VOLUME 8

PRODUCTION OPERATIONS

Table of Content

Section 1: Asset Management................................................................................................................................ 2

1.1 Introduction ............................................................................................................................................ 2
1.2 Annual Field Performance Review .................................................................................................... 3
1.3 Mature Fields ........................................................................................................................................... 3
1.4 Asset Relinquishment ........................................................................................................................... 5
1.5 Asset Abandonment Pre-Requisites ................................................................................................. 6
1.6 Transition Plan from Operations to Abandonment (TPOA) ....................................................... 9

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Section 1: Asset Management

1.1 Introduction
Contractor(s) shall operate in a manner that is consistent with principles of
sound well, reservoir and Facilities management at all stages of the field’s life
cycle.

As explained in Volume 6, Technical Review Committee (TRC) acts as a single

point of techno-commercial accountability, endorses technical assurance; plan
and activities and schedule and cost related to asset management through ADIR
and AMIR processes.

AMIR is a single annual review that integrate all asset management reviews. The
focus for AMIR is as detailed below:
a) RMP;
b) Volumetric update;
c) TWM;
d) Objective driven surveillance and data acquisition;
e) Surface Facilities;
f) TP and production forecast;
g) Abandonment; and
h) Projects/Activities and costs.

The objectives of AMIR are as follow:

a) To evaluate asset performance in holistic approach;
b) To identify opportunities, constraints and threats to production potential
and UR;
c) To trigger AVF, FFR, or FDP studies and development opportunities to
maximise recovery; and
d) To provide an avenue for technical endorsement or approval for
PETRONAS activities such as but not limited to the above focus areas.

Details of AMIR are discussed in Volume 8, Section 1.2. Further details on ADIR
and AMIR shall be referred to “Enhancement of Business Processes to Achieve
Optimum Life-of Field (LOF) Value”.

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1.2 Annual Field Performance Review

1.2.1 Asset Management Integrated Review (AMIR)
PETRONAS shall determine the timing of AMIR of a field. Contractor(s)
shall submit the required data and information prior to AMIR of the field.
For AMIR of the field, Contractor(s) shall deliver but not limited to the
following:
a) Summary of management and performance of the field (well,
reservoir and Facilities) based on the defined KPIs and business
drivers;
b) Inventory of opportunities, risks and constraints to the operation,
cost, production, technical potential and reserves of oil,
condensate, AG and NAG with respective action plans and
recommendations;
c) 1+1 year of activities, schedule and associated cost;
d) Recommendations for cost reduction and performance
enhancement through innovative solutions; and
e) Recommendations for partial or full asset abandonment or
relinquishment.

1.2.2 Requirements for AMIR

Contractor(s) shall make all necessary data and information available for
AMIR as per AMIR guidelines or template issued by PETRONAS.
Contractor(s) shall use recent data and information in the presentation
package. The data and information shall be as recent as two (2) months
prior to planned review session. Contractor(s) shall also make sure that
key personnel is available during the review.

1.3 Mature Fields

Contractor(s) is responsible and obligated to deliver production and cost
effectively with the right operating philosophy, approach and model at each
stage of the field life cycle.

This also applies when a field becomes mature. PETRONAS views ‘mature field’
as a field that has limited remaining economic life with potential to maximize
economic recovery, typically one that has produced for more than twenty (20)
years (for non-marginal fields) or approximately four (4) years (for marginal
fields).

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In general, Contractor(s) is allowed to have an acceptable level of flexibility on

how the field is operated as compared to the early years of the field being in
operation.

The illustration of when a field may be considered mature is depicted in Figure

1.3-1, although it must be noted that the application of Production and Reserves
Enhancement (PRE), Late Field Life Optimization (LFLO) and Asset Life Extension
(ALE) may not be sequential as indicated.

Figure 1.3-1: Typical Field Life Cycle

Once a field qualifies as a mature field, Contractor(s) is required to perform the

following to optimize productivity and maximize profitability:
a) PRE
Once the production has passed its peak and is declining, the subsurface
potential is to be maximized to prolong economic life of a mature field
by among others, deployment of innovative IOR and production/reserve
enhancement methods.

b) LFLO
Once the production is low with little remaining subsurface potential, the
operations efficiency is to be enhanced through process simplification,
eliminating any ‘excess’, sharing of facilities, changes to operations/
maintenance philosophies and/or any other suitable methods.

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c) ALE
The operation of a facility may be extended beyond the intended design
life should there be a need with focus on safety, integrity and reliability of
the asset and to ensure it is still economically viable to continue its
operations.

Details of the abovementioned elements can be further referenced in the MFOM

Guideline.

The elements were established with the objective of realizing improvements in

the economic value, ensure safe and efficient operations of a mature field,
which are essential to Contractor(s) and PETRONAS’s business and HSSE
performance targets.

Contractor(s) shall submit proposal(s) to PETRONAS as specified in the

respective sections of the MFOM Guideline. Progress updates and status
reporting shall be done through existing forums such as IOMs, AMIR and others.

1.4 Asset Relinquishment

1.4.1 Full Relinquishment
Contractor(s) shall continue to gather and analyse well and reservoir
performance data and operate in a manner that is consistent with the
optimum reservoir management strategy of the field in line with Volume
8, Section 2 at any time during the period of the Contract.

At the end of the Contract period, Contractor(s) shall comply with

surveillance requirements and reservoir management strategy of the field
and reservoir. Contractor(s) shall maintain all data and information
pertaining to the field and reservoir and make them readily available to
PETRONAS by the end of the Contract period following the details as per
Volume 11, Section 4.

Contractor(s) shall hand over all the wells and facilities in a safe and
operable condition at the end of the Contract period.

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Contractor(s) shall undertake and fulfill all rectification activities identified

through Due Diligence Assurance (DDA) as well as all abandonment
liabilities as stipulated in the Contract.

Further details on full relinquishment and DDA shall be referred to Volume

8, Section 7 and Volume 9 for field abandonment.

1.4.2 Partial Relinquishment

Contractor(s) may partially relinquish operatorship of sub-block, field, or
asset during the Contract period. Contractor(s) shall handover all wells
and Facilities in a safe and operable condition.

Contractor(s) shall undertake and fulfill all rectification activities identified

through Due Diligence Assurance (DDA) as well as all abandonment
liabilities as stipulated in the Contract.

Further details on relinquishment and DDA shall be referred to Volume 8,

Section 7 and Volume 9 for field abandonment.

1.5 Asset Abandonment Pre-Requisites

1.5.1 Full Field Abandonment
Contractor(s) shall complete the following pre-requisites prior to full field
abandonment:
a) Obtain approval for full field abandonment via ADIR upon
completion of FFR or AVF. Refer to Volume 6, Section 1;
b) Obtain SWAP-1 certificate approval for all wells in the field via
AMIR. Refer to Volume 8, Section 2;
c) Obtain SFAP certificate approval for all associated Facilities in the
field via AMIR. SFAP is an official document issued by PETRONAS
to Contractor(s) certifying that the Facilities abandonment shall
take place. Refer to Volume 8, Section 1.5.2; and
d) Obtain PAP certificate approval for all Pipelines in the field via
AMIR. PAP is an official document issued by PETRONAS to
Contractor(s) certifying that the Pipelines abandonment shall take
place. Refer to Volume 8, Section 1.5.2.

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Further details on CoP shall be referred to Volume 8, Section 7 and for

details on decommissioning process and execution shall be referred to
Volume 9, Section 3.

1.5.2 Partial Field Abandonment

Contractor(s) may partially abandon a field and Facilities or Pipelines
associated with it. Pre-requisites for partial Facilities abandonment are as
follows:
a) Contractor(s) shall obtain SWAP-1 certificate for all wells
associated with a platform or Pipelines proposed to be
decommissioned and abandoned in accordance with Volume 8,
Section 2.3.3.3 and plan for abandonment of all the wells in
accordance with Volume 7, Section 8 and 9;
b) Contractor(s) shall obtain SFAP approval from PETRONAS through
AMIR for any platform, jacket, or structure to be decommissioned
and abandoned; and
c) Contractor(s) shall obtain PAP approval from PETRONAS through
AMIR for any Pipelines to be decommissioned and abandoned.

For issuance of SFAP certificate, Contractor(s) shall satisfy the following

and obtain approval via AMIR:
a) For Facilities with wells, all wells associated with the platform have
been granted SWAP-1 certificate through AMIR, in accordance
with Volume 8 Section 2.3.3.3; and
b) The Facilities or platform has no present or future economic value
for exploitation of any field which could utilise the Facilities.

For issuance of PAP certificate, Contractor(s) shall satisfy that the

Pipelines has no present or future economic value for exploitation of
any field which could utilise the Pipelines.

AMIR may require AVF or FFR outcome together with ADIR for approval
of the partial field abandonment and associated SFAP and PAP
certificates.

Contractor(s) shall submit Facilities or Pipelines abandonment plan for

PETRONAS approval within six (6) months of issuance of SFAP or PAP

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certificate. Requirements for Facilities or Pipelines abandonment is listed

in Volume 9.

PETRONAS may issue SFAP or PAP certificates for Facilities and

Pipelines which are idle or are operating at uneconomic conditions, the
considerations of issuance of SFAP or PAP are as follows:
a) For platform or jacket in which all wells have SWAP-1,
Contractor(s) shall provide justification and obtain approval from
PETRONAS that the platform or jacket has future economic use
within six (6) months of PETRONAS issued SFAP certificate date. If
no approval from PETRONAS is obtained for the proposed future
platform and jacket use requirements, Contractor(s) shall adhere
to timebound limits for SFAP as stipulated in Volume 8, Section
1.5.3 and proceed with abandonment planning;

b) For platform or jacket which is idle, Contractor(s) shall provide

justification and obtain approval from PETRONAS that platform, or
jacket has either remaining economic reactivation potential or
other future use requirements within six (6) months of PETRONAS
issued SFAP certificate date. If no approval from PETRONAS is
obtained, Contractor(s) shall adhere to timebound limits for SFAP
as stipulated in Volume 8, Section 1.5.3 and proceed with
abandonment planning; and

c) For platform or jacket which is producing at uneconomic level,

Contractor(s) shall provide justification that future activities will
bring the platform or jacket back to economic production levels
via production enhancement, IWR, redevelopment potentials, or
cost reduction measures within six (6) months of PETRONAS
issued SFAP certificate date. If no approval from PETRONAS is
obtained, Contractor(s) shall adhere to timebound limits for SFAP
as stipulated in Volume 8, Section 1.5.3 and proceed with
abandonment planning.

Analysis of economic viability shall include estimated production revenue

and cost to the end of Contract period, including abandonment costs.

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1.5.3 Timebound Limit for Surface Facilities and Pipelines

Contractor(s) shall adhere to timebound limits for Facilities and/or
Pipelines which are idle or have received SFAP or PAP certificate as
specified below:
a) Platforms or jackets which are idle shall either be reactivated or
obtain SFAP certificate within twelve (12) months or before
Contract expiry, whichever is earliest;
b) Platforms or jackets which have SWAP-1 certificate for all
associated wells shall obtain SFAP certificate within twelve (12)
months or before Contract expiry, whichever is earliest;
c) Pipelines which are idle shall either be reactivated or obtain PAP
certificate within twelve (12) months or before Contract expiry,
whichever is earliest; and
d) Facilities for which SFAP was granted shall be decommissioned
and abandoned within three (3) years of SFAP issuance date or
before Contract expiry, whichever is earliest.

1.6 Transition Plan from Operations to Abandonment (TPOA)

The objective for TPOA is to ensure the Facilities are properly maintained
without imposing unnecessary risk and jeopardizing decommissioning
execution in terms of HSSE, cost, and schedule.

Contractor(s) shall prepare TPOA and submit to PETRONAS within two (2) weeks
of full or partial field abandonment approval. This activity shall be a continuation
from the planned maintenance program and focused on equipment and/or
items to be utilized during the decommissioning and abandonment phase.

The content of the TPOA shall include, but is not limited to the following:
a) List of any preservation, flushing, topsides modifications,
depressurization, draining of liquids, waste handling, isolation, and
interim maintenance required prior to decommissioning. The list is
required for both pre and post CoP;
b) List of any modifications and requirements for topside modifications
required prior to well plug and abandonment;
c) Types of medium and methods used to execute Hydrocarbon free
process;

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d) Inspection and surveillance plan identified between CoP to

abandonment;
e) Cost estimate and timeline for estimated scope to be performed during
the transition from operations to abandonment;
f) List of documents identified and required to support abandonment
review and execution. The updated asset register list shall be in
accordance with Volume 8, Section 3; and
g) Handover requirements includes scope demarcation matrix, summary of
checklist prior to handover from operations to abandonment team, and
list of equipment required to be maintained for decommissioning and
abandonment scope.

Further details on CoP shall be referred to Volume 8, Section 7.3 and details on
decommissioning and abandonment execution shall be referred to Volume 9.

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