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RFID Integration with Oil & Gas Industry

  • Akansha Sharma
  • Jul 25, 2023
  • RFID
Oil & Gas Industry

Oil & Gas Industry is a major industry, responsible for maintaining the functioning of a variety of other industries in the market. We need oil & gas to power our homes, manufacture consumer goods, conduct transportation throughout the supply chain, etc. Essentially, without oil & gas, human civilization could not survive the way it is. That is why, these operations are carefully managed and monitored. A piece of technology used for this purpose is RFID, yes, RFID integration with Oil & Gas Industry has proven to be an optimizing factor in these operations.

So, let’s discuss how this technology operated in the oil & gas industry.


What is RFID?

RFID technology has been a part of our industries for decades by now. These systems use radio signals to communicate information, allowing users to have tracking & management capabilities. An effective RF system to automatically identify items & track their movement throughout the supply chain.

In general, a normal RFID infrastructure consists of three basic components, namely – RFID Tags, Readers, and Antennas. There are a variety of tags available in the market, with a common purpose. These tags are encoded with the information of items, and use signal backscattering or electromagnetic induction to transmit said information using radio waves. The readers & antennas work in tandem to communicate with the tags and track them. The antennas broadcast radio signals to the tag and receive the signals coming back from the tags and send them to the reader. The reader, as the name suggests, converts those signals into readable format.


How is RFID Used in the Oil & Gas Industry?

Like many industries that deal with large volumes of products, Oil & Gas relies heavily on RFID technology for maintaining smooth operations. These systems provide multiple applications in drilling operations.

So, let’s check out how RFID can be utilized in Oil & Gas industrial operations.

(A). Data Collection from Drilling Pipes

A huge part of the function of an RF system is automated data collection. That is one of the most used applications of this technology in oil & gas rigs. For the purpose of drilling & extracting crude oil & gas, companies need to drill deep holes and insert pipes, all the way down to the source. Businesses attach tags on these pipes before installing them down the hole. This allows them to track the depth at which oil is available.

These tags are also capable of recording telemetry data like temperature, flow rate, pressure, etc. In addition, tags are used to identify separate pipes & joints, making it easier to locate leaks and pressure on each joint.

(B). Tracking Workers

A different function of these systems has nothing to do with the drill or the equipment, but more of a managerial role. That’s right, we meant employee tracking. These facilities offer their employees smart ID cards embedded with an RF inlay. This allows them to track the movement of their employees in/out of the facility, as well as within the premises. It also acts as an alternative to an employee attendance monitoring system.

(C). Inventory & Supply Chain Monitoring

Once the drilling and extraction start, these businesses have to deal with a large volume of produce/material that must be stored safely in the inventory and supplied further through the supply chain. Shutting down or pausing an oil rig is an insanely complex procedure, so these industries put a lot of effort into the management of their inventories & supply chain. This is where the use of RFID becomes prominent.

RF systems allow them to have accurate monitoring of their inventory and have real-time tracking information all over their supply chain. From the extraction facility to the refinery to the storage warehouses, and from there to the final destination.

(D). Hazardous Material Tracking

Fuel isn’t the only material that is created from extraction & refining, these operations also produce some hazardous materials. And these cannot be discarded into the ocean or the drill site, they have to be processed and discarded very carefully. For that, they are transported to specialized facilities in sealed cans/drums, that are tracked using RFID technology.

(E). Locating Tools & Equipment

Oil & Gas operations tend to be very complex, requiring multiple machinery and personnel to safely extract the liquid gold. In addition, the personnel relies on several on-site tools to conduct daily operations and provide maintenance and service to the equipment. These tools need to be available at a moment's notice, that is why, rigs use RF tags to keep track of these tools and make retrieving them easy.


How RFID Improves the Safety of Oil & Gast Operations

By now you know how RF systems have so many applications within a single extraction facility. What you may not realize, is how all these applications not only make the operations more efficient, but significantly safer.

By having total visibility over the operations and the conditions of viable assets like the drilling pipe array, these systems instantly alert the users of any component on the verge of being compromised. Helping them prevent any breakdowns and provide preventative maintenance.

These systems also keep track of the movement of personnel and items in and out of the facility. This helps in a significant reduction of stock shrinkage and theft of any material, tools, or documents. And also acts as an effective access control system and prevents any unauthorized personnel from gaining access to the premises.


Benefits of RFID in the Oil & Gas Industry

Integration of RFID technology in the Oil & Gas industry allows businesses to optimize their operations and help them grow. This happens due to several small advantages that businesses that use RF systems enjoy over others, like-

(A). Operational Efficiency

By providing fast and unmanned data collection capabilities, these systems allow the operators to be well-informed in real time. This prevents any waste of time between data generation & action taken by the operators. This makes the entire operation run with far more efficiency. 

RFID also helps users identify equipment and tools far more quickly, thus, reducing the time used in location and retrieval.

(B). Automated & Accurate Data Collection

As you already know by now, one of the biggest benefits of RF technology is that it seldom required an operator. These systems usually collect data on their own. And unlike barcodes or manual data collection, RFID systems are significantly less prone to errors in data collection.

(C). Reduction in Net Cost

With the integrations of automation, data collection & tracking; these businesses see an overall increase in productivity & a reduction in the net cost of operations. In addition, improving the security of the site and preventing loss of stock and equipment, also puts a nice dent in the operation cost.

(D). Improvement in Security

The tracking capabilities of RF systems allow businesses to vastly improve their security systems and protocols. These systems allow users to keep an accurate track of the movement of employees, visitors, equipment, and stock. 

This significantly reduces any chances of theft and loss of stock.

(E). Greater ROI

Overall, with all the advantages that are provided to these businesses due to the integration of radio frequency identification technology, these businesses enjoy a greater Return on Investment in their Rf systems.


Frequently Asked Questions

Q1. What is RFID and its function?

It stands for Radio Frequency Identification, a class of AIDC technology that relies on radio signals to communicate information. RF technology is used in a variety of industries for asset identification & tracking operations, access control, and inventory management.

Q2. What is the role of RFID in SCM?

SCM stands for Supply Chain Management, meaning the monitoring and controlling of the supply chain of a particular industry. For example, the supply chain of a food brand would consist of – Manufacturing Plant, Warehouse, and Retail Facility.

Most SCM operations make use of RFID technology, to make it easier to run these operations by providing automation and accuracy to asset tracking.

Q3. What is RFID in the oil and gas industry?

RFID is a very popular technology used in the oil and gas industry, due to its capability to integrate automation, tracking & data collection. In the oil and gas industry, these systems provide end-to-end visibility throughout the production line, telemetry data collection of the drilling operations, and access control.

Q4. What is the principle of RFID?

RFID systems use the principle of radio communication to work. The readers use the antennas to create an interrogation zone around throughout the premises/supply chain. The tags are placed on the items/products/assets/equipment and transmit the data stored in them wirelessly to the reader when they enter the interrogation zone.

This provides the user with automated identification & tracking capabilities.


Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.


  • Created on Jul 25, 2023
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