Summary of 2009 Third Quarter Results

(Comparison with second quarter of 2009 and third quarter of 2008)

                               Q3 2009      Q2 2009           Q3 2008
                               -------  ----------------- -----------------
Net sales (US$ million)        1,771.5  2,096.3     (15%) 3,074.0     (42%)
Operating income (US$ million)   360.6    436.8     (17%)   931.8     (61%)
Net income (US$ million)         237.3    336.4     (29%)   631.2     (62%)
Shareholders' net income (US$
 million)                        229.9    343.3     (33%)   570.6     (60%)
Earnings per ADS (US$)            0.39     0.58     (33%)    0.97     (60%)
Earnings per share (US$)          0.19     0.29     (33%)    0.48     (60%)
EBITDA (US$ million)             488.3    563.1     (13%) 1,064.6     (54%)
EBITDA margin (% of net sales)      28%      27%               35%

Our results in the third quarter reflect weak demand for our products and services from our customers in all regions though sales in the Middle East and Africa region registered a modest year on year increase. Shipments of tubular products fell 50% year on year and 16% sequentially. However, our EBITDA margin stabilized on a sequential basis as lower input costs offset lower prices. Earnings per share declined by 60% year on year reflecting the decline in sales and margins. However, cash flow from operations remained strong and we reduced our investment in working capital by a further US$359.5 million. Our net financial position (total financial debt less cash and other current investments) is now net cash positive with a balance of US$556.9 million at the end of the period.

Interim Dividend Payment

Our board of directors approved the payment of an interim dividend of US$0.13 per share (US$0.26 per ADS), or approximately US$153 million. The payment date will be November 26, 2009 (however, because such date is not a business day in the US, shareholders in all jurisdictions may receive their interim dividend on or after November 27, 2009, which is the first business day following the stated payment date), and the ex-dividend date will be November 23, 2009.

Market Background and Outlook

Global oil prices have risen during the first nine months of 2009 from their low of around US$30 per barrel at the beginning of the year and now stand around US$75-80 per barrel. The increase in oil prices is supported by expectations for a continuing recovery in the outlook for global growth led by the resilient performance of the Chinese economy and OPEC actions to curtail production. North American gas prices have recently rebounded from their lows below US$3.00 per million BTU but production has not yet fallen in line with demand and gas in storage is now at historically high levels.

The international count of active drilling rigs, as published by Baker Hughes, continued to decline during the third quarter. It averaged 969 during the third quarter of 2009, 1% lower than the second quarter of 2009 and 12% lower than the same quarter of the previous year. The corresponding rig count in the US, however, started to rebound in July driven mainly by an increase in oil drilling activity and lower rig rates. It averaged 973 during the third quarter, 4% higher than the second quarter of 2009 but 51% lower than the third quarter of 2008. In Canada, the corresponding rig count, which is affected by seasonal drilling patterns, averaged 187 during the quarter, a decrease of 57% compared to third quarter of 2008.

Whereas demand for our pipes this year has been severely affected by the decline in oil and gas drilling activity and the actions taken by customers to adjust to reduced cash flows and a less favorable market outlook, in the third quarter our level of incoming orders by volume is recovering. In addition, in the US and Canadian markets, inventory levels, although they remain high, have been coming down from the extraordinarily high levels they reached in the first quarter of this year. With activity levels now stabilizing, the oil price at an attractive level, and inventories closer to more reasonable levels, we can expect pipe shipments in our Tubes operating segment to begin showing a moderate increase in the fourth quarter.

During this quarter the order backlog for our large-diameter pipes for pipeline projects in South America has continued to decline and we therefore expect lower shipments going forward.

Our production costs should start to benefit from efficiencies associated with an increase in production levels, and from the effect of the actions underway to reduce our structural costs.

Our average selling prices in the coming quarters will reflect a gradual adjustment to the lower levels currently in the market and, consequently, any recovery in net sales and EBITDA will be more modest than that of our shipments.

Analysis of 2009 Third Quarter Results

                                                                  Increase/
Sales volume (metric tons)        Q3 2009         Q3 2008        (Decrease)
                                  -------         -------         --------
Tubes - Seamless                  407,000         669,000           (39%)
Tubes - Welded                     67,000         263,000           (75%)
Tubes - Total                     474,000         932,000           (49%)
Projects - Welded                  97,000         155,000           (37%)
Total                             571,000       1,087,000           (47%)
                                                                  Increase/
Tubes                             Q3 2009         Q3 2008        (Decrease)
                                  -------         -------         --------
(Net sales - $ million)
North America                       515.6         1,280.8           (60%)
South America                       225.9           368.3           (39%)
Europe                              176.9           408.1           (57%)
Middle East & Africa                360.4           344.2             5%
Far East & Oceania                   82.3           169.9           (52%)
Total net sales ($ million)       1,361.0         2,571.3           (47%)
Cost of sales (% of sales)             58%             53%
Operating income ($ million)        285.8           856.2           (67%)
Operating income (% of sales)          21%             33%

Net sales of tubular products and services decreased 47% to US$1,361.0 million in the third quarter of 2009, compared to US$2,571.3 million in the third quarter of 2008, in line with shipments as lower like for like prices were offset by a richer product mix. All regions were affected except for the Middle East and Africa which benefited from higher sales of deepwater line pipe products in West Africa. In North America, notwithstanding higher demand for OCTG products in Mexico, demand for OCTG products in the US and Canada declined precipitously due to the decline in drilling activity and inventory reductions. Sales in South America were affected by low levels of demand in Venezuela and Argentina. In Europe, sales were affected by lower demand from the industrial sector, lower demand from distributors serving the process and power plant sector and lower sales of OCTG principally in Romania. Sales in the Far East & Oceania were lower mainly in Japan and China.

                                                                  Increase/
Projects                          Q3 2009         Q3 2008        (Decrease)
                                  -------         -------         --------
Net sales ($ million)               288.7           319.1          (10%)
Cost of sales (% of sales)             71%             73%
Operating income ($ million)         59.5            44.3           34%
Operating income (% of sales)          21%             14%

Net sales of pipes for pipeline projects decreased 10% to US$288.7 million in the third quarter of 2009, compared to US$319.1 million in the third quarter of 2008, reflecting a lower level of shipments to gas and other pipeline projects in Brazil and Colombia.

                                                                  Increase/
Others                            Q3 2009         Q3 2008        (Decrease)
                                  -------         -------         --------
Net sales ($ million)               121.7           183.6           (34%)
Cost of sales (% of sales)             74%             68%
Operating income ($ million)         15.2            31.4           (52%)
Operating income (% of sales)          12%             17%

Net sales of other products and services decreased 34% to US$121.7 million in the third quarter of 2009, compared to US$183.6 million in the third quarter of 2008. Although demand for our Brazilian industrial equipment business remained firm, demand for our US electric conduit business was substantially lower and sales of sucker rods were affected by lower activity.

Selling, general and administrative expenses, or SG&A, increased as a percentage of net sales to 18.5% in the quarter ended September 30, 2009 compared to 14.7% in the corresponding quarter of 2008, mainly due to the effect of fixed and semi-fixed expenses over lower revenues.

Net interest expenses decreased to US$20.6 million in the third quarter of 2009 compared to US$21.5 million in the same period of 2008.