The paper presents a systematic methodology for the optimal design and operational management of offshore oil fields. It is comprised of two stages. At the design stage, the optimal production capacity of a main field is determined with an adjacent satellite field and a well drilling schedule. The problem is formulated as a mixed-integer linear programming formulation. Continuous variables represent individual well, jacket and topsides costs. Binary variables are used to select individual wells within a defined field grid. The mathematical formulation is concise and efficient. An MINLP model is proposed for the operational management optimisation of the offshore oilfields. In the latter model, non-linear equations are extensively used to model the pressure drops in pipes and wells for multiphase flow. Non-linear cost equations have been derived for the production costs of each well accounting for the length, the production rate and their maintenance. Operational. decisions determine the oil flowrates, the operation/shut-in for each well and the pressures for each point in the piping network. (c) 2006 Elsevier Ltd. All rights reserved.