Organization Design and Manpower Strategy for Improving Financial Performance in Marginal Field: A Case Study of Upstream Oil and Gas Company in Indonesia

Abstract

Background: Marginal oil and gas fields present significant operational and economic challenges due to declining reserves, low production rates, high operating costs, and negative financial performance. Objective: This study aimed to develop an appropriate organizational model and manpower strategy for managing AX-145 to improve operational efficiency and support the long-term sustainability of marginal field operations. Methods: A qualitative single-case study was conducted using the Galbraith Star Model as the analytical framework. Data were collected through purposive interviews with key stakeholders, analysis of internal company documents, organizational structure evaluation, workload and role-criticality assessment, and Full-Time Equivalent (FTE)-based right-sizing analysis. Results: The study proposed a three-stage organizational transformation consisting of a Lean Internal Operating Model, Cluster Operating Model, and Strategic Partnership Model. The Stage-1 redesign reduced total field-allocated formations from 527 to 375 (28.8%) through supervisory consolidation, organizational delayering, optimized span of control, Operator Driven Reliability (ODR)-based multi-skilling, and Shared Service Organization (SSO) integration. The proposed manpower strategy integrated role-criticality assessment, workforce reallocation, competency-based multi-skilling, and the Manpower Productivity Index (MPI) as a performance measurement instrument, with the projected MPI improving from 0.71 to 1.00 and estimated manpower cost savings of USD 4–6 million annually. Conclusion: The proposed organizational model and manpower strategy provide a structured framework for improving manpower productivity and operational cost efficiency in marginal oil and gas fields while offering a practical reference for managing similar assets within Indonesia's upstream oil and gas industry.