Tenaris SA (NYSE:TS) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 10:00 am ET
we are well positioned with good visibility in Saudi Arabia, in the Emirates and Qatar, where we expect drilling activity to continue to be resilient despite lower oil and gas prices. In recent days, we have reached agreement for a two year extension on our long-term agreements with Enea [Phonetic], with Petrobras and with Pioneer. We were also awarded a one year extension on our Section 232 exclusion for the import of steel bar for our Bay City mills. While we advanced with the investment we are making in our Koppel steel shop in Pennsylvania so that it will be able to supply bars to be city starting from next year.
In the coming months, we will be focused on reducing cost and working capital and position the Company for an extended downturn and advancing with our long-term strategy. This includes digital integration of the supply chain with our customers, where we have made substantial progress in the past month. Through our direct -- Rig Direct portal, customer can directly load their order into our system, and today, 44% of Rig Direct call -- callout requests in the US are managed this way.
Through our PipeTracer tool, we provide pipe-by-pipe tracking and traceability, which allow for more efficient well planning and supply chain integration. We've reduced pipe handling and fuel inspection [Indecipherable]. We are advancing system integration with larger customers in the Permian, Colombia and Argentina. In response to pandemic, we have begun providing well integrity service remotely to offshore platform in the North Sea, the Gulf of Mexico and the Asia Pacific, and have reorganized our technical training service for online delivery. As customers seek further ways to reduce cost and streamline operations, they are looking on -- at how the digital integration can reduce cost in the supply chain.
Also, drilling activity may be starting to bottom out worldwide. The oil and gas industry continues to have a large overhang of inventories and production operation capacity, which will take an extended period of time to bring back into a more stable balance. Oil and gas companies have reduced capital budgets and are postponing projects, which will delay the recovery in drilling activity. In this environment, demand for our products and service will continue to be deeply affected through the rest of the year. Eventually, the oil and gas industry will need to resume investing at a faster pace to assure an adequate supply of energy to the world in its recovery from this crisis.
Thank you. We can now take your questions.