The Competitive Advantage Analysis of PT Halliburton Indonesia By Using Resource Based View

This research is a descriptive quantitative research embodied in a case study of PT Halliburton Indonesia. This study is aimed to analyze the company competitive advantage with the resource-based approach, through the identification towards resources and capabilities that manifest the competitive advantage and sustainable competitive advantage for the company as well. The method for data collection was conducted through the data acquired from policy maker institutions in upstream oil and gas industry and the data from related research journals, as well as distributing questionnaires and interviews to 6 subject matter experts who are the associated officials of PT Halliburton Indonesia. The research results show that there are 29 resources and 10 capabilities that influence the success of the company in the upstream oil and gas industry (strategic industry factors). Furthermore, through the resources and capabilities appraising analysis, there are 16 resources and 8 capabilities identified as the key strengths of PT Halliburton Indonesia and become the competitive advantage for the company. Then through the VRIO test, 5 resources that become the sustainable competitive advantage for PT Halliburton Indonesia are identified. These resources are coiled tubing units, well-cementing units, packers and bridge plugs, subsurface safety valve equipment, and good corporate reputation towards clients. This research provides an overview regarding the available resources that become the sustainable competitive advantage for PT Halliburton Indonesia. Therefore, its development, maintenance, and deployment become a priority for the company.


INTRODUCTION
The oil and gas industry is facing a number of major challenges.The latest issue is energy transition, a pathway towards transformation of the global energy sector from fossil-based to zero-carbon by the second half of this century (Irena, 2021).The energy transition is essential to reduce climate change crisis caused by global warming and also to promote more sustainable economic growth.
In Indonesia, the transition to clean and renewable energy system has become one of the government top priorities.Ministry of Energy and Mineral Resources Republic of Indonesia has created a roadmap to achieve net zero emission.By 2050, the usage of renewable energy is expected to reach 87%, while at the same time the sales of conventional fossil-fuel vehicles are being stopped.In other words, by 2050 the conventional gasoline vehicles will no longer be sold and will be replaced by electric vehicles.Furthermore, Indonesia is expected to achieve net zero emission in 2060 (Kementerian ESDM Republik Indonesia, 2021).
Another issue currently being faced in the oil industry is the global economic recession caused by the Covid-19.The latest topic is the Covid-19 pandemic continues to spread across the world with new variant namely Omicron.Though the Organization of the Petroleum Exporting Countries (OPEC+) stated that the impact of the new Omicron variant is expected to be mild and short-lived and the world have already better equipped in managing Covid-19 (Ghaddar, 2022), yet the economy remains slow and demand for fossil energy keeps on decreasing across the globe.
By having all these challenges the oil and gas industry is facing uncertainty.This is reflected in recent fluctuations of global oil prices.According to the data from Nasdaq, in April 2020 oil prices fell to $22/barrel, the lowest in the last 21 years.Throughout 2021 the oil prices are fluctuated with an increasing trend.
In August 2021 oil prices reached $68/barrel, but it still far below the standard compared to 6-7 years ago which reached an average price of $100/barrel (Nasdaq, 2021).This condition impacts the companies engaged in the oil and gas sector.Various efforts are made by oil and gas companies, including expenditure reviews on ongoing projects, and reducing the number of employees.
The fulfillment for petroleum sufficiency in Indonesia is conducted through the cooperation between the Government and Cooperation Contractor (KKKS).KKKS are companies that cooperate with the government to undertake petroleum exploration and exploitation activities with profit sharing system.In the implementation process, these KKKS companies require other types of business entities to fulfill the requirements of procurement regarding the goods and services.This type of supporting business entity is referred to as upstream oil and gas service company or Oil Service Company.Oil Service Company is engaged in upstream oil and gas sector, offering services to KKKS companies in exploration, drilling, maintenance, operations and other services.One of the largest Oil Service Companies operating in Indonesia is PT Halliburton Indonesia.
PT Halliburton Indonesia is a subsidiary of Halliburton Company, an American multinational corporation founded in 1919.With such history, Halliburton is considered as one of the oldest oil service company in the world with plenty experiences.The company's long history and good reputation are the sources of competitive advantage as mentioned by Yunadi (2016), when choosing a product or service, consumer also consider the age of the business compared to the results and performance achieved.Hence, the consumer will be more confident to use the product and service provided.
Kata kunci: Keunggulan bersaing, Sumber daya, Kapabilitas, RBV, Strategic Industry Factors, Resources Appraising, VRIO, Halliburton external environment has led to a decrease in profits in the majority of Oil Service Companies, including Halliburton.According to the company's annual report, in 2019 Halliburton has experienced $441 million operating loss (Halliburton Annual Report, 2019) and $2.4 billion operating loss in 2020 (Halliburton Annual Report, 2020).If calculated by using the return on assets ratio; in 2019 the company is at -4.4% position and in 2020 is at -12.8%.
The pressure experienced by PT Halliburton Indonesia proves how transformation in the business environment can greatly affect the profitability of the company.As mentioned by Suhartini (2020), today's business environments are changing rapidly, complex, radical, unplanned, and requires sustainable development and continuous learning by the organization.The industrial organization's perspective will explain this phenomenon through the study of changes in various factors in the external environment as well as its impact on the internal company.For example, the concept of Porter's five forces model emphasizes that the company's opportunities will be higher and the threats will be lower if the company is in an attractive industry (Porter, 1985).This concept uses two main assumptions: firstly, the resources owned by the company in one industry are homogeneous.Secondly, the resources used for strategy implementation are having a high mobility.But these two assumptions emerge a doubt.These assumptions abandon the possibility of heterogeneity of resources in an industry and the possibility of the non-dynamic movement of resources within an industry (Barney, 2002).These conditions underlies the development of resource-based view which explains that the sustainable competitive advantage is acquired from the company's internal strength (Barney, 1991).There are strategic assets, the firm's specific resources and capabilities that are scarce, difficult to imitate by the competitors, and provide competitive advantage (Amit R. & Schoemaker, 1993).
In reference to a resource-based view, for Halliburton Indonesia, the challenge faced is how to develop, protect, and mobilize resources and capabilities that can help the company to acquire the competitive advantage.According to this description, it is interesting to study regarding the availability of resources and capabilities to become a source of competitive advantage for PT Halliburton Indonesia in the upstream oil and gas industry during the uncertainty that occurred at present time.

RESEARCH METHOD
This research is a descriptive quantitative research embodied in a case study of PT Halliburton Indonesia.The type of descriptive design used is a case study research.The procedure of research implementation is conducted through several stages.The initial stage is conducted by collecting the list of resources and capabilities that affect the upstream oil and gas industry.The list of those resources is formulated by accessing the official site of the upstream oil and gas industry standard operating institutions (APIs), the API (American Petroleum Institute), as well as collecting several lists of capabilities from related journal publications.
The second stage is the process of identifying the resources and capabilities that become the competitive advantage for PT Halliburton Indonesia which conducted through disseminating questionnaires towards the related officials in the company.At this stage, the researcher has met directly with the subject matter experts at the location of the operating unit of PT Halliburton Indonesia that located in Duri and Jakarta City.The design and method of the questionnaire assessment are conducted by referring to the concept of resource appraising model.
The last stage is analyzing the resources and capabilities that become a sustainable competitive advantage for PT Halliburton Indonesia.At this stage, the researcher disseminates the VRIO test questionnaire and conduct direct interviews towards the subject matter experts in the management ranks of PT Halliburton Indonesia.

Resources and Capabilities Identification
The identification of tangible resources is conducted in accordance with a publication published by API (American Petroleum Institute).In the process of identifying these tangible resources, researcher accesses the official website of the API which lists the physical resources that play an important role in the upstream oil and gas industry.According to the publication of the official website pages of API, the research has found 20 lists of physical resources that determine the sustainability of oil and gas service providers in the upstream industry (American Petroleum Institute, 2020).The intangible resource identification stage is conducted through referring to the categorization compiled by Grant (2010) who found 9 other resources that contribute to the sustainability of the company's business (Grant, 2010).Then, there are 10 lists of capabilities that also contribute towards the success of a company in the upstream oil and gas industry (Shuen et al., 2014) as well as the functional classifications compiled by Grant (2010).

Resources Appraising
The resources and capabilities analysis is conducted by recapitulating the results of the questionnaire that have been disseminated towards the subject matter expert (SME).In order to recapitulate the results of 6 SMEs appraising processes, the researcher calculated the mean value of each resource and capability.Table 1 below is a resources and capabilities appraising table that presents a description regarding the position of resources and capabilities of PT Halliburton Indonesia.These result of resources and capabilities appraisal are mapped into quadrant to discover the position of each resource and capability.Figure 1 below shows the mapping result of the resources appraising process.According to the data processing above, the position results of resources and capabilities of PT Halliburton Indonesia are divided into four quadrants, such as:

Key Strength
The resources and capabilities in this position are considered essential for the business sustainability of the company and to stand above the competitor companies, thus they become the source of competitive advantage for PT Halliburton Indonesia.Test Tools), R20 (Liner Hanger Equipment), R21 (Operational Fund), R22 (Company's good reputation towards the clients), R23 (Company's commitment towards the living environment preservation), R24 (Global Business Scope), R25 (Patents towards Technology), R26 (The system and network security of internal information), R27 (The experiences and skills of company employees), C1 (The capability to fulfill the health, safety, environment (HSE) standard), C2 (The capability to predict the operational volume and risk in the stage of investment proposal arrangement in accurate manner), C3 (The capability to finish the project according to the determined budget/capital discipline), C4 (Employees'recruitment mechanism), C6 (Innovation towards the technology/field technologies), and C9 (Customer relationship and retention).

Key Weaknesses
The resources and capabilities in this position are the weakness factor in the company.Because these resources and capabilities are basically considered essential by the company, however, their strengths are still below the average competitor companies.

Superfluous Strength
The resources and capabilities in this position are considered to be in a strong position compared to the competitor companies, however, their roles are considered less important to prevail in the industry competition.

Zone of Irrelevance
The resources and capabilities in this position are the company's weaknesses compared to the competitors, but the company is also considered these resources and capabilities are less important in the industry competition.Resources and Capabilities in Zone of Irrelevance positions are: R2 (Surace and Underwater savety valves), R6 (fishing equipment), R10 (proppants), R11 (Drill Through Equipment / Through Tubing Equipment) , and R12 (Control System for Diverter Equipment) .

The Analysis of Sustainable Competitive Advantage using Vrio
According to the analysis of resources and capabilities appraising, a list of company strengths in the key strength position in the quadrant is found.This list of resources and capabilities is a competitive advantage of PT Halliburton Indonesia.This list of strengths then tested in further by using the VRIO model in order to determine the resources and capabilities that become a source of sustainable competitive advantage for the company.The subject matter experts which in this case are the management of PT Halliburton Indonesia, are provided with a sequential question to confirm whether the listed resources and capabilities fulfill the criteria of valuable, rare, imperfectly imitable, and organizationally aligned.
The VRIO test results discover 5 resources and capabilities as the source of sustainable competitive advantage for PT Halliburton Indonesia, namely: coiled tubing unit (R1), well-cementing unit (R4), packers and bridge plugs (R15), subsurface safety valve equipment (R16), and the company's good reputation towards clients (R22).

Conclusion
1.There are 29 resources and 10 capabilities that influence the success of the company in the upstream oil and gas industry 2. There are 16 resources and 8 capabilities that become the source of competitive advantage for PT Halliburton Indonesia to prevail in the competition of upstream oil and gas industry.3.There are 5 resources that become the source of sustainable competitive advantage for PT Halliburton Indonesia.These resources are coiled tubing units, well cementing units, packers & bridge plugs, subsurface safety valve equipment, and intangible resources in the form of good company reputation towards clients.

Recommendation
1.The availability of tangible resources in the form of coiled tubing units, wellcementing units, packers and bridge plugs, and subsurface safety valve equipment has become a sustainable competitive advantage for the company in the upstream industry.Thus, the company should take steps to maintain the quality of these resources through a series of research and technology development (R&D) activities.
The company also needs to consider the purchasing power of clients in the midst of the crisis of declining world oil price as occurred at present.The advantages of reliability and technology should be balanced with the ability to provide competitive pricing on service contracts with clients.2. The future typical research is expected to review the quality of tangible resources in a more comprehensive manner, thus it would provide more in-depth technical understanding of these resources potential.