The Mackenzie Gas Project is a go, sort of.

The Oil and Gas Journal reports that the Canadian government has approved the Mackenzie Gas Project.  A $16 billion 1,196 km, 1.2 BCF / day pipeline, three onshore natural gas fields and 457 km NGL pipeline. The Mackenzie Gas project extends from the Beaufort Sea to Northern Alberta, is operated by Imperial Oil and includes as partners the Mackenzie Aboriginal Pipeline LP, ConocoPhillips Canada, Shell Canada Ltd., and Exxon Mobil Canada Properties.

At the end of the article it is noted that.

Imperial filed a letter with the NEB in March stating it would not decide whether to proceed with the project until late 2013, citing administrative delays in the approval process and subsequent difficulties keeping the project adequately staffed. 

It is refreshing to see the candid nature of Imperial’s et al’s admission that they are having difficulty organizing, or staffing, this project. It has been a long held assumption of People, Ideas & Objects that the oil and gas industry is facing a fundamental change in the underlying makeup of the business. That change being the demands of the earth science and engineering effort required for each unit of energy produced is increasing, and will continue to increase, on a trajectory that requires the producer to focus on innovation. Additionally, commodity prices are reallocating the financial resources to reward the innovative producer. These are fundamental changes in the underlying oil and gas business that will reconfigure who the winners and losers within the industry are.

To address this changed environment People, Ideas & Objects provides the oil and gas producer with an overall vision of how the industry could operate in this future. This vision is captured in our Draft Specification and is based on using the Joint Operating Committee (JOC), and applying the Information Technologies of the 21st Century. It is our vision that addresses the issues that Imperial et al are facing in staffing the Mackenzie Gas Project, and the issues that all producers are facing throughout the global oil and gas industry.

This vision of how the industry could operate is based on a solid understanding of industry operations, steeped in academic research, and based on the unique idea of using the industry standard Joint Operating Committee. By building the ERP systems that identify and support the movement of the compliance and governance frameworks of the hierarchy; over to and into alignment with the legal, financial, operational decision making, cultural, communication and innovation frameworks of the JOC, the producer attains a speed, accountability and innovativeness of operations.

In establishing this vision, and by developing the use of the Joint Operating Committee, People, Ideas & Objects have now set a standard of “start-up” ERP vendors investment requirements. This would also pertain to the standard bearer SAP and other vendors to provide a comprehensive and compelling vision for how the oil and gas producer can solve the issues the industry faces. Either way, as a start-up or as a full solution vendor, the need for “custom” development to meet an oil and gas vision is a necessity to selling an ERP solution in the marketplace today. Where are the others vendors visions and solutions?

Lastly I would argue that neither Imperial, Shell, ConocoPhillips or Exxon, the producers mentioned in this article, in any combination or permutation could develop this solution. And neither could any producer who participated in any Joint Operating Committee. What is necessary is to have a solution provider that is a third party to all of the producers, that represents all of the producers needs, such as People, Ideas & Objects is configured to do. For Imperial or Shell or any combination of producers alone to provide a software solution would limit the acceptance of the solution by the other producers in the Joint Operating Committee. This acceptance limitation is not an issue with the solution provided through People, Ideas & Objects.

It is now time for producers to act. Review of our Revenue Model will inform producers with attributes of how they can participate in the development of People, Ideas & Objects Preliminary Specification. Producers can contact me here for further information, or to begin the process of their participation.

Hardware Policies & Procedures

Let's talk about that 800 pound Gorilla that's sitting in the room. That is the desire of the management of oil and gas producers to control their data, their software code and the hardware their applications run on. With this post, management will see how it is they have those attributes under their control in a manner that gets this animal out of the room.

Hardware and software are two areas that need to be addressed in providing the People, Ideas & Objects application to its users. The software is as has been detailed elsewhere, open source providing the producer firm to see what their applications are doing. This opportunity may best be managed in the hands of a consortium of professional accounting firms that review and verify the code on behalf of their clients, the producers. The hardware is proposed to be handled in the following manner. This proposal is valid until April 30, 2010 and is dependent on producer firms, shareholders and investors funding the 2010 software development budget.

By way of granting an exclusive license to run the binary of People, Ideas & Objects, People, Ideas & Objects earn an interest in a subsidiary corporation. This firms sole purpose will be to run that binary in manner that is consistent with the innovative oil and gas producers needs. The only caveats that I place on this firm is the hardware is sourced from Oracle and is "cloud" based in its delivery. We do not need to have a disjointed hardware service that is scattered around the globe. Centers could be located in Calgary, Houston, Dallas, Aberdeen, Riyadh, Rio de jeneiro, Malaysia or Mexico City. But only one location within each logical region. In Wednesday's Oracle presentation Larry Ellison asked "How could you be against Cloud Computing, that's all there is."

An equal portion of the firm will be granted to Oracle in providing them the ways and means to profit from the firms activities. Oracle will need to have Data Base Administrators (DBA's) servicing the user and producers. The fact that these facilities will be all Oracle products might be an opportunity for Oracle to make a donation of hardware, software or services in recognition of that.

The industry will then provide the start-up funds for this hardware and service. These are expected to run up to $2 million and the industry earns their equal interest. Therefore Oracle, the industry and People, Ideas & Objects will each own one third of the firm and each will have some skin in the game as they say. But this will still not satisfy anyone with the removal of the monkey.

With the granting of the license to run the binary, Paul Cox or my designate, will sit as the Chairman and have two votes on the board of directors. Oracle and industry will each have one designate. The president of this hardware firm will be the innovative oil and gas producers designate, as will all of the staff of the facilities. The Chairman will have limited access to the facilities in all ways and at all times. In addition to running the binary of the application, these facililties will host the development environment for People, Ideas & Objects.

Invoicing of the costs associated with running the facilities will be sent to People, Ideas & Objects. These funds will be sourced from the annual assessments paid by the innovative oil and gas producers.

The Hardware Policies & Procedures satisfy the needs of industry with respect to their data, their processing and the costs associated with running these facilities. Absolute administrative control is provided to the producers. Oracle will provide their hardware, software and services in such a manner as the administration deems necessary and in compliance with the license granted.

This structure is proposed to expire on April 30, 2010, and is contingent on our 2010 budget fully secured. The oil and gas producers have a fully motivated team operating this critical resource. If your an enlightened producer, an oil and gas investor or shareholder, who would be interested in funding these software developments and communities, please follow our Funding Policies & Procedures. If your a government that collects royalties from oil and gas producers, and are concerned about the accuracy of your royalty income, please review our Royalty Policies & Procedures and email me. And if your a potential user of this software, and possibly as a member of the Community of Independent Service Providers, please join us here.

Technorati Tags: People's Oracle Development Organization Policies Proposal
 

A Community of Independent Service Providers.

With the preparation of this next years fiscal budget. I made the call to recruit 100 individuals to be involved in this first phase of development. These people will be involved in taking the Draft Specification and adding many of the necessary details for when the developers begin the job of the applications development. The deliverable will be the Preliminary Specification which will have rounded out many of the missing details in the Draft Specification and seek to provide creative solutions to the problems they discover.

Who are these people? They are the ones that are currently employed in the oil and gas industry, or have retired and have many years experience. They are the people that have worked for an oil and gas firm in all the different capacities and professions. Landman, accountants, geologists, engineers, field staff and many who were employed in the traditional energy service industry. People who understand and can articulate their point of view on the differences in using the JOC as the key organizational construct.

What exactly will they be doing. Building off the Draft Specification and taking it to the "Preliminary Specification" stage. This may include gathering the details of the various regulatory and compliance requirements of an application, working within the scope of the oil and gas marketplace as they define it. Adding their creative ideas of how an application should provide support to an oil and gas firm. I think it is only reasonable to establish a minimum scope of operations being North America and the maximum is any energy jurisdiction. The one advantage here is the Joint Operating Committee (JOC) is culturally systemic the world over.

These people will also be the critical first group that will join People, Ideas & Objects. What I expect is that they will be the first, or in on the ground floor of the opportunities that will develop for themselves and others. What I expect will happen is they will also be charged with developing the "Community of Independent Service Providers". Who will develop within their own businesses the service capabilities that will work with the software in the oil and gas firms. This first and foremost should be looked at as a business opportunity they can build in the new economy.

One hundred people sounds like a lot, and in many ways it is. However, they are all not going to be full-time. Recall as I have mentioned in the budget I expect this time to be invested by them in establishing their "Service Provider" operations. (In subsequent years work on the software will be fully compensated.) The broad diversity of the service offerings that have to be developed to augment the software is their domain of operation. By signing the license and registering with this community is how to get started. Recall all participants (users, developers, project managers and oil and gas investors) are entitled to leverage off this software applications intellectual property in their own service based offerings. The first 100 that participate in developing the Preliminary Specification will naturally have a significant head start in starting their service operations. People, Ideas & Objects provides the software and the developers, the Users provide the problems and our clients needs.

Where these people will be located is anywhere they are needed. Based on the scope that they decide they will be able to establish Service Providers in their region as they see fit. None of these licenses are exclusive, and therefore being first has substantial advantage. They are also the ones that will establish initial contact with the producers in preparing them to move to the system when it is operational. This marketing will be done jointly by People, Ideas & Objects and the Service Provider. We will be using some form of Salesforce.com applications to ensure that the oil and gas firms are managed by one Service Provider who will sub-contract the work for that oil and gas firm. I will reiterate, being first has substantial advantages.

When should they sign up? What's wrong with now? Follow the process as described here, please note that we need senior oil and gas individuals, this is not something I don't think anyone should attempt that does not have 10 years of oil and gas experience. Not to discourage anyone, but the detail in the Preliminary Specification will be somewhat high level but detailed, if that makes any sense. So please follow the process and sign up as soon as you can. In a lot of ways I think this opportunity fits the somewhat tech savvy early or soon to be retiree of the industry.

If I have not mentioned this next item on the blog before I would not be surprised. It is in the private wiki as one of the project policies. Users, Developers, Project Managers are compensated for their time, however, People, Ideas & Objects will only contract for 110 days out of each calendar year. The reason for this is to increase our scope of understanding of the industry by essentially doubling the number of people in the project. And ensuring that the individual is also actively engaged with the oil and gas firms through their Independent Service Offerings. Learning, anticipating their needs and guiding the developers in the development of the solution to those needs.

I have talked about the response that I have received from the oil and gas companies. I would certainly not wish this treatment on anyone else. Therefore I should state that all of the operations in the wiki and this work of the first 100 will be in complete confidence. Access to the wiki is through the People, Ideas & Objects account that will be provided. The communications are all encrypted in https. Therefore if you were to be using the wiki in your office your boss would never know. (Not that I would encourage that, but I would certainly endorse it.) The only way that your "boss" may find you are involved in this project is if s/he is a participant in this project. There is no need for anyone to be associated with this project and as such be affected by the companies apparent insistence that it not be built.

If you know of an investor in oil and gas that this project may appeal to. Please forward the URL to their attention and encourage them to commence the financial support of this project. And please, join me here.

Technorati Tags: People's User Proposal Call-to-Action

Shareholder beware.

This current financial meltdown is not an under regulation problem, but an over regulation problem. Although I have issue with the expectation that markets will fix everything, and this may be a symptom of that expectation, the real culprit is the separation of ownership and control within a business environment.

I pulled this reference from the www.adamsmith.org website.

...negligence and profusion resulting from
the separation of ownership and control in a business enterprise.

The author of the article that made that quote brings up an interesting point in the subsequent debate. And that is, the reference to the separation of ownership and control being the Federal Reserve and Treasury Departments recent actions to companies on Wall Street. The Fed and Treasury are certainly not accountable to the shareholders. He makes the following point as well.

There’s a pattern here. The biggest shocks to the financial system have all come from stock market companies. By contrast, hedge funds, which many expected to cause trouble, have been innocent bystanders. These are, generally, owned as private partnerships. So one form of ownership has caused a crisis, and another hasn’t.

To add insult to injury, the Fed and Treasury are trying to stop this immovable, and natural force. This is a Republican administration that is based in the Reagan doctrine. Recall that he stated the nine scariest words in the English language are;

We are from the government, we're here to help.

In Saturday's Wall Street Journal, Amity Shlaes says we are following the same failed steps that were taken in the lead up to the great depression. Her article matches the players and their roles between 1929 and today with frightening similarities. Do we really believe that the government is going to be able to solve these business problems?

Within the oil and gas industry we have a different type of problem. The shareholders are being fleeced by the management. Why, because the rules and regulations that are designed to protect the shareholders limit their actions to a few minutes each year. That also assumes that the investor can rally the other shareholders to fight the management. A proxy scenario that is played out in only the most extreme cases.

I have written many times about Professor Carlota Perez. Her analysis shows the results of seven severe global changes in economics. These have occurred over the past three hundred years with the last one being 1929's. She has identified the many stages that an economy progresses, and describes in historical detail the scope and scale of the changes. In a nutshell she has detailed the process of how the old industries die off and the new industries take over as the key in the economy. Her prescription is very accurately being played out on the today's newspaper headlines .

In each case Professor Perez details the important role that financial capital fills in these transitions. Overbuilding of the infrastructure of the next great surge is something that has systemically happened. Whether it was roads, canals, shipping or in today's instance the Information and Communication Technologies. (ICT)

This is a healthy period and one that should be embraced. What the old economy will be doing is falling flat on its face. The scope of the failure according to Perez has to be significant enough "that people know the old ways no longer work". That is the only motivation that people will have to move to the new economy. Financial capital then assumes a much less significant role in the economy. This eventually leads to the crashes and other "meltdowns" that are also systemic with her data and analysis. Product capital, something that barely exists in my opinion, rises from the ashes of the financial capital.

It is my opinion that we have another problem on top of the ones that are being discussed here. That is the management of organizations, companies and governments are invincible. That is to mean they are employed in the act of solving problems for the most part. Lets call this the new oxymoron, the art of management. It may be up to half the people in the U.S. economy are employed in a role of overseer. They can't help themselves but to manage their way out of a crisis. I don't think this was necessarily the case in 1929 and prior economic collapses. At some point, however, they will realize the fact that no one can stop these forces and they are not necessarily bad, and get on with the prosperous future that is in front of the us. Schumpeter calls it creative destruction for a reason. 

Charlie Rose hosted an interview with AIG's former head Hank Greenberg. As a significant shareholder in AIG he feels he should have a seat at the table when discussing any future firm plans. In the video, Greenberg is completely in the dark in terms of how the company is going to be affected, and no one has returned his calls. Amazing. This is not capitalism. The problem here is that we are talking about Hank Greenberg. If he can't get anyone to call him, why would any one call the smaller investors?

The attitude of the Fed and Treasury may have assumed that the time for Hank Greenberg to act was long ago. That he didn't act in a timely manner was his problem, and he should bear the consequences of his inaction. I think that the love affair that Hank had with Elliott Spitzer was probably what distracted him from fulfilling his rightful duties. Imagine that an individual run out of their business for innuendo and rumors from a dirty government official.

Lets be honest here, western society has believed the shareholder was passive. That management were best able to manage the company. These statements, from both perspectives, are now seen as folly. The investor can not sit idly by uninvolved. We all know it doesn't work that way. And more regulations on the management only entrench their useless activities deeper within their untouchable domain. Has anyone heard a single complaint about Sarbane's Oxley lately?

To my point in this web log. The oil and gas investor can see clearly how they are being treated, and their prospects of future treatment in this environment. They are also the leaders in this capital intensive industry. The money has to go first to make things happen.

Here is what I recommend for the oil and gas investor to do in the next five years.

• Start funding this project.

Our budget for this year is only $180,000 and that can be shared amongst many investors.

• Get out of the oil and gas companies that you own now.

Oil and gas has to transition from the old era to this new era. Picking the winners and losers is impossible. People, Ideas & Objects is the new era of how an investor can manage their investments. Actively, much like a hedge fund that was discussed earlier.

• Start picking off some of the properties in oil and gas that will be offered for sale.

The investors lack of investment in these oil and gas firms will cause the financial's to deteriorate. Particularly with the credit tightening that is now ongoing. The energy companies are going to have shortages of cash and the properties will need to be sold to maintain operations.

• Get involved in actively managing these assets by getting involved in the People, Ideas & Objects ERP system and community.
  

Don't let what is happening to Hank Greenberg happen to you. At the very least you should hedge your bets, join me here.

Technorati Tags: People's Funding Leadership Market Proposal

Five years and counting.

As of September 1, 2008 I have now been working on this project for over five years. Time flies when you're having fun. We have much work to do to build this application. Unfortunately with the publication of the Draft Specification, the type of work that needs to be done has changed. The heavy lifting needs to begin and none of this will happen unless we begin the process of generating revenues and acquiring the resources to make this application real.

I have recently focused on four Canadian producers in an attempt to make the case that these companies are failing. Their failure is also documented in this Statistics Canada report which states the oil and gas industry is the worst performing industry in Canada. Not housing or auto's, oil and gas.

Although receipts for energy production are higher, the countries overall production is down. Companies have realized commodity prices that are far in excess of their "plans". Yet even with the record prices these companies report losses, declining reserves and production, increased debt, cost overruns and project schedules that are constantly slipping. To expect more from these companies will only lead to disappointment.

The time to do something about this is now. I don't know if the Draft Specification is the solution to these problems. I only know that on paper they work, and that is the proof that is necessary to show that the ideas are workable. I know that with the input of the users, the People, Ideas & Objects application will address the issues and opportunities that the People within the industry are faced with.

What we learned in the preliminary research report was that developments in science lead to knew innovations which lead to new developments in science and so on. This is the road that needs to be taken in order for the industry to address the declining reserves and production. The bureaucracies were built to deal with the cheap energy era, we need new organizations to take us to the next level.

This project has to find new sources of money and leadership to fill-in the many voids of the overall vision. If you know of someone who could help to financially support this project please do what you can to bring their attention to this. Ninety-five percent of the ownership of the oil and gas industry is held by individuals. Individuals who are the investors, users and developers of the People, Ideas & Object application. Join me here and lets build this software.

The PayPal button on this website will gladly take donations that can further us along in the road we are headed. Even if you can only contribute $10.00 we will be that much further ahead.

Technorati Tags: People's Call-to-Action Leadership Proposal

People's value proposition.

In last weeks entry I noted three items that were causing our software development budget to increase substantially. They are;

• Paying the user.
• Undertaking a global scope.
• Employing a 36 hour work day.

This entry will note why these costs are not as onerous as they would be under past software development methodologies. And in turn defining our business model's value proposition.

I am critical of the software development methods used in the past. The SAP and Oracle model have proven successful for their companies, but recall they are applications from prior technology era's. And no one would suggest that the model of "build it and they will come" is relevant today. The two major constraints of an innovative software developer are the code of the application, and the customers that use it. Users that are looking at new and innovative ways of deploying either SAP or Oracle are met with a bureaucratic process that makes changing organizations a much easier task. Upgrading the software comes with high costs and many promises that do little but entrench the vendor further in your organization.

If SAP and Oracle were to spend the required budget to build this People, Ideas & Objects type of application, the producers would end up paying for this code several times over. There has to be a better way.

Why doesn't the oil and gas industry as a whole pay for the ERP system code just once. Why not share the costs of development over the entire industry on the basis of costs plus a percentage for the developer. A developer on this basis would only interest themselves in what makes the software better. And that is the ability to interpret the users demands and build the software they want. If the user wants to scrap a module and replace it with two new ones, based on this proposed business model the developer would be most pleased with that.

This is how I have proposed the People, Ideas & Objects application from the very beginning. An industry wide software development capability, designed and defined by its users, supported by distributing the costs of development across the global producer population. Has their been a software developer that has used this model today? I think Google does it this way and therefore this comparison imputes the development will never stop. The innovative process is iterative and it never stops, why does software development?

It is my opinion that using the Joint Operating Committee in the manner that is defined in the draft module specifications provides me with the competitive advantages that I need to build this software development capability. This advantage is not open to any other software development firm as I have the rights to the ideas secured. This IP based competitive advantage is necessary to ensure that a series of competitive look-a-likes to this development don't dilute the focus to get this right.

In summary this is the value proposition of this software development project.

• Establish an innovative footing for the oil and gas producer.
• Eliminate the constraints of code and customers.
• A "software development capability" based competitive advantage.
• User driven and focused developments.
• Determining and interpreting User needs.
• Charge the oil and gas industry on a software development cost-plus basis.
• Focus the industries actions through management of Intellectual Property.

Join me here.

Technorati Tags: People's, Development, Innovation, Proposal, User,

Open Source is democratic.

Users and Developers need to think of this system as theirs. For that is what it is. A place where Developers and Users can come together and solve the energy industries problems, through new and innovative software. These development are the beginning of how people will sign-on to the system to do their work. Where the daily commute is replaced by the daily access. Where people are engaged by producers to conduct their administrative, management and business activities on-line, irrespective of their location.

Not everybody has an idea to contribute and not every contribution is an idea. It will take all different kinds of people to make the application that is needed to do the job. Maybe someone will find through the process of this development they have an effective means of communicating with Developers. And maybe that person will find the freedom and compensation in doing that work more satisfying then their current activities.

The first thing a User or Developer should do is to process the information necessary to join this community. When enough people have joined then the community should begin the process of nominating people to the Executive Committee and each modules Expert Group. Establish the roles and responsibilities of these groups and establish a time frame in which each will sit. Once these nominations are set, the voting for each position can begin.

This process isn’t written in stone, it is only my idea of how the development “might” work. If the User community wants a different process then they should adopt it. This is your system. My vision of how this “could” operate is what I have written in the innovation blog and draft specifications. My role now and in the future is to support the community with what it needs to get the job done and be successful. This primarily focuses on sourcing the financial resources from the producers to pay the Users and Developers.

What I foresee some Users and Developers doing in this community is making the system a cornerstone of their own business operation. Where they may have, or will develop, a firm that integrates the land and accounting information of a producer into these systems modules. Or you may have a business that you conduct an element of the production accounting for a variety of JOC’s. Or possibly a business that provides technical support for a number of producers and / or JOC’s. Some will be one-person operations, and others will have a large staff base. The common denominator of all these businesses is the producers’ needs and the software systems that are being built here by its Users.

A further clarification of where the beginning and end of these businesses start and stop is that I only have an interest in the software. The software is supported indirectly through these businesses, and it is the business of those independent businesses that makes it stand on its own. The final clarification is that I pay for the User and Developer involvement of defining and building the software, and therefore may be considered by some of these businesses to be a paying customer.

But what about the producer, how do they fit into and benefit from this eco-system? Simply they pay to have their systems development done on a cost basis amortized over the entire industry. Unlike SAP and Oracle that repeatedly charge for the software to each company, each company in this system is only paying for their proportionate share of the software development and infrastructure costs. A proportionate share that is being determined as a function of $x.xx per barrel of oil equivalent per year. Whereas if the cost per boe per year is determined to be $1.00 in the first year of development. Then a company such as Encana, which produces 700,000 bbls per day, would pay $700,000 for one year’s access to the system. Each year would be a different value based on the software development needs of the community.

The point of this is that the total cost of the community is shared over the entire producer base. For Encana to pay $700,000 for these services would be a single digit fraction of what they are paying now. Lets hope they begin to see the value of this methodology and start their participation, which is desperately needed, and provide the funding for this community.

The methodology being proposed here, where the producers pay the annual cost of software development mitigates the two impediments to innovation. The two impediments are code and customers. As a software company gets more of each, it begins to take on a Herculean task to re-write and update the code. The software vendor then becomes sensitive to the desires of the community and begins to reject changes on the basis that the costs are not supported in their revenue model.

The producers knowing the software developers potential market is small further aggravate this situation. By limiting the financial resources the producer starves the software developer of the financial resources they need to grow and prosper. A desperate software developer must eat and will do things that are against its best business interest and capitulate to the marketplace.

The reality of the situation in Calgary is, I think, further aggravated by the lack of investment capital for software development. Who after all wants to invest in the scenario that I mentioned above? And secondly, banking for intellectual property just doesn’t exist.

These situations are real and manifest themselves in the fact the software stagnates for 30 years with a 70% market share.

When the financial rewards of exploration and production are as prosperous as the $100 price of oil. Then I think we need to start doing things differently. What I am proposing eliminates these problems and provides a competent software development capability that serves its community. Join me here.

Technorati Tags: People's, Open-Source, Organization, Proposal,

Conservative environmental policy.

An announcement by the Canadian Federal Government on environmental policy was leaked, with few specifics, on how the country would achieve certain CO2 targets.

There will be more information coming on Thursday at which time I will post an update. I "hope" that the government does not assess industry as it is suspected of doing. The tax, if any, should be assessed on the consumer, not industry. Secondly the majority of the taxes should be focused on bringing the costs of Coal in line with Natural Gas.

The other interesting point was, the reduction in greenhouse gases was proposed at 150 million tonnes. In my previous posting, the one facility had injected 7 million tonnes over four years on a pilot project. Maybe the injection of CO2 as a miscible agent will provide the environmentalists with the means to solve this alleged problem. Therefore I would recommend the Federal government join the Alberta Government and provide incentives for the energy industry to act in this manner.

Technorati Tags: Genesys, Environment, Proposal, Government

Revised Final Research Report Abstract.

Preliminary or "Peer" review of the Final Research Report has been completed. The purpose of the peer review is to capture many of the attributes and issues that the industry sees in the report and to assimilate it here. Therefore I am submitting this Revised Abstract as a precursor to approaching the appropriate decision makers in industry. The results of the peer review include the following points.

"What does the industry get."

I am asserting a revised business model then what exists in the marketplace. Investment capital is unavailable for the software developments purposes. Looking at the long-term aspects of this software solution I have concluded it requires a strong revenue stream. This revenue stream starts with the subscription deposits noted below.

"Sticker Shock"

The costs mentioned in the Final Research Report are the total project costs to develop a Canadian oil and gas application. These development costs are amortized over the overall number of producers that subscribe to this development. Ideally this should be the industry at large. Discussion of these initial upfront costs being subsequently equalized over the industry is something that I would support. These costs are allocated over the life of the development, with well over half the costs being incurred in the last fiscal year of development. This provides a decision / stage gate point in time over the 4 cash calls.

"The Joint Operating Committee is the appropriate organizational construct."

This involves moving the "Accountability" framework, consisting of the "reporting", "regulatory" and "compliance" sub-frameworks, over to the "Financial", "Legal", "Operational Decision Making" and "Cultural" frameworks of the Joint Operating Committee. This re-alignment of the oil and gas producers organizational focus will have the material effect of increasing the scientific and engineering capability to a higher overall industry capacity. This is based on much of my current research in Professor Langlois, Dosi, Perez and others. This will also facilitate a faster speed of implementation of corporate policies. These concepts are proven in my research noted on http://innovation-in-oil-and-gas.blogspot.com. These concepts have substantial support from the academic community, as noted under the calls to action in the Final Research Report. And it can now be said has tangible industry support.

"The myriad of permutations and combinations of a facility."

Review of the Partnership Accounting module reflects how this system could be built to accommodate the needs of the industry. How this has been handled in the past is poor. I suggest in this research report that the methods and means are at our disposal to provide the CO&O Farm-in / out, Pooling, Lease and associated mail ballots, AFE's etc. The Partnership Accounting module will have the influence on the accounting either through a strict application of the chemical makeup of the product produced, or the legal agreement, or any point in between these two extremes. This is the nut that is being cracked through the development of this software.

Review and comment on the competitive landscape.

CGI was granted a production accounting development on a shared basis between a number of the senior producers. This applications delivery is now in excess of 14 months late and is rumored not to be able to meet its requirements. The limited scope of the application and focus on the linking to each and every ERP vendor makes this a still born project in my opinion. I am also concerned with the level of expectation that these developers would therefore be available to this project. This project will hire the necessary people to make the application function in the market as expected. The people therefore who are coming to this clean slate approach, I will ensure are the best available. I also have methods and means that I can use to increase the overall capacity of the development community in Calgary.

There is now a definitive mindset in the industry regarding the packaged applications provided by SAP and Oracle. There is a general agreement that the oil and gas industry is poorly understood and represented by these vendors and their offerings. It is also agreed that these vendors consider the Canadian oil and gas industry as a niche market, not worthy of any new development investments.

IBM has now sold Qbyte, their oil and gas solution in the market. 140 producers use this solution. Many feel they were buying IBM, and hence no one ever lost their job recommending IBM. Many producers feel the current offering, which will not be supported by the purchaser in this transaction, will have ripple effects throughout the industry. These ripple effects include having an ERP system that is not supported is inconsistent with the requirements of Sarbane's Oxeley. It also makes the demand for IT services during the next 3 years seriously over subscribed.

I want to highlight the point I made in the Final Research Report regarding the copyright I hold. This is a unifying point for the industry to rally around. I am only licensing one company to develop the software and there will not be this scattered or "Venture Capital" approach to developing many solutions at the same time. All the energies of the development community and energy industry are focused on getting it "right". I can state this as no developer will be able to develop alternative systems based on the joint operating committee without a license from myself. This will disable the Venture Capital approach through the fact that Sarbane's Oxeley and general prudence would not permit producers’ employees to use a system from a pirated venture.

Development needs.

The four stage-gate cash calls are calculated on the basis of 10 subscribing producers to this offering. (Based on the minimum budget of $87.7 million.)

* Deposits of $1,000,000 ($100,000 per producer) on or before February 28, 2007
* $10.6 m / # of subscribing producers ($1,06,000 per 10 producers). Due September 30, 2007
* $19.6 m / # of subscribing producers ($1,96,000 per 10 producers). Due September 30, 2008
* $57.5 m / # of subscribing producers ($5,750,000 per 10 producers). Due September 30, 2009

An additional request for 4,000 sq. ft. in the downtown core to September 30, 2008 is required.

Contact Information

Paul D. Cox
403-467-7971
Access my email address through the profile on this blog.

Technorati Tags: Development, Reference, Research, Strategy, Proposal, Genesys, Call-to-action

Photo courtesy troels

A clarification of my contradiction.

In my previous post on the weekend, I stated that the industry should not fund the suppliers needs with the capital to build more rigs or capacity. And that would apply to all members of the service industry. The point that I was making is that the entrepreneurial and market forces are stunted by industry attempting to influence the market to get what it needs. The oil and gas producers need entrepreneurial activity to anticipate and provide the market with what it needs, when it needs it. The contradiction comes as a result of my asking industry to fund the development of these systems they need. How can I contradict myself in such a manner.

An important clarification would involve the difference between building drilling rigs and developing software. Software is a unique and important component in society, not to suggest that a rig is not. The business models are different in that all of the costs are in the up front initial phase, and the revenues are in the later phases. Software is intangible with nothing of value to leverage other then it's revenue stream. The purpose built software systems for industry needs should not be funded by capital infusions from the industry or venture capital. The funds necessary to develop these systems will be the revenue stream of the software developer.

The technical risks of the success of this software is highly dependent on the involvement of industry. If they have no skin in the game, then they are free to proceed in other directions leaving the development team and its potential investors in the lurch. By tying the industry to the funding in this manner also has them putting some skin in the game. Ensuring that the system gets built properly with the producers full attention.

Capital investment in software ceased during the dot com meltdown. The possibility of having someone stand up and finance this projects $110 million budget is laughable on the surface. The software is being built for the oil and gas industry and that is where the long term source of the software developers revenue will come from. Therefore, in my logic, revenue should also be used to develop the system. This method also reduces the producers costs by eliminating the venture capitalists costs and expectations.

Since the software business model is more long term, intangible and capital intensive then the drilling rig business model. This proposed model of revenue supported developments is the only manner that I should consider in taking on these developments, it is the only manner in which I have the full attention and support of the energy industry.

Technorati Tags: Genesys, Development, Plurality, Proposal
Photo courtesy troels

One year summary.

It was December 29 last year that I started writing this blog. It was at the prompting from a friend that I write about the things that I was researching. Write about the things I was passionate about, to write about innovation in the oil and gas industry. I thank him for pointing out this opportunity to me. I started this blog with several specific objectives in mind;

1. Discuss the methods of (re)-organization of oil and gas firms, and specifically, replace the hierarchy or bureaucracy with the industry standard Joint Operating Committee (JOC).
   
2. Debate and discuss the attributes and elements of innovation within the oil and gas industry.
3. Explore the impact of today's information technologies, and their role in making energy firms more innovative and accountable.
4. Discover what is possible and how things could be better.
   

I am pleased to report that these objectives are being, and will continue to be, met. I am also pleased to report that I have no shortage of material to write about. The basis of this website is my Master's Thesis that proved the joint operating committee is the optimal organization for innovative oil and gas producers. The scale of this revised organizational structure is not small. The re-organization, re-configuration, and re-everything of every element of activity, process, data and approach in oil and gas is affected. I've certainly landed in the middle of a fire storm of controversy, conflict and best of all, value for all concerned.

Reviewing the material that I posted this past year, I noticed a theme that I thought was rather valuable for the industry. That these concepts and material, particularly the new organizations supported by the new information technologies, was being accepted in the larger academic arena. Explicit support was being built for these concepts. I was able to spin these concepts out of this weblog and publish the "Final Research Report." This support alone has significant tangible value for the energy industry. Value in that it documents the many calls to action that are being stated throughout the world for both the energy industry and business community in general.

There is something else I want to point out. That is the value that this weblog represents. I think the oil and gas worker has a central location for discussion and presentation of material that is consistent with the innovative employee / worker, and the technologies impact. These are the main focus of the recent revisions that I've done to the website. I am therefore making this an unexpected, and much valued objective of my writings.

Another area that I am particularly enthusiastic about is the Massachusetts EnerTech Cluster that was recently announced by Dr. Robert Metcalfe. This is based on the desperate need for something of this nature, and is building on the works done by the recent efforts of MIT's. This is necessary, and I would assert should have been done many years ago. I also foresee similar, however more limited, clusters of Energy Information Technologies in both Silicon Valley and Houston. These three locations will be the brain trust of how the energy needs of the future are met.

Technorati Tags: Innovation, Massachusetts-Enertech-Cluster, Proposal, Summary

Another McKinsey survey.

This survey is reported by Dr. Nicholas Carr on his Rough Type web log. (Click on the title of this entry to go there.) Noting that large percentages (61%) of companies in North America are on the verge of adopting SaaS (Software as a Service). Their motivation being, and it is a subtle point, that companies are moving closer to Dr. John Hagel lll's idea that industry will need to restructure as either;

• Infrastructure Management (Firms like Genesys providing SaaS solutions.)
• Innovation Management (The key role of the producer (Based on capabilities and oil and gas leases.))
• Customer Management (The down stream business of refining and marketing.)

As I move to secure some of the residual budget allocation for 2006, I will be highlighting these points to the industry, I only hope they are listing to the volume of people that are speaking to these issues.

Technorati Tags: Genesys, NicholasCarr, McKinsey, Research, Survey, SaaS, Call-to-Action

Index of the proposal.

An index of the content that was included in the final report and there associated links. If anyone wants a .pdf of the proposal just write to my email address.

Abstract
Executive Summary

A technological vision

Who would Henry Ford hire?

Free like a puppy.

Security Model

Tacit Organizations

Plurality Summary

Joint operating committee revolutionary?

Military Command

Partnership Accounting
Petroleum Lease Marketplace

Human Resource Marketplace.
Calls to Action

A different approach.

Technorati Tags: genesys, index, proposal

What is a Petroleum Lease Marketplace?

The final component of the proposal has been edited and the document is now complete.

Up until now we have not discussed what "may" be possible as a result of the organizational changes which are caused by a focus on the joint operating committee. Moving to the Joint Operating Committee (JOC) as an organizational model has an air of being too philosophical or intangible and thus there is a need to have some substance added to this concept. The following is how I see the manner in which this type of system will be developed to meet the needs of the oil and gas industry.

The Mineral Lease and associated agreements define and establish the rights and responsibilities regarding the lands and minerals described within the lease document. Looking at the Marketplace concept, these leases are bought, sold, traded, surrendered and pledged as capital in the oil and gas industry. Each lease provides to the holder the rights to those reserves and any associated production facilities. In short, the entire oil and gas industry "market" can be boiled down to these documents. These documents are the point where the industry and / or producer activity begins. The lease "market" in Calgary does not substantially differ from any other oil and gas marketplace in the world. What this proposed development is attempting to display and encourage is the virtual existence of an oil and gas market. Although initially limited in its geographic scope to the province of Alberta, many of the outgrowths of the system will be global in scale, with only immaterial differences in the reference values of the geographical data elements.

Given that the market for oil and gas leases is very large, the critical nature of this system will need to assume a number of variables that do not exist in their current form. If a producer has a lease that is in jeopardy of being surrendered, then the producer could expose the lease within the virtual Marketplace to determine if there is an interested party that may want to partner or purchase the lease and maintain it. Currently the scope of the offers to do business with the producer is limited to the extent of his or her personal network of interested parties. What if the lease was perusable and searchable by the entire market for a willing buyer? This system is designed to provide this environment to the oil and gas producer.

Taking the analogy of an exchange a little further, consider the possibilities of the Petroleum Lease Marketplace in terms of what this can do for a business. Search and discovery mechanisms could be built in as tools that would enable the producer to optimize the opportunities and hence the value of the lease. Data involving the prospective operation would be codified in the marketplace and the transaction processing would be an enabling capability and an inherent justification of the marketplace. This marketplace would then provide the means to collaborate on the methods of operation around the newly formed partnership. Where a Farmout / in, Joint Venture, Pooling or Construction Ownership & Operatorship agreement is facilitated in codifying the partnership based on the Petroleum Lease Marketplace Module. Adding secondary agreements (Novation, Area of Mutual Interests), Accounting & Operating Procedures as they are formed, agreed to, and counter part executed by the users of the Petroleum Lease Marketplace. This Marketplace will be the beginning of the industries commercial activity, establishing a base of software operations that would provide the producer with A.F.E., budget and operational programs. This system, ultimately, would be designed to facilitate the processing of capital and operating expenditures, revenues and royalties, based on the partnerships of producers needs and wants. This is the system that is being captured and codified in the Petroleum Lease Marketplace.

I have documented elsewhere the unique nature of partnership accounting for oil and gas. The business dynamics of each producer are so fundamentally different in terms of financial metrics and motivations. I have also described how the Partnership Accounting system mirrors the organizations needs. If two groups are partners and one owns the midstream assets that it in turn rents to provide access to these facilities to the other partners, the criteria for measuring and comparing results are different from producer to producer but the data is the same, only perceived differently. This is one of the fundamental aspects of Relational theory and is a tacit underlying theme in Java. Critical to the understanding of this system is that the metrics of each producer in a property are different and are directly related to each producer’s strategy and organizational capability. The difficulty in the partnership knowing the specifics of each producer’s motivations are unknown and not relevant to each of the other producers. The common interest that drives each producer is in harmony, as they are all driven financially to succeed. There is no conflict of interest because the motivation is consistent throughout the marketplace irrespective of the competing strategies employed by the different partners. And these unique features are relevant and evident to each producer in this system.

The Alberta Petroleum Lease Market.

The PLM is a database of the Petroleum & Natural Gas Leases for the land governed by the state, province or lessor. The lease, or concession, entitles the holder to the mineral rights and is the start of the process of exploring and drilling for oil and gas. This is therefore the natural place to start these software developments.

The lease documents are populated into the database to represent the mineral rights for the region. The population contained within the database would be those that are under lease, being posted, auctions and prospective lands. The level of detail of information queried and available by an authorized user is recorded and controlled by the system. The ability to then buy, sell trade or surrender these leases would be possible through a variety of transactions managed by the system. Or, in other words, a Marketplace is formed with its own community.

From here the derivative works of the Farm-in, Farm-out, Novation, Joint Operating Agreement and / or Construction Ownership and Operator-ship could be developed through the collaborative environment of the PLM. Additional documentation such as the operating and accounting procedures would be available to be negotiated, documented and counter part executed electronically in this collaborative environment.

The PLM would be a virtual portal that gives the producer, investor or employee access to the Lease, agreements and its associated history. It would literally be the area where people would log in via the Human Resource Marketplace in order to go to work. Having both a Private and Public interfaces to the data elements and functionality, a producer who has an interest in a certain area would be able to engage the owners of any lease of interest, on future business opportunities and from there, pursue subsequent operations extending the operations management, accounting and administration function. The marketplace is a place where the people will go to do business.

Employees and contractors could actively contact producers and investors to offer and provide their services to work as consultants in the day to day activity of the lease, or contract for drilling rigs etc. Adding additional software developments to manage the approval of AFE's, Mail-Ballots, Contracts, Statements of Operations, and Statements of Expenditures and ultimately providing a high level of on-line commerce.

All of these operations are derived through the Joint Operating Committee (JOC). As was mentioned in the preliminary research document the JOC is, the financial, legal, cultural and operational decision making framework of the oil and gas industry. Why not move the accountability for those decisions over to the JOC? This conceptual alignment has received immense tacit support by most of the people who are employed in the oil and gas industry.

The accountability is currently managed by the hierarchy because that is the only logical manner in which an organization could control their assets during the past 100 years. Now with the Information Technologies available for "Collaborative Commerce" (Harvard's term) the hierarchy is not necessary for the purposes of 21st century operation, particularly in oil and gas.

Another key point is the methods by which the energy industry would pay for these transactions. The producers would need to subscribe to the system and pay a nominal fee for each transaction. Or, alternatively an assessment can be made on each producer based on the number of barrels of oil per day it produced. Assessing $1 per barrel of annual production would cost a firm such as Encana to access the system approximately $700,000 per year. I can assure you that no employee or individual would ever have to pay for access to the system. The oil and gas industry revenue is in excess of $2 trillion. The employee's use is almost guaranteed due to the fact that the alternative is to work the prospective 80 hours or more that their jobs would take through the traditional hierarchical methods available today. This is the definition of Web Services and accurately reflects the threat of how things may be developed in the near future. Users are key and their productivity is the focus of their, and the software development, efforts. A capable software developer is critical to achieving these results. This proposal exposes the opportunity for the industry to build this software.

For the sake of clarity, the information within this module appears complex and an attempt to accurately reflect "what" and "how" this operates is my purpose. So, in summary, the PLM is a market to buy, sell, market, trade, assign. novate, post, bid, surrender, a working / royalty interest. Facilitating the electronic capture, management, secure and authorized access to the documentation regarding joint ventures, assignments, novations, sales, AMI's, of working / royalty interests. And establishment of joint operating committees - CAPL, PASC operating and accounting procedures, caveat registration, assignment of committee members, their roles, their responsibilities, delegations of authority, programs budgets, A.F.E.'s, Mail Ballots, Amendments etc.

Technorati Tags: Genesys, proposal, Petroleum-Lease-Markeplace

A different approach.

It could be argued that the focus of this research is a software product that falls within the classification of vaporware. And it does. However I would put some spin on the classic definition of vaporware and call this a clean slate approach to oil and gas systems. The category that this "product" is in is difficult to define and therefore difficult to build without the express support of the oil and gas industry. This final research report is an attempt at communicating these concepts far and wide within the oil and gas industry in an attempt to find an audience. The strength of the concept of using the Joint Operating Committee requires that every data element, every relationship, and every process be revisited and rewritten. New modules and marketplaces will be built to eliminate the old software classifications.

I am attempting to articulate a vision of what a new approach could do in the systems area. It certainly is vaporware as no group or company has ever approached the joint operating committee as the central organizational focus. How can I, as one individual, do all this work in order to make a viable system exclusively for the producers? The clean slate approach has to be communicated in a way that the system could and should be built in order to accurately describe its features.

I have identified several points that present future difficulties in oil and gas systems. Partnership Accounting, Human Resource Marketplace module, Petroleum Lease Marketplace module and the Genesys Technical Vision are the foundation of this final research report and are unaddressed by the competition. All these aspects of future software systems have to be addressed and neither SAP, Oracle or IBM have a solution or vision that is as compelling as shown in this research report.

To be more specific, the perspective of using the joint operating committee brings new and better ways of managing an oil and gas enterprise. From a systems point of view oil and gas has ignored and avoided the joint operating committee as it conflicts with the underlying purpose of the bureaucracy. Significant contradictions and conflict have crept into the oil and gas producers’ operations that results in the Joint Operating Committee being precluded from the systems used.

This project was originally proposed to the industry in 2004 as an $85 million software development project. The producer must ask itself,: isn't it more appropriate to keep your options open ? What if SAP and Oracle continue with their current offerings; will those be adequate in the future? A future with IPv6 capability? A further question that needs to be asked, and based on the work of John Hagle III and John Seely Brown, is : Are the proposed industry stratifications changing to be reflected as either innovation management, infrastructure management or customer management?
Is there an expectation or belief that the bureaucracy and its use of last century’s technologies can hold a candle to this vision? These technologies and the forces of change in all areas of the economy have to be addressed. Oil prices are up almost 300% will result in the reallocation of financial resources to support innovation. Organizations are constrained in their speed and innovativeness due to the bureaucracy and its refusal to accept the joint operating committee as the explicit form of organization. Constraints in human resources, field capacities and speed to market are real issues that jeopardize the industry.

We have consistently seen successful companies that were able to integrate technology into their strategy and form strong competitive advantages. A company such as HSBC. Homogenization on SAP is not a competitive strategy. I have now counted 12 calls to action from Harvard, Oxford Analytica, MIT, McKinsey, John Hagel III and John Seely Brown, Secretary Bodman, SEC Chairman Christopher Cox and a variety of others. Add to these calls the demands of the consumers. The time to act and put these software developments into play is now.

Ray Lane is a partner at Kleiner, Perkins, Caufield & Byers and a former president of Oracle Corporation. He knows what he is talking about. This entry will take you to a Business Week article that documents many important points. Two of these points I want to discuss in this entry, they are:

"The traditional method of selling big corporate software applications as multi million-dollar packages that take years to implement is broken."

"The 70% of startups out there that are trying to do what the big companies do, only better, faster and cheaper - it's a fools errand. The customers would like to buy that from a large company, so they’re going to lose out." Ray Lane

Surprisingly, perhaps, I think he is right on both counts. The large multi year, multi million dollar packages are the dinosaurs of the software world. Even Petro Canada tried to implement SAP and after $14 million gave up. It’s fallacious to try to retrofit the company to the software.

On the second point of Ray Lane's, stating that the startups will fail, is something that I struggled with at the beginning of this process and something that I think I can also prove is not valid in the oil and gas sector. The two points that I would assert in my defense is that I am the copyright owner of the methods and processes discussed in this research, and in the preliminary report. I published my thesis in May 2004. I have tangible evidence that the state of the art thinking was not as advanced as what I proposed in September 2003, and earned in the publication of the Plurality document.

Back in 2003 I concluded that the software vendors could consume themselves competing with new offerings and no one would have been able to secure a competitive hold in the market. The only manner in which to establish a competitive offering, I felt, was to own the intellectual property as the key competitive advantage. The copyright, and other forms of intellectual property are the only sources of value in this new age.

Secondly, if anyone thinks that a large vendor is going to be able to write the code for the Partnership Accounting, Human Resource Marketplace, Security, Petroleum Lease Marketplace module that I have spoken about in this report I think they would be mistaken in their expectations. What is needed is a clean slate approach and the heavy involvement of potential and future users. The day and age when the software innovations were brought to the industry’s door through the cottage software industry has ceased. The involvement of the industry in its software development needs is mandatory, and become an inherent capability

So on that basis I would agree and disagree with Mr. Lane. Intellectual property is the only method of securing any kind or competitive advantage in this new day and age. Those that attempt to build systems without their differentiation being codified and protected are in my opinion wasting their time. What is required to compete with this software is some fundamentally different basis of organizational structure for the software to define and support just as I have outlined here.

Technorati Tags: Genesys, approach, perspective, proposal, research

Application Architecture: Appendix

The two hardware vendors that will provide the development environment are Sun Microsystems and Apple Computer. The following are some of the tools and products that will be incorporated into this solution.

The primary operating system will be Solaris.
The primary database for both development and deployment will be Ingress.
The tools used will be the Sun Microsystems family of open source Integrated Development Environments (IDE's). Consisting of Netbeans, Sun Studio Creator and Sun Studio Enterprise.
The build tool will be Maven 2.0 or better.
The repository will be Subversion.
Java v5.0 or greater will be the programming environment.
Java Swing and Java Web Start will be the default and only interface.

This application will operate as a "Software as a Service" (SaaS) that will be hosted on a number of geographical grids provided by Sun Microsystems. No hosting of this application will be done locally, but only through the grid offerings of the major tier one original equipment manufacturers, primarily Sun.

Java is the base programming environment. The reasons for the Java selection are its inherently strong security model, broad industry support and modern underlying technologies. It has been assessed as the most effective language to develop a comprehensive transaction oriented system such as this. Within Java, the Enterprise server that we have chosen is Sun Microsystems GlassFish open source offering. This is the first server to be certified based on Java V 5.0 and has the full backing of Sun Microsystems and the open source communities. Java also contains the Mobility Environment, which deals with the programming environment on cell phones pagers, and other devices that this proposal sees as becoming both prolific and ubiquitous. In the oil and gas industry the ability to monitor and control any and all of these devices will become mandatory and this is where Java has had substantial success with well over 1 Billion installed Mobility Environments.

As the technology vision denotes, IPv6 is a cornerstone of the Genesys application. This therefore will be secured through the grid provider.

Technorati Tags: Genesys, Proposal, Architecture, Appendix

Free like a puppy.

In this section I will describe the benefits in terms of free or open source software. Genesys as an application will be made available to be downloaded, reviewed, inspected and tested but not compiled into an application. The only fully compiled application will be the one all the users will access via the Sun Microsystems operated network and grid. It is critical to the producers that they have this free access to the code upon which they are operating their firm. The ability to freely verify the software code is unlimited. Industry needs a software capability that is as transparent as possible. As the licensee of the application, Genesys, will have the rights to publish the code in this manner. What is suggested is not that dissimilar to what Sun Microsystems does with their software offerings. It is an objective of this proposal that the code of the operating systems, database and specific application available to be inspected by anyone. This will not encumber the copyright of the software as no one will be licensed to run the actual application.

The best way I can think to describe how I expect the code to develop is it is free, not as in price, but like a puppy that is following its own thoughts and direction, a direction that is under the control of its users. A direction that everyone involved in oil and gas has stake in, but no specific individual or group has control of.

Harvard Professor Jeffery Sachs made an interesting point in the PBS Series "The Commanding Heights" by Dr. Daniel Yergin . Throughout the six hours of video, Professor Sachs was consistently called upon to identify and resolve the economic issues of individual countries. Bolivia, Russia and Poland were three of the governments that Sachs consulted with. In each case it became quite obvious that the solution was unique and therefore had a specifically crafted solution. Not a solution that would be assumed to be appropriate for each and every country, but a "custom" designed method of dealing with the countries issues. I draw an analogy to this "custom" oil and gas solution to note that the unique attributes of the energy industry need to be captured and resolved.

These unique oil and gas attributes (the joint operating committee) are not recognized or considered in SAP, Oracle or IBM. These oil and gas applications therefore preclude their respective vendors from the opportunity to ever provide a solution that might be considered adequate. Their basic designs were to provide the original equipment manufacturers and supply chains with a solution.

Technorati Tags: Open-Source, Genesys, Proposal

Human Resource Marketplace

More editing.

The Human Resource Marketplace is derived from the software's prospective user base of eligible oil and gas workers. Its purpose is to provide global access to the human resources the oil and gas industry needs to conduct its operations. Organizing the volumes of people and making them readily accessible by other users from interested producers and joint operating committee's. The Human Resource Marketplace will be a free resource for its users and is part of the overall system that will be financially supported by the oil and gas industry.

The population of these software users will include the full scope of the professions, trades and skill set found in the industry, and its suppliers, regulators and governments around the world. These users are the critical resource to the success of this system and the oil and gas industry. They are the driving force in defining and demanding the types and quality of software applications they need to operate effectively in the oil and gas industry.

As has been stated elsewhere, the ability to access the necessary human resources is a challenge for the energy industry. This challenge is expected to increase as the brain trust of the industry begins their retirement. Industry already is taxing the maximum amounts of employee time and is actively competing on the basis of lifestyle benefits to acquire and maintain talent. This proposal assumes that industry agrees with this author's opinion that people want to be more effective at their jobs. Enhanced employee effectiveness is best achieved through higher productivity and this proposal shares these concerns of industry and its employees. I am boldly suggesting here that the condition of employee effectiveness begins with the effective reorganization with these objectives in mind. The process of creating more creative, productive and innovative oil and gas workers needs to be planned and implemented through this software development proposal.

What this proposal offers industry is a software development capability. An ERP software development capability that sources its application development's leadership, direction and functionality from its user's involvement and demands. It is these users who will demand and expect the necessary software applications be crafted and built from the developers employed by Genesys. Creating a virtual environment where developers and users collaborate. Building a new generation of software systems based on the reorganization of the industry around the Joint Operating Committee.

The Human Resource Marketplace user's interface will be their gateway to completing their task's, fulfilling their roles and responsibilities to the Joint Operating Committee's that actively hire and engage their skills. Each user will have free and unlimited access to the Human Resource Module to manage the:

• Marketing of their skills.
• Day to day interactions with other users.
• Managing and completing their work.
• Accounting, billing and banking services.
• Work orders and contracting with producers.

All access will be controlled by a high quality security system that ensures access to the system is by authorized users only. It will ensures all access is accredited and verified as to their accessibility. Included in this verification will be:

• Educational transcripts.
• Verified and supported employment references and documentation of their Curriculum Vitae.
• General ranking and task capability. (See section on Military Command.)

Once accredited it will be up to the user to maintain their on-line presence and work environment. Representatives of the producers will have access to source their employee needs through the Petroleum Lease Marketplace module and or Partnership Accounting described elsewhere. It should be evident that this module is conceived as the major point of contact for the user working in the oil and gas industry. All the primary transaction and document access, creation and processing is done, from the user's point of view, through this portal.

Specific technical attributes of the Human Resource Marketplace module.

This application will manage the Genesys domain name for users based on "first.lastname@genesys-energy.com". This will be the manner in which people access their work and tasks, eliminating the need "to drive to the office". This portability of the user creates issues regarding the level of automation adopted by industry. Manual processes will be limited in the virtual world, primarily due to the need to present data to many different users simultaneously. Efforts through this application need to be focused on this point. If a firm requires paper pushing employees in the future, they will have no competitively sustainable business, and potentially no business partners. Nonetheless to help with this transformation of the working environment, Google's Tessaract OCR (Optical Character Recognition) engine will be embedded within this application.

Each user, producer and joint operating committee will have access through their specific portal (Human Resource Marketplace, Petroleum Lease Marketplace and / or Partnership Accounting modules). Therefore security at the portal has to be of the highest grade and quality possible, has to capture these needs and most importantly the security module needs to be built first. To layer in a management security requirement after the system has been built will prove fruitless. The security module specifications and possibilities that exist today are such that the type of security level that can be achieved will be more then adequate for the needs described here. As this system will also be operated on Sun Microsystems grid, a higher level of security is achieved and provided. Security is the first priority for this system.

The Human Resource Marketplace will provide:

• Modules for marketing their products and services. These will consist of blogs and Wiki access for each user to actively promote and market their skills and services to the full range of producers as represented in the joint operating committees, service providers and employers.
• Access to community based Wiki. (Specific areas for Accounting, Geology, Engineering, and Land etc.) Including glossaries, dictionaries and other reference material pertinent to the oil and gas industry.
• In the military command section of this proposal there is discussion surrounding how the command and control of the hierarchy is replaced. The command and control issue is resolved by adopting a military command type of structure. The rank and role that an individual will have with respect to its client producers and assigned joint operating committees that make up the users "place of employment".
• Search module access (Google appliance) within the user's authorized domain.
• Project management module consisting of a variety of project management, calendar and task management.
• An RSS pool / reader.

In short, a social network for the oil and gas industry worker to access and manage the work they are doing. It may appear that the service will take on a "MySpace" type of atmosphere and that would be incorrect. The purpose of this environment is that the presentation to the other users is based on your professional life, not just a social aggregator.

Technorati Tags: Genesys, Proposal, Marketplace, People

Security Model / Module.

And more back from the editor.

Security Module

This module concerns all user access to any and all markets / modules contained within all of Genesys. The important element of this discussion is the methods, procedures and types of security provided here will be the first order of business in the development of this software. Clearly identifying and implementing the highest level of security is the objective and this can not be implemented after the fact or after any of the software is developed.

Therefore, in summary, security includes:

- Elliptical encryption technology via Solaris on all communications. ( http://research.sun.com/spotlight/2006/2006-02-13_ECC.html )

- Sun Solaris has now released their "ZFS" file system providing historical and 128 bit file storage. ( http://www.sun.com/bigadmin/features/articles/zfs_part1.scalable.html ). The benefits of using Solaris is that it provides new and critically needed tools for the general user community. "With ZFS, Sun addresses the important issues of integrity and security, stability, and difficulty of administration". With 128 bit addressing there is no limit on the amount of files the system can address. With the global scope of this application, and mission critical nature, it is necessary to have this level of capability.

- Single Sign On (SSO).
- Global access on all public and private networks.
- UserID, Password, Authentication and smart card.

- Encryption and signing keys for documents and transactions are separate from those that are provided for access and security.

- Contacts - LDAP access to all registered users located throughout the world.

IPv6's inherent security model that provides IPsec, the protocol for IP network-layer encryption and authentication.

Technorati Tags: Genesys, Security, Proposal