Good day, ladies and gentlemen, and welcome to Q1 2011 Tenaris S.A. Earnings Conference Call. My name is Veronica, and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be conducting a Q&A session towards the end of today’s conference. (Operator instructions) I would now like to turn the presentation over to your host for today’s call, Mr. Giovanni Sardagna, Investor Relations Director. Please proceed.

Thank you Veronica, and welcome to Tenaris 2011 first quarter conference call. Before we start, I would like to remind you, as usual, that we will be discussing forward-looking information in the call and that our actual results may vary from those expressed or implied herein. Factors that could affect those results include those mentioned in the company’s 20-F and other documents filed with the SEC. With me on the call today are Paolo Rocca, our Chairman and CEO; Guillermo Voguel, Vice President of Finance and member of our Board of Directors; Ricardo Soler, our Chief Finance Officer; Germán Curá, the Managing Director of our North American operation; and Alejandro Lammertyn, the Managing Director of our Eastern Hemisphere operation. During the first quarter of 2011 sales increased 42% to 2.3 billion compared to 1.6 billion recorded in the first quarter of last year, and 13% sequentially. Our EBITDA for the quarter reached 570 million, which was 31% higher than the corresponding quarter of 2010, and 11% higher sequentially. Our EBITDA in the first quarter of 2011 included 70 million of provisions on stocks and receivables in Libya. Sequentially, our seamless sales volumes increased 12% as we benefited from the realization of the previous quarter delayed shipments of line pipe products to the Middle East, and a strong recovery in shipments to Canada. Welded volume sales, always excluding projects, were sequentially 5% higher as we continue to benefit from the healthy operating environment in the main regions in which we operate. Average selling prices of our tube division increased 2% sequentially, but they remained at the same level of last year. During the quarter our sales of high-end seamless products were 48% of our total seamless volumes compared to 45% recorded during the first quarter of last year, and 47% recorded in the fourth quarter of 2010. Results of our other operating segments have also recorded significant year-on-year and sequential increases, and we believe that during the remaining quarters of the year they could increase further. Now, I will ask Paolo to say a few words before we open the call to questions.

Thank you Giovanni, and good morning to all of you. This week marks the 10th anniversary since we introduced the Tenaris brand. We have come a long way since then transforming the company to a major player in North America, and the sector leader in quality, technology and service for the oil and gas industry worldwide. As the new cycle of investment in oil and gas proceeds, we are uniquely positioned to respond to the needs of our customers throughout the world, and they expand their operation, and undertake increasingly complex projects. Around the world, oil and gas drilling activity is growing, fuelled by favorable oil prices and increasing use of natural gas in power generation and industrial production. Political unrest in North Africa and the Middle East has increased concern about the reliability of supply. The severe damage to the Fukushima nuclear complex from the tragic earthquake and tsunami in Japan is going to question plans for new nuclear facility worldwide, and we can envisage a larger reward for gas and LNG worldwide. These factors are driving additional activity, aimed at expanding spare capacity and activating medium and long-term projects. Both of these activities focus on complex field and unconventional application. And in this environment, Tenaris can deploy all of its potential. Our facility in Japan was not damaged by the earthquake, and we were able to resume operation quickly. We are supporting our employees whose families were affected, and many of our employees worldwide expressed their solidarity with the victims through the nation, which were matched by company fund. In the OTC this week we introduced the first of a new line of premium connection, the TenarisHydril Wedge Series. This new technology that will be gradually introduced into the market presents a breakthrough in managing very harsh environments, such as high-pressure, high temperature wells, and wells, which require high torque compression and bending requirements. This new technology will be an important component of our differentiation strategy for the future. We have a strong presence in the Americas, where demand continued at a good level, and we have increased our focus in the eastern hemisphere, where activity is increasing, particularly in the Middle East, and in areas such as sub-Saharan Australia and Australia, where complex offshore projects are being developed with our extensive portfolio product, supported by testing and development activities. With our new mill in Mexico, which is already in operation, and our global organization and resources, we are confident that we can take advantage of the opportunity that this cycle (inaudible). We will be doing official inauguration of our plant in Mexico on May 17, and President Calderon will come to Veracruz for this ceremony. We are very happy with this, and looking forward to this opportunity. We expect that this favorable demand outlook should translate into further growth in our sales and operating results as well for the year. Thank you. We are ready for your questions.

(Operator instructions) And your first question comes from the line of Ole Slorer from Morgan Stanley. Please proceed.

Thank you very much, and congratulations with the 10-year anniversary.

Thank you Ole.

It's amazing to think about the kind of brand that you've built here over the past 10 years. It's impressive. My first question comes from a little bit of a comparison with your sequential revenue numbers that you've posted here for the international markets, by international I mean outside the North America, because when comparing this with what the big four service companies delivered sequentially, it's quite a big difference. The big four service companies had an average international revenue decline into the first quarter of 5%. Of course a lot of that was to do with the slowdown in North Africa and the Middle East. But still you had on average across the regions more than 10% revenue growth. So how do you see this? What was the real reason for the very strong particularly Europe and South America where you had 17% and 18% revenue growth compared with minus 3% to 5% for the other big service companies? Could you explain the difference? Is your business an early cycle component as the drilling commences or was there a restocking component or what was the nature of this big difference in performance?

Well, thank you Ole for your question. On one side, remember we had some short-term effect because of the delayed shipment. And now we arrive in the December, we had some shipment that is shifted into the first quarter, and this also supported the quarter. On the negative side, we had some negative effect on North Africa. But as a whole, I would say that our business improved, and our demand in shipment improved in almost all of the regions. I would echo some comment here on how we see, let us say this quarter, and also the outcome that we can see for the future in the eastern hemisphere first. And I will let Alejandro make some comments.

Yes, Ole. As you have seen, well we have a stable situation in international in this quarter, and we are foreseeing in the eastern hemisphere in the coming quarters driven mainly by the Middle East, where Saudi Aramco comes in to recover the reduction of oil coming from Libya. And they are prestarting a plant to go back to the 130 rigs that they had in 2008. This has driven a high tendering process for our material that has been even beyond what they have requested in the last three years combined. We see this driving also in the Emirates, where Abu Dhabi, ADCO, ADMA, SADCO are requiring an important volume to sustain their level of production and moving to the 3.5 billion liters [ph] per day in a couple of years. This situation is also moving, considering the Middle East, in Qatar where we are seeing some move in the Northfield because of the increased demand of LNG, driven by the requirement in Southeast Asia, mainly driven by the Japanese situation. So what we’re seeing clearly in the Middle East is higher growth. The other areas of growth that we are seeing are in sub Saharan Africa, all the exploration cycle has increased based on the availability of rigs coming from Gulf of Mexico, lot of activity coming in West Africa and the eastern part of Africa that will drive our operations. Also we are seeing due to LNG, increased activity in Australia that will become a major supplier for LNG for the Southeast Asia.

One question there.

Yes.

What is the timing of your sales relative to the timing of the drilling programs that your customers are planning? Is it three months lead indicator or is it a six months lead indicator? So could you explain a little bit? It sounds like this is more than just restocking. It sounds like this is a strong leading indicator, your revenues here, that the international drilling is about to finally start picking up a bit.

Well, one comment on this because just to separate, if we look at the reason for our increased international sales in the first quarter, really the driver in Europe, some of the delayed shipment is important. In South America, dynamic of the market in Columbia has been a factor in our increase, but not only Colombia, also Argentina and part of our sales in Brazil and the rest of Latin America has been an important contribution to our first quarter. Remember in Europe, we also have additional demands from our industrial and line pipe business. We perceive a clear recovery of demand in a sense. Also some disruption of operation of some competitor is adding demand in the first quarter. Now as Alejandro was explaining, in the Middle East, even if this quarter was in line with last quarter, our expectation for a strong increase of demand in the second part of the year. I would say that Middle East is back, and we will see actual shipment to support the program of development in Saudi, in Kuwait, and in the rest of the regions probably between the third and the fourth quarter of this year. It is, let us say, the lead time of the program that Alejandro identified. One interesting point is South East Asia, Far East and Oceania because here we had additional sale in this quarter, an interesting perspective in the long run driven by LNG. This will be a factor probably in 2012.

We've heard from – separately from about three different large oil companies as of late that they're starting to get concerned about the ability to source premium tubulars for ultra deepwater application, particularly in West Africa. And I presume that having seen one of the three suppliers that re-enable to deliver because the power outages in Japan might have had something to do with it. But could you explain a little bit about what you're seeing here on the demand side for deepwater and whether they're – and whether these comments from these customers – just give some context around the ability to supply and whether the market has to become visibly tighter for premium tubulars in deepwater?

Well, I really think that we are at the beginning of the new cycle in the energy sector. On all of the three segments, let us say, recovery of oil and gas in the existing field discovery, and discovery is mainly focused on deepwater and unconventional like the project we see in Canada and in other parts of the world for heavy oil or SAGD. So on the three of them, but deepwater, there is renewed activity from what we perceive on exploration. Usually the requirement of these fields are very demanding, and the regulation and the occurrences in the Gulf of Mexico last year and the new regulation, RP 96, that could become like a stand I would say for deepwater operation, driving demand in the very high segment of our production. Now I don’t see today what you would say is a limited supply, because we are at the beginning of a cycle. But if this exploration project turns into development, later on in 2012, I think there will be serious demand for products that require absolute guarantee, integrity, ability to reach, extended reach offshore, very high wide clearance for operating with different tools in the column. This is very important. The new series, the 600 series that is the semi-flush Wedge that has outstanding performance in terms of in term of resistance from point of view is exactly where it is aimed to. Now, we are in the testing process. We will gradually expand the range of product to cover the entire application. I think this will be a tight market for this going on into 2012 gradually increasing, because LNG is also important from the point of view of deepwater, tight requirement, complex environment. So, there could be I think a tight market for this product. I think we’re ready and from an industrial point of view, or from a product point of view, real action on this from my point of view will be more in 2012 or 2011 than in the coming quarter, and immediately.

But it sounds like the 600, the new TenarisHydril could that replace the thread and couple connections for deepwater, and therefore reduce weight quite a bit? Is that part of the idea here?

Well, a complex process would require always a combination of products, but the Series 600 is correctly designed, as you are saying, to allow – lean well designed with lot of space, clearance for additional tooling and communication system in the well. So it's designed for the let us say the new requirement of deepwater that in turn is associated with exploration projects, is associated with LNG and in the end from our point of view is a key part of the new cycle.

Okay. Well, thank you very much for a thorough run-through. Thank you.

Your next question comes from the line of Bill Sanchez from Howard Weil. Please proceed.

Good morning, thank you for the time.

Good morning.

My first question, just to circle back on deepwater in the Gulf of Mexico specifically, there's been nine deepwater plants approved since the moratorium has been lifted. Only one has come in the form of a new well, if you will. Most offshore service companies or all service companies acknowledge that they really can't predict the timing of a true deepwater recovery in the Gulf. But as you talked about in the earlier question, given that your products are ordered early in the well plants, could you just spend a moment talking about how you see the Gulf of Mexico deepwater market unfolding here as we go through the balance of 2011 and into next year?

Yes. Thank you Howard for your question. Well, I really think that the sense we get from the contact with our plant is that they are concerned about the reliability of the supply chain for oil in the medium term after North African turmoil. Today it is limited to Libya, some in Syria, Yemen, but in the end it is perceived that is something that hopefully not, that could spread to a area that are very important for the energy, the energy supply in Europe and Far East. So in this environment, I think also the attention on reducing energy dependence in the state is really rising fast. There are many actions that could be taken, and I think will be taken in gas and in oil. In oil, the offshore is probably the most important action that could be taken. I think it will move, but I will ask Germán to expand a little on what we really see in the demand of our client, and if this permits are turning into wells and turning into rigs, and which timing we may expect this to happen. Germán Curá: Thank you Paolo. Good morning Bill. In fact, following the temperament Bill, and you are right, we cannot really predict to what extent Gulf of Mexico will develop and exactly when, but we tend to saying in 2011, the rest of 2011 will be more of a transition year than not. Now as we speak, we are speaking to a good number of operators, both majors and independents, and some of them are in fact are in the other parts of the wells. So we are presently discussing taking orders, different degrees of development, but we are already working in Gulf of Mexico, and we’re already supplying to some extent some of Gulf of Mexico new wells requirement.

German, can you refresh us, if you don't mind, on what your OCTG market share was in the Gulf of Mexico deepwater prior to Macondo? Germán Curá: Well, Bill, we don’t really disclose if specific, but we typically say that we have a large presence, a very, very important presence with our premium connection technology in the Gulf of Mexico prior to Macondo and the 600 series development would allow us to sustain or expand that.

Okay. And if I could just one follow-up, German, I guess I will stick with you since you addressed it – international was addressed earlier. Just in North America, if we look at revenues of 14% sequentially. I know in the opening comments, we heard about seamless volumes up nicely in Canada, Mexico down. I guess we would have expected perhaps more welded volume growth sequentially as part of the driver. Can you just give us your thoughts around revenues versus volumes and how we should see the balance of the year unfolding there? Germán Curá: Well, in generic terms, Canada or the Canadian session during the quarter was very, very strong. We had fairly important volume both seamless and welded in Canada. The states also grew, and that offset during the quarter part of New Mexican reduction all together. Now going forward, we continue naturally spring break aside; we continue to see in the US the possibility of potential growth. I think rig count will continue to grow to some extent. At one point I believe it is going to level off. Canada, we have big expectations for next year. Naturally we need to transition the spring break. And as we have indicated, and Alejandro could expand on this, we continue to see Mexico during 2011 as the transition year.

Okay. And I guess there's one last one. It's fair to say when I just look at total seamless volumes for the quarter; Venezuela still is essentially a zero there. Is that fair?

I think yes, Venezuela is increasing activity; mainly the number of rigs is rising. The point is in Venezuela the credit risk, and we are limiting our shipment considering what we can get and the payment that we can get. Frankly I think that the cash flow should be increasing, and maybe we can have during this year better payment performance, and so we may increase our sales over time. You know Venezuela is our technology is very well established there. We really are supplying the complex products there, and so the price [ph] allow them to improve on the payment performance, I think we can have room for increased sales during this year.

Great, thank you all for the time.

Thank you.

(Operator instructions) Your next question comes from the line of Michael LaMotte from Guggenheim Securities. Please proceed.

Hi, good morning, Joseph Triepke here on behalf of Michael LaMotte. A couple of questions, actually, one of them an unrelated follow-up, if I may. First, we're hearing a lot of optimism around shale gas in Argentina. Just wondering if you could give a little bit of color on what the pace of growth might look for tubes there, and how long it will be before that becomes a meaningful piece of business for you guys?

Well, I think in Argentina the companies, Repsol and Apache are very optimistic about the ability, I mean the resource, and the ability to have it commercially in shales. Now the question is the regulation of the sector, and the price of gas is stable, and reliable enough to justify major deployment. I would say at this moment, the company is trying to give a dimension to research, access, cost of development of the reserves, and they would consider a major more substantial deployment probably next year, or in the coming quarter, but in the second part of at least – considering how the regulation in the sector could be.

Thanks, very helpful color. Then, just as an unrelated follow-up, just wondering will – in your mind, do you think power problems in Japan this year might translate into reductions at Sumitomo's output and potentially provide more upside in Asia for Tenaris?

Well, I visited our operations in Japan. The impression I got is that it will take time for the industrial system to recover fully. Because really the extent of disruption of the supply chain, in which many companies were depending for supply in the region that were most affected, this is really substantial. In the automotive, you have seen the figure for April. I still believe the differences in the eastern part of Japan, and western parts, the tube for power are dependent, I think the activity on the eastern part would be affected. I have no reason to think that the Sumitomo production system would be affected. Our system will not for sure, even if we may have to source some of our components from different sources, but I have no reason to think that we have major effect on our competitor. Hopefully – also Japan will recover fast and that will reduce the extent of power shortage this summer. This means in summer, the demand will increase and so the question is if there will be power shortage in some area. But simply I don’t think this will happen to our competitor.

Okay, great. Thanks for the time. I'll turn it back.

Your next question comes from the line of James West from Barclays Capital. Please proceed.

Hey, good morning. Thank you. Guys I was curious about pricing increases going forward. I know you have increased pricing recently. We saw some indication to that on the – in this quarter. When should we see a full implementation of recent price increases in the numbers? And then secondarily, when would you look to increase pricing in excess of raw material cost increases?

Well, I think the situation is very different in different segments of the market. If you look at the low end API component, especially internationally, the demand is not increasing so much in the countries; it is almost stable in this segment of low end. The real increase is in the premium component, and the more sophisticated product component, in line pipe or in OCTG. These are the areas in which we are getting price increases that even today are say recovering the impact of cost, and in some case above the recovery of the cost. We will see this in our balance sheet profit and loss over time in the second part of the year because there is a lead time between the tendering, between the increased demand, negotiation of prices and when the prices, the product will be actually delivered. In the case of low end, only in the international area we see a recovery of the cost, but not much more. In the case of United States, may be the situation is leading to it. Pipelogix has shown a strong increase last month, and I will say that here the question is the increase will be there for premium product and for API product. The point is imports we are monitoring very closely the import in this country in areas like Korea that did extraordinary increase in their shipment to the United States. And this is clearly having negative impact on prices, and we will monitor closely how this unfolds in the coming quarters. I don’t now German, if there is something you want to add on pricing. Germán Curá: Well, not so much, I think the situation is fairly clear. Just to remind everybody that Pipelogix is a good proxy for in fact the low hand basket of products that is in fact under somehow imports, somehow exposed to imports much more than not.

Okay. That's all from me. Thank you.

Your next question comes from the line of Frank McGann from Bank of America. Please proceed.

Yes, good day. Just kind of following up on that in terms of overall inflation effect you're seeing beyond just raw materials in terms of wages and energy costs and production costs, how are you seeing those in the different facilities that you have, and what is the expectation that that would have on margins as you go into the second half?

Thank you Frank. As we mentioned in the last conference, we clearly saw the inflation in raw material, in hot roll coils, and scrap, the price that we are getting up. Now I would say that hot roll coils is leveling off, and are showing some decrease, some reduction, and iron ore and scrap also have shown some reduction, and then they are quite volatile today. It is a situation in which probably we can expect some volatility in the coming quarter. Now, we are anticipating some purchases of raw material, so we’re moving down the impact of these on our profit and loss. We basically expect the increased cost to have the same impact for the next quarter like this quarter, and then probably our margin, I expect our margin to increase in the second part of the year, and probably in the end of the year we can expect as a whole 2011 profit margin in the range of 2010.

Okay. And if you're looking at other cost like labor cost and other energy costs, other costs for operating your facilities, any pressures that you're seeing there?

Yes, we are in an environment in which our currencies are all appreciating against dollar, our operation in Argentina, Brazil, even Mexico today, and Europe, the currencies are appreciating, our cost of labor is increasing. But as I said before, the recent decrease in raw material over time that may compensate some of this effect. Also we are acting internally on improving efficiency. On top of this, remember our factory, the new plant in Mexico is coming on-stream, gradually production is increasing, by the fourth quarter of 2011 this will be really fully operational. At that point, we would have a better cost mix from our plant, and this will also be contributing to improving our cost structure.

Okay, thank you very much.

Your next question comes from the line of Amy Wong from UBS. Please proceed.

Hi, good afternoon, thanks for taking my question. My question is on the excess capacity that's developing. I mean, I think there's a lot of capacity starting up in the next 12 to 18 months, which would likely create some excess capacity globally. How do you see this affecting your business and what's your estimate of the excess capacity by the end of 2011 and in 2012? And perhaps you can split your view by looking at the premium in the low-end products separately. Thanks.

You are right there is lot of capacity coming in in 2011 let us say in the second part of the year, and there would be capacity coming in. but most of the capacity is in the low end market. That is a lot of capacity coming in in China that is targeting a market that is a low end market. This will put pressure on pricing in this segment, but I think we could preserve reasonable margin even in this segment thanks to the loyalty of the client – of our clients and the confidence in reliable products. Because in the end, even in the low end short-term, you want to have a very reliable product, low-end doesn’t mean that you can accept unreliable products. When you talk about capacity in the premium segment, this is not so much. I mean there will be Vallourec mill in Brazil coming in, but it will take time for this mill also to move into the high premium segment. It will not be something that happens overnight. And the market in that segment is growing. It is growing, and I was saying before in 2012 some of the projects today in the exploration stages should turn into development stage, some of the additional demand and the flight for quality on part in the offshore, and in other segments will kick in. So, in the end, short – understandably, I think this will be – there will not be a large imbalance, or something that will put excessive pressure on margins.

Okay, great. Thank you very much for that.

Your next question comes from the line of Andrea Scauri from Mediobanca. Please proceed.

Yes, hi, good morning. My question refers to the raw materials and I just would like some more colors on the first quarter result. If I remember well in the last call you said that you were expected to use inventories of raw materials. I was wondering what is the difference of prices of raw materials booked in your inventories compared to the current spot level to make this margin that you had in the first quarter. Thanks.

Well, we mentioned this – our inventory, as you have noticed our – we have a relatively high working capital level today. And it increased between the December and the March, most of this is in the receivable side, part of this is also in the value of our inventory. The value of our inventory, we did increase as I mentioned volume. I would say the volume is the same, but the value of our inventory is slightly higher. So you can have an idea there of let us say, which is increasing in the average value of our inventory. We expect this to stabilize in the coming quarter.

Hello?

We expect to stabilize I would say in the coming quarter, but I wouldn’t put a precise figure on the difference between our inventory and what we’re getting from the market. There is a lot of volatility in the value of our material, scrap, and iron ore.

Okay. Thank you very much.

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Well, if there are no other question, we would like to thank you all for taking part in this call, and see you in the next conference call for next results. Thanks.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.