Publications

The Indonesian natural gas industry is in a period of negative growth with economic variables showing a negative trend. Several business issues have been identified such as: decreased level of investment, reducing proven gas reserves, reducing man power resources etc. The purpose of this research is to identify the root causes and identify industry business strategy to resolve the root causes. The PESTEL framework was used to identify external factors continuing with a Fault Tree Analysis to identify root causes and system dynamic framework as an appropriate method to create an industry business strategy. The dynamic framework will be performed by using 3(three) approaches: feedback, aggregate and simulation. The results show 12 (twelve) possible root causes of the business issues from the PESTEL framework and Fault Tree Analysis, and the recommendations obtained from the system dynamic framework on the addressed possible root causes are: to create a valuebased holding company not a sector holding company, because exploration businesses are experiencing financial stress, and the government needs to (i) sacrifice government share of production for the next 5 years to boost gas exploration, (ii) keeping existing wholesale gas price regime for next 3 years and then slowly ramp down to the acceptable levels, and (iii) reducing “load” on exploration businesses by sharing responsibilities to midstream businesses.