Local Content Requirements in Indonesia's Upstream Oil and Gas Industry in 2034 Using an Inductive Scenario Planning Approach

Abstract Indonesia's upstream oil and gas sector, a vital engine of the national economy projected to generate USD 9.68 billion in transactions and create over 18,000 jobs by 2024 (SKK Report 2023), relies on Local Content Requirements (LCRs) as pivotal policies for deepening domestic value capture through enhanced participation, supplier competitiveness, and economic multiplier effects. This study investigates the future trajectory of LCR implementation in Indonesia's upstream sector by 2034, employing qualitative methodologies—including pre-questionnaires, expert interviews, and focus group discussions—to systematically identify 24 Key Driving Factors (KDFs) spanning regulatory, economic, technical, socio-political, and energy transition dimensions that critically shape LCR outcomes. Utilizing an inductive scenario planning framework, three plausible futures were constructed to explore strategic challenges and opportunities for multinational corporations (MNCs): Long Way to Marathon Race characterizes sustained hydrocarbon growth underpinned by robust local capabilities; Shifting the Baton in Relay Race is defined by energy transition dynamics reshaping priorities toward renewables; while Run Through the Obstacle depicts operational pressures from declining traditional sectors coupled with sluggish renewable adoption. The research underscores that strategically implemented LCRs, by cultivating competitive domestic supply chains, are fundamental to maximizing the sector's contribution to sustainable economic growth, technological advancement, and regional prosperity, thereby equipping MNCs with essential foresight for navigating Indonesia's evolving upstream landscape through these scenario-based insights.