HIGH-TECH DIMENSIONS OF ENERGY

Piotr GalitzineChairman, TMK IPSCO

USRBC Annual Meeting

October 21, 2010

2

TMK Global Strength

o 22 production sites

o 46,000 employees

o 6.4M tons of pipe-making capacity

o ~ $5 billion annual revenue

3

3

The United States and Russia are the global leaders in oil and gas drilling.

TMK’s product mix is geared to meet the needs of the energy industry. Line Pipe

32%

OCTG38%

Industrial30%

Energy

70%

TMK’s strategic positioning made it the steel tubular industry leader in 2009, selling over 3 million tons in a down market.

0

1,000

2,000

3,000

4,000

5,000

6,000

2007 2008 2009 Sep 09 - Aug 10 Aug-10

Sch

lum

berg

er R

ig C

ount

United States Russia CIS (Excl Russia)

Latin America Asia Pacific Middle East

Canada Africa Europe

53%47%

55%55% 50%

TMK Uniquely Positioned to be the Leading Supplier of Energy Tubulars

4

Top 5 States = 76% of Rig

Count

TMK IPSCO Poised for Growth

Today drilling is centered on the

shale plays which are believed to

contain as much as a third of the

United States’ technically

recoverable gas resources.

Source: EIA Modern Shale Gas Primer, April 2009

Smith Technologies

U.S. Rig Count

TX

LA

OKNDPA

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007 Avg 2008 Avg 2009 Avg YTD Aug-10 Avg

5

Increasing Rig Productivity

22%

31%

63%

49%

19,500

20,000

20,500

21,000

21,500

22,000

22,500

23,000

500 1,000 1,500 2,000

U.S. Natural Gas Rig Count

U.S

. N

atu

ral

Gas

Mar

kete

d P

rod

uct

ion

(i

n b

cf)

2007

2008

2009

2010EDriven by technological advances in horizontal drilling and hydraulic fracturing, the natural gas industry has become more efficient—producing more natural gas using fewer rigs.

Source: EIA Short-Term Energy Outlook, Smith Technologies

Today’s Energy Environment New Market Dynamics

Since no increase in natural gas consumption is part of the Short-Term Energy Outlook, the natural gas rig count may never return to 2007 – 2008 levels.

End of Period Natural Gas Inventories

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

in b

illi

on

cu

bic

fee

t

5 Yr Min 5 Yr Avg 5 Yr Max 2010F 2011F

6Source: EIA Short Term Energy Outlook, Credit Suisse

The industry has traditionally viewed $5 to $6 as the economic drilling price of gas, but a recent Credit Suisse study estimates

surprisingly low break-even costs for the major shales.

Today’s Energy Environment Lower Break-even Costs Encouraging Drilling

Lower break-even costs will allow the higher rig count to continue despite lower natural gas price forecasts.

Henry Hub Spot Price

2

4

6

8

10

12

14

Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011

Actual Sep STEO

Aug STEO Jul STEO

dollars per MMBtu

8

7

Aquifer

¼ mile radius

5,0

00

– 1

0,0

00

ft

8,000 – 12,000 ft

Multiple fraczones

ULTRA - SF

Hydrofracturing:3,000 psi/5,000 psi/25,000 psi

Frequency:10X/25X

Hydrofracking

8

Steam out

Oil In

Two Staged Pairs(Initial)

Two Staged Pairs(final)

With Wedge Well

SAGD Pair (side view)

Advances in Steam Assisted Gravity Drained (SAGD) Wells

(e.g., Cenovus Energy Inc., Calgary)

Wedge Wells

9

Oil In

Slot-Sawing: Another approach to increasing flow pathwaysin the zone of hydrogen recovery

Cutting Cable

Slit Area

10

U.S. Rig Targets by Year

1,416 1,500

797959

310400

282

468

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007 Avg 2008 Avg 2009 Avg YTD Aug-10 Avg

Gas Oil Other

U.S. Oil Rig Count by State

3765

50

82 94 99107 116 123

136136

0

100

200

300

400

500

600

2007 Avg 2008 Avg 2009 Avg Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10

Source: Smith Technologies Rig Count

Today’s Energy Environment Oil Driving Growth in Rig Count

32%

26%

21%18%

TX

ND

KSOK

NMTop 5

States = 83% of oil rig count

Both the oil and gas rig counts have rebounded in 2010, but on the back of high crude oil prices, the oil rig count has grown to levels unseen since 1991.

The technologies pioneered in the gas shales have been used to unlock the oil shales. The Bakken shale of North Dakota has a 96% horizontal rig count.

11Source: Company estimates

Competitors continue to announce tubular and finishing capacity additions over the next two years. By the end of 2012, North America will potentially have enough capacity to support 2,400 rigs.

New Challenges North American Capacity Increasing

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Henry Hub Monthly Average Comparison2006 - 2011F

$0

$2

$4

$6

$8

$10

$12

$14

2006 2007 2008 2009 2010F 2011F

$ p

er M

MB

tu

WTI Crude Oil Monthly Average Comparison2006 - 2011F

$0

$20

$40

$60

$80

$100

$120

$140

$160

2006 2007 2008 2009 2010F 2011F

$ p

er b

arre

l

Source: EIA Short-Term Energy Outlook, September 2010

The EIA has held the crude oil and natural gas price forecasts in the same range as 2010.

2011 Early Outlook Commodity Prices Resembling 2010

Oil prices remain stronger than recent years while natural gas prices are lower due to the large supply of accessible shale gas.

15

13Source: New York Times, EIA

2011 Early Outlook Canadian Oil Sands Gaining Momentum

U.S. Top 10 Sources of Crude Oil Imports - 2009(in thousands of barrels per day)

0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000

Canada

Mexico

Saudi Arabia

Venezuela

Nigeria

Angola

Iraq

Brazil

Algeria

Columbia

Oil Sands21%

12%

11%

3%

3%

Today Canada is the source of over 20% of U.S. crude oil imports; it’s estimated that half of Canadian imports come from the oil sands. The IHS Cambridge Energy Research Associates project that the oil sands will account for 36% of U.S. oil imports by the year 2030.

Today, four Latin American

countries supply another 30% of U.S. crude oil

imports. . .

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TMK IPSCO has a demonstrated ability to engineer customized solutions allowing our customers to access new markets like the shale plays. Our team of technical experts is continually working to provide the best value in pipe and premium connections to the energy industry as it evolves.

TMK IPSCO’s 2011 Outlook Innovative Solutions Driving Growth

Barnett Haynesville Woodford Marcellus Fayetteville

The shale drilling "training ground"

The deepest, hottest, highest pressure shale

Aggressive drilling, high productivity

The most expansive shale

Currently the 2nd most productive

shale

API ULTRA-SF ULTRA-FJ ULTRA-FJ ULTRA-SFULTRA-DQX ULTRA-DQX

Production API L80 API P110 API P110 API P110 API P110casing grade API P110 HC-P110 HC-P110 HC-P110 HC-P110

CYS 100

Casing O.D. and 4 1/2" 11.6# 4 1/2" 15.1# 4 1/2" 15.1# 5 1/2" 17.0# 5 1/2" 17.0#thickness 5 1/2" 17.0# 5" 23.2# 5" 23.2# 5 1/2" 20.0# 5 1/2" 20.0#

5 1/2" 23.0#

Connection

15

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

'95 '09

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

'95 '09

Coal

Nat GasPetroleum

RenewablesNuclear

48%

22%

22%

18%

The EIA’s Annual Energy Outlook predicts that by the year 2035, coal will still comprise 22% of U.S. energy consumption while renewables grow from 7 to 11%.

Sources: EIA May 2010 Monthly Energy Review, Annual Energy Outlook 2010

Natural gas is the cleanest-burning fossil fuel, emitting half the pollutants of coal. Given the current political and economic climate, there is much incentive for increased use of natural gas as the “bridge fuel.”

Electric Power Consumption

in trillion Btu

CO2 Emissions - Electric Power

in millions of metric tons

11%

1%

Coal22%

Liquids34%

Nuclear8%

Natural Gas22%

Renewables11%Biofuels

3%

TMK IPSCO’s Long-term Prospects Natural Gas – The Key to a Greener Future

TMK IPSCO:Committed to Grow with the Energy Industry