1. A computer system for modeling an oilfield having a subterranean formation and an underground reservoir therein, comprising: a repository storing a geomechanical model for representing at least a portion of the subterranean formation and the reservoir, the geomechanical model comprising a stress equation and a fluid flow equation; a processor and memory storing instructions when executed by the processor comprising functionalities for: combining the stress equation and the fluid flow equation into a matrix equation; and modeling the oilfield by solving the stress equation and the fluid flow equation simultaneously.