Wednesday, Jun. 28, 2017

New frontiers and powerful
solutions for Africa

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27/03/2017

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March 2017 Contact us
New frontiers and powerful <br> solutions for Africa

A continent of discovery, diversity and
new opportunities for oil & gas

Amidst the turmoil of the oil price crisis, Africa is thriving with formidable natural resources, opening new frontiers, challenges and opportunities for the oil & gas industry for the years and decades to come. Vallourec is proud to provide powerful solutions to its customers and partners throughout the continent, with a commitment  to innovation, proximity and cost-efficiency.

Africa has always been exciting, complex and diverse, a most fascinating land of exploration, adventure and discovery. It is no doubt the continent offering the greatest variety of identities, with scores of different countries, an amazing multiplicity of peoples, languages, religions and cultures. Africa is a world of contrasts, of ever changing environments and climates, with extraordinary landscapes and oceans, where ancient traditional societies live alongside booming ultra-modern cities and business hubs. Last but not least, Africa is thriving with amazing natural resources to the extent that it is believed most of Africa’s natural wealth and reserves are yet to be discovered. The recent findings of formidable oil and gas fields in Uganda and Tanzania, as well as off the coasts of Egypt, Ghana and Mozambique prove this to be true.

The lands and waters of North Africa and Sub-Saharan Africa abound with massive reserves of oil and gas, many of which at great depths, in the toughest environments imaginable. Whether onshore or offshore, in drilling or production, African markets require a full spectrum of products and services to answer all requirements and configurations. You can find easy oil and gas calling for simple, low cost answers on the one hand, or the hardest to get oil in oceans and seas surrounding Africa, requiring the most advanced technologies and solutions, on the other hand. Vallourec is relentlessly seeking to provide the most efficient and powerful solutions for its customers and partners in Africa.

Historical partners for long term development
Vallourec has always been committed to supporting projects and development throughout Africa. We believe in long term and long-lasting partnerships, in shared expertise, in meaningful local content and development. Vallourec is present throughout the continent with sales offices, threading facilities, support hubs, yard management and VAM® Field Service near every key market. Beyond local regulations and requirements, Vallourec supports local operators, stock distribution networks and businesses, offering in-depth training to local engineers for product design and utilization, manufacturing and maintenance, welding technologies and project management. Throughout Africa, Vallourec can deliver its full scope of products for OCTG, drilling, offshore and onshore line-pipe and hydrocarbon processing together with a broad range of global solutions. With technical support and training, well coordination and accessories, stock management, procurement and delivery solutions, VAM® Field Service maintenance and repair, Vallourec contributes to making all your projects possible.

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Vallourec addresses the vast array of markets in Africa

A quick overview of African markets and projects shows that although the most challenging offshore projects have been put on hold since the collapse of oil prices, the projects that were sanctioned prior to the crisis are still ongoing.

Operators have focused on streamlining the more complex projects to lower the break-even point as well as on developing new straightforward projects with fast returns. Vallourec has sought to develop cost-efficient answers to these new market constraints, supporting every project with competitive offers with no compromise on quality and safety. Being close to the market, establishing customer intimacy and building partnerships to offer innovative solutions, is more crucial than ever.

North African markets vibrant with exciting prospects
North Africa offers great prospects for the Oil & Gas industry, driven by the recent discovery of extraordinary natural gas fields off the coast of Egypt, as well as with Algeria’s strategic program to boost production and processing and the potential revival of Libyan oil production. Beyond the great fields of Zohr, revealed by ENI in 2015, North Africa is truly vibrant with exciting prospects for drilling, OCTG, line pipe projects and hydrocarbon processing. Vallourec is strengthening its footprint with a new sales and service office in Algiers, in addition to the office established in Egypt, in 2009. Philippe Laurent, Regional Sales Manager for Onshore Line Pipe said: “The qualification process to tender for projects in this area can be lengthy and demanding, but success is all the more rewarding! We work very closely with our customers and have established fruitful long-term relationships based on understanding, trust and reactivity. The new office in Algeria will reinforce this proximity and help us serve the growing demand.”

A wealth of opportunities in West and in Sub-Saharan Africa
Although new deep and ultradeep projects have been postponed in West Africa, Vallourec is still busy delivering offshore projects, like those of ExxonMobil in Angola, or Total in Nigeria and Congo. Vallourec remains close to all its partners, working with NOCs, IOCs, and independent operators to redesign projects, optimize potential and lower costs to make these projects profitable at a 50-60 $ oil barrel. With the perspective of higher oil prices, it is clear that most offshore projects, including the huge offshore potential in Mozambique, will gradually become viable and be re-activated, requiring the expertise, innovation and global solutions that Vallourec can offer.

Meanwhile, simple onshore and lower cost offshore projects are providing opportunities in Senegal and Ivory Coast, in Mauritania, Sierra Leone and Gabon. Vallourec is actively developing lower cost supply routes by associating pipes from Tianda in China with VAM® connections to provide high quality, competitive solutions. In Uganda, Kenya and Tanzania, where hundreds of wells are planned for the coming years, Vallourec is strengthening its presence, ready to serve the market with best-in-class drilling and OCTG products and services.

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At the heart of the African Oil & Gas industry in Johannesburg

The essence of customer intimacy is proximity, which is why, in 2015, Vallourec set up a new office in Johannesburg. After little more than a year, Vallourec has deepened relations with its customers, as well as with local operators, distributors and industry players, particularly for the Sub-Saharan oil & gas markets.

South Africa has become a major business hub for numerous oil and gas companies operating in the Sub-Saharan region, with easy access to the huge markets of West & East Africa. Henri de Fonvielle, Director of Vallourec South Africa, testifies: “The advantage of being in Johannesburg is obvious: numerous headquarters covering Sub-Saharan projects are based here, the city is buzzing with people from all over the world. Business in Africa implies being close to all the players, where new projects and challenges are discussed daily. You have to be here, where the action is, just a phone call away from your counterparts. We are in regular contact with Sasol, the largest South African chemical and energy company, whose managers, engineers, operational sales departments are all based in Johannesburg. Travelling to all the surrounding countries and areas is very easy from Johannesburg, which means we can meet people every day, building the strong relations we need with local industry players from international operators through to the smallest distributors.” Since opening the Johannesburg office in South Africa, Vallourec has received strong interest from the market and has secured quality orders for a whole array of projects. Awards include OCTG in Mozambique for onshore wells, OCTG in South Africa for a future offshore exploration project, drill pipes to equip offshore and onshore projects through rental companies; together with line pipe and fittings to South African distributors for the hydrocarbon processing market. In short, Vallourec is working and growing enthusiastically with all the key clients and partners in South Africa, developing business and prospects for Uganda, Tanzania, Kenya, Angola, Gabon, Congo, Nigeria, Ghana, with more to come.

Thanks to its globally acknowledged expertise, Vallourec has already participated in major complex projects throughout Africa such as Kaombo and CLOV in Angola, Egina in Nigeria, Tullow TEN in Ghana, and Moho Nord in Congo, providing a full range of products, services, solutions and project management. “There are definitely signs that activity will be picking up in the coming months. With the fantastic potential of Mozambique, for example, International Oil Companies are setting up future bases for development in the area. Our presence in Johannesburg will prove essential by providing competitive and innovative solutions for all incoming requests.” concludes Henri de Fonvielle.

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Meeting the challenges of local content in Africa

Vallourec’s commitment to local content in Africa is historical and long lasting. For decades, Vallourec has sought to support local companies, train a new generation of engineers and technicians, and set up facilities near project locations. Local content comes at a cost, but is in its essence a true added value in the development of countries and populations, building bonds and relationships beyond projects. Here are a few testimonies to our most successful ventures.

Setting up a threading mill in Nigeria
Vallourec’s Augustin Irabor, OCTG Commercial Director, Nigeria, explains: “Local content is essential and mandatory in Nigeria. It involves producing or subcontracting a certain portion of every project locally to support and develop local human resources and skills. Vallourec set up sales and services as early as 2007, followed by a threading mill in Port Harcourt in 2009, creating jobs, developing local know-how and stimulating training. It has helped us consolidate relations with our customers, understand their needs and demands and participate in the development of the country. Concerning customer benefit, however it’s maybe too early to tell, because this level of investment in local content comes at a cost for operators and companies and can prove an expensive policy. For Vallourec, it’s clearly a positive experience and constitutes a major asset. Our challenge in the future, however, is to make this kind of local content more cost efficient and appealing for operators as well as local contractors and engineers.”

Working with local players and training young engineers
Karsten Walz, Area Sales Manager for Offshore Linepipe recalls two aspects of Egina’s local content: “Egina was a major offshore project with a lot of technical barriers which called for Vallourec’s expertise. My first task in Nigeria was to find the best local partner to work with us. Bell Oil and Gas, proved to be a very serious and dedicated partner, for a very challenging project, and together we successfully delivered the flowline and riser package of the project. One of the most original aspects of our partnership was certainly our training program for 10 young Nigerian engineers. The training began with a focus on safety, followed by a comprehensive technical program to explain the manufacturing process, from steel production through to the finished seamless pipes. The training encompassed testing protocols, yield strength calculation, steel mechanical properties. The program also included a visit to several R&D facilities in Europe, a visit to coating suppliers and  to the harbor of Antwerp, to see how Vallourec manages and organizes transport to Nigeria. It was completed with a visit to Serimax, with demonstrations to understand how the pipes are welded and what technologies are used for pipe fabrication for subsea applications.”

Operating a local spoolbase and training local workers in welding techniques
Julien Blondeel, Commercial Director at Serimax, testifies: “For the Pazflor project in Angola, we worked with TechnipFMC, operating from the spoolbase in Dande, assuring that 65% of the business was local content. All of the welding, inspection and field-joint coating  activities were under Serimax’s responsibility. Our training plan carried out with TechnipFMC, involved the selection of 30-40 local workers as well as 5-6 high-potential leaders. The latter followed an intensive 6-week training program in Europe, so they would in turn become the trainers of the workers in Angola. At the end of the day, 60-70% of the staff working on the spoolbase were local. The training included welding and spoolbase operations together with highly qualified project management positions.”

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Ready for the future, ready for new frontiers!

As the world seeks new fossil fuel reserves, all eyes are turned towards Africa’s east coast. Vallourec is supporting its customers with innovative, cost efficient solutions.

“Africa’s hydrocarbon potential continues to grow at an incredible pace, a development slowed but undeterred by the oil price crisis,” says Hubert Paris, Regional Director for Europe & Africa. “The new gas discoveries in Mozambique and Tanzania, as well as rising exploration in Kenya and Uganda, are changing the game and making East Africa a future big player in the global industry.”

Already in the field
Africa holds an estimated 8-10% of world reserves in both oil and gas, and a large share of these future reserves are to be found off the coast of Mozambique. Nonetheless, with most of these fields in ultra deep waters, the price tag to first oil is steep. In addition to challenging market conditions, operators will have to invest in considerable infrastructures that are lacking in the eastern regions, as well as rely on trustworthy partners to overcome the technical and logistical barriers of such projects. “This is where Vallourec proves one of the most reliable and solid partners for East African developments,” Hubert Paris says, “Our experience and innovation track record in deep and ultra deep offshore solutions speak for themselves. We have the expertise in premium pipe design for drilling, OCTG and line pipe, together with advanced welding technologies. Furthermore, our teams are seasoned in large project management and field service. Our track record includes major achievements like CLOV, Egina and Tullow TEN, amongst many others, bolstered by the worldwide reputation of our VAM® service network.” “Vallourec is already in the field, on these new markets, helping operators conquer new frontiers,” confirms Damien de Montlebert, OCTG Commercial Director for Europe & Africa. “Vallourec is strengthening its regional footprint in Nigeria, Gabon, Angola, for West Africa, in Algeria and Egypt for North Africa, as well as Kenya and South Africa. Even in Mozambique, we already have an onshore rig equipped with Vallourec products, and have delivered OCTG casing and tubing to Sasol.”

Sustainable value for the customer
“For every future development, Vallourec must demonstrate both superior technical efficiency and cost effectiveness. We seek to bring sustainable value to the customer, and not just a promise. Good solutions translate into saved costs, increased quality and safety, greater field support and field efficiency, measured by time saved and well integrity. Vallourec is proud to bring powerful solutions to Africa and enthusiastic to help sustain the growth of its new frontiers!” concludes Hubert Paris.

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