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RFID Addresses Harsh Environment, Tight Regulations in Chinese Oil and Gas Industry

August 05th, 2018 Manufacturing - Features - Energy
By Claire Swedberg
Xerafy is providing its UHF RFID solutions for managing tools and pipes to CNOOC Oil and Gas, off-shore, as well as to PetroChina, at its onshore Junggar Basin site, to capture operation, maintenance and inspection details about equipment use in some of the world's harshest oil-drilling environments.

As global oil demand is growing, especially in Asia, Chinese oil and gas companies have been pressured to become as efficient as possible, while also meeting industry regulations and boosting safety. Demand from an energy-hungry economy in China has been increasing as the nation shifts to more domestic supply sources. This growth in oil exploration and drilling for China's own energy requirements is in response to rising import prices, according to a 2015 Deloitte study.

There's nothing easy about some of the geography the country is targeting, however. Oil exploration in places such as China's Junggar Basin means the nation could have access to more oil, but extraction will be in harsh desert, mountainous and off-shore geographies. One way for oil companies to accomplish greater efficiency on their drill or exploration sites is to deploy radio frequency identification, but the technology needs to be functional in that challenging terrain.

CNOOC's primary objective was to improve the company's ability to track the identity, integrity and lifecycle of each pipe.
Traditionally, oil and gas producers have manually tracked information about the maintenance and status of drill pipes, using paper forms. This isn't practical when it comes to tracking tens of thousands of pieces that are often used in remote locations, however. For this use case, RFID provides a benefit.

Case in point: China National Offshore Oil Corporation (CNOOC) and PetroChina Co. are deploying UHF RFID-based systems from Xerafy to ensure that they can put their hands on assets easily, when needed, while also maintaining a record of the maintenance and inspection histories in some of China's most difficult terrain.

"We've seen trends of increasing need and urgency for better tracking of drilling assets with RFID," says Dennis Khoo, Xerafy's founder and CEO. Furthermore, he says, there has been a trend to use real-time data to improve operational efficiency, comply with industry regulations, enhance oilfield operational safety and reduce asset-management costs.



The Chinese installations began years earlier. In 2014, Xerafy provided an RFID-enabled asset-tracking solution to China Petroleum and Chemical Corp. (SINOPEC), an oil and gas exploration and production company based in Beijing. The firm had used bar-code scans to identify pipes and other assets for maintenance and inspection records, but those scans often failed and led to incomplete records.

The company had wanted to use RFID for years, Khoo says, but could not find equipment that would be durable and reliable enough until it turned to Xerafy. Since that time, he adds, "We are definitely seeing growth in this [Chinese] market, demanding better tracking and real-time traceability."

For PetroChina's Xinjiang deployment, oil pipes for onshore operation had to be protected from the effects of external and internal corrosion.
Xerafy is a leading innovator in RFID solutions in the oil and gas industry, Khoo says, "and we will continue to offer tailored solutions to our global clients and help them achieve their business targets." Xerafy began working with CNOOC in 2013, originally as the company was seeking a technology-based solution to track oil pipelines. Now, the firm is deploying the technology for tracking all of its equipment.

CNOOC conducts off-shore drilling in areas such as the Bohai Bay. It has a planned 10 percent annual growth rate of oil output, so efficiency is essential as it finds new drill sites and extracts oil. The drills it operates in offshore operations consist primarily of a series of 30-foot drill pipes, each weighing about 600 pounds. The pipes are screwed together to create a drill string. As drilling proceeds, and as the well becomes deeper, the crew adds new sections of pipe to the ever-lengthening drill string. Depending on the types of deep-water drilling facilities involved, the drill pipes can operate at between 660 and 11,500 feet.

CNOOC's primary objective was to improve the company's ability to track the identity, integrity and lifecycle of each pipe, Khoo says, and also to understand how long each asset has been in service and what maintenance or repair work has been conducted. Therefore, the oil company attached Xerafy Xplorer tags on drill pipes that are then used in deep-water or sub-sea drilling. It started with 20,000 Xplorer RFID tags on deep-water drill pipes for offshore drilling, and now plans to increase that number to 100,000 by 2020.



With better understanding of each pipe's condition and history, the company aims to prevent the breakdown of its equipment. Improved maintenance means drill-pipe assemblies typically have a longer lifecycle, Khoo explains. "By using correctly maintained and repaired components that are now tracked autonomously," he says, "CNOOC can anticipate when parts will need replacement before a failure, which can significantly improve safety on the deep offshore and onshore well drilling platforms."

With real-time data in hand, captured and analyzed by Xerafy's software, and with automated data-gathering processes, the company has achieved a boost in operational efficiency. This visibility into equipment maintenance history records reduces the need for additional inventory, Khoo says, as well as unnecessary equipment and maintenance or repair costs.

Xerafy provided an RFID-enabled asset-tracking solution to SINOPEC in 2014.
In April of this year, PetroChina began installing the same technology at its Xinjiang Oilfield to track pipes. Xinjiang is China's largest region, bordering Central Asia, and the oilfield is in one of the harshest environments in that country. The region is home to K2, the second highest mountain in the world, as well as three deserts. Within this region is the Junggar Basin, in northern Xinjiang, a triangular-shaped depression that is highly asymmetrical, with steep, stratified rock and complex non-contiguous fault lines. Any drilling equipment used in the area is highly prone to overcooking, due to massive pressure and high temperatures

PetroChina is now using RFID on pipes in this area to determine how they are being used in drilling and thereby better understand when those pipes were used, for how long, and when they were maintained or inspected. The company began deploying Xerafy's Dot Wedge RFID tags, Khoo says, by testing between 50 and 100 tags at the oilfield. It then began scaling the installation to hundreds of thousands. The Dot Wedge tags are IP68-rated against dirt and fluids.

The tags were designed to withstand extreme heat and cold, as well as exposure to drilling and hydraulic fluids. Moreover, they are UV-resistant and can survive immersion in sea water. The tags used in both projects are designed to withstand the harsh conditions of oil and gas industry deployments, whether onshore or off. In both cases, Khoo notes, the tags are embedded in a similar position on the pipe surfaces.



The needs of offshore and onshore drilling are very different, however. With PetroChina's Xinjiang deployment, oil pipes for onshore operation need to be protected from the effects of external and internal corrosion. Offshore drilling presents much more of a challenge, Khoo reports, due to the sheer depth of the water just to reach the Earth's surface. The force of the waves, particularly in deep, rough waters, presents major stability issues.

For both companies, the tags are being interrogated via handheld RFID readers. Inspectors onsite typically read the tag of each pipe they inspect in order to access data about its history, and to input what services they are providing. The Dot Wedge tags have a read range up to 3.3 feet on metal, while the Xplorer tags provide a read range on metal up to 5 feet. The collected data is stored in the Xerafy software, which resides on the oil and gas company's server.

CNOOC attached Xerafy Xplorer tags on drill pipes that are then used in deep-water or sub-sea drilling.
Each deployment is tailored to a particular use case and customer, Khoo says. "We listen to our clients first to identify their needs," he states, "and combine the best resources in the industry to come up with tailored solutions." Xerafy offers integrated solutions, including tags, hardware and software.

In general, the company indicates, China's oil fields serve as some of the most challenging asset-management environments on Earth, due to the water and conditions, as well as the regulatory requirements. The cost of maintaining an oil well in China is normally around US$450,000 to $750,000, he reports, "so our clients in China, as well as in the United States and the EMEA [Europe, the Middle East and Africa] region, cannot risk failing the operations of the oil well or the drilling platform when the tags go wrong."