Media Center

TMK Announces Production Results for 2006

OAO ТМК (TMK), one of the world’s largest oil and gas pipe producers, and the market leader of the Russian pipe industry, today announces its production results for 2006.

The total volume of pipes shipped [1] reached an all-time high of 3,018,000 tonnes . Shipments of billets were 320,000 tonnes.

Shipment Volumes in 2006

(Thousand Tonnes)

Pipe shipments increased by 94,000 tonnes or by 3.2% over 2005 with high-tech, seamless pipes experiencing the highest levels of growth. OCTG shipment increased by 16.7% on the previous 12 months and the total share of OCTG shipments in 2006 increased by 3.6% to 31.6%. Shipments of seamless pipes in 2006 accounted for 64.4% of the Company total, compared with 64.2% in 2005.

Despite lower shipment volumes of large-diameter welded pipes, as a result of the ongoing modernisation program, total sales of welded pipes increased in 2006. TMK shipments of industrial welded pipes were 18.1% higher than in 2005.

Amidst a favourable environment for the world pipe industry, TMK increased its share of the total number of pipes exported from Russia from 48.8% to 56.1%. The total volume of pipes supplied by the Russian subsidiaries of the company in 2006 to non-Russian customers was 806,000 tonnes, which exceeded the volume in 2005 by 56,000 tonnes.

Within the framework of TMK’s program to achieve self-sufficiency in billets, TMK produced 2,150,000 tonnes of steel in 2006. The Company is continuing to successfully implement its strategic investment program. In 2006 two continuous casters of one million tonnes capacity each were put into operation at Seversky Pipe Plant and Taganrog Metallurgical Works. As a result of these measures, self-sufficiency in billets will reach 90% in 2007.

In 2007 TMK will also continue upgrading its high value-added, seamless pipe production capacities. The share of Premium tubular goods of the total shipment volume in 2006 accounted for approximately 23%.

Measures taken to upgrade production capacities during 2006 were performed on time and in accordance with the approved budgets. Currently, approximately 30% of the strategic investment program, which runs until 2010, has been financed.

TMK’s CEO Mr. Konstantin Semerikov said, “In 2006, TMK undertook large-scale works aimed at upgrading production and mastering new technologies, and simultaneously increased shipment volumes, particularly in the high value-added segment. We are confident that we have the capabilities and infrastructure in place for further successful development”.

[1] Shipments are goods produced and shipped from the plants for the sale to third parties (excl. intra—group deliveries)