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The Arun field, located in northern Sumatra in Indonesia, is a condensate gas reservoir. Mobil's operations in this area are conducted under a production sharing agreement with Pertamina. Since starting production in 1977, the average annual gas production has increased to the current level of over three billion standard cubic feet per day. Field facilities provide for the separation of gas, condensate and associated condensed water. Most of the gas is processed at a nearby plant for LNG export. The water is treated on-site and discharged to the nearby rivers.The Arun field currently produces 32,000 BID of condensed water. This water rate is expected to increase to 52,000 BID by 1997. In preparation for this rate increase, a project was initiated in late 1992 to modify the treating process and to upgrade the equipment. This upgrade includes the testing of chemical demulsifiers for better separation of oil and water, the design of a new system to skim condensate from the produced water and the installation of larger aerators to enhance biological oxidation.The first phase of the upgrade which was designed to reduce the hydrocarbon content of the produced water has been completed. This paper describes operating results of the new system.