Hilong expects drilling gear, services to sustain full-year revenue growth
Focus on high-end services helped oil and gas drilling services firm to stay profitable, says company official
Hilong, the world’s second-largest producer of drill pipes, that saw its share price nearly double in September this year, is anticipating sharp growth in revenue from pipe sales and services during the second half of this year and next year.
The Shanghai-based company, which is also a major oil and gas drilling services provider, said recovering crude oil prices, a focus on high-end services and growing orders from Russia, contributed to the healthy outlook even though the wider oil and gas services sector still remains in the doldrums.
“Hilong’s recovery from the downturn has been quicker than that of the wider industry since we have focused on high-end services and established a good track record overseas,” Amy Zhang Shuman, Hilong’s company secretary told the Post in an interview.
Zhang expects Hilong’s full-year drill pipe sales to exceed 28,000 tonnes, up 40 per cent from last year. Pipe sales in 2017 are expected to exceed 31,000 tonnes, she said. During the first six months of this year the company’s pipe sales got an unexpected 150 per cent year-on-year boost to 13,559 tonnes, thanks to increased demand from Russian customers.
To encourage domestic production of oil and gas drilling equipment amid sanctions from western nations since Russia’s annexation of Crimea from Ukraine in 2014, Moscow has raised tariffs on imports and ordered state-owned oil and gas firms to pay a 10 per cent premium for domestically made or provided equipment and services, Zhang said.