To survive, companies look at ways to rationalize their assets, which include rearranging operation modes or suspending production facilities. A drastic cost reduction was achieved by restructuring the operation mode in the Kilo flow station. This success depended on cooperation among engineering, production, and the shared technical-services group and embracing a new operating plan for the flow station. The offshore northwest Java production-sharing contract in the Java Sea, Indonesia, covers approximately 6,950 sq miles. The first exploration well was drilled in 1967 and first production occurred in 1971.
Gas lift is the primary method of artificial lift.
However, gas production has become a more significant contributor in sustaining low operating cost. Exploitation efforts are repositioned to capture the increasing demand for domestic gas, and rationalization efforts are focused on lowering the cost associated with oil production. Fig. 1-Production and operating cost. The main purpose of asset nationalization is to characterize assets and verify them as core or noncore. Geographically, the core assets are relatively close, but the noncore assets are scattered across the contract area.