This study examines the potential optimization of the Local Business Development (LBD) partnership program in the development of MSMEs in the upstream oil and gas work area of the Rokan Block, Riau Province. MSMEs in Indonesia, totaling 64.2 million units, play a crucial role in the economy by contributing 61.07% to GDP and absorbing 97% of the workforce. However, MSMEs face various challenges such as limited access to financing and low technical capabilities. Pertamina Hulu Rokan (PHR), through the LBD program, seeks to enhance the capabilities of local MSMEs in the oil and gas mining sector. This study uses the SEM-PLS analysis method to explain the relationship between partnership, entrepreneurial orientation, human resource capability, organizational learning, and the competitive advantage of MSMEs. Data were collected through questionnaires from 232 MSME owners registered in the LBD partnership program. The analysis results show that partnership, entrepreneurial orientation, and organizational learning significantly influence human resource capabilities and the competitive advantage of MSMEs. This research provides practical and theoretical guidelines for the implementation of the LBD-based partnership program, as well as deep insights for oil and gas companies, the government, and relevant stakeholders in enhancing the contribution of partnerships to MSME development. This study also bridges existing research gaps and empirical gaps and offers a new perspective on partnership theory with a local business development contract cooperation pattern supported by the upstream oil and gas company's partnership program.