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Significant growth of tube orders

SIGNIFICANT GROWTH OF TUBE ORDERS FOR OIL EXPLORATION AND EXTRACTION

The demand of tubes for investment projects in the oil exploration and extraction industry has experienced a significant increase throughout 2011. Thus, tube order intake in this sector has grown to more than double during the year and it is the first sector of demand of tubes for new investment projects.

This increase is determining in the performance of the demand of tubes for oil and gas exploration and extraction (OCTG), which is manufactured at the Amurrio factory.

TUBACEX decided to develop production capacities strategically in those value-added segments requiring a high level of expertise within the oil, gas and power generation industries, and which are expected to grow the most, such as the exploration and extraction of oil and gas in extreme conditions (offshore and deep water extraction) and power generation in state-of-the-art plants. The development of a strategic alliance with Vallourec & Mannesmann is also leading to important orders in the power generation and OCTG sectors.

The tube order intake for investment projects in the power generation industry has also grown significantly. These two sectors, oil and gas exploration and extraction and power generation, represented almost half of the order intake for new investment projects in 2011, which gains weight within the mix of high added-value products sales.

Another sector of demand that has shown a positive performance is the refining industry, with a considerable order intake during the year. This is one of TUBACEX's most important sectors of demand.

Order intake has dropped in other sectors with a lower quantitative relevance, such as the nuclear sector. This sector's investments have been negatively influenced by the Fukushima nuclear power plant disaster after the earthquake in Japan and subsequent tsunami, in March 2011.

Press relations

Nagore Larrea

nlarrea@tubacex.com