PPGUA

PETRONAS
EXISTING NEW
REVISE & INTEGRATE
PPO PGIM PPGUA
P
E
POTENTIAL NEW G/L

GPSW
T INTEGRATED
GGM/GDLHM
R
PGBOOM
PPO
ERCP
PDO
O GPSW
PGIM
PDO PGBOOM
N
A
S GGM/
ERCP
GDLHM
REVISE
VOL. 1
VOL. 2
G
O LEM/TEK HEALTH&SAFETY
V (TENORM)
-AELB
(OSHA)
-DOSH
E
GOVERNMENT's
REQUIREMENT
R EEZ DOSH CONSOLIDATE

N -MDTCA (PTO/PTI)
M
E MARPOL EQA/EIA
-MARINE DEPT. -DOE
N
T
PROCEDURES / GUIDELINES FOR

UPSTREAM ACTIVITIES
VOLUME 1
(PETRONAS' REQUIREMENT)
PETROLEUM MANAGEMENT UNIT

AUGUST 2000
PETRONAS
PROCEDURES AND GUIDELINES
FOR UPSTREAM ACTIVITIES
PREAMBLE
With effect from August 1, 2000 every Production Sharing (PS) Contractor of
PETRONAS shall endeavour to comply with the following procedures and guidelines
in conducting its petroleum activities, onshore or offshore of Malaysia. These
procedures and guidelines shall be regarded as PETRONAS’ general procedures
and guidelines for PS Contractor to comply with the Production Sharing Contract and
shall supersede the procedures and guidelines issued previously. These procedures
and guidelines review update for the Upstream Activities have been undertaken by
Petroleum Management Unit in association with the established PETRONAS’ PS
Contractors.
These procedures and guidelines may be added to or amended from time to time
upon written notice by PETRONAS and in consultation with PS Contractor and
provided such additions or amendments are consistent with the provisions of the
Production Sharing Contract. In the event of conflict between these procedures and
guidelines and the Production Sharing Contract, the Production Sharing Contract
shall prevail. The amended procedures and guidelines shall become effective on the
date on which PETRONAS notifies the said amendments to PS Contractor.
PS Contractor may request exception to these procedures and guidelines. Such

exceptions shall subject to PETRONAS’ approval and may be granted on case by
case basis after PETRONAS takes into account factor such as operational safety,
efficiency and good industry practices, etc. Exception may be granted for a specific
terminal, field, platform or jacket as required.
PS Contractor shall be responsible for ensuring that anyone performing work for it,
whether its personnel or employees, or subcontractors, complies with the provisions
stipulated in these procedures and guidelines and provisions stipulated pursuant
thereto. PS Contractor shall also establish an internal control system so as to
efficiently ensure that these procedures and guidelines are complied with.
ISSUED BY
PETRONAS
PROCEDURES AND GUIDELINES
These procedures and guidelines are intended for Malaysian operation and shall be
treated as confidential documents between relevant parties and shall not be
disclosed to third party without prior written approval from PETRONAS. Service
company providing services to PS Contractor are allowed to access the procedures
and guideline on need to know basis.
ISSUED BY
PETRONAS
PROCEDURES AND GUIDELINES i
VOLUME 1
(PETRONAS’ REQUIREMENTS)
TABLE OF CONTENTS PAGE
INTRODUCTION iii
A. MAIN DOCUMENTS
1. EXPLORATION ACTIVITIES
Section 1 : Guidelines for Fish Trap Survey Operations 1
Section 2 : Guidelines for Marine Site Survey Opeartions 4
Section 3 : Guidelines for Marine Seismic Survey Operations 6
Section 4 : Guidelines for Land Seismic Survey Operations 9
2. PROJECT DEVELOPMENT MANAGEMENT

Section 5 : Procedures for Project Development Management 12
3. INSPECTION AND MAINTENANCE OF PRODUCTION FACILITIES

Section 6 : Guidelines for Inspection and Maintenance of 22
Production Facilities
4. PRODUCTION OPERATIONS
Section 7 : Procedures for Crude Oil Production Allowables 25
Section 8 : Procedures for Gas Production and Flaring/Venting 29
Allowables
Section 9 : Procedures for Onshore/Offshore Operations 33
Section 10 : Procedures for Subsurface Safety Devices
Section 11 : Procedures for Well Test, Production Measurement 37
and Allocation
Section 12 : Guidelines for Reservoir Management 47
5. HEALTH, SAFETY & ENVIRONMENT

Section 13 : Guidelines for Health, Safety & Environment 51
6. PLATFORM ABANDONMENT
Section 14 : Guidelines for Decommissioning of Oil and Gas 57
Installation
ISSUED BY
PETRONAS PROCEDURES AND GUIDELINES ii
TABLE OF CONTENTS
B. SUPPORTING DOCUMENTS
7. PROCEDURES FOR DRILLING OPERATIONS
8. GUIDELINES FOR BARGES OPERATIONS
9. GUIDELINES FOR GAS & LIQUID MEASUREMENT
10. EMERGENCY RESPONSE & COMMUNICATIONS

PROCEDURES
11. FDP REVIEW AND APPROVAL PROCESS GUIDELINES
12 . APPENDICES
Appendix 1 : List of Local Authorities for Exploration Activities
Appendix 2 : List of Fish Traps Available in Malaysian Water
Appendix 3 : List of Compensation Rates for Exploration
Activities
Appendix 4 : List of Governmental Permit, Approvals and
Notifications for Offshore Facilities for
Development Project
Appendix 5 : List of KPI’s for Inspection & Maintenance
Appendix 6 : List of Well Proposal Requires PETRONAS
Approval
Appendix 7 : List of Data Submission for Health, Safety &
Environment
Appendix 8 : Key Activities and Approval Process of Platforms
Decommissioning
13. DEFINITIONS
14. ABBREVIATIONS
15. ACKNOWLEDGEMENT
ISSUED BY
PETRONAS
PROCEDURES AND GUIDELINES iii
INTRODUCTION
Structure of the Procedures/Guidelines
The procedures/guidelines are divided into two volumes :-
Vol. 1 : PETRONAS’ requirements

Vol. 2 : GOVERNMENT’s requirements
Figure 1 indicates the concept adopted in preparing the revised PETRONAS

procedures/guidelines and relationship between Vol. 1 and Vol. 2.
Vol. 1 - PETRONAS’ Requirements
Vol. 1 consists of PETRONAS’ requirements for petroleum upstream activities which

covers the complete cycle from exploration upto decommissioning. The main
document covers Exploration, Project Development, Production Operations,
Inspection and Maintenance, HSE and Platform Decommissioning. The main
document is to be read in conjunction with supporting document for specific activities
which includes Drilling Operation, Barge Operation, Gas and Liquid measurement,
and Emergency Response & Communication. As for Diving Operation, PS
Contractors need to refer to PETRONAS’ Technical Standard on Diving Operations.
Vol. 1 also refers to Vol. 2, Government‘s Requirements if a particular activity needs
to comply with government’s regulations.
Vol. 2 - Government’s Requirements
Vol. 2 compiles of the existing government’s regulations or guidelines to comply with

government’s requirements related to petroleum upstream activities.
These guidelines include Environmental Impact Assessment (EIA), Environmental

Quality Act (EQA), Occupational Safety Health Act (OSHA), Exclusive Economic
Zone Act (EEZA), Guideline for Radioactive Materials Monitoring (TENORM), DOSH
Permit to Install/Permit to Operate (PTI/PTO) and Marine Regulation on Pollution
Prevention (MARPOL).
ISSUED BY
PETRONAS
PROCEDURES AND GUIDELINES iv
OVERVIEW : CONCEPT
EXISTING NEW
REVISE & INTEGRATE
PPO PGIM
P
E
POTENTIAL NEW G/L

GPSW
T INTEGRATED
GGM/GDLHM
PGBOOM
R PPO
PDO
ECP
GPSW
O PGIM
N PDO PGBOOM
A
S
GGM/
ECP
GDLHM
REVISE
VOL. 1
VOL. 2
G
LEM/TEK HEALTH&SAFETY
O (TENORM) (OSHA)
V -AELB -DOSH
GOVERNMENT's
E REQUIREMENT
R EEZA DOSH CONSOLIDATE
-MDTCA (PTO/PTI)
N
M
E MARPOL EQA/EIA
-MARINE DEPT. -DOE
N
T
Note :
PPO - Procedures for Production Operations (1988)

PGIM - PETRONAS Guidelines for Inspection and Maintenance (1988)
GPSW - General Procedures for Safety and Welfare (1985)
PDO - Procedures for Drilling Operations (1988)
PGBOOM - PETRONAS Guidelines for Barges Operations Offshore Malaysia (1990)
GGM/GDLHM - Guidelines for Gas Measurement (1988) / Guidelines for Dynamic Liquid Hydrocarbon
Measurement (1988)
ECP - Emergency Communications Procedures (1998)
LEM/TEK - Lembaga Teknikal
TENORM - Technologically Enhanced Naturally Occurrence Of Radioactive Materials.
AELB - Atomic Energy Licencing Board
OSHA - Occupational Safety & Health Act
DOSH - Departmental of Occupational Safety and Health
EEZA - Exclusive Economic Zone Act
MDTCA - Ministry of Domestic Trade and Consumers Association
PTO/PTI - Permit To Operate / Permit To Install
MARPOL - International Convention on Prevention of Pollution from Ships 1973 - 78
EQA - Environmental Quality Act 1974.
EIA - Environmental Impact Assessment
DOE - Department of Environment
ISSUED BY
SECTION 1
GUIDELINES FOR FISH TRAPS Page 1
SURVEY OPERATIONS
Summary
This section provides guidelines on fish traps survey prior to seismic survey operations.
This Guidelines does not cover all aspects of fish traps survey operations, and shall be
regarded as PETRONAS' general guidelines necessary for ensuring a safe and smooth
fish traps survey operations.
In cases where either equipment is not listed in this Guidelines or the scopes of fish
traps survey operations are not specified in this Guidelines, PS Contractor shall derive
the scope based on good industry practices, internationally recognised codes and
standards and applicable Malaysian Laws, and shall implement the same accordingly.
ISSUED BY REVISION 0
PETROLEUM MANAGEMENT UNIT AUGUST 2000
SECTION 1
SURVEY OPERATIONS
1.1 Pre-survey preparation (In-house)
Decision and timing for conducting the fish traps survey is left to the discretion of PS
Contractor which may vary between regions i.e. Peninsular Malaysia, Sabah and Sarawak.
PS Contractor must notify PETRONAS and relevant authorities (refer to Appendix 1) on the
necessity to conduct the fish traps survey. Notification of fish traps survey to the Fisheries
Department should be sent prior to seismic survey commencement.
The planned survey route should not be conducted beyond Malaysian water without prior
approval from respective government agencies and the respective countries.
In all correspondence with government authorities, all surveys conducted by PS Contractor

should be identified as PETRONAS and PS Contractor’s survey.
1.2 Survey operation (On-site)
PS Contractor to ensure representatives from fishermen and fisheries department both

appointed by Fishery Department shall be included as witness to the survey. These
representatives should have undergone a basic sea survival training or have current
certification prior to going onboard the vessel for the fish traps survey.
PS Contractor to identify and meet the Health, Safety and Environment requirement on the
suitable vessel and equipment for the fish traps survey.
All fish traps / lures observed during the survey shall be tagged appropriately.
PS Contractor to include requirement of ‘HALAL’ food and ‘NO LIQUOR’ as part of tender
documents.
PS Contractor shall ensure that all offshore personnel to carry their identification.
Some of the fish traps types are shown in Appendix 2.
SECTION 1
SURVEY OPERATIONS
1.3 Post-survey preparation (In-house)
All data or map to be submitted to Fisheries Department or other relevant government

authorities shall be addressed as confidential matters.
Total compensations to fishermen are to be agreed prior to the seismic survey. If under
operational situation where negotiation may not take place prior to seismic survey, PS
Contractor is to notify the Fisheries Department to proceed with the seismic survey.
Representative from fishermen and Fisheries Department are both required to support the
actual negotiation on the compensations to be paid to the fishermen after the seismic
survey is completed. The list of compensation rates for each fish traps is shown in Appendix
3 for reference. However, the actual rate are based on the current standard practice.
All compensation shall be made through Fisheries Department.
PS Contractor shall submit close-out report to PETRONAS for any compensation made.
PS Contractor shall report to Fisheries Department on all fish traps matters.
PS Contractor shall request PETRONAS assistance should any problem arises between
Fisheries Department, Fishermen, Federal Government or any other local authorities.
- END OF SECTION 1 -
SECTION 2
GUIDELINES FOR MARINE SITE Page 4
SURVEY OPERATIONS
Summary
This section provides guidelines on scopes for marine site survey operations. This
Guidelines does not cover all aspects of marine site survey operations and shall be
marine site survey operations based on good industry practices.
In cases where either equipment is not listed in this Guidelines or the scopes of marine
site survey operations are not specified in this Guidelines, PS Contractor shall derive the
scopes based on good industry practices, internationally recognised codes and
SECTION 2
GUIDELINES FOR MARINE SITE Page 5
SURVEY OPERATIONS
2.1 Pre survey preparation
PS Contractor shall notify PETRONAS, Fisheries Department and relevant Local Authorities
prior to marine site survey commencement.
Subject to statutory requirement especially for coastal areas, the authority may require PS
Contractor to conduct Environmental Impact Assessment (EIA) prior to site survey (refer to
PETRONAS Procedures and Guidelines Volume 2 :Environmental Impact Assessment
Guidelines for Petroleum Industries).
PS Contractor shall ensure that all personnel to be onboard site survey vessel have
undergone a basic sea survival training or have current certification.
2.2 Surveying
PS Contractor to conduct vessel Health, Safety and Environment (HSE) and technical
inspection prior to mobilisation of the site survey vessel.
PS Contractor to include requirement of ‘HALAL’ food and ‘No LIQUOR’ as part of tender
documents.
PS Contractor to prepare a list of focal point/on duty person to be contacted for emergency
purposes.
PS Contractor and site survey contractor should develop their in-house Project Safety Plan
for evacuation programme and all HSE requirement should be based on HSE Guidelines
(refer to Section 13).
2.3 Post survey
PS Contractor shall submit close-out report to PETRONAS.
PS Contractor shall submit all site survey data to PETRONAS upon completion and prior to
expiry of the block as required by Production Sharing Contract.
SECTION 3
GUIDELINES FOR MARINE SEISMIC Page 6
SURVEY OPERATIONS
Summary
This section provides guidelines on scopes for marine seismic survey operations. This
Guidelines does not cover all aspects of marine seismic survey operations, and shall be
marine seismic survey operations based on good industry practices.
In cases where either equipment is not listed in this Guidelines or the scopes of marine
seismic survey operations are not specified in this Guidelines, PS Contractor shall derive
the scopes based on good industry practices, internationally recognised codes and
SECTION 3
SURVEY OPERATIONS
PS Contractor shall prepare seismic programme proposal and undertake scouting/fact

finding (if necessary).
PS Contractor shall notify Fisheries Department and other relevant Local Authorities prior to
marine seismic survey commencement.
PS Contractor shall submit estimated project schedule to PETRONAS prior to seismic

programme.
Subject to statutory requirement especially for coastal areas, PS Contractor may conduct
Environmental Impact Assessment (EIA) prior to seismic survey (refer to PETRONAS
Procedures and Guidelines Volume 2 :Environmental Impact Assessment Guidelines for
Petroleum Industries).
PS Contractor shall get Co-Venturers concurrence prior to submission of approval to

PETRONAS to conduct any seismic survey.
PS Contractor shall ensure that all personnel to be onboard marine seismic survey vessel
have undergone a basic sea survival training or have current certification.
3.2 Surveying
PS Contractor to conduct vessel Health Safety and Environment (HSE) and technical
inspection prior to mobilisation of the seismic and escort vessels.
documents.
PS Contractor to prepare a list of focal point/on duty person to be contacted for emergency
purposes.
PS Contractor and seismic contractor should develop their in-house Project Safety Plan for
evacuation programme and all HSE requirement should be based on HSE Guidelines.
SECTION 3
SURVEY OPERATIONS
PS Contractor must submit weekly survey report to PETRONAS for the whole survey
duration.
3.3 Post survey
PS Contractor shall submit to PETRONAS a full operation report. The report shall be in both
hard copy or acceptable electronic format.
PS Contractor shall also submit all seismic data to PETRONAS upon completion and prior
to expiry of the block as required by Production Sharing Contract.
SECTION 4
GUIDELINES FOR LAND SEISMIC Page 9
SURVEY OPERATIONS
Summary
This section provides guidelines on scopes for land seismic survey operations, onshore
Malaysia. This Guidelines does not cover all aspects of land seismic survey operations
and shall be regarded as PETRONAS' general guidelines necessary for ensuring a safe
and smooth land seismic survey operations based on good industry practices.
In cases where either equipment is not listed in this Guidelines or scopes of land seismic
survey operations are not specified in this Guidelines, PS Contractor shall derive the
scopes based on good industry practices, internationally recognised codes and
standards and applicable Malaysian Government Laws, and shall implement the same
accordingly.
SECTION 4
SURVEY OPERATIONS
PS Contractor shall prepare seismic programme proposal and undertake scouting/fact

finding (if necessary).
PS Contractor shall notify relevant Land / Local Authorities and other relevant Local
Authorities prior to land seismic survey commencement.
PS Contractor shall submit estimated project schedule to PETRONAS prior to seismic

programme.
Subject to statutory requirement, PS Contractor may conduct Environmental Impact

Assessment (EIA) prior to seismic survey (refer to PETRONAS Procedures and Guidelines
Volume 2 :Environmental Impact Assessment Guidelines for Petroleum Industries).
PS Contractor shall get Co-Venturers’ concurrence prior to submission of approval to

PETRONAS to conduct any seismic survey.
PS Contractor shall ensure that all personnel have undergone through appropriate HSE
training or have current certification.
4.2 Surveying
PS Contractor to conduct full HSE and Technical Audit on seismic crew prior to
commencement of seismic operations.
documents.
PS Contractor shall ensure that all personnel possesses valid identification.
PS Contractor must submit weekly survey report to PETRONAS for the whole survey
duration.
SECTION 4
SURVEY OPERATIONS
4.3 Post survey
PS Contractor shall submit to PETRONAS a full operation report. The report shall be in both
hard copy or acceptable electronic format.
PS Contractor shall also submit all seismic data to PETRONAS upon completion and prior
to expiry of the block as required by Production Sharing Contract.
SECTION 5
PROCEDURES FOR PROJECT DEVELOPMENT Page 12
MANAGEMENT
Summary
This document provides procedures on the project management of upstream petroleum

operations and activities of the Production Sharing Contracts (PSCs) to ensure they are
carried out prudently and effectively as per the best practices currently prevalent relating
to Project Development Management and it also provides a mean by which PETRONAS
would be able to assess and steward performance.
In this respect the PS Contractor shall have the Project Development Management
system in place, to ensure that the key project parameters i.e. Health, Safety &
Environment (HSE), quality, cost and schedule are better managed.
To meet the above objective, PS Contractors are encouraged to adopt integrated

approach in implementing a project to :-
y optimise design
y capitalise on economy of scale benefits, where applicable
y promote sharing of services
y adopt Engineering, Procurement & Construction (EPC) / Engineering, Procurement,
Construction, Installation & Commissioning (EPCIC) / Engineering, Procurement,
Construction & Commissioning (EPCC) types of contracts, where applicable
y fit for purpose equipment and process
y off-the-shelf equipment / material, where applicable
y use of functional specifications, where applicable
y use of cost effective and proven technology
y implement standardisation and variety control
y maximise local contents
y form integrated project team
y apply a new technology, where applicable
The procedures are tailored for a new facility project and some sections are applicable to
a facility upgrading project.
SUPERSEDE ISSUE: ISSUED BY REVISION 1

MAY 1988 PETROLEUM MANAGEMENT UNIT AUGUST 2000
SECTION 5
MANAGEMENT
The procedures provide traditional flow processes of Project Development starting from
Field Development Plan (FDP) approval to Project Implementation phases, Development
Drilling and ending at the start-up of first oil or gas production at which time the project is
handed-over to the Production Operations. It also includes the approval of Contracting
and Procurement Strategies, Work Programme and Budget submission and the project
development related matters.
The procedures outlined are as follows :

1. Field Development Plan (FDP) Review and Approval Process
2. Project Implementation Phases and Activities
3. Development Drilling
4. Contracting and Procurement
5. Health, Safety and Environment (HSE)
6. Project Quality Assurance (QA)
7. Reporting and Documentation
8. Project Performance
9. Work Programme and Budget (WP&B)
10. Regulatory Requirements

SECTION 5
MANAGEMENT
5.1 Field Development Plan (FDP) Review and Approval Process
Under the Production Sharing Contract, PS Contractors are required to submit a Field
Development Plan (FDP) for PETRONAS review and approval before proceeding to
develop a particular field.
PETRONAS' requirement is that any FDP submitted should be a comprehensive

stand-alone document with a complete set of information and/or references that would
provide the evaluator with a better and easier understanding and rationale for the field
development proposed. The FDP shall address at least the following subjects ; exploration
activities, geological studies, depletion strategies, drainage plan, facilities, drilling program,
operational requirements, Health, Safety and Environment, production forecast,
economics/cost and abandonment plan.
In reviewing the FDP, the approach taken by PETRONAS is to establish whether there are
any aspects of the proposed development which may conflict with Government and
PETRONAS' objectives and to focus attention on resolving those aspects before the formal
FDP is submitted. The FDP Review and Approval Process Guideline is provided in the
Supporting Documents’ section. Under this process, Milestone Reviews are proposed in
order to maintain a continuing dialogue and technical reviews as the description of a field
and options for its development emerge during the development planning studies.
The objective of the Milestone Reviews is not to have the detailed review of every area of
the development but rather the identification and resolution of any aspects of the
development which may contradict Government and PETRONAS' objectives and on which
the views of PETRONAS and PS Contractors may diverge. These aspects will be
examined more thoroughly with the PS Contractors with the aim of reaching mutually
satisfactory conclusions.
As the understanding of the field develops, there may be a need to modify the FDP
accordingly. PS Contractors are therefore, responsible to inform PETRONAS as soon as
deviations from the approved FDP are foreseen. A formal revision to the approved FDP
shall be required if there are significant deviations to the approved development scope.
This may include development of new reservoirs or the need to further appraise the extent
of the field, changes to drainage plan involving number of platforms, wells and types of
completion (conventional to non-conventional) or changes to the selected development
concept (e.g. evacuation route, integrated development etc).

SECTION 5
MANAGEMENT
It is envisaged that the FDP Revision in a form of an update to the specific scope that
require changes would be sufficient for submission and approval by PETRONAS. Changes
affecting design concept, operating philosophy or new technology in surface facilities that do
not affect the sub-surface design, do not require an FDP Revision ; these will be evaluated
as part of the Project Implementation Management process.
5.2 Project Implementation Phases and Activities
5.2.1 Conceptual Design
PS Contractor shall develop a baseline document referred as the Basis for

Design (BFD) / Project Development Memorandum (PDM) which provides the
functional requirements for the facilities for the chosen concept which include but
not limited to :-
y Brief description of the facilities

y Definition of the boundary conditions
y Definition of the status of any existing facilities and the performance
characteristics of processes
y Definition of the requirements for the new or modified facilities
y Definition of any other constraints
y References to any relevant study reports
PS Contractor shall develop Project Specification / Design Basis Memorandum

(DBM) based on the above BFD / PDM which shall be further defined for any
remaining sub-options to determine the functional specifications for the required
facilities. The Project Specification / Design Basis Memorandum is to provide a
detailed description of the essential project hardware, together with the project
technical requirement such that it can be used as part of the document for
detailed engineering design.
PS Contractor shall develop Project Execution Plan (PEP) to manage the project.
It provides the basic parameters of the field development, a description of the
project scope and description of how the project will be executed from the end of
Conceptual design until hand-over of the project to the Operations . Generally it
covers the following topics :

SECTION 5
MANAGEMENT
y Project definition
y Project scope
y Contracting / procurement plans
y Organisation and resource plan
y QA and HSE plans
y Cost and schedule
y Commissioning and hand-over strategy
y Project management systems and procedures
PS Contractor shall conduct a Management Review / Independent Project

Review of the Conceptual Design to ensure readiness to proceed to the detailed
design phase. PS Contractor shall submit the BFD / PDM, Project Specification /
DBM and PEP to PETRONAS accordingly for review.
PS Contractor shall adhere to sub-section 4.0 of PETRONAS procedures for

Contracting and Procurement, when engaging Design Consultant services for the
Conceptual Design.
5.2.2 Detailed Design
Detailed engineering design of the facilities is produced at this phase which

includes all specifications, Process & Instrumentation Diagrams, commissioning
plans, 3D models, materials take off and spare parts lists.
The scope covers but not limited to :
y preparing preliminary detailed design

y preparing data sheets, specifications and requisition packages
y analyse bids and review vendor data
y prepare construction tender packages
y prepare Approved For Construction (AFC) / Issue For Construction (IFC)
packages
y prepare procedures and manuals for commissioning and operations
y handle site queries and produce as-built drawings
y conduct preliminary HAZOP and, Safety and Design Risks assessments

SECTION 5
MANAGEMENT
PS Contractor shall conduct a Management Review / Independent Project

Review of the Detailed Design to ensure readiness to proceed to the fabrication /
construction phase.

Contracting and Procurement, when engaging Design Consultant services for the
Detailed Design.
5.2.3 Fabrication / Construction
The scope of fabrication / construction varies greatly depending on whether the

development is onshore, offshore or subsea and whether it is a new facility
project or existing facility upgrading project.
The main activities include :
y manage, plan and schedule the fabrication / construction activities

y review design drawings and prepare shop drawings, weight control and final
documentation
y fabricate structural components at onshore fabrication yards for offshore
project
y pre-fabricate process system packages at the vendor's work sites
y install system packages at fabrication yards
y maximise systems and equipment pre-commissioning at the onshore
fabrication yards
y load out and sea fastening of structural components
y site survey, clearance and preparation for onshore construction project
y line pipes coating at the onshore coating yards

Contracting and Procurement, when engaging the fabrication / construction and
pipe coating contracts.

SECTION 5
MANAGEMENT
5.2.4 Transportation and Installation
Types of barges used depend on the weight and size of the structural
components and its availability. The main activities are to transport and install the
components at offshore site, and to lay offshore pipelines.
PS Contractor shall ensure that the barges used are meeting marine HSE
requirements in accordance with PETRONAS Guidelines for Barges Operating
Offshore Malaysia (PGBOOM). Refer to Supporting Document for Barges
Operations.

Contracting and Procurement, when engaging transportation and installation /
pipelaying contracts for the substructure, topsides and pipelines.
5.2.5 Hook-up and Commissioning (HUC)
Hook-up and commissioning is the final completion of work, testing and

verification of system, in preparing for the start-up.
PS Contractor shall carry out pre start-up HSE Audit / Independent Project
Review to ensure the facilities and operations are fit for start-up.
PS Contractor shall invite PETRONAS participation in the audit / review exercise.

Contracting and Procurement, when engaging the HUC contract.
5.3 Development Drilling
PS Contractor shall carry out the development drilling activities in accordance with the
PETRONAS Procedures for Drilling Operations (PDO). Refer to Supporting Document for
Drilling Operations.
5.4 Contracting and Procurement

SECTION 5
MANAGEMENT
PS Contractor shall adhere to the PETRONAS procedures for the contracting of services
and purchasing of material and equipment packages in accordance to PETRONAS Tenders
and Contracts Administrative Procedure Manual for Upstream Activities.
PS Contractor shall prepare and review the overall contracting strategy with PETRONAS at
the earliest opportunity and submit to PETRONAS Central Tender Committee for approval,
prior to executing other contracting activities.
5.5 Health, Safety and Environment (HSE)
HSE management system is required to ensure project activities are undertaken in a safe
risk-controlled environment. This HSE management system is to complement other project
management systems and to focus on key safety and project risks.
PS Contractor shall establish the project HSE management system in full compliance with
Malaysian law and regulations as per Volume 2 and be consistent with PETRONAS’ HSE
requirements (refer to Section 13).
5.6 Project Quality Assurance (QA)
QA management system is required to achieve project quality. The system should be

consistent with ISO 9000 standards or equivalent.
PS Contractor shall develop Project Quality Plan to drive the QA aspects for all phases of
the project. As a minimum it should :-
y identify the critical systems and activities

y define the standards, control, performance indicators and documentation, and
y schedule of audits and reviews
PS Contractor shall invite PETRONAS participation in the audit/review exercise.
5.7 Reporting and Documentation
PS Contractor shall submit the project progress status reports to PETRONAS on weekly or
fortnightly and monthly basis with the following objectives but not limited to :

SECTION 5
MANAGEMENT
y identify the current status of work
y compare actual achievement vs plan
y highlight critical issues and major areas of concern
y facilitate effective management control and corrective action
y S-curves for cost and schedule comparing actual achievement vs plan
( monthly report only ).
PS Contractor shall submit the following reports and document to PETRONAS as and when
available :
y Field Development Plan (FDP)

y Basis for Design (BFD) / Project Development Memorandum (PDM)
y Project Specification (Conceptual Design Report Summary) / Design Basis
Memorandum (DBM)
y Project Execution Plan (PEP) ( including updates )
y Management Review Report / Independent Project Review Report for Conceptual
Design ( executive summary only )
y Management Review Report / Independent Project Review Report for Detailed Design
( executive summary only )
y Pre start-up HSE Audit / Independent Project Review Report (executive summary only)
y Project Close Out Reports ( Draft report and Final report submission is one month and
three months respectively after project completion )
y HSE / Technical Audit Reports ( on request )
y HAZOP, Special Studies Reports ( on request )
5.8 Project Performance
PS Contractor shall submit to PETRONAS on the relevant Key Performance Indicators

(KPIs) for the development project in accordance with PETRONAS Work Procedure /
Guidelines For Processing WP&B.

SECTION 5
MANAGEMENT
PS Contractor shall present the project progress performance of the development project
during the quarterly Operations Committee Meeting (OCM).
5.9 Work Programme and Budget (WP&B)
PS Contractor shall submit to PETRONAS for approval of the annual Work Programme &
Budget and revisions for the development projects and upgrading projects in accordance
with the PETRONAS Work Procedure / Guidelines For Processing WP&B.
5.10 Regulatory Requirements
For the offshore development project which is in the Exclusive Economic Zone (EEZ), PS
Contractor shall apply permission to install and operate the facilities from the Ministry of
Domestic Trade and Consumers Association (MDTCA) in accordance with PETRONAS
EEZ Guidelines. PS Contractor shall comply to the relevant local authorities requirement by
phases as per Appendix 4.
PS Contractor shall adhere to all the Malaysian law and regulatory requirements that are
applicable to the project development (refer to PETRONAS Procedures and Guidelines for
Upstream Activities - Volume 2 ).

SECTION 6
GUIDELINES FOR INSPECTION AND Page 22
MAINTENANCE OF PRODUCTION FACILITIES
Summary
This section provides Inspection and Maintenance minimum requirements for the
inspection and maintenance activities of facilities, pipelines and structures related to
production of oil and gas either installed onshore or offshore. This Guideline does not
cover all aspects of inspection and maintenance of every facilities, pipelines and
structures, and shall be regarded as PETRONAS’ minimum requirements necessary for
inspection and maintenance activities whilst ensuring safety and integrity of production
facilities based on good industry practices.
PS Contractor shall derive the strategies, scopes and frequencies based on good
industry practices, internationally recognised codes and standards and applicable
Malaysian Laws, and shall implement the same accordingly. PS Contractor is required to
report the Key Performance Indicators (KPI) related to inspection and maintenance
aspect as recommended in Appendix 5 to assess and steward PS Contractor’s
performance.

1988 PETROLEUM MANAGEMENT UNIT AUGUST 2000
SECTION 6
6.1 Inspection & Maintenance Philosophy Document
PS Contractor shall develop and establish its own Inspection & Maintenance Philosophy
(IMP) and strategies accordingly to ensure that the technical integrity of facilities, pipelines
and structures is safeguarded at all times while meeting Health, Safety, Environmental and
Statutory / Government requirements. The IMP shall include, but not limited to the following
elements;
y Inspection and Maintenance strategies for all facilities, pipelines and structures
y Systematic Inspection and Maintenance programme.
A copy of the IMP shall be submitted to PETRONAS Regional Office.
6.2 Inspection & Maintenance Philosophy Review / Update
PS Contractor shall review and update the IMP as required, based on analysis of the
performance and the effectiveness of the existing strategy, changes in legislation or
Company standards or to reflect industry best practices. The revised IMP shall be copied to
PETRONAS Regional Office.
6.3 Deviation of Inspection & Maintenance Philosophy
PS Contractor shall establish its own Deviation Control System to ensure any deviation are
properly managed and documented. PS Contractor shall report any deviations to
6.4 Inspection and Maintenance Programme Optimisation
PS Contractor shall continuously optimise the Inspection and Maintenance programme by

minimising the total maintenance cost whilst ensuring that the availability of equipment and
systems is met so as to achieve operational and Health, Safety and Environmental
requirements.

SECTION 6
6.5 Equipment Database
PS Contractor shall develop and maintain proper equipment database including inspection
findings and maintenance records so as to perform continuous analysis on the effectiveness
of equipment performance and maintenance programme.
6.6 Reporting and Key Performance Indicator (KPI)
PS Contractor shall monitor and report the Inspection and Maintenance effectiveness using
Key Performance Indicators (KPI), as stipulated in Appendix 5. The report shall be
submitted to PETRONAS Regional Office accordingly.
6.7 Unplanned Major Repair / Inspection
In the event of unplanned major repairs or inspections of facilities, structures and pipelines,
PS Contractor shall inform PETRONAS Regional Office together with the pertinent
operational information. Upon completion of the said work, a report shall be submitted to
6.8 Preservation
In the event that the facilities, structures and pipelines are planned to be shut-in for a period
of three months or more, PS Contractor shall ensure that the said facilities, structures and
pipelines are preserved in accordance with good industry practices or manufacturers’
recommendations. PS Contractor shall advise PETRONAS Regional Office of the aforesaid
in advance and upon request shall submit to PETRONAS Regional Office the procedures to
preserve the said facilities, structures and pipelines, including the estimated duration and
costs.
6.9 Technical Integrity
PS Contractor shall ensure that all facilities, structures and pipelines are in acceptable
technical integrity condition prior to handover / field relinquishment to PETRONAS.

SECTION 7
PROCEDURES FOR CRUDE OIL Page 25
PRODUCTION ALLOWABLE
Summary
This section provides procedures on crude oil production allowable process.

PETRONAS shall be responsible for establishing the approved production rate of crude
oil in each Petroleum Field as provided for in the Production Sharing Contract.
In this respect PS Contractor is requested to provide the crude oil production forecast
based on good industry and approved reservoir management policy taking into
considerations the need for efficient and economic exploitation of hydrocarbon
resources.

SECTION 7
7.1 Production Forecast by PS Contractor
By October 1st of every Calendar Year, in submitting the annual Work Programme and
Budget, PS Contractor shall submit the remaining life cycle of crude oil production potential
and availability forecasts and condensate availability forecasts (if applicable) for each
petroleum field.
The potential and availability production forecasts shall be based on latest reservoir
engineering study consistent with safe operating conditions, good industry practices,
approved reservoir management policy and a realistic development scheduling.
These production potential and availability forecasts shall be shown as follows:-

y first Calendar Year on monthly and quarterly basis,
y succeeding four Calendar Years on quarterly basis,
y remaining Calendar Years on annual basis.
7.2 Approved Production
PETRONAS shall convey its approval for annual Crude Oil Production for each PS
Contractor and shall also provide the preliminary quarterly breakdown for planning
purposes. PS Contractor is also required to comply with all the pertinent advice as
stipulated in the approval letter.
PETRONAS shall advise PS Contractor on the quarterly Approved Crude Oil Production
prior to the commencement of the relevant quarter. In this respect, PS Contractor is
required to submit to PETRONAS the following information:-
i) the average expected production potential and availability by field for each month of
the said and remaining quarter.
ii) the average quarterly actual or latest estimate versus quarterly approved by field for
the previous quarter with written explanation of the causes for any variation of more
than +/-10% or 1000 bpd whichever is greater.

SECTION 7
iii) the monthly and year-to-date actual gas production, utilisation and flaring/venting with
written explanation if the flaring/venting level had exceeded the annual approved limit.
iv) the update of planned shutdowns.
v) where applicable the average monthly condensate production (actual/forecast) of the

year.
PETRONAS may request for a meeting with PS Contractor for clarification.
Towards achieving the said quarterly approved production, PS Contractor shall propose the
relevant monthly production levels at the monthly crude oil lifting/programming meeting.
Such proposals shall be in line with the quarterly approved production, projected crude oil
price movement, good and modern industry practice, approved reservoir management
policies, flaring/venting limit and safe operating conditions. The monthly target production
shall be decided by PETRONAS which shall then be implemented by PS Contractor.
7.3 Over-Production and Under-Production
PS Contractor must first take all possible steps to comply with the approved levels with
minimal production fluctuation. However, to cater for unexpected operational requirements ,
a +/- 5% or 1000 b/d whichever is greater of the approved quarterly average for the
Contract Area shall not be exceeded.
For field that fall under the National Depletion Policy (NDP), the production shall be
governed by the latest NDP guidelines. The NDP states that any major fields which are
having total Oil Initially Inplace (OIIP) equal to or more than 400 MMstb, the production will
be limited to a ceiling of 3.0% of OIIP in any one year.
In the event that there is over-production or under-production, PS Contractor shall then

reduce the over-production or make-up the under-production in the next succeeding
quarter. The make-up production shall be agreed by PETRONAS during the tanker
lifting/programming meeting.

SECTION 7
In any event, over-production or under-production should be minimised towards achieving
the approved quarter level by quarter end and approved annual level by year end.

SECTION 8
PROCEDURES FOR GAS PRODUCTION & Page 29
FLARING/VENTING ALLOWABLES
Summary
This section provides procedures on non-associated and associated gas disposal and
approval processes on flaring/venting of the gas.
PS Contractor shall seek PETRONAS' approval for flaring or venting of associated and
non-associated gas from any Petroleum Field
In this respect PS Contractor is requested to provide the non-associated and associated

gas production forecast based on good industry and approved reservoir management
policy taking into considerations the need for efficient and economic exploitation of
hydrocarbon resources.

SECTION 8
8.1 Non-associated Gas
PS Contractor shall annually submit to PETRONAS in the Work Programme and Budget
production (including condensate) and utilization forecast for each non-associated gas field
based on gas demand.
The potential and availability production forecasts shall be based on latest reservoir
engineering study consistent with safe operating conditions, good industry practices,
approved reservoir management policy and a realistic development scheduling.
These production potential and availability forecasts shall be shown as follows:-
y first Calendar Year on monthly and quarterly basis,

y succeeding four Calendar Years on quarterly basis,
y remaining Calendar Years on annual basis.
PS Contractor shall not produce non-associated gas, other than for the purpose of gas
sales and gas related operational requirements, without prior approval of PETRONAS.
8.2 Associated Gas
PS Contractor shall annually submit to PETRONAS in the Work Programme and Budget the
production and utilization forecast for each Petroleum Field. Such forecast shall be
consistent and in accordance with the considerations as stipulated in Section 7.1 of
Procedures For Crude Oil Production Allowable.
8.3 Gas Flaring / Venting
8.3.1 Non-associated gas
Non-associated gas shall not be flared or vented without prior approval of

PETRONAS, except as provided herein:-
a) when gas is released from condensate stabilization units and the utilization
of such gas cannot be economically justified;

SECTION 8
b) during cleaning up of a well and well evaluation tests not exceeding a

continuous testing period of 48 hours;
c) when gas is released during emergencies, or as part of normal production

operations; and
d) during regular schedule facilities maintenance and inspection of gas related

equipment not exceeding 1 week
e) during commissioning of gas related equipment not exceeding 2 weeks.
8.3.2 Associated gas
PS Contractor shall seek PETRONAS' approval for flaring or venting of

associated gas from any Petroleum Field and shall provide justification for such
flaring or venting.
In this respect, PS Contractor shall upon receiving the respective annual oil
allowable, submit the corresponding forecast of associated gas production and
utilisation and shall provide justification for the flaring or venting level. The
forecast shall be based on annual oil production allowable from PETRONAS.
PETRONAS may request for discussion with PS Contractor.
PETRONAS shall convey the annual flaring/venting limit of associated gas from
any Petroleum Field for PS Contractor to comply.
Associated gas shall not be flared or vented without prior approval of

PETRONAS Regional Office, except as provided herein:-
a) when gas vapours are released from storage vessel including tanks,
specifically surge tanks and Free Water Knock-out Vessels, and if such gas
vapours cannot be economically utilised;
b) during temporary equipment failure, e.g. compressor but not exceeding 72

hours;
c) during cleaning up of a well, production test or any other well evaluation

tests not exceeding a continuous period of 48 hours;

SECTION 8
d) when regular scheduled preventive maintenance, inspections and testing

are conducted;
e) when gas is released during emergencies, e.g. emergency shutdowns,

blanketing or pressure relief operations, or as part of normal production
operations (e.g. instrument gas); and
f) during commissioning of gas related equipment not exceeding 2 weeks.
8.3.3 Flaring Permit
In the event that flaring/venting exceeding the specific period as stipulated in

Sections 8.3.1 and 8.3.2, PS Contractor shall seek flare/vent permit from

SECTION 9
PROCEDURES FOR ONSHORE/OFFSHORE Page 33
OPERATIONS
Summary
This section provides procedures on the operations of offshore and onshore

installations. PS Contractor shall operate the offshore and onshore facilities, structures
and pipelines safely in accordance with good industry practices and compliance with
regulatory requirements.
PS Contractor is required to develop and update the operating manual, operating

procedures, shutdown programme, as-built drawings for all offshore production and
onshore terminal facilities.

SECTION 9
OPERATIONS
9.1 Notice of Intent
PS Contractor shall submit a notice of intent advising at least 30 days before

commencement of operations for any newly constructed offshore and onshore facilities,
structures and pipelines and shall have prepared a start-up procedure.
9.2 Operating Manual
PS Contractor shall prepare an operation manual consisting of starting, operating and

shutdown procedures which shall outline preventive measures and systems checks required
to ensure proper functioning of all shutdown, control and alarm system for production
facility. PS Contractor shall provide a copy to PETRONAS when requested.
9.3 Simultaneous Operations Procedures
PS Contractor shall prepare and update a general operating procedure for conducting
activities simultaneously with production operations, which could increase the possibility of
occurrence of undesirable events such as harm to personnel and/or environment or
damage to properties.
The general operating procedure shall include but not limited to a detailed description of
operations and procedures for mitigation of potential undesirable events. The general
operating procedures and any subsequent revision shall be submitted to PETRONAS.
Activities requiring the general operating procedure shall among others cover drilling, rig
workover, diving and major construction operations and maintenance activities.
PS Contractor shall prepare a specific/dedicated simultaneous procedure for each activity

and location prior to execution.

SECTION 9
OPERATIONS
9.4 SHUTDOWN
9.4.1 Annual Shutdown Plan
PS Contractor shall advise PETRONAS of the annual schedule of planned

production shutdowns, stating the reasons for and the duration of the shutdowns
and shall update PETRONAS on quarterly basis as specified in Section 7 : Crude
Oil Production Allowable - Approved Production.
9.4.2 Unplanned Shutdown
PS Contractor shall notify PETRONAS Regional Office promptly of any major

unplanned crude oil production shutdown estimated to exceed 72 hours.
PS Contractor shall notify PETRONAS Regional Office within 24 hours of any

unplanned gas production shutdown which has an impact on downstream gas
customers.
9.5 As-Built Drawings
PS Contractor shall revise all as-built drawings for facilities, structures and pipelines
whenever significant modifications are carried out. The said drawings shall be made
available to PETRONAS when requested.
PS Contractor shall make available all latest as-built drawings for hand-over to PETRONAS
prior to field relinquishment as required under Petroleum Sharing Contract.
9.6 Daily Operations Log and Report
PS Contractor shall ensure that daily operations log is maintained to record significant daily
operational activities. PS Contractor shall submit or make accessible the daily operations
report to PETRONAS Regional Office.
Duration of keeping the log and daily report is at the descretion of PS Contractor.

SECTION 9
OPERATIONS
9.7 Monthly Production Report
PS Contractor shall submit to PETRONAS monthly production report including crude,

associated and non-associated gas production per platform and field, crude sales and
stocks, gas sales and condensate production and sale if applicable.
9.8 TERMINAL OPERATIONS
The Terminal Operations shall comply with the following requirements namely:-
y PETRONAS’ Measurement & Allocation Procedures that consist of the crude

inventory, loading, metering, validation, custody transfer and accounting procedures;
y PETRONAS’ Marine Safety Practices;
y PETRONAS Emergency Communication/Notifications Procedures; and
y Malaysian Statutory requirements.

SECTION 10
PROCEDURES FOR SUBSURFACE SAFETY Page 37
DEVICES
Summary
This section provides procedures on the requirement of subsurface safety devices on all
tubing installation with regard to flowing, shut-in wells or injection wells, the subsurface
safety valve specification, testing and additional protective equipment.

SECTION 10
DEVICES
10.1 Installation
All tubing installation in wells shall be equipped with surface-controlled subsurface safety
devices.
Notwithstanding the above, during an emergency, alternative safety devices may be

temporarily installed without prior consent of PETRONAS. PETRONAS shall be notified of
the situation and circumstances.
10.2 Shut-in Wells
Unless a well is equipped with a functioning subsurface safety valve (SSSV) the well has to
be shut-in and a tubing plug shall be installed.
10.3 Injection Wells
Subsurface safety devices as described under sub-section 10.1 shall be installed at all
injection wells unless it is determined that the well is incapable of naturally flowing oil or gas.
10.4 Valve Specifications
PS Contractor shall use subsurface safety devices that comply with the minimum standards
set forth in API Specification 14A i.e "Subsurface Safety Valves equipment" for quality
assurance including design, material, and functional test requirements and for verification of
independent party performance testing and manufacturer functional testing of such valves.
10.5 Reinstallation, Testing and Maintenance
PS Contractor shall install, test and maintain the SSSV Systems based on their operating
and inspection maintenance philosophy.

SECTION 10
DEVICES
10.6 Tubing and Plug Testing
A shut-in well equipped with a tubing plug or other device shall be inspected for leakage of
not less than once in six months. If leakage is detected, the plug shall be removed, repaired
and reinstalled, or an additional tubing plug may be installed in lieu of removal and repair.
10.7 Additional Protective Equipment
All tubing installations in which a wireline or pumpdown retrievable Subsurface Safety

device is to be installed shall be equipped with a landing nipple come with flow couplings, or
other protective equipment above the landing nipple to provide for sitting of the subsurface
safety device.
Any subsurface controlled SSSV installation shall require PETRONAS prior approval.
10.8 Other Completion Techniques
PS Contractor may apply exception for SSSV requirements for wells which have other
completion technique that prevent SSSV installation e.g. Sucker Rod Pump.
10.9 Records
PS Contractor shall maintain records which include design specifications; verification of

assembly and setting depth, removal date, reason for removal, and reinstallation date, and
all mechanical failures or malfunctions with notations as to the cause. Such records shall be
made available upon request by PETRONAS.

SECTION 11
PROCEDURES FOR WELL TEST, PRODUCTION Page 40
MEASUREMENT AND ALLOCATION
Summary
This section provides the procedures on the requirement for the information that is
required to be submitted related to the completion and recompletion of development/
production wells on well test and Production Measurement and Allocation.
It also provides the procedure for acquiring basic information for the purpose of reservoir
management. Arrangement for measuring petroleum is set in the Guidelines for
Dynamic Liquid Hydrocarbon Measurement and Guidelines for Gas Measurement. The
Procedure in this section does not cover all aspects of well testing and Production
Measurement and Allocation, and shall be regarded as PETRONAS' general minimum
requirements necessary while ensuring safety and integrity of production facilities based
on good oilfield practices.
In cases where the requirements and frequencies are not specifically stated in this
Guidelines, PS Contractor shall derive the scopes and frequencies based on good
oilfield practices, internationally recognised codes and standards and applicable
Malaysian Laws, and shall implement the same accordingly.

SECTION 11
11.1 Oil Producing Well
11.1.1 Production Rate Test
Upon completion or recompletion of wells, PS Contractor shall carry out the

production rate test within 90 days of production or at the first safe opportunity
available. The test shall be carried out on each separated producing interval of
the well.
PS Contractor shall conduct subsequent production rate test monthly for all
active producers. However, if the well has established a consistent and
predictable performance trend, a quarterly production test is allowed with
PETRONAS approval. Production rate test shall also be conducted if the
following arised:-
a) The new choke size has never been used before;
b) The choke size has been tested before but has exceeded six months
period; and/or
c) The well performance is anticipated to be significantly different from

prediction.
Result of the production test shall be maintain by PS Contractor and be made

available to PETRONAS upon request. The result of the above test shall include
but not limited to the following information;
a) Choke size used for the well during the production test was conducted.
b) Result of the production rate test.
c) Measurement of the surface production conditions, i.e tubing and casing

head pressure, pressure and temperature (where applicable) of the
measuring equipment.

SECTION 11
11.1.2 Bottom hole pressure survey
a) Transient Pressure Survey
PS Contractor shall conduct initial flowing and build-up (FBU) or drawdown

(DD), pressure survey(s) for newly completed or recompleted wells. PS
Contractor shall inform PETRONAS if any survey is not required after the
reservoir pressure trend has been established.
This survey shall be conducted at the first safe and practical opportunity
available. The survey results shall be submitted within 60 days of
completion of the survey.
Subsequent to the initial survey, periodical survey shall be conducted on

each active producer when deemed necessary for wellbore evaluation. The
exercise shall be conducted in accordance with prudent reservoir
management practices.
PETRONAS may also request the exercise to be conducted by the PS

Contractor within operational constraint.
b) Static Bottom Hole Pressure (SBHP) Survey
This survey shall be conducted on at least 50% of the total active producers
in each reservoir annually for the first two years of its producing life and on
at least 25% of total active producers thereafter.
11.2 Gas Producing Well
11.2.1 a) Deliverability Test
Upon initial completion or recompletion of wells, PS Contractor shall carry

out the initial deliverability test within 90 days of production or at the first
safe opportunity available. The test shall be carried out on each separated
producing interval of the well and on a minimum of three(3) rates.

SECTION 11
Result of the initial deliverability test shall be made available upon request.
Subsequent to the initial deliverability test, periodical delivery test shall be

performed at least once a year, if a single rate test indicates significant
delivery change. This test shall be conducted for at least four (4) different
flowrates on all active producers.
b) Periodic Production Rate Test
Periodic production rate test shall be conducted once a calendar month for
all active producers.
The report shall include but not limited to the following informations;
i) Choke size used for the well during the production test was conducted.
ii) Result of the production rate test.
iii) Measurement of the surface production conditions, such as tubing and

casing head pressure, pressure and temperature (where applicable) of
the measuring equipments.
11.2.2 Bottom Hole Pressure (BHP) Survey
The requirements of FBU/DD and static BHP surveys for gas producing wells are
similar to those detailed in sub-section 11.1.2 (a) and (b) respectively.
11.3 Pressure Test For Injection Wells
PS Contractor shall conduct initial injectivity test in every injection well or in any well
converted to injection well for the purpose of pressure maintenance. PS Contractor shall
inform PETRONAS if any test is not required after the reservoir pressure trend has been
established.
Test shall be conducted within 90 days of injection or at the first safe practical opportunity
available.

SECTION 11
PS Contractor shall perform periodic injectivity and/or fall-off tests for injection wells when
deemed necessary for wellbore damage evaluation and reservoir description.
11.4 Exception to the above requirements
PS Contractor may apply approval for exception to the above requirements during an
activity that would restrict access by wireline units to some wells or when pressure trends
has been established and the measurement is considered redundant or other justifiable
reason(s).
PETRONAS may also from time to time , request additional tests to be carried out within
operational constraint if necessary.
11.5 Record Keeping
Result of the above test shall be maintained by PS Contractor and made available to
PETRONAS upon request.
11.6 Production Measurement and Allocation
11.6.1 Production Allocation to each Field and Platform/

Production Station.
a) Measurement
Production rates of oil, gas, condensate (if applicable) and formation water
shall be determined for each platform/production station, field and terminal.
Measurement for platform/production station, field and terminal which share
a common facility with other station having different equity and PSC shall be
agreed upon by PETRONAS. Metering on these stations shall be in
accordance with the PETRONAS Guidelines for Gas Measurement and
Guidelines for Dynamic Liquid Hydrocarbon Measurement.

SECTION 11
b) Allocation
Following the end of each calendar month, based on official measurement in

the terminal either onshore or marine terminal or in other authorised place,
the monthly production of oil, gas, condensate (if applicable) and formation
water for each field and production platform/station shall be determined. A
monthly report shall be submitted within thirty (30) days from the end of the
month under review and shall include the following reconciled figures :-
i) petroleum and formation water;
ii) fluids injected; and
iii) petroleum/gas utilised, flared or vented, stored in and delivered from

each production station/terminal.
11.6.2 Production Allocation To Each Production String
Following the end of each calendar month, based on the monthly production, the
production rates of oil, gas, condensate (if applicable) and formation water for
individual string shall be determined based on production rate test.
11.6.3 Production Allocation To Each Producing Interval
When two or more producing intervals are being produced through a common
string, the oil, gas, condensate (if applicable) and formation water production of
the string shall be allocated to each producing interval according to the split ratio
for the individual fluid.
Determination of the split ratios shall be made before a new combination of

producing intervals is placed into production or when the combination is changed
or when data indicate a change is in order. Revision of the split ratios shall be
made when deemed necessary based on well performance and survey and when
operationally feasible.

SECTION 11
For wells which are not accessible for survey, the split ratio shall be based upon
reservoir engineering calculation from the subject well(s) or from other wells in
the same field. Consideration should be given to data such as porosity,
thickness, estimated permeability, reservoir pressure and other characteristics of
the producing intervals for calculations of the split ratio.

SECTION 12
GUIDELINES FOR Page 47
RESERVOIR MANAGEMENT
Summary
This section provides the basic framework of reservoir management guidelines for PS
Contractor:
a) on continuous reservoir data acquisition, the monitoring and analysis of reservoir

performance as appropriate through the field life cycle; and
b) to carry out periodic reviews and studies and further development activities as
appropriate.
The objective is to promote efficient field development by economically optimizing

hydrocarbon recovery and maintain optimal field performance.
SECTION 12
12.1 Early Depletion Stage
PS Contractor shall operate in a manner that is consistent with the optimum reservoir
management strategy of the field as approved in the field Field Development Plan (FDP).
PS Contractor shall ensure that prudent reservoir management policies/strategies are being
implemented. The reservoir management strategy may need to be revised or modified in
light of the new data being acquired during the initial development stage.
During the course of operation PS Contractor shall maintain database of production,

pressure, reservoir performance and reservoir geological description data. With the new
data, PS Contractor shall update model/performance forecast, when necessary. PS
Contractor shall submit a proposal for PETRONAS review and approval if reservoir
performance and other data show that a different reservoir management strategy than that
approved in the FDP is required for optimum reservoir management. Prior to submitting the
proposal for PETRONAS approval, PS Contractor shall have technical review upfront with
PETRONAS.
Due to uncertain drive mechanism any GOR controls, where appropriate and in accordance
with prudent reservoir management practices, shall be addressed in the approved FDP. If
significant uncertainty exist in the reservoir drive mechanism, the FDPs should have
multiple scenarios covering the potential range of reservoir drive mechanisms and reservoir
descriptions, and consequently the range of anticipated reservoir behavior.
However, if no reservoir studies has been conducted, the reservoir GOR shall be limited to
1.5 x Rsi during the initial production stage. This is to ensure that there is no adverse impact
to oil recovery and to allow sufficient time on data gathering to understand the reservoir
behaviour.
Nevertheless, PS Contractor may propose for PETRONAS approval the revision of GOR
limit in accordance with good industry practices.
The reservoir depletion shall not exceed 15% of developed EUR per year. Any depletion
rate exceeding 15% need to be supported by reservoir study and approved by PETRONAS.
SECTION 12
PS Contractor shall take actions to improve well deliverability/injectivity as deemed

necessary. PS Contractor may carry out workovers and/or other well work activities and
artificial lift program which require submission of proposal for PETRONAS approval (refer
to Appendix 6 for documentation and approval requirements).
PS Contractor shall present to PETRONAS the field performance/surveillance during annual

review.
12.2 Middle and Late Depletion Stage
PS Contractor shall continue to gather and analyze reservoir performance data and operate
in a manner that is consistent with the optimum reservoir management strategy of the field
in line with sub-section 12.1.
PS Contractor shall apply appropriate reservoir management tools and/or techniques for
analyzing field performance. PS Contractor shall also conduct major reservoir studies (e.g.
full field review/depletion study) at least once every 3 to 5 years from the initial production
and submit to PETRONAS for review. These full field review/depletion study shall cover but
not limited to subsurface static and dynamic model update and further development
opportunity. PS Contractor may apply for exception for the field review/depletion study with
justification for PETRONAS consideration.
When necessary, PS Contractor may carry out workovers and/or other well activities,
artificial lift program which require submission of proposal for PETRONAS approval (Refer
to Appendix 6 for documentation and approval requirements).
PS Contractor shall present to PETRONAS the field performance/surveillance during annual

review.
12.3 Secondary and/or Tertiary Recovery
At every stage of depletion PS Contractor shall look for opportunities to add reserves,
preferably by natural means. However, secondary recovery may be required in cases
where natural drive mechanisms are insufficient and it is economically justifiable to do so.
PS Contractor shall submit the secondary recovery program in the FDP or FDP Revision for
PETRONAS review and approval.
SECTION 12
Examples of secondary recovery include, but are not limited to, water injection, immiscible
gas injection and artificial lift.
For fields with water injection or gas injection, PS Contractor shall conduct voidage
replacement and volumetric sweep analysis of each reservoir and present summary of
results to PETRONAS annually. For water injection, voidage replacement policy of each
reservoir will be determined by the optimum reservoir management strategy of the field.
For immiscible gas injection, voidage replacement policy of each reservoir will be
determined by the optimum reservoir management strategy of the field, and/or a group of
fields sharing the same infrastructure.
At any stage of depletion PS Contractor may seek PETRONAS approval of plan for the
application of tertiary recovery techniques. PS Contractor shall conduct screenning study
on large fields for tertiary recovery development opportunities before field abandonment.
Examples of tertiary recovery technique include, but are not limited to, miscible gas
injection, microbial enhanced recovery, surfactant flooding, steam flooding and polymer
flooding.
12.4 Reservoir Management Plan
PS Contractor shall submit a Reservoir Management Plan (RMP) to PETRONAS. Any

revision to the RMP shall require PETRONAS approval.
12.5 Well Abandonment
PS Contractor shall submit plans for well abandonment for PETRONAS approval once the
PS Contractor or/and PETRONAS has determined that the reservoir can no longer or do not
have the potential to produce economically.
SECTION 13
GUIDELINES FOR HEALTH, SAFETY Page 51
AND ENVIRONMENT
Summary
This section provides guidelines on managing Health, Safety and Environment aspects
of upstream petroleum operations and activities of the Production Sharing Contractor
(PSC) to ensure they are carried out prudently and effectively in line with the best
practices currently prevalent in the industry and provide a means by which PETRONAS
would be able to assess and steward the PS Contractor’s performance.
In this respect, the PS Contractor shall have in place a documented Health, Safety and
Environment (HSE) management system to ensure that the operational integrity of its
upstream operations is meeting the PETRONAS health, safety and environmental
requirements inclusive of statutory requirements.
The system shall ensure continuous improvement in performance and provide evidence
that all risks and critical operations have been assessed to minimise the risks to as low
as reasonably practicable.

SECTION 13
AND ENVIRONMENT
13.1 Health, Safety & Environment Management System
PS Contractor shall have in place a documented Health, Safety & Environment

management system to ensure that the operational integrity of its upstream operations is
meeting PETRONAS health, safety and environmental requirements inclusive of statutory
requirements. A copy of the manual shall be submitted to PETRONAS Regional Office for
reference.
The Health, Safety & Environment management system (HSE-MS) shall consist of at least,
the following elements:
13.1.1 Leadership & Commitment
PS Contractor Management shall demonstrate and be committed to HSE matters

in its operations by having strong, visible leadership and commitment and
accountability, and to make available the necessary resources to develop,
operate and maintain the HSE-MS.
13.1.2 Policy & Strategic Objectives
PS Contractor Management shall have HSE policies defined and documented.

The policies shall be initiated, developed, supported and endorsed by the highest
level of the PS Contractor Management. These policies shall also satisfy all
applicable HSE regulatory requirements.
PS Contractor Management shall draw up strategic objectives to support these

policies and reflect the operational and business requirements, relevant HSE
hazards and effects system and the views of employees, contractors, customers
and companies engaged in similar activities.
13.1.3 Organisation, Resources & Documentation
In order to effectively implement the policy and meet the strategic objectives, PS
Contractor shall establish a clearly defined organisational structure with specific
roles and responsibilities relating to HSE-MS.

SECTION 13
AND ENVIRONMENT
PS Contractor shall make available adequate resources, including personnel,

funds and hardware necessary to implement the HSE programmes. There shall
be a process in place to provide assurance of competency of the relevant
personnel involved in HSE critical activities.
There shall be an effective communication means to disseminate and assimilate

HSE information throughout the PS Contractor’s organisation. PS Contractor
shall possess all relevant reference documents and standards, including HSE
legislations and ensure proper controls are in place to manage HSE-MS,
including ensuring all the latest versions are available.
13.1.4 Evaluation and Risk Management
PS Contractor shall identify all risks and hazards in all phases of its activities at
all levels, evaluate their severity, effects and probability of occurrence, have in
place a control mechanism to prevent or eliminate non-compliances and propose
mitigation steps and recovery and restoration actions.
Risks shall be managed and reduced to as low as reasonably practicable.
13.1.5 Planning
PS Contractor shall develop a long term plan (preferably five-year) prepared

annually which provides a long term overview of planned objectives and detailed
activities to be implemented for the current year. This plan shall be submitted to
PETRONAS Regional Office for reference.
For assurance of technical integrity of the assets, PS Contractor shall design out
the risks, and this may be achieved by the specification of minimum standards for
the design, construction, operation, maintenance and inspection of the facilities.
These standards shall be PETRONAS Technical Standards (PTS) or acceptable
international standard. PS Contractor shall also develop specific procedures and
work instructions for all its activities. There shall be procedures for the
management of change or deviation in the established procedures and approval
should be sought in accordance with the requirements of the procedures.

SECTION 13
AND ENVIRONMENT
PS Contractor shall have appropriate Emergency Response and Oil Spill

Contingency Procedures, both at the company level and at the specific location.
This would serve to prevent an incident from escalating to a degree where
people can be harmed or asset damaged or destroyed. These emergency
response procedures shall have clearly defined communication linkages to the
PETRONAS Upstream Emergency Communications/Notification Procedures
(ECP) and relevant government agencies as stipulated in the Supporting
Documents of Volume 1 and Government’s requirement of Volume 2
respectively.
13.1.6 Implementation and Monitoring
PS Contractor shall conduct all tasks and activities according to the systems,
procedures and guidelines based on the standards set and adopted.
PS Contractor shall have an effective performance monitoring system in place to

ensure targets are met and continuous improvement is achieved. Relevant
performance indicators shall be adopted.
PS Contractor shall maintain relevant records as required by the HSE-MS,

procedures and guidelines.
13.1.7 Audit
PS Contractor shall conduct HSE auditing, either internally and/or by

independent parties, to provide assurance that its activities are adequately
performed and if not, to highlight deficiencies and recommend appropriate
remedial action.
PS Contractor shall develop the overall audit programme and provide

PETRONAS a copy upon request. PS Contractor is to extend invitation to
PETRONAS for participation. PS Contractor is to submit a close-out report to

SECTION 13
AND ENVIRONMENT
13.1.8 Review
PS Contractor shall conduct regular reviews of the HSE-MS to evaluate its

effectiveness, review of performance and identify gaps so that remedial actions
can be undertaken.
13.2 Safety Inspection & Audit
PETRONAS reserves the provision to conduct HSE inspection or technical audit at PS

Contractor’s operational locations, whenever necessary.
13.3 Reporting and Key Performance Indicator (KPI)
PS Contractor shall monitor and report the Health, Safety and Environment (HSE)
effectiveness using Key Performance Indicators (KPI), as stipulated in Appendix 7. The
report is to be submitted to PETRONAS Regional and Main Offices accordingly.
13.4 Incident Reporting & Investigation
PS Contractor shall notify PETRONAS immediately by completing Initial Incident Report as

stipulated in PETRONAS’ ECP on either one of the following categories;
y Incidents resulting in loss of life (fatality)

y Incidents resulting in lost-time (LTI) disable injuries; and
y Incidents resulting in loss or damage to equipment and structure.
PETRONAS reserves the right to participate in any or all investigations to be undertaken by

PS Contractor. A full report of the incident shall be submitted to PETRONAS within a month.

SECTION 13
AND ENVIRONMENT
13.5 Safety Passport
All personnel going offshore facilities must posses valid safety passport. The safety
passport must be obtained from recognised Training Providers which has satisfied
PETRONAS’ Minimum Industry Standard and Facilities requirements.
13.6 Other Related Procedures
This procedure is to be read together with;
y PETRONAS Emergency Communication/Notification Procedures (refer to Supporting

Documents Volume 1); and
y Malaysian statutory requirements as prescribed under EEZ, MARPOL, LEM/TEK,
OSHA, EQA, etc. (refer to PETRONAS Guidelines for Upstream Activities Volume 2).

SECTION 14
GUIDELINES FOR DECOMMISSIONING OF Page 57
OIL AND GAS INSTALLATION
Note :
The “GUIDELINES FOR DECOMMISSIONING OF OIL AND GAS INSTALLATIONS” will

be issued later.
ISSUED BY
PETRONAS PROCEDURES AND GUIDELINES
B. Supporting Documents
7. Procedure for Drilling Operations
8. Guidelines for Barges Operations
9. Guidelines for Gas and Liquid Measurements
10. Emergency Response and Communication

Procedures
11. FDP Review and Approval Guidelines
ISSUED BY
APPENDIX 1 Page 1
LIST OF LOCAL AUTHORITIES
1. Yang Berbahagia Setiausaha Kerajaan Negeri Terengganu

Wisma Darul Iman
20503 Kuala Terengganu
Terengganu Darul Iman
2. Pengarah
Bahagian Pengurusan & Perlindungan Sumber
Jabatan Perikanan Malaysia
Kementerian Pertanian Malaysia
Tingkat 8 & 9, Wisma Tani
Jalan Sultan Salahuddin
50628 Kuala Lumpur
3. Pengarah Operasi
Jabatan Arah Operasi
Kementerian Pertahanan (Kementah)
Jalan Padang Tembak
50634 Kuala Lumpur
4. Pengarah
Pusat Penyelarasan Penguatkuasaan Maritim
Bahagian Keselamatan Negara
Jalan Iskandar Shah
Telok Muroh
32200 Lumut
Perak Darul Ridzuan
5. Syahbandar Pantai Timur

Pejabat Syahbandar
20000 Kuala Terengganu
ISSUED BY
APPENDIX 1 Page 2
6. Pengarah
Perikanan Negeri Terengganu
Wisma Perikanan Negeri
Taman Perikanan Chenderin
21080 Chendering
Kuala Terengganu
7. Pengarah
Perikanan Negeri Kelantan
Tingkat 6, Wisma Persekutuan
Jalan Bayam
15628 Kota Bharu
Kelantan Darul Naim
8. Pengarah Laut
Jabatan Laut Sarawak
Lot. 683, Seksyen 66
Jalan Utama
Padah Putih
93619 Kuching
9. Pengarah Laut , Marin Labuan

Fax No. : 087-410891
10. Pengarah Perikanan Laut

Jabatan Perikanan Laut
Tingkat 15, Bgn Sultan Iskandar
Jalan Simpang Tiga
93628 Kuching
11. Pengarah Perikanan Laut,

Jabatan Perikanan Sabah
8th Floor, Manara Khidmat
88628 Kota Kinabalu
12. Pengarah
Jabatan Perikanan Labuan
Km 4, Jalan Patau-Patau
Peti Surat 395
87008 Labuan
ISSUED BY
APPENDIX 1 Page 3
13. Pegawai Laut, Shipping Miri

Fax No.: 085-418608
14. Marine Manager, Bintulu Port Sdn. Bhd

Fax No.: 086-253597
15. Ketua Bahagian Haidrografi, Kementah KL

Fax No.: 03-3685289
16. Senior Manager

Petronas Maritime Services Sdn Bhd
Level 47, Tower 1
PETRONAS Twin Towers
Kuala Lumpur City Centre
50088 Kuala Lumpur
Fax No.: 03-5812463/4100
17. Senior Manager

Petroleum Resources Assessment Department
Petroleum Management Unit
Level 28, Tower 1
PETRONAS Twin Towers
Kuala Lumpur City Centre
50088 Kuala Lumpur
Fax No.: 03-5813238
18. Senior Manager

Sabah/Sarawak Regional Office
Jalan Sekolah
98100 Lutong
Sarawak
Fax No.: 085-662623
19. Senior Manager

East Cost Regional Office
3rd Floor, PETRONAS Office Complex
24300 Kertih, Kemaman
Terengganu
Fax No.: 09-8640127
ISSUED BY
APPENDIX 2 Page 4
FIGURE 1
Type : BUBU
ISSUED BY
APPENDIX 2 Page 5
FIGURE 2
Type : UNJANG
ISSUED BY
APPENDIX 2 Page 6
FIGURE 3
Type : UNJANG BUAI
ISSUED BY
APPENDIX 2 Page 7
FIGURE 4
Type : UNJANG IBU
ISSUED BY
APPENDIX 3 Page 8
LIST OF COMPENSATION RATES (RM)
COMPENSATION FOR
RELOCATION
LINES CUT
FISHING GEAR
(Map & Notice) (No map or No Notice)
1. Traditional Fishing
Gear
a) Bubu 60/80 60/80 60/80 60/80 150 150 150 150
b) Umpan Panau - - - - - - 50 50
c) Rawai 100 100 - - - - - -
d) Pompang/Gombang 100 - - - 200 - - -
2. Fish Aggregating
Device
a) Single Unjang - - - - 120/100 120/100 - -
120/ 120/
b) Cluster Unjang - - - - unit/ unit/ - -
cluster cluster
3. Culture Cage
400/ 400/ 2,800/ 2,800/
a) Kerapu/Kupang raft raft
- -
raft raft
- -
400/ 400/ 2,800/ 2,800/
b) Siakap raft raft
- -
raft raft
- -
ISSUED BY
APPENDIX 4 Page 9
LIST OF GOVERNMENTAL PERMIT, APPROVALS AND

NOTIFICATIONS FOR OFFSHORE FACILITIES OF
DEVELOPMENT PROJECT (BY PHASES)
Government Applicable
Permit, Approval or Notice
Agency Law
A. Screening, Conceptual Design, Concept Selection and DBM Preparation.
1) Approval of Environmental Impact Assessment (EIA) Report for Offshore

DOE EQA
Facilities.
B. Preliminary and Detailed Design

MDTCA EEZA
1) Approval to Install and Operate Platforms, Pipelines, Submarine Cables in
the EEZ .
2) Approval for Direct Importation of Procured Materials and Equipment for

CED CEO
the Project.
3) Exemption from Customs Duties and Tax for Project Purchased Non-BEL
Treasury CA
Items.
4) Communications Equipment Import Permit for Platforms. TD TA
5) Approval to Install Subsea Trunk Pipelines and Onshore Pipelines (PTI) DOSH PSMA
6) Notification of Intent to Cross Telecommunications Cable. JTM -
7) Approval for OSC (Onshore Slug Catcher) Pipeline Shore Crossing. Port Authority -
C. Fabrication
1) DOSH Approval of Cranes/Pressure Vessels/Machineries on Platforms. DOSH FMA
2) Approval to Dispose of Project Purchased BEL Items. Treasury CEO
D. Offshore Transportation and Installation
1) Approval to Designate Platforms as Legal Landing Places. (Construction

CED CA
to make request thru Tax Dept.)
2) Maritime Notification for Temporary Offshore Marine Vessel Operations

MD MSO
Related to Offshore Construction Activities.
3) Notification of Permanent Offshore Installation of Platforms, Pipelines and

MD MSO
Submarine Cables.
ISSUED BY
APPENDIX 4 Page 10
Government Applicable
Permit, Approval or Notice
Agency Law
4) Approval for Direct Importation/Relocation of Fabricated

CED CEO
Components.
5) Notification to DOE of Commencement of Offshore Construction

DOE EQA
Work.
6) Notification to DOE for Completion of Offshore Construction Work. DOE EQA
7) Notification to DOSH for Subsea Trunk/Onshore Pipelines. DOSH PSMA
8) Approval from DOE Director General to Discharge Effluent into

DOE EEZA
Malaysia Waters for Pipeline Flushing, Pigging and Hydrotesting.
9) Notification of Platforms and Pipelines Installation for Fishermen’s

FD MOU
Compensation.
10) Notification of Pipeline Installation Landing Onshore. DC -
E. Startup And Operations
1) Gazetting the Offshore Installation as a Protected Place. MHA PAPPA
2) Communications Equipment Operating License and Assignment of

TD TA
Operating Frequencies.
3) Approval to Operate Subsea Pipelines to shore. DOSH PSMA
F. Notifications to DOSH for Emergency Pipeline Works (If necessary) DOSH PSMA
ISSUED BY
APPENDIX 5 Page 11
List of KPIs for Maintenance and Inspection
KPI Element Definition Unit of Frequency

Measure of Reporting
Production (Production losses / capacity)* 100 % Monthly

Downtime
Performance
Unit Maintenance Cost / Barrel Oil RM/BOE Monthly

Maintenance Equivalent
Cost
CDFT’s Rate of CDFT’s completed per % Monthly

completion approved maintenance plan
Performance
PM Compliance Rate of PM completion completed % Monthly

of life saving & per statutory requirement on life
support saving & support appliances
appliances maintenance programme.
ISSUED BY
APPENDIX 6 Page 12
TECHNICAL PROPOSAL REQUIRES PETRONAS APPROVAL
PETRONAS
NO. TECHNICAL PROPOSAL DOCUMENT APPROVAL
TIMING
1 Any new wells not included in the y FDP Revision or
approved FDP. 1 Month
y Notice of Operations
2 Any workover wells of the following
objectives :-
y Recomplete/deepen to new zone y FDP Revision
1 Month
not develop/address in the FDP, y Technical Proposal
y Sidetrack new zone not develop/
address in the FDP.
3 Any workover wells of the following
objectives :-
y Recompletion,
y Reperforation,
y Sidetrack existing zones,
y Technical proposal 2 Weeks
y Squeeze/plug job,
y Gravelpack installation
y Mechanical repair,
y Acid stimulation/fructuring
y Change in well utility
4 FDP Revision :-
y Development of new reservoirs,
wells, platform.
y Appraisal of new area
y Changes to drainage plan i.e. :- y FDP Revision 1 Month
§ Platforms
§ Wells
§ Type of completions
y Changes to development concept
e.g. Evacuation route, integrated
development, FPSO, etc.
ISSUED BY
APPENDIX 6 Page 13
Note :
PETRONAS
NO. TECHNICAL PROPOSAL DOCUMENT APPROVAL
TIMING
5 Reservoir Management Plan
revisions:-
y GOR Limit revision/relaxation
y Gas/Water Injection revision
y Production Policy i.e. :- y Technical proposal. 2 weeks
§ Offtake by well/reservoir
§ Commingle/decommingle zone
y Change in depletion strategy and
well utility i.e. :-
§ Oil producer to gas/water
injection
§ Gas injection to gas sale
1) Other activities not listed above does not require PETRONAS technical approval.
2) Contractor may apply for exception to the above approval timing i.e. when good
opportunity arises with justification for PETRONAS approval.
3) The PETRONAS approval timing is based on best endevour basis and subject to
issues being resolved.
ISSUED BY
APPENDIX 7 Page 14
Guidelines for Health, Safety and Environment
Reporting
Data Submission Reporting Level
Frequency
1 Oil Spill Incident Monthly PETRONAS Regional Office
2 Fire/Explosion Incident Monthly PETRONAS Regional Office
3 Safety statistics (LTIF/TRCF) Monthly PETRONAS Regional Office
4 Effluent Discharge Quality Monthly PETRONAS Regional Office
Number of occurences > 40
ppm
5 Hydrocarbon & toxic gas Monthly PETRONAS Regional Office
release
6 Property damages Monthly PETRONAS Regional Office
7 Number of fines (by Authority) Monthly PETRONAS Regional Office
ISSUED BY
APPENDIX 8
Note :
The Appendix for “KEY ACTIVITIES AND APPROVAL PROCESS OF PLATFORMS

DECOMMISSIONING” will be issued later.
ISSUED BY
PETRONAS PROCEDURES AND GUIDELINES Page 1
DEFINITIONS
Actual Production
Average production rate actually realised over a specified period.
Approved Production
Average production rate over a specified period that is established and issued by
PETRONAS from time to time to be complied by PS Contractor.
Facilities, structures and pipelines
All topside facilities, offshore structures, pipelines, safety devices and system, storage
tanks, wellhead stack-ups including sub-sea completions system, export & loading
facilities, electrical installations and telecommunications facilities that related to
production of oil, gas and condensate either installed onshore or offshore except for
subsurface safety devices.
Gas Oil Ratio (GOR) Limits
GOR limits established and issued by PETRONAS to be complied by PS Contractor.
Gas Utilisation
The gas uses for petroleum operations and gas lift.
Guideline
The official document outlining main PETRONAS’ requirements on specific activities to

be undertaken by PS Contractor to ensure safe and cost effective operations in
upstream activities.
ISSUED BY
HALAL Food
Food contain no pork or meat without proper Islamic preparation. It shall be certified by
Local Islamic Authorities.
Major Repairs
Any repair work which cost RM 500 K and above for each particular unplanned works
related to crude, gas and condensate production.
Make-up Production
The average production rate to be added or subtracted to the Approved Production level
that would ensure that the cumulative Actual Production equals the cumulative Approved
Production level.
National Depletion Policy (NDP)
Major fields having total Oil Initially Inplace (OIIP) equal to or more than 400 MMstb. The
production from major fields will be limited to a ceiling of 3.0% of OIIP in any one year.
Oil Production Availability
The Oil Production Potential after taken into account the planned shutdown schedule.
Oil Production Potential
The forecast of oil production deliverability at full wellstream or at system capacity.
Operational Integrity
Operational Integrity of a facility is achieved when it is being operated as intended, such

that it can achieve production targets without attracting undue risks to personnel,
environment or assets.
ISSUED BY
Over-Production
The differential by which the Actual Production exceeds the Approved Production
Levels.
PETRONAS Regional Office
PETRONAS Petroleum Management Unit (PMU) regional offices located at Kerteh and
Miri (refer to Appendix 1).
Procedure
The official document outlining detail PETRONAS’ requirements on specific tasks in

upstream operations to be undertaken by PS Contractor to ensure quality, reliability and
standardized output
Tanker Lifting / Programming Meeting
The monthly meeting between Crude Oil Group, Petroleum Management Unit and PS
Contractor to forecast and target the subsequent month production level.
Technical Standard
Standard set by PETRONAS in meeting certain technical specifications and

requirements.
Technical Integrity
Absence during specified operation of a facility foreseeable risk of failure endangering

safety of personnel, environment or asset value. (Acceptable technical integrity refer to
audit team recommendation prior to the field handover/relinquishment process).
Under-Production
The differential by which the Actual Production falls short of the Approved Production
levels.
ISSUED BY
Upstream Operations
All activities involved in the oil, gas and condensate production.
ISSUED BY
LIST OF ABBREVIATIONS
AELB : Atomic Energy Licencing Board
CA : Custom Act
CED : Custom and Excise Dept.
CEO : Custom Exemption Order
DC : District Council
DOE : Department of Environment
DOSH : Departmental of Occupational Safety and Health
DOSH (FMD) : Departmental of Occupational Safety and Health

(Factories and Machinery Department)
EEZ : Exclusive Economic Zone
EEZA : Exclusive Economic Zone Act
EIA : Environmental Impact Assessment
EQA : Environmental Quality Act 1974.
EPC : Engineering, Procurement and Construction
EPCIC : Engineering, Procurement, Construction, Installation and

Commissioning
EPCC : Engineering, Procurement, Construction and Commissioning.
FD : Fisheries Department
FMA : Factories and Machinery Act
ISSUED BY
HSE-MS : Health, Safety and Environment - Management System
JTM : Jabatan Telekom Malaysia
LEM/TEK : Lembaga Teknikal.
MARPOL : International Convention on Prevention of Pollution from Ships

1973 - 78
MD : Marine Department
MDTCA : Ministry of Domestic Trade and Consumers Association
MHA : Ministry of Home Affair
MOU : Memorandum of Understanding
MSO : Malaysian Shipping Ordinance
OSHA : Occupational Safety & Health Act
TENORM : Technologically Enhanced Normaly Occurrence Of Radioactive

Materials
PAPPA : Protected Area Protected Place Act
PSMA : Petroleum Safety Measures Act
TA : Telecommunication Act
TD : Telecommunication Department
ISSUED BY
ACKNOWLEDGEMENT
These procedures and guidelines review update for the Upstream Activities have been
undertaken by Petroleum Management Unit in association with the established
PETRONAS’ Production Sharing Contractors namely, PETRONAS Carigali
Sdn.Bhd.(PCSB), ESSO Production Malaysia Limited (EPMI), Sarawak Shell Berhad
(SSB), LUNDIN Malaysia Incorporated (LUNDIN), Amerada Hess (Malaysia) Limited
(AMERADA HESS), Santa Fe Oil (SANTA FE) and Murphy Sarawak Oil Ltd & Sabah Oil
Ltd (MURPHY OIL). The PMU Management would like to express special thanks and
appreciation to the following key personnel for their perseverance and endless
commitment in making these procedures and guidelines possible :
1. Guidelines for Exploration Activities

i) Mr Low Cheng Foo - PCSB
ii) Mr Nor Azhar Ibrahim - PCSB
iii) Mr Md Radzi Arshad - PCSB
iv) Mr Ahamd Bukhari Ibrahim - PCSB
v) Mr Redzuan Md Said - EPMI
vi) Mr Razak Nurin - EPMI
vii) Mr Denis Tan - SHELL
viii) Mr Kok Yip Cheong - SHELL
ix) Mr Michael Ho - SHELL
x) Mr Lee King Sim - SHELL
xi) Mr Lai Soo Khnan - LUNDIN
xii) Mr David W Abrahamson - AMERADA HESS
xiii) Mr Andy Timmis - AMERADA HESS
xiv) Mr David Mackerich - AMERADA HESS
xv) Mr Paul Lim - AMERADA HESS
xvi) Mr Henfie L Alison - SANTA FE
xvii) Mr Foo Say Jeow - SANTA FE
xviii) Mr Ralf M DePauw - MURPHY OIL
ISSUED BY
2. Procedures for Project Development Management

i) Mr Hasbullah Abu Hassan - PCSB
ii) Mr Kamaruzaman Yaacub - PCSB
iii) Mr Chew Cheng Hooi - EPMI
iv) Mr Nicholas Chin - SHELL
v) Mr Edwanee Cheah - SHELL
vi) Mr Yusoff Tapri - LUNDIN
3. Guidelines for Maintenance and Inspection

i) Mr Mazalan Baharuddin - PCSB
ii) Mr Noor Azmi Sudin - EPMI
iii) Mr Raja Ahmad - SHELL
iv) Mr Numpang Ak Santai - SHELL
v) Mr Loo Wei Bheng - LUNDIN
4. Procedures for Production Operations

i) Mr Ahmad Zailan Zakaria - PCSB
ii) Mr Zulghaffar Jantan - EPMI
iii) Mr Joel Wylie - EPMI
iv) Mr Son Huu Do - SHELL
v) Ms Wong Yang - SHELL
vi) Mr Subramaniam - LUNDIN
vii) Mr Abdullah Zulkarnain - LUNDIN
5. Guidelines for Health, Safety and Environment

i) Mr Abdul Rahman Mehat - PCSB
ii) Ms Choo Sor Mooi - EPMI
iii) Mr Sim Kian Hua - SHELL
iv) Mr Subramaniam - LUNDIN
v) Mr Abdullah Zulkarnian - LUNDIN
ISSUED BY

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PETRONAS

POTENTIAL NEW G/L

R EEZ DOSH CONSOLIDATE

PROCEDURES / GUIDELINES FOR

PETROLEUM MANAGEMENT UNIT

PS Contractor may request exception to these procedures and guidelines. Such

TABLE OF CONTENTS PAGE

2. PROJECT DEVELOPMENT MANAGEMENT

3. INSPECTION AND MAINTENANCE OF PRODUCTION FACILITIES

5. HEALTH, SAFETY & ENVIRONMENT

7. PROCEDURES FOR DRILLING OPERATIONS

8. GUIDELINES FOR BARGES OPERATIONS

9. GUIDELINES FOR GAS & LIQUID MEASUREMENT

10. EMERGENCY RESPONSE & COMMUNICATIONS

11. FDP REVIEW AND APPROVAL PROCESS GUIDELINES

Structure of the Procedures/Guidelines

The procedures/guidelines are divided into two volumes :-

Vol. 1 : PETRONAS’ requirements

Figure 1 indicates the concept adopted in preparing the revised PETRONAS

Vol. 1 - PETRONAS’ Requirements

Vol. 1 consists of PETRONAS’ requirements for petroleum upstream activities which

Vol. 2 - Government’s Requirements

Vol. 2 compiles of the existing government’s regulations or guidelines to comply with

These guidelines include Environmental Impact Assessment (EIA), Environmental

POTENTIAL NEW G/L

PPO - Procedures for Production Operations (1988)

1.1 Pre-survey preparation (In-house)

In all correspondence with government authorities, all surveys conducted by PS Contractor

1.2 Survey operation (On-site)

PS Contractor to ensure representatives from fishermen and fisheries department both

Some of the fish traps types are shown in Appendix 2.

1.3 Post-survey preparation (In-house)

All data or map to be submitted to Fisheries Department or other relevant government

All compensation shall be made through Fisheries Department.

PS Contractor shall report to Fisheries Department on all fish traps matters.

2.1 Pre survey preparation

2.3 Post survey

PS Contractor shall submit close-out report to PETRONAS.

3.1 Pre survey preparation

PS Contractor shall prepare seismic programme proposal and undertake scouting/fact

PS Contractor shall submit estimated project schedule to PETRONAS prior to seismic

PS Contractor shall get Co-Venturers concurrence prior to submission of approval to

3.3 Post survey

4.1 Pre survey preparation

PS Contractor shall prepare seismic programme proposal and undertake scouting/fact

PS Contractor shall submit estimated project schedule to PETRONAS prior to seismic

Subject to statutory requirement, PS Contractor may conduct Environmental Impact

PS Contractor shall get Co-Venturers’ concurrence prior to submission of approval to

PS Contractor shall ensure that all personnel possesses valid identification.

4.3 Post survey

This document provides procedures on the project management of upstream petroleum

To meet the above objective, PS Contractors are encouraged to adopt integrated

SUPERSEDE ISSUE: ISSUED BY REVISION 1

The procedures outlined are as follows :

SUPERSEDE ISSUE: ISSUED BY REVISION 1

5.1 Field Development Plan (FDP) Review and Approval Process

PETRONAS' requirement is that any FDP submitted should be a comprehensive

SUPERSEDE ISSUE: ISSUED BY REVISION 1

5.2 Project Implementation Phases and Activities

5.2.1 Conceptual Design

PS Contractor shall develop a baseline document referred as the Basis for

y Brief description of the facilities

PS Contractor shall develop Project Specification / Design Basis Memorandum

SUPERSEDE ISSUE: ISSUED BY REVISION 1