Citation:

William Aditya Pramana, Noorhan Firdaus Pambudi. "Enhancing Upstream Productivity in the Natural Gas Supply Chain: A Resource-based View and Transaction Cost Economics Perspective on Performance-based contracting at an Indonesian Private Oil and Gas Company" International Research Journal of Economics and Management Studies, Vol. 5, No. 7, pp. 155-162, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I7P120

Abstract:

The Indonesian upstream oil and gas sector faces significant productivity challenges stemming from market volatility, complex logistics, and heavy regulatory oversight. This study investigates strategies for enhancing supply chain productivity at PT XYZ Energi, a large private Indonesian oil and gas company, by applying the theoretical lenses of the Resource-Based View (RBV) and Transaction Cost Economics (TCE) to evaluate the effectiveness of the company’s current transactional contracting model. A qualitative, descriptive case study design was conducted in two primary phases: first, content analysis of secondary corporate data and a semi-structured interview with a key internal expert to identify structural supply chain bottlenecks; and second, the Analytic Hierarchy Process (AHP) and Game Theory to formalize the expert’s qualitative judgments mathematically and objectively evaluate the strategic utility payoffs of alternative contracting models. The analysis reveals that the current transactional approach traps the company in a sub-optimal Nash Equilibrium, capping total expected utility at 0.775, with high monitoring administrative costs and severe vulnerability to vendor moral hazard; a global sensitivity analysis further exposes a structural break-even point at a 35.20% cost-weight threshold beyond which the system collapses into a low-oversight state. To resolve this strategic deadlock, the study proposes adapting Performance-Based Contracting (PBC), which demonstrates a mathematically dominant strategic payoff of 0.994 a 28.2% optimization leap by shifting operational risk to the vendor, thereby reducing transaction costs while building sustainable, long-term competitive advantage and national vendor capacity.

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Keywords:

Analytic Hierarchy Process, Game Theory, Performance-Based Contracting, Procurement, Resource-Based View, Supply Chain Management, Transaction Cost Economics, Upstream Oil and Gas.