The French group Vallourec announced on Tuesday that it has signed an agreement with the Saudi oil giant Aramco to supply it with tubes for ten years on the basis of quarterly orders delivered by its plant located in the kingdom.
No amount has been communicated, but the group specifies in a press release that two orders have already been placed with delivery scheduled for early 2023.
This agreement “will cover part of Saudi Aramco’s needs for premium seamless steel pipes (OCTG) for its drilling activities” and “includes the supply of premium casing pipes as well as inventory management services,” the French company said.
Vallourec welcomes this “important success” which strengthens its relationship with the world’s largest crude oil exporter and “paves the way for a joint roadmap focused on innovation, services and energy transition”.
“With this first long-term agreement, Saudi Aramco distinguishes Vallourec as a strategic partner for the years to come,” said Philippe Guillemot, chairman and CEO of Vallourec, quoted in the release.
The group had inaugurated an oil and gas pipe finishing plant in Saudi Arabia in 2014, stemming from the 2011 acquisition of Saudi Seamless Pipes Factory Company Limited, a total investment of about $200 million primarily to supply Saudi Aramco and other energy companies in the region.
In the second quarter, the French manufacturer recorded a net loss of 415 million euros, mainly due to provisions related to its social plan. Revenues followed a reverse curve, with a 35.9% increase between April and June, to 1.14 billion euros.
Vallourec benefited in particular from strong growth in its Oil & Gas division, up 63.2% in the quarter to 781 million euros, due to both higher prices and volumes in North America, as well as higher volumes in Europe, the Middle East and Africa.
