SANTIAGO (Bloomberg) -- Vallourec SA, the world’s second- largest supplier of seamless pipes for energy extraction, said it's leading the race to supply equipment for a field off the Brazilian coast that may hold $6 trillion of petroleum.

Petroleo Brasileiro SA, also known as Petrobras, estimates its Tupi oil field has as much as 8 billion barrels, the biggest discovery in the Western Hemisphere since Mexico’s Cantarell in 1976. That may make Brazil one of the 10 largest oil producers.
Vallourec, competing against Argentina’s Tenaris SA, will gain from its proximity to Petrobras as it develops a factory in Brazil, the French pipe producer’s Chairman Pierre Verluca said today in a Bloomberg Television interview.
“We are the only ones who have a close relationship with Petrobras,” Verluca said. “We are already working with them on defining the products they need.”
Petrobras may spend $240 billion to unlock offshore reservoirs holding as many as 50 billion barrels of oil, according to estimates from U.K. research firm Neftex Petroleum Consultants Ltd.
Vallourec and Tenaris are the two leading companies chasing contracts to supply steel pipes to Petrobras, said Federico Rodriguez, an energy analyst at Buenos Aires-based Consultatio Asset Management, which holds Tenaris shares.
The Brazilian plant being built by Vallourec will be ready in 2010 and will increase the company's production capacity by 10 percent, Verluca said.
-----------205 miles offshore
“Vallourec moved very, very fast to invest in Brazil,” Rodriguez said. “Vallourec’s strategy was to impede Tenaris’s entry.”
Tupi’s oil is 330 kilometers (205 miles) away from Brazil’s Atlantic Coast and beneath 2,000 meters (6,560 feet) of ocean and 5,000 meters of rock, Petrobras Chief Executive Officer Jose Sergio Gabrielli said in a July 25 interview.
Vallourec rose 1.10 euros, or 0.6 percent, to 193.26 euros ado 10:36 a.m. in Paris trading. The stock has advanced 4.5 percent to 10.3 billion euros ($16 billion).
It said yesterday second-quarter net income declined 1 percent to 255.1 million euros and warned raw-material costs and a weaker dollar would curb earnings for the rest of the year.