TX 75083-3836, U.S.A., fax 01-972-952-9435. AbstractCreation of a simulation grid that accurately represents the reservoir and enables efficient numerical solutions is often one of the most important steps in constructing a reservoir simulation model. Complex structural settings can present particular challenges in this respect. This paper demonstrates a novel approach to this problem: the use of PEBI grids, which are unstructured and extremely flexible, with a commercial reservoir simulator that was designed primarily for structured Cartesian or corner-point grids.This unconventional combination of techniques is accomplished without a significant change in workflow. The PEBI grid -a combination of Cartesian and irregular grid blocks -is first built to represent the necessary geologic and well detail. Then the grid is made compatible with a conventional reservoir simulator by treating the irregular parts of the grid as non-standard gridblock connections to their neighboring Cartesian blocks.The business example comes from a development study of a highly faulted reservoir group located in the Gulf of Mexico. Associated structural complexity includes steeply dipping beds, sloping, directional wells cutting through faults, and interbedded shale layers. A comparison of simulation results from PEBI and conventional rectangular and curvilinear gridbased models illuminates the advantages of PEBI grids for this project: a more accurate representation of geologic detail with less effort, more computational stability, and reduced cycle times for model updates following geologic model revisions.