VOLUME 8

PRODUCTION OPERATIONS

Table of Content

Section 6: Operations Excellence Assurance ........................................................................................................ 2

6.1 Introduction ............................................................................................................................................... 2
6.2 Expectations and Aspirations................................................................................................................. 2
6.3 Performance Management .................................................................................................................... 2

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Section 6: Operations Excellence Assurance

6.1 Introduction
Operations excellence assurance is a continuous process of ensuring the
producing assets and processing Facilities deliver the highest level of
performance. This section provides Contractor(s) with guidelines for
performance management and the explanation of various terminologies relating
to the conduct of performance management. Contractor(s) shall ensure that the
required reporting is executed with integrity and clarity.

6.2 Expectations and Aspirations

PETRONAS expects the Contractor(s) to drive operational excellence in the
upstream activities at all times. Contractor(s) may, at its own effort or upon
instruction by PETRONAS, conduct improvement initiatives on specific activities
for example in production operations or projects in the event that performance
of the producing fields or processing Facilities is below expectation.

6.3 Performance Management

This section provides details of performance indicator, reporting requirements
and meeting frequency in addressing Contractor’s performance.

6.3.1 Performance Indicator

Measurements used as performance indicator to benchmark
Contractor’s operational management performance are described in
Table 6.3-1:

Table 6.3-1: Performance Indicator

PERFORMAN DEFINITION FORMULA OR CRITERIA
CE
INDICATOR
Production A key performance indicator Reconciled Production exclude idle wells
× 100%
efficiency that compares actual Technical Potential
production against technical
Production for:
potential to gauge
• Oil field: Oil and AG
production effectiveness.
• Gas field: NAG and Condensate

Flaring and A measure to the FV Standard conversion:

Venting (FV) performance which is a
good indicator to minimise MMtCO2e MMscf 78 × 365
Flaring � � = Flaring � �×
environmental risk. annum d 10000000

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The unit for FV is MMscf/d MMtCO2e MMscf 382 × 365

Venting � � = Venting � �×
and MMtCO2e. annum d 10000000
Contractor(s) shall monitor
MMtCO2e MMscf 52 × 365
the performance of this KPI CO2 Venting �
annum
� = CO2 Venting �
d
�×
10000000
daily and report monthly.

Total Volume of hydrocarbon (Oil TD Oil Volume = PD Volume + UPD Volume

Deferment and AG) that is deferred as
(TD) Oil Field consequence of both
Planned Deferment (PD) and
Unplanned Deferment (UPD)
events.

Total Volume of hydrocarbon TD Gas Volume = PD Volume + UPD Volume

Deferment (NAG and Condensate) that
(TD) Gas Field is deferred as consequence
of both Planned Deferment
(PD) and Unplanned
Deferment (UPD) events.

Planned Volume of hydrocarbon (Oil Downtime (hrs)

Oil Deferment Volume = × Oil TP
deferment and AG) that is deferred due 24 hrs
(PD) Oil field to activities or events that
Oil Technical Potential (TP) = using latest well TP of
have been planned in
the month
approved submission and
monthly production targets
For facilities with AG export:
that causes well to shut in. Downtime (hrs)
The unit for PD Oil and AG is AG Deferment Volume = × AG TP
24 hrs
in percentage (%).
Contractor(s) shall monitor AG Technical Potential (TP) = using latest well TP of
the performance of this the month
performance indicator daily
and report monthly.

Planned Volume of hydrocarbon NAG deferment volume

deferment (NAG and Condensate) that = Well TP prorated to latest nomination − Actual Production
(PD) Gas field is deferred due to activities Downtime (hrs)
= 24 hrs
× Well TP prorated to latest nomination
or events that have been
planned in approved
Condensate deferment volume
submission and monthly
= Well TP prorated to latest nomination − Actual Production
production targets that Downtime (hrs)
causes well to shut in. The = 24 hrs
× Well TP prorated to latest nomination
unit for PD Gas is in
percentage (%).
Contractor(s) shall monitor
the performance of this
performance indicator daily
and report monthly.

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Unplanned Volume of hydrocarbon (Oil Downtime (hrs)

Oil Deferment Volume = × Oil TP
Deferment and AG) that is deferred due 24 hrs
(UPD) Oil field to activities or events that
Oil Technical Potential (TP) = using latest well TP of
have not been planned in
the month
approved submission and
monthly production targets
For facilities with AG export:
that causes well to shut in. Downtime (hrs)
The unit for UPD Oil and AG AG Deferment Volume = × AG TP
24 hrs
is in percentage (%).
Contractor(s) shall monitor AG Technical Potential (TP) = using latest well TP of
the performance of this the month
performance indicator daily
and report monthly.

Unplanned Volume of hydrocarbon NAG deferment volume

Deferment (NAG and Condensate) that = Well TP prorated to latest nomination − Actual Production
(UPD) Gas is deferred due to activities Downtime (hrs)
= 24 hrs
× Well TP prorated to latest nomination
Field or events that have not been
planned in approved
submission and monthly
Condensate deferment volume
production targets that
= Well TP prorated to latest nomination − Actual Production
causes well to shut in. The Downtime (hrs)
unit for UPD Gas is in = 24 hrs
× Well TP prorated to latest nomination
percentage (%).
Contractor(s) shall monitor
the performance of this
performance indicator daily
and report monthly.

Unplanned Volume of hydrocarbon *AG Loss volume

Loss (UPL) Oil (Associated Gas) that is lost = Well TP prorated to latest nomination − Actual Production
fields by flaring or venting due to Downtime (hrs)
= 24 hrs
× Well TP prorated to latest nomination
activities or events that have
not been planned in Note: * Facilities with AG export
approved submission or
monthly production targets
that causes equipment’s to
shut in.
The unit for UPL for AG is in
percentage (%).
Contractor(s) shall monitor
the performance of this
performance indicator daily
and report monthly.

Unplanned Volume of hydrocarbon NAG Loss volume

Loss (UPL) Gas (Non-Associated Gas) that is = Well TP prorated to latest nomination − Actual Production
fields lost due to activities or Downtime (hrs)
=
24 hrs
× Well TP prorated to latest nomination
events that have not been
planned in approved
submission or monthly

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production targets that

causes Equipment’s to shut
in.
The unit for UPD NAG and
Condensate is in percentage
(%). Contractor(s) shall
monitor the performance of
this performance indicator
daily and report monthly.

Gas Delivery GDR is a key performance There are two (2) measurements of GDR:
Reliability indicator that measures 1) GDR (days)
(GDR) Contractor’s ability to meet Number of days meeting 95% of daily nomination
= Number of days in a month
× 100%
gas nomination.
2) GDR (vol.)
Monthly average AG and/or NAG sales
= × 100%
Monthly average sales gas nomination

Note: * Facilities with AG export

Audit Action Audit action item is defined As per specific Audit requirement
Items as action items that resulted
from the audit findings
which may impact the
organisation against HSSE,
image and economic
consequences if the items
are not effectively reported
and attended to.

Unit The cost incurred to Total production OPEX (RM)

× 100%
Production produce, process and Total production (boe)
Cost (UPC) transport one barrel of oil or
the equivalent of sellable OPEX: all operation cost including
hydrocarbon products (Oil + • Fuel Gas @ gas sales price*
condensate + AG + NAG). • Flaring and venting @ gas sales price*
Note: * Facilities with gas export only
Unit The cost incurred for floaters Total infrastructure OPEX (RM)
Infrastructure and terminals to process and × 100%
Total production (boe)
Cost (UIC) transport one barrel of gross
production or the equivalent OPEX: all operation cost including
of sellable hydrocarbon • Fuel Gas @ gas sales price*
products (Oil + condensate • Flaring and venting @ gas sales price*
+ AG + NAG). Note: * Facilities with gas export only

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Availability Probability of an item to be in Mathematically (for historical Availability):

a state to perform a required
function under given Availability %:
conditions at a given instant Uptime (hrs)
= × 100%
of time, or in average over a Total available time (hrs)
given time interval.
Uptime:
= Total Available Time –Downtime

Down Time:
= Scheduled Downtime + Unscheduled Downtime
Availability (%)

Uptime
=
Uptime + Downtime

Where,

• “Uptime” excludes, unplanned and planned

stoppages (i.e. run-time). Uptime is a simplified
measure of Reliability, and,
• “Downtime” includes the duration of, planned
and unplanned downtimes

Reliability Probability of an item to Reliability %:

perform a required function Uptime (hrs)
= × 100%
under given conditions for a Total available time (hrs) − Schedule downtime (hrs)
given time interval.
Formula above is for the measurement of
Key points on Reliability: Reliability at Facilities level and above only.

• It is a measure of Measurement for Reliability at Equipment level is

probability that an asset Mean Time Between Failures (MTBF).
can function as intended
The formula for MTBF is below:
• It depends on the
original function that it:
Total run-time
o was designed for,
o operated at (i.e. the Number of failures
conditions), and
o maintained
• Time is calendar time,
cycles, running-hours or
any other time-related
unit that the item is
subjected to.

Hence Reliability is
applicable to any item,
including:

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• rotary equipment and

machinery,
• electrical equipment,
• instrumentation and
control, and
• static equipment (e.g.
vessels, tanks, piping,
pipeline and structures).

Maintainability Probability of an item under Common measurement for Maintainability is Mean

given conditions of use, to Time to Restore (MTR) or Mean Time to Repair
be retained in, or restored to, (MTTR).
a state in which it can
perform a required function, Mathematically, (simple) MTTR is:
when maintenance is
performed under given Total actual-repair time
conditions and using stated Number of repairs
procedures and resources.
Mathematically, (simple) MTR is:
Key points on
Maintainability: Total restoration time
Number of repairs
• It is a measure of
probability of restoration
of an item within a
specified time.
• It depends on the:
o design (e.g.
interchangeability,
simplicity, and
accessibility),
o operation practices
and conditions (that
influences the
different Failure
Modes and
consequences), and,
o maintenance policy,
procedures and
resources.

Price of POUR is the measurement Calculation (in RM):

UnReliability of the loss of value in terms
(POUR) of production deferments POUR = Production Deferment (converted into
and cost of repair. RM) + Repair cost

6.3.2 Performance Reporting

Contractor(s) shall submit the reports outlined in Table 6.3-2 to
PETRONAS.

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Table 6.3-2: List of Reports

REPORT CONTENT FREQUENCY
Daily Operations Reports Content includes but not limited to the Daily (no later than
via DataGrab following: 1300hrs)
a) HSSE performance
b) Production performance
c) Flaring and Venting
d) PD/UPD remarks
e) Injection and Lift
f) Crude and Condensate Cargo
g) Gas customer
h) Personnel on Board (POB)
i) Logistics

Operations Performance a) Technical Potential (TP) Monthly (no later than

Report (OPR) b) Actual Production 10th of the following
c) Total Deferment (TD) month)
(i) Unplanned Deferment details
(ii) Planned Deferment details
d) Gas Utilization

Contaminants Report a) Carbon Dioxide, CO2 Quarterly

b) Hydrogen Sulphide, H2S
c) Mercury, Hg

IOM Report Content includes but not limited to the Quarterly

following:
a) HSSE performance
b) Production performance
c) Subsurface operations performance
d) Financial performance
e) Asset Integrity and Assurance
performance
f) Hydrocarbon Measurement &
Allocation (HMA) performance

The Terms of Reference (TOR) for IOM is

detailed out in Volume 8, Appendix 11.

Outstanding Audit Action Status of audit action items: 1. Monthly (no later
Items Report a) Open, closed and overdue status and than 7th day of the
closure plan following month)
b) Status of HIGH findings (Note: HIGH 2. Quarterly – as
rating as per latest OSRMS Risk Matrix) covered in Item (e) of
c) Highlight issues for example overdue IOM Report
items (if any)

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6.3.3 Management Meeting

Contractor(s) of producing fields is required to attend regular
performance management meetings with PETRONAS as summarised in
Table 6.3-3:

Table 6.3-3: Performance Management Meetings

MEETING OBJECTIVE FREQUENCY ATTENDEES
Operations Committee Review Contractor(s) Quarterly/6-Monthly PETRONAS
Meeting performance and Contractor’s
and track gap closure representatives
initiatives

Steering Committee Review UA Quarterly/6-Monthly PETRONAS, Host

Meeting Contractor(s) Authority
performance and Contractor’s
and track gap closure representatives
initiatives

Integrated Operation Review Contractor(s) Quarterly PETRONAS

Meeting performance and Contractor’s
and track gap closure representatives
initiatives

Monthly Coordination Review RSC PETRONAS

Meeting Contractor(s) and Contractor’s
performance representatives
and track gap closure
initiatives

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