National Oilwell Varco 2002 Annual Report Download - page 4

National Oilwell has developed an integrated information technology and process improvement strategy to enhance
procurement, inventory management and logistics activities. As a result of the need to improve industry efficiency,
oil and gas companies and drilling contractors are frequently seeking alliances with suppliers, manufacturers and
service providers to achieve cost and capital improvements. We believe we are well positioned to provide these
services as a result of our:
- large and geographically diverse network of distribution service centers in major oil and gas producing
areas;
- strong relationship with a large community of industry suppliers;
- knowledge of customers procurement processes, suppliers capabilities and products performance; and
- information systems that offer customers and suppliers enhanced capabilities.
In addition, the integration of our distribution expertise, extensive network and growing base of customer alliances
provides an increased opportunity for cost-effective marketing of our manufactured parts and equipment.
Continuing our Acquisitions Strategy
We believe the oilfield service and equipment industry will continue to experience consolidation as businesses seek
to align themselves with other market participants in order to gain access to broader markets and integrated product
offerings. From 1997 through January 2003, National Oilwell has made a total of thirty-two acquisitions and plans
to continue to participate in this trend.
OPERATIONS
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, traveling equipment and rotary tables. 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. 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 systems, 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.
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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 solutions for offshore rigs.