Selection of Sustainable Subsurface Suppliers using AHP-TOPSIS Method in Upstream Oil and Gas Industry

Abstract

  This study addresses the critical role of subsurface supplier selection in the upstream oil and gas industry, emphasizing the integration of sustainability principles aligned with UN’s Sustainable Development Goals (SDGs) and the Strategic Plan of the Oil and Gas Directorate General by the Ministry of Energy and Mineral Resources of the Republic of Indonesia. The selection of subsurface suppliers especially in the context of drilling operations for well development at Upstream Oil and Gas Company X needs to incorporate comprehensive sustainability principles to avoid negative impacts on product and service quality, as well as the social and environmental responsibilities of the company that arise from the supply chain. The research employs the combined AHP-TOPSIS method to identify and assess criteria and sub-criteria factors influencing sustainable subsurface supplier selection. Four criteria have been divided into 13 sub-criteria to evaluate the subsurface suppliers. Using the AHP method, the study determines that the criteria with the highest weights obtained are Environment (44%), Economy (34%), Social (16%), and Ethics (6%), while the sub-criteria with the weights are Environmental Management Systems (15.10%), Occupational Health & Safety System (14.44%), followed by Code of Conduct (12.48%) and Quality (11.77%) with a consistency ratio < 0.1. The TOPSIS method is then applied to rank alternative subsurface suppliers, revealing that supplier S5 attains the highest preference value of 0.6750. Data collection involved observation, discussion, questionnaires, and literature studies, targeting professional experts in Upstream Oil and Gas Company X in Indonesia. The results emphasize the robustness of the TOPSIS method through sensitivity analysis, confirming that alterations of ±2% do not impact the ranking of alternative subsurface suppliers. This study provides a comprehensive approach to sustainable subsurface supplier selection, contributing to the industry's adherence to sustainability goals and responsible supply chain practices.