Enhancing customer value through performance, innovation and cost-effectiveness
Customers, global players and stakeholders in the Oil and Gas industry are more than ever seeking value to lower their Total
Cost of Ownership, to sustain their profitability and investment capabilities. Today’s market is driven by two main trends: on the one hand, a considerable technical challenge to retrieve harder to get oil in greater depths, tougher environments, new territories; and on the other hand a quest for more cost-efficient solutions in a context of low oil prices, shorter market vision and greater financial pressure.
From a premium manufacturer to a solution provider, Vallourec is growing into a major player in Global Solutions, creating value beyond the pipe. Vallourec supports the cost-performance of its customers with solutions that mitigate risks, optimize execution and operations, and ultimately increase the integrity of the whole Oil & Gas life cycle. Vallourec’s global and local reach provides solutions where it counts most, through product, application and well design support, innovative R&D programs, as well as advanced testing, on-site field services, welding solutions, inspection, integrated logistics, local content, training & project management.
Value is delivered through quality and timesaving solutions for field operations and execution. Value is measured by concrete results for the client, through improved performance, operational efficiency and long-term well and application integrity. Vallourec is committed to lowering the Total Cost of Ownership of its customers every day, worldwide, where it counts.
Creating value in Vallourec
Philippe Deletombe, Corporate marketing manager at Vallourec, explains: “We are broadening our horizons. Value is usually what stands over and beyond product and price. Value is measurable when risks are mastered, when scheduled execution is on time, when performance is improved; in the end, when the customer’s costs are under control and in line with his project forecast. As every project is unique and complex, one of our roles is to help the client foresee potential risks and make the best engineering choices in line with the specifications and constraints of his project.”
Thomas Comte, vice-president, Client Support Center, for drilling products, develops: “It’s true, challenges and success are measured over the whole span of a project, from the early stage of first designs, through the exploration and appraisal phases, to the whole life cycle of the drilling product and completion of the well. Strategically, we can offer value before, during and after the project: before, with specific design optimization and tailored products; during, with stringent testing, services to ensure faster execution and project management; finally, we bring value after by providing durable and fail-safe solutions, as well as maintenance, inspection and repairs.”
Phillipe Deletombe continues: “Value is measured on a global scale, beyond the product. It’s not because you sell something at a lower price that you are creating value: acquisition and procurement are just the tip of the iceberg of the Total Cost Ownership of the client. We are focusing on bringing value where it counts, during project execution, logistics, as well as with maintenance, repairs and inspection. On average 50-75% of the expenses related to the OCTG and Drill pipes are operational expenses, on top of their initial acquisition cost. That’s precisely where Vallourec is now developing solutions and helping the client optimize and lower his Total Cost of Ownership. ”
From customer intimacy to value propositions
Partnership starts at a very early stage and is founded on mutual understanding and shared vision. But proximity is not built overnight: it’s built over time, through experience, dialogue and a long history of exchanges and intimacy. Value is seldom mentioned by name in interactions with the client, but it is always there and understood as the result, the fruit of a partnership. Philippe Deletombe explains “We are not interested in just selling pipes but are committed to the success of our client’s whole enterprise: we help foresee risks, test solutions, optimize the supply chain and deliver services that are all aiming at use. The customer is not buying something; he is using something!” Proximity and daily collaboration helps build customer insight. “We want to be in his shoes, understand his vision at all levels, throughout all the stages and the life of his project. That’s how we can serve him best.” Relations are well beyond commercial teams and buyers and include technical teams, R&D experts, engineers, quality teams, field operatives, partners, and of course top management.
Edouard Guinotte, Division’s VP of Commerce and Development for the OCTG Division at Vallourec, develops: “Customer intimacy helps better grasps the priorities of the customer and enables us to work together in aligning our drivers, exploring all the specificities of his undertakings, even before the project is launched, at pre-cradle level: What are the technical challenges of the project? What is the specificity of the environment or territory? Can we help improve the application or well design? What are the best product specifications for the project constraints? Can we offer the right level of performance and integrity? Does the client need ‘good enough’ products or highly innovative solutions for tougher environments? What is the level of potential local content? How can we help with local legislation, regulations and procedures?” These are the questioned answered through proximity, day to day, at mills, research centers, in the field and at the client’s, as often as he needs. As Phillipe Deletombe concludes: “It’s all about being there when it counts! Your offer is solid, measured and cost-effective when it’s deeply rooted within the needs and expectations of the customer.”
Value through technology: bolstering performance, speed and integrity
Thomas Comte, explains how Vallourec Drilling Products improve execution and increases efficiency. “We are increasingly closer to the client, on the field: together, we are seeking ways to achieve higher performance associated with a very low repair and maintenance rates. You must understand the client perspective and design a product that is both reliable during its mechanical duty and easy to use because, at the end of the day, it’s on the rig, during the execution, that costs are mastered or not.
The day rate on a rig, site or vessel is expensive: every minute saved can be converted into money, and we are talking about thousands of dollars per day. Any solution that makes operations easier and faster, helps the customer saving money. For example, the VAM® Express connection was developed from an operational standpoint, to address the needs on the rig with a very practical application. With VAM® Express, you don’t need to guide the pipe so you spare one operation. The product is designed to stab deep during the make-up operation hence eliminating the need of an extra component. In addition, the connection features 6 turns to make-up instead of 11, making installation that much faster! That’s twice as fast as the competition, for that operation. Our product design saves crews energy and time to make up the pipe. That’s a concrete example of a technological answer to a cost priority for the client, an answer born from dialogue, from our rig experience, supported by engineers and R&D teams. That’s value the client can measure.”
Beyond performance, the value of a product is in its reliability and durability. Product testing is essential in delivering fail-safe solutions. Thomas Comte develops: “Our products have a long history of tough testing, demonstrating we can offer much more than a pipe. We have testing facilities entirely dedicated to submitting our products to the toughest constraints, through destructive and advanced non-destructive testing. To be competitive, our pipes, connections and accessories must be the most reliable. At the end of the day, it’s when you’re drilling, connecting pipes, welding line pipe and laying umbilicals that you prove the client can explore and exploit oil fields without failure, with minimum risk. High performance and advanced products are there to avoid and prevent risks. That’s where quality is really one of the core values of Vallourec.”
Value through service and local content
A growing number of countries in which Vallourec operates, increasingly wish the products they buy to be produced locally, in order to boost their national economies. To address this challenge, Vallourec continues to internationalize its industrial base, while developing local services for its customers. Vallourec is now providing more services, closer to the customer and pursuing an ambitious regional development strategy with new production, R&D and service facilities in Brazil, Europe, the USA, Middle-East, China and now Asia Pacific.
Client costs, beyond the pipe, are structural. By offering a wider range of services and local content, Vallourec creates added-value in day to day business for the client. Services include logistics, with storage facilities, yard organization and shipping, but also maintenance and repair as well as fabrication. In a commitment to be closer to the client, Vallourec is increasing its global and local reach.
Edouard Guinotte tells: “Over the past 10-15 years, we have shifted from an export model to a locally-driven business model, with local production, local threading and testing facilities, spoolbase operations, and even one-stop-shops. This is not new: we pioneered in Aberdeen, in Scotland, and PTCT, in Indonesia, about 30 years ago. Today, our local strategy is extended with, for example, local threading in China and Saudi Arabia, as well as drill pipe and yards in Dubaï, and much more! We bring local support and local content in Angola, Congo and Ghana. We have teams in the field, on rigs and vessels, providing field service, welding services as well as testing and maintenance worldwide.” We value local content and support local development with our best teams. In Egina, a deep offshore project off the coast of Nigeria, for example, local content included local production, coating, and many associated services. Vallourec sought local partners, qualified companies with the client, worked along side local suppliers, and even trained 20 young Nigerian engineers in its European mills and R&D centers.
In Brazil, the product portfolio standardization combined with a strategic stock approach has allowed Petrobras to reduce its inventory by 50%.
By providing more services, Vallourec seeks to save client execution cost at the very heart of projects, as Edouard Guinotte explains: “There are many internal customer costs that we can help reduce with our integrated services, saving time and energy: planning, scheduling, collecting, storage, yard management, project delivery, inventory, inspection… all these are high time-consuming factors that we take a pride in handling for the customer and his partners. We can monitor mill production, follow delivery, manage yards to fit the client schedule and cut intermediary costs and drastically reduce risks linked to delays or coordination mishaps.”
Value through execution and field operations
Beyond a high performance product, it’s in the field that Vallourec has developed its greatest assets to increase customer value with on-site optimization, risk management and flexible services.
Sometimes, despite great preparation, a problem can occur on the rig, in the middle of operations. When Vallourec teams are deployed in the field, they can make the difference by taking immediate corrective measures, by mobilizing engineers to correcting or optimizing the product in very short lead time, thus securing execution flow and limiting time lost.
Philippe Deletombe remembers: “At a late stage of the operational deployment of a deep project in West Coast Africa, we were called in by the customer on a rig, because of a faulty accessory that slowed down operations to a halt. Our Field Service engineers intervened quickly and spotted the fault immediately, providing the customer with a corrective solution. Together, we changed the accessory design, and tested it on the spot. Once it was totally reliable, following our intervention, all the wells of the field were equipped with our solution. We were able to fix an unforeseen difficulty in the project, and provide a concrete solution. We were responsive and efficient and, at the end of the day, we were able to supply and deliver. This is paramount for the client, and this kind of service is new for Vallourec. We clearly could not have delivered such a solution ten years ago, in real-time, in the middle of rig operations.”
In another instance, in the Total Malaysia project, Vallourec was deeply committed to the customer and supported preliminary studies, helped shape project flow, provided flexible and adaptable options during operations, improved execution, and in the end helped the client save money.
Vallourec also provides advanced project management. The customer has one contact person to manage everything from conception to delivery, and we coordinate every stage within Vallourec, through our project management team. Coordination is of the essence, and we strive to operate in real-time. The great added value is that, if there is an issue, we can handle it immediately, internally, with field experts who know the product and application and Vallourec is becoming an expert in project execution. It’s all the more critical when you’re talking about new products and new solutions… The amount of testing (qualification testing, with the most stringent specifications and requests) and advanced inspection is critical and has tremendous value for the customer.
Value is the fruit of understanding, creativity, trust and hard work. With greater proximity and local deployment, Vallourec teams can propose the best products and services, with global solutions and a high level of local content. By sharing project vision with the client, Vallourec can help mitigate risks, enhance operational excellence, sustain execution schedules, and optimize well integrity. Ultimately, Vallourec helps the customer lower his Total Cost of Ownership by being a dedicated partner, with innovative, concrete and creative solutions.