries  and  tires  used in the
     operation of such automobile.

               (vii).Employee shall be entitled to the use of a
     cellular  telephone in connection with the performance  of
     his duties  hereunder  and  all cellular telephone charges
     associated with Company business  shall  be  reimbursed to
     the Employee by the Company.

          (b). Payment   to   Employee   of   all  compensation
     hereunder  shall  be at such times and in accordance  with
     such payroll and reimbursement  practices  as are followed
     by  the Company for employees occupying positions  similar
     to that of Employee.

          (c). Employee  will  be entitled to reimbursement for
     ordinary  and necessary business  expenses  incurred  from
     time to time  on  behalf of the Company in accordance with
     the Company's policies  in  the  performance of his duties
     hereunder,  provided no such expense  will  be  reimbursed
     unless Employee  will have properly accounted for expenses
     to  the extent necessary  to  substantiate  the  Company's
     federal  income tax deductions for such expenses under the
     Internal  Revenue   Code   of  1986  and  the  regulations
     promulgated thereunder and consistent  with  the Company's
     expense  reimbursement  policy.  Subject to the  Company's
     air  travel policy, as amended  from  time  to  time,  air
     travel on trans-Atlantic flights, flights over any portion
     of the Pacific Ocean and flights which exceed a total of 6
     hours  of  flight  time  shall  be  in  business  class or
     equivalent thereof.

          (d). Any   and   all  of  Employee's  service  as  an
     employee, officer or director  of  any subsidiary or other
     affiliate  of  the  Company  shall  be  performed  without
     additional compensation.

          (e). Company  shall use its best efforts  to  provide
     directors and officers  liability  insurance  coverages of
     the  Employee  as  an officer and director of the  Company
     with a minimum limit  of  liability  of  $5 million in the
     aggregate and shall obtain the broadest possible  coverage
     terms  using its commercially reasonable best efforts  and
     shall  provide  indemnification  of  the  Employee  as  an
     officer  and director of the Company to the maximum extent
     permitted  by applicable law and the applicable provisions
     of the Company's  By-laws,  as  amended from time to time.
     Simultaneous  with  the  execution  of   this   Agreement,
     Employee   and  Company  shall  execute  and  deliver  the
     Company's standard  indemnification agreement entered into
     between the Company and its executive officers.

     IV. Termination.   (a).    Death.   This  Agreement  will
     terminate  upon  Employee's  death,  in  which  event  the
     Company shall pay to Employee's  spouse  or,  if  Employee
     leaves  no spouse, to Employee's estate, in a lump sum  in
     cash within  30  days  the  sum  of the pro rata amount of
     Employee's Annual Salary earned through  the date of death
     to  the extent due but not previously paid  (the  "Accrued
     Salary").  The Company shall also timely pay or provide to
     such person any Other Benefits required to be furnished to
     such person under any employee benefit plan.

          (b). Disability.   If   Employee  becomes  unable  to
     discharge the essential functions  of his job for a period
     of more than 30 consecutive days or  for more than 60 days
     in  the  aggregate during any 12-month period  because  of
     physical or  mental  impairment,  the  Company may, at its
     option,   terminate  Employee's  employment   under   this
     Agreement upon  not  less  than  30  days' written notice.
     Employee shall continue to receive his  full Annual Salary
     at  the  rate  then  in  effect  until  his employment  is
     terminated   pursuant  to  this  Section,  provided   that
     payments so made  to  Employee shall be reduced by the sum
     of  the  amounts,  if  any,   payable  to  Employee  under
     disability benefit plans of the Company.  Upon termination
     of Employee's employment under  this  Section, the Company
     shall pay to Employee in a lump sum in cash within 30 days
     of the date of termination all Accrued  Salary  and  shall
     timely furnish to Employee all Other Benefits.

          (c). Cause.   The  Company  shall  have  the right to
     terminate  Employee's employment for Cause.  For  purposes
     of this Agreement, the Company shall have "Cause" if:  (i)
     Employee  commits  an  illegal  act  (other  than  traffic
     violations   or  misdemeanors  punishable  solely  by  the
     payment of monetary  fines)  or  engages  in  dishonest or
     unethical  conduct  that  has  an  adverse  effect on  the
     Company or its business reputation; (ii) Employee is found
     guilty    of    fraud,    theft,   embezzlement   or   the
     misappropriation  of  funds or  a  crime  involving  moral
     turpitude; or (iii) Employee  fails  to perform the duties
     required to be performed by him hereunder  or breaches any
     covenant or agreement hereunder and such failure or breach
     is  not waived by the Company or cured by Employee  within
     15 business  days  after  the Company notifies Employee of
     the basis for the Company's claim that Employee has failed
     to perform his obligations  hereunder,  unless  and to the
     extent  that  such  failure  is  a result of the Company's
     breach of this Agreement or such failure  occurs at a time
     during  which Employee has Good Reason (as defined  below)
     to terminate  his  employment,  or such failure is excused
     under the Company's sick leave or  vacation  policies.  If
     Employee's employment shall be terminated for Cause by the
     Company,  this  Agreement shall terminate without  further
     obligation to Employee  whatsoever  other than for Accrued
     Salary, which shall be paid in a lump  sum  in cash within
     30  days  of  the  date  of  termination,  and  for  Other
     Benefits,  which  the  Company  shall  timely  furnish  to
     Employee.

          (d). Notwithstanding anything to the contrary herein,
     the  Employee's employment may not be terminated for Cause
     under  Section  4(c)(iii)  hereof  (A) unless the Employee
     shall  have  failed  to  have  corrected  the  failure  or
     misconduct constituting such Cause within 15 business days
     after having received written notice  from  the  Company's
     Chief   Executive   Officer  specifying  such  failure  or
     misconduct and the action  that  the  Company requests the
     Employee  take to remedy such failure or  misconduct,  and
     (B) unless  and  until  there shall have been delivered to
     the Employee a copy of a  resolution  duly  adopted by the
     affirmative vote of not less than a majority of the entire
     membership  of the Board at a meeting of the Board  called
     on behalf for  the  purpose  (after 10 day's notice to the
     Employee and an opportunity for the Employee together with
     his counsel, to be heard before  the  Board), finding that
     in the good faith opinion of the Board  the  Employee  was
     guilty  of  the  conduct  set  forth  in  clause 4(c)(iii)
     hereof, specifying the particulars thereof in detail, that
     the  Employee  was  given  written notice to correct  such
     failure or misconduct as provided  above, and the Employee
     failed to have corrected such failure or misconduct within
     the  15  business  day  period  provided   above.   It  is
     expressly  agreed  and  understood that this Section  4(d)
     shall not apply to the term  "Cause" as defined in Section
     4(c)(i) and (ii) hereof.  It is  also expressly understood
     that the Employee's attention to the business set forth in
     Appendix B attached hereto shall not  provide  a basis for
     termination  for  Cause; provided such attention does  not
     unduly  interfere  or   materially   conflict   with   his
     obligations  hereunder,  as  determined by the affirmative
     vote of not less than a majority  of the entire membership
     of the Board at a meeting of the Board  called  on  behalf
     and for the purpose of making such determination (after 10
     day's  notice  to  the Employee and an opportunity for the
     Employee, together with  his  counsel,  to be heard before
     the Board).

          (e). Good   Reason.    Employee  may  terminate   his
     employment at any time and for  any  reason, including for
     Good  Reason  (as  defined below).  For purposes  of  this
     Agreement, "Good Reason"  shall  mean  any  action  by the
     Company  in  relation  to  Employee's  salary,  duties  or
     position  as  an  officer  of  the Company (other than any
     action contemplated under this Agreement,  any action that
     is  voluntary  on the part of Employee, and any  isolated,
     insubstantial and  inadvertent  action  not  taken  in bad
     faith  and  which is remedied by the Company after receipt
     of notice thereof  given  by Employee) that results in any
     of the following:  (i) a reduction  in  Employee's  Annual
     Salary  or  other  compensation  provided  for  under this
     Agreement  or  a  failure  by  the  Company  to pay to the
     Employee any installment of the Annual Salary or incentive
     bonus, if any, which failure continues for a period  of 20
     days after written notice thereof is given by Employee  to
     the Company; (ii) a change in the Employee's status, title
     or  position (as an officer of the Company) which does not
     represent  a  promotion from or enhancement of his status,
     title, position as an executive officer, or the assignment
     by the Company's Board of Directors to the Employee of any
     duties or responsibilities  which  are  inconsistent  with
     such  status,  title  or  position  or  any removal of the
     Employee from or any failure to reappoint  or  re-elect to
     such  position,  except  in  connection with a justifiable
     termination by the Company of  the  Employee's  employment
     for  Cause  or,  the  disability,  retirement or death  of
     Employee  or  termination by Employee  of  his  employment
     other than for  Good  Reason;  (iii)  the  failure  of the
     Company to review the Employee's Annual Salary as provided
     in  Section  3  hereof;  and  (iv) Company's requiring the
     Employee, without  the  Employee's  consent,  to  be based
     anywhere other than in Houston, Texas, except for required
     travel   on   the   Company's   business   to   an  extent
     substantially  consistent  with  the  business  and travel
     obligations which the Employee undertook on behalf  of the
     Company  prior  to  such  required  change.   If  Employee
     voluntarily terminates his employment other than for  Good
     Reason,  this  Agreement  shall  terminate without further
     obligation  to  Employee whatsoever  other  than  for  the
     Accrued Salary, which  shall be paid in a lump sum in cash
     within 30 days of the date  of  termination, and for Other
     Benefits and fully vested stock options hereunder, if any,
     which the Company shall timely furnish to Employee.

          (f). If on or prior to the second anniversary hereof,
     the  Company shall terminate Employee's  employment  other
     than for  death,  disability or Cause or if Employee shall
     terminate  his employment  for  Good  Reason,  ("Severance
     Payment Event") then Employee shall be entitled to receive
     in a lump sum  in  cash  within  30  days  of  the date of
     termination equal to the product of (A) two times  (B) his
     then Annual Salary.  If the Severance Payment Event occurs
     after  the  second anniversary thereof, Employee shall  be
     entitled to receive  a lump sum in cash  within 30 days of
     the date of termination  equal  to  his then Annual Salary
     In the event of such termination, the  Company  shall also
     timely pay or provide Other Benefits, if any, to Employee.
     Earnings  of  Employee from other sources before or  after
     the date of termination  shall  not  be taken into account
     and  shall  not  reduce  the  amount payable  to  Employee
     hereunder.

     V.  Representations and Warranties of Employee.  Employee
     represents and warrants to the  Company  that (a) Employee
     is  under  no  contractual or other obligation  compliance
     with which is inconsistent  with  the  execution  of  this
     Agreement,  the  performance of his obligations hereunder,
     or the other rights  of  the  Company  hereunder  and  (b)
     Employee  agrees  faithfully and consistently to comply in
     all material respects  with all of the Company's policies,
     procedures, regulations  and  workplace  rules, as amended
     from time to time.

     VI. Confidential Information.  (a).  Employee agrees that
     he  will  not  either during the period of his  employment
     hereunder or at  any  time  within  five  years thereafter
     disclose to any unauthorized person or entity,  or use for
     his own benefit or the benefit of any unauthorized  person
     or  entity,  any  Confidential Information relating to the
     Company, its subsidiaries  or affiliates, or to any of the
     businesses operated by them,  and  Employee  confirms that
     all such information constitutes the exclusive property of
     the Company.  For the purposes of this Agreement, the term
     "Confidential Information" shall mean information  of  any
     nature and in any form that at the time or times concerned
     is  not  generally  known  to  those  persons  engaged  in
     business  similar to that conducted or contemplated by the
     Company or its subsidiaries (other than by the act or acts
     of an employee  not  authorized by the Company to disclose
     such information), and  shall  be  deemed  to  include all
     lists  or other compilations of data regarding the  names,
     addresses  or  other  information  concerning  existing or
     potential  customers  of  the Company and its subsidiaries
     ("Customers"), trade secrets, new ideas, pricing policies,
     operational  methods,  marketing   plans   or  strategies,
     business  expansion  plans  or  strategies, and  financial
     data, irrespective of whether such information or material
     is marked "Confidential."  Employee  shall  return  to the
     Company all Confidential Information reduced to a tangible
     or  electronic  medium  and  all other Company property in
     Employee's possession or within  Employee's  control prior
     to or at the termination of his employment.

          (b). The  confidential  obligations, restrictions  of
     use and ownership provisions set  forth  herein  shall not
     extend  to  any device, process, technology, idea, design,
     hardware or other  Confidential  Information  that: (i) is
     currently in the public domain; (ii) subsequently  becomes
     a part of the public domain through no fault or breach  by
     Employee; (iii) is disclosed by others to Employee without
     any  breach  of  any  obligation  to  the  Company  or its
     subsidiary or affiliated companies; or (iv) which Employee
     can show (A) was already in his possession at the time  of
     disclosure  to  him  or (B) was independently developed by
     Employee  during  a  period  of  time  not  including  the
     Employment Term.

     VII.Obligation of Loyalty  to  the Company.  (a).  During
     the term of Employee's employment  under  this  Agreement,
     Employee agrees that he will not:

               (i). Make  any  statement  or  perform  any  act
intended  to advance an interest of any existing competitor  of
the Company  or  its  subsidiaries  in any way that will or may
injure the Company or its subsidiaries  in  their  relationship
and dealings with any existing or potential customer,  supplier
or creditor, or solicit or encourage any other employee  of the
Company and its subsidiaries to do any act that is disloyal  to
the  Company or its subsidiaries or inconsistent with the inte-
rests of the Company or its subsidiaries or in violation of any
material provision of this Agreement;

               (ii).Solicit  any  other employee to participate
     in or assist with the formation or operations of any busi-
     ness  intended  to  compete  with   the  Company  and  its
     subsidiaries  or  with  respect  to  the  possible  future
     employment of such other employee by any such business; or

               (iii).Inform any existing or potential customer,
     supplier  or creditor of the Company and its  subsidiaries
     that Employee  intends to resign, or make any statement or
     do any act intended  to  cause  any  existing or potential
     customer,  supplier  or creditor of the  Company  and  its
     subsidiaries to learn of Employee's intention to resign.

          (b). During the term  of  Employee's employment under
     this Agreement, if Employee has  or  expects  to acquire a
     proprietary  interest in, or is or expects to be  made  an
     agent, consultant,  employee,  officer or director of, any
     existing or future business that  provides or will provide
     services or products in competition  with  the Company and
     its subsidiaries, Employee agrees that he will immediately
     furnish  to  a  corporate officer of the Company  all  in-
     formation that may  reasonably  be  of  assistance  to the
     Company  in  acting  promptly to protect its relationships
     with  any  existing  or potential  customer,  supplier  or
     creditor with whom Employee  has had any dealings as a re-
     sult   of   his  employment  by  the   Company   and   its
     subsidiaries.

     VIII.Covenant   Not   to   Compete.    (a).   During  the
     Employment  Term  and  for  a  period of up to  two  years
     commencing  on  the  Termination Date  in  the  event  the
     Company elects pursuant  to  Section 8(c) hereof, Employee
     agrees  that, with respect to each  State  of  the  United
     States  or   other  jurisdiction,  or  specified  portions
     thereof, in which the Employee regularly (i) makes contact
     with customers  of the Company or any of its subsidiaries,
     (ii) conducts the  business  of  the Company or any of its
     subsidiaries or (iii) supervises the  activities  of other
     employees  of  the Company or any of its subsidiaries,  as
     identified in Appendix  C  attached  hereto  and forming a
     part of this Agreement, and in which the Company or any of
     its  subsidiaries engages in the Company Business  on  the
     Termination  Date  (collectively,  the  "Subject  Areas"),
     Employee  will  restrict his activities within the Subject
     Areas in accordance  with the following provisions of this
     Section 8.  For purposes  of  this  Section  8,  the  term
     "Company   Business"   means   the  business  of  directly
     providing diving, remotely operated  vehicles, vessels and
     related marine construction and other  ancillary  services
     and  products  including,  without  limitation,  the sale,
     manufacture  and installation of subsea pipeline connector
     products and marginal  well  protection  systems  and  the
     provision  of  environmental  remediation  and  oil  spill
     response  services and derrick barge and related ancillary
     services.

               (i). Employee  will not, directly or indirectly,
     for himself or others, own,  manage,  operate, control, be
     employed  in  an  executive,  managerial  or   supervisory
     capacity  by,  or  otherwise engage or participate  in  or
     allow his skill, knowledge, experience or reputation to be
     used  in  connection  with,   the  ownership,  management,
     operation  or control of, any company  or  other  business
     enterprise,  or  any  part  thereof  or  interest therein,
     engaged in the Company Business within any  of the Subject
     Areas;   except   Employee  may  engage  in  the  business
     enterprises set forth  in  Appendix  B attached hereto and
     made a part hereof.

               (ii).Employee will not call upon any customer of
     the  Company  or  its  subsidiaries  for  the  purpose  of
     soliciting,  diverting  or enticing away the  business  of
     such  person  or  entity,  or   otherwise  disrupting  any
     previously established relationship  existing between such
     person or entity and the Company or its subsidiaries;

               (iii).Employee   will   not   solicit,   induce,
     influence  or  attempt to influence any supplier,  lessor,
     licensor, potential acquiree or any other person who has a
     business   relationship    with   the   Company   or   its
     subsidiaries, or who on the Termination Date is engaged in
     discussions  or negotiations  to  enter  into  a  business
     relationship with  the  Company  or  its  subsidiaries, to
     discontinue or reduce the extent of such relationship with
     the Company or its subsidiaries; and

               (iv).For a period of one year from and after the
     Termination Date, Employee will not make contact  with any
     of  the employees of the Company or its subsidiaries  with
     whom  he  had  contact during the course of his employment
     with  the Company  for  the  purpose  of  soliciting  such
     employee,  for hire, whether as an employee or independent
     contractor,   or   otherwise  disrupting  such  employee's
     relationship with the  Company  or its subsidiaries except
     Employee's new employer, if any, may make contact with and
     solicit  Company  or  its  subsidiary  employees  provided
     Employee has not breached Section 6 hereof with respect to
     such new employer's action.

          (b). Employee agrees that  he  will from time to time
     upon   the   Company's   request   promptly  execute   any
     supplement, amendment, restatement or  other  modification
     of  Appendix  C  as  may  be  necessary or appropriate  to
     correctly reflect the jurisdictions  which, at the time of
     such  modification, should be covered by  Appendix  C  and
     this Section  8.   Furthermore,  Employee  agrees that all
     references to Appendix C in this Agreement shall be deemed
     to  refer  to  Appendix  C  as  so  supplemented, amended,
     restated or otherwise modified from time to time.

          (c).   In the event of the termination  of Employee's
     employment hereunder for any reason or no reason,  whether
     by  the  Company or  the Employee, Company shall have  the
     option at  the  time  of such termination, upon payment to
     Employee of an amount in  cash  equivalent  to $220,000 to
     extend Employee's foregoing covenant not to compete  for a
     period  of one (1) year or two (2) years from the date  of
     termination  (at the Company's option) and Employee agrees
     to such extension of such covenant upon receipt of payment
     of such above  amount in immediately available good funds;
     the $220,000 payment shall be due and payable on the first
     day of each of the  two  years  if two years is elected by
     Company ($440,000 in total).

          (d). Employee acknowledges that  a breach by Employee
     of  Section 6 or 8 would cause immediate  and  irreparable
     harm  to the Company for which an adequate monetary remedy
     does not  exist; hence, Employee agrees that, in the event
     of a breach  or  threatened  breach  by  Employee  of  the
     provisions   of  Section  6  or  8  during  or  after  the
     Employment  Term,   the   Company  shall  be  entitled  to
     injunctive relief restraining Employee from such violation
     without the necessity of proof  of  actual  damage  or the
     posting  of  any bond, except as required by non-waivable,
     applicable  law.    Nothing   herein,  however,  shall  be
     construed  as prohibiting the Company  from  pursuing  any
     other remedy  at law or in equity to which the Company may
     be entitled under  applicable law in the event of a breach
     or  threatened  breach  of  this  Agreement  by  Employee,
     including without  limitation  the recovery of damages and
     costs  and expenses, such as reasonable  attorneys'  fees,
     incurred  by  the  Company as a result of any such breach.
     Employee acknowledges  that  the  payments  provided under
     Section  8(c)  are  conditioned upon, among other  things,
     Employee's fulfilling  his  agreements  contained  in this
     Section  8.   In  the  event  Employee  shall  at any time
     materially  breach  any  noncompetition  or  nondisclosure
     agreements contained in Section 6 or this Section  8,  the
     Company  may suspend or eliminate such payments during the
     period of  such  breach.   Employee  acknowledges that any
     such  suspension or elimination of payments  would  be  an
     exercise  of  the  Company's right to suspend or terminate
     its performance hereunder  upon  Employee's breach of this
     Agreement;  such  suspension  or elimination  of  payments
     would not constitute, and should  not be characterized as,
     the imposition of liquidated damages.

          (e). Any dispute regarding the  reasonableness of the
     covenants and agreements set forth in  this  Section 8, or
     the territorial scope or duration thereof, or the remedies
     available to the Company upon any breach of such covenants
     and  agreements,  shall be governed by and interpreted  in
     accordance with the laws of the State of the United States
     or other jurisdiction  in  which  the  alleged  prohibited
     competing activity or disclosure occurs, and, with respect
     to each such dispute, the Company and Employee each hereby
     irrevocably consent to the exclusive jurisdiction  of  the
     state  and  federal  courts  sitting in the relevant State
     (or, in the case of any jurisdiction  outside  the  United
     States,  the  relevant  courts  of  such jurisdiction) for
     resolution of such dispute, and agree  to  be  irrevocably
     bound by any judgment rendered thereby in connection  with
     such  dispute,  and  further agree that service of process
     may  be  made  upon him or  it  in  any  legal  proceeding
     relating to this  Section 8 by any means allowed under the
     laws of such jurisdiction.

          (f). Employee  hereby  represents to the Company that
     he has read and understands,  and  agrees  to be bound by,
     the  terms of this Section 8.  Employee acknowledges  that
     the  geographic   scope  and  duration  of  the  covenants
     contained in Section  8  are  the  result  of arm's length
     bargaining and are fair and reasonable in light of (i) the
     importance of the functions performed by Employee  and the
     length of time it would take the Company to find and train
     a   suitable   replacement,   (ii)  the  nature  and  wide
     geographic scope of the operations  of the Company and its
     subsidiaries, (iii) Employee's level  of  control over and
     contact  with the business and operations of  the  Company
     and its subsidiaries  in  all jurisdictions where same are
     conducted and (iv) the fact that all facets of the Company
     Business are conducted by the Company and its subsidiaries
     throughout  the  geographic  area   where  competition  is
     restricted by this Agreement.

     IX. Binding Effect.

          (a). This Agreement shall be binding  upon  and inure
     to the benefit of the Company and any of its successors or
     assigns.

          (b). This  Agreement is personal to the Employee  and
     shall  not  be assignable  by  the  Employee  without  the
     consent of the  Company (there being no obligation to give
     such consent) other  than  such  rights or benefits as are
     transferred   by   will  or  the  laws  of   descent   and
     distribution.

          (c). The Company  shall  require  any successor to or
     assignee  of  (whether  direct or indirect,  by  purchase,
     merger, consolidation or  otherwise)  all or substantially
     all  of  the assets or businesses of the  Company  (i)  to
     assume unconditionally  and  expressly  this Agreement and
     (ii) to agree to perform all of the obligations under this
     Agreement  in  the same manner and to the same  extent  as
     would have been  required of the Company had no assignment
     or succession occurred, such assumption to be set forth in
     a writing reasonably satisfactory to the Employee.  In the
     event  of any such  assignment  or  succession,  the  term
     "Company"  as  used  in this Agreement shall refer also to
     such successor or assign.

     X.  Notices.  All notices  hereunder  must  be in writing
     and shall be deemed to have given upon receipt of delivery
     by:  (a) hand (against a receipt therefor), (b)  certified
     or  registered   mail,  postage  prepaid,  return  receipt
     requested, (c) a nationally  recognized  overnight courier
     service  (against  a  receipt  therefor)  or (d)  telecopy
     transmission  with  confirmation  of  receipt.   All  such
     notices must be addressed as follows:

     If to the Company, to:

     American Oilfield Divers, Inc.
     130 East Kaliste Saloom Road
     Lafayette, Louisiana  70508
     Telecopy No. 318-232-7306
     Attn:  Quinn J. Hebert

     If to the Employee, to:

     Kevin Peterson
     Jupiter, Florida  33458-8946
     Fax No.:  (561)  221-7267

     or  such  other address as to which any party  hereto  may
     have notified the other in writing.

     XI. Governing Law.  This Agreement shall be construed and
     enforced in  accordance  with and governed by the internal
     laws of the State of [Texas]  without regard to principles
     of  conflict  of  laws, except as  expressly  provided  in
     Section 8 above with respect to the resolution of disputes
     arising under, or the  Company's enforcement of, Section 8
     of this Agreement.

     XII.Withholding.  The Employee  agrees  that  the Company
     has  the  right  to  withhold,  from  the  amounts payable
     pursuant  to  this Agreement, all amounts required  to  be
     withheld under  applicable  income  and/or  employment tax
     laws, or as otherwise stated in documents granting  rights
     that are affected by this Agreement.

     XIII.Severability.   If  any  term  or  provision of this
     Agreement (including without limitation those contained in
     Appendix  A,  B or C), or the application thereof  to  any
     person or circumstance, shall at any time or to any extent
     be invalid, illegal  or  unenforceable  in  any respect as
     written,  Employee  and the Company intend for  any  court
     construing  this  Agreement   to   modify  or  limit  such
     provision  temporally,  spatially or otherwise  so  as  to
     render  it valid and enforceable  to  the  fullest  extent
     allowed  by   law.    Any   such  provision  that  is  not
     susceptible of such reformation  shall be ignored so as to
     not  affect any other term or provision  hereof,  and  the
     remainder  of  this  Agreement, or the application of such
     term or provision to persons  or  circumstances other than
     those  as  to  which  it  is  held  invalid,   illegal  or
     unenforceable, shall not be affected thereby and each term
     and  provision  of  this  Agreement  shall  be  valid  and
     enforced to the fullest extent permitted by law.

     XIV.Waiver  of  Breach.   The waiver by either party of a
     breach  of  any  provision  of this  Agreement  shall  not
     operate  or be construed as a  waiver  of  any  subsequent
     breach thereof.

     XV. Remedies  Not  Exclusive.  No remedy specified herein
     shall be deemed to be  such  party's exclusive remedy, and
     accordingly, in addition to all of the rights and remedies
     provided for in this Agreement, the parties shall have all
     other rights and remedies provided  to  them by applicable
     law, rule or regulation.

     XVI.Company's    Reservation    of    Rights.    Employee
     acknowledges and understands that the Employee  serves  at
     the  pleasure of the Company's Board of Directors and that
     the Company  has  the  right  at  any  time  to  terminate
     Employee's  status  as  an employee of the Company, or  to
     change or diminish his status  during the Employment Term,
     subject  to  the  rights  of  the Employee  to  claim  the
     benefits conferred by this Agreement.

     17. Survival.  The rights and  obligations of the Company
     and  Employee contained in Section  8  of  this  Agreement
     shall survive the termination of the Agreement.  Following
     the Termination  Date,  each party shall have the right to
     enforce all rights, and shall be bound by all obligations,
     of such party that are continuing  rights  and obligations
     under this Agreement.

     18. Counterparts.  This Agreement may be executed  in one
     or more counterparts, each of which shall be deemed to  be
     an original but all of which together shall constitute one
     and the same instrument.

     IN  WITNESS  WHEREOF,  the  Company  and the Employee have
     caused this Agreement to be executed as  of the date first
     above written.

                              AMERICAN OILFIELD DIVERS, INC.


                              By:        /s/ Rod W. Stanley
                                         -------------------
                                           Rod W. Stanley
                                     President and Chief Executive
                                              Officer

                              EMPLOYEE:

                              By:        /s/ Kevin Peterson
                                         ----------------------
                                             Kevin Peterson



                                                     APPENDIX A


                AMERICAN OILFIELD DIVERS, INC.

                    POSITION SPECIFICATION

                 EXECUTIVE VICE PRESIDENT AND
                 PRESIDENT - TECHNOLOGY GROUP


SUMMARY

     Reporting  to  the  Chief Executive Officer and President,
the Executive Vice President  and  President - Technology Group
will  be  the  key  executive  responsible   for   the  overall
management of the Technical Services Group, Hard Suits Inc. and
certain  other special projects.  This position will  focus  on
overseeing  day-to-day  activities  of  these  profit  centers,
providing leadership for increasing sales, undertaking safe and
profitable  projects  and  creating  an  effective and positive
growth and profitability-focused working environment.   He will
provide hands-on profit and loss management to a company facing
significant   international   growth  opportunities  in  highly
competitive market conditions.

RELATIONSHIPS

Reports to:       President & Chief Executive Officer
Direct reports:   General Manager, Hard Suits Inc.
                  Vice President Technical Services Group
Key               Board of Directors
relationships:
                  President & Chief Executive Officer
                  Corporate Counsel and Secretary
                  VP-Finance and Chief Financial Officer

                  MAJOR RESPONSIBILITIES

*  Plan, develop, establish and  enforce  long-term  and short-
   term  policies,  directives  and business strategies of  his
   area  of  responsibility in accordance  with  the  Board  of
   Directors' and the CEO's policies and directives.

*  Oversee the  day-to-day  operations and resolve the material
   and significant issues that arise during the ordinary course
   of business.  Confer with  his  managers  and  other Company
   executives  on  a regular basis to coordinate functions  and
   operations among  all  Company  subsidiaries,  divisions and
   departments  to  maximize  profit  and eliminate unnecessary
   duplication.   Establish,  maintain  and   enforce  internal
   responsibilities  and  procedures  to  maximize  growth  and
   profitability  and  eliminate  inefficiencies.    Establish,
   maintain  and  enforce  internal  controls  and  checks  and
   balances  to ensure the Company's manufacturing subsidiaries
   accurately  track  products,  costs,  stay  on  schedule and
   otherwise  comply  in  all material respects with government
   contracting standards.

*  Review   management   information    systems   and   analyze
   organization's  financial  and  other reports  to  determine
   results of operations compared to  the  plan.  Timely revise
   and adjust business plans and strategies  in accordance with
   current and expected market conditions.  Stay  fully abreast
   of all market conditions.

*  Evaluate  performance  of  appropriate managers on  a  semi-
   annual  basis  for  compliance  with  established  policies,
   profitability and performance objectives.

*  Review  and  recommend   potential   acquisition  candidates
   (whether a separate company, products  or new service lines)
   and  other  business  opportunities with the  President  and
   other appropriate executives.

*  Act  as a facilitator among  the  various  subsidiaries  for
   future business growth and profitability.

*  Create  an  atmosphere  of cohesive teamwork for appropriate
   internal performance analysis and action.

*  Confer with members of senior management regarding sales and
   marketing activities for unified and thorough presentations.

*  Member of Executive Committee  comprised of CEO,  VP-Finance
   and CFO and Corporate Counsel/Secretary and  to, among other
   things, review strategic issues  and  handle  various  other
   companywide matters.

*  Participate in and help lead Company meetings and functions,
   investor  conference  calls,  sales  calls and other similar
   meetings and functions, as required by  the above duties and
   responsibilities or as requested by the President.

*  Ensure the effective function and integrity of the Company's
   capital budgetary process.

<PAGE>

              Appendix B to Employment Agreement
            between American Oilfield Divers, Inc.
                              and
                        Kevin Peterson

*  Capitalized terms used herein unless otherwise defined shall
   have the same meanings ascribed to them in the Employment
   Agreement.

<PAGE>

              Appendix C to Employment Agreement
            between American Oilfield Divers, Inc.
                              and
                        Kevin Peterson

                 Revision No. O of Appendix A,
                 Effective as of May 15, 1997;

              Jurisdictions In Which Competition
                   Is Restricted As Provided
                         In Section 8

A.   States and Territories of the United States:

1. Louisiana--   The  following  parishes  in  the   State   of
   Louisiana:

     Cameron,   Vermilion,  St.  Mary,  Terrebonne,  Lafourche,
     Jefferson, Plaquemines,  Orleans,  St.  Bernard, Lafayette
     and Iberia.

2. Texas--  All counties.

3. Kansas-- All counties.

4. Ohio--  All counties.

5. California--  All counties.


B. Other  Jurisdictions:  Nigeria, Ivory Coast,  Australia  and
     the United  Arab  Emirates,  including without limitation,
     all   of   the   land   area   within   their   respective
     jurisdictional boundaries or otherwise under  the  control
     of  or  claimed  by  their  respective  governments, their
     respective  territorial  offshore  waters, other  offshore
     waters otherwise under the control of  or claimed by their
     respective governments.