Jul 10, 2002July 10, 2002 -- With most new technologies, there are companies that oppose adoption because it threatens their market, and there are companies that see an advantage in the disruption of the old technology. Expro International Group, a midsize oil services company based in the UK, sees an opportunity in using RFID in oil wells.
Expro has just signed a licensing deal with In-Depth Systems, a technology company set up by Marathon Oil of Houston to developed RFID systems for oil wells. One of In-Depth's first products is called Excape Express, a method of triggering perforating guns inside wells using RFID.
Perforating guns are put down into an oil well. Oil may be trapped in several different layers of rock, along with gas and water. After the well is drilled, a steel pipe is inserted into the well and concrete is poured around the outside of the pipe for strength.
Isolation values are used to seal off sections of the well. Then, perforating guns shoot holes in the casings, so oil can flow in and be pumped to the surface. The right guns need to be fired at the right time. If the wrong gun is fired, the well could fill with water.
In-Depth approached big oil services companies like Haliburton and Schlumberger to help develop the technology. But those companies weren't interested. Why? Because they provide expensive control lines -- long steel cables snaked into the borehole -- to actuate equipment in wells and they don't want to lose that revenue.
But Expro realized the new technology offered it a potential competitive advantage. It worked with In-Depth to develop the Excape Express system. Expro has been granted a non-exclusive license to provide the RFID technology to its customers.
Expro does provide control lines, but isn't worried about the lost revenue. "We want to use technology like this to be a more competitive in the marketplace against the guys that want to squash this kind of innovation," says Stan Wall, an Expro VP based in Houston.
Expro will be the first services company to offer RFID technology for down-hole applications. It believes the technology can save oil companies a lot of money because they won't have to rent expensive equipment and haul it out to remote locations.
Expro is working with In-Depth to devise other down-hole applications. The difficult conditions in the well mean that special tags and readers need to be developed.
"Envision going two miles below the surface in oven-like temperatures in an area the size of a breadbox and trying to get things to function properly," says Wall. "It's a difficult environment, but we have a lot of applications where we have mechanical devices in the wellbore that need to be actuated. RFID holds real promise."
Since Expro helped develop the technology, it is paying In-Depth a nominal fee for the license. It will also charge its customers, the oil drillers, a royalty, which will be paid to In-Depth. Expro already has several jobs lined up in which the RFID technology will be used, says Wall.
