National Oilwell Varco 2010 Annual Report Download - page 10

Portable Power. The acquisition of Welch Sales and Service, Inc. in 2008 placed Wellsite Services in the power generation and temperature
control business. The Portable Power division provides rental equipment for use in the upstream oil and gas industry, refinery and petrochemical,
construction, events, disaster relief and other industries.
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 CO 2 , H 2 S 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, the Company created a 60%-owned joint venture in China with the Huabei Petroleum
Administration Bureau, which coats Chinese produced drill pipe using the Companys proprietary coatings. In 2007, the joint venture opened a
second coating plant in Jiangyin City, China.
In addition to the Companys TK® coatings, it also has complementary corrosion control products and services including TK® Liners,
TuboWrap, and KC-IPC Connections. TK Liners are fiberglass-reinforced tubes which are inserted into steel line pipe. This safeguards the pipe
against corrosion and extends the life of the pipeline. In conjunction with the Thru-Kote® connection system customers can weld a sleeve for a
continuous fiberglass lined pipeline. Tubo-Wrap is a high performance external coating that protects the pipe during installation and from
corrosion once the pipeline is in place. KC-IPC Connections use a modified American Petroleum Institute (API) coupling to create a
gas-tight seal that prevents corrosion and turbulence in the critical connections of tubulars while protecting the internal plastic coating at the
highly loaded contact points.
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 Company 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 drill pipe, 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  8000 ä. The Company 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.
Machining Services. In 2005, the Company acquired Turner Oilfield Services and expanded our product offering into thread repair, tool joint
rebuilding and sub manufacturing. Since then the Company has made strategic acquisitions of Hendershot and Mid-South and has expanded its
machining services internally to develop a one-stop-shop concept for its drill pipe customers. Thread repair services include rotary shouldered
and premium connections. The Company is licensed to perform thread repair services for API and proprietary connections. Tool joint rebuilding
is a unique process to restore worn drill pipe tool joints, drill collars and heavy weight drill pipe to the original specifications to extend the service
life of those assets. The Company manufactures downhole tools and is API licensed for this process in several locations.
In November 2009, the Company acquired South Seas Inspection (S) Pte. Ltd., (SSI) and certain assets of its Brazilian affiliate. SSI provides a
wide array of oilfield services including rig and derrick construction, derrick inspection and maintenance, drops surveys and load testing at the rig
through the use of rope access technicians. This acquisition adds multiple new services and allows the Company to grow this business by
leveraging existing relationships and infrastructure. These operations are based out of Singapore with branch offices in Baku, Azerbaijan and
Aktau, Kazkhstan as well as a representative office in Vietnam. The highly trained workforce is completely mobile and provides these services
worldwide. 10