TMK announces 2011 first quarter production results and trading update

OAO TMK, one of the world’s leading oil and gas steel pipe producers, today announces its production results for the period ending March 31, 2011.

For the first three months of 2011, TMK shipped 1,077 thousand tonnes of pipes to customers, representing a 15.4% increase over the first three months of 2010, and generally maintaining the record level of production reached in the fourth quarter of the last year.

Volumes of shipped pipe products (thousand, tonnes)

Of the total volume of TMK products shipped, 380,000 tonnes (35.3%) were made up of OCTG, and 218,000 tonnes (20.2%) of line pipe. OCTG shipment volumes increased by 3.3% and 4.7% over the fourth quarter of 2010 and the first quarter of 2010, respectively. Volumes of large diameter pipe shipments remained strong in the first three months of 2011 at 213,000 tonnes, which is 42.6% more than in the first three months of 2010.

In the first three months of 2011, TMK shipped about 108 thousand premium connections developed by the Company's Russian (TMK family) and American (ULTRA) divisions, which is 20.6% more than in the fourth quarter of 2010. Of the total volume of premium connections shipments, the share of ULTRA threads was 72%.

The increase in demand for ULTRA connections due to active development of shale oil and gas as well as expected growth in development of oil sands in the United States and Canada supported the management’s decision to further expand TMK IPSCO's premium threading capacities. In March, the second thread line for ULTRA connections with the capacity of 240,000 joints was commissioned at the Brookfield facility.

Pipe shipments by TMK IPSCO amounted to 232,000 tonnes, which is 9.2% more than in the fourth quarter of 2010 and 24.1% more than in the first three months of 2010.

The Company expects the North American market for OCTG pipes to remain attractive over the long term, as the increase in complexity of unconventional drilling results in higher consumption of premium pipe products.