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RFID Penetrates Oil Wells

Marathon Oil has developed an RFID system that makes "dumb iron" smart. It could save oil companies millions of dollars a year.
Jun 10, 2002June 10, 2002 - Radio frequency identification won't solve the world's energy problems, but it could bring new efficiencies to oil drilling. In-Depth has developed an RFID system that that makes it possible to more accurately measure bore hole depths and eliminates the need for hauling expensive equipment to remote sites. It could save oil drillers millions of dollars a year.

Dumb iron
In-Depth is a technology development company based in New Orleans. It was set up by Marathon Oil Corp. of Houston a couple of years ago, to explore the use of RFID in wells. "We got interested in RFID because we saw it had down-hole applications to solve some oil and gas well needs," says Phil Snider, a petroleum engineer and senior technology consultant with Marathon. "We saw ways it could improve operations and reduce costs."

The company is working on several different RFID applications. One involves firing perforating guns at a precise depth. An oil company typically drills a borehole with a nine-inch diameter to 10,000 or 15,000 feet. It then inserts a casing, or pipe, that is 3.5 to 7 inches in diameter into the hole. It then fills the space between the hole and the outside of the casing with cement for strength.

Oil wells don't typically suck up oil through the hole at the end of the well, like a straw. Instead, they may drill through several pools of oil trapped between layers of rock. They then have to punch holes in the casing in the area where the pool is. Typically, a driller might put five perforating guns down in a hole and fire only the ones where the oil is and seal off the sections below so the oil can be pumped to the surface.

In-Depth has developed a method of attaching RFID readers to the perforating guns and isolation valves that go down in the hole. Each reader is programmed to close an isolation valve and fire its perforating gun when it reads a particular code. So the driller only has to drop an RFID tag with the right code down the hole to close an isolation vale and fire the right perforating gun.

Earlier this year, In-Depth tested this RFID application by completing a Marathon oil well in Alaska. It was the first commercial job in which the technology -- already proven in research and development testing -- was used in a well producing oil.

The readers in the wells cost upwards of $3,000 each, but In-Depth says this is still cheaper than the alternative, which is to use a hydraulic line to close the isolation valves and set off the perforating guns. The hydraulic line is a long tube rented from services companies like Halliburton. It's very expensive to haul the equipment out to remote locations.

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