OCTG NÂ°8 DEF.qxd (Page 1) - VAM Services

THE VALLOUREC & MANNESMANN TUBES MAGAZINE 

OIL & GAS DIVISION 

October 2007 - No.10 

Together 

to build 

the future 

Vallourec Group

EDITORIAL 

The large investment plan 

pursued by Vallourec in 2006 

and 2007 testifies of our trust 

in the future. In this magazine, 

you will discover that 

this ambitious plan is covering 

all our existing facilities 

in Europe and North America, 

but it is also expanding to 

new territories with a new threading plant in China. Not 

to mention of course the new major industrial complex 

planned in Brazil. 

The increase of capacity in OCTG and Drilling Products 

is responding to the growth of the market expected in 

the coming years. In the short term, these investments 

will contribute to improve the level of service by restoring 

shorter lead time more in line with our customers 

expectations. They will also allow us to reinforce our 

strategic positioning in the high end segment of the 

market, a primary condition for a sustainable growth in 

the coming years. 

As drilling conditions are getting more and more severe, 

the markets will request more and more complex products, 

and this is definitely good news for V & M TUBES 

Oil & Gas Division as it means more premium connections, 

more sour service grades, more innovative products 

to come and more demanding customers with 

higher quality standards. 

Let us continue to mobilize our talents and resources to 

move in this promising direction! 

Alain Lancry 

Marketing & Development Director, Oil & Gas Division 

CONTENT 

VAM ® is a registered Trademark of Vallourec Mannesmann Oil & Gas France 

CAPACITY INVESTMENT 

New-EMAG-Lathes, 

Rath plant. 

P.04 - “Facing increased demand 

while keeping one step 

ahead” 

P.05 - Global capacity Strategy 

P.06 - V & M TUBES OCTG Europe: 

Back to normal by the end of 

the year 

P.12 - V & M TUBES OCTG North 

America: More steel, 

More tube, More premium 

connections 

P.13 - A step ahead 

P.16 - VAM Drilling: A bright outlook 

P.10 - VAM (Changzhou) Oil & Gas 

Premium Equipments Co. Ltd: 

And then they were three… 

P.14 - Improvements in all plants 

PRODUCT 

P.18 - Weatherford – V & M TUBES 

partnership: The Expandables 

Duet 

P.20 - SPOTLIGHTS 

www.vamservices.com - www.vamdrilling.com 

Publisher: VALLOUREC & MANNESMANN TUBES - 27, avenue du Général Leclerc, 92660 Boulogne Billancourt Cedex- France - Editorial Team: Hassna Belmalek - 

Phone: + 33 1 49 09 35 83 - E-mail: hassna.belmalek@vmtubes.fr - Alain Lancry - Phone: + 33 1 49 09 37 77 - E-mail: alain.lancry@vmtubes.fr - Fax: + 33 1 49 09 37 13 - 

Production: Zabriskie., Paris - Design: LeGrand8., Paris - Photographs: Thierry Truck, Saint-Saulve, V & M TUBES, VMOGUK, Paul Bounie, V & M STAR, VAM Mexico, VAM 

Canada, VAM USA, VAM Drilling, Weatherford, Hassna Belmalek, V & M do Brasil, or as mentioned otherwise - All rights reserved.



“Facing increased demand 

while keeping one step ahead” 

Global capacity 

strategy 

Readers of V & M REPORT – Oil & Gas Division are active in the 

oil and gas sector and have first-hand knowledge of how the business 

works. It would be interesting to know how their main 

supplier of OCTG and Drilling Products views this market, as 

almost 50% of the Group's earnings come from these sectors. 

We asked Abderrazak Benyahia, Member of the Strategic Group 

and Marketing Vice-President for the Vallourec Group who is 

responsible for forecasts, market studies. 

Claude Blanquet. 

As the V & M TUBES HRT Division's Vice-President for Industrial Policy, 

Claude Blanquet is involved in all decisions on investment in capacity 

taken by the Vallourec Group. His overall view of the initiatives agreed 

on over the past two years points to a consistent strategy which places 

Vallourec in a position to adapt to changes in the various markets 

served by the Group - starting with oil and gas sector. 

Abderrazak Benyahia. 

“ 

Oil and gas drilling activities 

world-wide have seen doubledigit 

growth since 2004. The 

annual increase has been between 10% 

and 20% and is way beyond levels seen 

at the beginning of the eighties. There 

were 4,500 active rigs in the United 

States at that time - compared to just 

3,200 for the world as a whole in 

November 2006 (excluding China and 

CIS countries). The low capacity we are 

required to remedy today is partly due 

to the cautious investment strategy adopted 

by oil companies between 1986 and 

2003. There are also the huge energy 

needs of emerging economies like China 

and India, coupled with the recovery in 

the US and the renewed economic 

expansion in ex-Soviet bloc countries. 

Two different phenomena are at work: 

the market is catching up on lost time 

and also satisfying fresh demand.This 

leads us, like many other market analyzers, 

to think that current trends are far 

from being driven by speculative initiatives. 

This view, obviously does not exclude 

the possibility that geopolitical events - 

or even climate-related factors - could 

upset the steady growth at any time and 

generate crises which may prove to be 

serious. 

This analysis of the situation is confirmed 

by oil prices staying within a price 

range of USD 40 to 60 USD a barrel, 

and gas prices fluctuating between 6 and 

9 USD / Mcft. The Vallourec Group 

has embarked on a massive short and 

medium-term investment plan. The aim 

of this exercise is three-fold: to satisfy 

our customers' needs as quickly as possible, 

to get ready for future changes in 

demand and then continue our strategic 

development in the high end segments. 

THE WAY FORWARD 

LIES IN INNOVATION 

We are well aware that behind the immediate 

requirement to increase capacity 

lie the technological challenges for the 

years to come. Our partners want to 

exploit known deposits to the full and 

are facing increasingly difficult exploration 

and production conditions. They 

want valuable offers to reduce costs and 

are looking for materials which are easy 

to use, reliable and lighter. They need 

to ensure the safety of personnel and 

equipment on rigs and want to protect 

the environment. They would also like 

a wider range of services. Even though 

these expectations may seem to be contradictory, 

they do correspond to the 

way we see the market. 

Logically enough, the emphasis is on 

exploiting the oil and gas reserves which 

are the easiest to access. As these sources 

of supply are depleting, it is now 

necessary to look for new ones in increasingly 

harsh environments, such as in 

offshore locations at great depths, with 

high temperatures and pressures under 

corrosive conditions. The increasing 

sophistication of OCTG and Drilling 

Products is part of a major change in the 

industry. Although we have catered for 

our customers standard requirements, 

we have also been working hard since 

decades to be involved in top-end components 

with high added value. The 

know-how and experience we have 

gained in this area have placed us among 

the world leaders, in particular for 

premium products. We are determined 

to pursue and intensify our efforts in 

research and development as we know 

that offering innovative solutions is the 

only way we can help our customers 

meet the challenges of the economic and 

technical changes the market will be 

undergoing." 

“ 

The unprecedented investment 

plan pursued by the Vallourec 

Group in 2006 and 2007 was 

developed from a global perspective and 

on a world-wide scale. A good example 

of this approach can be seen in the way 

we have handled the question of heat 

treatment in Europe, where we have 

simultaneously simplified production 

flows, widened our options and increased 

capacity to respond to a market which 

is increasingly turning to products with 

higher added value. As far as the oil & 

gas aspect of our business is concerned, 

we need to draw a distinction between 

two different types of investment in 

capacity: spending on production units 

which are exclusively devoted to this 

market, and investment in other plants 

which supply steel and tubes to these 

production units. 

Naturally enough, the latter type is typified 

by our steel mill at Saint-Saulve, but 

it also applies to our tube mills at Saint- 

Saulve, Déville and Montbard in France 

and at Mülheim and Rath in Germany. 

100,000 TONS MORE STEEL 

When the new conticaster comes into 

service at the electric steel mill at Saint- 

Saulve in October, it will increase the 

plant's capacity by over 100,000 tons and 

allow us to extend the range of sizes 

produced to include products up to 

310 mm in diameter. The curved casting 

technique adopted applies exactly the 

same principle as the method used at the 

V & M STAR and V & M do BRASIL 

steelworks. This technique was developed 

with the manufacturer (Danieli), 

and offers the best solution currently 

available in this field. These facilities 

will be brought on stream without any 

interruption to production on the old 

vertical rotary caster to avoid any loss of 

capacity. A part of this 66 million euroinvestment 

have been spent on the forge 

which has now been given an additional 

heat treatment furnace. The forge can 

now operate on a continuous basis and 

produce more of the high alloy steels 

which are so sought after by the oil and 

gas market - espe-cially 13% chromium 

products. 

PRIORITY ON 

HEAT TREATMENT 

An investment is to be made at the 

Saint-Saulve tube mill to install a new 

heat treatment line in the course of 2008. 

75% of the additional capacity provided 

will be dedicated to tubes for the oil 

industry. The plant will then be in a 

position to supply plain-end hollows 

direct to the Oil & Gas Division's 

European threading lines - in particular 

to the Aulnoye plant. There has been 

significant expansion in coupling stock 

production at Montbard to meet increased 

demand for these made-to-measure 

products. In addition to running weekend 

shifts and having its heat treatment 

facilities revamped, the Déville site is also 

to have a new preheating furnace and 

cutting equipment due for commissioning 

at the beginning of 2008. Priority 

is being given to heat treatment at the 

Rath and Mülheim plants as well as 

the development of threading capacity 

exclusively for OCTG products." (see 

V & M TUBES OCTG Europe article). 

Extension Bay 

for the new Caster 

(Steel Plant 

Saint-Saulve). 

4 V & M R E P O R T - O I L & G A S D I V I S I O N S P E C I A L I S S U E N R . 1 0 - O C T O B E R 2 0 0 7 V & M R E P O R T - O I L & G A S D I V I S I O N S P E C I A L I S S U E N R . 1 0 - O C T O B E R 2 0 0 7 5


V & M TUBES OCTG Europe: 

Back to normal by the end of the year 

The sky is gradually clearing for V & M TUBES OCTG Europe. Plant load 

rates for most product lines are expected to return to normal by the end of 

the year. With demand even stronger than in 2006, V & M TUBES are pulling 

out all the stops to make this happen: large sums are being invested in 

increasing plant capacity, more shifts are being worked, Continuous 

Improvement Teams (CITs) are trying even harder to boost productivity - 

a concerted effort is being made on all fronts. 

Philippe Emery. 

“ 

The V & M TUBES Oil & Gas 

Division is divided into two 

large regions: North America 

and Europe. OCTG Europe covers 

not only the European market, as you 

would expect, but also the North Sea, 

Eastern Europe, the Middle East, Africa 

and the Far East as well," explains the 

Division's Deputy Managing Director, 

Philippe Emery. "In other words, all 

parts of the world except for North 

America (the United States, Canada and 

Mexico) - and Brazil which is served by 

V & M do Brasil. I should also stress 

that our European plants supply tube 

to OCTG North America and that we 

outsource some work, particularly for 

the manufacture of threaded coupled 

tubulars through our Indonesian subsidiary, 

PT Citra Tubindo. Achieving 

optimum use of our existing production 

facilities is therefore not an easy 

matter. 

The context is set, and a quick review 

of available resources shows that all 

capacity has been fully utilized for 

almost two years. With this sort of 

workload, any production incident 

generates delays which are very difficult 

to make up for later on. We have 

looked into all possible ways to increase 

the capacity of all sites in order 

to bring the situation under control 

as quickly as possible. In most cases, a 

number of different approaches were 

put into effect simultaneously: we made 

huge investments, we worked harder, 

we improved productivity and brought 

in a number of other measures. 

However, there was a great deal of disruption 

to the way we organize and 

schedule our activities. We have now 

managed to bring the load rate back to 

normal for larger sizes, and we think 

that we will be able to do the same for 

small-diameter products by the end of 

the year. This is a much more ambitious 

objective than it may seem, as demand 

is even greater than in 2006." 

TOWARDS GREATER 

VERSATILITY 

V & M TUBES OCTG Europe have 

also taken a large number of more 

ad-hoc measures to ensure that customer 

satisfaction is maintained. The 

Division has worked with some of our 

customers to put a number of priority 

production schedules in place to cope 

with particularly urgent requirements. 

Raw materials have been sourced from 

outside the Group to make up for the 

shortages brought about by increased 

demand and by the impact of the problems 

at the HKM steelworks. Production 

capacity at plants in Brazil and 

North America has also been used 

sometimes to fill the gap. 

"This difficult period has strengthened 

our belief that we need to make our 

production units more versatile," explained 

Philippe Emery. "Even though 

some plants will still specialize in particular 

areas, we should aim to have 

the ability to manufacture material 

for any order at any site. This objective 

will obviously require investment. As 

far as we are concerned, this goes 

without saying, as all sites are bound to 

comply with the quality criteria demanded 

by our Group in all respects." 

MORE CAPACITY 

The investment made to give extra 

capacity to the V & M TUBES plants 

at Rath and Mülheim in Germany is a 

good example of the Group's desire to 

overcome a situation which was not 

satisfactory. 

Oliver Sommerkamp. 

ping of the present machines commissioned 

in March have enabled us to 

boost capacity and take on the production 

of new products. We have also 

increased the number of shifts, like all 

of the European plants. To cope with 

New Heat Treatment, Rath plant. 

"A considerable investment plan was 

rolled out at Rath in 2006 and 2007," 

explains Oliver Sommerkamp, manager 

of the OCTG Thread Mill. 

"With respect to OCTG, the new 

EMAG threading units and the revamthe 

present high activity, the number of 

temporary workers has been significant 

increased. Further on our continuous 

improvement teams continue to ensure 

an increase of our productivity for the 

future. 

••• 

New Heat 

Treatment, 

Rath plant. 

Bay of new Heat 

Treatment, Rath plant. 



Ulrich Menne, manager of 

the Mülheim's continuous 

mandrel mill. 

Since this interview, Dr Markus Ring 

is taking over from Mr Ulrich Menne. 

Therefore, Dr Ring is now the Plant 

Manager of Mülheim’s continuous 

mandrel and Mr Menne takes the 

position of Plant Manager Plug Mills 

Rath and Déville. 

Aulnoye plant. 

••• 

Ulrich Menne, manager of the 

Mülheim's continuous mandrel mill 

continues: "OCTG products – casing, 

tubing, drill pipe, green pipe, etc. – 

account for an important share of our 

business and we are also involved in 

threading API standard products. Our 

heat treatment capacity has steadily 

increased by about 40% in recent years, 

and we also installed new air quench 

equipment for 13% chromium steel in 

2006. At the same time, we have 

brought in all the systems required to 

satisfy the PSL 2 and PSL 3 required 

by the new API specifications. 

Traceability has been improved by the 

deployment of a data matrix system for 

tracking each tube from the moment 

the order is taken, through the delivery 

to the customer. Above all though, 

2007 will be remembered as the year 

when we set up a new threading line 

dedicated to premium products. This 

project is one of the largest investments 

made at Mülheim in recent 

years." 

MORE WORK 

Mülheim plant. 

The Aulnoye plant in France manufactures 

a wide range of OCTG products 

- as well as drill pipe – and serves 

most of the markets in which V & M 

TUBES OCTG Europe is active. 

Aulnoye has come to prominence 

over the past three years as the site 

that has done everything in its power 

to improve production. "One of the 

main levers we have used to boost 

capacity has been increasing the number 

of shifts," explains Jean-François 

Claver, VMOGF's Industrial Director. 

"We have gradually moved up from 

15 to 21 shifts a week, which means 

that we are now running our production 

facilities at full capacity. We have 

brought in overtime, run weekend 

shifts and hired around 360 new 

people on a temporary or fixed-term 

contract basis. The new arrivals have 

had up to five weeks training, and 60 

or so were taken on as permanent 

employees in 2006. We have also arranged 

to have some personnel temporarily 

sent over to us from other companies 

in Aulnoye and from a Group 

subsidiary with a lighter workload. 

These measures have increased our 

capacity by almost 60% in 18 months." 

The Aulnoye plant is planning to do 

even better, and is counting on good 

results from its 20 productivityoriented 

CITs, as well as reaping some 

benefit from the capital expenditure 

program of 2007, invested on the site. 

MORE PRODUCTIVITY 

VMOGUK's 260 workers at Bellshill 

in Scotland perform heat treatment and 

threading work on green pipe - chiefly 

for the North Sea market. The plant's 

output of OCTG products almost 

Final Inspection, Bellshill plant. 

David Robb. 

tripled between 2003 and 2006! "This 

achievement has been due to the increase 

in the number of shifts worked" 

explains Bellshill plant manager, David 

Robb. “We had to hire around a hundred 

additional people during this period, 

and they all needed to be trained. Our 

plant has also been making considerable 

efforts in terms of continuous 

improvement: we have increased the 

number of CITs and redefined their 

objectives. For the moment, we have 

put issues like reducing costs to one side 

in order to concentrate on improving 

productivity. One of our ten CITs 

brought home a Vallourec Gold Award 

in 2006. We have also used benchmarking 

against other Group production 

units as a means of optimizing the 

use of our facilities as well. On top of 

this, we have also invested on clearing 

bottlenecks which were restricting our 

heat treatment and threading capacity. 

The North Sea market is one of a 

kind, and these initiatives have enabled 

us to keep up with rising demand 

without compromising the quality of 

the products and services we offer our 

customers." 

Non Destructive Testing - 

Probes, Bellshill plant. 

Jean-François Claver. 



VAM (Changzhou) Oil & Gas Premium Equipments Co. Ltd: 

And then they were four… 

Vallourec's fourth plant in Changzhou will be dedicated to the Oil & Gas 

Division. Due to come on stream during the second part of the year, 

extension in the future. It should be 

easy enough to set up two or three 

further threading lines. 

the site will produce VAM connections for the local market and free up 

production capacity in the Group's European units. 

Paul Bounie, 

Lotus Project 

General Manager. 

Paul Bounie's assignment is 

coming to an end. His task was 

to deliver a turnkey plant to 

the site’s new operator: the V & M 

TUBES Oil & Gas Division. “One 

year after Vallourec’s decision to locate 

a new production unit in China - 

and with just a few weeks to go until 

the plant is officially commissioned, 

I can feel proud of the work performed 

by the team through this investment,” 

explained the project manager. 

VAM Changzhou will deliver its 

first orders on schedule. It is a 

modern, functional facility which allows 

plenty of scope for future development. 

I also feel that it looks pretty good 

as well." 

The plant has been built on a 6.5 

hectare plot and has 17,600 sq. meters 

of covered floor space. Part of the 

structure is made from MSH hollow 

sections supplied by the Vallourec 

Group, and the building is covered 

with metal cladding. It bears a clear 

family resemblance to its big sister built 

for the HRT (Hot-rolled Tubes) 

Division about 300 meters away in the 

same industrial zone in Changzhou. 

Some space is still available, and an 

option has been taken on an adjacent 

20,000 sq. meter plot for possible 

PREMIUM PRODUCTS FOR 

DIFFICULT CONDITIONS 

In the initial stage, VAM Changzhou’s 

equipment consists of swaging machines, 

a brushing machine, EMAG 4- 

axis CNC lathes, saws, surface treatments, 

bucking machine, a coupling 

lathes and MPI non-destructive testing 

equipments. In addition to the threading 

line and the couplings shop, the 

plant also boasts a dedicated finishing 

line with cleaning, painting, marking 

and packaging facilities. This means 

that the new site can perform all finishing 

work on heat-treated tube coming 

from the Vallourec Group's production 

units in Europe. “The equipment we 

have at the moment allows us to produce 

high added-value VAM connections 

in sizes ranging from 5-1/2 to 

13-3/8 inches,” Paul Bounie told us. 

3D View VAM Changzhou 

These are mostly VAM TOP products, 

although we can provide 

products from the VAM FJL, VAM 

SLIJ II, DINO VAM or even VAM 

MUST ranges. Their technical characteristics 

obviously have to meet the 

difficult operating requirements of 

Chinese oil and gas fields. They need 

high yield strength and must be suitable 

for sour service to cope with great 

depths, high temperature, high pressure 

and corrosion. We already had a 

strong presence in this segment in 

China with a 50% market share. The 

VAM Changzhou plant and its hundred 

or so employees will allow us to 

consolidate this position and keep up 

with the rising demand brought about 

by the country’s economic growth.” 

TOP FOREIGN 

INVESTOR 

IN THE AREA 

Since local oil and gas reserves will 

be insufficient to meet this demand, 

Chinese oil companies like SINOPEC, 

CNPC, CNOOC and PETRO CHINA 

will also have to carry out exploration 

activities and operate fields in other 

parts of the world - especially in Africa 

or the Middle East. It is very important 

for the V & M TUBES Oil & Gas 

Division to be in a position to move 

forward with these customers in these 

activities and offer products and 

services which have already received 

official approval in China. “VAM 

Changzhou opens up prospects of 

solid, sustainable relationships with 

our Chinese partners,” stresses Paul 

Bounie. "Our presence demonstrates 

that we want to succeed in our efforts 

to help in the country's development 

both within China and internationally. 

With four plants and 400 employees, 

the Vallourec Group is the first investor 

in Changzhou. Having the plants 

close together provides a number of 

opportunities, like benchmarking, 

tapping synergies and sharing certain 

functions. Taking a wider view, the 

new plant will also free up precious 

production capacity in our European 

units, and with the way the market is 

going at the moment, this is excellent 

news for all customers of V & M 

TUBES.” 

Team VAM Changzhou. 

MSH Steel Structure 

Construction. 

Column erection. 

First Stone laying 

Ceremony, 

November 11 th , 

2006. 



Didier Hornet. 

V & M TUBES OCTG North America is holding its positions at a time of strong market growth - 

particularly in the United States, and the Division is extending its range of high-end products 

following major investment in capacity at its four production units (V & M STAR, VAM USA, VAM 

Canada and VAM Mexico). 

With sales totaling around 2.7 

million tons, North America 

accounts for almost 30% of the 

8.5 million ton world seamless OCTG 

market alone. A large portion of this 

material is going to the oil industry. One 

of the features of the U.S. market is that 

80% of OCTG products supplied are 

used in drilling for gas. Oil companies 

have to drill more and employ increasingly 

complex methods to extract the 

same quantity of gas. V & M TUBES’ 

production capacity was insufficient to 

satisfy this strong demand and the company's 

market share gradually began to 

slide. "This is why our Group agreed to 

go ahead with a huge investment plan 

which is already being rolled out in our 

four units in North America," explains 

V & M TUBES OCTG North America's 

Deputy Managing Director Didier 

Hornet. "We are investing in steel production, 

tube manufacture and heat treating 

at V & M STAR and in VAM 

Joints threading activities for VAM 

USA, VAM Canada and VAM Mexico." 

Heat treatment was the first area to 

benefit from this program. The second 

stage of the investment plan launched 

this year targets steel production and 

V & M TUBES OCTG North America: 

More steel, More 

tube, More premium 

connections 

tube manufacture. "This big increase in 

our capacity mainly concerns our topend 

products," explains Didier Hornet. 

"It will allow us to maintain our market 

share at a time of strong growth, and will 

mean that we can give our customers 

better service as their needs increasingly 

turn toward products with high added 

value. Our new double quench facilities 

are particularly welcome, and we can 

offer grades of up to C110 and supply 

products for sour service applications." 

Along with the increased rolling capacity 

provided by V & M STAR, V & M 

TUBES OCTG North America can 

also rely on continued supplies of material 

from the Group's plants in Brazil and 

Europe which have also benefited from 

heavy investment. 

PRIORITY ON 

PREMIUM 

CONNECTIONS 

V & M TUBES OCTG North America's 

market share will grow significantly. 

"Here again," stresses Didier Hornet, 

"the competitiveness of our premium 

connections stems from the expansion 

of on-shore deep wells which now often 

go down over 5,000 meters." 

To satisfy current needs and to adapt to 

future requirements, VAM USA is to 

have two - or even three - additional 

threading lines and this will double the 

existing capacity. Two of these lines may 

be installed at the V&M STAR location 

to integrate pipe heat treating, API 

threading, and VAM Joint threading 

in the same location. VAM Canada 

doubled capacity in 2006, and VAM 

Mexico can now handle significantly 

greater throughput following extensive 

refurbishment of production facilities. 

"You need to understand that the main 

reason for our capacity increases is to 

ensure that we provide the quality of 

service we owe to our customers," concludes 

Didier Hornet. "It was very 

important to keep offering the flexibility 

the American market demands. In 

practical terms, this means giving 40-day 

lead times on tube deliveries and providing 

threading services on a just-in-time 

basis. We must be able to ensure that we 

bring to the market the benefit of a mill 

joint within 45 days, and still that an 

order for premium connections received 

on a Friday evening will be on the rig on 

Sunday - the same week!" 

A step ahead 

Vallourec & Mannesmann Tubes (V & M TUBES) initiated its North American tubular 

production five years ago with the acquisition of V & M STAR, the USA’s leading producer of 

seamless tube products in sizes ranging from 5 in to 10-3/4 in. Since then, V & M Tubes has 

been committed to an on-going process of improving plant capacity, product performance and 

marketing of V & M STAR’s tubulars in North America. 

Caster, billet strands. 

Since July 1, 2002, V & M STAR 

has had an ongoing capital improvement 

program, and in the last 

two years has earmarked more than $100 

million for capacity improvements at 

its plants in Youngstown, Ohio; and 

Houston, Texas. 

Eighty percent of V & M STAR’s production 

is for Oil Country Tubular 

Goods (OCTG). OCTG can be delivered 

with API threads or plain end 

or, now, as a mill-finished product in 

cooperation with VAM USA. The remaining 

25 percent of production is API 

coupling stock, line and standard pipe, 

mechanical tube and structurals. 

“Our capability to heat treat and finish 

high grade OCTG in Houston, in the 

heart of the domestic market, allows 

flexibility for our customers and positions 

us a step ahead of our competition,” 

says Roger Lindgren, President and 

Chief Executive officer of V & M 

STAR. “We are continually improving 

our product offering, our quality, our 

productivity and equipment reliability 

while at all times mindful of our environmental, 

safety and health (HSE) 

responsibilities.” 

Much of the current CAPEX improvement 

program is based on responses to 

customer surveys, says Fields. “For 

example, we are now able to produce 

higher grade sour service products, such 

as C-110,” he says, “and we’ve increased 

our capacity for all quench-and-tempered 

grades, such as high-grade enhanced 

collapse casing.” 

These improvements have been broken 

up into three capital improvement centers: 

the melt shop and pipe mill in 

Youngstown; and the heat-treating 

facility in Houston. 

The Youngstown facility is known for its 

high productivity electric arc furnace 

steelmaking and retained mandrel mill 

pipe production, however improvements 

to the melt shop and pipe mill will increase 

capacity about 150,000 tons per 

year when completed 2008. 

In 2006, Electrical Furnace upgrades 

were completed, increasing steelmaking 

throughput ratings two tons an hour. 

Other projects to be completed by 2008 

include: 

- Scrap-charging and billet-handling 

cranes upgrade to accommodate increased 

production. 

- New bag house to better capture dust 

and conform to environmental 

••• 

Roger Lindgren. 

Doug Fields. 

Piercing Mill, Overview with transfer table. 



Improvements in all plants 

As offshore wells are drilled even deeper with higher temperatures and pressures, and 

as onshore wells are drilled in more complex formations, the demand for premium 

connections will continually increase. 

••• 

Pipe Saws after Sizing Mill. 

requirements with increased production. 

Pipe mill improvements are focused on 

modernizing equipment to improve 

quality and increase capacity. Consolidation 

and modernization of the pipe 

mill pulpits were completed in 2006. 

Now, communication is improved because 

of the visual overview of the mill. 

“We are making significant investments 

in our plants,” said Joel Mastervich, 

Chief Operations Officer for V & M 

STAR. These improvements will help 

us remain competitive in the growing 

OCTG market.” 

Pipe on cooling bed with sprays. 

Joel Mastervich. 

VAM USA plant. 

With VAM North American 

threading operations – VAM 

USA, VAM Canada and VAM 

Mexico – have invested in their plants 

and personnel to not only satisfy the 

current demand but also the increased 

future activity. 

To process this increased threading 

demand, VAM USA has added capacity 

at its threading plant in Houston near 

the airport and is planning to add two 

new threading lines at the V & M STAR 

facility east of Houston. These improvements 

will increase threading capacity 

by 40 percent. 

At VAM USA’s Hardy Road facility, construction 

is nearing completion on a 

large OD threading line for pipe up to 

20”. VAM USA will now thread pipe 

from 2-3/8” up to 16”. 

At the V & M STAR facility on Sheldon 

Road, VAM USA plans to add two new 

threading lines, lines 10 and 11, by 2008. 

This new threading plant, dedicated to 

premium threading of heat-treated and 

quenched V & M STAR pipe should be 

completed in the first quarter of 2008. 

There has been a continuous increase in 

the demand for finished goods at VAM 

USA. 

VAM Mexico plant. 

“Long-term demand remains strong 

and our performance has been outstanding,” 

says VAM USA President 

Grady Harrison. “While we continue to 

improve our product offering with millfinished 

products, service and delivery 

are still our strong suit.” 

In Canada, VAM Canada President Rick 

Osborne doubled its capacity at its Nisku 

plant in 2006. Besides its plant in Nisku, 

VAM Canada has a sales office in Calgary 

and field service facilities in Red Deer 

and Saint John. 

VAM Canada has added a new threading 

machine, expander and stress-relieving 

unit and improved its inspection and 

end-finishing capabilities. 

VAM Mexico is located in Veracruz, 

Mexico, and employs 350 people, manufacturing 

VAM connections in size 

ranges from 2-3/8 in to 13-3/8 in. 

In addition, VAM Mexico has an accessories 

shop, protector shop and a VAM 

Field Service office. 

To meet market demand and improve its 

technology, VAM Mexico upgraded one 

threading line in 2005 and another in the 

first half of 2007 and will add a half line 

by the end of 2007 for total capacity 

increase of 22 percent above the 2005 

level. The accessories shop is also being 

updated to improve productivity and the 

quality of service to its customers. 

“With these steps, VAM Mexico will 

continue having satisfied customers 

and keeping the leadership in the premium 

connection market in Mexico,” 

says VAM Mexico President Adán 

Sandoval. 

VAM Canada Threading Line 

Expansion - 2006. 

Grady Harrison. 

Rick Osborne. 

Légende photo 

Adán Sandoval. 



VAM Drilling: 

A bright outlook 

It’s been only been a year and a half since V & M 

TUBES’ acquisition of OMSCO and a short few 

months since the launch of VAM Drilling, but much 

has been accomplished, says VAM Drilling Inc. – 

USA President Steve Williamson. 

Steve Williamson. 

“ 

The market has shown that it 

is eager to have a strong company 

as an alternative, particularly 

for premium products,” says 

Williamson. “This is evidenced by the 

frame agreements we’ve developed with 

large drilling contractors and service 

companies and the continued support 

of our valued, longstanding customers.” 

Additionally, says Williamson, “major 

oil companies are seeing the value of 

Vallourec’s strong research and development 

resources. We are working 

hand-in-hand to find solutions to difficult 

drilling challenges.” 

When you are a new organization 

you have to try harder and the goal at 

VAM Drilling is to create a worldwide 

organization that acts “local”, 

providing unmatched customer service 

and unique, cost-effective downhole 

solutions. 

To that end, VAM Drilling conducted 

a worldwide customer survey to understand 

what customers wanted. A technical 

marketing group was formed and 

R & D targets were established. 

An early priority for VAM Drilling 

USA was to implement the Vallourec 

Management System (VMS), which 

utilizes Total Quality Management 

(TQM) and Continuous Improvement 

Technology (CIT). These systems support 

the well-proven Vallourec principles 

of establishing and communicating 

clear goals, using metrics to track 

progress and involving everyone in 

improving the business. 

“Another priority for VAM Drilling 

USA is improving our HSE programs 

with the goal of achieving ISO 14001- 

compliance by the end of 2007,” says 

Williamson. 

Besides investing in systems and professional 

staff, VAM Drilling is making 

a substantial investment in its plants in 

Houston; and Cosne-sur-Loire, Aulnoye 

and Tarbes in France. 

To better meet the high level of 

customer demand, a two-year CAPEX 

program is underway in Houston to 

increase drill pipe capacity by 50 percent, 

while decreasing plant costs by 

20 percent. 

The investment includes: 

- Heat treatment line upgrade and new 

straightener, increasing capacity 

- New weld line with high tech process 

control and automation, increasing 

welding capacity 

- Upgrades to other work-centers and 

storage to balance the plant capacity. 

INCREASING 

PRODUCTION 

Future plans for the Houston plant 

include improving efficiency to produce 

extra long Range 3 drill pipe for offshore 

applications and completing an 

upgrade to an existing weld line to 

match capacity and process controls of 

the new weld line. 

Once completed, the new and upgraded 

weld lines will operate as a cell. One 

line will weld boxes and be conveyed 

with automated pipe-handling to the 

other line for welding pins. The twoline 

cell will reduce lead time for 

customers, while improving quality 

and productivity. 

“We’re also investigating a new heat 

treatment line as the primary investment 

toward increasing our Houston 

capacity in future years,” says 

Williamson. 

At VAM Drilling’s plant in Cosnesur-Loire, 

a large investment has 

the goals of increasing production of 

heavy weight drill pipe by 50 percent 

and roughly doubling production of 

sophisticated MWD components. At 

our Holland facility, an investment is 

being made to allow the facility to 

efficiently produce large quantities of 

drilling tool accessories, such as rotary 

subs and pup joints. 

At the Aulnoye plant, goals include 

improving drill pipe production capacity 

for a higher mix of premium products, 

and improving quality through 

additional wet-magnetic inspection 

and improved hardbanding capability. 

The CAPEX improvements also include 

a new tool joint line and additional 

weld line heat-treating equipment. 

VAM Drilling has also invested in a 

facility at Tarbes, to produce tool joint 

forgings for Aulnoye. In addition to 

making the first forging line fully 

operational, improvements are being 

made to the heat-treating operations, 

and a new line is being added for 

rough-turning forgings. VAM Drilling’s 

future plans include a second forging 

line in Tarbes. 

Besides its investment in capital equipment, 

VAM Drilling continues to 

invest in new processes to improve 

product capability/robustness and 

reduce costs. VAM Drilling has also 

invested in new products for sour 

service (H 2 S), high-torque threaded 

connections for extended reach/horizontal 

drilling and high tensile-strength 

materials for ultra-deepwater drilling. 

“With this intensive effort, the market 

has rewarded the new VAM Drilling,” 

says Williamson. “For 2007, we have 

already sold most of the group’s capacity 

for the year and sales of premium 

products are exceeding plan with 

numerous high specification orders. 

“We believe the steps being taken to 

build a solid organization, both for 

now and for the future, give us a bright 

outlook. Our strategy of customer 

service, emphasis on drilling solutions 

through premium products, investing 

in people and equipment and a worldwide 

sales/production network is a 

winning combination.” 


PRODUCT 

Weatherford – V & M TUBES partnership 

The Expandables Duet 

The 24th SPE/IADC Drilling Conference and Exhibition in Amsterdam at the end of February: Pat York, 

Commercialization & Marketing Director and Lev Ring, Technology Director from Weatherford's Solid 

Expandables business unit had an appointment to meet V & M TUBES Expandable Product Manager, Philippe 

Deletombe. V & M REPORT sat in on the conversation… 

V & M REPORT: You seem to think that 

2007 will be a turning point in the development 

of expandable products. What 

are your reasons for this 

Pat York: Simply because we consider 

that the market is now ripe. Our customers 

no longer have any doubt about 

the future of expandables and are now 

concentrating on mastering the use of 

these systems and making them as riskfree 

as possible. We have spent the past 

few years developing tools and a range 

of products to convince our customers 

that this new technology is sound and 

reliable. A vital element in this was to 

have tubular connections which provide 

guaranteed levels of quality and 

performance. This is why both we and 

V & M TUBES place so much importance 

on testing these systems and on 

obtaining certification. We are now 

ready to market them, and this year will 

see a number of projects which will 

demonstrate the relevance of solid 

expandable systems. Everything will be 

in place for a real breakthrough from 

2008 onwards. 

THE DIFFERENT APPLICATIONS OF THE SOLID EXPANDABLES 

V & M REPORT: What were the respective 

roles of Weatherford and V & M TUBES in 

the development of your range of expandables 

Lev Ring: The expandable technology 

depends on three main components: the 

tubulars (pipes and connections), the setting 

tools and the accessories. We don't 

make casing ourselves, so we always 

thought that Weatherford should entrust 

V & M TUBES to manufacture the tubulars 

and concentrate on the tools. We felt 

that the question of accessories was of 

secondary importance, as it was likely to 

sort itself out as the technology moved 

ahead. This project was a high-risk investment 

for both of our organizations and 

we knew that if either of us failed to 

succeed in any one of the many stages of 

the process, this would set off a chain reaction 

and we could well find ourselves with 

nothing to offer the market. Very tight 

planning, full commitment and the expertise 

each partner have put us in a position 

where we can now launch four new product 

ranges. This is a considerable technical 

achievement by any standards! 

V & M REPORT: As you know, V & M 

TUBES value the benefits of working 

with Weatherford and are particularly 

pleased with the company's expertise 

and the very high standards applied to 

technical performance and quality. From 

your standpoint, how do you rate the 

contribution made by your partner 

Lev Ring: Very positive. We don't 

know any other manufacturers in this 

area which integrate all stages of the 

production process - from steelworks, 

to tube mills through to threading and 

finishing shops, which have reached the 

same level of technological progress. 

The quality of our relationship is another 

factor in the success of our partnership. 

Our staffs have been working 

together for a long time and know each 

other well. We have no problems in 

communicating with each other. We've 

been in touch almost every day over the 

past couple of years. We have meetings 

in France and the US, we exchange 

e-mails and we know everyone's cell 

numbers by heart. Both V & M 

TUBES and Weatherford are staking 

their reputations on this enterprise. 

Our commitment is our pledge to our 

customers, and they already have the 

assurance that we can provide products 

which meet specifications which exceed 

future standards for expandables. 

V & M REPORT: You have also worked 

together on the service side, and 

marketing must surely be the most 

difficult aspect at the moment. 

Pat York: Even though Weatherford 

and V & M TUBES are leaders in the 

development of this technology, the 

marketing activities associated with it 

are not the easiest aspect for either of 

the partners. The human resources and 

logistics network needed must be put 

in place before the marketing process 

can begin. 

At the beginning, we expected that 

there was a good sales potential for 

expandables, however we have even 

been surprised by the very keen interest 

shown in the Weatherford’s solid 

expandable technology. We've literally 

been besieged by customers here in 

Amsterdam. We've rarely experienced 

this kind of customer excitement before 

at a technical conference. The fact 

remains though that, like any new technology, 

expandables has to compete 

with solutions which have already been 

tried and tested. This particularly 

applies to "open-hole clad" and "casing 

liner remediation" applications. We 

have to demonstrate that the benefits 

these systems bring are worth changing 

established design, procurement 

and production practices. In addition 

to technical sales promotion, we also 

have to determine exactly who does 

what in our two organizations - particularly 

in relation to the supply of 

accessories. 

We are going to deliver six different 

products to majors this year, mainly 

for contracts in the Gulf of Mexico, 

the Middle East, the Far East, the 

North Sea and West Africa. 

VAM ET WISE PERFORMANCES VS, OPERATOR’S FIELDS 

V & M REPORT: What are your objectives 

as far as technical developments are 

concerned 

Lev Ring: We know that we will have to 

do more than offer the range of systems 

we have just finished putting together no 

matter how innovative and credible they 

may be. It is very important to build on 

the knowledge and skill we have already 

acquired and continue our efforts in research. 

We already see signs that the oil 

industry will have huge demand for newgeneration 

solid expandable products 

using technologies which do not yet exist, 

or which are still at an experimental stage. 

(l to r) Pat York, 

Philippe Deletombe 

and Lev Ring. 

Picture is a courtesy of Weatherford company. 

Philippe Deletombe: The mutual trust 

underpinning our partnership allows us 

to save time. We have always reported 

any setbacks we have experienced. This 

openness has forced us to respond immediately 

and come up with alternative 

solutions to achieve our goals at each 

stage of the process. 

Working closely with operators of Monobore Open-Hole Liner 

systems not only facilitates the ability to design expandables for 

high-collapse applications, but also allows the study of the system’s 

casing and connector performance envelopes to ensure 

suitability for particular field applications. 

The following plot compares V&M’s casing and connector performance 

envelops with the performance requirements for the end 

user’s assets. This plot allows customers to directly compare 

the envelops to a simulation of the loads within each asset in 

various well conditions over the life of the well. 


SPOTLIGHTS 

VAM Drilling School for Weatherford 

in Den Helder 

V & M do Brazil supporting the sport in Brazil 

Last May 6 th 2007 took place the second VAM Drilling school 

organized for Weatherford International in Den Helder (the 

Netherlands). After a first session set-up in Aberdeen the former 

month, the VAM Drilling technical support team had the opportunity 

to introduce the following subjects to a group of 23 participants 

(Weatherford managers, quality inspectors and inspection 

companies’ representatives): 

- Main concepts and design features associated with VAMDrilling 

high performance products 

- VAM Field procedures related to inspection and running of our 

high torque connections, VAM EIS ® and VAM Express TM 

The discussions that followed the presentations confirmed the interest 

and the value of such events which improve the knowledge 

of all parties involved. They will lead to more accuracy and efficiency 

for inspectors and product managers in the field and they 

will help us improve operational instructions thanks to the feed 

back on actual field practices. 

VAM Drilling – Platinum Sponsor of IADC 

World Drilling 2007 Conference in Paris 

VAM Drilling sponsored the IADC World Drilling Conference taking place in Paris 

on June 13 th and 14 th 2007. A booth introducing VAM Drilling products and 

organization was set-up for the occasion and encountered a great success. It was 

a unique opportunity to share our new company name and introduce our product 

lines to a large number of players in the drilling business. We did also present 

during the conference a technical paper on HYDROCLEAN TM (one of our performance 

drilling systems) with Hapiztuddin Mangor from Talisman Energy and Raymond 

Elder from COR (Certified Oilfield Rental). Anthony Monnet, marketing and technic 

al support manager, did contribute significantly to this success. 

On November 11 and 18, 2006, V & M do 

Brazil promoted the V&M Cup of yachting; 

which is part of the social project “Na 

Rota do Futuro”. 

The event took place in ICRJ (Rio de Janeiro 

Yacht Club) with the presence of young sailors 

of the Optimist class, some government officials, 

such as the state secretary of sports, 

and V&M clients who came to support the 

event in special boats. 

The main goal of the project is to meet the 

restrained demand for initiation courses in 

this sport, as well as to invest in the formation 

and professional initiation of young 

athletes. 

In a one-year term, the project allowed to 

increase and to improve the sport’s infrastructure 

and to form new yachtsmen. 

Currently, the school service an annual average 

of 60 students in the sailing initiation basic 

courses and 50 sailors in the Flotilha class, 

with ages between 8 and 15 years old. 

At the same time, there was an exposition 

where pictures from “Na Rota do Futuro” 

project and the history of sport in the state 

of Rio de Janeiro were showed. 

VAM Drilling 

Customer Event 

China 

VAM Drilling had the pleasure to gather most of its 

customers, participating to the IADC World Drilling 

Conference in Paris, and share a cocktail followed by an 

evening dinner at the top of the Montparnasse tower. 

All our guests had a wonderful time and so did we! 

Casing and tubing: 

Following 2006, year 2007 is again excellent year for the OCTG 

deliveries. VAM casing and tubing will be delivered mainly 

to the critical drilling areas including Tarim Basin and Sichuan 

basin where they have the most critical well conditions with 

High Temperature, High Pressure, High collapse (up to 140HC) 

and Sour service (up to 110SS) . 

As a result of strong technical and sales promotion some key 

customers are now taking VAM TOP as their standard products. 

As more and more deep wells are drilled, some customers are 

diversifying their casing design options by using VAM MUST 

and VAM FJL. 

VAM Drilling: 

We successfully booked over 35,000.-meters of VAM EIS 

combined with sour service grade (VM105SS) which will 

be used in Sichuan basin. New orders are under discussion. 

We expect VAM Drilling’s orders will keep strong in year 2007. 


SPOTLIGHTS 

Moving office for 

VAM DUBAI L.L.C. 

V & M STAR recognized for exceptional 

environmental stewardship 

As of July 4th, 2007 VAM DUBAI L.L.C. has 

moved the office to the following location: 

VAM DUBAI L.L.C. 

World Trade Center 

Level 14, Suite 14:01 

PO BOX 9405 

Dubai, U.A.E. 

Your local contact remain the same: 

Mr Jean-Pierre Peter 

for OCTG products 

Phone: +971 4329 16 18 

Fax: +971 4329 1622 

Mr Scott Macpherson 

for Drilling products 

Phone: +971 4332 03 13 

Fax: +971 4332 03 14 

V & M STAR’s Youngstown mill is 

one of only three steel producing 

facilities in America to be accepted 

as a member of the Environmental 

Protection Agency’s National Performance 

Track program. To become 

a member, applicants must 

undergo an extensive independent 

assessment demonstrating maintenance 

of a comprehensive Environmental 

Management System, 

surpass compliance to legal requirements, 

achieve improvements in 

energy, waste and other conservation 

programs, and participate in 

community related projects. From 

2003 to 2005, V & M STAR has saved 

(l to r) Roger Lindgren, President and CEO, and 

Joel Mastervich, COO, receive from Jeff 

Bindas, Environmental Manager, the certificate 

recognizing V & M STAR as a member of the 

EPA’s National Environmental Performance 

Track program. 

90,649,845 kWh of electricity by optimizing chemical energy at the EAF 

and using light sensors in work areas. Water usage has decreased by 

27,512,052 gallons by re-circulating process water. Jeff Bindas, Environmental 

Manager, represented V & M STAR in Washington, D.C. to accept 

the award. According to EPA administrator Stephen Johnson, [facilities 

that meet this level of commitment] “demonstrate on a daily basis that economic 

prosperity and environmental protection can go hand in hand”. 

V & M STAR was also named ‘Recycler of the Year’ from The Steel Manufacturer’s 

Association with special commendations from Ohio Senator, 

John Boccieri, who congratulated V & M STAR for its leadership and work 

in environmental responsibility in the Greater Youngstown area. 

VAM Drilling 

new company names 

As of February 14th, 2007, SMF INTERNATIONAL 

changed the name into VAM Drilling France. 

The companies abroad operate also under new 

names: 

• OMSCO Inc. becomes VAM Drilling USA Inc. 

• SMF INTERNATIONAL SINGAPORE PTE LTD 

becomes VAM Drilling Singapore Pte Ltd 

• SMF INTERNATIONAL DUBAI LLC becomes 

VAM DUBAI LLC 

• SMF INTERNATIONAL OF HOLLAND B.V. 

becomes VALLOUREC MANNESMANN 

OIL & GAS NEDERLAND B.V. 

Vallourec relocate 

the company 

headquarter in France 

The Vallourec Group headquarters 

relocated to a new office building 

on 21st of May this year. The new 

address is as follows: 

27, avenue du Général Leclerc 

92660 Boulogne-Billancourt -Cedex 

France 

THE PHONE AND FAX NUMBERS REMAIN UNCHANGED 

22 

V & M R E P O R T - O I L & G A S D I V I S I O N S P E C I A L I S S U E N R . 1 0 - O C T O B E R 2 0 0 7

Deeply Rooted in Innovation 

The world of Oil & Gas exploration and production is full of technical challenge. Our mission within V & M TUBES is to develop 

the most innovative and competitive solutions to our customers’ challenges. 

DEEP SEA 

V & M TUBES has developed a full 

range of cost effective threaded 

and coupled solutions for all your 

drilling and production riser 

applications, with excellent fatigue 

performance of materials and 

connections. 

HP-HT 

V & M TUBES has continually 

demonstrated its leadership and 

expertise in the highest profile 

"HighPressure -HighTemperature" 

projects around the world. V & M 

TUBES offers comprehensive 

solutions including "tailor-made" 

heavy wall pipes with unsurpassed 

Sour Service performance and 

industry leading VAM Premium 

connections. 

EXPANDABLE 

TUBULARS 

V & M TUBES metallurgical knowhow 

and recognized premium 

connections expertise: a winning 

combination for expandable casing. 

VAM ® ET: the only field proven 

13%Cr gas-tight connection is at the 

cutting edge of Solid Expandable 

Technology. 

CLEANWELL ® 

The Environment is our future! 

V & M TUBES has developed a 

complementary technology for 

VAM ® TOP connections that improves 

not only Storage of OCTG, Safety 

and Rig Efficiency, but also minimises 

Waste. With CLEANWELL ® , no thread 

compound is ever required! 

Illustration : Agnès Borg 

world leader in premium connections 

www.vamservices.com

OCTG NÂ°8 DEF.qxd (Page 1) - VAM Services

Create successful ePaper yourself

Delete template?

Save as template?