VV&&MREPORMREPORTT OCTG DIVISION SPECIAL ISSUE SEPTEMBER 01 - # 1

OilOil && GasGas AA genuinegenuine passion!

www.vamservices.com Our world for your success

VALLOUREC & MANNESMANN TUBES is commit- VALLOUREC & MANNESMANN TUBES over 100 ted to providing its customers with the best pro- years of experience and unrivaled reputation in the ducts and services available on the market, made oil & gas industry, coupled with a continuous possible by a unique global approach supported focus on the future, is your guarantee that we are by local capabilities. fully dedicated to make your business a success.

This commitment is backed by an annual produc- tion of 2.5 million tons of steel pipes manufactured in 15 strategically positioned production facilities worldwide, a network of more than 90 VAM® licen- VALLOUREC & MANNESMANN TUBES see workshops devoted to local support for the OCTG Division VAM ® premium connections, and 12,000 skilled professionals working around the clock to provide Sales & Technical Sales Phone: +33 1 49 09 35 86 130, rue de Silly Fax: +33 1 49 09 37 13 first-class customer service. 92100 Boulogne, France Internet:www.vamservices.com Summary Editorial

I am pleased to present to you this special issue of the V & M Report for OCTG. We intend to publish this report two or three times a year for our customers. In this first edition you will find a comprehensive description of all the V & M subsidiaries comprising the OCTG Division. It is my privilege to lead this Division, replacing Pierre Verluca who now sits A worldwide network 4 on the Board of Directors of the Vallourec Group. Since May 2000, V & M do Brasil (VMB) has been incorpo- A network that rated within V & M Tubes. This fully integrated company – measures up to from forests and mines to finished seamless pipes – is a major player in Latin America, particularly in Brazil with Petrobras. the Group’s goals We thought it would be of interest to you to hear about how we work with this Brazilian oil & gas company and to relate Customers portrait 8 our strengths within VMB. The OCTG business is a case for High Schools, very cyclical Petrobas: with huge amplitudes between the ups and the downs. Less well prepared for than twelve months ago, we future challenges were desperately searching for business in order to load our Contacts threading plants in Europe. 12 Today, we are working three Adresses, phone shifts everywhere. Indeed we are looking to start a fourth and fax numbers, shift where we can and are optimising the loads between websites... the different subsidiaries to maximise our available equip- ment and still offer the shortest V&MREPORT delivery times possible. OCTG DIVISION SPECIAL ISSUE You, our customers, require this flexibility, a quick adaptation Jean-Pierre Michel Publisher to actual needs. Using the VALLOUREC & MANNESMANN TUBES advantages of our wide base of 130, rue de Silly, 92100 Boulogne - France production in the different key areas of the world, we study Editorial Team with you, in the framework of long term contracts, the best Linda Wais - Phone: + 33 1 49 09 35 83 way to satisfy your requirements. Integrated services, short E-mail: [email protected] Didier Hornet - Phone: + 33 1 49 09 37 77 lead times, inventories and the uniquely famous reputation E-mail: [email protected] of the VAM® product line are just a part of our offering. Fax: + 33 1 49 09 37 13 The next issue will focus on who is doing what and where Production within the different companies of the Division. In the meantime Zabriskie., Paris please do not hesitate to let me have your comments about Design LeGrand8, Paris this V & M OCTG Special Report initiative. Photographs Jean-Pierre Bolle, Angelo Crivellari, Helmut Mühle, Jean-Pierre Michel, PETROBRAS, Thierry Truck, or as mentioned otherwise Chairman, Oil and Gas Division

All rights reserved

V&M REPORT - OCTG DIVISION SPECIAL ISSUE A WORLDWIDE NETWORK A network that measures

Scotland VALLOUREC The OCTG Division groups together a dozen or so MANNESMANN OIL & GAS UK LTD companies across the world, most of which are Canada established in major oil-producing regions. All these VAM PC companies constitute a network that has generated hundreds of direct jobs and thousands of other France indirect ones. Along with the HRT Division - which USA V & M FRANCE provides plain end tubes either directly to the oil VAM PTS VALLOUREC industry or to the OCTG Division – the network is Mexico MANNESMANN responsible for developing Vallourec’s activities in PRINVER OIL & GAS FRANCE the oil and gas sector. VALLOUREC & MANNESMANN TUBES CORPORATION

Brazil V & M do PRINVER BRASIL SA

4 DATE OF ESTABLISHMENT: 1981 DATE OF ACQUISITION: 1993 PRODUCTION SITE: VERACRUZ (MEXICO) ACTIVITIES: TUBE THREADING, PRODUCTION OF THREADING PROTECTORS Prinver, former subsidiary of OTIS Engineering (see VAM PTS) was created in 1981 to serve the Mexican market. It became part of the Vallourec group in 1993. Today, with a market share of over 50%, Prinver leads the Mexican market in the field of premium joints. Since 1995, it has developed major business activities in the on-site service V & M do BRASIL SA (VMB) sector. More recently, in 1997, the company started to produce threading protectors meant to cover its own needs plus 50% of the needs of the units within the OCTG Division, which have notably increased since the arrival of V & M do BRASIL. With this new investment, Prinver is sure to rapidly become the most competitive manufacturer of threading protectors.

Mannesmann SA, created in 1964, joined VALLOUREC & MANNESMANN TUBES in May 2000 to become V & M do BRASIL SA. V & M do BRASIL’s main industrial complex is the Barreiro plant situated in Belo Horizonte, the capital city of the federal state of Minas Gerais. This integrated unit groups together all production facilities from the fusion and steel treating units to the finishing lines for tubes and pipes, in addition to, of course, the various hot-rolling mills. Aside from the Barreiro plant, V & M do BRASIL operates two subsidiaries: V & M FLORESTAL Ltda and V & M MINERAÇAO Ltda.

V&M REPORT - OCTG DIVISION SPECIAL ISSUE s up to the Group’s goals

Germany VALLOUREC MANNESMANN OIL & GAS GERMANY GMBH VAM PTS V & M DEUTSCHLAND GMBH

DATE OF ACQUISITION: 1984 PRODUCTION SITE: HOUSTON – TEXAS Vietnam (UNITED STATES) VIETUBES ACTIVITY: TUBE THREADING

Malaysia In order to guarantee the development of the VAM product Indonesia UCM line, it was necessary to have a production unit in the United PT CITRA TUBINDO States. In 1977, a license agreement was signed with OTIS Engineering, which resulted in the creation of OTIS PTS. Singapore A few years later, OTIS decided to withdraw from its activities VAM FAR EAST in this sector and so a joint venture between Vallourec (51%) and Sumitomo (49%) was established in 1984 to purchase the entity, which was renamed VAM PTS. The company is 5 active in the threading of superior quality joints on tubes supplied by distributor-stockists. VAM PTS became the leader in the US market for “super ENTITIES OPERATING IN THE OIL AND GAS SECTOR: premium” joints destined for difficult applications in very deep wells with their threaded and coupled tubing and V & M TUBES: OCTG Division casing (VAM ACE RS Type 1 series) in carbon steel and V & M TUBES: HRT Division stainless steel. Accessory and repair VAM licensee facilities Since 1997, VAM PTS has also been developing its activities in the field of integral joints without couplings, known as “flush” or “semi flush”, for which it set up a new threading line in 1999. Its objective is to be among the leaders in this fast-growing market with the VAM FJL and DATE OF ESTABLISHMENT: 1964 the VAM SLIJ-II. VAM PTS has a test center to carry out DATE OF ACQUISITION: 2000 on-site product qualification tests; it also has an efficient PRODUCTION SITE: BELO HORIZONTE, STATE on-site service team as well as sales and technical-sales OF MINAS GERAIS (BRAZIL) teams that follow up projects in the United States and the SALES AND TECHNICAL SALES OFFICE: rest of the world. RIO DE JANEIRO ACTIVITIES: TUBING-CASING, API / BTC AND VAM JOINTS (RANGING FROM 2 3/8” TO 13 3/8”)

They produce charcoal from eucalyptus forests and iron ore for the Barreiro plant as well as for other steel producers established in Brazil. The company produces seamless tubes for the automotive, petrochemical, energy, mechanical and oil and gas industries. In the future, the production of OCTG is to increase rapidly in quantity and quality. The drilling programs in Brazil are ambitious, not only for Petrobras, the national oil company, but also for international companies that are now active in Brazil. The drilling operations, especially deep-sea ones, will also start to be carried out at much greater depths. In order to be able to satisfy these new needs, V & M do BRASIL will be making the necessary investments in terms of quenching and tempering and threading processes. In Brazil, as elsewhere in the world, new services (on-site services, inventory management) are currently being launched.

V&M REPORT - OCTG DIVISION SPECIAL ISSUE A WORLDWIDE NETWORK

VALLOUREC & MANNESMANN TUBES CORPORATION (VMUSA) Before the establishment In the field of OCTG, the company DATE OF ESTABLISHMENT: 1997 of VMUSA in October 1997, has a stock of smooth casings OFFICES: HOUSTON (TEXAS) AND following the joint venture destined for American distributors PITTSBURGH (PENNSYLVANIA) between Vallourec and who perform the threading process PRODUCT LINE: PETROLEUM TUBES Mannesmannröhren- themselves according to end-client (OCTG AND LINE PIPE PROJECTS) Werke, Vallourec ran specifications. On top of this, the HOT-ROLLED TUBES (ALLOYED, two offices in the United company also carries references BOILER, MECHANICAL TUBES AND States, one in Pittsburgh such as DINO VAM and VAM SLIJ-II strings for the development BLANKS) and one in Houston, that of VAM products. The mission of VMUSA’s teams is to offer their both specialized in the sale of hot-rolled tubes for industrial clients the full expertise of the Vallourec group, notably in the field applications. Mannesmann also had two outlets in Houston: of thick-walled steel tubes and tubes made of sophisticated Mannesmann Pipe and Steel, which sold tubes for industrial grades of steel that are ideally adapted to the specific difficulties applications, and Mannesmann Oilfield Tubulars (MOT), involved with deep-water drilling, notably in the Gulf of Mexico. specialized in the sale of tubes for the oil industry. Since 1997, VMUSA markets all tubes produced by V & M TUBES in the United States. VALLOUREC MANNESMANN OIL & GAS FRANCE (VMOGF)

DATE OF ESTABLISHMENT: 1930 PRODUCTION SITE: AULNOYE- AYMERIES SALES AND TECHNICAL SALES OFFICE: The company adopted BOULOGNE 6 the name VMOGF in 1997, ACTIVITIES: TUBE THREADING, following the merger THREADED COUPLINGS, DRILL PIPES between Vallourec and Mannesmannröhren- VAM PREMIUM Werke’s seamless tube activities. Thanks to its 4 threading lines and its production unit for accessories, it manufactures tens of CONNECTIONS (VAM PC) thousands of tons of threaded tubes with diameters ranging from 2 3/8” to 13 3/8” every year. With I.D.P.A., which was taken over DATE OF ESTABLISHMENT: 1983 by VMOGF in June 2000, the company also operates a drill pipe PRODUCTION SITE: NISKU, production unit. All these activities are located in Aulnoye-Aymeries INDUSTRIAL ZONE OF EDMONTON, in the North of France. On top of sales coordination for OCTG IN ALBERTA (CANADA) tubes and drill pipes, VMOGF monitors the development of SALES AND TECHNICAL SALES OFFICE: VAM throughout the world through three departments: CALGARY VAM PC was created - Technical Sales Promotion, which analyses market needs and ACTIVITY: TUBE THREADING in 1983. It had a sales handles before-sales promotion and after-sales support; office in Calgary, - Research and Development, which designs and develops where many oil companies are established,and a production new products and special grades that meet the increasingly unit located on the Algoma Steel site, a Canadian producer specific needs of customers; of seamless tubes. After the closure of Algoma’s tube activities, - VAM Services, which is responsible for maintaining the quality the workshop was reopened in November 1999 in the suburbs standards of VAM throughout all the Group’s plants, at of Edmonton, where stock piles of petroleum tubes are kept. Sumitomo Metals and within the production units of 90 licensees VAM PC’s mission is to serve the fast-developing markets of all over the world that produce accessories and repair threaded Western Canada. Its markets include heavy oil fields that tubes equipped with VAM joints. VMOGF has recently require the combined use of vapor-injection techniques and developed new skills in the area of ancillary services and VAM SW, a special product specifically developed for this Just-In-Time production procedures that are already or will application, as well as deep gas wells for which the VAM be in operation for clients such as Shell (Netherlands and PRO and VAM FJL are well-suited. Nigeria), Maersk (Denmark) and Aramco (Saudi Arabia).

V&M REPORT - OCTG DIVISION SPECIAL ISSUE VALLOUREC VALLOUREC MANNESMANN MANNESMANN OIL & OIL & GAS GERMANY GAS UK LTD (VMOG UK) GMBH (VMOGG) VMOG UK (formerly T.I.S.L.) came about as a result of the acquisition of VMOGG was created in October 1997 British Steel’s OCTG seamless tube following the joint venture between Vallourec and Mannes- production plants. The facilities are located in the suburbs of mannröhren- Werke. Located in Düsseldorf-Rath, the company Glasgow (Scotland) and their principle mission is to supply sells petroleum seamless tubes (casing, tubing, risers) with tubes for the British North Sea sector. This sector is characterized diameters ranging from 2 3/8” to 26”. In addition to API and by high-pressure, high-temperature oil fields, which constitute VAM OCTG, the company also sells drill-pipes. VMOGG has a major technical challenges and require specialist know-how. team of technical-marketing specialists who work alongside The products manufactured by VMOG UK are perfectly adapted clients to provide them with all the necessary ancillary services to these special conditions. The main references are VAM TOP, and whose business sectors span the USA, China, Eastern VAM TOP HT (“High Torque”) and VAM HW (“Heavy Wall”) as Europe, Germany, Norway, Austria, Greece and Libya. Plain well as highly sophisticated grades of steel such as VM 110SS. end tubes are supplied by the Mülheim continuous rolling mill, In order to meet market expectations in terms of ancillary services, the Stiefel rolling mill, the Rath pilger mill (V & M DEUTSCHLAND VMOG UK is in full control of its product supply chain from the GmbH) and by the V & M FRANCE’s Saint-Saulve, Aulnoye steel works to the platform. This initiative includes the definition and Deville plants. of production programs according to drilling schedules, the Threading operations control and financing of stock, the management of logistics until are also carried out at offshore dispatch, the implementation of products on the platforms Mülheim and Rath. in conjunction with the on-site service provider, VAM Field Service International, etc. VMOG UK offers all these services to its clients, DATE OF ESTABLISHMENT: among which are some of the largest petroleum companies in 1899 the world. VMOG UK is supplied with ”green” tubes from SALES AND TECHNICAL V & M TUBES French SALES OFFICE: DÜSSELDORF- and German plants. It RATH (GERMANY) performs quenching and tempering and threading on the tubes and also produces couplings with diameters ranging SOUTH-EAST ASIA from 4 1/2” to 14”. 7

South-East Asia is a major oil and DATE OF ESTABLISHMENT: 1967 gas producing zone. For several PRODUCTION SITES: CLYD ESDALE WORKS IN BELLSHILL years, large corporations such as (TEMPERING) - IMPERIAL WORKS IN AIRDRIE (THREADING) Total, Shell and BP have been SALES AND SERVICES OFFICE: ABERDEEN present in this market where they ON-SITE SERVICE PROVIDER: VAM FIELD SERVICE INTERNATIONAL work with VAM joints, which have IN ABERDEEN. provided them with total satisfaction. The fact that the countries STORAGE SITES: EDZELL (10,000 TONS) - GREAT YARMOUTH in the region favor locally-produced OCTG was an important (5,000 TONS) factor in Vallourec’s strategic decision-making process: - In Indonesia, since 1985, Vallourec has sub-contracted the threading of VAM joints to PT Citra Tubindo on the island of Batam. Vallourec, however, is in charge of providing marketing The VAM® operations. Four years later, the decision to build a tube - PT CITRA TUBINDO - BATAM, INDONESIA product line, today HEAT TREATMENT, API AND PREMIUM tempering workshop was made. At this time, Vallourec and tomorrow THREADING purchased a 25 % stake in the capital of PT Citra Tubindo, Core products (*) which was floated on the Djakarta Stock Exchange. Since this - UCM - LABUAN, EASTERN MALAYSIA NEW VAM API AND PREMIUM THREADING VAM ACE time, the two partners have enjoyed close working relations. VAM PRO - In Malaysia, in 1990, UCM, a threading workshop (API and VAM TOP VAM TOP HC Premium) in which PT Citra Tubindo holds a 30 % stake, was - VIETUBES - VUNG TAU, VIETNAM VAM TOP HT established in Labuan. API AND PREMIUM THREADING DINO VAM BIG OMEGA (is) - In Vietnam, in Vung Tau, the Vietubes threading workshop was VAM FJL - VAM FAR EAST, SINGAPORE set up in 1995. V & M TUBES holds 7 % of its capital and VAM SLIJ-II ON-SITE SERVICES AND GAGES PT Citra Tubindo 25 %. Niche applications (*) - Finally, in Singapore, VAM FAR EAST VAM MUST (V & M TUBES - 51 % - and Sumitomo - 49 %) VAM HW ST VAM SW was made responsible for on-site services VAM RISER Work Over and the supply of gages for VAM licensees in VAM FIT South-East Asia and the South Sea Islands. VAM EIS - Drill Pipe This network of companies helps to ensure Under that VAM retains its leadership position in development (*) VAM TOP FE the region. VAM ET VAM HP VAM RISER Production VAM TAURUS - Drill Pipe “Dry make-up solution” for all VAM products (*) Patented or patent- pending, or in the process V&M REPORT - OCTG DIVISION SPECIAL ISSUE of being registered. Customer portrait

8 Petrobras well prepared for f

Conditions in the oil and gas etrobras was founded in its business segments the company up to meet the following goals: 1953 as a state-owned com- will attain the same levels of excel- expansion, enhanced profits, industry in Brazil have Ppany, and is the largest lence it has previously achieved in improved production and inter- changed, and so has Petroleo Brazilian company today. It oper- the fields of prospecting, explo- nationalisation of its activities. Brasileiro S.A., Petrobras ates in an integrated way in all seg- ration and production technolo- ments of the petroleum business. gies, especially in the context of Strategic partnerships for short. The period The company is undergoing an in- deep-water challenges. Petrobras is a 25 billion dollar of monopolies has passed, house transformation process with Against this background, Petrobras company in terms of sales, holding the objective of renewing and has the following vision for the total reserves of 17.3 billion barrels and since the largest country adapting the company to meet and year 2010: to consolidate the com- of oil equivalent (83% oil; 17% gas) in Latin America has opened overcome the challenges posed by pany’s leading position as an inte- in Brazil, ranking fourth among open competition in the energy grated energy company in Brazil, the major oil companies in the up the petroleum market to sector. A newly developed strate- with a strong presence in Latin world, even after the megafusions private ventures, the world’s gic plan for the next ten years has America, focusing on services, and of the last few years, producing set goals for all sectors of free to act as an international cor- 1.1 million barrels of oil and 32.6 major oil companies have Petrobras. Placing special empha- poration. Focusing on its core million m3 of natural gas per turned their attention to Brazil. sis on environmental issues, in all business, the company is gearing day, through 8,500 active wells

V&M REPORT - OCTG DIVISION SPECIAL ISSUE !

Research and development is a key factor in the success of Petrobras ! Seamless oilfield tubulars ready for shipment ! Running a pipe string into an oil well ! A worker on a platform

9 ! Oil and gas reservoirs are found all over the world, offshore and onshore or future challenges

(917 offshore), investing 3 billion lion barrels, 64 vessels and 2 fer- mainly in Latin America, the Gulf prices in offshore fields at ever dollars per year (80% upstream tilizer plants with a total capacity of Mexico and the West Coast of increasing depths. operations), spending 4.2 billion of 4,282 tonnes of ammonia & Africa. These strategic partner- dollars in tax payments, with urea. And at the end of this prod- ships mean sharing risks, profits Integrated energy solutions 35,800 employees and more than uct line are customers in many and technology, and this strategy Throughout the next ten years, 127,000 shareholders, and an industrial fields and – of course – will be continued for the explo- Petrobras will grow into an energy annual community expenditure of motorists, who can use more than ration and development of pro- company which offers its customers more than 115 million dollars. 7,000 service stations with the duction for the huge reserves in several energy options. Natural gas will In 47 years, Petrobras has invested green-yellow-white BR logo to the vast Brazilian continental assume increasing importance in the almost 100 billion dollars in buy petrol in Brazil. shelf. For the next five years, company’s portfolio. The discovery Brazil, to build a huge infrastruc- Today, Petrobras operates abroad around 70 % of the planned total of enormous natural gas reserves ture comprising 97 production in 12 countries, producing 75,000 investments are earmarked for in Bolivia in 1999 was a major step platforms (74 fixed; 23 floating), barrels of oil and gas equivalent upstream activities. in this direction. The construction 11 refineries processing 1.5 mil- (boe) daily, managing more than Enjoying international recogni- of a new 3,150-kilometre gas lion barrels of crude oil per day, 140 partnership contracts signed tion with ultra-deep-water tech- pipeline from the San Alberto and 15,330 km of pipelines, 53 termi- with 83 of the most important nology of its own, Petrobras is San Antonio blocks in Bolivia to nals, storage capacity of 67 mil- international oil companies, producing oil at competitive the main consumption centres in •••

V&M REPORT - OCTG DIVISION SPECIAL ISSUE Customer portrait

••• Brazil is one of the challenges of are the main factors in the com- today. The growing demand for pany’s new strategy for their refin- natural gas in Brazil will largely be ery complex. met by this Bolivia-Brazil Gas In addition to the objective of Pipeline, which is Petrobras’ increasing its processing capacity largest infrastructural project in to meet the country’s growing Latin America. demand for oil products such as The development of the natural diesel oil, gasoline and LPG, there gas market in Brazil is therefore is a technological challenge, too: one objective for the next ten the refineries have to be adapted years. This will be pursued mainly in order to increase the conver- through alliances between sion rate for different types of duction, processing and trans- ship between a customer and a Petrobras and thermoelectric crude oil within the existing portation of petroleum products. supplier: it is a longstanding trust- energy generating companies and process structure. This is neces- This has been the case right from ful co-operation in all fields where by means of incentives for indus- sary to reduce dependence on the beginning, when the then seamless steel tubes and pipes are trial customers. imports. newly built works in Belo required for numerous applica- The increase in domestic oil pro- Horizonte produced their first tions. And the distance between duction, the greater participation Partnership in tubulars seamless tubes in 1955, only two Belo Horizonte and Rio de Janeiro 10 of natural gas in the energy matrix, V & M do BRASIL S.A., formerly years after the foundation of is short: less than a one-hour flight. the growing domestic demand for Mannesmann SA, supplies seam- Petrobras. This continuous part- V & M do BRASIL also has a sales petroleum products and increas- less quality tube and pipe to nership over four and a half office in Rio. ing environmental requirements Petrobras for the exploration, pro- decades is more than the relation- The co-operation between tech-

CENPES – The R & D centre

Most of the technological success not only Petrobras that benefits attained by Petrobras across a range of from CENPES results. activities is explained by the The R & D centre also holds development of the company’s R & D countless international patents, centre CENPES. This integrated some of which are of interest technology centre is known as one of to the international oil industry. the foremost international oil research The international reputation centres, with a broad spectrum of CENPES is underpinned activities and the very latest by the fact that it has been chosen

equipment. This includes two Virtual by the United Nations ! Reality Centres (VRC), rooms with Organisation as one of only a few Aerial view of the R & D features such as three-dimensional and institutes world-wide to carry out centre CENPES stereoscopic images which are helpful tests on substances used in to oil exploration and production chemical weapons. operations as well as to projects for oil Another development with great ! facilities. international prestige is the High-quality Many innovative technological creation of a high-quality gasoline gasoline from Petrobras solutions have been developed here, chosen by the BMW-Williams is chosen by including solutions for deep-water oil team for Formula 1 racing. BMW Williams exploration and production. And it’s for Formula 1

V&M REPORT - OCTG DIVISION SPECIAL ISSUE ! One of Petrobras’ petrochemical

plants !

Drilling records in Brazilian offshore oil fields from 1977 to 1999

nical experts of Petrobras with Centre CENPES and V & M do their partners in V & M do BRASIL BRASIL, through its Quality phase on a laboratorial scale has New development projects are in is often based on new technical Engineering Department / Hot been finished and the first orders discussion between Petrobras Well challenges to the material proper- Rolled Tubes, and also supported for tubing strings 3 1/2” and 4 1/2” Technology Group and the ties of the tubes, for which the fea- by the laboratories of INT in the modified material have just Quality Engineering Department sibility has to be tested. At present, (Instituto Nacional de Tecnologia) been placed with V & M do BRASIL, / Hot Rolled Tubes of V & M do the following common projects are in Rio de Janeiro. The results are subject to field tests. BRASIL. These include material in the development phase: promising, which is encouraging • A development project has been grade L80 Type 13 Cr for tubing 11 • Petrobras is looking for a modi- the experts in their work. conducted for rigid riser pipes in and production casing as well as fied casing grade P110 with mild • For salt water injection into the API 5L X70 and X80 grades with casing with high-collapse resist- corrosion resistance to H2S for wells, a modified composition for outside diameters below 8 5/8” ance for deep water projects. future deep-drilling projects, in tubing grade L80 has been tested (219.1mm) and wall thicknesses of Petrobras will follow the recom- order to avoid the use of the more in CENPES laboratories as an up to 0.562” (14.3 mm). V & M do mendation to use VAM Premium expensive grade C-110 in some alternative to the grade N80 which BRASIL has succeeded in manu- Connections for future casing and applications. This project is being has been used up to now. It was facturing hot-rolled test pipes, tubing strings where high require- co-ordinated by Petrobras Well found that the addition of 1% Cr whose weldability through arc ments for the thread connections Technology Group working to- in L80 grade reduces the corro- welding is being studied in a pro- are defined. This is in line with the gether with Petrobras Research sion rate by up to 50%. The test ject together with ESAB in Brazil VAM threading capacities and and CENPES. Radial Friction license available at the mills in Belo Welding tests were also carried Horizonte. A first order for casing out on these pipes as part of the with VAM-TOP connections was project between recently placed. Additionally, a Petrobras/CENPES, Stolt licensee network has been devel- Offshore (UK) and GKSS, in oped in Brazil by VAM Services, Germany, with the co-operation particularly to fulfil Petrobras’ of the UFRGS (Universidade needs in terms of accessories sup- Federal do Rio Grande do Sul). pliers and repair shops. Good corrosion resistance in envi- It is clear that Petrobras regards ronments with a higher content of V& M do BRASIL as a steady and H2S and CO2 was obtained by reliable partner. “In our daily busi- material grade X65 with increased ness we have no problems with Cr content, recently produced their products and services,” noted by V & M do BRASIL. Based a manager responsible for explo- on these results, a further develop- ration and production. And the

! Partnership in tubulars: Jacques Braile Saliés (white shirt) and ment project currently underway V& M managers will do all they Benício Claudino Barbosa from Petrobras in Rio de Janeiro explain a project to Dr. Júlio Márcio Silveira e Silva (left) and Marco Paulo will aim to meet the same require- can to ensure that Petrobras’ good Santos Cola (right), their partners from V & M do BRAZIL ments for the X70 and X80 grades. opinion is maintained.

V&M REPORT - OCTG DIVISION SPECIAL ISSUE Contacts

VALLOUREC MANNESMANN VAM PREMIUM OIL & GAS FRANCE CONNECTIONS Inc. 130, rue de Silly 1500, 400 – 3rd Avenue SW, 92100 Boulogne - France Calgary, Alberta, Phone: + 33 1 49 09 35 86 Canada T2P 4H2 Fax: + 33 1 49 09 37 13 Phone : + 1 403 233-0119 Fax : + 1 403 266-2332 VALLOUREC MANNESMANN OIL & GAS UK Ltd VALLOUREC & MANNESMANN TUBES CORP. Ocean Spirit House, Prospect Point 33 Waterloo Quay 1990 Post Oak Blvd, Aberdeen, UK AB11 5BS Suite 1400 Phone: + 44 1 224 564000 Houston, Tx 77056-3813, USA Fax: + 44 1 224 564007 Phone : + 1 713 479 3200 Fax : + 1 713 479 3201 PRINVER VAM Services Licensee Network Av, Framboyantes Lote 6, Manzana 5 Cd.ind. Bruno Pagliai 21-23, rue de Leval Tejeria, Vera Cruz 59620 Aulnoye Aymeries, CP 91697 France Phone: + 52 29 89 87 27 Phone: + 33 3 27 69 66 15 Fax: + 52 29 89 87 34 Fax: + 33 3 27 66 45 75

V & M do BRASIL VAM Field Service International Rua Lauro Müller 116 - Sala 2508 Botafogo 22290-160 Ocean Spirit House, Prospect Point Rio de Janeiro – RJ 33 Waterloo Quay Brazil Aberdeen, UK AB11 5BS Phone: + 55 21 38 73 83 00 Phone: + 44 1 224 585331 Fax: + 55 21 38 73 83 16 Fax: + 44 1 224 583491

VALLOUREC MANNESMANN VALLOUREC & MANNESMANN OIL & GAS GERMANY GmbH TUBES Rather Kreuzweg 106 Middle East Delegation 40472 Düsseldorf P.O Box 4015 Germany Abu Dhabi, UAE Phone: + 49 211 960-0 Phone : + 971 278 8780 Fax: + 49 211 960-3924 Fax : + 971 278 8790

VAM PTS VAM FAR EAST PTE Ltd 19210 Hardy Road 593 Havelock Road # 01-03 Houston, TX 77073 Isetan Office Building USA Singapore 169641 Phone : + 281 821 5510 Phone : + 65 736 23 72 Fax : + 281 821 7760 Fax : + 65 235 11 26

Please visit our websites : www.vamservices.com www.vmtubes.com