Rosneft and TMK Sign Long-Term Tubular Supply Contracts
Rosneft and Tubular Metallurgical Company (TMK) entered into a long-term production casting and tubing supply contracts at the XXI St. Petersburg International Economic Forum. The document was signed by Rosneft Chief Executive Officer Igor Sechin and TMK Board of Directors Chairman Dmitry Pumpyanskiy.
The formula pricing based long-term contract term is over 5 years. Tubular supplies to Rosneft will start in 2H 2017.
Such form of cooperation provides a reliable market tool enabling higher production efficiency, long-term planning, timely and robust supplies of high quality products. The strategic character of cooperation is demonstrated by significant volume of contracts comparable with one quarter of annual investment expenditures of the Company in cash terms. During the contract period the share of TMK tubulars in the total volume of the production casing and tubing purchases by Rosneft will be over 50%.
Commenting on the contract signing, Rosneft Chief Executive Officer Igor Sechin said, "The agreement shall stimulate development of domestic production and become an important step in implementing the import substitution program. Moving to long-term contracts will enable enhancing efficiency of both companies' operations and assure transparent pricing of the procured tubulars."
"The contract shall enable TMK to ensure stable capacity utilization and to considerably expand the business planning horizon for making uninterrupted and timely supplies of high quality tubulars to Rosneft, our most important client," commented TMK Board of Directors Chairman Dmitry Pumpyanskiy.
Notes for editors:
In December 2016, Rosneft and TMK signed a Memorandum of Partnership in implementing a program for tubular products substitution for offshore projects.
The purpose of the Memorandum was to formalize and further develop a system of cooperation between Rosneft and TMK in mastering the import substitution tubulars, including new types compliant with the international standards and Rosneft requirements.
Within the cooperation framework, the parties shall explore an opportunity of using the TMK's current products for Rosneft's offshore projects, as well as manufacturing new types of tubulars based on the order of the oil company. The much-needed product list includes high-strength casing and tubing, including the cold-resistant types, large diameter casing, new types of premium thread connections possessing special properties, particularly a 100% tensile and compression strength, and the GreenWell lubricant free casing string assembly technology.
TMK is one of the global leading suppliers of tubular goods for oil and gas sector. TMK encompasses over 27 companies in Russia, USA, Canada, Romania, Oman, UAE and Kazakhstan, as well as two Research and Development Centers in Russia and USA. Threaded petroleum tubulars account for the highest share of the Company's sales and are shipped to consumers in more than 80 countries around the globe. TMK supplies high quality products, as well as renders services related to thermal treatment, protective coating, threading premium class connections, storage and repair of tubulars.
Rosneft Information Division
Tel.: +7 (495) 517-88-97
June 2, 2017
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