Kimray Inc. experienced a "mad rush" of demand for its wares after an offshore drilling rig explosion in April loosed thousands of barrels of oil into the Gulf of Mexico.

The Daily Oklahoman

JAY F. MARKS
August 13, 2010

Oklahoma City-based Kimray Inc. is no stranger to the oil and gas industry. The 62-year-old equipment manufacturer even sells some of its products to producers working offshore in the Gulf of Mexico, but nothing like the "mad rush" it experienced after a BP drilling rig exploded in April and unleashed thousands of barrels of oil.

Larry Johnson, Kimray's sales and service manager for the Gulf Coast, said the oil spill caused runaway demand for skimmers, many of which use Kimray equipment.

He said there weren't enough skimmers available to deal with the massive oil spill, so fabricators rushed to make more. Johnson said most skimmers are barges that let in oil and water to be processed by scrubbers and separators. Those mechanisms have pneumatic liquid level controllers, diaphragm-operated valves, back pressure regulators and turbine meters made by Kimray.

"We just had a really mad rush for this equipment," he said. "They wanted it, and they wanted it right now." Johnson said Kimray distributors gave priority to those involved in the cleanup effort, a decision supported by the company's other customers.

He said many other oil and gas operators willingly waited for their stock so the cleanup effort could be a priority. "They said, 'Anything we can do to help BP we're going to do,'" Johnson said.

Kimray distributors in Louisiana and Texas saw sales jump because of the cleanup. Johnson said the boost helped offset the lag caused by uncertainty dogging offshore producers as the Obama administration tries to enforce a drilling ban in the deep water of the Gulf. He said such a ban would be bad for the Gulf region.

"If it last for a long period of time, it's going to cost people their jobs," Johnson said. He said Kimray is able to offset some offshore business losses with the demand for equipment for shale gas production in area. "Our sales are up. Business is good, but we're not selling stuff offshore," Johnson said. He estimated only about 20 percent of Kimray's business is offshore, but the company sells a lot of equipment to fabricators who may ship their wares to companies that operate in the Gulf. "In reality, quite a bit of Kimray equipment ends up in the Gulf of Mexico and other places that we don't sell to directly," he said.

Kimray's line of pneumatic and mechanical valves and controllers typically is used by oil and gas operators to set up production equipment, Johnson said.

The company has seven locations in the Gulf region, where about 99 percent of its sales involve the oil and gas industry. Johnson said nearly every oil rig in the area has some Kimray products on it. "We've always sold the same equipment," he said.

Jim Wells, Kimray's regional manager in Oklahoma, said the company is mindful of looming changes that could affect the oil and gas industry so it always focuses on reducing emissions. Kimray has added electronic controls to its catalog, he said, and is making progress in expanding its business internationally. "We've got equipment everywhere," Wells said.

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