The Bureaucracies New Plan
And costly it will be. The first phase will be to have the industry agree to some changes in the way that overhead is dealt with. That is the elimination of the overhead allowances. Expect this to be the first kitten that enters the room. Next they'll have to agree amongst themselves that a change in the manner that overhead is handled will be adopted by the industry. Yet more kittens. The implication of which is that the operators will be offloading their working interest shares of the overhead that they have been carrying. By then the kittens have filled the room and grown to become cats. I’ve tried to herd cats before, particularly in the oil and gas industry. I swore I would never do it again. I’m sure that there will be more people that will swear that they've giving up herding cats, after trying to herd those cats.
What will be the purpose of the exercise? To better calculate profitability at the property level. And why are we doing that? We haven't done that in 60 years, why start now? At which time those that are doing this to counter the Preliminary Specifications claim that we provide the most profitable means of oil and gas operations have no response. Its political. An exercise of enormous effort. And when I say enormous, the cost and effort to do this is approximately equal to a ⅕ of the accounting effort that is currently done today. And its all to counter People, Ideas & Objects claims. It shows you how much of a threat to the installed base of the bureaucracy the Preliminary Specification is. They are wiped out. These people are fighting for their lives it's no wonder that they are making such desperate moves.
I forgot one important element of this whole conversation. It was what we discovered in our Preliminary Research Report of May 2004. That the changes that you make within your organization have to be made first and foremost in the software that you use. Otherwise the changes won't become the established process. So there’s that to consider as well. They'll need to develop the software for all of those systems that they use. That’ll take a lot of money. The problem is there isn’t just one system that a company uses that impacts the overhead. Usually they have several, essentially one for each process. And every time they want a change, the software vendor has their hand out. And they’ll no doubt ask why do they want these changes when some producers don’t?
Herding cats is such fun. But then again, it could be just politics as I said. None of these tasks will really be initiated. Its just a game of “bullshit baffles brains.” They could talk about this process, yet not do anything about it, and no one, that is no investor, the individual whose brains need to be baffled, will be able to discern whether it is truly ongoing in the industry or not. And there will be no shut-in gas to fix the price structure. And we'll continue on for another year of low, and maybe even lower natural gas prices and profitability in the North American oil and gas industry. But that’s one more year where the bureaucracy was firmly in control. And in a way, by saying they'll be calculating profits on properties, it’s almost like they have a plan.
The Preliminary Specification provides the oil and gas producer with the most profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.