National Oilwell Varco 2010 Annual Report Download - page 13

erosion or accidental fracture. Borehole Enlargement provides bi-centered drill bits, expandable reamers (marketed under the AnderReamer
brand name) and associated equipment along with well-site service technicians who deliver 24 hour support during hole enlargement operations.
NOV Downhole offers drilling optimization services via its Advanced Drilling Solutions (ADS) business line. ADS services incorporate
various downhole vibration measurement and mitigation tools along with dedicated, highly trained personnel who interpret such data and provide
drilling parameter guidance intended to improve drilling efficiency and reduce drilling risk.
Pumps & Expendables. The Companys Pumps & Expendables business designs, manufactures, and sells pumps that are used in oil and gas
drilling operations, well service operations, production applications, as well as industrial applications. These pumps include reciprocating positive
displacement and centrifugal pumps. High pressure mud pumps are sold within the Rig Technology segment. These pumps are sold as individual
units and unitized packages with drivers, controls and piping. The Company also manufactures fluid end expendables (liners, valves, pistons, and
plungers), fluid end modules and a complete line of dies and inserts for pipe handling. The Company offers popular industry brand names like
Wheatley, Gaso, and Omega reciprocating pumps, acquired in 2000; Halco Centrifugal Pumps, acquired in 2002; Petroleum Expendable Products
(PEP), acquired in 1997; and Phoenix Energy Products, acquired in 1998.
The Company also manufactures a line of commodity and high end valves, chokes, and flow line equipment used in both production and drilling
applications. Additionally these products are used in the fabrication of choke and kill standpipe, cement, and production manifolds. The
Company manufactures its pump products in Houston, Odessa and Marble Falls, Texas; Tulsa and McAlester, Oklahoma; Scott, Louisiana;
Newcastle, England; Dehradun, India and Buenos Aires, Argentina.
XL Systems. The Companys XL Systems product line offers the customer an integrated package of large-bore tubular products and services for
offshore wells. This product line includes the Companys proprietary line of wedge thread marine connections on large-bore tubulars and related
engineering and design services. The Company provides this product line for drive pipe, jet strings and conductor casing. The Company also
offers weld-on connections and service personnel in connection with the installation of these products. In early 2007, the Company completed
development of its new high-strength Viper weld-on connector that it believes will permit the Company to penetrate traditional markets that do
not require the enhanced performance of its proprietary wedge-thread design.
Customers and Competition. Customers for the Petroleum Services & Supplies tubular services include major and independent oil and gas
companies, national oil companies, drilling and workover contractors, oilfield equipment and product distributors and manufacturers, oilfield
service companies, steel mills, and other industrial companies. The Companys competitors include, among others, Ameron International Corp;
EDO Corporation; ShawCor Ltd.; Schlumberger, Ltd.; Franks International; Inc.; Baker Hughes Incorporated; Halliburton Company;
Weatherford International Ltd.; Patterson Tubular Services; Vallourec & Mannesmann; and Precision Tube (a division of Tenaris). In addition,
the Company competes with a number of smaller regional competitors in tubular inspection. Certain foreign jurisdictions and government-owned
petroleum companies located in some of the countries in which the Company operates have adopted policies or regulations that may give local
nationals in these countries certain competitive advantages. Within the Companys corrosion control products, certain substitutes such as
non-metallic tubulars, inhibitors, corrosion resistant alloys, cathodic protection systems, and non-metallic liner systems also compete with the
Companys products. Management believes that the principal competitive factors affecting this business are performance, quality, reputation,
customer service, availability of products, spare parts, and consumables, breadth of product line and price.
The primary customers for drilling services offered by the Petroleum Services & Supplies segment include drilling contractors, well servicing
companies, major and independent oil and gas companies, and national oil companies. Competitors in drilling services include Schlumberger,
Ltd. (SWACO); Baker Hughes Incorporated; Halliburton Company; Derrick Manufacturing Corp.; Fluid Systems; Oil Tools Pte. Ltd; Peak
Energy Services, Ltd.; Varel; United Diamond; Roper; Robbins & Myers; Southwest Oilfield Products; and a number of regional competitors.
The Petroleum Services & Supplies segment sells drilling services into highly competitive markets. Management believes that on-site service is
becoming an increasingly important competitive element in this market, and that the principal competitive factors affecting the business are
performance, quality, reputation, customer service, product availability and technology, breadth of product line and price.
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