The price of oil has plunged since its high of $147/ barrel last July, but demand for oil exploration has held steady. Shell Oil, for instance, is spending over $30 billion for drilling and exploration this year, while ExxonMobil and BP are both raising their expenditures from a year ago.
For companies like Forge USA, a Houston-based open-die forge shop, this means big business. But it also demands an increased capacity to handle the workload.
Forge USA recently opened a new machining and heat-treatment facility in Brookshire, TX. The 92,000 square foot complex houses both operations, including three 70-foot wide bays that house 10-ton and 30-ton cranes, respectively. Two of the bays are specialized toward heavy machining, while the third is designed for heat treatment. The facility is also ISO 9002 certified.
Forge USA, which employs 35 full-timers, specializes in large open-die forgings, generally weighing as much as 25 to 30 tons. The bulk of these forgings are supplied for oil exploration and oil-field production equipment, for both offshore and on-shore applications. Forge USA chairman Jerry Brougher estimates that 70 percent of the company’s work is for the oil and natural gas sector, with the remaining volume going toward general industrial machinery, steel mill equipment, and pressure piping.
“In the recent past, there was a huge demand for everything,” says Brougher. “The sub-contract base was not as responsive as it should have been. So we felt the need to have that schedule-control ability.”
Equally important, Forge USA’s customers were demanding shorter supply chain times. For example, the massive cash investments required by oil companies for sea drilling projects are reduced considerably if all the necessary equipment can be made available early in the process.
“There is a lot of pressure on suppliers to become what I call ‘schedule capable’,” says Brougher. “That means, you can meet tighter schedules, you have the quality background, and the confidence of the purchaser, to know that the equipment will have the quality and can be delivered quickly. We consider that ability to be a great competitive weapon.”
Forge USA has traditionally possessed its own heat-treatment operation, but until recently, it wasn’t of sufficient capacity to handle an increased workload. The new facility will allow the company to heat treat all of its forgings in-house, with several long furnaces that can to handle 36 foot long pieces to both quench-and-temper and oil or polymer.
The design criteria of Forge USA’s work puts a premium on heavy machine tools. For years, the company has aggressively scoured the worldwide usedtool market for the best items, refurbishing horizontal mills, horizontal and vertical lathes and large planer mills.
“If you look around today, people are not making those big, heavy machine tools with a lot of horsepower,” says Brougher. “We just got this big Ingersoll mill and it’s a very extensive rebuild job. But we’ll have a brand-new machine when we get through it. That’s the course most people who want high horsepower equipment are having to take these days.”
Though the price of oil and gas continues to be a market- focused debate, the long-term demand for the commodities is without question. And for Forge USA, that means many more orders of specialized tube forgings.
“This is sort of the beginning,” says Brougher. “We put more square feet in the building than we need now. And we’ve already started expanding the number of machine tools. We’re installing another CNC horizontal boring mill as we speak. And, we haven’t even gotten the plant up to full production yet. What this will allow us is the ability not only to offer a quality product on time, but we can do it very economically and in large quantities.”