Building Economic Sustainability of the Energy Sector: How Purchasing Performance and Material Inventory Performance Influence Sustainable Economic Levels Moderated by Fiscal Term

Abstract

This research investigates the relationship between purchasing performance and material inventory performance with the fiscal term as a moderating variable on sustainable economic levels in Indonesia's upstream oil and gas industry. Data were collected over five years (2017-2021) from 26 Production Sharing Contract Contractors (PSCC) in Indonesia during the preliminary Plan of Development (POD) phase. This research uses Structural Equation Modeling (SEM). The results showed that purchasing performance significantly affects sustainable economic levels, and material inventory performance has no significant effect on sustainable economic levels. Fiscal term moderation on the influence of purchasing arrangements on sustainable economic levels has a significant impact. In contrast, fiscal term moderation on the influence of material inventory performance on sustainable economic levels has an insignificant effect. This research provides a comprehensive framework by explaining the influence of purchasing performance and material inventory performance with the fiscal term moderating variable on sustainable economic levels as a novelty in this research.