Global Cases

Providing solutions for oil and natural gas drilling

global

Sumitomo Corporation entered the oil country tubular goods (OCTG) business in the 1950s to supply pipes used in the drilling of oil and natural gas to energy developers in various countries. Since then, we have been working not simply to supply products but also offer various related services, such as supply chain development and consulting related to oil and gas well design, looking to help with the implementation of safe and stable energy development projects. We will continue to pursue the OCTG business in order to underpin the stable supply of oil and gas, still essential energy sources today, thereby contributing to the Development of local society and economy around the world.

The pipe supplier that leads the world

OCTGs are pipes, used in the drilling of oil and natural gas, possessing the strength necessary to reach deep into the ground. Depending on underground conditions, such as the existence of corrosive gases, they also need to be high-quality pipes with resistance to corrosion. We provide a wide range of OCTGs to meet the needs of oil companies around the world, thus supporting the stable supply of oil and natural gas on a global scale.

Adding more value

Since starting the OCTG business in the 1950s, we have not only supplied OCTGs but have also offered various services that meet clients’ needs in our transactions with oil companies over the span of half a century. For many years, we have provided supply chain management (SCM) services on behalf of the client, managing the inventory of OCTGs and other auxiliary equipment and achieving just-in-time delivery, as well as providing consulting services related to oil and gas well design. We have been highly recognized by oil companies around the world for these comprehensive support services that extend beyond simply buying and selling, typical for trading companies in the past.

A rig off the coast of Norway in the North Sea. Photo by / Harald Pettersen © Statoil.

Forging links

Linking is key in our OCTG business: linking technology with client needs, linking OCTG manufacturers with oil and gas companies, and linking the oil and gas below with the ground above. The ability to link, which is an advantage that integrated trading companies have over others, is particularly exhibited in the following three businesses:

Long-term contracts for OCTGs

We hold long-term supply contracts for OCTGs with the world’s oil giants, including Royal Dutch Shell, BP and Equinor (formerly Statoil), as well as state-owned firms in major oil-producing nations. We win such long-term contracts due to our experience in supplying OCTGs over many years and the high level of trust in our responses to clients’ sophisticated technical demands, as well as our SCM services.

In 2018, the Sumitomo Corporation Group and BP Oman signed a long-term contract for OCTG transactions

OCTG: North American region

Many OCTGs aid in oil and gas development in the Gulf of Mexico, which is a central location for oil and natural gas, as well as in onshore oil and gas development. Since the 1980s, Sumitomo Corporation has invested in major American wholesalers for OCTGs as well as manufacturing or processing businesses, thus building a supply chain entirely within the U.S., and establishing a strong position as the number one supplier in the U.S., the world’s largest market for OCTGs.

OCTG: Middle Eastern region

Our OCTG business in the Middle East, which accounts for about 50 percent of the world’s oil reserves and about 40 percent of its natural gas reserves, is another success for Sumitomo Corporation. One characteristic of the Middle Eastern market is that OCTGs in this region require resistance to corrosion, due to the texture of the soil. For natural gas development in particular, high-quality OCTGs with the highest level of resistance to corrosion is required. Our OCTG supply chain greatly to the stability of energy production in Middle Eastern countries.

Signing ceremony for the extension of a long-term contract with an oil development company in Oman

To further enrich the lives of people around the world

Our vision is to provide a variety of equipment including oil country tubular goods (OCTG) as well as services to support drilling activities at oil and natural gas production sites around the world, to enable safe and stable energy development, and to further enrich the lives of people around the world with the energy that is produced. This energy is also delivered to Japan where it supports industry and daily life.

The demands from oil companies and their drilling sites are becoming more diverse than ever before. By leveraging our global network as an integrated trading company as well as providing solutions that take advantage of our expertise across a wide range of business divisions to meet these demands, we will continue to strongly support energy production around the world as a global solution provider.