Fiscal Moderating Effect for Sustaining the Upstream Petroleum Field Economics and Profitability: Inventory and Purchasing Performance

Abstract

Introduction: The study literature's obvious limits with a complete fiscal term model for moderating variables are crucial to our investigation. In order to preserve petroleum field economics and profitability in Indonesia's petroleum business context, this study examines the relationship between material inventory performance, purchasing performance, and fiscal term moderating influence with an agglomeration approach. Theoretical Framework: Industry character strongly influences the inventory and purchasing performance relationship (Basu & Wang, 2011); Hofer et al., 2012); (Priniotakis & Argyropoulos, 2018). Despite circumstances and fiscal terms that were not adaptive to environmental dynamism (Acquah-Andoh et al., 2019), Production Sharing Contract (PSC) Contractors' upstream field economics deteriorated compared to the initial (Paramita, 2022). Financial term in fossil sector draws investors, ensuring fair economic performance and cost balance (Mardiana et al., 2019; Yun et al., 2020). Methodology: Cross-sectional time series data were collected over five years from 26 Production Sharing Contract (PSC) Contractors from Indonesia's upstream oil industry in the preliminary Plan of Development (POD) phase. Econometric analysis using multivariate structural equation modeling will test the model. Results and Discussions: The results showed that different financial performance agglomerations showed an inconsistent relationship between inventory performance, petroleum field economics, and profitability, but purchasing performance showed a positive relationship in any scheme, and fiscal terms significantly strengthened the relationship between variables. Conclusion: This study sheds light on whether fiscal term strengthening variables in the upstream petroleum company affect decision-making.