OCTG Automation and Inventory Optimisation

The transition to reach optimum levels of inventory management in Oil Country Tubular Goods (OCTG) in the Middle East is only just beginning, but the potential gains in efficiencies are genuine, says Rob O’Neill, business development director, Ramco.

Weather and environmental conditions in the Arabian Peninsula create unique challenges for specialists in charge of pipe inspection, care and maintenance for the oil and gas industry. The combinations of heat, salt and water significantly speed up the corrosion of OCTG products. These can be dealt with by putting corrosion controls in place and implementing efficiencies that come from process automation.

A greater challenge being overcome in the region is a change of thinking when it comes to OGTG. Operators, including many of the national oil companies (NOCs), have started to explore opportunities for efficiencies in the purchasing, use and inventory management/control of tubulars. They are arriving at this change of mind-set as global operators show the value of using only necessary resources in the face of downturn in key markets.

The Middle East has been in a position of its own in recent years, with drilling activity consistently high when compared to other oil and gas hubs. Whenever business is going well, there isn’t a necessity to change techniques or technologies. However, operators are realising there are lessons to be learned from other regions where drilling demand has been lower. More than that, some global partners are expecting certain behaviours in a lower for longer environment.

Improved management of drill pipe, casing and tubulars

Operators in the Middle East and North Africa (MENA) region have many choices of where they purchase their OCTG products and services. Steel mills are producing across the region while the import market is strong for the major international manufacturers. Once the joints are supplied by the thousands, typically on a projected annual demand basis, that’s where the relationship between the supplier and the customer often ends. The pipe is delivered to the client, passes an initial receipt inspection and from there becomes the ownership and responsibility of the NOC, who have until recently viewed OCTG as a consumable, not a valuable asset.

There is a different approach that is filtering into MENA and it comes from examples of best practice and lessons learned globally. Technologies are enabling better inspection, refurbishment and inventory management, allowing companies to control OCTG as an asset and remove the consumable tag therefore reducing waste.

Ramco is using its 40 years’ experience in the Total Tubular Management™, inspection, care and maintenance of OCTG in mapping out the tubular process and current inefficiencies on behalf of several Middle East NOCs. Adapting the lifecycle philosophy of OCTG away from a disposable product that ends up as scrap to a commodity with an asset value. This approach has the potential to reduce the cost base of drilling operations.

By improved inventory and asset management of OCTG, managing the lifecycle from manufacture to well site including the rig returns, rejects, and damaged joints millions of dollars can be saved annually.  Reduced inventory levels can be held, reducing capital or operational expenditure, smaller storage facilities are needed, less pipe handling occurs and most importantly every joint is an asset to be treated as such and used, repaired, inspected and cleaned rather than thrown away.

Technology-led savings

Ramco has proven that launching a Total Tubular Management™ programme is relatively low-cost in comparison to the complexity of an operator shipping, storing and deploying tubulars only for a percentage to remain unused. It can avoid excess handling and extensive corrosion while lowering logistics costs and improving safety due to less manpower or movements.

A technological advancement within Ramco, enabling speed of operations, corrosion control and flexibility near drilling sites, is the Pipe Care Unit 3 (PCU3®). It is a mobile pipe care unit, self-contained in two 40’ containers, which can be transported by vessel and truck. The PCU3® technology is designed to offer operational efficiency for internal and external cleaning and treatment of OCTG. It can be commissioned by customers and set-up anywhere in the world within 7-10 days. Each unit is designed to be operated with minimal local labour due to automated functions.

It can process from 2 3/8” to 20” OCTG, using a multi-stage cleaning and inspection system. Designed by the in-house engineering team at Ramco, the entry, processing and inspection racks aid manpower with gravity-fed loading, selection and loading arms, and safety bullets to stop uncontrolled movements. Automation includes a spring-deployed internal steam cleaning lance which washes at 300 psi. All water is then automatically channelled into a filter system for re-use, a vital aspect in remote and desert conditions. A further technology-assisted step is a laser tally system during the inspection stage which also includes an automated drift system, stencilling capability and protector cleaning station. Ramco has consistently delivered using the latest technologies and will continue to drive safety and process improvements with the continued use of R&D and investing in the latest and safest technology.

Encouraging signs

Driving greater efficiencies across the supply chain in every region is vital. Relationships based on mutual gains have produced significant benefits for Ramco and its customers. The company has ensured it has the people and technologies to manage the whole process from the moment OCTG leave the steel mill to the time they are ready for use at the drilling site.

NOCs are listening to these types of findings and it is becoming clear that a Total Tubular Management™, care and maintenance approach makes business, environmental and logistical sense. Importantly, this change of mindset can support the drive for greater efficiencies across the supply chain and we’re working with partners on further new ideas.

Total Tubular Management™ based on much more accurate data than was previously possible is becoming a reality. Teams of inventory specialists are using digital resources as tools to allow customers to know where their tubular is at all stages of the process and lifecycle. At Ramco, we have introduced our new operational management system (ROMS) which allows us to build a picture of customers’ activities from beginning to end, with real-time figures on tubular usage within an inventory, stock rotation and cleaning and refurbishment schedules.

Making the future happen

There are regions of the world where inventory management makes sense in financial and logistics terms. At Ramco, we have shown it is possible to drive efficiencies in remote locations, such as Western Australia, through inventory optimisation and automated technologies deployed closer to drill sites. Customers have confidence in our Pipe Care Excellence, which they know means we constantly review current processes and find ways of working which lower costs associated with moving, handling and maintaining OCTG. We know that this sound advice can make differences in the Middle East too.

Ramco has embedded itself in five global regions and remains determined to fully understand the unique challenges of each while using the experience of lean principles and development of technologies to make differences that make financial, logistical and environmental sense. The OCTG market has always been driven by basic demand for products, but now customers want greater efficiencies during the supply and storage stages. We’re confident as a supply chain partner that we have the correct tools and relationships in place to offer sound advice and provide the answers.