OCI Operations Management, Part II

 Oracle Supply Chain Management

As mentioned earlier, the underlying use of Oracle’s Joint Venture Management solution will form the basis of what we develop in the overall Preliminary Specification. Each module of the Preliminary Specification outlines significant elements of the Oracle Cloud ERP suite of applications. These elements provide the starting point for the work we’ll do for oil & gas. We are not recreating the wheel, only building upon it. And leveraging Oracle’s defined method of development architecture that uses their Oracle Cloud Fusion Applications and Fusion Middleware as the tools to enhance our additions and not through individual stand alone applications. We can accept this architecture as Intellectual Property is one of People, Ideas & Objects' three competitive advantages. Our proprietary content is published and protected. In the Operations Management module, we'll use Oracle Supply Chain Management as the primary base offering. In addition, we'll incorporate many other Oracle applications and features incorporated through connections with other modules in the Preliminary Specification. 

To understand Oracle Supply Chain Management offering, review the following YouTube videos. 

Oracle developed their cloud-based Supply Chain Management solution through the development and integration of their enterprise hardware manufacturing business purchased from Sun Microsystems. This development brings Supply Chain Management capability into Oracle Fusion Middleware and ERP Applications. These were and are the sources of Oracle Cloud ERP today. One of the unique characteristics of Oracle’s hardware manufacturing process is that each order is "Configure to Order (CTO)" and delivery is made to 156 countries. Approaching the development of their Supply Chain Management module in this manner is consistent with Oracle’s past methodologies. What is commonly referred to in the software development industry as “eating your own dog food,” or using software you develop yourself, Oracle Cloud ERP is used throughout Oracle’s organization. 

At People, Ideas & Objects our user community provides the most profitable means of oil & gas operations, everywhere and always. That is the motivation behind what we do. Can producer profits from a "real" perspective motivate our user community to keep their focus and commitment throughout the development, implementation, service and maintenance of the oil & gas industry? I believe they’ll only need to reflect back on this period. They'll understand that the disaster that is oil & gas, the service and tertiary industries, and what will become of the industry in the next decade is a result. This catastrophe is entirely attributable to producers' lack of "real" profitability. When producers create real wealth and prosperity. It demands that the greater oil & gas economic structure participates in that creation, its wealth and prosperity too. Contrast this to today where only producers, officers and directors are satisfied. Therefore it is reasonable to suggest that our user community is motivated. But there’s more. Our user community are the only people licensed to prepare derivative works to the Preliminary Specification software and services. They are the principles of the service provider organizations they own and operate. These organizations service and support producer firms with People, Ideas & Objects software. 

Innovation is one of our major initiatives and one of the seven Organizational Constructs of the Preliminary Specification. Innovation needs to be structured and developed within an organization before its realization. Therefore much of the design and development of People, Ideas, & Objects is focused on the innovation demands of an organization for both the producer and the greater oil & gas industry. Dynamic, innovative, accountable and profitable producers will approach the dichotomy of their profitability vs affordable, abundant and reliable energy they'll innovatively provide to the consumer. 

It is here in innovativeness that Oracle presents a previously unrealized and otherwise unavailable benefit of Oracle Cloud ERP. Oracle Cloud ERP quarterly upgrade cycle is a feature. A feature in which People, Ideas & Objects have architected the Preliminary Specification and oil & gas producers will fully realize. Innovation is iteration and user involvement working hand in hand to progress forward. 

In Sources, Procedures & Macroeconomic Effects of Innovation by Professor Giovanni Dosi, we learned.

… the conditions controlling occupational and geographical mobility and or consumer promptness / resistance to change, market conditions, financial facilities and capabilities and the criteria used to allocate funds. Microeconomic trends in the effects on changes in relative prices of inputs and outputs, including public policy. (regulations, tax codes, patent and trademark laws and public procurement.) p. 1121.

As Dosi notes, enhanced financial facilities provide real value for producers in the 21st century. Iteration on the integrated and aligned business, operations and technical ends of the producer and Joint Operating Committee is where the Operations Management module seeks to bring the disparate elements of the Preliminary Specification together for active management and control.

This next point ties into our earlier quote from Safra Catz regarding now is the time to be bold. The Operations Management module is an innovative type of application being envisioned that is a necessity when the Internet of Things (IoT) enables and begins comprehensive automation. What People, Ideas & Objects traditionally call the ability to monitor and control devices. We now prefer to use Oracle’s classifications of “Pull of Data” and “Push of Instruction.” This is a world of exponential data and complexity, risk and uncertainty with unimaginable rewards and opportunities. As the slide title states it is a journey not a destination. The journey begins with Operations Management and continues with the assistance of People, Ideas & Objects, our user community and their service provider organizations and Oracle established as a permanent ERP software development and integration capacity and capability within the oil & gas and tertiary industries.

The nature of unanticipated and foreseeable catastrophes is documented on the next slide. To the far right is the anticipated frequency of these and the time necessary to prepare for the catastrophic event. I’m unable to categorize the oil & gas industry into any of these situations. A four decade run of destruction, fueled by investor capital sourced through specious means and no action reflects to me that this industry has been built on the basis of catastrophes (boom / bust cycles) where the culture has accepted and accommodated a “hair on fire” situation as normal. However, when we review the financial statements of producers. A random sample of 10 or more producers. Can anyone point out the heroes and which ones are the zero’s? Over the course of a decade try to determine from these financial statements what the state of the industry is in? Was it a boom or bust and did the company win or lose? 

People, Ideas & Objects have painted a radically different vision of how administrative and accounting processes are managed throughout North American oil & gas. Turning overhead cost structures from fixed to variable based on profitable production. Enabling producers to shut-in any unprofitable production and reap substantial value from our software and service provider organizations. 

The question becomes how is this opportunity realized? Will a strategy of “muddle through” get us there? Or do these need to be undertaken purposefully? In the way that the fourteen modules of the Preliminary Specification establish and enhance Oracle Cloud ERP.

People, Ideas & Objects acknowledges the broader Oracle community of developers and users in the Oracle Cloud ERP, Oracle Autonomous Database and Java environments. This is a resource pool we can draw upon during our development, implementation and operations. This will provide further value and performance for North American oil & gas producers. We hope to contribute to this community through the challenges we face and need to resolve during this process. And the overall task of seeing an industry rebuild itself on performance and profitability.

Enabling Technologies

Internet of Things (IOT)

There are three inherent characteristics of the IoT that mark the changes in “what and how” the Internet is operated. The first is the ability to acquire unique individual addresses through IPv6, the next Internet iteration. Enabling an addressable range of 2 to the power of 128. Which is a sizable volume higher than the current IPv4 addressing capability of 2 to the power of 32. As a result, each device on the Internet can have its own unique identifiable location. Therefore it is identifiable and accessed by that one specific device in that one location in that one factory in that country… There are current workarounds being offered where IPv4 masks IPv6 addressing which is adequate for some purposes, however for IoT it is inadequate. IPv4 addressing is quickly running out of unique addressing and the cost to acquire an address reflects its rarity. The second and third enabling capabilities of IoT are the capacity for monitoring, or as Oracle describes “Pull of Data” and control, or Oracle’s term of “Push of Instruction” those devices that are connected and easily identified, and hence only that device, through their unique addressing.

The Internet has changed business in remarkable ways that today appear quite advanced from the prehistoric age of only a decade ago. Yet the corporate implementation of Information Technology is poor as the maturation of the underlying technologies have come of age. What appear to be dramatic developments and improvements have little effect on organizations' productivity and performance. Issues and opportunities that existed then remain unresolved and unrealized today. Information Technology has never been realized and business has false expectations. Having the latest version of the Windows operating system will not increase productivity. It is the application of Information Technology through the business model, the business strategy and making it work for us beyond the install script. This is where the value proposition lies. IT is not the solution but a tool to prepare the business solution.

In saying that, this next phase of the Internet will be difficult to ignore in my opinion. The Internet of Things (IoT) is one of three underlying technologies that provide oil & gas with People, Ideas & Objects Operations Management module opportunities. With the disparate nature of geographical regions and locations, process-based manufacturing demands a highly sophisticated infrastructure. This complexity and control has been well managed to this point by the producer firms. Questioning its continued management is reasonable when the service industry's capacities and capabilities have suffered such severe destruction. The recent strategy of the producers to focus on clean energy is disconcerting and reflects the uncaring nature of its officers and directors in approaching the oil & gas business. 

Applying IoT to the business model of the Preliminary Specification where the Joint Operating Committee is the key organizational construct. One of seven distinct Organizational Constructs that form the oil & gas industry culture we're building. It’s the natural consequence of a reasonable approach due to the value gained. Automation, specialization and the division of labor would need to be redefined by optimizing these three enabling technologies in the Operations Management module. A process that we’ve proposed and applied throughout our development. It would be redundant to undertake the process of developing the Preliminary Specification only to immediately return upon its completion to implement the IoT opportunity. Therefore it is within our budget that we are undertaking the Operations Management module at the discretion of our user communities and during our initial development.

Communications

Starlink

Technology has recently become available to enable this Operations Management Module. Elon Musk’s Starlink is a product launched by SpaceX. Although operational with 4,487 satellites, (7/2023) it has not fully deployed its planned 42,000 satellites. What we are witnessing is the deployment of new technology that enables the Internet to be available anywhere within the domain of our proposed North American marketplace. The speed at which this technology is deployed is remarkable.

Currently there are a variety of ways to connect to the Internet. With North America being the domain of People, Ideas & Objects, we are addressing a large geographical area. Producers will have remote operations and may have a variety of methods to connect to the Internet at some of their operations. None of these will be standard across the continent. With SpaceX, People, Ideas & Objects, will standardize the connectivity of all locations. In addition, we will enhance all producers' data and reporting capabilities through our Cloud Administration & Accounting for Oil & Gas. The advantages of doing so are substantial and they fall within the objectives of what we seek to achieve here in the Preliminary Specification. Although complex in its makeup, the Operations Management module is a contributor to the producer's automation, innovation and profitability.

Swarm

LOW COST GLOBAL DATA FOR IOT

Swarm provides low-bandwidth satellite connectivity for only $5/month using ultra-small satellites in low orbit. Swarm satellites cover every point on Earth, enabling IoT devices to affordably operate in any location.

In direct response to Starlink's high cost, SpaceX purchased a dedicated IoT network provider. The Swarm network is a configuration of 160 low orbit satellites. Although the bandwidth is lower than Starlink's, that is not an issue for the Internet of Things. Whether the need to capture small numbers of data variables on a real time basis throughout the day, or to gain the real advantage of IoT, which is the ability to “Pull of Data” and “Push of Instruction” devices. Network requirements are substantially less demanding than typical users' data requirements. No one will watch videos or browse the web on Swarm. The Swarm network is the means by which Starlink offers text-based cellular phone coverage in areas without it.

The cost of Swarm compared to Starlink is telling. Starlink is $2,500 for the equipment and $500 / month for the service. Swarm can bring these costs down by 96%. To have each Joint Operating Committee connected, no matter how remote, which is what I believe would be the requirement, would be far less costly to achieve a full implementation of IoT through SpaceX’ Swarm network. As an incidental cost, it would cost $100 for the hardware and $5 monthly for the service. What this purchase includes in terms of network configuration and IP addresses is unknown. 

As an example of the use of the Swarm network’s use in the Preliminary Specification and its application of IoT. People, Ideas & Objects have expanded the functions and process management of the Material Balance Report to the highly engineered document that it always should have been. The issue has always been that the value generated for one company is limited compared to the significant costs to engineer it appropriately. With our budget aggregation and distribution of the application across the industry, this value add is a critical feature of the Preliminary Specification. Information Technology has now matured to undertake a task of this nature. As originally written in 2012, the Material Balance Report used monthly production numbers. Now with IoT and the Swarm network the ability to capture daily production volumes and re-engineer the field data capture process away from SCADA would be attainable. This would not only be possible but an advantage. It’s not that daily production volumes are used for financial calculations today. They could be used in the Material Balance Report to calculate next month's revenue and royalty accruals. This is based on the reported daily volumes, on the known characteristics of production and the prices of those products. Increasing the accuracy of accrual with no man hours incurred in any aspect of the accrual process. 

The use and value of IoT, both Starlink and Swarm networks will be determined through our user communities' innovativeness and their interactions with the dynamic, innovative, accountable and profitable oil & gas producer firms. Any suggestion other than this obvious accounting accrual possibility limits the value of the IoT in terms of the Preliminary Specification. In terms of what the engineering possibilities are is certainly unknown to me. We can only assume that better information on a timely basis with remote Pull of Data and Push of Instruction is a benefit to that discipline. As a result, I am confident that there would be much more that our user community could generate in terms of value.

Joint Operating Committees subscribe to the Swarm network. The issue with defining the allocation of nodes to the Swarm network is the monthly demand for data. The network's maximum monthly use is limited to 600 kb, or .6 MB or 300 pages of text. Reflecting that only small packets of data are transported across the network. Whether that is Pull of Data or Push of Instruction, the IoT device, it is reasonable to assume that a small Joint Operating Committee would only demand one node and distribute the service to a number of addresses, whereas larger ones would need several to accommodate higher bandwidth requirements. Standardization and deployment of these technologies across the industry would create an infrastructure for innovation. When it becomes standard practice, a part of the business and available at reasonable costs through our user communities and service providers, the industry would be operational at a higher throughput capacity.

A proof of concept of the Swarm network, and an endorsement of its much lower cost model, is the fact that Swarm networks are currently deployed in oil & gas. 

Moving to the key Organizational Construct of the Joint Operating Committee we’ve made a fundamental change in recognizing and aligning administrative and accounting to the operational culture, Using these three enabling technologies, IoT, Swarm network, and Oracle, we foresee dramatic increases in data, processes, and the number of service industry firms that producers use and opportunities. Much the same as our user community service providers will leverage such value from their work.

OCI Operations Management, Part I

 Operations Management

I am pleased to present the 14th module of our Preliminary Specification. Operations Management should be seen as an entirely different module from the Preliminary Specification. Other modules enable producers to capture, analyze, and report on their data, gain insight from them, and make informed decisions. The Operations Management module enables producers to actively engage with their producer and Joint Operating Committee organizations. To conduct their operations based on the decisions they make, the strategies they employ, and the unique competitive advantages that come from their land & assets. As well as coordinating the markets' earth science and engineering capabilities. 

The Operations Management module is at the crossroads between two separate and distinct operations and corporate groups that have developed over the past decades in oil & gas. These two groups work at opposite ends of the producer firm where the corporate silo is interested in the SEC, regulatory and tax requirements. They have not fulfilled their role in providing valuable operations information on an overall producer basis or to each Joint Operating Committee. Operations and technical environments have sought to mitigate the lack of business knowledge, understanding and information passed into operations. This in many ways has created the broad industry issues that have manifested themselves. 

We're rebuilding the oil & gas industry through the development of Preliminary Specification and Cloud Administration & Accounting for Oil & Gas. End-to-end planning, implementation, and optimization of the exploration and production process need to be undertaken and implemented. That will be done through the producer and Joint Operating Committee in this Operation Management module. This module more than any other is a producer-facing module. The key difference between what may exist today is that the Preliminary Specification will be populated with actual, factual accounting and administrative data and information. Not recycle costs or other estimates from reserve reports or elsewhere. We’re replacing what exists today in the industry and producer firms. Replacement of what has been done is necessary to rebuild industry culture towards profitability and performance.

Preamble

How does the producer firm focus on innovatively producing profitable oil & gas? The Preliminary Specification relieves them of their non-competitive tasks of administration and accounting. Supported by our user community and their service provider organizations, producers will no longer need to build and maintain their unshared and unshareable capacities and capabilities to meet the requirements of those aspects of their business. Engineering, geology and business operations in terms of exploration and development are their domains of expertise. Based on their ability to deploy their distinct competitive advantages of their land & asset base and to coordinate the markets earth science & engineering capacities and capabilities. 

North American oil & gas producers are in a state of organizational collapse which is catastrophic for all concerned. With internal and field capacities and capabilities that are severely deprecated, producers are incapable of maintaining their activity levels, assets and productive deliverability for the mid to long term. Their capital structures are and have been unsupported for almost a decade. The amplification of the accelerated shale decline curve has placed the North American economy and society in a situation where the status quo is proving incapable of even recognizing their difficulties. Leaving what will become a long term consequence of their inaction to be detrimental to the most powerful economy ever known to man when it's dependent on foreign sources of oil & gas. The opportunity to mitigate this is through the active disintermediation and rebuilding of the industry by way of the development of the Preliminary Specification. This is done by our user community, their service provider in People, Ideas & Objects Cloud Administration & Accounting for Oil & Gas software and service.

2023s natural gas price shows the one thing producers assured us they controlled. Production discipline doesn’t and has never existed under their current culture of “muddle through.” To them, producing unprofitable production is considered a right and a privilege. As a result, producers cannot determine whether a property is profitable. Their ERP systems are not structured to capture property data, especially the detail involved in overhead and depletion. Capital costs are intended to build balance sheets, not pass these capital costs onto consumers. The issue that People, Ideas & Objects Preliminary Specification is designed to resolve, is chronic, systemic overproduction of oil & gas since July 1986. Despite natural gas becoming a weapon of war and shale decline curves appearing in all basins, this anomaly of overproduction by the North American natural gas producers continues.

People, Ideas & Objects propose the vision of the Preliminary Specification and its 14 modules built upon Oracle Cloud ERP. Designed, developed, supported and serviced for the long term through our user community and service provider organizations. A rebuilt industry that provides the most profitable means of oil & gas operations, everywhere and always. Profitable operations are the only source and means of capital that is large enough to satisfy the demands of what oil & gas will require throughout the greater oil & gas economy up to the year 2050. What we know and understand of the current administration's is that when pressed, they never listen or act. They'll say anything to satisfy the present concern, do absolutely nothing, eventually regressing back to their cultural norm. Which is consistent with and part of their dedicated "muddle through" strategy.

Review of this Operations Management module will leave most people thinking that the scope and scale of the application is well beyond what's possible or practical. I would certainly understand that commentary and ask you to view this differently. It is the 21st century and we are building applications for the issues that plague the industry today, the next generation and the future. I see the Operations Management Module using the Preliminary Specification and leveraging it in ways that are the basis of the type of innovation that Oracle, People, Ideas & Objects, our user community and their service providers will be able to conduct with producers and Joint Operating Committees in the future. We are leveraging this opportunity to integrate a monitoring and control system for producers to manage their Joint Operating Committees. This will enable them to be the dynamic, innovative, accountable and profitable properties and producers they’ll need to be. 

The perspective that I see in these types of applications delivery, such as our Operations Management module provides to the producers. Will no longer contain a box of diskettes, digitized manuals available on the world wide web and supported through a help desk Monday’s to Friday’s from 8 - 5. It’s not from the early 1990s, and is worthless today. This is one of the reasons we've focused on our user community as our key competitive advantage and their service provider organizations. They’ll need to be available 7/24 supporting the Preliminary Specification, ensuring they’re operational and troubleshooting issues prior to any producer calling or discovering the issue. Capable of resolving difficulties in industry operational, technical, administrative or accounting domains. 

People, Ideas & Objects find today's producer expectations of our ERP competitors surreal. Paying for nothing, expecting miracles, casting aspersions when Service Level Agreement (SLA) expectations are not achieved. In addition, there is no producer participation beyond SLA execution. My expectations of our user community are for it to lead the development of new business models within the industry. I also expect it to provide the value proposition that the Cloud Administration & Accounting for Oil & Gas software and service is designed to deliver. The user community is taking proactive steps to address the issues and opportunities facing the industry. This is to ensure they’re providing North American dynamic, innovative, accountable and profitable oil & gas producers with the most profitable means of oil & gas operations. This role has been capitulated by producers through their culturally systemic “muddle through” strategy and must be undertaken.

We see this as the future of enterprise software. Business' dynamic nature can't be managed through a generic configuration conceived decades ago and not amended. Software to manage the enterprise alone is an inherently dangerous assumption. Nothing of complexity, substance or significance works in that way. People, Ideas & Objects is a comprehensive software and service offering that is a permanent capability of North American producers. This is the level at which the software industry has reached. It is the promise it has always had. Officers and directors assume it will be available by flipping a switch. Conversely this does not imply that producers will continue to define the terms of what they expect in a Service Level Agreement. They will sit back and criticize any deficiencies. It is too late to settle for old failed processes in a world where software dominates the workplace. It’s no longer enough to just own the oil & gas asset, it’s also necessary to have access to the ERP software and services of People, Ideas & Objects et al’s Cloud Administration & Accounting for Oil & Gas, which makes the oil & gas assets profitable. This must be an all hands on deck commitment by all for success to be achieved. That is Oracle Cloud ERP, People, Ideas & Objects, our user community, and their service provider organizations. This is for development, implementation, service and support of the Preliminary Specification. Dynamic, innovative, accountable and profitable producers and the service industry will all need to participate actively.

With the Preliminary Specification we are seeking a transformation in the profitability, performance and culture of the producer organization and Joint Operating Committees as we’ve detailed throughout. These will need to undergo a transformation that is far more radical than what the status quo culture can comprehend. How this transformation will happen will be through their efforts in this Operations Management module. Through this process, they will be able to reduce their process and activity timelines, as well as raise their performance criteria and expectations consistently throughout the century. Tighten up the interactions between the tier 2 and 3 sub-industries to optimize the producers and Joint Operating Committees production and exploration processes. An industry-wide rebuilding process that will need to be and can only be conducted and funded through oil & gas production profitability. Where producers can compete effectively on North American capital markets. They will also maintain affordable, reliable, abundant and secure domestic sources of oil & gas for consumers. 

People, Ideas & Objects

We are Enterprise Resource Planning software developers for oil & gas. Our competitive advantages include our user community, Intellectual Property and research. Delivered through our Cloud Administration & Accounting for Oil & Gas software and services. It’s no longer adequate to just own the oil & gas asset, it’s also necessary to have access to the ERP software and services of People, Ideas & Objects et al’s Cloud Administration & Accounting for Oil & Gas that makes the oil & gas asset profitable. 

Our user community

Our focus and priorities are on the People, Ideas & Objects user community. We have established our user community with a comprehensive vision. This ensures that they can make the changes that provide for the most profitable means of oil & gas operations, everywhere and always. Three significant attributes of their structure provide them with the means to do so. 

Only user community members are licensed to make changes and prepare derivative works to the underlying Intellectual Property of the Preliminary Specification. 

Our developers are licensed to take instruction and input only from our user community. They are deaf, dumb and blind to all others. Producers can discuss their issues and potential opportunities directly with our user community members. 

Our user community controls their own budget.

The method and means of communication that producers, Joint Operating Committees and service industry representatives will use to engage our user community will be through this Operations Management module. This communication and collaboration portal will simply be a representation of a stand alone, dedicated, collaborative module established throughout the Preliminary Specification. This module will enable enhanced and focused communications.

Service provider

Each user community member is licensed to establish one or participate in the ownership and operation of many service provider organizations. Service providers enable the change People, Ideas & Objects et al make to oil & gas producers' cost structure. Moving from fixed, producer-based, overhead, accounting and administrative capacity and capabilities. To variable, industry-based, overhead, accounting and administrative capacity and capabilities. Variable dependent on profitable production. Service providers are independent organizations owned and operated by our user community members that manage an individual process operation within the Preliminary Specification. Applying their services and competitive advantages in the form of quality, specialization and the division of labor, automation, innovation, leadership, integration, deployment of their tacit knowledge, issue identification and resolution, creativity, research, ideas, design, planning, thinking, financing, observing, judgment, reasoning, conflict and contradictions, collaboration and compromise.

Using these unique skills and industry understanding to apply their process across the industry data set. Populated through a reallocation of the producers current accounting and administrative resources these people will be the ones that deliver the software and services of Cloud Administration & Accounting for Oil & Gas to North American based producers and those they interact and transact with. 

As with our user community, service providers will use the Operations Management module as a portal for communication between themselves and the larger oil & gas community. Collaborating on issues and opportunities of concern and information pertinent to the various stakeholders identified in this module. Communications for enhanced software and services development, integration, issues and opportunities.

Oracle

People, Ideas & Objects have selected Oracle as the base Information Technology provider for the Preliminary Specification. Using Oracle Cloud ERP as the foundation, with all of their underlying technologies, which hold the premier spot among enterprise technology providers. Oracle recently began moving towards heavily automating processes to build substantial value for organizations throughout the business world. Partnering with J.P. Morgan Chase to employ their credit card to record corporate expenses during expense reporting processes. When an employee uses this credit card they can designate the charges destination and Oracle will process it to ensure it fits within the companies eligibility policies. The individual will not have to spend hours filling out expense reports. Others won’t need to review them and charges will be paid appropriately. Eliminating the many thousands of hours consumed in expense reporting annually to a few milliseconds of processor time. Additional process automations are being undertaken for logistics with providers in those industries, for example. 

These automations will be comprehensive in nature and will build upon themselves as users realize the combinations and permutations of the various processes and how they’re related. The value earned by those firms that move to this architecture and organize themselves in this manner will reap substantial rewards in performance, productivity and profitability.

This is the same undertaking that People, Ideas & Objects, our user community and their service provider organizations are conducting with the development and implementation of the Preliminary Specification. The difference between what we propose in the Preliminary Specification and what Oracle does is that they provide generic business processes. We tackle North American producers' specific oil & gas attributes. Having the full stack of unique oil & gas and generic business process automation handled and improved continuously for enhanced productivity and profitability. 

People, Ideas & Objects targets North American oil & gas producers as the market for our Cloud Administration & Accounting for Oil & Gas software and service. We have further defined this market to include Exxon Mobil and Chevron down to the startups that began at the breakfast table this morning. This appears to be an impossible and misguided ambition when we consider that Oracle Cloud ERP and their underlying technologies are among the most comprehensive and technically difficult Information Technologies to support and use. We agree. Our user community and their service provider organizations, however, provide the software and services needed to support all producers. We would ask, under this configuration, what would preclude a small startup oil & gas organization from realizing the benefits of using People, Ideas & Objects for expense reporting? This is with the Oracle / J.P. Morgan Chase credit card integration we just highlighted.

This theme is evident and became abundantly clear during Oracle CloudWorld 2022 conference. It was there that they unveiled the comprehensive nature of their offering and the drive to move in this direction. It is this drive that led to the rewrite of the Preliminary Specification and the inclusion of the Operations Management module. People, Ideas & Objects believes that Information Technology has never fulfilled its promise. This is due to the lack of maturity in the underlying technology base. Oracle has worked diligently since its founding to put that architecture together and make it robust. And they can now turn it towards what everyone expected Information Technology to provide. It would be a shame for those companies that have become disenchanted with Facebook to believe that Information Technology is a false promise and will never deliver. The time has come to understand the time we are in, and to act accordingly.   

Oracle CloudWorld 2022

Being bold is the way to win, that being timid could wipe you out.

Safra Catz, CEO Oracle 

End-to-end transformation is another common theme throughout this conference. What purpose would it serve to trim around the edges and try to resolve truly existential issues with the oil & gas organizational methodology used today? One of the many points this conference reflected on is that now is the time to act. Bold action at this point will enable organizations to realize the benefits of Information Technology disruption. Safra Catz's Keynote Presentation stated that it is not time to issue a White Paper. The time required to evaluate options will be too costly. The lead time for considering opportunities and researching issues has passed. The time to implement a “plan” is now. The producer's plan needs to be bold. It has to address the issues that are causing significant difficulties throughout North America's oil & gas economy. There are existential issues confronting the current producers organizational method, which has failed and has no support or future. And the only plan available is Oracle, People, Ideas & Objects, our user community and their service provider organizations. In the form of the Preliminary Specification.

Oracle is the Premier Tier 1 ERP Provider

What has been difficult to express in the Preliminary Specification is the robust platform it is built upon. Oracle Cloud ERP is the premier tier 1 ERP solution in the marketplace. Which is difficult to understand if you've never seen it in action. Their products, technology and the Redwood interface must be seen. This is to understand that it is People, Ideas & Objects et al purpose to stand on the shoulders of this absolute giant. This URL refers to Oracle’s Best Practice Demo Series. In this series, there are several videos to learn about Oracle Cloud ERP quality, fit and feel. I cannot recommend highly enough that everyone should view "Simplify Your Month-End Close by Automating Joint Venture Management” to learn the details of how comprehensive and high quality Oracle’s Joint Venture Management product is. It is the most comprehensive Joint Venture Management system available today. And I am not aware of any North American producer using it. 

The Preliminary Specification defines seven distinct Organizational Constructs. Our key Organizational Construct is the Joint Operating Committee. This is the organizational structure to deal with Joint Ventures, the cultural method to represent partnership organizations established in oil & gas. When we move the current corporate model culture into alignment with the Joint Operating Committee, everything within the producer and industry changes. Nothing in oil & gas remains consistent with management's operations today. We are aligning the business directly on to the operational and technical cultures of how the industry has operated for 100 years. This is a culture derived from oil & gas operations partnerships everywhere. 

It is our hypothesis that in the 1960s when computers were introduced accounting became one of its uses. Soon after tax, royalty and regulatory environments were established, ERP systems focused on the corporate organization. They had nothing to do with the oil & gas business. A separation between business and technical areas grew and became a source of conflict. This precipitated a lack of communication and two independent islands competing for control. Operations dominated out of necessity and corporate elements were left to satisfy cash demands. That is what we’ve eliminated in the Preliminary Specification by aligning the business to the operations and technical culture. The Operations Management module outlines what and how that will be accomplished.

We use Oracle’s recommended architectural method of “additions” to the base of all Oracle products. This way none of the code between their efforts and ours will cause any difficulties being released into commercial software if there are changes in either environment. Exploiting the full potential and value of object-oriented programming. At the same time I can state unequivocally that both Oracle and People, Ideas & Objects are relational database developers first and foremost. 

Recently Oracle implemented a quarterly update schedule for Oracle Cloud ERP where incremental changes and upgrades are scheduled for release each quarter. People, Ideas & Objects will be participating in this quarterly release schedule for our own updates and have noted an added benefit as a result of the Preliminary Specifications structure benefiting from the Organizational Construct under the title “New Growth Theory.” That we are sharing the “non-rival” costs of the infrastructure of accounting and administration across the North American producer population. Therefore the need for each producer CFO to be heavily involved in these ERP changes each quarter can be reduced to a less onerous task when the industry can plan and implement the upgrades on a shared or non-rival basis. Innovation is incrementally increased through iterative developments. They are not big bang changes unless the organization is challenged by existential threats such as the oil & gas producer organizations are today.

We are not rebuilding an ERP system from scratch to achieve the Preliminary Specification. We are defining and catering for specific oil & gas related software developments needed to deal with oil & gas issues and opportunities today and in the future. Configuring and augmenting Oracle Cloud ERP to do so. Reorganizing the industry to function efficiently and profitably. The Operations Management module combines business, operations and technical groups into one functioning organization using the same data. Establishing the team environment necessary to collaborate within the producer organization and each Joint Operating Committee. This is deemed necessary to move forward in a challenging and difficult future. Where the most dynamic, innovative, accountable and profitable producers are provided with the most profitable means of oil & gas operations, everywhere and always.

Operations Management Module, Part X

 Performance Evaluation

This last sub-section of the Operations Management module brings together an advanced toolset that producers and Joint Operating Committees can use to develop and test new criteria for better performance. The combination of the Analytics & Statistics, Performance Evaluation and Artificial Intelligence module within the Operations Management module is advantageous due to the combination of the financial, operational and technical data and information. This data being the engineered and documented data that is the output of the process of building the Preliminary Specification and establishing the objective and standard qualities necessary for its unimpeachable nature of what is presented and understood by its users.  

Working on the performance aspects of the producer and Joint Operating Committees the user of the Operations Management module doesn’t need to be making decisions that are based on bad data or information. The reliability and understanding of the conclusions made are only as good as its data and the information quality that exists, its consistency and what users believe the data represent. To suggest that Artificial Intelligence will be of any value when the data and information that it uses is questionable, is only the latest iteration of an Information Technology widget as the solution to a business problem. People, Ideas & Objects approach to Artificial Intelligence is fundamentally different. 

As I indicated in the Pro-forma Worksheet section of the Performance Management section of this module. The use of decision making based on factors outside of the framework of the accounting system, which is imposed when using the Pro-forma Worksheet, would lead to incorrect assumptions and hypotheses. This is of particular concern in using the Performance Evaluation section to make the performance based decisions on the actual, factual data but not using the strict interpretation of the financial accounting system and therefore leading to incorrect decisions being made on clean data nonetheless. However taking the SEC’s perspective is not how innovation is developed. New and creative perspectives and ideas need to be developed and understood for their stand alone value in order to see their worth. Once proven in the Performance Evaluation section, testing the theory in the Pro-forma Worksheet would then provide its business understanding and implications. 

This is the point of divergence between what the investors believe they see in oil & gas, and what it is the officers and directors are producing. The SEC sets out through its coordination with accounting standards bodies and the audit firms to provide a generic understanding of financial accounting in North America. Such that when an investor analyzes an annual report from company A in industry B, they’re able to use the same understanding and apply it for comparison to company C in industry D. They then will be able to make the appropriate decision as to where to invest their money for the optimum return. When company A in industry B has gone off the cliff in terms of the generic understanding of financial accounting, have begun using their own criteria to make their performance exaggerated, then investors appropriately feel betrayed. 

The purpose for this use of a standardized reporting system is substantial. It eliminates the need for each and every investor to spend the time to review each and every document of each potential investment they consider. When they understand the general framework of how the North American reporting system operates, they can defer to it and not have to spend the time reviewing the details at great cost to themselves and at the same time incur an unacceptable cost for the firm to be catering to each and every potential investor's question, their concerns and needs. Markets operate on information. Information in the form of price, when the understanding of how that price is generated then the market is able to operate efficiently. 

It is the implications of the changes that are being made within the Pro-forma Worksheet that need to be considered in all cases. It is doubly so when the mixture of many changes being made may have an overall negative effect on earnings that need to be avoided. Or the changes that generate any detrimental consequences need to be removed. When producers have the ability to see what their investors in oil & gas understand. Adjust their decision making to ensure profitability everywhere and always, the consequences of those decisions being made will be able to avoid future difficulties and errors with their investors. 

Analytics & Statistics, Performance Evaluation Modules

These two modules consist of the tools that are able to provide their users with the ability to perform statistical analysis on the data and information they’re authorized to access in their domain. The Performance Evaluation module is for the Joint Operating Committee and Analytics & Statistics provide the same tools for the producer firm as a whole. The difference is the domain of the data and information is constrained in the case of the Performance Evaluation to the members of the Joint Operating Committee.

The means to build a library of tools to use personally, as a team, a Joint Operating Committee or producer firm is available in each of these modules. The use and reuse of these formulas will assist in providing accuracy, understanding and value to each organization. The domain of an individual's data would be prescribed by their authority and responsibility within the organization of concern, and managed by the Oracle Autonomous Database role definitions.

Artificial Intelligence

ChatGPT has demonstrated the concerns that I have about Artificial Intelligence and its value. Producer firms have been using Artificial Intelligence in their organizations for up to three years now and I am unable to notice any marketable increase in their performance. I often tell people who seem so enamored with AI, the ones that were all over Facebook, that they should go write a software program. Find out how difficult it is to actually conduct anything serious in technology and then reconcile their vision of AI with that reality. 

Our approach in the Artificial Intelligence module is one of cost mitigation in this initial phase of the introduction of the technology. The costs and resource uptake involved in Artificial Intelligence is high. As with innovation the costs need to be controlled and monitored effectively with the appropriate organizational means. In People, Ideas & Objects Preliminary Specification AI is a shared and shareable resource due to its high development costs and the demand for high cost, quality resources that may in fact be displaced from productive activities. If each producer sets out to incur these costs on their own we’ll find the other factor consistent in today’s AI implementations. There are currently only 1% of these initiatives that are considered successful. 

Separate and distinct from the Analytics & Statistics module. Artificial Intelligence in the Preliminary Specification is a shared and shareable resource that is available to the Producers and Joint Operating Committees to use. Based on the development of a packaged, proven number of algorithms that are tried and tested before availability. Artificial Intelligence is potentially a powerful tool that can add significant value to a science based industry such as oil & gas. However, each and every producer throwing extensive resources at this unproven technology will, I believe, maintain its unproven nature. Ensuring that it never will become an effective tool when it fails to deliver any value at significant cost. With the high cost of AI and its success rate below 1%, sharing the costs of the infrastructure of these non-competitive resources, producers will be able to deploy it as they discern its value. 

Therefore if we provide a means in which the contributions of a service provider were available, where collaboration across the industry as to the application and use of the AI algorithms, what are the possible enhancements etc. The need to control the costs and share in its success / failure can be managed once across the industry instead of at each individual producer. When and if the success and value of the AI resources should break out into a meaningful and highly valuable discipline the industry will be able to take advantage of what it has learned in this initial phase, turn it into a competitive advantage and build from there the individual capabilities in-house what is deemed necessary. If it is deemed a success there would be an initial infrastructure in place from the collaborations and markets established through these service providers and therefore something in which to build upon. Today there appears to be only science fiction. 

There have been too many times that we’ve been led to believe that some whiz bang IT product was going to make the world spin to the left. AI appears to be today's approach. People, Ideas & Objects approach is to initialize the technology within the science and technology based industry of oil & gas, control its costs through the Organizational Construct of making it a non-rival cost, or part of Professor Paul Romer’s “New Growth Theory.”   

Operations Management Conclusion

Producers within oil & gas are faced with an interesting dichotomy. One in which profitable operations are the only acceptable means of production everywhere and always from this point forward. Much has been wasted in the past decades and the capital structures of the producers are unsupported. Damage and destruction is extensive and only a comprehensive rebuild of the industry and its secondary industry based on the Preliminary Specification is able to resolve the existential organizational issues facing the producer officers and directors. Continuation of “muddling through” does not appear to be capable of dealing with these issues or resolving the most difficult future the industry has ever faced. The other side of this dichotomy of providing profitable oil & gas operations everywhere and always is that the consumer needs to be provided with reliable, secure, abundant and affordable energy resources. With the objective of North American energy independence being fulfilled for the remainder of the 21st century. With 10 to 25 thousand man hours of equivalent manpower contained in each barrel of oil equivalent. The supply of this resource is a necessity to our civilization.

We’re not going to get there with the chronically unprofitable production of the past four decades. The investors have bowed out and the only source of capital large enough to fulfill the task to fund these capital demands is the profitability of the industry. In other words the oil & gas business in North America is going to have to be operated as a going concern. Only the Preliminary Specification has the plan in which to make that happen. We have no right to pass an industry on to the next generation until we can prove that we’ve produced the resource responsibly. Which means all of it was produced profitably. Each barrel of oil equivalent should be profitable from the “real” sense from this point forward as the resource is irreplaceable and is the blood of our economy. If we lose the script now it would not be difficult to foresee foreign sources of oil & gas demanding North America to play second fiddle to China, Russia or others in terms of our supply demands? 

People, Ideas & Objects Operations Management module is designed to provide producers and Joint Operating Committees with a means to monitor and control their operation. Establishing a sound base of data and information necessary to ensure that decisions and actions are conducted with precision and profitability in mind. Where the financial, operational and technical data of the producer or property are available for use. Technologies involved in the Internet of Things are deployed and operational to the advantage of these users. And resources are deployed based on the budgets and plans that are generated and set through this module. The Operations Management module is the aggregation of and accumulation of the efforts that are being undertaken in the Preliminary Specifications other 13 modules and presented in a format where the information can be used effectively for profitable decision making.

Operations Management Module, Part IX

Conclusion to the Research & Capabilities, and Knowledge & Learning modules

These two unique modules are designed to deal with the distinct competitive advantage of the producer firms through what can only be seen as the most difficult and challenging period of oil & gas history that begins today through to 2050. To establish a footing of profitability everywhere and always will be a challenging transition when the business discipline takes center stage in the decision making process. And it will be there that better, actual, factual, standardized and objective information in terms of comprehensive financial statements and other information will be provided for each Joint Operating Committee by the Preliminary Specification enabling those decisions to be made through this Operations Management module. When there is none of this business information available these resources have resorted to their own means of determining what the situation is and the status of the industry today is the consequence. 

To suggest this occurred by accident would be incorrect. There is no doubt in my mind that the lack of any funding of even reasonable levels to the ERP providers in oil & gas was deliberate. The self-serving means of those officers and directors who have chosen not to be accountable for their actions. Discovered they were best able to attain their lofty objective through purposely inadequate ERP systems, disorganization, their excuses, lies and viable scapegoats. When was the last time officers and directors took responsibility for any aspect of their authority or the business they’re responsible for? They’ll state that “oil & gas is such a complex industry,” hide the details, confuse the point and claim they don’t have the data, which as stated they don’t. Convenient and easy. 

In 2015 their investors said enough and ceased to continue funding the industry any further. An industry that was and is incapable of supporting itself through “real” profitable operations. An industry where officers and directors are satisfied personally with what is generated in terms of cash flow from investors prior investments, keeping them enthused for another year. They’ve lost the common sense of what it is that a business should do and how it would do it. Establishing corporate objectives such as “building balance sheets” and “putting cash in the ground” as reflections of how obscure and indecent their lunacy has become. 

Nonetheless the industry is in a state where its issues throughout North America are serious and demand resolution. The seriousness of the difficulties we face is not only the volume of issues, but their consequences. I’ll first put an apt quote from Professor Richard Langlois’ paper “Transaction Cost Economics in Real Time”

F.A. Hayek (1945, p. 523) once wrote that 'economic problems arise always and only in consequence of change.' My argument is the flip-side: as change diminishes, economic problems recede. Specifically, as learning takes place within a stable environment, transaction costs diminish. As Carl Dahlman (1979) points out, all transaction costs are at base information costs. And, with time and learning, contracting parties gain information about one another's behavior. More importantly, the transacting parties will with time develop or hit upon institutional arrangements that mitigate the sources of transaction costs. p. 104

• The protracted oil & gas downturn, covid and other concerns leaving inappropriate staffing levels available in the industry. 
• The inventories of work-in-progress within the industry and producers are shallow and will demand excess attention. Issues such as shales decline curve and the cannibalization of the processes that support normal operations. What capacity is the industry capable of operating at?
• Capacities and capabilities in the service industry are a severe detriment to the needs of the producers in the normal course of business. Service industry representatives are not motivated to rebuild the infrastructure that producers destroyed during the past decades and most particularly during the COVID epidemic. 
• The service industry will not rebuild their industry to have it ruined again by producers. Their thinking is if the producers had some skin in the game then they’ll think twice about destroying that industry again. Therefore the producers broke it, the producers can fix it. Oil & gas producers are the primary industry and all others participate in secondary or tertiary industries. 
• Rebuilding, refurbishing, reclamation and infrastructure need to be undertaken on a scale never done before. Just to maintain the status quo production. The status quo is unacceptable to the most powerful economy in the world, and if we become dependent on foreign sources of energy we may no longer be able to claim the title of most powerful economy. 

The serious nature of the consequences of continued inaction on behalf of the officers and directors will have a severe impact on all those involved in North American society. The officers and directors are fine and they thank you for asking. They are oblivious, uncaring and fundamentally inactive. “Mudding through” and “doing nothing” are the only strategy and tactic I’ve ever seen from this bunch. They can sit high above and continue to criticize the Preliminary Specification because it was rude, or it didn’t have that feature or they didn’t like that one and wait for exactly what it is they’re thinking of when they’re “muddling through.”

However we are undertaking a comprehensive rebuild on the basis of the vision of the Preliminary Specification. We won’t be compromising and dealing with them in much detail. We’ll ignore what we feel are their cultural influences and establish the performance based culture that we are seeking. A comprehensive rebuild at this time will be less onerous, it will take far less time than attempting to deal with their compromises and culture. And our user community will be far more successful building from the ground up in terms of breaking away from the losing traditions of today's oil & gas producer. 

I’ll reiterate that the Intellectual Property that underlies the Preliminary Specification is comprehensive. Any effort by the producer officers and directors to circumvent it in any way our IP will be dealt with. They are unlicensed, unauthorized and warned not to use it. Other software companies whose revenues are dependent upon their Intellectual Property respect other software vendors Intellectual Property. Therefore we feel the appropriate level of assurance that none of our IP will be used by them. The implications of this are broad and consequential to the producer firms as they are therefore unable to breach what we have set out in any attempt that they may make to establish alternative ERP systems. As indicated earlier in this conclusion to the Research & Capabilities and Knowledge & Learning modules. Producer officers and directors are probably satisfied with that as it reinforces their method of operation in somewhat of a permanent state. Or until someone makes the decision for them to build the Preliminary Specification with our Profitable Production Rights initiative. 

Finishing off the Research & Capabilities and Knowledge & Learning modules we have a quotation from Professor Richard Langlois that builds off of Harvard Professor Carliss Baldwin’s “Knowledge begets Capabilities, and Capabilities beget Action.” There is also the quotation from Professor Richardson that capabilities are the “Knowledge, Experience and Skills” (1972, p. 888) to which we at People, Ideas & Objects have added “Ideas.” And this next quote from Professor Langlois helps to bring the clarity we need.

In a metaphoric sense, at least, the capabilities or the organization are more than the sum (whatever that means) of the 'skill' of the firm's physical capital, there is also the matter of organization. How the firm is organized - how the routines of the humans and machines are linked together - is also part of a firm's capabilities. Indeed, 'skills, organization, and technology are intimately intertwined in a functioning routine, and it is difficult to say exactly where one aspect ends and another begins' (Nelson and Winter, 1982, p. 104). p. 106

Operations Management Module, Part VIII

 Knowledge & Learning

We should begin the discussion of the Knowledge & Learning module with an appropriate quote from Professor Richard N. Langlois in “Transaction Cost Economics in Real Time.”

In this sense, the ability of a large organization to coordinate the implementation of an innovation, which is clearly an advantage in some situations, may be a disadvantage in other ways. Coordination means getting everyone on the same wavelength. But the variation that drives an evolutionary learning system depends on people being on different wavelengths - it depends, in effect, on out-breeding. This is something much more difficult to achieve in a large organization than in a disintegrated system. Indeed, as Cohen and Levinthal (1990a, p. 132) point out, an organization experiencing rapid change ought in effect to emulate a market in its ability to expose to the environment a broad range of knowledge gathering 'receptors'. p. 120

In terms of Organizational Constructs the Preliminary Specifications Knowledge & Learning module relies heavily on the Joint Operating Committee, specialization and the division of labor, Intellectual Property, Innovation and Markets. Five out of the seven shows a high dependence on cultural influences. This tells us that the implementation of this module will be difficult as the cultural forces that exist will resist these changes. To which we'll apply our standard approach of ignoring them as we’re rebuilding the industry. And secondly the form of the module will have strong cultural support once what exists is forcefully ignored. 

Whereas the Research & Capabilities module is a producer-facing module that captures and documents the distinct competitive advantages of the firm's earth science and engineering capacities and capabilities. The Knowledge & Learning module is a Joint Operating Committee module designed to manage the specific properties organizational needs. 

People, Ideas & Objects have used specialization and the division of labor throughout the Preliminary Specification as an Organizational Construct to focus the producer and Joint Operating Committees organizations on what they do best. These specializations are broad and diverse throughout and include allowing computers to just store and process information while having humans do what humans do best, which is comprehensive and not just shuffling data about. We have specialized the process of innovations development within the producer organization to ensure they’re constrained, focused and their costs are controlled with results and deliverables. The Knowledge & Learning module specializes in the Joint Operating Committees ability to take the producer firms that are working interest owners of that property. And select from each of those firms what specific capabilities and innovations are available, at what capacities they’ll be needed by that property and for what role they’re required. Organizing them and deploying them to ensure that their field objectives are attained.

It should be noted here that the information, the capabilities that populate the Knowledge & Learning module for each Joint Operating Committee. Is not the full complement of what the producer has developed in terms of their capabilities. Each of the producer's capabilities when developed and made available will be selected or tagged with the type of capability and its application. Therefore a capability involved in multilateral fracing will not have been populated to a producing zone, operation type, region, etc to the Knowledge & Learning module of a Joint Operating Committee without those characteristics. It will only receive those producer capabilities for the purpose that they are undertaking. 

It is this process of specialization in the earth science and engineering resources that will cause producers to incur uncommercial operations under the current management. Having the full breadth of skills in house will demand too extensive of an infrastructure and resource uptake for producers to remain viable. Particularly during the era of the looming constraints of these resources. People, Ideas & Objects have therefore eliminated the “operator” designation and created the “pooling concept” in order to resolve these resource and specialization issues. This reorganization is necessary as the demand for these resources is subject to a number of changes that are outside the producers control. The current brain trust is retiring and the intake from the universities are not replacing them quickly enough. Higher throughput needed for energy independence and the demand for incremental earth science and engineering effort increases with each barrel of oil produced. A method is necessary to deal with this issue and People, Ideas & Objects are using the only viable alternative to elevate an organizations throughput through specialization and the division of labor.  

The question then becomes what amount is charged to the Joint Operating Committee for these resources hourly charges through our Work Order system. What we have developed is a unique factor that represents the value of each individual producer's performance, innovativeness and value in terms of their earth science and engineering capacities and capabilities. Revenue Per Employee will be used to determine the charge out rate of any of these individuals who will work at a Joint Operating Committee through the Work Order system. A senior engineer will be charged at x% of Revenue Per Employee and a junior engineer will be charged out at y% of Revenue Per Employee. The diversity in calculating the Revenue Per Employee numbers throughout the North American producer population provides for a remarkable variance. It is the only factor that I can point to that differentiates the quality of the producer in terms of performance. Any overt attempt to increase the producers Revenue Per Employee factor would only create incremental shareholder value and spark a competitiveness within the industry to increase this factor. A floor price for these resources would have to be established for the start-up and small producers due to their initial limited production.

Preparation and development of the specific capabilities of the producer, and most specifically their innovations. Are processes that are controlled and managed within the Research & Capabilities module. Seeking to reduce the costs of innovation by controlling, testing and developing them before they’re deployed too soon. And to ensure that the producer organization is not consumed by too many similar innovations being conducted repeatedly throughout their organization. Once the innovative procedures are documented in the Research & Capabilities and are ready to be deployed. It is through their availability to the Joint Operating Committees that each of the properties working interest producers will be able to access those capabilities and select them to be deployed. It is the Knowledge & Learning module that is the method that innovations, capacities and capabilities are deployed within the property. Using the fully tested and documented processes which each of the Joint Operating Committees producers have established and made available for use.

What may appear to be freewheeling markets to some of the existing officers and directors of the producers today is nothing more than the difference between using the market to provide for what it is the producers need. As opposed to what it is that is tightly controlled within the producer organizations under the “operator” designation today. Freewheeling markets may be an apt description of innovative developments as they are perceived as being messy. However they should not be considered to be uncontrolled in the Preliminary Specification. I would suggest that in the Knowledge & Learning module the ability to maintain high levels of operational control is available through these interfaces. In the Operations Management module we see many aspects of the operations that are not currently provided. The data and information of the financial, operational and technical domains have all been engineered in the People, Ideas & Objects et al software development process to ensure their high levels of integrity and accuracy. The level of documentation of capacities and capabilities are done for a variety of different reasons and the purposes in doing so are comprehensive. The ability to deploy the producer's resources through standardized and agreed methods of what the program will consist of once the selection in the Knowledge & Learning module has been made. And lastly the control of the operation through the Work Order, AFE, Job Order and other means. This will appear messy at times, however reliance on the process will ensure the outcome.

Principally People, Ideas & Objects believe that higher commodity prices are a reallocation of capital that will be necessary to fund the innovations and capital deployment for that very long list of capital projects that need to be undertaken in North America. “Muddle through” doesn’t appear to have been able to identify they have a problem and the firm's officers and directors continue to sail through clear blue waters, or so it would seem. Conversely the Preliminary Specifications price maker strategy is designed to ensure that the actual, factual costs of oil & gas exploration and production are recorded within each Joint Operating Committee to ensure that they remain profitable at all times. If they are no longer profitable, these properties are shut-in so that they’ll generate a null operation, no profit but also no loss. At which point the Joint Operating Committee can turn to the Knowledge & Learning module to determine what is the best course of action that is available to remedy its lack of profitability, and return it to profitable production as soon as possible. In an environment of ever increasing costs the accuracy of actual, factual, standardized and objective accounting information will be critical.

A question that I would ask at this point is whom do you want to participate as partners in Joint Operating Committees. There has been an interesting trend in oil & gas of renewal over the past decades. What was in the 1970s and 1980s a landscape dominated by large corporations quickly saw independent and start-up producers become the dynamic growth arena in the 1990s. Today many of the producers from the 1980s and 1990s that set out the independent producers movement in the oil & gas industry are no longer with us. The past few years has seen high levels of consolidation being the means in which to survive the difficulties in oil & gas leaving even fewer producers than before. Consolidation has been highly beneficial for the clean energy industry but not much else. Now that officers and directors realize their misdirection into other industries was a mistake, will they ask for forgiveness? Will that allow us to trust them that much more? What we believe the Joint Operating Committees would best be represented by would be the start-up and small producers having the opportunity to participate. They are the ones that have driven the change in the industry and it is the change in the industry that is most needed today. Innovation demands that we expand the reserves base, increase revenues and reduce costs. What is it that we’ve seen out of the consolidated producers is foolishness, misguided adventures and nothing much else.

Operations Management Module, Part VII

 Resource Management

Deployment of the producers and Joint Operating Committees engineering and geological resources towards their chosen strategies and tactics is a requirement People, Ideas & Objects propose for the Operations Management module. Whether it be in any one of the three main subsections of this module, those being Producer / JOC Operations, Performance Management or Resource Management, how and where these people are deployed and their activities will be able to be managed, monitored and controlled through this module. This is the purpose of the Operations Management module of the Preliminary Specification. We are not replacing what may exist in the marketplace, we are rebuilding the oil & gas industry on the basis of profitability and performance. Therefore what is done today should be seen as redundant.

The Operations Management module is a senior management Console enabling producers and Joint Operating Committees to manage their operations. Having the financial, operational and technical data and information of the producer and its Joint Operating Committees is appropriately collected, stored and available through these systems. Although much is discussed in the marketplace about data and information and their respective values. Little is discussed about the disparity of the sources within these organizations, the quality of the data or how it’s used and if it’s being managed appropriately. The Preliminary Specification, overall, should be seen as the opportunity that it is to begin the process of objectively standardizing, organizing and implementing the data and information of these organizations. Only then could any value be discerned from these sources. After all, who knows the officers and directors may have been making excellent decisions, they just were using really bad data.

The tools People, Ideas & Objects, our user community and their service provider organizations have included and developed in the Operations Management module of the Preliminary Specification, such as the Work Order, AFE, Job Order and others. Are made available to invoke the authority and fulfill management's responsibilities. These form the basis of the Operations Management modules' purpose. To consolidate the interface of information and tools necessary to effectively operate their domain of responsibility, to document these and ensure compliance and reporting to regulatory authorities is handled.

It’s important at some point in this discussion that we reiterate the two distinct types of information that are the domain of the producer and the Joint Operating Committee. As we’ve noted elsewhere in the Preliminary Specification the producer data and information is predominately proprietary and confidential to all those outside of the producer firm and tightly controlled within the firm. The Joint Operating Committee contains information that is predominantly of a public nature and any of its proprietary information is shared between the producer participants of that property. The use of Oracle Cloud ERP is able to provide the assurance that the architecture of how all of this information and data is stored and shared will be able to meet these requirements and comply with North American regulatory requirements. Security levels are of the highest in terms of Oracle’s capabilities and capacities in terms of its Oracle Autonomous Database. Their Java security model establishes it as the most secure development environment available as nothing is able to be run outside the Java Virtual Machine. Part of our user community's tasks is to define a hierarchy of roles and responsibilities that define access privileges to the data. Then producers are able to assign the appropriate roles to the appropriately authorized individuals to read / write those data elements. Compared to other vendors these security features may seem redundant and more trouble than they’re worth, however they provide good coverage. Oracle’s commitment to security continues as their firm uses Oracle products internally in a practice known as “eating their own dog food.” Also please review the Security & Access Control module of the Preliminary Specification and the unique attributes we introduce and resolve there.

Research & Capabilities

The Research & Capabilities module of the Preliminary Specification is concerned with capturing and documenting the producer firms explicit knowledge of their earth science and engineering capabilities and capacities. Their development and the control over the innovative process, of which the Preliminary Specification has two primary innovative processes being managed. With deep connections through to the service industry, the collaborative efforts throughout the industry and its tertiary industries are able to advance the science and technology of the oil & gas business iteratively. The interface between the Research & Capabilities and Resource Marketplace modules establishes these connections in order to fulfill the various roles and responsibilities for the completion of any initiatives. As a science based industry whose demands will become ever more complex and difficult, it will be the innovative advancement of that science and its interplay between the industries innovative technological development that in turn push the science forward. 

Control of this process of innovation is a necessity as the propensity to disallow innovation within the firm is done to ensure it does not become a free for all. Where experiments are tried by various different groups that may have success or not, only to have them tried again and again each and every year. A highly wasteful, unproductive, un-innovative and costly undertaking. The ability to fully develop, test and deploy on a sample basis the innovations that are developed, to have those well documented in the Research & Capabilities module in order for people to see what the state of affairs are in terms of the innovations development and its pathways taken, as innovativeness is defined by its process of discovery and failure. To have the explicit knowledge captured and where to turn to acquire the tacit knowledge to implement the innovation provides producers with the ability to stop much of the wasteful “innovative approaches” being undertaken in North America today. What we’ve learned is that innovation is a defined process that can be replicated throughout the organization. It must be controlled and managed to ensure that costs are not unnecessarily high. Innovations results can best be realized through the sharing of ideas through a science based business that collaborates to move the science forward.

Capturing the explicit knowledge can be, and should be as robust as possible. Providing the information and knowledge of who and where to have the what and how or “know how” of tacit knowledge deployed. Acquisition of the Intellectual Property through the Research & Capabilities module is an opportunity that must also be undertaken. People, Ideas & Objects seven organizational constructs have Intellectual Property as one of the foundations of how the industry moves forward innovatively and otherwise. Without Intellectual Property being appropriately managed, no one is going to be able to persist to bring about the developments of new ideas when they take so much time and effort and are subject to so much risk of having these poached in the marketplace. Conversely producers and Joint Operating Committees can mitigate the high costs of innovations through Intellectual Properties assertion that no derivative works are authorized without a license. Therefore unnecessary duplication of effort is eliminated in the marketplace. Yet at the same time the ideas are known and others can learn from them. 

It is here within the Research & Capabilities and Knowledge & Learning modules that the producer or Joint Operating Committee can source and organize the team they need for the task at hand. Using the search facilities within their own firm, the Joint Operating Committee, the firms they’re associated with or the larger market of producer and consulting firms, depending on the publication definitions of the producer. Producers will be able to acquire the resources they need to ensure the task is completed through the Preliminary Specifications Work Order. With the Preliminary Specification we are using specialization and the division of labor to resolve the current and anticipated resource shortfall in engineering and geology. However, we also believe that with this specialized diversity of resources, the specialized demands would put the producer firm beyond the point of commercially viable operations if they were to attempt to maintain them internally. We have therefore assumed the “operator” designation of one producer within a Joint Operating Committee, providing all the resources to the Joint Operating Committee is unworkable. And therefore People, Ideas & Objects established the “pooling concept” where all participants in the Joint Operating Committee commit their unique, specialized resources to the property and any shortfall is fulfilled by the market of consulting firms or other producers. Establishing a second source of revenue for each of the producer firms that generates revenue as a means to offset the high(er) costs of maintaining these engineering and earth science capacities and capabilities. Management of this entire process is the role undertaken by the Work Order of People, Ideas & Objects. 

Operations Management Module, Part VI

 Performance Management

To resolve many of the difficulties that are present in oil & gas today. It is necessary to add financial performance based on the actual, factual accounting information of the property to the operational and technical data that’s aggregated within this Operations Management module. Then delivering it to those decision makers within the producer firms and Joint Operating Committees. To be able to rely on this information as the unimpeachable truth of the performance of the property will add clarity and precision to the decisions being made in the industry. With the implementation of the Internet of Things (IoT), as discussed earlier in this module, monitoring and controlling the operation will be considerably more remote. Therefore, based on the decisions made from these three distinct sources of information it will make the producers dynamic in ways that were never imagined before. 

Partnership Accounting

There are two distinct accounting based modules within the Preliminary Specification. Partnership Accounting and the Accounting Voucher work to report for the producers and Joint Operating Committees, and to capture the data and transactions. The two critical aspects that differentiate the accounting between what is done today and what is proposed in the Preliminary Specification is that financial statements are provided for each and every Joint Operating Committee and overhead costs have been converted to variable as opposed to fixed. These financial statements are based on the actual costs of the property and include an allocation of capital in the form of depletion that provides for the property to compete for capital in the North American capital markets. Secondly the overhead is the actual overhead that’s incurred by the property. There are no overhead allowances as the Preliminary Specification has converted the producers' fixed costs of accounting and administrative capacities and capabilities into the industries variable costs of accounting and administrative capabilities and capacities. Variable based on profitable production. Providing the producer with the ability to shut-in any unprofitable production, as determined by the detailed financial statements for the property, which if it is shut-in it will incur a null operation, no profit but also no loss, to maximize their corporate profitability and achieve the many other monetary benefits.

What may become obvious to many readers is that this is a different environment for the accounting resources to be occupied in. We no longer just record transactions and report on them. If we go back to the beginning of this module's description we find that the “pull of data” and “push of instruction” from the Internet of Things will have severe implications on the accounting of oil & gas. The volume of data will be tidal waves larger than what it has been at any point in the history of the industry. If we’re to obtain the benefits of automation and turn the computers to begin working for us then we’ll need to be grasping this opportunity on a holistic scale and implementing it broadly. Not everyone fits into this redefinition, however the future of the dynamic, innovative, accountable and profitable oil & gas industry depends upon it. 

It is this vision that can not be left to spontaneously appear. Spontaneous order has ceased to function in a world where software and global markets operate. The Information Technology infrastructure exists and is incumbent upon businesses and industries to ensure that they’re the ones that implement and realize the benefits. Otherwise others who are capable of operating in this environment will be the ones that leverage the opportunity to their benefit. The officers and directors' obstinance has already cost them the overall Intellectual Property and ERP software arena to People, Ideas & Objects and our user community. As we claim we are the only ones capable of providing North American producers with the most profitable means of oil & gas operations. How else could anyone do so? It would take, as I did, a decade of research to figure out another method to do so, and whomever would have the additional difficulty of having to avoid the Intellectual Property that exists within the Preliminary Specification. The fun part would come about when the officers and directors obstinance takes hold for another dozen years or more to be convinced they need the new technology.

Financial Statements

For purposes of the Operations Management module the producer will be able to view the makeup of their organization in any perspective they need. Having the ability to aggregate the specific Joint Operating Committees they desire to get a more holistic view of the larger asset to evaluate. These Financial Statements will enable the user to analyze the costs incurred against what was planned and expected in their operational and technical sources of information. Reconciliation of these three sources of data and information may lead to previously unknown unknowns. 

While marginal commodity prices may occur these financial statements would show the progression towards any unprofitable operations. It therefore provides a window for the Joint Operating Committees where the threshold of potentially falling into a period of non-production due to the lack of any commercial operations begins. The early foresight provided will enable those to look at their costs and determine with these three rich sources of data what an appropriate and innovative plan may be when and if the property is shut-in. To return it to profitable production by increasing its production, reducing its costs or enhancing its reserves. Limiting the time in which the property is shut-in and providing the time to more effectively plan and consider what may be the most effective method to return it to production. 

Pro-forma Worksheet

Having the ability to sketch out a what-if scenario based on the actual historical situation is the general purpose of any pro-forma worksheet. “What-if we changed this” and would that make a material enough change to make the property commercially viable again? Will provide historical data that sets the scenario in a factual basis that will ensure that guessing is eliminated. The implication of any changes to the financial statements can at times be difficult to understand the full scope. This is due to the pro-forma following the accounting methodology as set out in the preparation of the financial statements, the implementation of any pro-forma changes will follow and show the full implications of these accounting methods and therefore mitigate any surprises that the accounting world springs onto its users. 

The breadth and depth of the accounting information provided through the Partnership Accounting module is comprehensive. Whether it is the Oracle Cloud ERP related information or what People, Ideas & Objects have built in to accommodate oil & gas. This information is available to authorized users of the Operations Management module. It is structured in a way to provide the performance of the producer firm and drilled down to the individual Joint Operating Committees or any combination of those. I hesitate to suggest that this information can be catered to in revised formats that meet any specific user's needs. That runs counter to its purpose. We are striving to represent the financial performance from the perspective of the capital markets. To have ad-hoc reporting would be of an advantage if it does not distort the financial performance to make things appear better than they actually are. It is therefore necessary that the Operations Management modules users will have their enhancements addressed by our user community to ensure they’ve implemented and prepared the software and services they wish to see but also to ensure that the financial integrity is maintained in any ad-hoc reporting. This will ensure the capital markets focus is the priority of the properties financial performance.

Accounting Voucher

The second of the two pure accounting modules of the Preliminary Specification, the Accounting Voucher brings about several new dynamics into the oil & gas industries accounting. Introducing the Accounting Voucher as an encapsulated document that holds the information that supports transactional information captured, approved and recorded in the accounting system of the producer or Joint Operating Committee. To deal with the resource constraints in the earth science and engineering disciplines People, Ideas & Objects have used a variety of methods to resolve the issue. These are listed in the Organizational Construct section of our wiki. The predominant Organizational Construct affecting this change in the Accounting Voucher is specialization and the division of labor. In order to resolve any technical resource shortfall, specialization and the division of labor are the only proven method to resolve organizational productivity. Therefore each producer will need to be contributing their highly specialized technical resources to the Joint Operating Committee in order to provide for the full set of necessary resources. These may also be augmented through outside consultants who are specializing in the lower level skills of these disciplines. Allowing for producers to specialize on their distinct competitive advantage. 

Therefore what People, Ideas & Objects have done in the Accounting Voucher is provide a “role” in Oracle Cloud ERP which provides for the authorization necessary to incur costs on behalf of the producer or Joint Operating Committee. And therefore within a Joint Operating Committee there may be multiple technical resources that have authorized expenditure authority on their behalf. Therefore an Accounting Voucher in this instance is a Joint Operating Committee based voucher with overall budgetary authorization granted through the AFE process. However multiple firms may have this secondary or tertiary authorization, within the scope of the AFE to authorize specific expenditures to be purchased and payments authorized. That Accounting Voucher is therefore part of each of the Accounting systems of the working interest owners of the Joint Operating Committee. 

The Work Order mentioned earlier is also an Accounting Voucher that has been modified and enhanced to conduct processes in generic ways that fit the described purpose. As it is incurring costs and allocating them in either of the two scenarios of its operation, it has to inherit the capabilities of the Accounting Voucher first and foremost. Then our developers will, at our user communities direction, build the necessary infrastructure to meet the needs as defined to instill the Work Order as a permanent industry wide Accounting Voucher Template for use to manage their costs. 

Data, Information and Performance

If we could step back for a moment and ask ourselves how much time, and more importantly, how much frustration is consumed in the process of collecting data and information, moving it from one location to another, interpreting and recalculating it which is conducted on a daily basis. Why are we still doing this and what can we do to stop this financial drain that no one can support continuing? Would we be able to isolate the actual, factual information necessary, store that data in one location and have the system interpret it in the manner necessary for each of its users. Relational Database theory is designed for this purpose. Does the potential explosion of data as a result of the oncoming identified technologies demand we look at these issues and address them? The development of the Preliminary Specification, our user community and the reorganization of the administrative and accounting resources into their service provider organizations brings about this opportunity to set the foundation for realizing a more constructive basis of understanding the producer firm. And possibly the most valuable aspect of this information change for producers would be the quality of the decisions being made are more precise, reliable and factual. 

There is one more critical aspect to the reorganization of the data and information that needs to be discussed and that is the performance of the producer firm. How does a producer accelerate their performance, their trajectory and their velocity in terms of throughput? Would clean data and information, that was the foundation of the industry, standardized and objective, where everyone knew and understood the origins and its purpose accelerate the producers performance and throughput?

Or is “muddle through,” “do nothing,” apparently knowing and understanding nothing appropriate for the next generation of oil & gas officers and directors. They have their model and we should understand what that is now. We’ve seen them embrace Artificial Intelligence, digital twins and I can guarantee the next three buzz words coming out of the Information Technology industry will be immediately heralded as “the savior of the industry that’s already providing huge gains in performance.” Yes, it is that bad. When do we address this, the Preliminary Specification is the time in which to do so.

Material Balance Report

Another implementation of the Accounting Voucher is the Material Balance Report which is a comprehensive approach to the reporting and balancing of production through to its ultimate disposition. The Material Balance Report is an Accounting Voucher Template that is augmented to deal with a Joint Operating Committees unique needs. And then saved as its own specific Accounting Voucher Template to be reused each month. As changes occur and additional production, facilities or dispositions are added to the specific Accounting Voucher its Template is updated to accommodate those changes for that and subsequent months.  

The key overall objective of the Material Balance Report is to achieve the reconciliation of the oil & gas reporting volumes on the continent in unimpeachable form. It is at that point that we have the basis in which to automate the subsequent processes throughout their production months lifecycle. Whether that is production, accounting, administration, marketing, regulatory reporting or royalties. These are all subsequently dependent on the data and information that is derived in some way from the industry standard Material Balance Report. 

Undertaking this from the global perspective of an industry initiative is possible, valuable and necessary. The costs are too great for one firm and the net benefit is not the continental reconciliation as the base of automation. Again, this may be conceived as being too ambitious overall. However it can be done and done far easier than it sounds. In 1994 the Alberta government introduced their Royalty Simplification system that reconciled the entire province's monthly volumetric natural gas and liquids production on this basis. To the satisfaction where the government was confident enough to assess royalty shortfalls based on volumetric reporting anomalies. What could be done three decades later is unknown, however improvement is assumed. To not undertake this will leave the industry at the behest of manual processes that consume human resources in redundant processes that should be deemed unnecessary. These people are needed in the area of making the appropriate decisions as to where and what needs to be done to earn profitability. 

Production

There is an abundance of opportunities in terms of combining, comparing and reconciling the three sources of data and information that producers and Joint Operating Committees are dependent upon. Financial, technical and operational sources that are unimpeachable is a lofty objective, however one that is necessary to base the accuracy of future decisions upon. To be consumed with data in the future may be the operative word for the unprepared producers. If we do not spend the time to organize and ensure that the data and information we are using and preparing is of this high quality, then it’s a simple manner that’s well known by most of “garbage in, garbage out.” Decisions need to be made at a scale that will be logarithmic to what’s done today. These are the areas that people will be spending their time. If we are in an endless paper chase looking for the source of the actual data, that will be the eventual outcome of the current officers and directors' obstinance. These may be the two possible scenarios that people may be pursuing in the future oil & gas. An endless paper chase, or leaving the processing and storage to the computers and we’ll make decisions based on the understanding that everyone in industry participated in building the Preliminary Specification and understand what the sources and disposition of the data are.

Production data is the most interesting challenge and we have set out to engineer the appropriate solution in the form of the Material Balance Report of the Preliminary Specification. The ability to balance the Joint Operating Committees volumetric activity, gathering, processing facilities, pipeline, tank car or truck deliveries etc for the up-stream oil & gas business is more than possible. It is well beyond the scope of what is possible for one producer to undertake as the cost would be horrendous and the value would be quite limited. On an industrial scale however it makes sense and is the foundation of the critical value generation as a result of the specialization and division of labor between people and computers. Instead of feeding differing systems with the same data and occupying our time reconciling these we can engineer the appropriate solution and establish the appropriate roles for people to pursue. Roles such as enabling automation, innovation, leadership, integration, negotiating, financing, observing, reasoning, judgment, thinking, planning, ideas, researching, collaborating, creativity, issue identification and resolution to name just a few. 

Field Data Capture

Could this be the area of focus in terms of the implementation of the Internet of Things and the rebuilding of oil & gas through implementation of the Preliminary Specification? SCADA systems have worked well for large, integrated producers and independents. Their costs are unnecessarily high and the technology is, I would imagine, coming to an end of life situation. An area that will be critical to capture the production data and an area that is the foundation of securing the production data in unimpeachable form. 

It will be a matter of perception whether I’ve opened Pandora’s box or the world of opportunity. The reality is with much of the acceptance of the Preliminary Specification. We stand at a crossroads where the bureaucracy has ruled and their domain is crumbling. They’ll continue to fight for the last few pennies of value they can extract at whatever cost to others. However, we have to move forward. It is this vision, as incomplete as is stated here, and more broadly articulated in the Preliminary Specification itself that needs to be undertaken.