Find the online-edition of Connection magazine - VAM Services

T H E V A L L O U R E C O I L & G A S M A G A Z I N E
VALLOUREC & SUMITOMO TUBOS DO BRASIL
A giant is born
SOLUTIONS
Accessory...
but essential!
ON THE MARKET
Iraqi oil & gas:
The New Era
# 0 1 - J A N U A R Y 2 0 1 2
THE TECH FILES
Corrosion Resistant
Alloy for OCTG

edito
Dear Readers,
Scan this QR code
with your smartphone
and watch the live edito
of Thierry Wolkiewiez.
Welcome to the brand new magazine of the Vallourec Oil and Gas division. Last
April, we conducted an online survey to get your feedback about the V&M Report
magazine. I would like to thank you all for taking the time completing it.
The survey confirmed that our magazine is an effective tool for your business and
an important source of information about our products and technologies. Nevertheless,
you suggested many possible improvements. That is why we decided to keep the
concept of an Oil and Gas magazine but overhauling its design, structure, its ‘look
and feel’, and contents.
Today, we are proud to launch the first issue of CONNECTION!
CONNECTION will be available in a -traditional paper version -and also through a
web-magazine that will offer additional multimedia material. Furthermore, it will be
complemented by an e-newsletter every time that important news so requires.
Talking about web technology, I am pleased to announce that we have just finalized
an application for smartphones that should be very helpful for all VAM users. The
“VAM app” is now available both on the App Store for iPhone and on Blackberry
App World. We encourage you to download this app and discover its exclusive tools
and functionalities!
You will see that this first issue of CONNECTION covers very rich corporate news
for Vallourec, illustrating our strong willingness to develop our activity and to be
closer to our clients. Last September, we inaugurated Vallourec & Sumitomo Tubos
do Brasil, our new Brazilian state-of-the-art integrated mill that already
started production and that will deliver 600,000 tons of seamless
pipes all over the world. Very recently, we also concluded the acquisition
of Zamil pipes, a heat treatment and threading plant of more
than 100,000 tons in Saudi Arabia.
This first issue is also a good opportunity to introduce the new
VAM Global Solutions team to you. Indeed, we have just hired a
team of 20 people dedicated to designing and providing our customers
with a comprehensive offering of solutions to complement our OCTG
products with tailor-made services ranging from well design to
supply chain management and completion packages.
Enjoy reading it and let’s stay connected thanks to CONNECTION!
We wish you a Happy
New Year 2012!
VAM ® is a registered trademark of Vallourec Mannesmann Oil & Gas France
Thierry Wolkiewiez,
OCTG Strategy Director
“Let’s stay
connected
thanks to
CONNECTION!”
www.connection-mag.com
www.vamservices.com
Publisher: Vallourec Oil & Gas - 27, avenue du Général Leclerc, 92660 Boulogne Billancourt Cedex- France - Editorial Team: Hassna Belmalek -
E-mail: hassna.belmalek@vmtubes.fr - Phone: + 33 1 49 09 35 83 - Fax: + 33 1 49 09 37 13 - Thierry Wolkiewiez - E-mail: thierry.wolkiewiez@vmtubes.fr - Production: Zabriskie.,
Paris - Design: LeGrand8, Paris - Photographs: Thierry Truck, Vallourec, Thiago Fernandes, Roberto Stuckert, Victor Lupianez, Tubacex, V&M Middle East, Interbrand, V&M Tube Alloy,
Saudi Seamless Pipes Factory, VAM Services, Neuf&9 or as mentioned otherwise - All rights reserved.

FOCUS
PAGE 6
VALLOUREC & SUMITOMO
TUBOS DO BRASIL:
A GIANT
IS BORN
THE TECH FILES
PAGE 13
CORROSION RESISTANT
ALLOY FOR OCTG
SOLUTIONS
PAGE 18
NEW GLOBAL ACCESSORIES
EQUIPMENT SOLUTION:
ACCESSORIES…
BUT ESSENTIAL!
ON THE MARKET
PAGE 22
IRAQI OIL & GAS: THE NEW ERA
PAGE 24
ACQUISITION OF ZAMIL PIPES:
VALLOUREC STRENGTHENS
ITS PREMIUM POSITIONING
IN SAUDI ARABIA
EVENTS
PAGE 26
VAM LICENSEE EVENT:
THREE ACTION-PACKED DAYS...
PEOPLE
PAGE 27
VAM GLOBAL SOLUTIONS:
A LENGTH AHEAD
news
CLEANWELL DRY: SUCCESSFUL
RUN FOR WINTERSHALL NORWAY
CLEANWELL DRY was
successfully run in April for
WINTERSHALL Norway.
70 joints of 13 3/8” 68# L80
VAM TOP with CLEANWELL
DRY coating were run by
ODFJELL casing crew in
North Sea offshore conditions
and were achieved with very
satisfactory results.
CLEANWELL DRY is the new dope free solution for VAM premium
connections. A completely dry coating directly
applied in the mills on the surface of VAM
threads and ready to use on the rig. A successful
combination environmentally friendly, safer,
cleaner and more efficient.
Scan this QR code with your smartphone to know more about Cleanwell Dry.
Basra International Oil & Gas
Conference and Exhibition
Vallourec participated in the 2nd Basra International
Oil & Gas Conference and Exhibition
in 25-28 November 2011 in Iraq.
International Oil Companies and State
Companies from both Iraq and abroad,
participated in this biggest industry
event of Iraq. This was the perfect
opportunity for us to introduce our
premium products and solutions and
to set up valuable exchanges with
stakeholders on the booming Iraqi market. Our team received
very positives feedback all along the show. We look forward to
seeing you next year for the 3 rd edition!
VISIT US AT…
Nigeria Oil & Gas 2012
20-23 February 2012,
in Abuja, Nigeria
Stand S05
IADC/SPE Drilling
Conference and Exhibition,
6-8 March 2012, in
San Diego, California, USA
Stand 608
Ghana Summit,
27-29 March 2012,
in Accra, Ghana
Bronze Sponsor
Stand G04
VAM ® AT YOUR FINGERTIPS.
GET THE VAM ® APP NOW!
Vallourec Oil & Gas is proud to launch its VAM app available
on the Apple Store for iPhone and Blackberry App World.
The application is free and includes the following fonctionalities:
Product Selection
Guide to help you
choosing the grades
and the VAM
connections that
best fit your needs.
Color Codes Finder
to help you finding
the steel type for
Vallourec pipes and
couplings.
Our Sales &
Services network
Useful tools
you may need
dealing with
VAM products.
4 T H E V A L L O U R E C O I L & G A S M A G A Z I N E # 0 1 - J A N U A R Y 2 0 1 2 T H E V A L L O U R E C O I L & G A S M A G A Z I N E # 0 1 - J A N U A R Y 2 0 1 2 5
Company
news
Ask your
question to
Mr Help
Apple Store: http://itunes.apple.com/fr/app/vallourec-oil-gas/id472623844?mt=8
BlackBerry App World: http://appworld.blackberry.com/webstore/search/vallourec?lang=en
Contact: hassna.belmalek@vmtubes.fr

focus
The first rolled tube in April 2011
marked the startup of rolling production
with state-of-the-art equipment.
A GIANT IS BORN
Vallourec & Sumitomo Tubos do
Brasil inaugurates an integrated steel
mill with production that will serve
the international oil and gas market.
“This is a dream come true for the two groups that
began four years ago, when we thought of building one
of the most modern, sustainable steel plants in the
world.” This was the opening remarks of Flávio Azevedo,
President of the Board of V & M do BRASIL (VMB) and
of Vallourec & Sumitomo Tubos do Brasil (VSB), who
opened the press conference of the VSB steel complex
inauguration on September 1st, which invested R$ 5
billion in the mill’s construction.
Since the placing of the cornerstone which set off the
beginning of the Plant works on July 7, 2007, VSB has
sustainability and technology as the focus of its actions.
“The placing of the cornerstone represented the beginning
of one of the largest investments made in Brazil
in recent years. In tune with the communities in the
Jeceaba region and respecting the environment, we
planted the seed for the construction of one of
Vallourec’s most important plants,” commented Flávio.
VSB’s figures are impressive, starting with the number
of employees that worked in the Mill during the peak
of the works – 11 thousand. The production capacity
of the plant that will supply the international oil and
gas market will be one million tons per annum of raw
steel and 600 thousand tons per annum of seamless
steel tubes.
As with the Vallourec Group, which establishes that
Safety is its Greatest Value, VSB couldn’t be any different.
With actions directed to promote on-the-job
health and safety, excellent results were achieved during
the construction of the Complex. /...
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FOCUS SOLU
/...
Tancredo Martins, Director General, VSB
“
With four years of works
and more than 11 thousand
employees working on the
construction of Vallourec
& Sumitomo Tubos do Brasil
(VSB), the new steel making
complex, inaugurated in
September, marks the history
of the Vallourec Group, not
only by it being a steel plant
with cutting-edge technology
equipment, but also for it becoming an important channel
in the production of seamless steel tubes.
In order to have a dimension of the importance of a new
plant for Vallourec, the annual production of 600 thousand
tons of VSB tubes (of which 300 thousand go to Vallourec)
will increase the Group’s capacity by 10%.
Due to the complexity of the equipment and the concern
with the high quality of the products, step by step, all the
Plant’s areas have begun to take shape and enter into
operation.
In terms of health and safety, we have broken a record
for large-scale, complex Works. The safety results of the
contractors during assembly and installation was achieved
topping the goal established by the Group. It is operational
process safety that is already worked on every day with
our collaborators by means of awareness campaigns.
Since the startup of the plant construction in 2007,
Aerial view of the VSB
steel making facility, whose
area is 2.5 million m 2 .
Annual production will
be one million tons of
crude steel and 600
thousand tons of seamless
steel tube. Image produced
in February 2011.
VSB has worked under the banner of sustainability in its
actions. To this end, it develops not only its collaborators
but also the surrounding communities to the plant.
VSB seeks to make aware and motivate everyone to preserve
the environment. For this, it created a Reference Center
in Revegetation of the Atlantic Forest in a space close
to the Plant, where thousands of native species saplings
have already been planted. With the main objective of
recovering the referred areas through different scientifically
consolidated revegetation models, monitoring will be done
in the development of the saplings planted, periodically
qualifying the progress of the biodiversity of fauna and
flora, biomass and stored carbon.
As an installed company, there will be 1,600 direct Jobs.
It is also important to point out the role of each employee
for VSB’s success. The efforts and commitment of all
its collaborators so that the Company will obtain the
recommendation of certification in norms API/Q1, API 5l,
API 5ct, ISO/TS 29001 and ISO 9001 of the American
Petroleum Institute (API), demonstrates that all are
always focused on quality. We have achieved the result
without non-conformity with the requisites evaluated.
Fruit of a joint venture formed between Vallourec and
Sumitomo Metals, partners for more than 30 years in the
field of premium connections for the oil and gas industry,
VSB will have the commitment to maintain the quality of
its products and maintain credibility of the two groups in
the international seamless steel tube market.”
Even before starting the works, the first step made
by VSB was in the direction of sustainability with
the study of possible environmental impacts caused
by the Plant and the compliance to the conditions
proposed by the environmental authorities fo concession
of the licenses.
From then onward, the first challenge would be the
earthmoving needed in the 2.5 million m 2 of area
reserved for the steel making complex within the
Jeceaba Industrial District, whose total area has
12,500,000 m 2 . During the works, more than 19
million m 2 of earth were moved, 100 thousand
meters of piles driven into the soil and 200 thousand
cubic meters of concrete.
The logistics of the arrival of equipment that would
start to give shape to VSB had special care, due to
the complexity and size of the undertaking. A Dry
Port with an area of 40 thousand m 2 was built to
conduct the customs clearance and receival of
imported equipment arriving at the complex. “The
organizational and communications part was vital
to a structure such as this. We received crates of
up to 60 tons down to screws. The lack of a determined
equipment could harm the rhythm of the construction
or operation,” emphasized Tancredo
Martins, Director General of VSB.
A major differential of the VSB Steel Complex is the
management of its electrical systems (substations),
water and effluents (capture, treatment systems,
recirculation systems and physical and chemical
analysis laboratories), waste and by-products (internal
transportation of flasks, bottles, bins and containers,
physical/chemical characterization, oil regeneration
unit and dispatch to final destination).
Planned from the DBOT model (Design, built, operational,
transfer) a contract was signed with the
company Foz do Brazil for engineering, construction,
operation and management transfer, 15 years after
the contract signing, for VSB.
STRUCTURE
The steel shop buildings and rolling mills at the
Plant were built using Vallourec Group structural
tubes. VSB utilized 40 thousand tons of tubular
metallic structures, a volume equivalent to what
would be used to build the Eiffel Tower.
Weighing 74 thousand tons each and capable of
producing approximately two Thousand tons of pig
iron per day, the VSB two blast furnaces are suited
for using either charcoal or coke. Like V & M do
BRASIL, which uses off gases generated by the blast
furnaces for generation of power, VSB also will adopt
such a system.
The VSB steel making
produces steel bars with
diameters of 270 mm,
310 mm and 406 mm.
The methodology adopted in the blast furnace process,
besides its effective production, also assures
the sustainability of the process. Flávio Azevedo
points out that the environmental model chosen by
VSB is more eco-efficient, with the use of charcoal,
which contributes to the reduction of greenhouse
gas effect emissions. “This will be one of the largest
charcoal based steel plants in the world,” he mentions.
The VSB steel shop is the first in the world built
with a tubular metallic structure and equipped with
unique to Latin America: the CONSTEEL process.
Together with the electric arc furnace (EAF), it optimizes
energy consumption and assures greater control
over the steel fusion process, with low level of
noise and particulate emissions. Another differential
of the area is the casting of large-diameter bars (406
mm), another first in the Vallourec Group.
The equipment used by VSB makes the difference
in the product’s final quality. The three-roll PQF
mill, for example, uses state-of-the-art. The entire
procedure is made up of a rotating heating furnace,
The building that
give VSB its form
was constructed
with structural tubes
produced by
the Vallourec Group.
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/...

FOCUS SOLU
The President of Brazil,
Dilma Rousseff, unveiled
the inauguration plate at
VSB together with Group
President Philippe
Crouzet, Chairman of the
Construction Council,
Jean-Paul Parayre,
Minister of Development,
Industry and Foreign Trade,
Fernando Pimentel,
Governor of the State
of Minas Gerais, Antônio
Anastasia and President
of Sumitomo Metals,
Hiroshi Tomono.
/...
a cone-type piercing mill, a five-stand PQF mill,
a reheating furnace and a 12-stand calibrating
mill. “In technological terms, this is the most
modern rolling mill in the world, because it pro-
“To be here in Jeceaba today is a very special moment for
me, because I am taking part in a very relevant ceremony for
my country and very relevant to my Minas Gerais.
This mill we are inaugurating today marks a new era in
Brazil. It is a fundamental moment right now, this very
moment in which our country maintains a high growth rate
and strong growth prospects.
We are taking part in the inaugurationof a plant which has a
unique characteristic – it uses the most advanced technology
in its area and at the same time, transforms and adds value,
still in our country, to our iron ore.
Being here today is very important for the President of the
Republic. What I saw here in this visit shows a great
advance in the steel industry.
So I wanted to congratulate you. For Brazil and Minas
Gerais, it is very important that Vallourec and Sumitomo
have made an investment of this magnitude.”
Dilma Rousseff,
Brazilian President
Inauguration speech on September 1 st , 2011.
duces petroleum tubes with superior quality to the
others,” says Tancredo.
The integrated Mill is focused on the fabrication
of oil country tubular goods (OCTG) used in drilling,
well lining and tubes for petroleum and gas pipelines.
The production process assures the quality
of the tubes, which are highly resistant to diverse
conditions of temperature and pressure.
The OCTG finishing area is divided into two parts.
The Flex Line, dedicated to the production of socalled
line pipe, which are used in gas and oil pipelines,
such as in chemical plants and petroleum
refineries. They are prepared to resist varied pressures
and temperatures. Another finishing area is
the Fast Casing Line, which will make the threads
of the API connections and of the VAM TOP connections,
which offer gas seal, even under the most
severe conditions, including deep wells, directional
wells and hostile environments.
The evaluations to assure the quality of the tubes
are rigid. Non-destructive testing, which analyzes
the products with ultrasonic equipment, electromagnetic
inspection, in addition to visual inspection
performed by highly qualified technicians. These
techniques are done with latest generation apparatus,
guaranteeing total integrity of VSB products.
VSB tubes are submitted to hydrostatic testing,
where they are filled with water until they reach
pressures of up to 1 500 bar. At the end of testing,
the tubes are coated to protect them from corro-sion.
“VSB is the only company in the Vallourec Group
that possesses this capacity of testing within the
range of the diameter that we are working, which
goes from 6 5/8” to 16”. This standard is above
that required by the American Petroleum Institute,”
mentions Tancredo.
The forecast start up is for 3rd quarter 2012.
The VSB pelletizing plant will produce 1.36
million tons of iron pellets destined to feed the
blast furnaces of the steel plant. Half of this
production will be sent to V&M do BRASIL. VSB
will be the first steel plant in Latin America to
install the iron ore pelletizing process within the
steel making complex. The man advantage is that
the pellet is a high-value added product with adjusted
chemical quality to increase blast furnace
productivity.
“The application of cutting-edge technology greatly
contributes to the development of our steel making
complex, in addition to our engineers and technicians.
Allowing contact with new technologies is
an important step to advance in any production
industry and, therefore, for the growth of the country,”
comments Tancredo.
Audits performed at the Company in August of this
year attested to the quality of management at VSB
through the following certifications: ISO 9001 and
ISO / TS 29001, as well as API/Q1, API 5L and
norms API 5CT. ISO / TS 29001.
BRAZIL AS OUR HOME
The choice of Brazil as VSB headquarters was
important for the export strategy to be adopted by
During the visit to the rolling plant,
President Dilma Rousseff had the
opportunity to watch the rolling of seamless
steel tubes together with VSB partners.
the Company, since the country possesses infrastructure
under development and inputs needed for
production. The strategic geographic location, with
easy highway and railroad access to ports from
where the products will be shipped, was an important
aspect in choosing the location. Minas Gerais,
which had already hosted VMB in Belo Horizonte
and its subsidiaries V & M FLORESTAL (VMFL) and
V & M MINERAÇÃO (VMMN), was chosen to host
the complex. “It is important to emphasize that
the proximity to VMMN, VMFL and VMB was fundamental
in choosing the place to host the complex,”
recalls Tancredo.
“Present since 1952 in the state of Minas Gerais via
its V & M do Brasil subsidiary, Vallourec chose to pursue
its development here with this new plant, as it benefits
locally from the full range of competitive factors, not only
in terms of natural resources – iron ore and charcoal –
but also in terms of infrastructure and skilled labour.
This plant marks a new stage in Vallourec’s strategic growth.
It will enable the Group to support the ambitions of its
international customers, and serve their requirements
for premium tubular solutions for oil and gas applications.”
Philippe Crouzet,
Chairman of the Management Board.
Inauguration speech on September 1 st , 2011.
In his speech,
the President of
the Vallourec Group,
Philippe Crouzet,
pointed out the
importance of the
new plant for
the French group.
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the tech files
DEFINITION AND HISTORY
There are several ways for managing downhole corrosion,
from doing nothing to implement immune
materials like CRA. For the end user, the main purpose
of CRA tubing is not to resist corrosion but
to find out the overall less expensive solution. In
the oil and gas exploration, in many areas effluents
of the wells are corrosive and the trend is on the
increase.
The stainless steels appeared around 1870,
and at the beginning they were named “rustless”.
#01
CORROSION
RESISTANT ALLOY
for OCTG
At a glance the OCTG Corrosion Resistant Alloy (CRA) market is a
very small part: about 0.1% of the world wide stainless steel production.
But this part is fundamental for the exploration and production
of gas mainly in the more and more severe conditions.
COMPOSITION
Metallurgists consider steel as stainless if it contains
a minimum 10.5% Chromium that creates a
protective passive layer at the surface of the product
against corrosion. Some elements like Molybdenum,
Copper… can reinforce the corrosion resistance.
Stainless steels are sorted by ISO 13680 and API
5CRA in 4 classes related to their metallurgical
structure: martensitic, ferritic, austenitic-ferritic
(or duplex) and austenitic. Martensitic (mainly
13%Cr and super 13%Cr) are hardened by appropriate
heat treatment, but their use is limited to
Pilgering process Drawing process
.
The first target was to avoid corrosion in the guns
for weapons. Those rustless alloys then demonstrated
their advantages for many other usages like
in chemical industry. The true development of stainless
steels large mass production started in the
sixties with the steel melting and refining technologies
such as AOD and VOD. In the seventies the
development of gas research and production in cor
rosive wells leaded to develop specific OCTG
grades.
environment with low H2S partial pressures.
Contrary to duplex and austenitic, ferritic alloys
are not used in OCTG: their mechanical characteristics
are very difficult to strengthen by cold hardening.
Cold hardening (or also known as cold working or
strain hardening) is the strengthening of a metal
by plastic deformation. Shaping the product at
ambient temperature it allows reaching desired
yield strength and final dimensions. It is the main
process used for CRA.
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/...

...
THE TECH FILES
NEWS FOCUS SOLUTIONS ON THE MARKET EVENTS PEOPLE
WORLDWIDE VOLUME
Worldwide volume of stainless steel production is
about 30,000,000 tons/year (flat and long
products, all industries) and main alloys used for
production are Chromium (Cr), Nickel (Ni),
Molybdenium (Mo) and Tugnsten (W). Price of those
PRODUCTION PROCESS
Stainless steel production also requires specific
mills. The high alloy content and the required
thermo-chemical equilibrium lead to refine steel
using AOD (Argon Oxygen Decarburisation) or VOD
(Vacuum Oxygen Decarburisation) operations. Steel
APPLICATIONS
Choice of alloy depends upon the severity of the
environment and the strength requirements and
because presence of H2S and chlorides complicates
the selection of alloy for a specific service ISO
15156 / NACE MR0175 provides guidance on the
material selection process.
OCTG CRA shall be used as soon as partial pressure
of CO2 (pCO2) is above 2psi (12kPa). Then depending
on H2S partial pressure (pH2S) NACE
MR0175 recommends:
l For pH2S up to 0.1 bar (1.5 psi): Martensitic
(13% Cr and Super 13% Cr)
l For pH2S from 1.5 to 3 psi: Duplex (25% Cr
and Super 25% Cr)
l If pH2S higher than 3 psi: Austenitic (28% Cr
and above)
250°C
200°C
150°C
100°C
alloys (ex : 3 USD/Kg for CR, 20 USD/Kg for Ni,
…) and their proportion in the final product (31%
of Ni in a 28% Cr for ex) as well as their quotations
on stock markets explain their high costs and their
daily fluctuations.
is then casted into ingots, then transformed into
bars that will be used to produce seamless pipes
after piercing, extrusion (extruded product are
so called hollow) and cold working. This specific
process participates also to their price level.
Well temperature and demanded mechanical resistance
in situ are also 2 other discriminating factors.
Duplex and austenitic have weak tensile performances:
their Specified Minimum Yield Strength
(SMYS) is between 60 and 80ksi. To get stronger
tensile performances, cold working is needed (either
drawing or pilgering). The yield strength range is
related to the material ability to get the adequate
reduction ratio (Reduction Of Area or ROA) between
hollow and cold worked product. Cold hardening
can achieve on CRA SMYS 110 to 140ksi: interest
is to keep the same level of resistance for lower
weight i.e. lower cost.
H2S kPa
50°C
1 10 100 1,000 10,000
MR0175 Table A 25 (25S)
MR0175 Table A 14 (28Cr & 825)
MR0175 Table A 14 (G3)
MR0175 Table A 19 (S13)
MR0175 Table A 14 (C276)
MR0175 Table A 19 (13Cr)
MARKET EVOLUTION
Worldwide OCTG yearly demand is estimated at
about 7,000,000 tons among which :
l Martensitic alloys represent about 200,000
tons/year
l Duplex and austenitic demand is between
25,000 to 30,000 tons/year.
CRA used in OCTG (from 225,000 to 230,000
tons/year) is then a niche among the worldwide
stainless steel market (30,000,000 tons/year).
Meanwhile, despite its small market volume and
their costs:
l Market trend for Duplex and austenitic used in
OCTG is at growth: it is estimated to be at about
+25% on the 2012-2015 period. Additional
needs will mainly be brought by the Brazilian
field of Tupi which long term estimated volumes
(around 10,000 tons/year by 2015) should compensate
the decrease that will happen in other
market areas mainly because of depletion of oil
and gas fields.
l CRA contribution to sales is not negligible and
has to be disconnected of the volumes sold.
Although in 2010, CRA represented a negligible
VALLOUREC EXPERTISE
Vallourec is an integrated manufacturer of seamless
pipes OCTG from carbon steel up to 13% CR and
Super 13%Cr steels. For CRA (22% Cr and above),
Vallourec has established its strategic partnership
with the Spanish Supplier Tubacex, an integrated
world leader in the manufacturing of seamless
stainless tubes, in order to optimize the production
of seamless stainless tubular for OCTG. Partnership
was signed and announced on February 2009.
In that alliance Tubacex is in charge of supplying
high quality CRA tubular when Vallourec has
responsibility of technical and communication relationship
towards end-users, threading and commercialization
of final.
This organization is aimed at offering to the market
an optimized synergy of the respective areas of
excellence of both companies:
l Vallourec expertise in threading and testing
of leader proprietary connections of the VAM
family
l VAM field service support on VAM connection
l VAM licensee / repair network on VAM connection
CORROSION RESISTANT ALLOY FOR OCTG
Slightly sour - HPHT - Duplex
Severe sour - Ni-based
0.2 % of the total volume of pipes delivered
by Vallourec it represented 1.1 % of its sales.
Those 2 proportions are expected to significantly
increase in the coming years.
Major market areas are located in North Sea (ex:
Elgin Franklin), Middle East (ex: Shah, South
Pars…), Brazil (ex: Tupi) and GOM. Austenitic
represent 70% of the OCTG CRA market and large
diameters (6-5/8” and 7” mainly) represent 65%
of the worldwide need. On a long term, market
trend is to the request of larger diameters (9-5/8”
and above).
l Tubacex expertise in stainless seamless tube
production for Oil & Gas and non Oil & Gas products
l Tubacex integrated production including steel
mill and tubular production
l Cooperative R&D and technical expertise on
stainless grades production and testing, with
full support from Vallourec corrosion and metallurgy
research center (Vallourec Research
Aulnoye – VRA)
The partnership also beneficiates from Vallourec
past experience in CRA supply for OCTG. Tubacex
and Vallourec have notably conducted thorough
industrial qualification of OCTG production according
to Vallourec proprietary specifications in order
to ensure consistency in quality of supply.
All CRA grades are produced according to proprietary
Vallourec specifications and can be threaded
with major connections in the VAM family. VAM
connections have an extensive qualification history
on CRA and are threaded on about 80 % of all
OCTG CRA supplied worldwide.
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/...
#01

16
THE TECH FILES
NEWS FOCUS SOLUTIONS ON THE MARKET EVENTS PEOPLE
CORROSION RESISTANT ALLOY FOR OCTG
/... Present on the OCTG CRA market since the eighties,
Vallourec has already delivered numerous customers
on that different market areas:
l Total, British Gas, BP, … in North Sea
l ADMA, ADCO, KOC, … in Middle East
l Petrobras in Brazil
l But also: Gazprom, Exxon, Shell, Sinopec,
Talisman, Tullow … in other regions
Like for all OCTG, CRA Customers follow a qualification
process that includes check of Quality
Assurance / Control, ability to produce volumes
and grades and quality of the product through corrosion
tests. Two Customer policies co-exist on this
last item:
l One is based on specification without reference
to field conditions, which are unknown by supplier
l Other is based according to a medium that
approximate field specific conditions
In these 2 ways of qualification, Vallourec can give
some advices, but final choice of grade remains in
all cases under Customer responsibility.
Structure Category Cr Ni
Duplex
22-5-3
25-7-3
22,0
25,0
5,5
6,5
Super Duplex 25-7-4 25,0 7,0
27-31-4 27,0 31,0
Austenitic 21-42-3 22,0 42,0
22-50-7 22,0 50,0
20-54-9 20,0 54,0
SA=Solution Annealed CH=Cold Hardened
Mo
3,0
3,0
3,5
3,5
3,0
7,0
9,0
Cu
0,5
0,8
1,0
2,2
2,0
W
0,3
0,8
N
0,1
0,2
0,3
0,1
Ti
1,0
UNS No
S31803
S31260
S32760
N08028
N08825
N06985
N06950
V&M Grades
VM 22
VM 25
VM 25S
VM 28
VM 825
VM G3
VM 50
65
SA
75
SA
80
SA
SMYS
110 120 125 140
CH CH CH
CH CH
CH CH
CH
CH
CH
CH
#01
The main type of corrosion tests demanded is with
an applied stress. There are also tests without stress
that quantify the resistance of localised or generalised
corrosion. They are performed at different
temperatures. Examination of coupons after test
quantifies the level of corrosion. Measurement of
attack allows Customer to rank material from different
suppliers and reinforce its selection choice.
Tests with stress are split between test within elastic
domain and above elastic. They are screening tests
with different partial pressures of CO2, H2S and
temperatures and all other parameters that could
be given by customers and depending of well
conditions.
Tests within elastic domain are trials to understand
the material behaviour as in the well. Demanded
tests are NACE A (Tensile) or C (C-ring) as described
in NACE TM0177.
Test above elastic domain is SSRT (Slow Strain
Rate Test) conducted up to rupture. “Slow” because
1 test lasts about 1 day.
PRODUCT OFFER
Vallourec has developed a wide range of CRA for OCTG from to Austenitic Nickel base. The table below
shows all the available grades.
The Vallourec grades have been
tested NACE A and C in different
environments. NACE A is preferred
because it is closer from the condition
of use in the well.
The conditions of use (pH2S and
temperature only) by the customers
are given in the following graph.
Contact:
jean-jacques.servier@vmtubes.fr
or xavier-nicolas.mocek@vmtubes.fr
250°C
200°C
150°C
100°C
H2S kPa
50°C
1 10 100 1,000 10,000
T H E V A L L O U R E C O I L & G A S M A G A Z I N E # 0 1 - J A N U A R Y 2 0 1 2
CH
CH
CH
CH
MR0175 Table A 14 (28Cr & 825) MR0175 Table A 25 (25S) MR0175 Table A 14 (G3)
MR0175 Table A 14 (C276)
Customers conditions

Veracruz
NEW GLOBAL ACCESSORIES
EQUIPMENT SOLUTION
ACCESSORIES…
BUT ESSENTIAL!
Vallourec Oil & Gas is adding another feather
to its cap. VAM Global Solutions, the platform
of its customer-focused strategy, is branching out
with a complete line of accessories equipment
for oil and gas operators and original equipment
manufacturers. The new offer combines
products and services in a global solution
covering every step from plant to well.
9 production sites
Houston
Houma
Rio das Ostras
SOLUTIONS
Constantly in pursuit of customer interests, Vallourec
Oil & Gas teams have learned one certain fact: oil
and gas industry operators and original equipment
manufacturers (OEM) consider accessories equipment
among the most technical and difficult in terms
of timing in supply chain management of exploration
and production work. A survey conducted in 2009
also found that those same customers expect that
their main tubular and connection supplier would
also offer them a full range of accessories equipment.
"This finding backed up what we had sensed,"
explains Olivier Mathey, head of Central Planning,
Accessories Equipment. "We had already considered
the possibility of offering our customers a global
solution featuring a complete line of products and
services. A number of conditions had to be met for
the new line to satisfy our company's strict addedvalue
requirements. Mission accomplished!"
Bellshill Rath
Aulnoye-Aymeries
Cosne-sur-Loire
Batam
AT THE RIGHT TIME…
As operating conditions grow increasingly difficult,
wells are getting more complex and accessories
equipment involves ever more specific components.
As the vital interfaces between tubing, casing and
completion equipment, accessories components
must meet the same performance, quality and availability
requirements. "Accessories products also
require a lot of flexibility – a high proportion are
custom-made – and responsiveness – requests often
have to be met on an extremely urgent basis to
avoid any delays," adds Olivier Mathey. "Accessories
equipment must fit the well and not the other way
around. For all those reasons, we focus solely
“We recently asked
one of our German
plants to custom
fabricate three
tubular blanks
so that we could
make three 15”/14”
sour service steel
crossovers. A first!”
Control of the outside
diameter after machining
at VAM Mexico.
on products for which we have all the know-how
required at Vallourec. Pup joints, nipples, crossovers,
flow couplings, circulating heads, lifting plugs:
our line (see text in box page 20) features a dozen
clearly identified items that meet our customers'
current needs."
…AND THE RIGHT PLACE
Though the idea of creating a complete, comprehensive
line of accessories equipment had been
taking shape for some time in the OCTG Division,
and this process was jump started in 2008 with
the acquisition of V & M Tube Alloy (USA).
When bringing the new subsidiary on board, an
inventory of synergies and complementary
strengths with other Vallourec units found that
substantial industrial resources already existed in
a number of production units dedicated to OCTG,
at VAM Drilling and even in our Energy & Industry
Division. Accessories equipment of varying degrees
of complexity are made from OCTG, coupling blanks,
forgings, mechanical tubing, and solid bars.
Now within the Vallourec organization all orders
for accessories equipment can be filled with the
proper technical specification, on time, anywhere
in the world.
Sand blasting
operation
at V & M Tube Alloy
in Houma.
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Stock of couplings
before make-up
on pup-joints
at VMOGF Aulnoye.
/...

20
/...
SOLUTIONS
Components of
a taylor-made
cross-over before
final threading
and assembly.
ORGANIZATION
This service, which is a main pillar of VAM Global
Solution, relies on a sales organization managed
from the United States that caters to two main
categories of customers. One is the oil and gas operator,
which will be offered the accessories line
through their usual supply chain responsible for
tubes and connections. The other is OEMs such
as Baker Hughes, Halliburton and Schlumberger,
for which dedicated sales and technical teams have
been set up. This will also help us enhance business
relations with OEMs and provide end user
customers with more appropriate, better coordinated
solutions, especially for complex projects.
In the same strategy, we also offer OEM’s VAM threading
services for select parts made at their shop
which eventually require a VAM thread. We offer
to threads these parts in our accessory manufacturing
locations or where volume warrants, place
threading capacity in line directly inside the customer
facility.
ADDED VALUE
A single contact, technical support and supply
chain coordination are all services that add value
to the offer. The main goal of the new accessory
organization and value we bring to the customer
is reducing the risk that the equipment involved
in the accessory offer will interfere with the operation
of an oil and gas project. A company like
Vallourec has all the tools to provide this comprehensive
offer of pipe, threads and accessories.
Vallourec and its plants have made a commitment
to follow this strategy through its VAM Global
Solutions services platform. A crossover meets the
same specifications and quality criteria whether
Marker joint
ready for running.
it is made in the United States, Great Britain or
France.
“By applying Vallourec's quality assurance rules
to the accessories product line,” concludes Olivier
Mathey, “we plan to restore accessories equipment
to its rightful place. From now on, accessories
products are not just after-thoughts.”
Accessory portfolio
• Pup Joints
• Blast Joints
• Wire line Entry Guides
• Test Cap/test plug
• Mill out Extensions
• Perforated Pup Joints
• Flo-Pups ®
• Crossovers
• Lifting Plugs/Sub
• Couplings
• Marker Joints
• Specialized Equipment
(Taylor made equipment)
• Flow Couplings
• Half and full Mule Shoes
• Handling Plugs/sub
• Oriented Couplings
• Bull Plug
Contact: olivier.mathey@vmtubes.fr
T H E V A L L O U R E C O I L & G A S M A G A Z I N E # 0 1 - J A N U A R Y 2 0 1 2

ON SOLUTIONS THE MARKET
IRAQI OIL & GAS THE NEW ERA
Iraq's oil reserves are the envy of most of the other oil-producing
countries in the world. In a country determined to make the most of its
wealth so as to secure economic growth, Iraq has big ambitions
to fast track the production of its fossil fuels. Numerous stakeholders
in the oil industry are being called into action as part of this recovery.
More than ever, Vallourec is working by their side.
With wars and embargos, Iraq's history over the past
thirty years has been marked by a series of dramatic
events, hampering the continued development of its
oil production. Iraq is a member of OPEC — although
not included in quotas — and it has the fourth biggest
oil reserves in the world. This oil is typically easy to
extract from shallow, accessible reservoirs, except in
Kurdistan (Northern Iraq) which has a more challenging
drilling environment. Oil remains Iraq's main source
of income and as such, drives the country's economic
growth. In fact, its government has huge ambitions,
aiming to become the world's leading producer by 2017,
with talk of 12.5 million barrels a day by then, compared
to just 2.5 million in 2010. According to most
industry experts, production could reach 5 million
barrels a day over the next five years, which is already
a major challenge for the holders of drilling permits.
LEADING THE FIELD
The majors, drilling contractors and national oil companies,
already purchase a large share of their premium
and semi-premium tubular solutions from Vallourec.
The VAM range of connections is used extensively, due
to the procurement practices of the International Oil
Companies (IOC) working in Iraq and the corrosive
drilling conditions often requiring sour service material.
With increasing exploration of gas reserves, Vallourec
intends to lead the field and further consolidate its
position on the Iraqi market. The Group aims to achieve
this through the performance and quality of its products
and its unwavering desire to help customers rise to
the challenges they face, whatever and wherever they
are. All initiatives of this kind are closely supervised
and strongly supported by Vallourec.
THE FIRST VAM LICENSEE
The first VAM licensee, located in the capital of Iraqi
Kurdistan, Erbil, was qualified this year, clearly illustrating
Vallourec’s strategy to support operators in
Kurdistan. ‘Mountwest’ is now qualified to work on
premium products in the VAM range — for example,
VAM TOP, VAM TOP HC and VAM TOP HT. As a direct
result, the VAM tubular supply chain will be considerably
simplified.
This addition to the VAM licensee network was celebrated
on 11 October at an event organised at the Erbil
Rotana, attended by customers, representatives of the
Iraqi and French authorities as well as staff from
Vallourec. The programme included a visit of the
Mountwest workshops with a demonstration of a VAM
connection repair, as well as a technical seminar
presenting premium products and the specific performance
of the various steel grades available. The
success of this event clearly points to the local demand
and interest in Vallourec OCTG tubular technology.
Vallourec fully intends to respond to this demand on a
regular, in-depth basis. The latest date on the Iraqi
calendar was the Basra International Oil & Gas Conference
and Exhibition held from 25 to 28 November,
which provided another opportunity for valuable exchanges
with stakeholders on the booming Iraqi market.
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Quality control.
Visit of Mountwest
repair shop.
VAM technical
seminar at
Erbil Rotana.

24
ON SOLUTIONS THE MARKET
This acquisition provides Vallourec with ready-torun
heat treatment capacity and threading facilities
of up to 100 kt of pipe per year which will be
combined with the existing project to build a VAM
threading facility, on the same site. These operations
reinforce Vallourec’s local presence with end-finishing
facilities to serve the premium OCTG market in Saudi
Arabia and the Middle East.
Philippe Crouzet, Chairman of Vallourec’s Management
Board stated: “Increasingly complex and
challenging drilling conditions and important safety
and environmental considerations are driving demand
for premium OCTG and VAM ® connections – the
leading premium connections in the world. These
investments are fully in line with our strategy to
strengthen our local presence and provide more
premium solutions both in North America, where we
are a leading domestic supplier of OCTG; and in
Saudi Arabia, in response to growing demand from
the world’s largest oil producer, Saudi Aramco, and
other customers in the Middle East.”
ACQUISITION OF ZAMIL PIPES
VALLOUREC STRENGTHENS ITS PREMIUM
POSITIONING IN SAUDI ARABIA
Vallourec completed the acquisition
of Zamil Pipes on 25 November 2011,
for a total consideration of 3 97 million.
About Zamil Pipes
Premium threading lines.
Saudi Seamless Pipes Factory Company Limited "Zamil
Pipes", member of the Zamil Group Holding Company,
was founded in November 2007 to address the needs of the
drilling industry by developing the Saudi’s first processing
and end-finishing processor of Oil Countries Tubular Goods
"OCTG".
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VAM LICENSEE EVENT
A total of 84 attended the previous event and 110
were in attendance for the second which was held from
12 to 14 September at the Grand Palais in Lille. The
increase in participant numbers goes to show the enthusiasm
of VAM licensees throughout the world.
On the first day of this big event, the focus was on network
organisation and how it works. In the afternoon,
workshops were held to look closely at surface treatments
and torquing, for which corrective action is
sometimes requested during the regular quality audits
conducted by VAM Services auditors. Even during the
VAM Licensee Event, the quality of service provided
by licensees throughout the world remains the number
1 priority...
SOLUTIONS EVENTS
THREE ACTION-PACKED DAYS...
Vallourec currently has the support
of a network of 172 VAM licensees
throughout the world. These
licensees are an essential part of
the global product and service offer
and they are authorised to repair
VAM family premium connections
and provide accessories in keeping
with operator needs.
In mid-September, 110 of them
descended on Lille, in the North of
France, to attend the second edition
of the VAM Licensee Event...
DISTINCTIONS AND PRODUCTION
During a dinner to mark the Licensee awards ceremony
(see text box), the host, Philippe Emery, Deputy Managing
Director of OCTG Europe, took every opportunity to
remind us of the importance of the VAM licensee network
in the commercial strategy of Vallourec.
The following day, the participants were split into
several groups and went to visit the factory facilities
of Aulnoye-Aymeries located approximately 90 km
from Lille. These included the finishing lines, test
station and, of course, the building dedicated to gauges
which, when distributed throughout the global network,
enable licensees to very carefully respect required
dimensions when working on connections.
STRESS-RELIEVING
AND NEW TECHNIQUES
The third day consisted of a series of both technical
and commercial presentations. Speakers from the
R&D and VAM TCC services expertly raised the issues
of stress-relieving by thermal means after deformation
and accessory design rules. Many detailed exchanges,
to say the least, revealed that event organisers had
been fully justified in their choice of topic. In the
afternoon, participants were given the chance to discover
the details of new OCTG and drilling premium
products that will pass through their workshops in
the relatively near future. Everyone was able to see
that the partnership between Vallourec and its licensee
network has still got a very promising future.
After taking part in a Q&A session and enjoying a
typical dinner from the north of France, participants
were then able to return home exhausted but evidently
very satisfied with this three-day action-packed event.
Six welldeserved
awards
In recognition of their
outstanding contribution
and of the high quality
achieved in the manufacture
of VAM products
according to VAM Services
standards, the best
licensees in 2010 are:
Best Overall Licensee
Deer Park Oil Tools Pty Ltd
Perth - Australia
Best Licensee of the
Threading Facilities
V & M Deutschland GmbH
Mülheim - Germany
Best New Comer
Weatherford
Abu Dhabi – U.A.E.
Best Original Equipment
Manufacturers
Halliburton Manufacturing
and Services Ltd
Arbroath – U.K.
Best Improvement
Mécanic-Sud Industrie
Béziers – France
Best Drilling Licensee
VAM Drilling USA
Houston – U.S.A.
PEOPLE
VAM GLOBAL SOLUTIONS
A LENGTH AHEAD
Whatever your tubular product needs may be,
Vallourec Oil & Gas will take care of everything...
This is what VAM Global Solutions is all about and
it is offering a new, premium and comprehensive
range of solutions from the mill to the well. The aim
is to ensure that clients can focus on their core business
activity, where the real added value lies. Leaving
The team
Mathieu Robbe,
Project Director
"Develop customer-driven
solutions to complement
our OCTG offer"
Antoine Caillard,
Well Design Engineer
"Provide support and advice
to our customers
in the well design phase"
Sébastien Cochet,
Application Manager
"Propose application oriented
solutions to our customers,
including products and services"
Rafael Perez,
Tubular Essentials Project Manager
"Offer the best education
available on tubular products,
from conception to completion"
Hartley Taylor,
Supply Chain Project Manager
"Provide customized added
value services close
to our customers locations"
Anne Bertrand,
Technical Logistics QHSE Manager
"Maintain premium QHSE
standards along the whole
service chain"
ideas and basic rhetoric aside, VAM Global Solutions
has now become a reality and is incarnated by men
and women who are determined to maintain the
decisive head start it has over its competitors for
years to come. Here are just a few of them and the
tasks that they are assigned...
Caroline Camuset,
Demand Manager
"Propose adapted delivery
time options to meet our
customers needs"
Arnaud Pardé,
Freight Solutions Manager
"Deliver the right products
in good conditions at the right
time, at the right place"
Aaron Brammer,
Accessories General
Sales Manager
and
Olivier Mathey,
Accessories Planning
Manager
"Become the reference
supplier of VAM accessories
to all customers"
Karim Toubal,
Field Services
Commercial Manager
"Develop new Field Service offers
from the yard to the rig"
Pierre Lavirotte,
VAM Licencees Business
Development Manager
"Optimize our VAM licencees
network to better support
our customers"
Connection magazine will look at VAM Global Solutions in greater detail in a future issue.
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