IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v49y2016icp372-384.html
   My bibliography  Save this article

Proposing a decision-making process for the development of sustainable oil and gas resources using the petroleum fund: A case study of the East Natuna gas field

Author

Listed:
  • Batubara, Marwan
  • Purwanto, Widodo Wahyu
  • Fauzi, Akhmad

Abstract

The East Natuna gas field in Indonesia is planned to be developed to meet the increasing natural gas demand of Indonesia. This research investigates the sustainable development of the field using a multi-criteria decision analysis method (MCDA), namely the preference ranking organisation method for enrichment of evaluations (PROMETHEE). For this purpose a PROMETHEE model is employed to compare and appraise four alternative of petroleum funds against technical, economic, environmental and socio-political criteria. Those alternatives are determined by allocating 0%, 10%, 15% and 25% of the government's share of the gas field exploitation as petroleum funds. The results show that the adoption of a petroleum fund for the sustainable field development is both relevant and feasible. The bigger the petroleum fund, the better the merits. Employing 25% of the government's revenue towards this fund is found to be the most preferable choice, since it benefited from technology, environment and social aspects. However, the downside of this alternative lies in the economic aspects, such as the reduction of government revenues and potential increase in government debt as well as government resistance. As this study demonstrates, PROMETHEE can provide a relevant tool to assist decision makers to formulate policies aiming at a sustainable petroleum resources development.

Suggested Citation

  • Batubara, Marwan & Purwanto, Widodo Wahyu & Fauzi, Akhmad, 2016. "Proposing a decision-making process for the development of sustainable oil and gas resources using the petroleum fund: A case study of the East Natuna gas field," Resources Policy, Elsevier, vol. 49(C), pages 372-384.
    • Handle: RePEc:eee:jrpoli:v:49:y:2016:i:c:p:372-384
    DOI: 10.1016/j.resourpol.2016.07.010
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420716302161
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2016.07.010?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(6), pages 1157-1160, December.
    2. Bertrand Mareschal & Jean Pierre Brans, 1994. "PROMCALC & GAIA: a new decision support system for multicriteria decision aid," ULB Institutional Repository 2013/9349, ULB -- Universite Libre de Bruxelles.
    3. Diakoulaki, D. & Georgiou, P. & Tourkolias, C. & Georgopoulou, E. & Lalas, D. & Mirasgedis, S. & Sarafidis, Y., 2007. "A multicriteria approach to identify investment opportunities for the exploitation of the clean development mechanism," Energy Policy, Elsevier, vol. 35(2), pages 1088-1099, February.
    4. Haralambopoulos, D.A. & Polatidis, H., 2003. "Renewable energy projects: structuring a multi-criteria group decision-making framework," Renewable Energy, Elsevier, vol. 28(6), pages 961-973.
    5. Anthony Venables, 2010. "Resource rents; when to spend and how to save," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 17(4), pages 340-356, August.
    6. Schilling, Markus & Chiang, Lichun, 2011. "The effect of natural resources on a sustainable development policy: The approach of non-sustainable externalities," Energy Policy, Elsevier, vol. 39(2), pages 990-998, February.
    7. Tavana, Madjid & Behzadian, Majid & Pirdashti, Mohsen & Pirdashti, Hasan, 2013. "A PROMETHEE-GDSS for oil and gas pipeline planning in the Caspian Sea basin," Energy Economics, Elsevier, vol. 36(C), pages 716-728.
    8. ,, 2001. "Problems And Solutions," Econometric Theory, Cambridge University Press, vol. 17(5), pages 1025-1031, October.
    9. Michael Sturm & François Gurtner & Juan Gonzalez Alegre, 2009. "Fiscal policy challenges in oil-exporting countries – a review of key issues," Occasional Paper Series 104, European Central Bank.
    10. Harold Hotelling, 1931. "The Economics of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, vol. 39(2), pages 137-137.
    11. Sturm, Michael & Gurtner, François & González Alegre, Juan, 2009. "Fiscal policy challenges in oil-exporting countries: a review of key issues," Occasional Paper Series 104, European Central Bank.
    12. Gordon L. Clark & Adam D. Dixon & Ashby H. B. Monk, 2013. "Sovereign Wealth Funds: Legitimacy, Governance, and Global Power," Economics Books, Princeton University Press, edition 1, volume 1, number 10003.
    13. Behzadian, Majid & Kazemzadeh, R.B. & Albadvi, A. & Aghdasi, M., 2010. "PROMETHEE: A comprehensive literature review on methodologies and applications," European Journal of Operational Research, Elsevier, vol. 200(1), pages 198-215, January.
    14. Pohekar, S. D. & Ramachandran, M., 2004. "Application of multi-criteria decision making to sustainable energy planning--A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 8(4), pages 365-381, August.
    15. Ines Wilkens (nee Braune) & Peter Schmuck, 2012. "Transdisciplinary Evaluation of Energy Scenarios for a German Village Using Multi-Criteria Decision Analysis," Sustainability, MDPI, vol. 4(4), pages 1-26, April.
    16. Wang, Jiang-Jiang & Jing, You-Yin & Zhang, Chun-Fa & Zhao, Jun-Hong, 2009. "Review on multi-criteria decision analysis aid in sustainable energy decision-making," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(9), pages 2263-2278, December.
    17. Bertrand Mareschal & Jean Pierre Brans & Philippe Vincke, 1986. "How to select and how to rank projects: the Prométhée method," ULB Institutional Repository 2013/9307, ULB -- Universite Libre de Bruxelles.
    18. Brans, J. P. & Vincke, Ph. & Mareschal, B., 1986. "How to select and how to rank projects: The method," European Journal of Operational Research, Elsevier, vol. 24(2), pages 228-238, February.
    19. Mr. Steven A Barnett & Mr. Rolando Ossowski, 2002. "Operational Aspects of Fiscal Policy in Oil-Producing Countries," IMF Working Papers 2002/177, International Monetary Fund.
    20. Naazneen H. Barma & Kai Kaiser & Tuan Minh Le & Lorena Vinuela, 2012. "Rents to Riches? The Political Economy of Natural Resource-led Development," World Bank Publications - Books, The World Bank Group, number 2381.
    21. Balding, Christopher, 2012. "Sovereign Wealth Funds: The New Intersection of Money and Politics," OUP Catalogue, Oxford University Press, number 9780199842902.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Xu & Fang, Hong & Fang, Siran, 2020. "An integrated approach for exploitation block selection of shale gas—based on cloud model and grey relational analysis," Resources Policy, Elsevier, vol. 68(C).
    2. Chen, Xiaohong & Yang, Shuhan & Hu, Dongbin & Li, Xihua, 2024. "Sustainable mining method selection by a multi-stakeholder collaborative multi-attribute group decision-making method," Resources Policy, Elsevier, vol. 92(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aikaterini Papapostolou & Charikleia Karakosta & Kalliopi-Anastasia Kourti & Haris Doukas & John Psarras, 2019. "Supporting Europe’s Energy Policy Towards a Decarbonised Energy System: A Comparative Assessment," Sustainability, MDPI, vol. 11(15), pages 1-26, July.
    2. Behzadian, Majid & Kazemzadeh, R.B. & Albadvi, A. & Aghdasi, M., 2010. "PROMETHEE: A comprehensive literature review on methodologies and applications," European Journal of Operational Research, Elsevier, vol. 200(1), pages 198-215, January.
    3. Lerche, Nils & Wilkens, Ines & Schmehl, Meike & Eigner-Thiel, Swantje & Geldermann, Jutta, 2019. "Using methods of Multi-Criteria Decision Making to provide decision support concerning local bioenergy projects," Socio-Economic Planning Sciences, Elsevier, vol. 68(C).
    4. Rahimdel, Mohammad Javad & Noferesti, Hossein, 2020. "Investment preferences of Iran's mineral extraction sector with a focus on the productivity of the energy consumption, water and labor force," Resources Policy, Elsevier, vol. 67(C).
    5. Neofytou, H. & Nikas, A. & Doukas, H., 2020. "Sustainable energy transition readiness: A multicriteria assessment index," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    6. Troldborg, Mads & Heslop, Simon & Hough, Rupert L., 2014. "Assessing the sustainability of renewable energy technologies using multi-criteria analysis: Suitability of approach for national-scale assessments and associated uncertainties," Renewable and Sustainable Energy Reviews, Elsevier, vol. 39(C), pages 1173-1184.
    7. Alizadeh, Reza & Soltanisehat, Leili & Lund, Peter D. & Zamanisabzi, Hamed, 2020. "Improving renewable energy policy planning and decision-making through a hybrid MCDM method," Energy Policy, Elsevier, vol. 137(C).
    8. Strantzali, Eleni & Aravossis, Konstantinos & Livanos, Georgios A., 2017. "Evaluation of future sustainable electricity generation alternatives: The case of a Greek island," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 775-787.
    9. Cavallaro, Fausto, 2010. "A comparative assessment of thin-film photovoltaic production processes using the ELECTRE III method," Energy Policy, Elsevier, vol. 38(1), pages 463-474, January.
    10. Kokaraki, Nikoleta & Hopfe, Christina J. & Robinson, Elaine & Nikolaidou, Elli, 2019. "Testing the reliability of deterministic multi-criteria decision-making methods using building performance simulation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 991-1007.
    11. Albadvi, Amir & Chaharsooghi, S. Kamal & Esfahanipour, Akbar, 2007. "Decision making in stock trading: An application of PROMETHEE," European Journal of Operational Research, Elsevier, vol. 177(2), pages 673-683, March.
    12. Nasrollahi, Sadaf & Kazemi, Aliyeh & Jahangir, Mohammad-Hossein & Aryaee, Sara, 2023. "Selecting suitable wave energy technology for sustainable development, an MCDM approach," Renewable Energy, Elsevier, vol. 202(C), pages 756-772.
    13. Roman Vavrek, 2019. "Evaluation of the Impact of Selected Weighting Methods on the Results of the TOPSIS Technique," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 18(06), pages 1821-1843, November.
    14. Urošević, Branka Gvozdenac & Marinović, Budimirka, 2021. "Ranking construction of small hydro power plants using multi-criteria decision analysis," Renewable Energy, Elsevier, vol. 172(C), pages 1174-1183.
    15. Rogna, Marco, 2020. "A first-phase screening method for site selection of large-scale solar plants with an application to Italy," Land Use Policy, Elsevier, vol. 99(C).
    16. Doukas, Haris, 2013. "Modelling of linguistic variables in multicriteria energy policy support," European Journal of Operational Research, Elsevier, vol. 227(2), pages 227-238.
    17. Georgiou, Dimitris & Mohammed, Essam Sh. & Rozakis, Stelios, 2015. "Multi-criteria decision making on the energy supply configuration of autonomous desalination units," Renewable Energy, Elsevier, vol. 75(C), pages 459-467.
    18. Barbosa, Ailson de Souza & Shayani, Rafael Amaral & Oliveira, Marco Aurélio Gonçalves de, 2018. "A multi-criteria decision analysis method for regulatory evaluation of electricity distribution service quality," Utilities Policy, Elsevier, vol. 53(C), pages 38-48.
    19. Philip Mayer & Christopher Stephen Ball & Stefan Vögele & Wilhelm Kuckshinrichs & Dirk Rübbelke, 2019. "Analyzing Brexit: Implications for the Electricity System of Great Britain," Energies, MDPI, vol. 12(17), pages 1-27, August.
    20. Ball, Christopher Stephen & Vögele, Stefan & Grajewski, Matthias & Kuckshinrichs, Wilhelm, 2021. "E-mobility from a multi-actor point of view: Uncertainties and their impacts," Technological Forecasting and Social Change, Elsevier, vol. 170(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:49:y:2016:i:c:p:372-384. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.