To say that the last few years have been difficult ones for the oil and gas industry is something of an understatement.
Weak demand resulting from historically low prices has made life remarkably tough right across the supply chain.
It is estimated that the collapse in oil prices, beginning in 2014, led to a global reduction in capital expenditure of some 40% over the following two years.
Major projects that could no longer even come close to previously established profit criteria were deferred or dropped altogether.
Now, however, the industry may well be seeing the first shoots of a recovery. Although still well below even the post-recession high point, $115 per barrel for Brent crude in 2011, prices appear to be stabilising at a sustainable level.
Combined with the drive for efficiency savings that took place in every corner of the industry following the collapse, those higher prices are showing signs of stimulating a renaissance in activity.
The big issue for companies in the supply chain, businesses such as UK-based specialist tubing manufacturer Fine Tubes, is how to gear up for this anticipated recovery without overextending themselves.
Fine Tubes is one of the six businesses that make up AMETEK Specialty Metal Products (SMP).
SMP oil and gas product manager Nicholas Head said: “We’re considerably more confident about 2018 than we were about this year.
“We’re investing in raw materials, moving ahead of the market to support the increased demand that we anticipate in 2018.
“Initially, we expect to see this coming from the United States, and from the Middle East shortly afterwards.
“We believe it will be a global phenomenon.”
Matching availability to demand is critical for Fine Tubes because of the sourcing complexities involved in manufacturing high-performance tubes from specialty alloys such as stainless steel, nickel and titanium, which are used to achieve maximum corrosion resistance and withstand pressures of up to 60,000psi.
Head noted: “Over-ordering of raw materials, or under-ordering, could prove to be a costly mistake.
“That is why we’ve developed an integrated forecast system designed to support our planning and raw material purchasing.
“It’s a feature of our operations that sets us apart from our competitors and will undoubtedly prove critical in ensuring we take full advantage of the coming recovery.”
Of course, gearing up will only reap rewards if the product is right. Fine Tubes’ unique selling proposition (USP) is its ability to meet the most-exacting customer specifications, an ability built on 75 years of experience.
Today, the company manufactures tubes required for downhole, hydraulic and chemical injection control lines, subsea umbilicals, instrumentation tubing, downhole gauge cables and pressure housings to name a few.
Whatever the application, the key requirement is meeting the high-performance criteria required in the most hostile environments, thereby minimising the risk to the operator and reducing the ultimate cost of ownership by manufacturing to the very highest accuracy, quality and integrity.
The industry’s growing optimism was evident at the recent ADIPEC exhibition in Abu Dhabi where Fine Tubes showcased its latest range of high performance products.
The Fine Tubes booth experienced an unexpectedly high number of visitors and generated strong interest in the company’s portfolio of precision tubes in stainless steel, titanium and nickel alloys.
Numerous successful meetings indicated a cautious optimism and that the downturn is approaching its end.
AMETEK SMP, the division of which Fine Tube is a part, is a global leader in the manufacture of a range of specialty metal products, ranging from precision metal tubes, high-purity strip, foil, ultra-thin foil, shaped wire, high-purity metal powders, master alloys and clad metals.
All of the six companies within SMP are niche specialists with a record of serving the oil and gas industry.
The breadth of what SMP offers as a one-stop solution provider of specialty metal solutions for critical applications is yet another string to the bow of Fine Tubes as the company prepares itself for the upturn.