The introduction of Artificial Intelligence into Information Technology for Enterprise Resource Planning will be disruptive. That disruption will not be evenly distributed. Organizations and individuals that are unprepared will have limited time to respond.
This dynamic is not unprecedented.
A comparable—though materially less severe—transition occurred in the audit profession during the late 1980s and early 1990s with the introduction of portable computing equipped with spreadsheets and databases. Many practitioners initially resisted, preferring traditional columnar worksheets. That resistance was short-lived. The ability to interrogate large datasets and surface inconsistencies in real time rendered legacy methods obsolete.
That period represented a structural shift in capability. For the first time, auditors could independently identify issues before they were surfaced internally by the auditee. The implication was not incremental efficiency. It was a redefinition of professional competence.
What was misunderstood then—and remains misunderstood now—is that such transitions are not about simplification or speed. They require a change in method.
Effective use of these tools begins with the objective. From there, the user defines scope, assembles relevant data, analyzes for inconsistencies, develops alternative scenarios, and evaluates both direct and second-order outcomes. Where results are unsatisfactory, the process iterates. This disciplined approach is now formalized as scenario planning—an applied methodology grounded in hypothesis testing, observation, and refinement.
For oil & gas participants operating within both the technical and commercial domains, the implication is constructive.
Synallagi reduces operational complexity by structuring activity across two integrated environments: the Marketplace Interface and Operations Management. Each serves a distinct function while operating in parallel.
This architecture does not displace scientific or engineering systems. Reservoir simulation, geological modelling, and related technical tools remain unchanged and appropriately isolated. They are not Enterprise Resource Planning systems and are not intended to perform commercial functions.
Synallagi introduces the missing layer: enterprise-grade capability for executing transactions, managing commercial relationships, and governing financial outcomes across the North American oil & gas market.
In practice, operational users function across two primary interfaces. The Marketplace Interface provides external market engagement—asset acquisition and divestiture, service procurement, vendor evaluation, and collaboration for the Joint Operating Committee. Operations Management governs internal execution—Authorizations for Expenditure, Purchase Orders, Joint Venture administration, cost allocation, and performance tracking.
Together, these interfaces encompass the full commercial scope of the producer’s activities.
This structure is reinforced by continuous, performance-based reporting. Users receive timely visibility into asset-level outcomes, including variance in profitability, operational inefficiencies, and forward-looking scenario impacts. Decisions such as whether to continue production, shut in, or reconfigure an asset are supported by quantified, comparative analysis.
This restores a fundamental economic principle that has been consistently ignored: continued production of an unprofitable property destroys value. Timely recognition and corrective action—particularly shut-in decisions—are essential to preserving reserves, restoring capital discipline, and achieving sustained profitability.
The Marketplace Interface extends this capability by providing a unified view of the oil & gas market. Users can evaluate opportunities, engage service providers, participate in Joint Operating Committee activities, and procure the inputs required for operations. It complements Operations Management by connecting internal execution to external market conditions.
The introduction of Autonomous Asynchronous Transaction Orchestration will accelerate these dynamics. The disruption is structural and unavoidable. However, for those prepared to adopt the tools and operating model defined by People, Ideas & Objects, this transition represents a correction to longstanding deficiencies rather than a threat. Artificial Intelligence in Enterprise Resource Planning is not a tool upgrade—it is a redefinition of operational competence.
Financial Issues
Synallagi is designed to transform the prevailing culture of North American oil & gas producers. For decades, the industry has operated under what can best be described as a culture of “muddle through.” The objective of Synallagi is to replace that mindset with a culture grounded in reserves preservation, performance, and profitability.
The economic logic for this shift is well established. A useful paraphrase of these two works "Economic Calculation in the Socialist Commonwealth (1920), and Human Action: A Treatise on Economics (1949)” of Ludwig von Mises illustrates the principle.
Profit and loss provide the essential signals that guide entrepreneurs in allocating labor, capital, and resources toward their most valuable uses. The existence of profit indicates where resources are most urgently required by the market, while the magnitude of that profit reflects the intensity of consumer demand for particular goods and services. Without these signals, economic actors are effectively operating in the dark, faced with an overwhelming number of possible decisions but lacking the information necessary to choose among them rationally.
Projected profit-and-loss accounting therefore serves a critical function. It identifies which avenues of production warrant further investigation and which should be abandoned because they would deliver goods or services with insufficient consumer demand. In the absence of such signals, economic coordination breaks down. Without the discipline of profit and loss, markets lose their capacity to allocate resources efficiently and economic activity inevitably descends into disorder.
This principle raises a straightforward question for the oil & gas industry. After decades of weak financial performance and persistent capital destruction, the obvious question remains—have we arrived at the point where meaningful reform will finally occur?
Price Maker Strategy
People, Ideas & Objects recently updated its analysis of 21st-century natural gas losses using 2025 data. The resulting revenue shortfall now exceeds $5.0 trillion, surpassing the $3.56 trillion in revenues actually realized by producers for the past quarter century. This imbalance highlights a structural failure in price formation and production discipline. Synallagi addresses this failure through a decentralized production model designed to operate as a price-maker rather than a price-taker. The full range of economic benefits available to oil & gas producers is detailed below.
The price maker is a profit maximizer because it will increase output only as long as its marginal revenue is greater than its marginal cost—in other words, as long as it is producing a profit.
A price taker is a market participant that must follow existing price levels in a competitive market because they lack the power to influence pricing on their own terms.
The basis for this $5 trillion valuation lies in the declining heating value equivalence of natural gas compared to oil. Historically, the heating value ratio was based on the heating value of 6:1 to oil. However, the unchecked overproduction from shale has driven the natural gas price down to as low as 52.5:1 in March 2024, reflecting the severe damage inflicted on the natural gas market. Remedying the behaviors and correcting the characteristics that led to this level of damage will require many years of deliberate rehabilitation of natural gas markets.
Producers claim these losses are opportunity costs—potential profitability foregone by choosing not to pursue an opportunity. However, these natural gas losses are the result of a real decline in value, stemming from the management decisions of officers and directors. People, Ideas & Objects established our price-maker strategy, or decentralized production model, in Synallagi in August 2012. The majority of this assessment has been incurred by producers over the past fourteen years, giving them ample time and motivation to have mitigated and remedied most of these damages. In 2024, energy producers including Shell, BP, and Repsol initiated multi-billion dollar lawsuits against LNG provider Venture Global. Did these lawsuits seek to recover alleged "opportunity costs?" However, most of the litigation has been decided against the producers and in favor of Venture Global.
If the $5.0 trillion in resources had not been squandered, the industry would likely have supported a dynamic and innovative service sector, one capable of sustaining its long-term prosperity and profitability. A financially healthy producer base would have enabled service companies to invest in technology, skills, and capacity, reinforcing a virtuous cycle of operational improvement across the industry.
Under those conditions, producers performing competitively in North American capital markets would have generated sufficient earnings to distribute dividends on a regular and competitive basis. Banking relationships would have been used strategically—to finance growth and leverage their capital structure—rather than functioning primarily as extensions of working capital through the unused portion of revolving credit facilities.
The workforce would also experience the difference. Employees would see oil & gas as a financially stable industry and a credible long-term career path, rather than one characterized by persistent volatility and capital destruction.
The underlying principle is straightforward: profits are the only durable source of real value creation. Other sources of funding—whether investor capital or government support—do not generate new value. They merely reallocate existing capital within the economy.
Had producers retained access to the financial resources that were ultimately squandered, they would have possessed the balance sheet strength necessary to assert genuine strategic independence—defining their own direction, investing in innovation, and shaping the long-term structure of the industry.
Therefore the benefits of our price-maker strategy are numerous and justifiable. Accusations of it being collusion are unfounded, as independent business decisions based on actual, factual, property-level accounting information—made in order to minimize losses—do not constitute collusion. These price maker based business decisions secure the significant advantages listed below.
■ Maximized Profitability: Producers maximize profits when losses from unprofitable properties no longer dilute the gains from profitable ones. It’s common sense to limit one's losses.
■ Strategic Reserve Management: Holding reserves until they can be produced profitably means avoiding the incremental costs associated with losses from unprofitable production.
■ Cost Reduction: Keeping oil & gas as reserves reduces production and storage costs tied to excess, unprofitable output.
■ Variable Overhead Costs: Overhead costs are fully covered when oil & gas is profitably produced. That cash incurred on overhead is therefore returned within 60 days to the producers. Any shut-in production will not incur overhead as all Joint Operating Committee costs are turned variable, based on profitable production, in Synallagi.
■ Cloud Administration & Accounting for Oil & Gas: Shared administrative and accounting infrastructure costs of software and services based on the Cloud distribution model.
■ Hyper Specialization and the Division of Labor: Our cloud distribution model enables far greater levels of specialization and division of labor to be attained. Further reducing overhead costs charged to the Joint Operating Committee.
■ Market Stability: Removing unprofitable production allows commodity markets to find the marginal cost, establishing fair prices for all production. Eliminating industries' boom / bust cycle. Markets provide one thing, and only one thing, a price. If the price is profitable, produce.
■ Reserves Valuations: Market prices accurately reflect the value of producers petroleum reserves. Expanding the volumes of proven recoverable reserves and fulfilling officers and directors fiduciary duty to safeguard assets.
■ Innovation Opportunities: While unprofitable properties are shut in, producers can innovatively explore ways to increase production volumes, reduce costs, or expand reserves. To return the property to profitable production.
■ Replacement Value: The realized market price of oil & gas must reflect the current market’s costs of exploration and development. That is the cost of a replacement volume of all energy produced today.
■ Production Discipline: Using profitability as the criterion for production decisions is the only fair and reasonable method of production discipline. Producers that continue to produce unprofitably will have difficulty competing for capital in North American capital markets.
■ Alleged Capital Discipline: Producers claim by cutting spending on drilling and completions is their method of resolving low prices. “Capital discipline” is at best a dull, blunt instrument. It is the wilful destruction of productive capacity. What it also does is shift the bust of the boom / bust cycle to the service industry to suffer alone.
■ Innovation as a Foundation: Higher commodity prices finance greater innovative activity.
■ Effectively Eliminating the Boom / Bust Cycle: Dynamic changes to the producers production profile ensure they remain profitable and are aware when industry overbuilding has begun.
■ Commodity Values Realization: Each barrel of oil equivalent (boe) delivers the equivalent of 10,000 to 25,000 man-hours of labor to the consumer. This represents an irreplaceable value proposition, priced in January 2026 as high as $0.006 per labor hour, yet sourced from a finite supply.
It is our responsibility to future generations to ensure this vital resource is not squandered. We must demonstrate that all production was profitable and that we passed on a robust, prosperous, profitable and viable industry to future generations. Price makers only bring on new production when it is profitable.
■ Consumers will use the Products Price to Make Decisions: Consumer decisions based on price will stabilize the demand side of the market.
■ Independent Decisions: Our price maker strategy is built on making independent business decisions, using actual, factual financial information at the property level. This is sound business practice, not collusion, which renders any such allegations from producers moot.
■ Profitable Operations: Conceptually, profitable operations would provide a producer with all the financial resources they need to conduct their business. Providing leadership with the independence to set their own direction.
■ Achieves North American Swing Producer Status: Oil & gas are now both global commodities subject to the supply / demand dynamics of these markets. Shale and heavy oil are unquestionably the most costly produced anywhere in the world. The role of swing producers is to add or remove production as required to stabilize prices adequate for its markets to provide for profitable operations.
Value Proposition and Industry Transformation
People, Ideas & Objects value proposition is grounded in the assessment that cumulative natural gas market losses total approximately $5.0 trillion, with ongoing losses averaging roughly $35 billion per month. While it is reasonable to assume that oil markets have experienced comparable financial leakage, there is currently no objective mechanism to measure those losses with similar precision. A targeting framework will be built to assess those losses.
Even when confined to natural gas alone, the magnitude of value destruction is extraordinary. Over the past two decades, the officers and directors of producer firms have effectively dissipated one of the largest endowments of resource wealth in modern industrial history. The consequences extend beyond financial losses. The industry’s technical capacity, institutional capability, and operational resilience have all deteriorated to the point where long-term production deliverability is now a legitimate concern. 868.2 TCF of natural gas has been produced unprofitably and wastefully.
Given the scale of the problem, incremental reform is unlikely to succeed. The most efficient and reliable path to the necessary cultural, technical, organizational, and financial transformation is a “rip-and-replace” ERP implementation strategy. Deploying a new Enterprise Resource Planning system on a clean architectural and cultural foundation has repeatedly proven to be the most effective method for achieving durable cultural change across multiple industries. This approach therefore forms the implementation strategy for Synallagi.
Attempting to dilute or compromise this strategy would materially weaken the initiative. Any hybrid approach would require direct negotiation with individual producer firms rather than enabling implementation through an organized user community. Such fragmentation would slow development, increase complexity, and inevitably produce a prolonged and inefficient software development cycle.
As documented in other work, producer firm officers and directors systematically underfunded both Enterprise Resource Planning vendors and their own accounting departments. The predictable result was the absence of accurate, reliable financial information necessary for effective decision-making. Budgeting for accounting and administrative systems was intentionally inadequate, preventing the development of meaningful financial accountability within the industry.
Restoring accountability requires several structural changes. First, a comprehensive leadership transition across producer organizations is unavoidable. Investor confidence has been severely damaged after decades of capital destruction and operational loss, and meaningful re-engagement from capital markets is unlikely while the existing leadership structures remain in place.
Second, Synallagi and Oracle Cloud Enterprise Resource Planning framework were resisted precisely because they enforce objective and transparent accountability. These systems remove the informational asymmetries that historically allowed performance deficiencies to persist without correction. By adopting Synallagi, current officers and directors still have an opportunity to place the industry on a path toward measurable accountability, operational performance and institutional reform. Doing so would also allow them to reduce their own remaining officers and directors personal liability exposure. If corrective action is taken prior to their departure, directors’ and officers’ liability coverage remains intact, enabling an orderly transition and responsible conclusion to their tenure.
