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Page 1: Spe 80438 Rejuvenation PEP

Copyright 2003, Society of Petroleum Engineers Inc.9

This paper was prepared for presentation at the SPE Asia Pacific Oil and Gas Conference andExhibition held in Jakarta, Indonesia, 15–17 April 2003.

This paper was selected for presentation by an SPE Program Committee following review ofinformation contained in an abstract submitted by the author(s). Contents of the paper, aspresented, have not been reviewed by the Society of Petroleum Engineers and are subject tocorrection by the author(s). The material, as presented, does not necessarily reflect anyposition of the Society of Petroleum Engineers, its officers, or members. Papers presented atSPE meetings are subject to publication review by Editorial Committees of the Society ofPetroleum Engineers. Electronic reproduction, distribution, or storage of any part of this paperfor commercial purposes without the written consent of the Society of Petroleum Engineers isprohibited. Permission to reproduce in print is restricted to an abstract of not more than 300words; illustrations may not be copied. The abstract must contain conspicuousacknowledgment of where and by whom the paper was presented. Write Librarian, SPE, P.O.Box 833836, Richardson, TX 75083-3836, U.S.A., fax 01-972-952-9435.

AbstractPertamina DOH SBS located in South Sumatra, Indonesia,operates the largest area of oil fields under Pertamina ownoperations. It has 55 fields mostly discovered and developedfifty years (even for some more than a hundred years) ago.The common problems encountered in the old oil fields arelack of data; old facilities; artificial lifts requirement, depletedin pressure and reserves; and high water cut problems.

This paper reviews a comprehensive study onrejuvenation of the matured fields in Pertamina DOH SBS byemploying a cross function synergy team (multidisciplineteam) and project management approaches. The teams consistof geophysicists, geologists, reservoir engineers, operation/production and facility engineers, and professionals fromsupporting department such as finance, logistics, HSE, HRD,IT, etc. The project called Production Enhancement Projects(PEP) was established in 2001 and divided into phases.

The first phase of PEP that was assessing detailedsubsurface and surface facilities data has been donesuccessfully resulting in 45.6 MMBO of additional oilreserves within 12 selected existing matured fields. Besides,the upside potentials are identified as a surprising spill over ofthe study.

Plan of further development for each field has beenproposed including the evaluation of economics andenvironment aspects by considering in-depth GGRP(geophysic-geology-reservor-production) study and intensivediscussion among team leaders, team members, andmanagement. After prioritizing the proposed work plan,several implementations of well work (such as: reopening; re-perforating; reparation; sidetracking, twin drilling; etc.) showsome successful results. At least two wells will be drilled thisyear (2002) to prove the upside potentials of oil located indeep zones of the existing fields.

IntroductionPertamina DOH SBS has 55 oil and fields extended in twooperating areas. Those are East Operation Area and WestOperating Area. The West area is located in Pendopo fieldcomplex, while the East Area is in Prabumulih field complex.Figure 1 shows the situation map of two areas and itssurrounding fields.

Based on the field assessment, the total number offields is 55 consisting of 32 active fields (with 3 fields arerelatively new) and 23 non-active fields. The non-active fieldsare mostly abandoned because of high water cut or depleted.The others are still under observation with limited number ofwells. The most active fields have a potential remainingreserve, although those have been produced for tens of years,even for some more than a hundred years. The problems couldbe identified as follows: there are limited data available eitherthe quantity or its quality; the most production facilities areold with a low efficiency; the reservoirs have been depleted inreserves and pressures; the most active wells have high watercut problems, and some need artificial lifts optimization.These problems affected the performance of success ratio ofproposed workovers and development drilling activities, andfinally, it does not meet a production forecast. Consequently,the production/operating cost is getting higher.

With a spirit of solving these problems, especially forrejuvenating the matured fields, we have been conducting anew plan and strategy of integrated production enhancementprojects (it is then called PEP). Accordingly, the knowledge,skills, tools, and techniques are applied on all activities ofproduction optimization (developing and managing thematured fields with its all limitations). The steps of this projectare Planning (Re-setting Strategy), Implementing, Monitoringand Evaluating, and Reporting. If the realization is far fromthe planning, then we do Revising. The detail of these stepswill be provided in the next paragraph with a discussion of theproblems encountered.

History of oil fields in South SumatraThe first oil well in South Sumatra, Indonesia, was discoveredin 1870, and developed in 1896 by Muara Enim PetroleumCompany located in Kampong Minyak Block. In 1902, TheRoyal Dutch and Shell established Asiatic PetroleumCompany that focused on oil transportation and trading. Since1907, these companies merged with other oil companiesestablished De Bataafshe Petroleum Maatschappij (BPM) totake the exploration-production activities, the AsiaticPetroleum to have a trading business, and the Anglo Saxon toprovide the transportation services.

SPE 80438

Rejuvenation of Matured Oil Fields in South Sumatra, IndonesiaSalis Aprilian, SPE, Kun Kurnely, and Kiagus Novian, Pertamina DOH SBS

Page 2: Spe 80438 Rejuvenation PEP

2 SALIS APRILIAN, KUN KURNELY, KIAGUS NOVIAN SPE 80438

The exploration-production done by BPM coveredSouth Palembang (Sumatra) Complex such as Tanjung Tiga,Talang Jimar, Gunung Kemala, Tanjung Miring, Limau,Suban Jerigi, Prabumulih Barat, and Sei Taham. The peakproduction was about 75,000 bopd in 1961.

The other exploration-production company wasoperated in 1912 called Standard Oil of New Jersey, which in1959 was changed into Stanvac Indonesia (PTSI). Theoperation area of PTSI was located in Pendopo Area (westernof BPM area). The field named Talang Akar had a peakproduction of 20,000 bopd in 1916.

Pertamina as a state oil company of Indonesia thatwas just established in 1966 took over the exploration-production after buying all the assets of PT. Shell. Pertaminathen discovered several new fields like Kuang, Benakat Timur,Beringin, Musi, Sopa and Tapus. However, as a matured fieldthese discoveries could not lift the production significantly asshown in Figure 2. Seeing this graph, the prolific efforts mustbe created if we do not want to lose more production aftersteep declining since 1999. However, to maintain the agedfields, an integrated evaluation of production enhancementthat will come up with a realistic solution is needed. Re-settingstrategy of rejuvenating matured fields is then the mainobjective of this discussion.

Rejuvenation Philosophy and StrategyRejuvenation is a cycling process of making something agedto be younger, fresher, and stronger. In the other words,related to the oil and gas fields, we defined that not only theproduction facilities and other infrastructures should berenewed, but also we should find out the possibilities ofgetting new reserves or discoveries. Figure 3 shows the lifecycle of oil fields from discovery, developing, and finallybecome a matured field. Intensification of the existing fieldsis one of rejuvenating strategies through the steps ofmaximizing recovery. While the new exploration with a newconcept is needed to secure the production life cycle since theoil and gas reserves are not renewable. Explorationists say “wecould find the new reserves in the new areas with an oldmethod, but we could also find the new reserves in the oldareas with a new method (approaches).” For the geologistsand reservoir engineers, a specific forum evenly has beenconducted successfully to call attention to the fact thatrejuvenation of oil fields could be drawn from analysis ofcompartmentalized geologic units1). The other forum stressedon multidiscipline team approach to turn mature fileds intorejuvenated fields 2,3.

Based on a long history of fields located in SouthSumatra, we considered that those fields should be categorizedas matured fields. Hence, we tried to find more oil from theold areas (existing fields) with a new concept of rejuvenation.

In general oil fields, rejuvenation could beremodeling (geology and/or reservoir), infill or step-outdrilling, reopening, reparation, re-perforation, water shut off,stimulation (acidizing, fracturing), optimizing artificial lift orbean performance, or combination of these wellbore strategies.Also, it means replacing the oil production facilities,revamping, or rebuilding the gathering station, flowlines, atc.For certain oil fields, secondary or even tertiary recoverymethods are implemented4. Since these activities could be

defined as the projects (unique and has time limitation) thenwe treated them with a project management approach.

Project Management ApproachProject Management is defined as application of knowledge,skills, tools, and techniques on project activities to fulfillcompany needs and/or the target of project itself 5. The stepsare initiated by looking into the strengths, weaknesses,opportunities, and threats of the company and itsenvironments. This step is well known as SWOT Analysis.Through the analysis we have pictured our company profileswith its factual conditions for setting up the strategy ofdevelopment.

Input data of SWOT Analysis were taken fromdetailed data assessment including subsurface and surfacefacilities data, and company’s organization structure as well.The data assessment consists of inventory of the problems,such as availability of main and support data, empowerment ofexisting software/hardware, engineer allocation, and the short-middle-long targets.

From the preliminary study, we have Strengths onassets; working area; experienced engineers; gas market; oiland gas prices; most fields are still under primary recovery;unexplored deep zones; production facilities and otherinfrastructures (piping, gathering station, roads, building,software/hardware, telecommunication, etc.). The Weaknessesare on condition of tools; production facilities; data (quantityand quality) management; engineer allocation; technology;and field execution. Many Opportunities could be drawn fromthese conditions like developing gas fields; improving the datamanagement; secondary or tertiary recovery; explore upsidepotentials; and production enhancements. However, theThreats have to be considered like limited tools andtechnology available; investments; environments issues; andnew government rules.After having a SWOT Analysis, we focused on the problemsencountered in selected structures (fields). Then, weprioritized the potential elements to be solved in the short-middle-long period, and we decided to make the steps ofaction plan. As a project management approach, we stick allactivities to the time schedule that we arranged. The steps canbe summarized as Data Assessment; Engineer Allocation;Making Proposal and Presentation; Monitoring/Evaluation;and Reporting.

Prioritization. This step was conducted after we have donethe data assessment including surface and subsurface data andenvironments. The results of data assessment weresummarized on the “BCG – Growth Share Matrix” as shownin Figure 4. The Star, Cash Cow, and Question MarkMatrixes compose the fields that have remaining reservesabove 10 MMSTB. Based on this data, a prioritization hasbeen drawn to establish a multidisciplinary team that willfocus on arranging the next action plan.

Multidisciplinary Team. We decided to form 10 Multi-disciplinary Teams (then it’s called as PEP Teams) consistingof geophysicists; geologists; petroleum engineers; and facilityengineers. Also, as a Field Operation group, the supporting

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SPE 80438 REJUVENATION OF MATURED OIL FIELDS IN SOUTH SUMATRA, INDONESIA 3

departments like finance; HSE; procurement; HRD; and IT;contribute their work actively in the same goal of productionenhancement projects (PEP). The schematic of multi-disciplinary teamwork is shown in Figure 5.

If we draw the bold line, there are two groups of PEPTeams: the Engineering Group and Field Operation Group.The engineering group is responsible mainly on GGRP studyand making proposal of field development. While the fieldoperation group supports how to execute the proposalsuccessfully and safely (both technical and economicalaspects). Say, the procurement department has a novelprocurement strategy with purposes of increasing quality,availability, and realibility of materials and services.

Engineers Allocation. Since we have established a formalorganization structure run this area, we built an externalstructure to accommodate the approach as we called amultidiscipline team. The Organization Breakdown Structurecan be seen in Figure 6.

Each team took engineers from the existingorganization structure as full time persons who work with aGroup Leader. As stated in the job description, those engineersreport to Group Leader. We allocated about a half ofemployees of core department (geophysic, geology, reservoir,production-operation) in these groups. A Leader wasnominated based on his competency and the problems that wefaced in the selected fields. Let’s say, a reservoir engineer willbecome a leader for solving the problems of a stratifiedreservoir, while a geologist as a leader of selected field withundefined complex geology.

Reserves Assessment. Based on detailed GGRP (geophysics-geology-reservoir-production) study, the reservoir assessmenthas been conducted successfully. The available software andhardware were empowered by geophysicists, geologists andengineers to create a new and/or updated models with newintegrated knowledge and approaches for every single field.The results are shown in Table 1.

The additional reserves shown in the table are purelytaken from the existing data study with a new GGRP concept.The other table (Table 2) shows a spill over of this study, wecalled “upside potentials”. These resources were identified as“prospects” and “leads” that needs drillings or additionalseismic data for confirmation. At least three semi-explorationdrillings were proposed to be drilled in 2002. The others wereplaned in 2003 and so forth after running additional 3Dseismic in some areas.

Scheduling. This PEP was divided into phases7. The firstphase initiated in early 2001 was focused on reserveassessment and making Plan of Development (POD) and/orPlan of Further Development (POFD) of selected potentialfields. The general schedule is presented in previous figure.While the more detailed timetable was arranged by each groupto make their own schedule suited to their activities. Itdepends on the complexity of the problems, the dataavailability, and supporting engineers.

The second phase has been continuing the work ofPEP I by re-prioritization of the proposed projects (those areincluded in PODs/POFDs) based on economic analysis and

anticipating oil/gas business changes (The new Indonesia Oiland Gas Law, 2002). It includes the implementation of themost important and urgent projects, like waterflooding and re-pressurizing for certain fields. Besides, there are problems thatshould be solved like completion and artificial liftoptimization. For anticipating gas demand in the long period,we also established a new project group called “coalbedmethane (CBM) and shallow prospects”. This group isresponsible to evaluate CBM resources in South Sumatra thatwere indicated by previous study6, and they did study of theexploitation-production technology for CBM development.

Monitoring and Reporting. One of the important steps ineither Project Management or Reservoir Management isMonitoring and Reporting for the purposes of evaluation andmaking a revision8. The monitoring was done through theprogress report every two months. This progress report is usedto be an arena of judgment and evaluation of the proposedprojects. This forum was attended by management (decisionmaking level) and the experts. Every presentation was broughtby Group Leader and supported by group members in theirdiscipline.

Reporting was made after the progress report done byconsidering all the input from the forum. The final reportwould be a final plan of (further) development consisting ofcompleted GGRP study and development plan of related field.

Results and DiscussionIn the following paragraphs we would like to show the resultsof the PEP especially on rejuvenating the matured fields inPertamina South Sumatra.

Additional Reserves. This project has successfully updatedthe hydrocarbon reserves based on the new concept andmultidisciplinary approach by empowering the availablesoftware and hardware. Most of the selected fields come upwith an additional oil reserves around 0.2 – 12 MMBO asshown in Table 1. Some fields still have no additional oilreserves or even less than before updating.

“Upside Potentials”. A surprising result that we have neverthought before is what we called “Upside Potentials”. Theseresources are located either underneath the existing fields(deep zones) or laterally not too far from the existing fields.These potential reserves indicated by detailed G&G analysiswere categorized as prospects and leads as shown in Table 2.To prove these potentials we have strategy that the upsidepotential wells are drilled close to the good proven existinglayers. This step could reduce the risk and the cost as well. Atleast one well has been drilled based on this strategy and wefound the good result.

Drilling and Workovers. In the existing structures, at least 17(seventeen) wells were drilled based on new interpretation asresults of this study. A granite wash reservoir was identifiedclearly and mapped. The twin wells were drilled and producedup to 300 – 500 bopd per well. A new layer has been identifiedby biostratigraphy approach and tested successfully. Throughworkover in several existing wells resulted in gain productionof oil up to 675 bopd per well. The associated gas was also

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4 SALIS APRILIAN, KUN KURNELY, KIAGUS NOVIAN SPE 80438

recovered from some well up to 4.58 mmscfd. Reopeningand/or reperforating job on selected wells (layers) with orwithout acidizing had successful results after identifying theprospective layers. These reactivation wells produced up to600 bopd and 2.89 mmscfd per well.

The works done. New reservoir models was built fromseismic data and detailed structural geologic modeling. Arealistic model for faulting in the existing area was establishedto determine the distribution of key petrophysical propertiessuch as lithology, porosity, and water saturation. Deep GGRPstudy resulted in many advantages, such as: updated regionalgeology map, re-engineering GGRP data, updated reserves,quantified “upside potentials”, production facilities inventory,and optimized production. A new concept has been introducedbased on bio-stratigraphy to define and correlate the newlayers. One of the new layers called P21 (Oligocene) and P20-P17 (Eocene) have been successfully correlated and tested.The twin wells were drilled and workovers were conducted toprove the concept and, eventually, it provided surprisingresults. Several fields have been rejuvenated since there aresignificantly updated remaining reserves and productionfacilities. The investment has been spent for rejuvenating oldproduction surface facilities (like pipelines, pumps, generators,compressors, etc.).

In operation, we conclude that the twin drilling wellshas had successful strory in developing the existing fields. Wehave proved that the additional reserves shown in Table 1 area realistic range. From the new twin wells (about 5 wells) webook up to 300 bopd per well in average for initial production.Some wells flow naturally, and some need artifial lift forproducing the oil. The work over and reopening have gainedproduction of 100 – 455 bopd per well. One deep well hasproved that the Layer P21 (Oligocene) still existed and itcontains hydrocarbon. These results are being used forcorrelating to the other fields to prove the existence of “upsidepotentials.”

A continuous improvement has been applied toenhance the concepts for better results through monitoring andrutin meetings. The progress report presentation has beenemployed as an arena of evaluation and improvement of eachPEP Groups’ program.

ConclusionsFrom the above discussion, we conclude that the mostimportant step of rejuvenation of a mature field is the self-assurance of engineers and management that we could get theoil from the old field with a new concept. We should alsobelieve that “the oil is not in the earth, but in our brain”. Witha multi-disciplinary team approach, we recognize that, in theupstream oil business, each engineer has only about 10 -15 %of contribution to get a successful result. GGRP engineershave to incorporate with supporting department staff (suchfrom finance, legal, procurement, IT, HRD, security, etc.).

The other conclusions are as follows:1. The selected fields have been updated with an additional

oil reserves around 0.2 – 12 MMBO. However, some fieldsstill have no additional oil reserves or even less than beforeupdating.

2. “Upside Potentials” were indicated and categorized as

Prospects and Leads. These potential reserves are locatedeither underneath the existing fields or laterally not too farfrom the existing fields. To reduce the risk and the cost aswell, we have strategy that the upside potential wells aredrilled close to the good proven existing layers.

3. Several wells were drilled on existing structures based on anew interpretation (concepts) as results of this study. Thesewells produced up to 300 – 500 bopd per well.

4. A biostratigraphy approach has been used to proposedrilling and workovers in several existing wells. Thesewerkover jobs resulted in the net production of oil up to675 bopd per well with associated gas up to 4.58 mmsfd.

5. The advantages of PEP are updated regional geology map,re-engineering GGRP data, updated reserves, quantified“upside potentials”, production facilities inventory,optimized production, and a teamwork improvement.

6. The additional investment was spent to the detailed studyand especially for rejuvenating aged production facilities.

7. A routine meeting of evaluation and monitoring has beenconducted to enhance the concepts and the programs forbetter results.

AcknowledgementsWe thank Pertamina Management for permitting andsupporting the data in this paper. A special thank we extend toour colleges who gave us the ideas and invaluable commentsthat make this paper available.

Reference1. Slatt, R.M., Compartmentalized Reservoirs in Rocky Montain

Basins, Rocky Mountain Assocoation of Geologists, Dencer,Colorado, 1998.

2. Sneider, R. et.al, The integration of geology, geophysics,petrophysics and petroleum engineering in reservoir delineation,description and management, Proceedings of the First ArchieConference, Oct 22-25, 1990, Houston, TX.

3. Puspoputro, B., Aprilian, S., “The contribution of geoscience inreservoir management: Indonesia perspective, Proceeding ofIndonesian Association of Geologists GEOSEA 2001, 30th

Annual Conference, 10th Regional Congress, Yogyakarta,Indonesia, 2001.

4. Schlumberger, Indonesia 2000 Reservoir OptimizationConference, Schlumberger, 2000.

5. Suharsono T, Yassin, M, Project Management, In-house TrainingPERTAMINA, August 21-25, 2000.

6. Stevens, S.H., Sani, K., Hardjosuwiryo, H., “Indonesia’s 337 TCFCBM resource a low-cost alternative to gas, LNG”, Oil&GasJournal, October 22, 2001.

7. PEP, Searching for more oil and gas , The IOG Chronicle,August 2002.

8. Satter, A., and Thakur, G.C, Integrated Petroleum ReservoirManagement: A Team Approach, PennWell Books, Tulsa, 1994.

***

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SPE 80438 REJUVENATION OF MATURED OIL FIELDS IN SOUTH SUMATRA, INDONESIA 5

Table 1 The addition reserves based on PEP study

Table 2 “Upside Potentials”

Figure 1 The situation map of South Sumatra oil and gasfields.

Figure 2 The production history of Pertamina own operationin South Sumatra fields.

Figure 3 Schematic of oil/gas fields life cycle

Figure 4 The BCG-Growth Share Matrix of Pertamina SouthSumatra fields.

TL.Gula

Musi

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KAB.MUBA

KAB.MURA

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KAB.LAHAT

A P B

A P T

49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 '01 '03 '050

20000

40000

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100000

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GUNUNG KEMALA

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49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 '01 '03 '050

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PAST PRESENT FUTURE

EXISTINGFIELDS

REOPENINGREACTIVATION

EXTENSION(NEW DISCOVERY?)

MATURATION

REJUVENATION

MARGINALFIELDS

UPSIDEPOTENTIAL

PAST PRESENT FUTURE

EXISTINGFIELDS

REOPENINGREACTIVATION

EXTENSION(NEW DISCOVERY?)

MATURATION

REJUVENATION

MARGINALFIELDS

UPSIDEPOTENTIAL

BCG - GROWTH SHARE MATRIXpe riode 1999/2000

18

201719

25 2622

272324

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97

10

8

6

11

2

3

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ate

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No. FIELD NAMEORIGINAL PEP Additional

[MMBO] [MMBO] [MMBO]

1 FIELD 1 2.94 11.70 8.762 FIELD 2 6.25 6.44 0.193 FIELD 3 0.61 4.76 4.154 FIELD 4 6.09 5.76 -0.335 FIELD 5 5.63 12.89 7.266 FIELD 6 2.29 3.45 1.167 FIELD 7 2.84 2.84 0.008 FIELD 8 23.47 23.47 0.009 FIELD 9 3.57 15.80 12.2310 FIELD 10 11.00 11.40 0.4011 FIELD 11 3.91 13.17 9.2612 FIELD 12 8.06 8.06 0.00

SUB TOTAL 76.66 119.74 43.08

32.60 32.60 0.00

TOTAL 109.26 152.34 43.08

*) Related to confidential data, the field names are not mentioned

REMAINING RESERVE

A. PEP's FIELDS *)

B. Non-PEP FIELDS

No. Field/Block Name Formation/Layer Status(*) Minyak [MMBO] Gas [BCF]

1 FIELD 1 P22 Prospect - Oil 592.02 FIELD 2 P22 Prospect - Oil 273.33 FIELD 3 P22 Prospect - Oil 4.84 FIELD 1 P22 Lead - Oil 38.15 FIELD 4 P22 Lead - Oil 51.66 FIELD 5 P22 Lead - Oil 30.57 FIELD 3 P22 Lead - Oil 27.88 FIELD 1 Deep Gas Prospect/Lead Gas 367.19 FIELD 6 BRF Prospect - Gas 374.0

10 FIELD 7 BRF & LAF Prospect - Gas 245.0

(*) Related to confidential data, the field names are not mentioned

POTENTIAL RESOURCES

TOTAL UPSIDE (PROSPECT & LEAD) RESERVES 1018.1 986.1

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6 SALIS APRILIAN, KUN KURNELY, KIAGUS NOVIAN SPE 80438

Figure 5 Schematic of Multidisciple Team approach. Figure 6 The organization Breakdown Structure (OBS).

General Manager

Asset ManagersAPT & APB

ProjectLeader

Field OperationGroup

EngineeringGroup

Chief ofEngineering

Managers

General Manager

Asset ManagersAPT & APB

ProjectLeader

Field OperationGroup

EngineeringGroup

Chief ofEngineering

Managers

ProductionEnhancement

(POD or POFD)

Production FacilitiesEngineers

OperationEngineers

Production OperationEngineers

ReservoirEngineers

GeologistPetrophysicist

Geophysicists

Field OperationGroup

ProductionEnhancement

(POD or POFD)

Production FacilitiesEngineers

OperationEngineers

Production OperationEngineers

ReservoirEngineers

GeologistPetrophysicist

Geophysicists

Field OperationGroup