RTI INTERNATIONAL METAL $12M oil-well contract brings good news
RTI's newest deep-water oil well project is in addition to sites in the Gulf of Mexico and the North Sea.
THE VINDICATOR, YOUNGSTOWN
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
WEATHERSFIELD -- RTI International Metals' new $12 million contract to produce equipment for an underwater oil well off the coast of Indonesia is good news for the company, a spokesman said, but not enough to offset a drop in its aerospace business.
Workers at RMI Titanium, a subsidiary of RTI, will produce the titanium for the deep-water well.
RTI Energy Systems in Houston, its sister company, designed the system and will fabricate the risers for Unocal Corp., a natural gas and crude oil exploration company based in El Segundo, Calif.
"We're trying not to isolate ourselves in one part of the world. We want to go wherever the business is," said Richard Leone, RTI spokesman.
"It's not a large amount of work for the Niles plant, but it's a good company and a new part of the world for us."
RTI pioneered the use of titanium for deep underwater drilling in 1995 when it landed a contract to produce equipment for the Conoco Hedron project in the North Sea. Leone said the RTI project was "the world's first titanium high-pressure riser."
Other areas: Since then, RTI also has designed and produced titanium equipment for oil-drilling rigs on the Gulf of Mexico, and RTI Energy Systems has sales representatives working to find more, new underwater uses for the metal.
Titanium often is favored for deep-water drilling, Leone explained, because it is lighter, stronger and more flexible than steel and other metals. "They start to look to titanium when they get into deeper water," he explained.
Leone said the well for Unocal's West Seno Project is about 3,000 feet deep.
RTI engineers designed a system combining steel and titanium for the project, he said, because it will suit the conditions there, and the addition of steel will make the equipment more affordable.
Weathersfield-based RTI just completed its first quarter March 31. Its quarterly report to the federal Securities and Exchange Commission hasn't been released, but the company had projected lower earnings for its titanium division because of weakening aerospace markets.
What's down: Leone said he could not comment specifically on the first-quarter results, but he said the $12 million oil well pact won't be enough to make up for the drop in commercial aerospace orders the company has suffered since Sept. 11.
RTI gets about 40 percent of its business from the aerospace industry, about 30 percent from defense contracts, and the rest from gas and oil wells, consumer products like golf clubs, and other uses.
The company's stock is traded on the New York Stock Exchange under the RTI symbol. It closed at $11.85 Tuesday, up 15 cents from Monday's close.