PT Caltex Pacific Indonesia (CPI), as a production sharing contractor to the Government of Indonesia, operates a number contract areas in Sumatra, Indonesia. Among the assets are two of the largest fields in South East Asia. In January 1991, CPI formalized its Quality Improvement program. Concurrently, it launched QI training and conducted Business Process Reviews performed bycross functional teams. Based on the successful experiences with Cross Functional Teams, supported by the world wide experience of its shareholders, Chevron and Texaco, and aware of management trends in industry, in 1994, CPI elected to restructure the entire company to a work process, Cross Functional Team based organization to improve effectiveness and efficiency of operations. This paper presents background information and describes the process used for designing work processes and organizational structure around large single field assets. It is felt these efforts and models developed are unique to the industry in terms of asset size and the requirements for a new and different approach to organizational models.

Development of the process based organizational structure for large single field assets is based on industry models, lessons learned, publications and also takes into account development plans including Decision Analysis as a means of designing an effective organization. The overall framing, design, and implementation results are linked to an overall structure for organizing around work processes to add value. An asset management process was developed and is the fundamental starting point for the final product.

This effort is part of a five phase organizational change process—design, implementation, clarifying roles and responsibilities, behavior alignment, and implementation of necessary support systems. The principal work processes and organizational structure from the initial design effort; transitional and implementation activities; and results of activity through the first year of operation are discussed. Problem areas—what doesn't work and successes—what works well and the changes made to "fine tune" the structural model and processes are discussed.

This organizational change is viewed as being highly successful with greater employee satisfaction, more empowerment, reduced cycle times, and more effective operations. Additionally, there has been a significant positive impact to the Company's value as a result of the process based organizational change.


Design and integration of work processes and organizational structure to improve effectiveness and add value for large single field assets presents unique challenges and opportunities to fully integrate business strategies with optimum development and production practices. The size and complexity of development and operations for the very large single field assets require a new and different approach for the development of organizational models. PT Caltex Pacific Indonesia is a large production sharing contractor to PERTAMINA and the Government of Indonesia. CPI's operations include not only upstream oil and gas exploration and development but also the infrastructure necessary to support operations on the Island of Sumatra. The following statistics are an indication of its size and complexity:

  • 6 Contract Areas Covering 47,200 Square Km - 4 Camps - 3,800 Km roads -2,600 Houses

  • 133 Fields - 6,200 Wells - 750,000 BOPD

  • 12 Drilling Rigs - 450 Wells Drilled per Year - 290 MW of Electrical Power Generation - 6,270 Employees

Historically, CPI was typically a highly structured and functionally organized upstream oil and gas company. As it grew and its operations became increasingly complex, the need for change was recognized.

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