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An Important Value Case of RFID for Brazil's Oil and Gas Industry

There are a multitude of ways in which the world's ninth largest oil producer can benefit from utilizing radio frequency identification technology.
By Konrad Konarski and Sam Falsafi
Dec 03, 2012Brazil's strong economic indicators and rising gross domestic product (GDP) are indisputable characteristics of an emerging market economy (EME). The effective economic and political reforms, spearheaded by the nation's current and past leaders throughout the past two decades, have had empowering socioeconomic change. Currently, the country's GDP is $2.48 trillion (the highest in Latin America), according to the World Bank. An estimated 35 million people joined its rapidly growing middle class between 2003 and 2009 (see Growing Middle Class Fuels Brazil's Economy), while the nation's foreign investment policies are very favorable.

These reforms have accelerated Brazil's ability to harvest and tap its wealth of natural resources and commodities, including oil and natural gas. The country's growing production capacities in the geological formation known as the pré-sal (pre-salt), as well as at other off-shore sites, place Brazil as the world's ninth largest oil producer, according to the U.S. Energy Information Administration (EIA).

Konrad Konarski (left), Sam Falsafi
As these fields mature, the complexity of delivering equipment from onshore support locations to offshore platforms becomes much more elaborate. The need to adopt technology infrastructure to support product movement becomes essential to delivering the proper products in a timely manner to the correct locations.

Technologies such as RFID can provide an additional level of identification, as well as an enhanced ability to inspect products using the RFID reader infrastructure.

An RFID tag embedded in a wellhead

A fundamental value case of RFID that is the cornerstone of one of its central competitive advantages stems from its rewritable memory. The ability to append or rewrite information to an RFID tag's memory has particular merit in the oil and gas industry, in which complex oil-field equipment can involve an extensive list of subcomponents assembled for a final product, and demand referenced schematics and quality-control documentation. In Brazil, this value case is further compounded by the complexity of the tax documentation required during the transfer of a particular asset's ownership and/or transportation. This document, known as nota fiscal, demands that all equipment subassemblies be accurately reconciled and itemized prior to equipment transfer.

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