Vallourec said it has been awarded a “major” contract by Petroleo Brasileiro S.A. (Petrobras) in a bidding process for the supply of oil country tubular goods (OCTG) products and services for its offshore operations from 2026 to 2029.
The long-term agreement has the potential to generate total revenue of up to $1 billion, “representing the widest award both in volumes and revenues since Petrobras adopted the open tender strategy,” Vallourec said in a news release.
The contract covers the full OCTG scope of supply for seamless pipes and VAM premium connections required for Petrobras’ offshore wells from 4.5 inches up to 18 inches, including carbon and stainless steel tubulars and associated accessories, according to the release.
Under the contract, Vallourec said it will also deliver comprehensive value-add services both onshore and offshore, from desk engineering and material coordination to rig preparation, offshore supervision, rig return repairs, and re-stocking, “to support Petrobras in optimizing operational efficiency”.
Vallourec Chairman and CEO Philippe Guillemot said, “This achievement is a powerful demonstration of Vallourec’s ability to meet customers’ complex and evolving requirements. It confirms the strength and consistency of our positioning, built on technical excellence, an integrated industrial presence in Brazil, and a long-standing partnership with Petrobras based on mutual trust. I would like to thank Petrobras for its renewed trust and all Vallourec teams whose commitment and expertise made this success possible”.
Second-Quarter Results
In the second quarter, Vallourec reported revenues of $1.01 billion (EUR 863 million), down 20 percent year over year or 15 percent at constant exchange rates. The year-over-year comparison is partially attributed to the large volume of high-value products invoiced in the previous-year quarter that did not recur, the company said in its most recent earnings release.
Vallourec reported earnings of $0.19 (EUR 0.16) per diluted share, compared with $0.54 (EUR 0.46) in the previous-year quarter, reflecting an increase in ordinary shares due to the vesting of shares under management incentive plans and an increase in potentially dilutive shares related to the company’s outstanding warrants.
Revenue for the company’s Tubes segment were down 26 percent year over year due to an 11 percent reduction in average selling price and a 17 percent volume decrease driven primarily by lower shipments in the Eastern Hemisphere, according to the release. Vallourec said it also invoiced a large volume of high-value products that did not recur in the second quarter.
Guillemot said, “In the second quarter, Vallourec once again demonstrated the strength of its business model. Despite lower shipments in the Eastern Hemisphere, our Tubes EBITDA [earnings before income tax, depreciation, and amortization] margin expanded to 19 percent, driven by sequential improvements in profitability in our North and South American production hubs. Our Mine & Forest business also continued to perform extremely well despite sequentially lower iron ore market prices. Further, we continued our streak of positive total cash generation, which now marks eleven straight quarters of this performance”.
“The international OCTG market has been impacted by recent macroeconomic volatility; however, our stream of recent contract awards highlights the value of Vallourec’s premium product offering. We continue to see further opportunities ahead as our resilient customer base is progressing on major multi-year drilling programs which will require the support of sophisticated suppliers like Vallourec. The global shift towards increased gas and unconventional drilling will also provide significant opportunities for Vallourec to capitalize on its differentiated premium market positioning,” Guillermot continued.
“In the US, market prices further improved over the second quarter in response to the steel tariffs implemented earlier this year. US oil drilling activity has fallen in response to weaker and highly volatile oil prices, though this has been partially offset by a rebound in gas drilling activity. Despite this, our latest bookings indicate a healthy level of demand that will keep our mills well utilized at current staffing levels. Meanwhile, imports will likely moderate from their second quarter levels following the change in tariff rates announced in early June. This should support US-based industrial players such as Vallourec,” he concluded.
To contact the author, email rocky.teodoro@rigzone.com
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
element
var scriptTag = document.createElement(‘script’);
scriptTag.src = url;
scriptTag.async = true;
scriptTag.onload = implementationCode;
scriptTag.onreadystatechange = implementationCode;
location.appendChild(scriptTag);
};
var div = document.getElementById(‘rigzonelogo’);
div.innerHTML += ” +
‘
‘ +
”;
var initJobSearch = function () {
//console.log(“call back”);
}
var addMetaPixel = function () {
if (-1 > -1 || -1 > -1) {
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
} else if (0 > -1 && 70 > -1)
{
/*Meta Pixel Code*/
!function(f,b,e,v,n,t,s)
{if(f.fbq)return;n=f.fbq=function(){n.callMethod?
n.callMethod.apply(n,arguments):n.queue.push(arguments)};
if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;
n.queue=[];t=b.createElement(e);t.async=!0;
t.src=v;s=b.getElementsByTagName(e)[0];
s.parentNode.insertBefore(t,s)}(window, document,’script’,
‘https://connect.facebook.net/en_US/fbevents.js’);
fbq(‘init’, ‘1517407191885185’);
fbq(‘track’, ‘PageView’);
/*End Meta Pixel Code*/
}
}
// function gtmFunctionForLayout()
// {
//loadJS(“https://www.googletagmanager.com/gtag/js?id=G-K6ZDLWV6VX”, initJobSearch, document.body);
//}
// window.onload = (e => {
// setTimeout(
// function () {
// document.addEventListener(“DOMContentLoaded”, function () {
// // Select all anchor elements with class ‘ui-tabs-anchor’
// const anchors = document.querySelectorAll(‘a .ui-tabs-anchor’);
// // Loop through each anchor and remove the role attribute if it is set to “presentation”
// anchors.forEach(anchor => {
// if (anchor.getAttribute(‘role’) === ‘presentation’) {
// anchor.removeAttribute(‘role’);
// }
// });
// });
// }
// , 200);
//});
