CELEBRATING 50 YEARS OF VAM PREMIUM CONNECTIONS P.4 A HISTORY BUILT ON TECHNOLOGICAL AND ECONOMIC CHALLENGES

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1 P.4 A HISTORY BUILT ON TECHNOLOGICAL AND ECONOMIC CHALLENGES P.8 INNOVATION: A STRATEGIC PRIORITY FOR VAM P.12 PROXIMITY AND SERVICES: TWO REASONS FOR THE LONGEVITY OF VAM P.14 OUTLOOK AND FUTURE CHALLENGES IN A CONSTANTLY CHANGING MARKET CELEBRATING 50 YEARS OF VAM PREMIUM CONNECTIONS Press kit

2 03 WE HAVE CONNECTED MORE THAN JUST TUBES: WE HAVE BROUGHT TOGETHER PEOPLE, COUNTRIES, AND PROJECTS. Editorial DIDIER HORNET, SVP Eastern Hemisphere "In 1965, Alexandre Madrelle and his team designed the VAM joint, a revolutionary innovation which gave a sea ability that had never been achieved before. Since then, product has become a brand which has 30 patented pro ranges. We are constantly innovating so that we can design solutions to meet the ever more complex needs of our customers. Our success is based on a solid balance between our global presence, which enables us to benefit from an unrivaled strike force, our unique expertise, which is based primarily on the constant development of our R&D capacity, and our understanding of our customers' needs, which relies on our close proximity to them and a precise knowledge of their supply chains. This culture of cooperation and these assets have enabled us to be at the heart of our customers' operations and to continuously create value for them. We were, for example, the first on the premium connections market when VAM was developed 50 years ago to exploit the deposits in Lacq in France, the first to develop solutions that were suitable for the pre-salt fields in Brazil, and also the first in unconventional deposits in the USA. As well as these technical and technological achievements, with VAM we have connected more than just tubes: we have brought together people, countries, and projects. These "meaningful connections," which is the theme for the 50th anniversary of VAM, are actual individual accounts of the success of our model and the value that we are building with and for our customers. At a time when the market, which is always evolving, is today more demanding than ever, premium connections and human connections must continue to go hand-in-hand. This is an essential issue that will allow us to continue meeting our customers' challenges particularly those relating to safety, the environment and cost reduction by adhering to our values of premium quality, competitiveness, proximity and collaboration."

3 04 A HISTORY BUILT ON TECHNOLOGICAL AND ECONOMIC CHALLENGES For 50 years, VAM has supported the development of the oil and gas industry. In order to keep up with the increasingly demanding challenges our customers face, Vallourec develops specific solutions that continue to set the bar of excellence higher and higher. THE 1960s-1970s VALLOUREC ENTERS THE PREMIUM JOINT MARKET The VAM adventure started with the Société Nationale des Pétroles d Aquitaine (SNPA, formerly Elf Aquitaine, now Total) which was exploring for gas in Lacq in southwestern France a deposit with such a high concentration of sulfur that at the time it was not thought to be very viable. As a result, sealed connections capable of performing in a highly corrosive H2S environment had to be developed and special types of steel had to be designed. Alexandre Madrelle, an engineer at Vallourec, and his team took up the challenge and came up with the idea of combining a coneshaped sealing surface with a stop inclined at a negative angle which would increase the tightness of the metal seal. This was the very first VAM. THE 1980s VAM BECOMES A GLOBAL STANDARD While the innovation work continued in product design, Vallourec adopted a policy to develop its licensee network to ensure that there would be one single and unique quality standard everywhere in the world. The license given to British Steel in 1973 (which Vallourec subsequently acquired in 1994) marked a turning point as it enabled Vallourec to access the North Sea market, which at the time was considered the most technical market. VAM then came to the attention of major national and international oil and gas companies, a key step in offshore development. Key dates: 1983: NEW VAM, the second generation of VAM joints 1984: creation of VAM PTS (now called VAM USA) with the acquisition of a threading plant in Houston, Texas as a joint venture with Sumitomo (now NSSMC). 1985: R&D agreement with Sumitomo Key dates: 1965: first VAM patent 1976: VAM FJL TM, the first integral joint

4 06 A NEW TECHNOLOGICAL CHALLENGE WITH HIGH PRESSURE/HIGH TEMPÉRATURE DEPOSITS It was in the North Sea that the first High Pressure/High Temperature (HP/HT) deposits were developed. At the time, these wells were considered impossible to operate because they were too dangerous. So the first VAM HW TM (Heavy Wall) was designed to withstand pressures which could get up to 1,000 bars. These extremely critical wells encouraged customers to systematize the qualification tests. Vallourec was the first company to work with the major companies to develop these test protocols. At the end of the 1990s, the qualification tests were formalized with the API (American Petroleum Institute) standard. The test conditions led Vallourec, in collaboration with Sumitomo, to develop the VAM TOP, which is today the most widely used premium connection in the world. Key dates: 1990: VAM TOP, the most widely used threaded and coupled connection in the world 1995: VAM SLIJ II TM, the new standard in semi-flush 1997: joint venture with Mannesmann, which enabled VAM to double its production capacity and enter the Brazilian market 1999: VAM HPTM, the first connection specifically for HP/HT wells. SINCE 2000 EVER MORE DEMANDING TEST CONDITIONS WHICH LED TO THE CREATION OF VAM 21 TM The deep offshore created new conditions, particularly in the pre-salt area in Brazil: wells that are 7,000 m deep, approximately 2,000 m of water, and up to 2 km of salt layers to penetrate conditions that are especially critical since the pressures generated at these depths can damage the tubes. The requirements in terms of pressure and resistance to compression increased. The VAM 21 TM is a very high-end product which complies with the most stringent standards and can be used in the most critical of conditions: HP/HT in the North Sea, very deepwater offshore in the Gulf of Mexico, the pre-salt fields of Brazil, deep offshore in West Africa, particularly in Angola, and developing HP/HT wells in southeastern Asia, particularly in Malaysia. THE 1990s Key dates: 2001: VAM TOP FE TM, the first joint for riser towers 2007: VAM Express TM, a high-performance connection for drill strings 2008: VAM 21TM, the most advanced high-tech solution

5 8 INNOVATION, A STRATEGIC PRIORITY FOR VAM Since the first VAM patent was filed 50 years ago, Vallourec has made innovation one of the main focuses of its strategy. In 2014, the Group invested 95.7 million in research and development. Vallourec has a total of three VAM connection development and test centers in France, the USA and Indonesia, and will soon have a new VAM test laboratory in Brazil, and six R&D centers in France, Germany, Brazil and the USA. R&D DEVELOPMENT IN CLOSE CONTACT WITH MARKET NEEDS Until 2008, R&D activity was based in France, in Aulnoye-Aymeries, where all design projects were carried out. Customer qualification tests were, however, shared between France and the USA. Following Vallourec's merger with the premium connection company Atlas Bradford, the American R&D team was integrated into the Group and the research center in Houston was strengthened. This was an opportunity for VAM to develop its presence in the shale gas market, which at the time was growing rapidly in the region, with innovative products to meet the specific conditions encountered by customers at these wells. It was also an opportunity to provide solutions for the major companies in the Gulf of Mexico, which needed custom-made products for their particularly complex offshore projects. LEADING R&D PARTNERS Successful synergies developed with a number of partners have enabled the Vallourec group to maintain its technological progress. The Group develops R&D programs with leading partners in their areas of business, whether they are manufacturers, suppliers, customers or university laboratories, and this is the case all around the world. A few examples of partnerships: LONG-STANDING PARTNERS NSSMC for the development of VAM connections Tubacex for the development of stainless steel The Salzgitter Mannesmann Forschungsinstitut in Duisburg, a longstanding research partner for improving production processes. CUSTOMER PARTNERSHIPS As R&D is a process of continuous communication with customers, the Group works closely with some customers to develop solutions that meet their own operational needs. Petrobras : development of solutions for the pre-salt fields off the coast of Brazil Total: premium connections for HP/HT wells BP: drill pipes for horizontal drilling, tubes, and connections for riser towers UNIVERSITY PARTNERSHIPS Finally, Vallourec participates in basic research with several university laboratories around the world. Mines ParisTech (France) RWTH Aachen University (Germany) Carnegie Mellon (USA) Universidade de São Paulo (Brazil)

6 10 NEARLY 30 PATENTED PRODUCT RANGES 6 R&D CENTERS IN FRANCE, GERMANY, BRAZIL AND THE USA 3 TEST CENTERS: AULNOYE-AYMERIES (FRANCE), HOUSTON (USA), BATAM (INDONESIA) MORE THAN 500 R&D ENGINEERS AND TECHNICIANS AROUND THE WORLD A KEY CHALLENGE: TO RECREATE PHYSICAL CONDITIONS TO GUARANTEE EXCELLENCE Because the conditions that oil and gas stakeholders have to work with are ever more demanding, the Group has invested more and more heavily in test centers where each new product range can be developed and tested. VAM test center in Aulnoye-Aymeries (France) The development work carried out at the center focuses on the design of premium threaded connections, the development of proprietary steel grades, and the industrialization of threading lines. It is supplemented by capacity for full-scale testing where the sealing of the VAM connections is tested in the most extreme conditions. In January 2014, Vallourec announced its decision to expand its VAM connection development and test center in Aulnoye-Aymeries in France's Nord department in order to double its capacity VAM test center in Houston (USA) The expansion of the VAM connection test center in Houston is designed to meet the increased demand for certification to demonstrate compliance with new standards which cover the most extreme well conditions. The work focuses specifically on testing products for exploiting shale hydrocarbons and on offshore projects for the Gulf of Mexico. This test center will enable Vallourec to double its R&D capacity dedicated to designing and testing its premium connections in the USA. 1. VAM test center, Aulnoye-Aymeries (France) 2. VAM test center, Houston (USA) VAM test center in Batam (Indonesia) Vallourec also has capacity for testing in Indonesia via its subsidiary PT Citra Tubindo (PTCT), which carries out the heat treatment and threading of OCTG tubes and VAM connections for the Indonesian and Asia-Pacific markets. 3. VAM test center, Batam (Indonesia) 4. VAM test center, Belo Horizonte (Brazil) VAM test center in Belo Horizonte (Brazil) The VAM test center in Belo Horizonte will be operational end of 2015 and will primarily serve Petrobras needs.

7 12 PROXIMITY AND SERVICES: TWO REASONS FOR THE LONGEVITY OF VAM Whatever the needs of the customer, VAM provides a comprehensive solution that includes products, services, technical assistance and a distribution network that covers the whole world, wherever our customers are operating. THE VAM FIELD SERVICE: ENGINEERS ON THE GROUND 7 DAYS A WEEK, 24 HOURS A DAY The VAM Field Service has a team of nearly 230 site engineers who can be contacted at any time to go to platforms and install our products. The engineers ensure that the VAM connections are working correctly and ensure well integrity. So that they can be as close as possible to their customers, VAM Field Service centers are located everywhere in the world: Great Britain, USA, Canada, Mexico, Brazil, the Netherlands, Nigeria, Angola, United Arab Emirates, Saudi Arabia, Azerbaijan, China, Singapore, Indonesia, India and Australia. VAM AUDITORS GUARANTEE THE QUALITY OF THE LICENSEE NETWORK Today there is a network of more than 200 licensees which ensures that VAM connections and accessories meet the same quality standard in all countries around the world. Vallourec has implemented a system that works to qualify, inform, train and conduct regular quality audits with a dedicated team of VAM auditors. 50 INDUSTRIAL SITES FROM STEEL MILLS TO FINISHING UNITS 11 VAM FIELD SERVICE CENTERS WITH MORE THAN 230 ENGINEERS WHO ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK TO ENSURE THAT THE VAM CONNECTIONS ARE WORKING CORRECTLY AND TO ENSURE WELL INTEGRITY A GLOBAL SALES FORCE AND A GLOBAL NETWORK OF TECHNICAL SALES TEAMS. MORE THAN 200 VAM LICENSEE PARTNERS TO ENSURE THE SAME QUALITY STANDARD IS USED BY ALL PARTIES

8 14 OUTLOOK AND FUTURE CHALLENGES IN A CONSTANTLY CHANGING MARKET Today, the market is influenced by two opposing trends. The first is the end of the "easy oil" days, which will mean customers developing in areas that are increasingly difficult to exploit. And the second is an increasing need to reduce costs in order to cope with a market where barrel prices have dropped. The development of VAM aims to find solutions for these two trends. TWO SEGMENTS TO ADDRESS: THE «BARE ESSENTIALS» SEGMENT AND THE VERY HIGH-END SEGMENT In the effort to reduce costs, the trend is to standardize products wherever conditions so permit. Customers want to be offered "bare essential" products that are perfectly suited to the conditions of their wells. In addition, customers in this segment pay close attention to those solutions that make it possible to reduce stock levels or speed up time frames. However, the critical high-end market is also at the heart of the challenges facing the industry. This involves being able to develop custommade solutions and at the same time being able to adapt the tubes and connections to meet ever more advanced technological requirements. VAM PRIORITIES FOR CURRENT AND FUTUR NEEDS In order to address this apparent contradiction, Vallourec relies on its key assets, namely its capacity for innovation, its integrated approach from supplier to operator, and the way it operates in partnership with its customers to create a win-win situation for all. This comprehensive approach also enables the Group to optimize and continuously reduce its customers' Total Cost of Ownership (TCO). The Group also aims to offer its customers environmentally friendly solutions. This is the rationale behind the CLEANWELL range of products. Instead of using greases, this product range contains a non-polluting coating for threaded connections that also provides effective protection against jamming and corrosion. This group of coatings is being expanded so that it can be used in a wide range of different products. Finally, improving the supply chain by working on traceability is essential, and this is one of Vallourec's main priorities. The idea is to be able to monitor exactly where the tubes are and track their operating status in real time as a way of meeting our customers' needs as much as possible.

9 VAM : 50 YEARS OF «MEANINGFUL CONNECTIONS» For 50 years, VAM premium connections have been connecting more than just tubes: they connect men, women, projects, and countries. To celebrate the 50th anniversary of these meaningful connections, our customers, employees, and partners around the world are invited to share what VAM has meant for them and to tell their stories of the human and business connections generated over the years. "Our VAM stories" is a collaborative web platform, running throughout 2015 and open to contributions from all who have played a part in the history of VAM. It is an opportunity to illustrate the long-term relationships of trust that Vallourec has built with its customers and partners. But it is also an opportunity to show the commitment of our employees to foster the Group's values: innovation, excellence, proximity, networking, and confidence. Read the stories at PRESS CONTACT Héloïse Rothenbühler Media relations manager Tel.: +33 (0) heloise.rothenbuhler@vallourec.com VAM is a registered trademark of the Vallourec group.