NEW YORK A growing
cost-savings drive by companies in the domestic drilling sector
has had an impact on product mix, according to two large tube
and pipe makers.
"Clearly, there is a push from
the oil companies operating in the shale space to reduce their
costs as much as they can, and we see some shift from
full-premium connections to semi-premium connections," Paolo
Rocca, chairman and chief executive officer of Tenaris SA, said
during the Luxembourg-based companys first-quarter
earnings conference call.
Vallourec SA executives echoed
that view during their companys first-quarter conference
"It is an industrial activity,
meaning that operators are looking for cost-optimization," said
Didier Hornet, managing director of Vallourecs oil
country tubular goods (OCTG) division. "We still see an
increase of premium joints, but we also see an increase of
semi-premium offering. And to some extent recently, the growth
rate of semi-premium has been slightly above premium
The switch also comes as "the
market is now more oil-oriented than gas-oriented," with fewer
premium connections needed for oil drilling, Vallourec chairman
Philippe Crouzet said.
France-based company maintained its positive outlook for the
drill rig count this year. "The rig count is likely to recover
progressively within the next months, and ... the quality of
the rig fleet is improving, which will mean more OCTG
consumption per rig," Crouzet said.
In contrast, Tenaris predicted
that U.S. drilling likely will not recover until the end of the
amm.com, May 2).
However, while the rig count
might rise, Vallourec does not expect to see OCTG prices go
anywhere in the near-term. "We dont see any trend
allowing us to increase prices," chief financial officer
Olivier Mallet said during the conference call. "On the other
hand, theres no price decline expected anymore in the
U.S. market at this point."