Wedoany.com Report-Sept. 21, Vallourec has secured a major contract with Petroleo Brasileiro S.A. (Petrobras) for the supply of oil country tubular goods (OCTG) and related services for offshore operations from 2026 to 2029. The long-term agreement could generate up to $1 billion in revenue, making it the largest award in both volume and revenue since Petrobras implemented its open tender strategy.

The long-term agreement has the potential to generate total revenue of up to $1 billion.

The contract covers the full OCTG range for Petrobras’ offshore wells, including seamless pipes and VAM premium connections from 4.5 to 18 inches, as well as carbon and stainless steel tubulars and accessories. Vallourec will also provide comprehensive value-added services onshore and offshore, including desk engineering, material coordination, rig preparation, offshore supervision, rig return repairs, and re-stocking, to support Petrobras in improving operational efficiency.

Vallourec Chairman and CEO Philippe Guillemot said: “This achievement is a powerful demonstration of Vallourec’s ability to meet customers’ complex and evolving requirements. It confirms the strength and consistency of our positioning, built on technical excellence, an integrated industrial presence in Brazil, and a long-standing partnership with Petrobras based on mutual trust. I would like to thank Petrobras for its renewed trust and all Vallourec teams whose commitment and expertise made this success possible.”

Second-quarter results: Vallourec reported revenues of $1.01 billion (EUR 863 million), down 20% year-over-year or 15% at constant exchange rates. Earnings per diluted share were $0.19 (EUR 0.16), compared with $0.54 (EUR 0.46) in the prior-year quarter. The decline was partly due to a large volume of high-value products invoiced in the previous-year quarter that did not recur.

Revenue in the Tubes segment fell 26% year-over-year, driven by an 11% drop in average selling price and a 17% volume reduction, mainly from lower shipments in the Eastern Hemisphere. Guillemot noted: “Despite lower shipments in the Eastern Hemisphere, our Tubes EBITDA margin expanded to 19%, driven by sequential improvements in profitability at our North and South American production hubs. Our Mine & Forest business also performed strongly despite sequentially lower iron ore prices. We have now achieved eleven straight quarters of positive total cash generation.”

He added that while the international OCTG market has faced macroeconomic volatility, Vallourec’s premium product offering continues to attract multi-year drilling program contracts. “The global shift toward gas and unconventional drilling provides opportunities for Vallourec to leverage its differentiated premium market positioning,” Guillemot said.

Regarding the US market, he stated: “Market prices improved in response to steel tariffs implemented earlier this year. Oil drilling activity has fallen due to weaker and volatile prices but was partially offset by a rebound in gas drilling. Latest bookings indicate strong demand, keeping our mills well utilized, and imports are likely to moderate following tariff changes, supporting US-based industrial players such as Vallourec.”