TPi October 2012

business & market news

Tube industry booming in Oklahoma In 2009 Oklahoma ranked eighth in the United States in terms of total energy production. More than 95%of that energy came in the form of gas (81%) and oil (15%). In 2011, Oklahoma produced more than 74 million bbl of oil and slightly under 1.9 Tcf of natural gas, maintaining its status as one of the nation’s leading energy producing states. tremendous opportunity for business growth in the pipe/tubulars industry. Oklahoma is home to Chesapeake Energy, Devon Energy, Continental Resources and SandRidge Energy, four of the nation’s leading energy companies and pioneers in developing the unconventional energy resources that have reshaped America’s energy future.

According to independent studies cited in Governor Fallin’s Oklahoma First Energy Plan, in 2009, production and drilling activities supported approximately one-third of Oklahoma’s gross state product, and in fiscal year 2011, gross production tax collections accounted for nearly $1bn. The industry directly supports more than 71,000 jobs, representing almost 3.5% of the state’s workforce, and industry activity combines to support nearly 300,000 Oklahoma jobs, or almost 15% of the workforce. This means a business-friendly climate that understands and appreciates the role of traditional energy, which translates into

In addition to Oklahoma’s leading exploration and production companies, there are presently over 200 oil field service companies located throughout the state. These companies, which service the oil and gas sector in state and in surrounding states, include three major manufacturers of high quality tubular products for the oil and gas industry which operate mills/heat treat and threading facilities: Paragon Industries, headquartered in Sapulpa; a subsidiary of Vallourec & Mannesmann Tube Corporation in Muskogee; and TMK-IPSCO, which has a seamless and ERW mill in Catoosa. More than 39,000 miles of pipeline form an intrastate gathering and distribution network for oil and natural gas transport throughout the state. For example, two Tulsa-based energy companies, ONEOK and Williams, are engaged in natural gas gathering and processing, natural gas pipelines and distribution of natural gas liquids. Horizontal drilling and hydraulic fracturing have unlocked new resource potential in shale plays throughout the United States, dramatically changing the future of energy in America. According to Oklahoma secretary of energy, Mike Ming, “The US is experiencing a revolution in new energy supplies of both oil and natural gas that began to really materialise in the mid-2000s. In January 2012, US monthly gas production reached an all-time high.” This energy boom has translated into business opportunities for pipe/tube manufacturers and service providers who have been supporting the unconventional resource plays across the country. In addition to newfound supplies from the resource plays, Oklahoma is seeing revitalised potential from plays many considered played-out. For example, in the Granite Wash and the Cleveland

Oklahoma secretary of energy, Mike Ming

and Tonkawa tight sand formations, in north-western Oklahoma’s Anadarko basin, producers are unlocking enormous new supplies where only marginal production could be achieved with traditional vertical wells. The key has been horizontal well technology and tertiary, or enhanced oil recovery (EOR) efforts. 2 EOR potential, for example, offers recoverable reserves from estimated at more than 20 billion bbl, an amount greater than all the oil that has been produced in Oklahoma since 1900. The area of focus today for pipe manufacturers and suppliers in Oklahoma is fracking. While this process has been in use for well over 50 years, the technology is still evolving and improving. One of the key challenges for oil and gas companies is to determine the optimum type of pipe and connections that will be able to withstand the elevated stresses associated with this type of energy extraction process. This in turn will drive innovation for the pipe making process. “With all that is happening in Oklahoma’s oil and gas sector, the state is a good proving ground for pipe product manufacturers,” commented Mr Ming. CO

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Tube Products International October 2012

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