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Measurements of ocean-generated magnetic fields in submerged enclosures are affected by the nonconducting environment within the sensor housing. There are two physical sources for the effect: the exclusion of the electrical current from the interior of the enclosure and the perturbation of the hydrodynamic flow field produced by the enclosure. Of particular interest is the distortion of gradient-type measurements. Due to the current exclusion effect, any observed gradient dyad must be symmetric. This result is unavoidable. In order to analytically examine these effects in detail, we have considered the particular case of a spherical goemetry. Furthermore, in the present paper we neglect any vorticity associated with the perturbed velocity field (potential flow).