What Our Tactics Are Part II

There are two major trends that People, Ideas & Objects are capitalizing on in order to make the necessary changes within the oil and gas industry. The first has been the focus of most of the discussion that has taken place here on this blog. That being the unsustainable business model of the current bureaucrats in the industry. With them there is no future, no plans and no vision. Just more of the same losses and nothingness. The other trend that is as strong and is accelerating each and every day is the impact that Information Technology is having on our lives. People are experiencing change at a rapid pace in their personal lives. What could not be done a few years ago can now be done by the average four year old. It is truly remarkable. To disregard technology, which has been the attitude of many people, is now a dangerous position to put oneself in.

The effect of Information Technology in the business environment over the past ten years is of course a different story. The unchanging bureaucracy know that if they adopt the new technologies they lose control of their dominance and their desired form of organization. They need to stay in control and the way that they do that is to ensure that no technologies enter the organization that will ultimately render them even more obsolete.

So where do we stand in terms of the overall Information Technology horizon. I think that to state up to this point, the whole exercise has been a great exercise. The technologies have not been mainstream or powerful enough to make the promised changes. They have needed to mature and round themselves out in order to deliver on the promises that have been made. This history is one of the main reasons that people point to them as being irrelevant in the current marketplace. I think they are wrong. But its not too late. Now is the time in which to get on board and ride this train to its ultimate destination. Industries such as oil and gas will be fundamentally different as a result of the Information Technology revolution. And People, Ideas & Objects, I think, is the beginning of this trend.

When I began this journey in 1991 there was no way in which to implement the vision in any manner. The Internet was still a half decade away. Oracle’s technology was as dominant then but it was unable to carry the load. And computers, servers for that matter, were no better than what we have in our phones today. Probably most importantly was the problem of the user. How would they fit in? Its different today. I don't need anything more from Oracle other than for them to continue in their innovative ways. The Internet is more than capable. Computers and servers can do what we need in no time. And on that point there is an excellent article from the Wall Street Journal on where we are headed. And lastly the user is well educated and capable in the use and application of technology for their needs. I have what I need to implement the Preliminary Specification within the oil and gas industry. Something that until very recently I was unable to state.

So where do you fit in? Do you think the oil and gas industry needs to change? Is Information Technology an enabling capability to where you think it can go? Do you have ideas on how to improve the way in which we work? What will you do about it? I expect the bureaucrats to self select in the overall process. Either through the implementation of People, Ideas & Objects Preliminary Specification or not. They will retire from active employment in the oil and gas industry. Why do you think they have been spending so much of their money on their cabins these past few years? Either they will leave the industry to us, or they will leave it in shambles, they don't care. Their pensions are vested with the insurance industry. The point should be, what actions will you be taking as a result of this opportunity?

If we look at the Wall Street Journal article and understand the consequences of Information Technology in the workplace. Where can the individual go to implement these technologies and ideas in their business and realize the opportunities that are intimated in that article. In oil and gas people can move with People, Ideas & Objects. A vision of how the industry could operate captured in the Preliminary Specification. One that has as its primary focus the user and the importance of their role in the industry and the software that they develop and use. Its an exciting time to be alive. The next 25 years in oil and gas, and what that means in terms of the application of Information Technology, is as interesting as I think it gets.

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. 

What Our Tactics Are

Over the past few weeks we have been able to define a few issues within the oil and gas industry. We have also been able to show how People, Ideas & Objects Preliminary Specification would provide the capabilities for the dynamic, innovative and profitable oil and gas producers. All of these were focused around the capabilities of enabling “price maker” strategies for producers. And what was included in the costs of oil and gas production to ensure those prices were capable of ensuring profitable operations. What we have proven is that the average North American producer is losing money on operations in both oil and natural gas. And that the capital costs of the industry sit on the balance sheets of the producers where they provide no value other than to subsidize the consumers of these commodities.

These elements are some of the components of the Preliminary Specification and are part of the business model that is included within it. There are also many other components that add value to the producer firm. The quantification of all of these elements for the next 25 years stand at $45.7 trillion in incremental value over what the bureaucracy are offering today. Our value propositions base case of operations will be on display in the next two weeks as the earnings are announced by the various producers. It will be important to remember that the costs of capital should be included in their profit / loss calculations. When it costs 30% on average for a producer to maintain their production profile. With all of these costs and more being capitalized. And they only recognize 6-10% of their asset base as their annual depletion. They are inflating their asset base on an annual basis. This takes away from the investor, and the producer, the opportunity to ever earn a return on their invested capital.

Now we will see the extent of the issue with the earnings that will be announced in the next two weeks. Tomorrow we have two of interest in BP and Hess. Wednesday will have our friends at Penn West, with Exxon and Conoco. Thursday will see Chevrons. And then next week we will start with Occidental, Anadarko, Pioneer and EOG. Tuesday Husky, Chesapeake and Tourmaline. Wednesday is Apache, Canadian Natural Resources and Marathon. And Thursday we'll finish with Bonavista Energy.

People, Ideas & Objects have put our plan and vision forward. What is the bureaucracies? We need to look at the next 25 years and how it is that society will be provided with the energy that consumers need. Will this be at the expense of the investors? Those investors who have built this business to this point? Or will there be a change by the industry to the Preliminary Specification that provides for a sustainable business model. I don't think we could frame our solution any better than what we have by providing the Preliminary Specification. Which uses the industry standard Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable producer. The Joint Operating Committee is the legal, financial, operational decision making, cultural, communication and innovation framework of the industry. By identifying these frameworks in our software and aligning them with the compliance and governance frameworks of the hierarchy, we achieve a speed, accountability and innovativeness in our producer organizations. It is through these frameworks and their alignment that we are able to approach the issues of the industry, whether they are in the administrative, accounting or operational domain, and provide solutions for them.

What do the bureaucrats have. Fudged numbers of how they have been managing this industry. Continued overproduction in the natural gas industry as a result of shale reserves is the precursor to continued overproduction in the oil industry. Yet you hear nothing of this phenomenon and any approach to fix it! It has been five years in the natural gas business since prices have been destroyed. Not a word. No action. This being the first year in which the oil prices have declined. What we have is the same behavior. Not a word. No action. What is it that is expected from this unchanging and incapable form of organization? What we need to do is build the industry from the bottom up based on the Preliminary Specification. That way we will have the capabilities to deal with the industries issues and opportunities in the next 25 years.

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. 

The Service Providers Role

With the combination of the Preliminary Specification and the service providers. People can see the difference in the way that business will be conducted in the oil and gas industry. Administration and accounting will be handled by the service providers on a global industry wide basis. No longer will the oil and gas producer be constrained by their administrative and accounting capabilities affecting their growth or profitability. Having the service providers operating in the manner we noted yesterday makes these costs variable in nature. Allowing the producer to shut-in unprofitable production and therefore reduce the royalties, operating costs and overhead on the property and the firm overall. Enabling the producer to select their production profile based on the profitability of their production ensures that they, as a producer, will always be profitable. And their ability to scale up their production is immediate by accessing the administrative and accounting capabilities that support any new production through the industry based capabilities of the service providers.

Getting these concepts into the minds of the future user community participants is critical to the success of People, Ideas & Objects Preliminary Specification. We are not rebuilding the existing systems that are so deficient in providing value to the oil and gas producer. The entire configuration of the industry, where the service providers are separate from the producers. And focused on one individual process of the producers business. Demands a different perspective and point of view of how the industry operates and the systems that are built by the user community.

Our objective in making these changes is to provide the flexibility in the producers deliverability and production profile, and to allow them to focus on their key competitive advantages of their earth science and engineering capabilities, and their land and asset base. The service providers on the other hand are handling the administrative or accounting process that is theirs. They own the process and are solely responsible for the management of it on behalf of the industry. Their process is their competitive advantage. And with that they have the people to manage the process, the capabilities to make changes to both the process and the software itself through their participation in the user community. This is the critical point of failure where the quality of systems usually fail. The producer currently has no one to turn to who has ownership of the issue. The service provider, who contains the user community participant, has the power through the user community vision to enable the changes to be made. They will have the people to deal with the producers issues.

It will be the service providers process that is the source of their competitive advantage. And it will be on the basis of specialization and the division of labor that they are able to compete. Taking the data set of the industry and being responsible for it for that process is a completely different basis in which to look at the industry. It is also the only reasonable approach here in the 21st century. Having each producer develop the administrative and accounting capabilities to support their organization is a constraint and is the primary reason that so many producers are losing money. The scope and scale of the actual overhead of the producer is not that significant, however it is large enough that it requires them to continue producing in the current environment. With all the staff on their payroll they need to keep operating all of their properties to continue paying everyone. The shale revolution is declaring this business model is out of step with the needs of the industry. The bureaucrats won’t listen and continue on despite putting their firms in jeopardy. Change is desperately needed.

What we as individuals need to do is to think of the ways that the service providers will work in this new environment. That is the way that we need to go about building these new processes. First in the software itself with People, Ideas & Objects Preliminary Specification. Remember software identifies and supports the organizational constructs. That will enable the changes to be made in the organizations. Then with the user community participants developing the service providers themselves the changes needed in the industry can be implemented with the software, the process and the people operating in the manner that makes the oil and gas producer the most profitable that they can be.

It will be on the competitive basis that the service provider will use specialization and the division of labor. These will be their key tools in assisting the oil and gas producers. However, people will also need to think what the division of labor between computers and people will be. We need to stop doing the work that is best left to the computers. And begin the far more exciting work of leadership, unstructured problem solving, decisions, creative work, collaboration, research, ideas, design, planning, thinking and making the computers work for us, instead of us working for them.

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. 

Accounting At the Property Level

Last week we noted the determination of profits in oil and gas was subject to different methodologies in terms of how the firms assets were depleted and hence earnings were reported. I suggested that producers had bloated balance sheets as a result of capitalizing all of the activities in the field. And this bloating was enhanced further by the slow process of depletion when using the reserve base as the method of depleting those assets. Overall this having the effect of over reporting profits for the industry. I also suggested that this was systemic, large and unreasonable. Today I want to continue with the accounting theme and look at the individual properties of the producer. And why the producer is unable to determine which properties are not producing a profit.

The main culprit is overhead. The producer has no ability to determine what the overhead of a property is. Many might consider this to be an immaterial amount, however, when you consider what the gross G&A of a producer is, you'll see that the amounts become material to the determination of the properties profitability. The other aspect is the amount is hidden and only recognized as an overhead allowance that is chargeable to the joint account. These allowances are too small to recognize the real costs associated with the overhead of the property. Therefore the property is over reporting their profits. And the majority of the G&A that is reported on the Income Statement is only the net, after capitalization of the majority of the overhead occurs.

If you look at most annual reports you will find a determination of the netback prices showing that the producer is providing positive margins on their operations. And they are. However you can also see that these calculations only include the costs of royalties and production costs. And they are averages. Included in those averages are a few properties that are wiping out all of the profits of the producer. If you include the actual gross overheads and a reasonable depletion based on, lets say the decline curve, you will find that not every property within the producers portfolio will continue to report a profit. This is only reasonable. It is People, Ideas & Objects suggestion through use of the Preliminary Specification that the producer shut-in those properties that are unable to produce a profit, based on an actual accounting of the properties costs.

This can’t be done with the current bureaucratic systems and procedures. They are using accounting policies that were designed in the 1960’s that were involved in the introduction of computers. They are stuck with allowances and estimates, accruals and a whole lotta fudge to make their systems work. To get an accurate accounting of the costs of the property would require them to reorganize the industry around different parameters. Much like what our decentralized production model does.

And the focus that we provide the producer brings two new elements in terms of increasing their profits. One is the focus on specialization and the division of labor. Two economic principles that have been responsible for all of the economic growth that we have realized since the 1790’s. The ability to focus on these principles does not currently exist due to the fact that each producer needs to build the administrative and accounting capabilities within their organizations. And there is no current opportunity for them to share in these capabilities with other producers. When each producer has to be Sarbanes Oxley compliant, each producer has to hire Sarbanes Oxley compliance people. Therefore the administrative and accounting requirements of the producer firm are a constraint and limit to the speed and capacity to grow. With the Preliminary Specifications development of an industry wide administrative and accounting capability, these speed and capacity to grow constraints are removed and the issues do not arise. By having a Sarbanes Oxley compliant service provider specializing in the legislation and providing their services across the industry.

The second element that we provide is for the producer to be a price maker in the oil and gas commodity markets. As we noted above, the ability to shut-in production at the property, when available across the industry will provide the following advantages.

• The producer actually increases their profitability by reducing their production. 
• Under the decentralized production model there will be no overhead incurred by the producer on shut-in production. Overhead becomes a variable cost based on production.
• The commodity prices will rise as there will be less product on the market. 
• And the overall cost to produce will remain lower due to the fact that you won't be adding the losses of the property as additional costs to be earned in the future. 

The fact that Exxon is borrowing money to fund their negative cash flow. And it is expected that $100 billion will be needed to fund the negative cash flow of the shale formations. People, Ideas & Objects rational story about determining profits and acting on the outcomes makes sense to me. The bureaucrats are too conflicted to be involved in our software developments. We eliminate them from the scene. And the investors are cutting and running. Looks to me like an industry that has to experience the phenomenon of creative destruction in order to make the changes to the Preliminary Specification.

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. 

A Revelation in how our Budget is Funded

A few days ago we asked if we could afford failure. Failure in the oil and gas industry itself. Now I want to ask it in terms of People, Ideas & Objects and the development of the Preliminary Specification. Clearly we are engaged in a battle with the powers that be, the bureaucracy who hold little regard for us. And that makes our task difficult in terms of succeeding when you are in a protracted battle with your customer. However, our appeal, based on our value proposition, has been to address our message to those that are directly affected by the difficulties in the industry, the oil and gas investor. And it is here that we have specifically addressed 386 blog posts. The time has come to evaluate that approach, and ask if its reasonable at this point to assess this as a failure. Clearly the investor, and board of directors who represent them, are too detached from their investment in order to make any fundamental change. It is for them a passive investment. It is therefore fair to assume that our appeals have fallen on deaf ears. Our ability to cobble together a coalition of like minds in this area and fund our budget is a non-starter. And we need an alternative means in order to address our budget needs.

What we have is a value proposition that is in the trillions of dollars. What is needed to achieve this value is the software necessary to identify and support the organization to realize that value. Our budget is the key to establishing that organization. The organization consisting of People, Ideas & Objects, our user community and the service providers. These service providers will have the $40 to 60 billion in overhead that is incurred by the industry today, as the source of their revenue stream for tomorrow. Identified and controlled by the software that they participate in developing. The oil and gas industry generates several trillion per year in terms of its revenues with North America being a large subset of that.

How does disintermediation work? We certainly have identified the needs of the user community and service providers as necessary to make up the changes within the industry. Changes to enable the Preliminary Specification. However is that enough change in order to ensure that society's energy needs are met in the long term? Certainly we have identified the bureaucracy as a redundant form of organization within the People, Ideas & Objects ecosystem. However, is it appropriate to ask if the passive investor model of ownership of the oil and gas industry is also past its usable life? If they too are uninterested in the long term of their investment. And are willingly walking away from those investments. Who are we to argue?

What we therefore need to do is to identify new candidates for interested parties willing to disintermediate the oil and gas industry. In other industries that have been disintermediated the shareholders and directors of the “old” industries did stand by and watched as their investments were fundamentally destroyed. This is the model that fits in every example that I can see. The value of Apple has assumed the value of the industries that they disintermediated. Where are the shareholders in those “old” businesses and industries today?

Which leads us to the logical conclusion that we have for who we can approach to fund the disintermediation of the oil and gas industry. We can not only provide them with the upside in terms of our value proposition. A means in which to operate the industry in the most innovative, dynamic, profitable and successful manner. But also the disintermediation of the existing producers revenue stream which are being willingly given up by the investors and shareholders of the current producers. Who are the natural candidates for this approach? Two off the top of my head are Apple and Oracle.

So here is the revised plan for our development. We are sticking with the January 2017 software development start date. And user community developments are our priority for the period of time up to that point and always. However we will be actively looking to people who are interested in disintermediating the industry as sources for our budget. Passive investment is something that came into play when the merchant organizations became too big to manage by the founder. Disintermediation is a means of exercising the value away from the uninterested passive investors.

What disintermediation has proven time and again is that Information Technology is disrupting current business models. Its only now that I am realizing that one fundamental business model that is being disrupted is the passive investor model. Action is the last thing that comes to the mind of the investor in terms of what to do with their poor performing stock. The first thing they do is sell it. The trick will be not to hold any oil and gas stocks when the pain is realized in the marketplace. Not to involve yourself in fixing things. Therefore our plan will be implemented immediately with a return to our focus on the development of our user community come Monday. Over time we will figure out the funding requirements and ensure that society's energy needs are met in the long term.

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. 

We're on Trend Here Too, Part II

As promised we have the McKinsey article that shows that People, Ideas & Objects is on trend in terms of the technological aspects that are occurring in the marketplace. Specifically the Preliminary Specification will see the movement of the administrative and accounting resources of the producers move from the producers themselves to the service providers. This will change the dynamic of the industry in fundamental ways. Making the administrative and accounting resources an industry wide capability that is variable based on production. What is also included in these resources is of course the IT resources of the producer firm. People, Ideas & Objects being a cloud computing solutions provider, these IT resources will also be handled by the service providers, which includes us. Additional IT resources will be held within the producer firm in order to manage the earth science and engineering applications. However, from an administration and accounting point of view these will be managed through People, Ideas & Objects, the user community and service providers.

To the McKinsey article. It seems like there is little love being dispersed to the IT people at most corporations today. The article speaks to a general dissatisfaction with the job that IT is doing in corporate America.

On the whole, executives’ current perceptions of IT performance are decidedly negative. Beyond providing basic services and managing infrastructure, just one-third or less of respondents say their IT functions are very or extremely effective at a wide range of tasks. Even within IT, the shares reporting effective performance are small (Exhibit 1). The results also indicate fading confidence in IT’s ability to support key business activities, such as driving growth. In the 2012 survey on business and tech­nology, 57 percent of executives said IT facilitated their companies’ ability to enter new markets. Now only 35 percent say IT facilitates market entry, and 41 percent report no effect.

From People, Ideas & Objects point of view IT is a critical element of a producers strategy. It is not enough to own the oil and gas assets, today you need to have access to the software that makes the oil and gas asset profitable. In a sophisticated world that we find ourselves in you can operate in the cave man style of hiring bureaucrats. Or you can employ software to identify and support advanced specialization and division of labor such as the Preliminary Specification does. This is the role of IT in an organization today.

What the bureaucrats are increasingly focused on is the upgrade to Windows 10 and the role out of a new network topology. IT hardware, software and services of the organization. In terms of implementing those components in a manner that will enhance the organization's profitability, there is no hope of them going beyond the Microsoft claims of the value of Windows 10 in your organization. What is increasingly disturbing is that the McKinsey article is saying that they need to involve themselves in strategy. And that they are also doing the job of supporting the technology poorly. McKinsey should be careful they may find more and more bureaucrats will be cancelling the subscription to their research.

What is needed is a new approach. The industry is failing. Chris Grisanti stated on Bloomberg that the last supply side pricing decline was 1986 and it was sustained for 15 years. I remember those days and it was not something that the industry wants to relive. If you think that producers will soon change their mode of operation check back in 15 years and see if they have. 15 years is what they went through with previous low oil prices without making any strategic or tactical changes. They are certainly well prepared to do it again. Who is going to stop them? Unless I'm mistaken and the sole purpose of the oil and gas business is to generate losses.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

Gripping Again

As I had mentioned a few days ago. In a previous life I was an auditor. What I learned about myself in doing that job was that I was a professional gripper. This is a skill that I realized was of value and has provided me with insight throughout my career. Now I’m not a miserable person except when there are bureaucrats around. Usually I am positive and have an optimistic point of view. But then it starts, and I don't really notice it, I begin to gripe about something that is under my skin and only after a period of time do I realize that I have been gripping about something. What I have learned about this skill is that this is the time for me to pay attention. That something is needing my attention, that there is a problem that needs to be solved and its just below the surface. Something that is not readily obvious.

Now I have been gripping about the bureaucracy for many years in this blog. And that is not what I am talking about here today. I have been focused for the last couple of weeks specifically on the bureaucracy as there is something that is particularly concerning to me that has not been realized or expressed here before. And that is, where does this all lead? Lets assume for a minute that People, Ideas & Objects Preliminary Specification is not available in the marketplace. That the bureaucracy is the only alternative for the industry to proceed with the administration of the industry. If we also assume that we are at the beginnings of a failure of the industry in the next few years. One in which the producers can not stop the overproduction, and hence the losses. A given in my opinion and one that will play out in frustration over the next few years. One in which the bureaucrats will inevitably leave the administration of the industry to seek greener pastures in other industries. What happens to society if then the oil and gas industries capabilities are diminished to the point where they are unable to meet the needs of society.

We currently stand on the shoulders of giants, as the saying goes. To move from where we are to the next level of organizational capabilities is assumed to be a gradual transition towards it. The Preliminary Specification is very probably that next level and the gradual transition to it from where we are today is impossible. The level of change introduced is dramatic. Maybe our next transition has to be made in such a dramatic fashion as to leave the legacy constraints behind. It would appear to me that these legacy constraints are the ones responsible for keeping us in a holding pattern for the last number of years. Unable to break out of the status quo and expand on the capabilities that have been built before. For us to make the necessary changes to move to the next level of performance requires us to deliberately design and implement the next level of organizational performance. To assume that “spontaneous order” will generate new value from the sophisticated level that we currently enjoy is too far of a stretch for me to believe. One would assume “spontaneous order” would see producers shut-in unprofitable production when the commodity prices decline.

What is the cost of not making this deliberate act of change to the oil and gas industry. We can quantify the value proposition for the bureaucrats, investors and people within the industry. Who frankly believe that things will change in the behaviour of the producers and all will be ok again very soon. But what about the costs to society and individuals who depend on oil and gas for their daily needs. And what if their needs are disrupted as a result of a lack of oil or gas is made available to them due to a long term unprofitable, failing industry. People depend on energy for so many aspects of their life that they would be severely disrupted if energy was not provided to them in the manner that they were accustomed. Would the bureaucracy be held accountable for that? What if they weren't around?

I think this is the bigger issue that has been motivating my gripping in the past number of weeks. We have a job to do that is more than just what we do. We provide a product that is a significant contributor to the way that we live our lives. If we put that in jeopardy, which is what I am suggesting the bureaucracy is doing, then we are not doing our jobs.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

"More" is the Calling of Bureaucrats and Drug Addicts

“I want you to slash your staff in half and double your productivity.” This is the type of thinking of the bureaucrat. More with less. Its that simple to run an oil and gas producer. When that is achieved do it again. “More” is the calling of bureaucrats and drug addicts. It all comes down to a simple matter of pushing your staff for “more.” You have a job to do, it has to get done and the number of staff you have is fixed. Last month they produced x, this month you need y, they'll just have to produce “more.” This is the life of a bureaucrat. Its all about the numbers that make up the domain of their existence in their business life. Outside of this there only exists future domains that one could seek to conquer. The planning and execution of this expansion will take many years and much effort to ensure that the opportunity is presented, until then we will have to produce “more.”

Whether you're in administration, accounting or the sciences the behaviours become the same. Stratifying people in layers has the effect of classifying them into their own class system. There are the people who get the things done, or the drones, the executives, the many layers of management and supervisors. Each respecting those above and belittling the ones below. These activities and formalities begin to take up a large part of the day when everyone has to recognize and administer this social class system.

In the future the tasks of the drones will be taken up by the computers. Alleviating the mind numbing work that has to be done by half of the staff. As a result this will free up all of the staff to do other things. The kind of work that will be done in the future will be fundamentally different than what is done today by the self interested, conflicted bureaucracies. The types of jobs we will be doing will be leadership, problem solving, acquiring and processing new information, being creative, collaboration, research, idea generation, design and planning. The kinds of work that are not suited for computers. This is how the industry will become dynamic and leave the muddling along strategy behind. This position of letting things work themselves out is incapable of dealing with the industry issues and opportunities. There is too much at stake. We need to take a proactive approach and that means we have to work to actively manage the industry.

In order to make this transition we have to deliberately go about making the change. Developing the systems that will do the types of processing that will offload the types of work that are being done now by half of the staff of the oil and gas producer. And unnecessarily so. So that people can get to the work that needs to be done to ensure that the industry provides the energy for the next century and provides it profitably. Just because we did things like this in 1950 doesn't mean that we have to do it like this in 2015, or 2040. The only way we will change is to do it deliberately, it won't happen with the current bureaucracy in place protecting its turf.

Whether we get the funding for the People, Ideas & Objects Preliminary Specification in the current downturn of oil and natural gas prices is questionable. The need to experience pain by the average oil and gas investor is apparently quite strong. We are taking the long term perspective of providing the solution for the next 25 years. When you place our solution in comparison to the bureaucracy for that length of time, it becomes more evident for the need for action. Therefore we have the short term call to action with the pain from the low commodity prices. And the obvious common sense of how you run an industry in 2040. When you consider the bureaucracy vs. the Internet that common sense falls into focus.

What is the bureaucracy offering? What I see is total failure. That however is just one mans opinion. I don't see anything positive being offered. In an era of disintermediation of all industries by the Internet I guess it's reasonable to assume that the oil and gas industries bureaucracy will survive throughout the 21st century and prosper! The difficult question remains as to how we make this transition so the bureaucracy is removed.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

Some Market Capitalization Losses, So Far

I crunched some numbers, as the squints would say. On how much money has been lost in the past half year from the decline in oil prices. Calculating just the decline in market capitalization of the top ten oil and gas producers from their market high in 2014 to the end of January 2015. The list includes Exxon, BP, Shell, Chevron, Total, Conoco, Apache, Anadarko, Suncor and Occidental. These 10 producers experienced $423 billion in market capitalization declines in that period. That is exactly 105.75 times People, Ideas & Objects budget requirements. And that is just for the top ten! Exxon's market capitalization losses were in the $80 billion ballpark. I'd hate to think what has to happen to make those guys get out of bed.

These losses in market capitalization are the initial quantification of the value proposition that People, Ideas & Objects have been promoting here for the past number of years. The value we provide, the increase in revenue due to the price maker strategy we enable for all producers. Is approximately equivalent to the profit increase in the producers. All of the costs, except for the incremental royalties, are already being incurred. The increases in revenues that would arise from the price maker strategy are therefore free money. We employ the economic principle of elasticity of supply and demand. It may only require a choking back of 10% of production capability to realize a 100% increase in the price of the commodity. The bureaucracy only knows one mode of operation. And that is on. There is no other means of operation. It is full throttle all day, all the time. They have no capability or comprehension of any other means of operations.

When I ran these calculations many of these firms appeared to have lost fully one third of their value. It appears to me that the other two thirds is in just as much jeopardy as the first third. As we should recall under any North American law, the creditors have first priority in any court ordered breakup. That seems a bit radical to put forward, however natural gas is well below $3.00. Oil is mid $40.00 but we are assured that shale producers can now make money at $30.00. Funny how their costs kept falling in line with the prices! And I am not questioning the integrity of their claims that they can produce shale at $30.00. I am only pointing out the strangeness, or maybe the luck of the bureaucracy to have found the silver bullets in terms of cost reductions in shale formations. The fact of the matter is I really have difficulty being lied to.

The fact of the matter is these firms are in financial jeopardy. They have lost a third of their value in the past six months. They have no plans, no strategy, no vision and no discussion regarding the situation that they are in. They are losing money at a phenomenal pace. They have been cut off from the investment community, the banks and even the junk bond community and the smartest thing the bureaucrats can think to do is to continually lie about the state of operations and how much money they can make off shale oil. And I'm the crazy one for suggesting an alternative means of oil and gas operations!

The industry could have saved the losses that all the producers have incurred in the last six months if they only had invested in People, Ideas & Objects. That is an investment return that is real. Not some mythic “we can make money at $30.00 bs.” What we do however is we eliminate the bureaucrats. There is nothing for them to do in the People, Ideas & Objects Preliminary Specification and we have made no special accommodations for them. We have deemed them redundant and eliminated them because they are useless and to be honest more dangerous to have around. Its best when they aren't around so we kept them out. And that is why they have not made the investment in People, Ideas & Objects. They are highly conflicted. It is therefore up to the investors to act in their own best interest by supporting People, Ideas & Objects by getting the funds for this project, our user community and service providers. And then we will offer the alternative to the bureaucracy, and eliminate them from the landscape and build a dynamic, innovative and profitable oil and gas industry from what will probably be the ruins left by these corrupt, self interested, fools.

It used to be that there was speculation of damage to the industry by a crazy blogger with some ideas about the Joint Operating Committee. Then the business model came into view on how the industry could be provided with most profitable means of oil and gas operations. Then we formulated a value proposition in the trillions of dollars. Now we have quantifiable evidence of the fact that the industry is being run into the ground. I don't think there is a future with these bureaucrats. I am certainly biased, but that doesn't make me wrong.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

Industries, Like Big Companies Need to be Designed

In a previous life I had an audit firm that operated in the oil and gas industry from 1986 to 1994. We provided services for a variety of different clients conducting audits, and had various accounting responsibilities. My biggest client during that time was the Alberta Government who provided me with approximately 9,000 hours of audit contracts. The work that we were conducting was the review of gas royalty submissions by producers on behalf of the government. It was fascinating and interesting work that was extremely valuable to the people of the province of Alberta. Maybe not so much to those who I classify as my victims, the producer firms.

I spent almost all of those 9,000 hours at Texaco Canada and Imperial Oil. It was also a time in which John Paul Getty was saying sweet nothings into the ears of many people down in the states. If you recall he said “sold” to Pennzoil one minute, then “sold” to Texaco the next. Texaco refused to accept that Pennzoil was the winner in the Getty Oil Sweepstakes and proceeded with the acquisition. Pennzoil sued. Inevitably Pennzoil won, in a Texas court, where Texaco had no understanding that they had to post the full award that Pennzoil had won, $5 billion, in order to appeal. Texaco Canada was therefore sold to Imperial Oil in order to raise the money to appeal the verdict in the Pennzoil case. Making it that I essentially spent my entire time at Imperial Oil. Which is Exxon’s Canadian subsidiary and at the time Canada’s largest producer.

Texaco had to be purchased by Imperial. They complemented the Imperial assets so well that they could not have asked for a better opportunity. It was towards the end of this time that I had spent at Imperial. A time in which I had reviewed all of the properties in Canada in detail. Seen some of their field operations. That I had a level of detail and understanding that few people would have ever acquired. I knew every property and its purpose in the corporate strategy. I also knew from a very high level the purpose that each and every molecule of oil and gas was providing to the bottom line of the firm. After this time, in what appeared to most people to be a mashup of assets. Was a symphony of brilliance and achievement that was a deliberate and methodical building by the wise hand of one or two people. Granted in many ways they had an unlimited budget in which to source their needs from. The design and implementation of their vision was astounding. It was a true work of art that could not be seen without the effort of at least 6,000 hours in my opinion. And some very high level access to agreements, documents and plans.

The point I want to make here today is that these things “producers” and “industries” are not happenstance. In the time that I reviewed Imperial it was the result of many decades of building. Since that time it has been selectively sold off and refocused as a heavy oil producer. It is no where near the producer it used to be. That I can tell. And I would say the same for the industry. The 1990’s were a brutal time for the oil and gas industry. Survival was the reward for excellent management. In the 21st century the partying began with higher commodity prices and the bureaucracy have been inebriated or hung over with their bonuses, stock options and power. The results are being clearly displayed in today’s performance, and in the next few years with losses on operations that will make everyone look for the scalps of those responsible. Everyone would have been better off investing in the commodity marketplaces instead of the stock markets. The bureaucrats have added no value anywhere, and at no time. They have incinerated the capital that has been provided to them and should be held accountable for that. If you believe that things will improve, there is no stopping you. You can believe the moon is made of green cheese as well. Neither is true. The bureaucracy have fundamentally destroyed the oil and gas industry. The only thing left for them to do is for them to leave the scene with their booty intact.

As we stand here with this disaster in our hands today. What do we do for tomorrow. We should begin by looking towards the long term. The next sprint for the industry will end in 2040. That is the time frame that we should consider, the next 25 years. What our first step should be is our means of organization for those 25 years. We need to begin the rebuilding process that those that were responsible for building up Imperial in the 1960’s, 70’s and 80’s were able to conduct. That begins with the People, Ideas & Objects Preliminary Specification, our user community and the service providers. If we leave it to “happenstance” we can see what will happen. Just more of what we have been getting here the last few years.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

Losses are Completely Unncessary

Those unnecessary losses of course being those that have been incurred in the past five years in the natural gas side of the business. And the losses that we anticipate will be incurred on a go forward basis on both the oil and gas sides of the business. What everyone knows inherently about the oil and gas business is that the commodities are highly inelastic in terms of the supply and demand curve. I know we all learned this economic principle in university so I won't go into too much detail. But the long and short of it is. Removing a small portion of the current oil or gas production from the marketplace, in an inelastic supply and demand situation, leads to large impacts in the prices of oil and gas. The reverse, or what we are experiencing today, where a small volume of excess production hits the market has significant downward pressure on the prices. Its good to see we all agree on these fundamental economic principles. Excuse my condescending tone, however there is a purpose.

As we indicated the other day, the bureaucrats who have been educated in the economic principles of specialization and the division of labor, have refused to deal with the issues of low natural gas prices for the past five years. This is with knowledge of the Preliminary Specification and decentralized production models availability in the marketplace. We know they know about our product because of their antics regarding our Intellectual Property. We also know that they know the principles of inelasticity. So why has nothing been done? I'm at a loss to understand how the custodians of an industry could have brought it to the brink of total destruction knowing what we know they knew.

What is currently being discussed in the industry regarding low oil and gas prices? I don't hear anything. Why is that? The bureaucrats have nothing to lose therefore what is there specifically to discuss? If everything fell apart tomorrow they would be faced with the fact that the cottages gardening could be expanded substantially to take up most of their time and energy. What exactly is the issue? Certainly there will be difficulty keeping occupied in the winter but that is why they moved the cottage to Costa Rica! If there is a need to keep working there are other industries outside of oil and gas. Clearly the perception of an issue being at hand is that which is held by a small group of concerned, self interested loonies.

And I have been called worse by our friends the bureaucrats for many years. There strategy of waiting this out and having the oil and gas prices eventually recover is valid. The trouble is that with natural gas reserves being as they are today, they will never recover without the ability to implement some form of production discipline in the marketplace. This is because of the new element of shale reserves in the marketplace. Show me a producer who doesn't have a trillion cubic feet of gas and I'll show you a start up. And as obvious as that is on the natural gas side of the business, it is the complete opposite on the oil side. Natural gas reserves from shale could last 50 to 60 years. On oil they may last 10 at current production volumes. And at the rate they are developing them they could have them exhausted far earlier. Under either scenario, its the prolific nature of the flush production that dictates the price destroying characteristics in the marketplace. Its not that these producers are playing with matches, they’re playing with dynamite. And they need a method of production discipline to ensure that they don't destroy the marketplace every time they drill a well. The decentralized production model provides production discipline and the “price maker” strategy in the Preliminary Specification but that requires the bureaucrats will need to first work to build the software and then be forced into retirement by the software’s existence.

I’d rather be a loon than someone who consistently detonates their business interests. And so unnecessarily. I’d like to think there is some intelligence in the oil and gas business. An expectation that provides proof once again that I am a loonie.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

It's Time For Change

People, Ideas & Objects is looking forwards to a very active year in 2015. With the decline in the oil prices in the last quarter of 2014. And the further decline in natural gas prices in the month of December, our time has come. The Preliminary Specification decentralized production model deals specifically with the commodity prices and enables the producers to enact “price maker” strategies. Nothing could be more timely. But its not just the decentralized production model that we provide as solutions for the industry. By using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. We are able to provide solutions to the current and future issues and opportunities of the producers administrative, accounting and operational domains. That is the real value of the Preliminary Specification, beyond how it resolves today’s problems.

However today’s problems are problematic for all producers. Year end has now begun for the majority of producers based on the oil and gas prices that were in play at the end of the year. Operational losses of material scope will be announced in the next few months. Additional write downs of assets to the commodity prices will also be carried out by the audit firms. This is perceived by many in the industry as being of a non cash item and therefore not of concern. Producers would be wise to remember that this was your investors money and is evidence that it is worth less than what it was when it was given to you. I expect to see a bloodbath.

Its not that there has been any real discussion of the issue of how the industry will deal with low commodity prices. Any strategic or tactical plans, or any discussion at all, appears to be missing from the discussion of lower oil and gas prices. CEO’s and CFO’s seem to have their heads firmly placed in the sand and are unavailable for comment. In consideration of their situation, its not that they can do anything about it. Their business model is completely inflexible in terms of its operating strategy and full production is the only methodology. Their only alternative was to talk to me and adopt the Preliminary Specification with its decentralized production model as an alternative operating model.

That was yesterday. Review of this blog’s calendar feature shows that we began writing this in late 2005. We published the proposal for the Preliminary Research Report which offered to research the idea of using the Joint Operating Committee as the key organizational construct of the innovative oil and gas producer in August of 2003. If you look at anyone of the entries in this blog it is regarding how we can build systems for oil and gas based on the Joint Operating Committee. At anytime during this eleven and half years you would have thought this research and discussion would have obtained an audience. I can tell you that it certainly has. And the bureaucracy has engaged me at every opportunity that they could. The highlights were on three occasions where they hired three other groups in attempts to steal the Intellectual Property that makes up either the Preliminary Specification or earlier work. This was, in my opinion, so that they could lay claim to it and shut it down, not to use it for its appropriate purpose of building something constructive.

It has been throughout this past decade that there has been a theme in all of my writing. That is that all economic growth can be attributed to enhanced organization through specialization and the division of labor. Our society today requires software to define and support any enhanced version of specialization and division of labor. People, Ideas & Objects software and our software development capabilities are therefore critical capabilities of the oil and gas industries future growth. Some of these attributes were discovered in the Preliminary Research Report and published in May 2004. The bureaucracy have twisted this to their benefit by never acting to change their systems, therefore their franchise will never be challenged. Understanding that economic benefits were at stake their franchise was more important. This was in addition to the value that was available from the decentralized production model in the last five years from low natural gas prices. The bureaucracy therefore can not be trusted. They have refused to deal with me and therefore have proven unable and unwilling to use these tools to the betterment of society. Now with losses growing in a material way its time for change and I am unwilling to work with them.

Did Steve Jobs need the assistance of the record store managers in the development of iTunes? He offered a clear alternative without the legacy constraints of the past. I don't want to compromise with the bureaucracy on their legacy needs and losing ways. We offer a viable alternative with the Preliminary Specification, our software development capability, our user community and service providers. This is a remove and replace strategy based on the greater force of economic change, creative destruction. The bureaucracy have begun their role in this process, its time the investors find the will to step up and direct the payments be made to us to begin these developments and for us to begin our work.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

"The Big Crew Change" and Our User Community

Some have begun calling the issue of the turnover in the earth science and engineering disciplines over the next few years “The Big Crew Change.” The difficulty of course is that it is expected that upwards of 50% of the existing technical resources will be retiring in the short term. This of course can’t be handled by the universities as there are only so many people that are oriented to petroleum geology and engineering and it takes at least ten years to effectively train an individual. Therefore the industry has a clearly identified issue however, with the bureaucracy, they are clearly able to see the issue, as in low commodity prices, but unable to think of anything to do about them or implement any plan to deal with the issue. This post deals with the Preliminary Specifications method of dealing with the “Big Crew Change” and the user communities involvement during development.

Simply in the case of technical resource restrictions of the like that the industry is faced with. The only method of dealing with the issue is through specialization and the division of labor. If we look at the configuration of the oil and gas producers as they are today we see that each and every producer is developing their earth science and engineering capabilities to deal with every contingency that they are responsible for as operator of the properties. Therefore they have to build in contingent resources in order to ensure that they are able to deal with the ability to meet the demands of what the makeup of their properties might require. This surplus capacity leads to unused and unusable surplus capacity that the producer incurs on a day to day basis in their earth science and engineering resources.

If we aggregate the unused and unusable surplus capacity of the industry we have a sizeable amount of resources that are made available to us if we reorganize the industry. If we dispatch the concept of operatorship to the scrap heap. And introduce the idea of pooling of the technical resources within the partnership represented in the Joint Operating Committee. We can effectively eliminate the unused and unusable surplus capacity within the industry.

In addition we can have the individual producer firm focus on areas of specialization and further provide a division of labor in the earth science and engineering disciplines that will enable us to deal with the “Big Crew Change.” If we assume that these technical disciplines continue with their current progress. The status quo requirement of a producer will require each producer to cover off each of these new technical specializations themselves. Rendering the producer firm uncommercial in the marketplace due to the overhead caused by the expanded earth science and engineering resource requirements. Approaching this issue in the pooling fashion of the Preliminary Specification, where each producer specializes and then pools with their partners, is the only reasonable manner in which to deal with the “Big Crew Change.”

The user community has a distinct role in the development of this solution. The pooling of these technical resources is handled in the Research & Capabilities and Knowledge & Learning modules of the Preliminary Specification. It will be there that the specifics of the producers capabilities are listed and promoted between the members of the Joint Operating Committee in order to be selected as the key member to deal with the specific technical demands as they occur. The software developments in these modules will need to have the know how and understanding of how to create and enable these new and innovative interfaces in the oil and gas industry and that will come from the user community.

It is the resolution of the big issues that the industry faces that the user community is addressing in the developments of their software. That is the importance of this user community in the industry. They are the ones that are able to make the changes in the makeup of the industry. To reorganize the resources in different ways in order to solve the problems that we face. And that is the power that is provided to you the user community through the user community vision. And this must be how the oil and gas industry develops from this point forward. As we can see the bureaucracy is failing on all major elements of the industries needs. And through People, Ideas & Objects, the user community and our service providers the bureaucracy needs to be removed and replaced.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

The Speed Limits on Change, Have Been Erased

We are about to move into the Christmas season and all will slow down for the next couple of months. I think that it will be an appropriate time for people to assess the situation in terms of the future of the oil and gas industry and which side they want to be on. The bureaucracy, or to be with People, Ideas & Objects user community. I would suggest that each individual in the oil and gas industry has to make this decision at some point in the next few years. You're either with us, or against us, there is no common ground with the bureaucracy. Theirs is a form of organization and means of operation that is finished. I think the writing is on the wall with both oil and gas prices falling now, incurring financial losses and producers having no ability to deal with the problems.

Bureaucracies can't, won't and don't change. The level of change necessary within the industry to address the issues presented by the drop in these commodity prices. Require such high levels of organizational and structural change that the time, energy and capabilities to complete these changes are beyond what can be expected of these bureaucracies. Or, they have the choice in which they could implement the Preliminary Specification. Which they won’t do because it is effectively suicide for their like and its way of life. They have had almost a decade to deal with me. They have chosen at each opportunity to not deal with me. I now chose not to deal with them. Theirs is a value proposition and opportunity without any future. We would only be dragged down into a death spiral with them.

That is to say that for an individual to be choosing to stay with the bureaucracy is not an irrational choice. For personal reasons someone may be at the end of their career and looking to top out of their pension plan. Who could argue with that. Some may feel that we are to much change. Which they are uncomfortable with and therefore will stick with what they know. There are many reasons that people will reasonably choose to stay with the bureaucracy. There is a job that needs to be done while we are in our software developments and it will be up to somebody to do it while we are otherwise busy. The bureaucracy will be around for a while longer and these people can finish out their careers there.

In terms of the choice of moving to People, Ideas & Objects I can only assure you that it will be interesting and it is probably best to think of it as an adventure. I don't think anything of this scope and scale has ever been undertaken in the industry before. We won't be boring. I think it is evident that the demand for industry level change is in the air and we can leverage that to have our budget funded. I don't expect anyone to have to make any financial sacrifice in order to participate in these software developments. There is career risk however, that is something that will be within your control. And what exactly is the bureaucracy offering you in the future with their flawed business model?

In 2015 the speed of “things” is going to become an order of magnitude faster. The future will belong to those that are prepared. That will be the only manner in which to earn a living. Being prepared for what’s next. If you sit and wait for things to involve you, I think you’ll be living in the poor house and subject to the negative consequences of change. Information Technology driven change in commercial enterprises will be the trend in the next 20 years that will not stop. People, Ideas & Objects is configured to be that change driven agent in oil and gas. Your participation with us is your choice. The fact of the matter is that 2015 will be the year that people will look back and consider that that was the year that it all started to happen. That’s when Information Technologies in all industries began to make the economy more productive and businesses more profitable. That’s when things really began to change.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

A Comment on the Economy

It seems every year around this time I feel compelled to discuss the general economy. Last year it seemed to be looking fairly promising with the ability to crawl out of this malaise being a distinct possibility. A malaise that we have found ourselves in since 2008  We've had a good year, but that possibility of breaking out of the doldrums seems like we'll have to wait a while longer. I don’t know about you but I've turned pessimistic about the general economy over the past couple of months. I’ve lost that optimism that we were moving upward and onward. I’m feeling more like its pre 2008 and everyone is partying, thinking it will never end. There are a few that are saying that we should be careful this time and are preparing for some rough times. But I'm thinking of some real rough times. The central banks are out of bullets. And as much analysis and rewriting of history that has gone lately about the great depression. The best description that I can find of what did happen is that it was caused by a failure of governments. If the central banks have fired their ammo, and we head into some difficulty, then the failure of government could be upon us once again.

Turning to brighter news. The bureaucracy have sought and found all the cover that they could have ever wanted in the past decade in corporate America. Don't rock the boat, steady the ship and live to fight another day have been good strategies to make it through these years. And look at the performance of our organizations in general. Never in the history of corporate America has the economy performed consistently so poorly. With interest rates being at zero for so many years investment decisions have been lacking the appropriate discipline in the corporate world. If you make a mistake no one will notice as the consequences are not realized when there is no competition for the investment dollar. Therefore the bureaucrats have become more obese and even lazier than before. Leading to the poor performance in the economy.

At the same time the Information Technologies have matured to the level where it is possible for anyone to do anything with them. The limits of ones imagination are the constraints that we are now living with. And at the same time we are provided with FaceBook and Instagram, Pinterest and Snapchat. I guess these types of experiments are useful in ways but as businesses with large valuations I thought we dispatched these useless experiments in the late 1990’s. We are however beginning to see the revolutionary business model driven technology companies begin. Companies like AirBnB, Uber and Lyft are revolutionary. They are changing the accomodation and car ownership models. Other applications of this mature Information Technology are just around the corner.

It is these types of technologies that eliminate the bureaucracies and the power of the Taxi commissions across the globe. Applications that are developing today. These are where the economy needs to move too as soon as possible. The ability and capabilities of these technologies are dependent on societies capacity to change. Currently we are still hunkering down in our jobs, clinging to that paycheck that sustains us and constrains us. I think that, in a very short time, people will begin to see others embracing the technologies and moving to the new environments. Environments like People, Ideas & Objects where the individual matters more in the outcome of the oil and gas industries performance.

It is this transition to the mature Information Technologies that have been temporarily disrupted by the entrenched bureaucracies. In all industries in North America not just oil and gas. The sooner we take the opportunities to remove them from the scene the better off the economy will be and we can resume the normal course of economic development that we had once become accustomed to.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

Change at Oracle Corporation

News regarding Oracle’s CEO Larry Ellison stepping down from the CEO role came after the close of yesterday’s trading. At 70 years of age some are saying that the time has come for him to take a lesser role in the company. Replacing him as CEO will be Safra Catz and Mark Hurd who have been part of the team at Oracle for many years. Many of the pundits seem to be jumping on the poor financial performance of Oracle in the past few years and attributing that to Mr. Ellison. This announcement coming at the same time as the news that Oracle missed analysts estimates for the quarter in a material way. I expect that the piling on of the industry leaders and others to continue, Larry hasn't made many friends in the days of building Oracle. I too have been at the losing end of some of his antics back in February of 1997. However, I think that what the analysts, the pundits and everyone else will be wrong about is that Larry is doing nothing close to stepping aside. I think they are very wrong and unless there is more information regarding his health or other issues, I think it is fair to assume the following.

Larry Ellison is a visionary. He is the fifth wealthiest man on the planet based on his skills of implementing his vision. Oracle’s technologies are miles ahead of anyone elses in the marketplace. The breadth of offerings is fully diversified in the hardware, software and services domains. Oracle is the IBM of the 1950’s and 1960’s. There are no others that can play the game that they are in. Its just that the game is not being played at this time. People are comparing the financial performance of the firm against the other “cloud” companies such as Salesforce and Workday. I think Oracle is looking to compete in the marketplace that is defined in the Preliminary Specification, the user community and the service providers. Where industries are being disintermediated by technology and looking for the entire technology stack to be provided by one solutions provider.

Oracle has invested $50 billion on over 100 acquisitions over the past decade. They have also invested massive resources in terms of research and development based on Larry’s vision. The products are there, I can see them, and they make me want so badly to get to them. What is needed is to take these disparate products and package them into a coherent single unified message and market that to industries on the basis of what could be. Much as what we are doing here for oil and gas at People, Ideas & Objects. Technically Oracle has the opportunity to provide the hardware, software and related services to the commercial world. Just as IBM did in the 1950’s and 1960’s. Who is going to stop them. And who is going to provide that infrastructure to those industries in the next decade?

IBM’s technology isn't there anymore. They sell very little hardware and the software they do sell is Linux based. Not even their own proprietary operating system. DB2 was a challenger in the database in the past, but can’t hold a candle to Oracle in the distributed computing world. And Oracle was dominant there a decade ago. Sybase is a SAP technology, which is an ERP system, and only an ERP company. HP is on life support. Dell is restructuring. Most of IBM is Lenovo which is Chinese, and therefore government. Where exactly is the competition to Oracle’s unified, diversified, integrated, hardware, software and services offering going to come from? There is no choice. And anyone will need at least two decades to catch up to Larry Ellison's current position.

I’m sure Larry Ellison is frustrated with the impatience of his investors. He still holds 25% of the company and would like to see the developments happen quicker too. He however has seen his impatience get the better of him in the past. He still pays dearly for his attack on his partners in February of 1997. I wasn't the only one. He has been moved to the Executive Chairman position which means he’s still full time. And he is also now the Chief Technology Officer. So maybe it is his chief responsibility to make a coherent message of this broad product range. I see this as removing the constraints of being a CEO and enabling him to focus on where he builds the most value. On developing the overall vision and delivering the products of the firm.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable 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. 

How Does the Industry Change?

In terms of being a change initiative People, Ideas & Objects certainly have the overall concept down. As a result of implementing the Preliminary Specification there isn't a molecule in the oil and gas industry that isn't disrupted from its otherwise cozy routine. The one redeeming quality of this change initiative is that we are not having to “map” out for people how things will be in the new environment. We are moving to the natural manner in which to operate the industry. One that is logical and one that fits in with the culture of the industry. Therefore anyone with a few years of industry experience will be able to grasp what the change objectives are and be able to move to the new environment with little effort.

The overall guiding principle in making these changes is to provide the oil and gas producer with the most profitable means of oil and gas operations. This spells out part of the key motivation for people to get involved in the development of the software, participation in the user community, development of the service providers, the app marketplace and implementation of the changes within the industry. There is also motivation for all of the people that are involved in those groups to do so. We are establishing in some cases sub-industries with multi-billion revenue streams where no businesses currently exist. In other words there are substantial financial rewards available to those people as well. Change for the sake of change is not what People, Ideas & Objects are about.

If we had to quantify it today it would be along the lines of, “The new manner in which to operate the industry profitably, for all concerned, for the 21st century” as the overall objective. To take what I perceive as a failing industry. Failing in the sense of performance, leadership, accountability, innovation, strategically and tactically. Some might argue that the industry has performed well in terms of the past few years with the discovery and production of shale reserves. However, they are not making any money on those reserves, and they have no prospects of making any money on those reserves. Many would disagree with my assessment of a failing grade on all these metrics. I however stand on the fact that I am able to provide our value proposition through the proposed Preliminary Specification as evidence of the current industries failure.

It may be difficult to see the problems that I see. However, I have been in accounting and audit in oil and gas long enough to know the tricks of the trade to know that the industry is not making any money. Capitalizing royalties in Canada only shows the level of desperation. I see a dead industry that nobody has told that it has died. A ghost going through the motions not realizing that its not really there. No future, no plans and no energy to undertake any new direction or initiative. Dead. Driven by a self interested bureaucracy that in 1950 would have been considered progressive, but in 2014 is primarily responsible for the deforestation in North America. Other than the vast amounts of paper it consumes not many can point to anything that the bureaucracy does. If given another five years the bureaucracy will have the opportunity to upgrade their summer cabins. Which is the only thing you here in the coffee shops and the elevators. The business of the business is dead.

People, Ideas & Objects as a change initiative is therefore more of a survival of the industry than it is anything else. What will you do with the oil and gas industry when it is in the state that it is in? Who is responsible and what actions can be taken to deal with them? What effective actions can be taken to change the course the industry is currently on? Good luck thinking of something. I’m sure the bureaucracy will have as much fun with you as they have had with me. To put the industry on the appropriate trajectory, one with a heartbeat, needs some serious action. I propose the Preliminary Specification, the user community, the service providers and app marketplace. And that way we can have the dynamic, innovative and profitable oil and gas industry we need for the 21st century.

The Preliminary Specification and user community provides the oil and gas producer with the most profitable 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.