Like the rest of the petroleum industry, Texaco has been transferring its applications and databases from mainframes to PC’s and workstations. This transition has been very positive because it provides an environment for integrating applications, increases end-user productivity, and in general reduces overall computing costs. On the down side, the transition typically results in a dramatic increase in workstation purchases and raises concerns regarding the cost and effective management of computing resources in this new environment. The workstation transition also places the user in a Unix computing environment which, to say the least, can be quite frustrating to learn and to use. This paper describes the approach, philosophy, architecture, and current status of the new reservoir engineering/simulation computing environment developed at Texaco’s E&P Technology Dept. (EPTD) in Houston. The environment is representative of those under development at several other large oil companies and is based on a cluster of IBM and Silicon Graphics Intl. (SGI) workstations connected by a fiber-optics communications network and engineering PC’s connected to local area networks, or Ethernets. Because computing resources and software licenses are shared among a group of users, the new environment enables the company to get more out of its investments in workstation hardware and software.