Producer / Joint Operating Committee Operations
It is through the Producer Operations interface of the Operations Management module that the user can access the aggregate data of the entirety of their interests in their various Joint Operating Committees. This view contrasts with the similar interface available when the user drills down to an individual Joint Operating Committee. It is here that we see the two distinct and operationally diverse perspectives of how the Operations Management module prepares for both producers as corporations and as participants in a Joint Operating Committee.
Access to the Operations Management module within the producer would be tightly assigned to those concerned with profitability everywhere and always in their operations. Exposure to the firm's data and information contents under Producer Operations shows the majority of the Preliminary Specification modules are reported through this portal view. Populating the appropriate decision makers with actual, factual data and information from the business, operational, science and technical domains. Based on these factors, determine what decisions need to be made, when and how they need to be implemented to achieve and maintain profitable production.
Please note that People, Ideas & Objects have determined that the producer firm's data and information demand a higher security classification than the Joint Operating Committee does. The difference is that producer information is restricted to them, and only to a small subset of designated, authorized individuals. The Joint Operating Committee often deals with publicly available information and proprietary data shared among Joint Operating Committee members. It is recognized that Joint Operating Committee information will reflect the gross capital and operational expenditures and revenues of the property. In addition, it will reflect only the specific producer's interest share of those costs and revenues.
People, Ideas & Objects have been critical of the fact that “recycle costs” and independent engineering reports are relied upon far too heavily to make business decisions. However, what would they use when business information is more corporate in nature? Information that reflects estimates of overhead costs and does not represent capital costs allocation? Combining the producer firm's business, operations and technical data, information and resources is needed. This is to resolve the issues that have manifested themselves in the damage and destruction caused.
If there is a culprit in this it is the inadequacy and poor quality of accounting data and information, producer ERP systems and the organizational structure. This is primarily a product of the 1960s. And as we’ve repeatedly stated, the obscure and opaque nature of this has been a deliberate and orchestrated by producers' officers and directors. This is for their personal financial advantage. When such damage is done to an industry, where nothing is done to remediate these issues, where the calling is to muddle through, where only scapegoats, dishonesty and blaming are provided and the one specific group who have the fiduciary responsibility, authority, accountability and resources to deal with the issues. And it is only that group that benefits financially over all others? As a member of that group, what level of accountability would these officers and directors seek to instill within the organization they’re responsible for? Revealing their skeletons would never happen.
We should take a moment here and understand that the source of this issue and the lack of accountability is the cultural means of oil & gas operations throughout North America. It is therefore going to be the point of greatest resistance in terms of pushback and force applied by the status quo. This is to maintain their turf. We need to note and understand the Operations Management module's significance. This is in terms of the need to forcefully amend this culture of oil & gas and eliminate what exists culturally today. This will be one of the points of greatest resistance during our Preliminary Specification development. McKinsey notes in the February 28, 2014 article "Change Leader, Change Thyself."
The Producer Operations function is the portal that brings together actual, factual, timely, and accurate information for producer firms. It is not the original source of this information. All of it is drawn from other modules of the Preliminary Specification, other systems of the producer firms, Joint Operating Committees and public sources. A source of undisputed facts about the state of affairs that can be relied upon and decisions based upon. It is a means to control operations through our Industrial Command & Control and IoT implementation. This is to take any actions necessary to remediate issues, capitalize on opportunities, innovate and ensure profitability.
If we look to the future and the changes being implemented and opportunities created through the development and implementation of the Preliminary Specification. Which involves the Internet of Things, the Swarm network, and Oracle's comprehensive and mature technologies. The shared and shareable nature of service providers' administrative and accounting capabilities and capacities. Their implementation of advanced automation, specialization and division of labor. The challenging and difficult future that oil & gas faces in the next 25 years. We see the need for these changes first and foremost. Organization is needed to capture them. What we also see is an exponential increase in data volumes and an order of magnitude increase in complexity and risk. If oil & natural gas prices are subject to overproduction in early 2023, after all that we have been through, after all that is happening in the marketplace at that time, after all the assurances they had things under control, we find the Officers and Directors do not have any capacity, capability, willingness or desire to even admit they have an issue. Change is inevitable in some form. We can orchestrate it constructively with deliberate actions such as what People, Ideas & Objects et al describe. Or we can accept what foreign sources of oil & gas define as limits to our overall economy.
When our service providers provide objective, standardized data and processes they provide industry with a method of measurement, understanding, assurance, accuracy and timeliness that would not be possible without them. As a shared resource the costs of the service providers will be substantially less than what is required to build and maintain similar internal capabilities for each individual producer. Standardized and objective administrative and accounting doesn’t affect producer firm competitiveness. It is the strategy, land, assets, and coordination of the market's earth science & engineering capacities and capabilities that will determine the producer's competitive nature.
Standardized, objective data and information in the administrative and accounting components across the industry will help producers enhance performance and innovation on that shared understanding. In itself, this is necessary because standard, objective accounting indicates that a Joint Operating Committee does not produce a profit. The producer will know that it is in their best interest to shut-in any unprofitable production to maximize their corporate profitability, save their reserves for the time when they can be produced profitably, ensure the costs of their reserves do not have to incur the additional costs of any future losses, minimize their production and storage costs and remove marginal production from the commodity markets. That indeed their profitability assessment is based on the same standard, objective method that all other North American production is assessed under.
Financial Marketplace
The Operations Management module provides producer staff in all areas of the business access to the information they need to operate. It contains standardized, objective financial, operational, and technical information. Access to the necessary information may be limited here as the Financial Marketplace module, from the producer perspective, is more focused on the corporation's cash and financing needs. It is not, as conceived here, an accounting information module. There will be a greater role for this section of the module in the individual Joint Operating Committee sections as cash balances, inventories and cash calls require their information. The ability to execute transactions such as cash calls would be a feature.
As with the Resource and Petroleum Lease Marketplace modules, the Financial Marketplace uses the Preliminary Specifications Marketplace Interface. The Marketplace Interface is a virtual representation of these three markets in a simulation with individuals participating as avatars of themselves. Marketplace Interface fully supports conducting and engaging participants within various marketplaces. This is part of the ERP capabilities provided by the Preliminary Specification. The importance of the Marketplace Interface is not necessarily fully understood and comprehended at this point in time and place. I see this as an opportunity and medium in which people can engage with the full support of an ERP business environment available to them. Something that falls within the immediacy of a telephone conversation with another individual and a meeting arranged next week with all hands. The Marketplace Interface provides a more dynamic environment that fulfills immediate needs with support from ERP systems.
The most valuable and relevant aspect of our Marketplace Interface is two critical elements of economic development. These elements are lost due to software and Internet deployment across the globe. Serendipity and spontaneous order cannot occur when participants are thousands of miles apart. With the Marketplace Interface, virtual real estate can be established by vendors and participants to demo their products and services. Participants at those demos may discover one another and find similar needs. Either provide feedback to the vendor to address their needs or innovate upon products different from what is demonstrated. They can however use a conceptual difference that the vendor has demonstrated in their own product of service. Innovation is iterative and the foundations of the organizations and facilities of those organizations are critical to the success and failure of their innovation efforts.
Resource Marketplace
How are operations conducted? Who is available? Who is selected? These are the questions asked and answered in the Resource Marketplace module. Having a global view of the producer's operating environment the user will be able to engage tactically and strategically to ensure profitability is first and foremost in the minds of everyone involved including the service industry, within the producer firm, Joint Operating Committee and elsewhere.
The Resource Marketplace module has strong connections with both the Preliminary Specifications Research & Capabilities and Knowledge & Learning modules. The two modules are involved in the development of the producers' competitive advantages of their coordination of the markets earth science & engineering capacities and capabilities. And the deployment of those resources into Joint Operating Committees. To innovate efficiently. Thus, they don't repeat the same mistakes throughout the organization. For example, not everyone in the organization chases ideas. Resources deployed in innovation can only be achieved through tried and tested practices etc.
Oil & gas has a resource constraint problem in the engineering and geological sciences that has been identified but remains unresolved. Currently, the Mind Trust is rapidly retiring and university intake is inadequate to replace them. There is the fact that each incremental barrel of oil & gas demands more engineering and geology to produce. The expectation that North America will sustain energy independence. Rebuilding and refurbishing demands technical resources. However, first we have to overcome the industry difficulties today. Engineers and geologists will be at the forefront of industry future and innovations.
The Preliminary Specification resolves the issue in the following ways. Specialization and the division of labor are both the solution and the aggravating factor. To resolve the resource issue, specialization is the only method capable of satisfying the industry's resource constraints. That, we believe, will only lead to the point where each producer will be uncommercial in their attempt to maintain their just-in-time earth science & engineering capacities and capabilities. The scope and scale of these specialized needs will outweigh their commercial viability. It will therefore be necessary to establish specialized providers in the industry to fill out generic processes. These will be sourced as required by each Joint Operating Committee and incorporated into the workflow. The producer will become highly specialized in an area that they can build value for their land & asset base. And in addition, they will be able to deploy their capacity and capability as a highly specialized resource back into the industry as a service provider themselves. This will help to defer the costs of maintaining, enhancing and expanding that capability.
It is in the Resource Marketplace module that we introduce the concept of Pooling the technical resources of all the producers in the Joint Operating Committee. Pooling is our replacement for the operator role. This will become untenable after the further specialization and division of labor necessary to deal with the shortfall in these resources.
Industrial Command & Control
Superimposed across the producer and service industry population are generic classifications of the roles and responsibilities of the professions involved in the exploration and production process. These generic roles, responsibilities, authorities and accountabilities can be assigned to those that qualify and can undertake that task within a producer firm or Joint Operating Committee. Using Work Orders and Job Orders, we can document the work, its assignment, and its completion.
Additional features such as delegation of authority and other enhancements are included in the Industrial Command & Control system in the Preliminary Specification. Consistent with the method People, Ideas & Objects has chosen to deal with the resource constraints in the engineering and geological fields. The ability to augment and deploy a producer's or Joint Operating Committee capacities and capabilities through specialized resource markets is another stated use of Industrial Command & Control.
AFE
The Authority for Expenditures (AFE) is the standard way of establishing budgets for capital outlays. It documents the approvals of all participants in the Joint Operating Committees and reports those expenditures based on the agreed-to budgeted amounts. Supplementals and other features are included in these processes.
As with all the other processes detailed in the Operations Management module, these are dynamic in nature and populated with live data. In the business context, the user can easily roll back to reports representing the last accounting period or production month.
Work Order
The Work Order has a dual function and process defined and developed in the Preliminary Specification. The first role is to facilitate working groups within the producer population to conduct research and development on various science and engineering-based principles. These working groups have waned in the past few decades and will soon be needed in massive volumes to establish a higher level of iteration between the underlying sciences and technologies developed, and the market innovations derived from them which will then form the basis of new science, etc. Our Work Order provides the ability to create an ad-hoc organizational structure that is flexible enough to consider the various forms of contributions during participation in a working group. The aim of establishing these working groups is to manage them without the bureaucratic legacy that has defeated their purpose. When people who participate are audited for vastly longer periods of time than their participation.
The second role of the Work Order is directly related to the deployment of resources in the manner necessary for the producer. This is to acquire and deploy the engineering, geological and service industry resources necessary to conduct such work. To budget, record, accumulate and bill deployed resources costs. To source and coordinate the market for incremental engineering and geological resources.
There is a feature in the Preliminary Specification described in the Security & Access Control module. This feature defines the organization's Industrial Command & Control. It is here that the Oracle role system of their database is used to designate the authority and capabilities of each individual role and or responsibility. This is within the organization. It also defines how those are conducted. These roles and responsibilities are established and standardized industry wide through our user community. By adopting these in the Work Order, we can establish an organizational structure for these tactical organizations. This will be established by the producer firm’s or Joint Operating Committees deployed to complete a task. Cobbling together and assigning the appropriate roles, responsibilities and authority of the individuals during their tenure on the specific Work Order.
Purchase Order
This is an established method of purchase order processing that has existed for 75 years or more. Oracle Cloud ERP has facilities for these with the ability to be augmented as we need them to fit the oil & gas industry. Changes are included in the area of Joint Operating Committee capabilities which will include enhanced holdbacks etc.
Job Order
Our Job Order is another development in the Preliminary Specification. If we look at the Work Order from the perspective of sourcing and deploying resources, managing the budget and recording hours for internal and consulting roles being sourced. The Job Order is purely a tool to tactically document the execution of commands to fulfill operational tasks in an authorized manner. Action cannot be taken without a Job Order. A Job Order will be completed with the appropriate individuals informed of the job order and their designated authorities, etc. Based on its own email system, it manages only Job Orders and establishes their documentation and implementation.
General
Lastly People, Ideas & Objects are user community-based software development. Extensive and innovative attributes can be developed as the need arises. They may include additional features, functions and processes that enhance the Operations Management module. I am only defining the broader picture here, not the specific details.