In 2013, the group decided to unify its different businesses under the name Vallourec. Could you tell us about the different lines?

We are a global leader in the seamless steel tube industry for various applications in oil and gas, power generation, construction, and the automotive sector, among others. The group has more than 100 years of history and a workforce of 24,000 employees worldwide, in offices in more than 20 countries.

Within the oil and gas division, we have two main segments: OCTG products and drilling products. The OCTG part consists of casing and tubing pipes. The casing prevents the well from collapsing, and the production tubing is used to produce hydrocarbons. OCTG is the largest business because these products are needed in every single well; the casing is a structural component in well construction. In the case of drill pipes, they are products that can be reused in different wells. We manufacture virtually everything from the platform to the last accessory that connects to the drill bit.

For the drilling products division, we have two manufacturing plants in the Americas, as well as plants in the main producing areas internationally, including Europe and the Middle East. One of our largest plants is in Houston, and in 2011 we opened another facility in Belo Horizonte, Brazil. As part of the group, we also have our own steel mills in Ohio and other plants in Houston, Canada, Mexico, and Brazil.

Vallourec focuses on premium products. What have been your latest developments, and what market is there in Mexico for them?

We have recently developed a type of drill pipe for shale hydrocarbon applications. This patented technology, along with our high-torque premium connections, is already in use in the United States. Also in the shale hydrocarbon segment, we have the Hydroclean product line, designed to clean the well while drilling. Not having a clean well is the main source of problems during drilling operations because it causes lost time.

In addition, we have other premium products that are highly demanded in Mexico. In some of Pemex’s fields, there are significant amounts of sour gas (H2S); special alloys are needed to drill safely. With the opening of the industry and further development of the marine sector in Mexico, we will see more opportunities for other products such as casing installation columns, termination columns, well intervention and testing in deepwater marine applications. We have other premium grades for ultra-deep wells and specific applications where pipes need to be more resistant.

What countries offer the most potential within Latin America?

What is happening in Mexico with the energy reform is a huge opportunity, and expectations are very high. In other parts of the region, Venezuela has the largest reserves: the potential of the industry is enormous. On the other hand, there are the marine discoveries in Brazil in the last decade. More recently, shale hydrocarbon developments have taken place in the Argentine province of Neuquén. Colombia has slightly contracted but still offers potential. Peru and Ecuador are smaller markets but offer considerable stability.

How does Vallourec plan to take advantage of Mexico’s growth?

The arrival of some renowned international players will raise the level of local manufacturing standards. We will see more certified plants, similar to what happened in Brazil a few years ago. As Vallourec, we already have a significant market share in premium products for Pemex, for applications such as sour gas. We expect to grow significantly in Mexico for two reasons: on the one hand, Pemex will continue to invest; on the other, we already serve major international customers in other parts of the globe, and sooner or later they will come to Mexico.

You may also be interested in...