Products and Technology
National Oilwell designs, manufactures and sells drilling systems and components
for both land and offshore drilling rigs as well as complete land drilling and
well servicing rigs. Mechanical components include drawworks, mud pumps, top
drives, solids control equipment (used to remove particulates from drilling
fluids), traveling equipment (hooks and blocks used to hoist and lower drill
pipe) and rotary tables (used to rotate drill pipe). These components are essential
to pump fluids and hoist, support and rotate the drill string. Many of these
components are designed specifically for applications in offshore, extended
reach and deep land drilling operations. This equipment is installed on new
rigs and often replaced during the upgrade and refurbishment of existing rigs.
We design and manufacture masts, derricks and substructures for use on land
rigs and on fixed and mobile offshore platforms suitable for drilling applications
to depths of up to 30,000 feet or more. Other products include cranes, jacking
and mooring systems, reciprocating and centrifugal pumps and fluid end expendables
for all major manufacturers' pumps. Our business includes the sale of replacement
parts for our own manufactured machinery and equipment.
We also design and manufacture electrical systems and control and data acquisition
systems for drilling related operations and automated and remotely controlled
machinery for drilling rigs. Our control systems can control and monitor many
simultaneous operations on a drilling rig and often form the basis for our state-of-the-art
driller's cabin. Our automated pipe handling system provides an efficient and
cost effective method of joining lengths of drill pipe or casing, as does our
iron roughneck. These and similar technologically advanced products can greatly
improve the safety on rigs, often by reducing the number of persons working
on the drilling floor.
While offering a complete line of conventional rigs, National Oilwell has extensive
experience in providing rig designs to satisfy requirements for harsh or specialized
environments. Such products include drilling and well servicing rigs designed
for the Arctic, highly mobile drilling and well servicing rigs for jungle and
desert use, modular well servicing rigs for offshore platforms and modular drilling
facilities for North Sea platforms. We also design and produce fully integrated
drilling equipment packages for offshore rigs.
National Oilwell designs and manufactures drilling motors, drilling jars and
specialized drilling tools for rent and sale. We also design and manufacture
a complete line of fishing tools, used to remove objects stuck in the wellbore,
and progressive cavity pumps.
Distribution Services
National Oilwell provides distribution services through its network of 147
distribution service centers. National Oilwell's distribution service centers
are located throughout the oil and gas producing regions of North America, with
90 in the United States, 41 in Canada, and the remainder in various international
locations. These distribution service centers stock and sell a variety of expendable
items for oilfield applications and spare parts for our proprietary equipment.
As oil and gas companies and drilling contractors have refocused on their core
competencies and emphasized efficiency initiatives to reduce costs and capital
requirements, our distribution services have expanded to offer outsourcing and
alliance arrangements that include comprehensive procurement, inventory management
and logistics support. In addition, we believe we have a competitive advantage
in the distribution services business by distributing products manufactured
by us and from the association of this business with our Products and Technology
segment.
The supplies and equipment stocked by our distribution service centers vary
by location. Each distribution point generally offers a large line of oilfield
products including valves, fittings, flanges, spare parts for oilfield equipment
and miscellaneous expendable items.
Most drilling contractors and oil and gas companies typically buy supplies
and equipment pursuant to non-exclusive contracts, which normally specify a
discount from list price for each product or product category. Our goal is to
create strategic alliances with our customers whereby we become the customer's
primary supplier of those items. In certain cases, we assume responsibility
for procurement, inventory management and product delivery for the customer,
occasionally by working directly out of the customer's facilities.
We believe e-commerce brings a significant advantage to larger companies that
are technologically proficient. Our e-commerce system can interface directly
with customers' systems to maximize efficiencies for us and for our customers.
We believe we have an advantage in this effort due to our investment in technology,
geographic size, knowledge of the industry and customers, existing relationships
with vendors and existing means of product delivery.
Petroleum Services & Supplies
The Company provides a broad range of support equipment, spare parts, consumables
and services through the Petroleum Services & Supplies segment. The Petroleum
Services & Supplies group sells directly to drilling contractors; well servicing
companies; oil and gas producers; national oil companies; tubular processors,
manufacturers and distributors; oilfield distributors; and pipeline operators.
The Petroleum Services & Supplies group provides a variety of tubular services,
composite tubing, and coiled tubing to oil and gas producers, national oil companies,
drilling contractors, well servicing companies, pipeline operators, and tubular
processors, manufacturers and distributors. These include inspection and reclamation
services for drill pipe, casing, production tubing, sucker rods and line pipe
at drilling and workover rig locations, at yards owned by its customers, at
steel mills and processing facilities that manufacture tubular goods, and at
facilities which it owns. The group also provides internal coating of tubular
goods at several coating plants worldwide and through licensees in certain locations.
Additionally, the Company designs, manufactures and sells high pressure fiberglass
and composite tubulars for use in corrosive applications and coiled tubing for
use in well servicing applications; and provides in-service inspection of oil,
gas and product transmission pipelines through its application of instrumented
survey tools (“smart pigs”) which it engineers, manufactures and
operates.
The Company’s customers rely on tubular inspection services to avoid
failure of tubing, casing, flowlines, pipelines and drill pipe. Such tubular
failures are expensive and in some cases catastrophic. The Company’s customers
rely on internal coatings of tubular goods to prolong the useful lives of tubulars
and to increase the volumetric throughput of in-service tubular goods. The Company’s
customers sometimes use fiberglass or composite tubulars in lieu of conventional
steel tubulars, due to the corrosion-resistant properties of fiberglass and
other composite materials. Tubular inspection and coating services are used
most frequently in operations in high-temperature, deep, corrosive oil and gas
environments. In selecting a provider of tubular inspection and tubular coating
services, oil and gas operators consider such factors as reputation, experience,
technology of products offered, reliability and price.
The Company’s Petroleum Services & Supplies group also provides products
and services that are used in the course of drilling oil and gas wells. The
Downhole Tools business sells and rents drilling motors and specialized downhole
tools that are incorporated into the drill stem during drilling operations (“Downhole
Tools”), and are also used during fishing, well intervention, re-entry,
and well completion operations. The Solids Control business is engaged in the
provision of highly-engineered equipment, products and services which separate
and manage drill cuttings produced by the drilling process (“Solids Control”).
Drill cuttings are usually contaminated with petroleum or drilling fluids, and
must be disposed of in an environmentally sound manner. Additionally, efficient
separation of drill cuttings enables the re-use of often costly drilling fluids.
The Instrumentation business rents and sells proprietary drilling rig instrumentation
packages and control systems which monitor various processes throughout the
drilling operation, under the name MD/Totco (“Instrumentation”).
The Pumps & Expendables business provides centrifugal, reciprocating, and
progressing cavity pumps and pump expendables (“Pumps & Expendables”)
into the global oil and gas and industrial markets.
Tubular Coating. The Company develops, manufactures and applies its proprietary
tubular coatings, known as Tube-Kote® coatings, to new and used tubulars.
Tubular coatings help prevent corrosion of tubulars by providing a tough plastic
shield to isolate steel from corrosive oilfield fluids such as CO2, H2S and
brine. Delaying or preventing corrosion extends the life of existing tubulars,
reduces the frequency of well remediation and reduces expensive interruptions
in production. In addition, coatings are designed to increase the fluid flow
rate through tubulars by decreasing or eliminating paraffin and scale build-up,
which can reduce or block oil flow in producing wells. The smooth inner surfaces
of coated tubulars often increase the fluid through-put on certain high-rate
oil and gas wells by reducing friction and turbulence. The Company’s reputation
for supplying quality internal coatings is an important factor in its business,
since the failure of coatings can lead to expensive production delays and premature
tubular failure.
In 2005, NOV created a 60%-owned joint venture in China with the Huabei Petroleum
Administration Bureau, which coats Chinese produced drill pipe using NOV’s
proprietary coatings.
Tubular Inspection. Newly manufactured pipe sometimes contains serious defects
that are not detected at the mill. In addition, pipe can be damaged in transit
and during handling prior to use at the well site. As a result, exploration
and production companies often have new tubulars inspected before they are placed
in service to reduce the risk of tubular failures during drilling, completion,
or production of oil and gas wells. Used tubulars are inspected by the Company
to detect service-induced flaws after the tubulars are removed from operation.
Used drill pipe and used tubing inspection programs allow operators to replace
defective lengths, thereby prolonging the life of the remaining pipe and saving
the customer the cost of unnecessary tubular replacements and expenses related
to tubular failures.
Tubular inspection services employ all major non-destructive inspection techniques,
including electromagnetic, ultrasonic, magnetic flux leakage and gamma ray.
These inspection services are provided both by mobile units which work at the
wellhead as used tubing is removed from a well, and at fixed site tubular inspection
locations. The group provides an ultrasonic inspection service for detecting
potential fatigue cracks in the end area of used drill pipe, the portion of
the pipe that traditionally has been the most difficult to inspect. Tubular
inspection facilities also offer a wide range of related services, such as API
thread inspection, ring and plug gauging, and a complete line of reclamation
services necessary to return tubulars to useful service, including tubular cleaning
and straightening, hydrostatic testing and re-threading.
In addition, the Company applies hardbanding material to drillpipe, to enhance
its wear characteristics and reduce downhole casing wear as a result of the
drilling process. In 2002, the Company introduced its proprietary line of hardbanding
material, TCS — 8000ä. The group also cleans, straightens, inspects
and coats sucker rods at 11 facilities throughout the Western Hemisphere.
Additionally, new sucker rods are inspected before they are placed into service,
to avoid premature failure, which can cause the oil well operator to have to
pull and replace the sucker rod.
Mill Systems and Sales. The Company engineers and fabricates inspection equipment
for steel mills, which it sells and rents. The equipment is used for quality
control purposes to detect defects in the pipe during the high-speed manufacturing
process. Each piece of mill inspection equipment is designed to customer specifications
and is installed and serviced by the Company.
Fiberglass & Composite Tubulars. When compared to conventional carbon steel
and even corrosion-resistant alloys, resin-impregnated fiberglass and other
modern plastic composites often exhibit superior resistance to corrosion. Some
producers manage the corrosive fluids sometimes found in oil and gas fields
by utilizing composite or fiberglass tubing, casing and line pipe in the operations
of their fields. In 1997, the Company acquired Fiber Glass Systems, a leading
provider of high pressure fiberglass tubulars used in oilfield applications,
to further serve the tubular corrosion prevention needs of its customers. Fiber
Glass Systems has manufactured fiberglass pipe since 1968 under the name “Star®,”
and was the first manufacturer of high-pressure fiberglass pipe to be licensed
by the API in 1992. Through acquisitions and investments in technologies, the
Company has extended its fiberglass and composite tubing offering into industrial
and marine applications, in addition to its oilfield market.
Coiled Tubing. Coiled tubing provides a number of significant functional advantages
over the principal alternatives of conventional drill pipe and workover pipe.
Coiled tubing allows faster “tripping,” since the coiled tubing
can be reeled quickly on and off a drum and in and out of a wellbore. In addition,
the small size of the coiled tubing unit compared to an average workover rig
or drilling rig reduces preparation time at the well site. Coiled tubing permits
a variety of workover and other operations to be performed without having to
pull the existing production tubing from the well and allows ease of operation
in horizontal or highly deviated wells. Thus, operations using coiled tubing
can be performed much more quickly and, in many instances, at a significantly
lower cost. Finally, use of coiled tubing generally allows continuous production
of the well, eliminating the need to temporarily stop the flow of hydrocarbons.
As a result, the economics of a workover are improved because the well can continue
to produce hydrocarbons and thus produce revenues while the well treatments
are occurring. Continuous production also reduces the risk of formation damage
which can occur when the flow of fluids is stopped or isolated. NOV designs,
manufactures, and sells coiled tubing under the Quality Tubing brand name at
its mill in Houston, Texas.
Pipeline Inspection. In-service inspection services for oil and gas pipelines
identify anomalies in pipelines without removing or dismantling the pipelines
or stopping the product flow, giving customers a convenient and cost-effective
method of identifying potential defects. The Petroleum Services & Supplies
group inspects pipelines by launching a sophisticated survey instrument into
the pipeline. Propelled by the product flow, the instrument uses electromagnetics,
ultrasonics, and mechanical measurements received on digital and analog media
to monitor the severity and location of internal and external pitting-type corrosion
as well as other mechanical anomalies in the pipeline, providing a basis for
evaluation and repair by the customer. Once the test is complete, the survey
instrument is returned to the Company, refurbished and used for future pipeline
inspections.