Year End Closing

Where we currently stand to in the oil and gas industry is far from where we need to be. The deterioration of the capacities and capabilities can be felt draining from the industry in the past six months. Things that should be getting done are not even on the list of things to do. This of course is the old business model working as it does. Let the industry deteriorate until such time as shortages are created and then we’ll move to rebuild what was lost with other people’s money, again. The only thing the producers have today are spectacularly large balance sheets. These represent the money from the last time they fleeced the investors. The actions of the investors in the past few years shows that they’ve caught on to the game, and they don’t like it. They might sit this round of financing out. And therefore the producers will decay even further as shale’s flush production continues to overwhelm the commodity markets price mechanisms. The only way out is for producers to select the Preliminary Specifications decentralized production models price maker strategy. That way an industry wide method of production allocation, based on the equitable and fair basis of profitability of each and every Joint Operating Committee, can be used to determine which property produces and which property remains shut-in.

Until this scenario plays out People, Ideas & Objects and our user community have work to do. The forces of creative destruction in the industry are well in play. We need to commence work now in order to offset the difficulties in the industry. As they depreciate we’ll rise to recover from their failures. Eventually taking over from the ashes of what will be left of the producer firms that exist today. That is how creative destruction has worked in the past and how I expect it to function here. There will be many producers that might make the transition, however picking the winners and losers is a sport that Las Vegas would be more interested in. Our job is to get moving and to make sure that society does not have any difficulty in sourcing their needs of oil and gas.

It will be a cold, literally, hard slap in the face to those alternative energy and climate change people. They will think that the decline in oil and gas is an opportunity to build more wind and solar. I am always amazed at the extent that people can convince themselves of such foolishness. Those who think that they can just switch to wind and solar are fresh out of the looney bin. The oil and gas industry produces so much energy, and so much of it is used in industrial purposes that it would take centuries for wind and solar to catch up, let alone take over. Ever see a chemical plant next to a hydro dam? And you won’t. Society is not hooked on oil and gas. Oil and gas is the blood that makes society run. Let's not kid ourselves into believing in myths and fairytales before it's too late. Your participation in our user community is the mitigating factor and the destruction of this myth.

I will be taking the rest of the year off. I need to prepare for the early part of 2016. Producers will be once again preparing their annual reports for what has been a bad year in a dismal industry. They have no profitable operations anywhere. They have no financial resources and they are desperately short of cash. They need to show their investors and bankers, and most importantly their prospective investors and bankers, a plan on how they’ll turn this situation around. As we know they don’t have one and they’ll be unable to come up with anything in the next few months. What I suspect will happen is we will see the rats jump ship, so to speak. The bureaucrats will seek greener pastures knowing that the difficulties in oil and gas are beyond what they can resolve. After all that is their history and pedigree. Expect the announcements of retirements and resignations to begin once the bonuses have been distributed. That’s right bonuses. I am looking to return on January 11, 2016 and expect that posting may be light for the first four months of next year. This is crunch time for us. We must make this real. A decision has to be made to proceed with the development of the Preliminary Specification. I am looking to the investors and bankers that support the oil and gas producers to make that decision. So for now have a Merry Christmas and Happy New Year and will see you in 2016.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Users Wanted

Yesterday we went through some of the difficulties people may be faced with regarding the decision to participate in this user community. We understand that it’s not for everyone and we are looking for specific people who are able to make the difference in the new oil and gas industry. If you’ve made the decision to join the user community of People, Ideas & Objects, what’s next. Review of the application process can be found here. We know it’s extensive and will take some time and effort to complete. It is important for us to be able to make our decisions based on the best possible information available to us. Once you’re approved, this information will be available to all users across the community, and as a result, users will be able to find like minded people with similar experience to work with.

The second point we should concern ourselves with is that we are a technology oriented solution. From a specialization and division of labor point of view we are providing a new, sub-industry between the oil and gas and the Information Technology industries. Our user community is being drawn from the oil and gas industry and we have all had dealings with those who are in the Information Technology world. Sometimes it seems that they are speaking a different language and are on a different planet. The sub-industry we are creating needs to be able to understand oil and gas but also needs to understand the Information Technology industry at the level where they can effectively communicate with them on that planet. You won’t be writing or editing software code, but I can assure you that you will be reading it. You will also be leveraging your ideas and needs through the software developers of People, Ideas & Objects and members of the Information Technology community. They will be the tools that you use to provide the oil and gas producers with the most profitable means of oil and gas operations.

There is time, and I would suggest that everyone, whether through formal education or self study, be capable of achieving the above requirement in the Java and database environments. We are Oracle Fusion Middleware and Oracle Fusion Application users as the base of the People, Ideas & Objects application. These are the technologies that will form much of the work that you will do. If you have avoided the technologies up until now, or have a strong aptitude in the Information Technology area, it doesn’t matter. Your key value to the oil and gas producer is the understanding of their business. Your creativity and capabilities in determining what and how you can do what you can do in the future, when you have a software development capability available at all times, will be so much more effective if you fully understand the technologies capabilities and limitations. There is much that we can deliver to the oil and gas producer in terms of value from an oil and gas point of view. And there is much that we can deliver to the oil and gas producer from a technology point of view. This can only be attained by having a “hybrid” user community that can bridge the two industries that we sit between.

I think that I am on record as stating that these technological requirements would be attained with six or seven university level courses in Java and database technologies. This would give you the level of understanding that would make you proficient in that world from the point of view of understanding the tools that will be at your disposal. Having the software development capabilities of People, Ideas & Objects and Oracle technologies at hand, with the user community vision, empowers you to achieve our success over each of the next 25 years. It is that time frame that we should consider that these systems will be under constant iterative development and will continue to evolve to provide the oil and gas industry with the ability to meet society's needs for energy.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Courage

A defining characteristic of People, Ideas & Objects user community is going to have to be its courage. This is not something that is usually expected in the domains of oil and gas administration and accounting. However what we are doing demands that we have the courage to overcome the difficulties that we face in the process of changing the industry to one that is dynamic, innovative, accountable and profitable. No one can think that this will be easy, it will be the most difficult work that most have undertaken in their careers. And it will not necessarily stop once we have developed and released our software into the marketplace. The user community is a long term solution to the bureaucracy and will be the replacement to that means of administrative and accounting capability. We can expect more than a few fights from the bureaucrats and a general lack of support from them as well.

When I speak of courage in this instance I would define it in its purest form as the “conscious self-sacrifice on behalf of something greater than one’s own self-interest.” Let's be clear, I am looking for leadership to be an element of the user community. Leaders who lack the courage to lead are not leaders. And there are other common virtues of courage other than leadership. These include honesty, integrity, confidence, compassion and humility. I am setting a high standard in terms of the individuals who are members of the user community due to the role that they will undertake that is so critical to our success and the success of the oil and gas industry. Our demand for courage from our user community and service providers may be unique in the environment that the bureaucracy has created for itself. What I see in the bureaucracy is a group that is committed to being unaccountable and as self serving, who will do nothing other than for themselves. I have stood up to them and paid the price, we need to create a climate where accountability and virtue replace this unaccountable and self serving bureaucracy.

General William Tecumseh Sherman defined courage as “a perfect sensibility of the measure of danger and a mental willingness to endure it.” Many have expressed their concern about participation in the user community. Identifying the risks associated to them in joining our user community. Fear is what I am sure everyone is feeling regarding participation. It is an exciting project with significant downside risk to their medium to long term prospects of their careers. But that is the point, without fear there would be no need for courage. There will be many people in the user community who are committed to the success of this project, purely out of fear. If that fear is greater than your courage to approach the difficulties that we share in the future you should stop reading this blog and forget about participation. If however, your desire to resolve these difficulties in industry are greater than your fears than you should move to act on those feelings by joining our user community. It is said that “you can live with pain. You can live with embarrassment. Remorse is an awful companion.” Coulda, shoulda, woulda might be too much remorse to live with in the future. “Don’t let the sensation of fear convince you that you’re too weak to have courage. Fear is the opportunity for courage, not proof of cowardice.” John McCain

What I have done to mitigate your risk is to ensure that we have our budget funded in its entirety before we commence any software developments. This might be unreasonable, however. With a value proposition of $45.7 trillion over the next 25 years, and over $700 billion in the producer's market capitalization losses. If the producers can’t be compelled to save themselves by funding our developments in full, then there is no hope for them. Therefore there will be no financial risk for the members of the user community during our developments. We do not expect any of the user community participants will be engaged on a full time basis during any of our developments. Though we have costed the user community participants time at an average of $190 / hour.

There is much to do before we get to that time and the application process that we have established is rather onerous. We will detail these in tomorrow’s post and give you a better understanding of what might be opportune at this point in time.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Your Involvement

As members of People, Ideas & Objects user community you will be applying the understanding that you have gained from your years of experience in oil and gas to the development of the Preliminary Specification. What we have now is the overall vision of how the system will provide value for the dynamic, innovative, accountable and profitable oil and gas producer and industry. What we need to do is to fill in the details of what are required for the areas that you're familiar within the industry. What functionality and process management is necessary for you to undertake the types of work that are necessary and desired in your area. Understanding that we are not replicating the status quo but building a new industry and new producer for the 21st century based on the vision of the Preliminary Specification.

You will do this work with the People, Ideas & Objects software developers who will take your input and develop the software that you specify. This will be comprehensive, collaborative and iterative work that is done with the input of many users representing a diverse range of experience. It will be in this way that we can capture the exceptions that occur throughout the industry and deal with those through the software. Key to this development process is the work that will be undertaken by the service provider organizations that you establish. They are the organizations that you the users will be building in order to deliver the People, Ideas & Objects ERP software and your services to the producer firms. Each service provider will be dealing with a small subset of the overall Preliminary Specification and apply it across the industries data set. It is in this way that you will be able to apply the principles of specialization and the division of labor to the work that you are doing with the other users and our developers.

In addition to your competitive advantages of specialization and the division of labor, you will have process automation capabilities developed with your work with our developers, and innovation based on your expertise in either the administrative or accounting domain that your service provider organization operates in. These are the comprehensive competitive advantages that have not been available in the administrative and accounting domains of the producer firms. In the current oil and gas industry the producer has to acquire the capability to meet the requirement, and has no scope or scale in which to apply any of these competitive advantages. As a result, the administrative and accounting burden is taxing the producer organization to the level where they’re incapable of earning profits. These current administrative and accounting capabilities are being replicated within each oil and gas producer yet are unshareable to offset the costs. It is the application of these competitive advantages through the long term relationship that our users will have with our developers that will increase the service provider's profitability and reduce the administrative and accounting costs of the producers.

The quality of this service offering that the producer receives will be far greater than what is achieved today. The producers will be able to profit from the reorganization of the industry in two specific ways. First there will be an effective cost structure that is more consistent with the producers revenues. The service providers focus is, as with all parties associated with People, Ideas & Objects, to provide the most profitable means of oil and gas operations. Their focus will be on reducing the cost to the producer or enabling greater revenues being earned through business model changes. Secondly the ability to expand the output of the service providers will enable the industry to conduct a greater level of administrative and accounting throughput with the same level of resources. Specialization and the division of labor are the two elements of all economic growth. These attributes would provide substantial value, however, the service providers are also the reason that the producers are able to implement the price maker strategy of the decentralized production model. Enabling a whole new manner in which to operate the industry.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative, profitable and successful means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don’t forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.