National Oilwell Varco 2012 Annual Report Download - page 9

Index to Financial Statements
Derricks and Substructures. Drilling activities are carried out from a drilling rig. A drilling rig consists of one or two derricks; the substructure that supports the derrick(s); and
the rig package, which consists of the various pieces of equipment discussed above. Rig Technology designs, fabricates and services derricks used in both onshore and
offshore applications, and substructures used in onshore applications. The Rig Technology segment also works with shipyards in the fabrication of substructures for offshore
drilling rigs.
Instrumentation. The Companys Instrumentation business provides drilling rig operators real time measurement and monitoring of critical parameters required to improve rig
safety and efficiency. In 1999, the Company introduced its RigSense ® Wellsite Information System, which combines leading hardware and software technologies into an
integrated drilling rig package. Access of drilling data is provided to offsite locations, enabling company personnel to monitor drilling operations from an office environment,
through a secure link. Systems are both sold and rented, and are comprised of hazardous area sensors placed throughout the rig to measure critical drilling parameters; all
networked back to a central command station for review, recording and interpretation. The Company offers unique business integration services to directly integrate
information into business applications that improves accuracy and assists drilling contractors in managing their drilling business. Reports on drilling activities and processes
are now provided from the rig site as a part of the DrillSuite business solution to allow contractors to streamline administration by eliminating manual entry of data, promotes
accurate payroll processing and invoicing, and includes asset tracking and preventive maintenance management through its RigMS solution. The real time information
provided also allows the Company to advance the drilling process using advanced drilling algorithms and electronic controls such as our Wildcat Auto Drilling System for
better execution of the well plan, enhanced rates of penetration, reduced program costs, and improved wellbore quality. Complementing the Companys surface solutions is a
portfolio of Down-Hole Instrumentation (DHI) products for both straight-hole and directional markets. Key advancements in this area include the introduction of the
Companys time saving ETotco Electronic Drift Recorder, which serves as an electronic equivalent to the traditional mechanical drift tool that the Company has offered
since 1929.
Coiled Tubing Equipment. Coiled tubing consists of flexible steel tubing manufactured in a continuous string and spooled on a reel. It can extend several thousand feet in
length and is run in and out of the wellbore at a high rate of speed by a hydraulically operated coiled tubing unit. A coiled tubing unit is typically mounted on a truck,
semi-trailer or skid (steel frames on which portable equipment is mounted to facilitate handling with cranes for offshore use) and consists of a hydraulically operated tubing
reel or drum, an injector head which pushes or pulls the tubing in or out of the wellbore, and various power and control systems. Coiled tubing is typically used with
sophisticated pressure control equipment which permits the operator to perform workover operations on a live well. The Rig Technology segment manufactures and sells both
coiled tubing units and the ancillary pressure control equipment used in these operations. Through its acquisition of Rolligon in late 2006, the Company enhanced its portfolio
by adding additional pressure pumping and coiled tubing equipment products.
Currently, most coiled tubing units are used in well remediation and completion applications. The Company believes that advances in the manufacturing process of coiled
tubing, tubing fatigue protection and the capability to manufacture larger diameter and increased wall thickness coiled tubing strings have resulted in increased uses and
applications for coiled tubing products. For example, some well operators are now using coiled tubing in drilling applications such as slim hole re-entries of existing wells.
The Company engineered and manufactured the first coiled tubing units built specifically for coiled tubing drilling in 1996.
Generally, the Rig Technology segment supplies customers with the equipment and components necessary to use coiled tubing, which the customers typically purchase
separately. The Rig Technology segments coiled tubing product line consists of coiled tubing units, coiled tubing pressure control equipment, pressure pumping equipment,
snubbing units (which are units that force tubulars into a well when pressure is contained within the wellbore), nitrogen pumping equipment and cementing, stimulation,
fracturing and blending equipment.
Wireline Equipment. The Companys wireline products include wireline drum units, which consist of a spool or drum of wireline cable, mounted in a mobile vehicle or skid,
which works in conjunction with a source of power (an engine mounted in the vehicle or within a separate power pack skid). The wireline drum unit is used to spool
wireline cable into or out of a well, in order to perform surveys inside the well, sample fluids from the bottom of the well, retrieve or replace components from inside the well,
or to perform other well remediation or survey operations. The wireline used may be slick line, which is conventional single-strand steel cable used to convey tools in or
out of the well, or electric line, which contains an imbedded single-conductor or multi-conductor electrical line which permits communication between the surface and
electronic instruments attached to the end of the wireline at the bottom of the well.
Wireline units are usually used in conjunction with a variety of other pressure control equipment which permit safe access into wells while they are flowing and under pressure
at the surface. The Company engineers and manufactures a broad range of pressure control equipment for wireline operations, including wireline blowout preventers,
strippers, packers, lubricators and grease injection units. Additionally, the Company makes wireline rigging equipment such as mast trucks.
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