January 12, 2011
The following information contains statements relating to future events. These statements are based on current information, the assumptions of TMK management concerning known and unknown risks and uncertainties.
Pipe Metallurgical Company (TMK), one of the world's largest producers of pipes for the oil and gas industry, announced today its operating results for the period ended December 31, 2010.
In 2010, TMK shipped 3,969 tonnes of steel pipes by 42.2% compared with 2009.
The fourth quarter, as the previous nine months of 2010, confidently demonstrated positive dynamics of post-crisis recovery of markets. Exceeding the growth rate of the third quarter of shipment, shipment volume of the Company's products increased by 11.3% compared to the previous period.
In the fourth quarter of 2010 due to seasonal activity and gas companies for the purchase of pipes for oil and gas production saw an increase in demand for OCTG pipes. This is reflected in the increase TMK shipped this product by 6.0% compared to the third quarter. This result also contributed to the completion in October this year modernization project in Steelmaking and Rolling Complex in TPC-3 in the VPP, which produces seamless pipes for the energy industry. Overall growth in shipments of OCTG threaded pipes in 2010 compared to 2009 was 38.1%. TMK's share of the Russian market of seamless OCTG on the results of 12 months of 2010 is about 60%.
Shipment of large diameter pipes (LDP) in the fourth quarter rose by almost 40% compared to the third. Full year 2010 was marked by a high demand on the Russian market LDP through large-scale investment program of Gazprom and Transneft. This allowed TMK to increase shipments of LDP in 2010 to 671 thousand tons, representing an increase of 116.9% compared to 2009.
Continued growth in the market and seamless line pipe. In the fourth quarter of TMK increased its shipments of these products by 26% compared with the previous quarter.
Supported by increased demand from the Russian machine-building, in particular the automotive industry, in the fourth quarter increased shipment volume TMK seamless pipes for industrial use. Growth amounted to 17.9% by the third quarter.
For the twelve months of 2010, TMK shipped 397 thousand premium connections developed in Russian (TMK family) and American (ULTRA) divisions of the Company, which is 27.2% more than the same period in 2009.
Shipment of tubular products division of American Companies — TMK IPSCO in the fourth quarter of 2010 decreased by 7.4% compared with the previous quarter and amounted to 212 thousand tons. At the same shipment of seamless pipes increased by 7.2%, and seamless OCTG pipes — by 17.8%. The main decrease occurred in the segment of industrial pipes of both seamless and welded. In general, the 2010 Enterprise TMK IPSCO shipped 862 thousand tons, more than twice the volume of 2009.
Activity field development in the United States in the fourth quarter remained high. According to Baker Hughes, the number of drilling rigs in the U.S. increased by 2.1%, from 1,659 as of October 1, 2010 to 1,694 as of December 30, 2010. The increase was due to more active oilfield drilling, while drilling gas fields continued to decline.
The demand for ULTRA premium connections in North America continued to increase. Within 12 months of 2010, TMK IPSCO has shipped more than 295 thousand premium connections ULTRA, which is 36.5% more than the same period in 2009.