Sumitomo Corporation Contributes to Maintaining a Stable Energy Supply through its Oil Country Tubular Goods Business

Concentration of about 60% of the world's crude oil reserves

Various studies indicate that about 60% of the world's proven crude oil reserves is concentrated in the Middle East. It is no exaggeration, therefore, to say that the global energy supply is largely dependent on the stability of the handful of Middle Eastern countries that constitute the world's largest crude oil producers. Concerns are often raised about the possibility of the world's crude oil running out in the near future. Given the current rate of production, however, most Middle Eastern crude oil reserves are expected to last for at least another century, and above all, Iraq's should hold out for the next 300 years or more. This means Middle Eastern countries will retain their powerful position on the world stage for years to come.

Sumitomo Corporation plays a role in maintaining the stable supply of energy coming out of the Middle East through its oil country tubular goods (OCTG) business. OCTG are the pipes used to draw underground oil and gas to the surface. Buried deep under the ground and subjected to unimaginable pressure, they have to be extremely tough. Since subterranean conditions widely differ from place to place, the pipes must also be customized according to their specific purpose, the location and the particular needs of the customer. OCTG operations are therefore heavily dependent on both personnel with high technical skills and on high quality products.

By successfully meeting with or exceeding these kinds of stringent requirements, Sumitomo Corporation has managed to make significant achievements in the OCTG industry.

Implementing a supply chain management system that enables comprehensive provision of high quality services

With headquarters in Tokyo and major sales bases in America, Britain, Singapore, Dubai and China, Sumitomo Corporation has provided the global market with a wide variety of OCTGs based on its original supply chain management (SCM) system.

Sumitomo's global exports consist of CRA (high alloy) and other high-quality OCTG chiefly manufactured by Sumitomo Metal Industries, Ltd. Well management covers a number of elements, such as just-in-time deliveries, proper maintenance & inspection, inventory control of OCTG along with numerous numbers of accessories, all of those are performed based on careful estimation and monitoring of OCTG demand forecasts as well as well conditions. Sumitomo Corporation has developed an SCM system that provides comprehensive well management services tailored to the diversified needs of customers. The company's unrivaled know-how has consistently brought about a high level of customers trust.

One example of the successful implementation of Sumitomo's SCM system is in Oman, a mid-scale oil-producing Middle Eastern country where oil development used to be conducted by Petroleum Development Oman. It was said that that the question of how to effectively control their OCTG inventory was still open, with countless pipes being left unused in the desert.

Sumitomo Corporation brought in its SCM system in 2002 to provide comprehensive services, including inventory control, and since then has made a significant contribution to oil development in Oman. Similar examples can be found in 14 sites around the world. The company's collective expertise has been brought together in an SCM promotion outfit established in Houston, the United States, and utilized in numerous ways in SCM projects implemented all over the world.

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