4.4.Strategy and
priority activities
In accordance with the strategy approved by the Board of Directors, TMK main areas of activity are production and sales of tubular products in the Russian, American and European markets.
In 2015, we had to operate in a challenging macroeconomic environment due to falling oil prices, the depreciating Russian currency and an adverse situation in the US pipe market. Imports of seamless OCTG were down from 23% to 9%, while TMK increased its market share from 61% to 65%. An even more significant success was achieved by the Company in the premium connections market, where our market share grew from 65% to 75% in 2015. The domestic demand for TMK products remains solid. Production rates in the Russian oil industry grew to a record high of 10.73 million barrels per day, while drilling activity increased 12% year-on-year.
We continue the implementation of our import substitution initiatives. One example is an agreement we signed with Gazprom (valid until 2023) for the replacement of imported products used in gas field production for a total amount of 101 thousand tonnes. We also continue our involvement in Gazprom’s projects related to gas supplies to China.
TMK completed the implementation of key phases under the Strategic Investment Programme, which enabled the Company to evolve into one of the most advanced production platforms in the global pipe market.
Our current strategic goals include:
- Capex reduction
- Performance improvement
- Opex reduction
- Deleverage to the level of Net Debt / EBITDA at 2.5x
- Product mix improvement, with a focus on high value-added products
- New premium product development and sales, with a view to import substitution in Russia’s oil and gas industry and increase in the share of premium products in OCTG pipe shipments to over 30% by 2018 and
- Enhancement of oilfield services.
Despite an adverse situation in the US oil & gas and pipe markets, we intend to maintain our presence in this region. Our key focus will be on the seamless OCTG segment, and on premium connections for gas and oil fields.