Showing posts with label summary. Show all posts
Showing posts with label summary. Show all posts

Friday, April 19, 2013

I Didn't Notice...


That is to say that I didn’t notice that all of the earnings reports for the producers were in. I was waiting for the majority of them to show up through the normal channels, that is the media, nothing was coming through, so I thought I would check a few websites to see if they had reported them already. And they have, almost all of them. Without any fanfare or commentary in the press, the entire industry has released their earnings without a hint of promotion anywhere.

The point of the matter is that we can now update the 2012 earnings summary for the industry. The results of the North American producers and Exxon, Shell, BP and Total’s global earnings are $146 billion. In reviewing the details of each report it would seem that the performance of each company was down a bit from the prior year. And in each case the natural gas business was the cause of the decline in the performance. Therefore it is appropriate to conclude that if the People, Ideas & Objects Preliminary Specification were available to the industry the $67 billion in 2012 opportunity costs would be added to those earnings for a total of $213 billion.

It is our claim that we provide the most profitable means of oil and gas operations. This is through the use of an innovative business model that uses the Joint Operating Committee as the key organizational construct of the innovative and profitable oil and gas producer. By aligning the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee with the compliance and governance frameworks of the hierarchy we provide a speed, innovativeness and accountability in the producer.

We also provide within our business model the ability for producers to shut-in marginal production. Through a variety of interfaces within the eleven module Preliminary Specification is the ability to agree within the Joint Operating Committee to curtail production. This is done without the traditional costs to the producer as the Preliminary Specification employs the decentralized production model as its means of production. That means that all production and overhead costs are suspended in addition to the production. Leaving only the costs of capital uncovered during times of shut-in production. Allowing the reserves to remain for the time when the prices rise and provide a return to the producer. Producing at a loss only adds additional costs that the reserves will have to cover in the future.

For the next few weeks we will be discussing the Knowledge & Learning module and when we have finished that we will return to a discussion of the profitability of the oil and gas producer and the Preliminary Specification. 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.

Tuesday, August 02, 2011

Summary of our Budget Discussions


So ends our quick discussion on some of the points of our budget. Large in size though our budget may be, I think we can all agree that the scope and scale of the People, Ideas & Objects (PI&O) application, along with the need for that application in the marketplace, are needed today. Anyone proposing to build an application that begins to solve the problems that the industry faces will need to address the budget requirements that are of this scale.

People, Ideas & Objects have proposed a reasonable Revenue Model to raise the financial resources to meet these budget requirements. It is a fair and equitable model that provides benefits to those that participate early. After all early participation is where the real benefits lay.

We have shown how the copyright has the ability to ensure success of this project by ensuring that there will be no knock-off software developments siphoning financial resources off of this development. That the copyright enables the industry to focus all of its resources on this one software development and ensure that it is a highly engineered and focused on delivering a successful application.

How unique attributes of geographic regions, like Canadian royalty and oil sands requirements, can still be handled through the Preliminary Specification. That large software development costs for unique areas does not necessarily preclude producers from participating in the PI&O software development activities.

People, Ideas & Objects have benefited from the maturation in Information Technology and will continue to do so. The revolution in development tools and methodologies have brought our cost estimates in line with what is possible, our delivery times into the realm of truly surprising and the quality of our deliverables into the surreal. We stand at a very important point in time.

Lastly the time is now for the community to form and begin the Preliminary Specification. Our time-lines, start and finish dates depend on securing our budget for the Preliminary Specification. We have budgeted $100 million for this task and expect that the community will have significant influence in the determination of their time-lines. More patience is what is needed, but the time for everyone to act is now.

For the industry to successfully provide for the consumers energy demands, it’s necessary to build the systems that identify and support the Joint Operating Committee. Building the Preliminary Specification is the focus of People, Ideas & Objects. Producers are encouraged to contact me in order to support our Revenue Model and begin their participation in these communities. Those individuals that are interested in joining People, Ideas & Objects can join me here and begin building the software necessary for the successful and innovative oil and gas industry.

Please note what Google+ provides us is the opportunity to prove that People, Ideas & Objects are committed to developing this community. That this is user developed software, not change that is driven from the top down. Join me on the People, Ideas & Objects Google+ Circle and begin building the community for the development of the Preliminary Specification. Email me here if you need an invite.

Tuesday, January 26, 2010

9, 10, 11, ... 15, 16

Lets take a moment to review the compelling reasons for users and producers to join People, Ideas & Objects. The point of these is to provide both the understanding of what is possible and what is at stake. The first quarter of 2010 is a time in which we are raising the money necessary to begin development and define the Preliminary Specification. Those producers that are interested in funding these development should follow our Funding Policies & Procedures.

1.    The first reason to join this development is that it is generally agreed to that the easy oil is gone. Exxon has stated that an additional $20 Trillion in capital will be needed over the next 20 years. This does two things. It first identifies a relatively small window of opportunity to reorganize to meet these challenges. Do we believe the bureaucracies are capable of undertaking this increased load? The second thing is that it quantifies the scope of the problem to be larger then anything the industry has faced before. Doing more of the same and faster only leads to running into more problems faster. Organizing for this challenge is captured in the Draft Specification which aligns the industry to this task.

2.    Complex Adaptive Systems (CAS) are becoming the key differentiators of software development capability. Firms are achieving 500% increases in productivity by using Agile - Scrum methodologies. People, Ideas & Objects has been conceived under the basis that self organizing teams provides us with advantages over the traditional software houses. We are not applying these principles just to the developers either. Our user communities and the Community of Independent Service Providers will all subscribe to the Complex Adaptive Systems methodology. It is not within our domain, but I would suggest that each and every Joint Operating Committee could achieve sizable performance and productivity gains as a result of pursuing CAS. And if they do, they will have a dedicated software development team and communities that are able to keep up.

3.    You say you want a revolution. That's a good thing. National Public Radio prepared a timely graph that showed where the jobs are going to be in 10 years. Clearly all elements of the work that is being done at People, Ideas & Objects provides the greatest promise of job growth. It's important in this day and age to look at predictions with a healthy dose of scepticism. NPR were using the U.S. Federal Governments Bureau of Labor Statistics, therefore I don't think that much better data can be had.

4.    Being one that has lived the consequences of telling the bureaucracy its redundant, you would think I would have learned the lesson to keep my mouth shut. Unfortunately not. Management is wrong in not making this software development project timely. Their response of shooting the messenger has been typical of the vested interests that are so out of date in today's economy. They have proven to me that they are incapable of falling on their sword and doing the right thing. This is why we appeal to the Investors and shareholders in oil and gas for our funding. Providing them with an alternative means of organizing their oil and gas investments. Recently John Bogle of the Vangaurd Group, Professor Wanda Orlikowski and Professor Carlota Perez cited management is wrong in terms of their motivations and actions.

5.    We have identified a budget of $10 million be raised by the end of March 2010. These funds are not adequate to complete the Preliminary Specification, however, they are a start and are determined to be the most that we would be able to expend in 2010. Funding of the budget by enlightened oil and gas companies, investors and shareholders is the key determinate for the User community and Community of Independent Service Providers to form and commence this work.

6.    In addition to identifying the issues and opportunities that exist in the oil and gas industry. People, Ideas & Objects have developed a strong business model with a significant value proposition for its subscribing producers. Allocating the costs of development over the subscribing base of producers brings value to the industry. The cost-plus method of charging firms $1.00 / barrel of oil equivalent / year may generate upwards of $120 million / year for People, Ideas & Objects developments. At $10 it brings in substantial revenues and continues to be less then 1/10th of a percentile of the producers revenues.

7.    I recently had the opportunity to document the user interface of the People, Ideas & Objects. Our approach has always to deal with the business of the energy business and not to sell the next version of some widget technology. The reason we are moving to the "Synthetic Worlds" and Avatars is that the Draft Specification anticipated this innovation. To make it work we added three "Marketplace" modules where avatars will be able to conduct business virtually. Additionally to enforce the Compliance & Governance Module into this environment we came up with the Military Command & Control Metaphor for the producers in the Joint Operating Committee to remain compliant with the firms governance and compliance needs. All of these are contained within the module specification of Draft Specification

8.    Professor Carlota Perez in a recent document that we reviewed declared now is the time in which the Information & Communication Technology Revolution (ICTR) is about to begin. This will be a time of great value generation for the oil and gas producer, the user of People, Ideas & Objects application modules, the Community of Independent Service Providers and society. People want to move forward in these areas and the beginnings of something great is starting to be realized. This is not a short term trend. It is something that will carry our economy for the next 20 - 30 years.

9.    A trend has been noted in the academic community. Since the economy has somewhat stabilized, many papers are being written on how business and industries can build from the recent economic crisis. Clearly these endorse the economic time frame in which change can and should be orchestrated. What needs to happen today is management to be provided with the motivation to get moving and financially support these developments. This academic support should resonate with our identified market for funding. The investors and shareholders in oil and gas companies.

10.    I recently noted how we differed from most Open Source projects. That although we are not technically compliant with any of the Open Source Initiatives licenses, producer firms need to know that they can review, test and ensure the software code they are using meets their needs. I would expect that this will eventually fall within the domain of a proxy for the producers. Some group or team comprised of the Chartered Accounting Firms would probably be able to assure the producers of this on an annual contract.

11.    The Draft Specification is a result of the Preliminary Research Report and many years of research into how and what an application for this new era in oil and gas would look like. Much of this research has been in the area of Transaction Cost Economics. Professor's Richard N. Langlois, Carliss Baldwin and Oliver Williamson have provided the academic strength necessary for an application operating in the oil and gas industry. Transaction Cost Economics research was cited as the reason that Professor Oliver Williamson won the 2009 Nobel Prize in Economics. It's timely and critical recognition that the energy industry needs to build on these principles. Principles that are a part of the Draft Specification.

12.    Recently we documented the strategies of innovative oil and gas producers. How there focus needs to be on developing their earth science and engineering capabilities within the Joint Operating Committees of which they belong. Application of these capabilities to their asset base is how their competitive advantages are earned and are solely dependent on the uniqueness of their asset base and scientists. People, Ideas & Objects competitive advantage is ensuring that we provide the innovative oil and gas producer with the most profitable means of oil and gas operations.

13.    Oracle have spent a remarkable amount of money, $39 Billion, in configuring their new Fusion MiddleWare application offering. Within these applications it is expected that the energy producer will have to expend additional money in terms of oil and gas features. These costs are unique to the firm and will therefore be incurred by them to provide Oracle a return on their investment in Fusion MiddleWare. This does not address the issues that industry faces today. Issues that I documented in May 2004 in the Preliminary Research Report.

14.    Effective March 31, 2010 we have implemented a penalty structure for those producers who decide to wait while others do the heavy lifting. The penalties are structured to assess any firm that hasn't participated with 300% of the years fees. Therefore any firm that hasn't paid on April 1, 2010 will have to pay $4.00 per barrel of oil equivalent. These fees and penalties are retroactively payable as well. If a firm decides to join the group in 2012, fees and penalties for 2010 and 2011 will also need to paid in full before participation in the communities. It is  recommended that firms participate early as that is the time in which they can assert the greatest impact on the product quality and communities development. Coming in at 2012 will provide little value in terms of how the application and community are able to deal with the unique assets and business' of the producer.

15.    As I write this summary Apple has just announced their first quarter 2010 earnings. Steve Jobs was once asked what he wanted to do in life. His response was that he "wanted to put a ding in the universe". His earnings and Wednesday's announced iTablet may have enabled him to reach his aspirations. Truly spectacular that a company that is worth short of $200 billion can increase its business by 50% in one year. Tech Co. earnings are the proof that the "Sustainable Global Knowledge Society Boom" is here. People in oil and gas should review this project as their means of participating in this fascinating opportunity.

16.    I have been openly critical of Oracle and SAP product offerings. I'm not alone in that criticism. The oil and gas industry is a unique industry that can not be looked at from the perspective of a manufacturer or any other traditional industry classification. It requires a unique approach to its business and the systems that support the firms has to be unique as well. The Draft Specification consistently shows that the means of oil and gas operations, innovativeness, issue resolution and enhanced productivity are within our grasp. The recent Oracle - Sun merger provides us with a unique opportunity to capitalize on their scope and scale capabilities in developing and hosting an application such as People, Ideas & Objects. For the first time I feel excited that we are able to really build something special.

If you are a user that finds these reasons compelling, please join us here. Somehow all these concepts hold together. Imagine that.

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Saturday, January 16, 2010

Restating Our Value Proposition.

Another reason that the oil and gas producers should financially support this blog is our compelling value proposition. Based on a business model that allocates the costs of development over the population of subscribing producers. This creates value by assessing the producers only once for the development costs plus an element of profit as developers. The Community of Independent Service Providers (CISP) who provide direction and guidance to the developers are part of these costs. However, their costs in using the software to support the producer will also be billed directly by the members and do not attract the profits element for People, Ideas & Objects.

These are user-driven developments that have the user in the forefront of designing, implementing and supporting ERP software for their producer clients. This is a complete restructuring of the industry in order to "Provide producers with the most profitable means of oil & gas operations".

The perspective of People, Ideas & Objects towards software is that it's a journey and not a destination. An innovative oil and gas producer can not subscribe to a fixed ERP system when the political, technical, logistic and financial difficulties continue to escalate. As things change so should the software and the CISP who use it. This dynamic attribute can only be provided in the fashion that is discussed in this software developments value proposition.

In order for the success of this development and community to provide value to the producer. We need to provide the most profitable means of oil and gas operations. This is People, Ideas & Objects competitive advantage. It's important to realize that our competitive advantage can only occur if the strategy of the producer focuses exclusively on their competitive advantages. And lets be clear the choice of ERP system has absolutely nothing to do with an oil and gas producers competitive capability or advantage. For a producer to attain the success they are searching for. They need to build the engineering and earth science capability within their firm. In addition their asset base is where their scientific capability will be applied. People, Ideas & Objects competitive advantage only provides the producer with the knowledge that from an administrative point of view, it is the most cost effective and efficient means of production.

If you are producer and this value proposition resonates with your perspective of the future oil and gas producer, please review our Funding Policies & Procedures. If your a user, please join us here.

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Tuesday, April 07, 2009

Project P.U.M.A.

"Personal Urban Mobility & Accessibility" from GM and Segway. What have they done to my Segway? I have frequently pointed to the need to stop hurling 4,000 pounds down the highway at 60 miles per hour. As one solution to the many energy demand issues. We can't afford to be spending so much energy so inefficiently. If you believe in global warming, then you should also get behind this type of transportation. Using it to replace the car in your daily commute. And relegating the car to one or two days per week.


There is a large amount of talk in the blogs about PUMA. Segway have a blog that I subscribe too and they had three announcements today. You can read these here, here and here. Another one of the better sources of information is Fast Company. During the announcement Larry Burns, GM's VP of R & D says it well.
It'll be one-quarter the cost per mile, he told journalists. This is a vehicle that runs on electricity made from a wide range of sources, and because it's so small, it's efficient--it's approaching 150- or 200-gallon [tank] efficiency.
Note he doesn't call it a car. Those that have issue with the looks, I suggest it looks like any of GM's products. Me I'll buy a Segway as soon as all the insane city councils make it legal for them to be driven on streets and sidewalks. Also the TED Conference highlighted archive video's of Dean Kamen, who invented the Segway, and Larry Burns talking about his ideas in the car business. 

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Friday, January 23, 2009

The top 25 posts of 2008.

Much like other blogs I wanted to publish a "best of" list of the favorite content. I have been using Google's Feedburner service for many years and have watched this community grow. Google's acquisition of Feedburner was completed this past summer and as a result the domain changed and we have lost the cumulative "best of" or most popular data. However we still have the data from July 22, to December 31, 2008 as listed below.


Unfortunately, their is no information on the popularity of the Draft Specification which was published between December 2007 and August 2008. Google has made many positive changes to Feedburner and are still working very hard on improving the service. Here are the 25 most popular items on innovation in oil and gas. 


Thanks for reading, and please join me here.

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Monday, November 24, 2008

Two groups who need People, Ideas & Objects.

AP is reporting that the large and small producers in the oil and gas industry are experiencing some systemic difficulties. The large producers are able to generate large cash flow, and indeed have large bank balances. However, recent declining and negative reserve trends are now causing their production to decline. These accelerating decline curves are a direct reflection on their ability to find and produce more oil and gas.

On the other end of the spectrum the small producer is challenged by the inability to generate or raise any cash to begin to address their growing needs. This of course is as a result of their small asset base and the current low oil and gas prices. On the positive side, reserves are able to be increased at will. The reverse of the situation of the larger strata of the industry. To me this is not news, but a reflection on the way things have operated in the industry for many decades. The scope and severity of the problem comes down to the large producers declining production profiles.

Another issue that the entire industry faces in the short term is the size of the asset write downs caused by the today's lower prices. Based on the prices of the commodities it is fair to assume that producers were able to capitalize 100% of their costs associated with exploration and production since 2004. These costs are now subject to the auditors testing of value, based on the reserves. Potentially we may see the industry reflect large losses on their write downs to fair value.

Over the past 20 years the small producer has struggled to keep the doors open. Just as many small enterprises in other industries experience. Testing the risk profiles of small producers would result in the conclusion they are at stratospheric levels. Leading to the skill and courage of the investors and management, just to survive. Small producers have the inability to provide any returns for their investors for many years. The simple act of building a producer has to consider the many millions of dollars needed to increase the production profile. Many of these millions go to the simple act of keeping the lights on. The overhead of the firms is notorious for getting in the way of the investors expectation of receiving some value from the firm. Granted their will always be the capital gains that the investor could make over the life of building the firm. But their capital gains are not that spectacular and they should expect and receive more of the value they provide.

I have always marveled at the discussions that are made around the companies reserve reports. Reports on the field activities that have no concept or consideration that those operations have to support the administrative and management of the firm. In a public company this discussion takes on a much larger concern as the overhead costs of a public firm push the administrative costs well beyond what is possible for the management of the firm from an engineering and earth science point of view. The Private Equity movement that began in the last decade is symptomatic of the huge compliance and governance costs that a small public producer has to offset before there is anything left for anyone else. Please review the Compliance & Governance module of the Draft Specification for further information in how the compliance and governance is handled.

How is it that People, Ideas & Objects can help in this area? From the perspective of a large producer I see the problem as an issue of focus. The firm needs to simplify their strategy to something that will make money for the shareholders. This blanket strategy may not be appropriate for all of the properties or Joint Operating Committee's (JOC's) they have an interest in. (I attribute this as the source of the firms lack of "focus.") To say that there is conflicting strategies of the producers representing the JOC is obvious, and one of the sources of how problems get resolved is through identifying and resolving these contradictions and conflicts.

One of the advantages of moving to the People, Ideas & Objects system is that the JOC is able to set the strategy irrespective of the individual producers "global" strategy. Enabling each and every JOC to be optimized for their best operating and performance strategies and tactics. Providing the much needed focus that the large producers can not find. This strategy optimization in the JOC is a direct benefit of aligning the legal, financial, operational decision making, cultural and communication frameworks with each of the producers compliance and governance frameworks.

The banks, investors and money markets may have an interest in the producer or the JOC itself. Securitization of the individual interests in oil and gas will be necessary to fully optimize the innovative stance and increasing reserves of the industry.

Therefore the mix of producers in the JOC will help to mitigate the producers size issues for the entire industry. The large producer can partner with the smaller producers to balance out the needs of the property. Recall that the Partnership Accounting module in the People, Ideas & Objects system is based on the contributions of the individual firms represented. If a firm has a specialty in a certain regional geography, it can then agree with the partnership that the costs of those specialties goes towards satisfying some of the commitment from the company to secure their interest. In other words. The small and large producers are able to earn their interest in the property through their contribution of capital, expertise and / or land position on an all in valuation basis. If a geologist were to prove their value in the marketplace by finding commercial volumes of reserves. Then their ability to secure elements of the interests in the producing assets he / she is directly involved in creating.

The last point of the previous paragraph violates the first order of all oil and gas managements oath of allegiance. (I'm trying to be funny.)  Recognizing Intellectual Property (IP) is the exact opposite of the situation that exists in the energy industry today. Particularly the large firms do not want anyone to hold any form of IP as it conflicts with their needs to find people to employ and is (incorrectly) believed to be a leakage of value from their organization.

This is the 21st Century. We have the manner of all economics being re-aligned on the basis of new and more effective organizational structures. Those that believe in the bureaucracy, of any industry, are effectively being cut down to nothing in this market. The current economic climate is the same situation that affected the Former Soviet Union in 1989. The methods of organization could no longer sustain the demands of the people and failure was the result. Our system of organization has reached its limits of growth based on the bureaucracies inefficient efficiencies.

So the sooner we say good bye and good riddance, the sooner we can achieve the multiples of our current standard of living. As Jonathon Schwartz at Sun Microsystems says, you have to stop to change direction. These points are addressed in the Resource Marketplace and Research & Capabilities modules. If we expect to deny people the rights they earn in thinking through the big problems of how we can solve the oil and gas industries problems, then we are eliminating ourselves from the entire economic equation of the future. Our choice, and those that don't want the People to hold the trademarks, patents and copyrights should research which way is the best for the oil and gas industry to continue. We're going this way.

This issue is also addressed in the People, Ideas & Objects system. The competitive advantage of a producer is their physical producing assets, land base and scientific and engineering capabilities and capacities. Ownership of the capabilities and capacities, (the current situation) I don't think provides the industry with the value they think they attain. Building huge, mutually exclusive capabilities in each and every producer has increased the level of redundancy in the industry to a ridiculous level. Note also the large producers effectiveness of using these capabilities and capacities in finding and producing oil and gas. People, Ideas & Objects is the better way.

The producer who researches, develops and manufacturers their own drill bits is at a distinct disadvantage to the other producers who have manufacturers providing drill bits based on a collective need across all producers. I don't see too much difference in this example from what a firm is doing today with their geological talent. The alternative is hiring from a pool of highly qualified and talented scientists for application to a specific issue in one JOC. This has advantages that are directly beneficial to the future oil and gas producer. Once the geologist has completed their work, there may be no more work from that JOC in that area for his specialty again. He will have to keep thinking of how better to get the oil or gas out of the ground, (his job) which will form the basis of his new, and far more valuable to him, IP. Why employ him for 35 years and promise a retirement benefit that Wall Street will only take away from him.

The most effective change that the People, Ideas & Objects system provides the industry is an alignment to the cultural basis of the business. The JOC is the business, and the business is the JOC. Recognizing these facts in the IT that identifies and supports the JOC is a necessary realignment of the industries interests. A realignment that will fuel the innovation and further development of the critical sciences that are underlying the business of oil and gas.

With respect to the large and small producers that I started in this post. The alignment removes the conflict that the industry has with the development and ownership of Intellectual Property. It enables the large producer to use their cash flow in a manner that is more consistent with the needs of their JOC's producing properties. And the small producer has the ability to sell more of the talent and capability that is a necessary part of the industry makeup to financiers and investors. Both sides appear to me to be winners.

From the investor point of view, the fact that the systems will be supported through the levying of a fee on the basis of $ / BOE / year means that the larger producers will be paying the largest part of the freight in terms of the People, Ideas & Objects software development costs. Producers that are small and have no production would be use the system for free and have the Community of Independent Service Providers, that are a key part of the People, Ideas & Objects community, available to help mitigate the large associated costs of running a start up oil and gas concern. Please see the Compliance & Governance module for further clarification of how this is implemented in the system. And recall, that ideally the investor is the one representing the ownership interest of his / her share at the virtual JOC table.

Now is the time for these ways and means of operating be adopted. What we are witnessing is economic history. Producers MUST become more efficient and begin the process of rebuilding the industry from a more efficient and effective means of organization. To say the industry is collapsing is best reflected in Canadian Natural Resources Ltd impending demise. Please join me here.

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Tuesday, September 23, 2008

Where we're at in 624 words.

The following is a summary of where all the time went. September 2003 - May 2004. The beginnings of the People, Ideas & Objects software development project were based on my Master's Thesis. My hypothesis asked if the oil and gas bureaucracy had become redundant and if so; would the Joint Operating Committee, augmented with today's Information Technologies, provide for a more innovative footing of the oil and gas industry?

The findings of this research confirmed the hypothesis. If a producer was to move the compliance and governance of the bureaucracy to the legal, financial, cultural and operational decision making frameworks of the JOC, a greater alignment of these frameworks would provide for far greater levels of innovation. Additionally it was determined that systems define the organization. In today's business, any change in the organization must firstly be planned and software systems developed to identify and support the organization. Otherwise the organization will be relegated to manual systems.

May 2004 - December 2007 Comprehensive research was undertaken to determine; if the JOC was adopted as the key organizational construct of the oil and gas producer, what would an ERP styled system look like.

January 2008 to July 2008 a "Draft Specification" was published providing an overall vision of the systems modules. The system currently has eleven modules defined in the "Draft Specification" as follows:


One of the main reasons the People, Ideas & Objects software application can work is that when embedded in a transaction based collaborative environment, there is no need for the people to physically move from JOC to JOC. Bridging the physical distance between the participants in the JOC is enabled in the virtual transaction based environment of the application, which in turn enables the re-organization.

Since July 2008 I have attempted to make the case that the current bureaucracies are indeed failing and are only operating in managements own best interests to better themselves. Showing that declining reserves and production are leading to lower profits and even losses. Costs are escalating incrementally as project targets slip. Systemically using derivatives on the commodities they produce to prove they have no idea or understanding of what business they are in. During all this time, management have been rewarding themselves for this performance with multi-billion dollar stock option compensation.

August 2008 saw the commencement of the discovery process on how the funding of this project can proceed. Sourcing revenue for this project from the disenchanted oil and gas investor is the most likely candidate for starting the revenue. Unlike management's fleecing of Bear Stearn, Fannie, Freddie and Lehman shareholders, the People, Ideas & Objects software development project provides the oil and gas shareholder with options.

The purpose of this project is to build an environment where the oil and gas investor can produce their oil and gas in the most profitable manner. This is about enabling the industry to evolve at the speed of the underlying sciences. Based on this body of intellectual property, where the software is hosted in the "cloud," and the community of users provide the services to the producers in their own service based offerings.

This software development project needs Users (Oil and Gas workers of all professions), Developers, Project Managers and Oil and Gas Investors. The oil and gas investor has a vested interest in sponsoring this project and providing the funds necessary to build the system. This system provides the investor with an alternative organizational structure to have their oil and gas assets managed by this community. Managed in the most profitable manner where they are able to effectively control their assets in their best interest.

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Tuesday, May 08, 2007

Where we're at, Part II

In reviewing the recent posts of Professor Langlois' works, I find there are many points of great interest. Modularity is a critical component of the development environment of Java. Dr. James Gosling, the founder of Java, has put together an extremely powerful and safe environment in which we can develop these modular applications. One point that I should have made in those entries is the logical application of the Military Command & Control Structure (MCCS).

MCCS has its own label to aggregate all of the postings in this blog. It is an important concept of using the Joint Operating Committee (JOC) and I would suggest a review of the posts to gain a strong understanding of the principles that I have proposed. The principle is that a means of command and control is necessary to replace the hierarchical command and control that is otherwise lost in specifically recognizing the JOC. By recognizing the JOC there are many opportunities to accelerate the performance of a producer. By pooling the joint human and other resources, and making them fully available to the Joint Account, virtually, the performance of the work being done by the JOC will increase. The work being the planning and execution of the drilling, completing, building of gathering and facilities. To have the JOC populated by the members seconded (permanently) to the JOC and operating in a manner consistent with the Military analogy of command and control. Not only the people who are actively representing the owners of the JOC, but the suppliers and vendors that are usually the boots on the ground in implementing the plan. This enhanced collaboration would provide a collective knowledge base and would be able to mitigate any issues as quickly as is possible. It should also, in an almost natural way, provide the documentation and transaction processing as direct fall-outs of the decisions and actions of those active JOC's.

Modularity demands the Military Styled Command & Control Structure. The loose coupling that modularity in the organization, and in the systems, requires a strong bond to ensure that it is operating as expected. This bond is the MCCS. In periods of high growth and rapid change modularity needs the support of the MCCS.

Most importantly we have addressed the scope of this application with the analogy that Langlois uses in architecting these systems. The industry would not hire "two interior decorators" to design and implement 1/2 of a room. Systems, and systems design need to have a more holistic approach. Modules help to define exactly where the user will find what it is that they are looking for. Some of the modules reside in the exclusive domain of the firm, such as the Research Module, and some reside exclusively in the market domain, such as the Petroleum Lease Marketplace Module.

I am recreating the table that I produced after review of some of Langlois' works. This makes the division between the market and the firm as I foresee the JOC being employed. Various elements of the JOC are assigned the responsibility of the market and in other areas, such as research, are assigned the primary domain of the firm.

ConstructMarketFirm
Joint Operating CommitteePs
Military Styled Command and ControlsP
Transaction CostssP
Production CostsPs
InnovationPs
Routine, compliance and accountabilitysP
ResearchsP
DevelopmentPs
Financial FrameworkPs
Legal FrameworkPs
Cultural FrameworkPs
Operational Decision Making FrameworkPs

P = Primary
s = secondary

So if we take a moment and define some of the modular architecture of this system.
  • Partnership Accounting Module,
  • Petroleum Lease Marketplace,
  • Human & Supplier Resource Marketplace,
  • Financial Resource Marketplace,
  • Governance & Compliance Module, (a.k.a. Military Command & Control Structure)
  • Research Module
These module classifications enable one to begin to see the value of modular thinking. Langlois noted Hayek's comment;
"Abstract symbols and rules can provide a visible information structure that allows individuals to operate effectively on the basis of their more concrete (and hidden) information." p. 16
Those who are within the oil and gas industry can clearly see and determine where each part of their understanding of the industry would fall under. The beginnings of seeing the "hidden" information is already beginning to bear fruit, just with these modules classifications. It is very clear to me where I could find a specific issue, information or opportunity in the appropriate module. This "hidden" data and information is a very powerful concept. These six modules will become the core of the system we are building here. If there are any other modules that you might think of, please comment on it.

Recall a salient point of Langlois regarding private property;
"There is also a flip side. Ownership may not only insulate one from certain kinds of unforeseen change, it may also enable one to generate radical change." p. 25
I read this as being innovation, where the innovation is being generated in the modular architecture that I have laid out? And this is the point, it is no where specifically but innovation is everywhere. The innovations may come from anyone using any of the modules. Innovation is not something that can be defined as a process. It needs however, to be facilitated through the organizational construct that allows the innovators to apply their craft.

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Friday, April 06, 2007

Format change.

Taking a little time off this past week to reflect on the past three months research. I had completed a good chunk of what I have to do, and spent some time reviewing what has been discovered. The difficulty and the pace of the research were a bit too much for my liking and I think that is also reflected in my writings. I am particularly pleased with the writings of Professor Richard Langlois in determining the division of the market and firm. (The summary table is located here.)

The difficulty in reviewing so much information is that the ease of reading has been lost. Although I will continue to use this blog to secure the intellectual property that I feel is necessary to support the basic hypothesis. The manner in which the writings will be completed will change for the future. I will now in addition to the posting, summarize the key points of the entry in an opening commentary. The abstract or summary will provide the reader with enough of the necessary information to see if they desire to read on. I hope this helps in making this research more usable by the growing population of people visiting this site. I am pleased with the numbers of visitors and the growth. I think with a little more effort on my behalf it should make their experience better.

I would also point to the del.ic.ous and Google Reader columns at the side of these posts. For anyone interested in oil and gas, and information technologies, there are some very high quality information and writings there. The search for quality continues and I hope that this blog becomes the focal point for most people that are interested in innovation within oil and gas. I will also be posting many smaller items that I think require special notice. These will consist of a quick summary and introduction to other articles, videos and podcasts. One last point regarding tags and labels. It may seem redundant to being posting to both Technorati tags and Google for labels, however, using the labels limits the tags to this site exclusively, where as Technorati tags will aggregate any and all blog tags. Any other comments or suggestions would be greatly appreciated. So with that we resume regularly scheduled writing on Monday. And most of all thank you, I know I've enjoyed myself.

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Thursday, March 15, 2007

Project status.

On Sunday I mentioned this project was in a state of flux due to the actions of the major producers CIO's decision not to proceed. Well Popeye is back with what might be a better opportunity. Being isolated from the industry for the things I said has a tendency for me not to keep up to date. I had completely lost my window on the competition. The sale of IBM's Qbyte application, and the announced 2009 termination of support services provides an excellent market for this project to fill. If I exclude the major producers from the population of Qbyte clients, I still arrive at over 135 companies that need a solution.

Therefore a marketing approach will be developed to make this project appealing to those 135 producers. I want to spend some time revisiting the project and particularly the budget. My assumptions in preparing the last budget was for a relatively stable technology industry. Clearly with the majority of the firms looking for new systems in the near term, the time frame will be one of high demand on the resources in the technology area of the City. Therefore I will prepare a proposal to them that is based on the many things being discussed here.

Deadlines for the preparation of the proposal will be March 31, 2007 with a May 31, 2007 subscription date. Same application, same vision, same leadership, I'm enthused.

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Tuesday, January 30, 2007

LEM Working paper series.

Dr. Giovanni Dosi was the centerpiece of research that I used in my thesis to derive the Joint Operating Committee would provide industry with greater speed and innovative-ness. Dr. Dosi is a professor at the Sant'Anna School of Advanced Studies in Pisa, Italy. Within the school there exists the "Laboratory of Economics and Management" of which they published a series of articles known as the "LEM Working Paper Series" which can be downloaded from their site located here. The purpose of this laboratory is;

The Laboratory of Economics and Management (L.E.M.) at the Sant'Anna School of Advanced Studies sponsors and hosts research in the areas of economics, organization theory and empirics, management and corporate strategies, public choice and other aspects of public policy, innovation studies, environment, industrial history and theory, cognitive and artificial sciences. It welcomes interdisciplinary endeavours and favours dialogue between empirical investigations, theoretical developments and normative contributions - concerning both corporate management and public policies.
Naturally this is the place I want to travel too next. The articles within this series will be researched in much the same manner that I did with Professor Langlois works. After the LEM series I want to go to Professor Schumpeter and review two of his books. And for those readers that may wish to read ahead. These books can be downloaded from here.

These articles are just a small sampling of the documents that are available through IDEAS. A variety of economics authors and researchers have decided these papers belong collectively in one place for people to download them. These downloads are free! Therefore, since my job now and in the future is devour these documents; learn and apply what I know about industry and publish them through this blog. I could not be happier. To review the documents are free, however, as in the case of Langlois. I have certainly crossed the line in terms of the fair use doctrine, and I am awaiting his assessment of how these transactions should be conducted. I will do the same for the others that I research. It is also mandatory that I note http://repec.org as the source of some of this information.

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Saturday, December 30, 2006

One year summary.

It was December 29 last year that I started writing this blog. It was at the prompting from a friend that I write about the things that I was researching. Write about the things I was passionate about, to write about innovation in the oil and gas industry. I thank him for pointing out this opportunity to me. I started this blog with several specific objectives in mind;

  1. Discuss the methods of (re)-organization of oil and gas firms, and specifically, replace the hierarchy or bureaucracy with the industry standard Joint Operating Committee (JOC).
  2. Debate and discuss the attributes and elements of innovation within the oil and gas industry.
  3. Explore the impact of today's information technologies, and their role in making energy firms more innovative and accountable.
  4. Discover what is possible and how things could be better.
I am pleased to report that these objectives are being, and will continue to be, met. I am also pleased to report that I have no shortage of material to write about. The basis of this website is my Master's Thesis that proved the joint operating committee is the optimal organization for innovative oil and gas producers. The scale of this revised organizational structure is not small. The re-organization, re-configuration, and re-everything of every element of activity, process, data and approach in oil and gas is affected. I've certainly landed in the middle of a fire storm of controversy, conflict and best of all, value for all concerned.

Reviewing the material that I posted this past year, I noticed a theme that I thought was rather valuable for the industry. That these concepts and material, particularly the new organizations supported by the new information technologies, was being accepted in the larger academic arena. Explicit support was being built for these concepts. I was able to spin these concepts out of this weblog and publish the "Final Research Report." This support alone has significant tangible value for the energy industry. Value in that it documents the many calls to action that are being stated throughout the world for both the energy industry and business community in general.

There is something else I want to point out. That is the value that this weblog represents. I think the oil and gas worker has a central location for discussion and presentation of material that is consistent with the innovative employee / worker, and the technologies impact. These are the main focus of the recent revisions that I've done to the website. I am therefore making this an unexpected, and much valued objective of my writings.

Another area that I am particularly enthusiastic about is the Massachusetts EnerTech Cluster that was recently announced by Dr. Robert Metcalfe. This is based on the desperate need for something of this nature, and is building on the works done by the recent efforts of MIT's. This is necessary, and I would assert should have been done many years ago. I also foresee similar, however more limited, clusters of Energy Information Technologies in both Silicon Valley and Houston. These three locations will be the brain trust of how the energy needs of the future are met.

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Thursday, December 14, 2006

The attention economy.

John Hagel III has written a fascinating series of articles on what is being called the "Attention Economy". His comments are located here, here and here. I highly recommend my readers to view these articles thoroughly. Hagel picks up from the quotation of Professor Herbert Simon, Nobel Laureates quote,

"...in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of the information sources that might consume it."
I think that Hagel is picking up where Simon's comment left off and introduces some current research that Michael Goldhaber is doing in this area. Goldhaber's best articles are here, here and here. Attention is not a commodity, in that it is fixed and Hagel discusses both the scope of your own attention and the attention that ideas can garner and sustain. I wanted to comment on the important impact of this thinking and relate the significance of what I think is being said.

For myself I find the demand to keep enhancing my information systems requires daily diligence of what, where and who I spend my attention on. If I am not vigilant I become satisfied with the status quo and that is a dangerous attitude to have these days. There is enough justification and supporting information to ignore and belittle the overall and global changes that are occurring today. Many prefer to refer to their BlackBerry's and consume their lives in the day to day grind of mindless activity. We need to focus our attention on what and where we are going with these technologies. If we loose sight of the road that we are travelling on we could be lost for a sizable amount of time.

An important point of view to maintain is the technology works for me to meet my needs, I do not respond in any way to the demands of the technology. Needless to say I have no BlackBerry and I ensure that at least 80% of my synchronous time is spent in person, with limited amount of time being spent on phone calls. I communicate asynchronously, or at my time, on my schedule and my agenda. Many things fall off the table as a result, and I am best able to prioritize what is necessary.

The other aspect that is important is the speed at which things are viewed. I like to spend as much time as I can per day on reviewing and writing what I am researching about. With three blogs and two major topics it is something that requires a focus that is difficult to sustain. So there are two modes, quick and summary where little is available for immediate recall, yet some of the more important aspects are recalled many days later, or as required. Here is where Google is an invaluable tool in that I am then able to re-find that reference almost immediately. And then there is the reading and reviewing at the pace that is necessary to take notes and assimilate the complex topics that demand my time and efforts. These can take a goodly amount of time, but that time is afforded to me as I know nothing otherwise will be lost.

I frequently look at it from the point of view that Google has provided me with at least 7,000 of the smartest people in the world, working to make my information better. Google also provides me with the supercomputing power necessary to index and make available that information that is the most important to me. Such power in the hands of every user will make the majority of the major issues in the world more solvable. The most surprising element of this tool is that Google is making a billion dollars a quarter doing this. The attention economy operates on a different premise.

So what is it that I am trying to do here. In a nutshell I am trying to create and sustain the necessary attention of my readers to ensure that their time is most effectively spent on reading, sharing and conversing through this blog. There ability to be fully informed through a high quality filter is what I am preparing and providing to them in this blog format. The recent changes that I have made to this blog are designed to increase the value and usability. And include;
  • Use of Labels, as well as Technorati tags, providing my readers with a variety of ways to aggregate items that I and others write about.
  • I installed three custom search engines;
    • Oil and gas custom search reviews the highest quality journals and sites that cover the global oil and gas business. As I find more high quality documents and sites I will add them to that search engine.
    • Innovation search engine reviews the quality documents and sites that I discover and use in my research regarding innovation.
    • Academic search engine that provides the best academic sites available. Oxford, Harvard, MIT, London School of Economics, University of Chicago, Berkely, Princeton, Yale and Stanford to name just a few. Other sites like DSpace and most of the universities that provide their course offerings and videos online.
  • I have installed not only the del.ico.us articles that I read and find of value, but now have included the tag cloud that these articles and tagging provides. Readers are encouraged to fully explore the referenced articles and tags, they are there for your reading enjoyment and to act as a filter to get to the quality stuff first. Please don't hesitate to join my del.ico.us network while visiting.
  • I have also provided 50 of the most recent blog posts and readings that I discover through my RSS reader, Google Reader. These url's can be seen by going to the website where these ideas are hosted. These provide my readers with the best of the best.
  • And finally a financial summary that caters to the oil and gas market activity. And a summary of the Sun Microsystem Aquarium which is where the J2EE server that we will be using is summarized.
If I am able to provide quality reading material and idea generation for my viewing public, focused on innovation in the oil and gas industry globally. With a strong focus of my writing regarding the revolutionary use of the joint operating committee, I think that I am spending my time as effectively as I can. I believe that this enables my readers to focus their attention a little clearer on the issues and opportunities we all face in the oil and gas industry.

I hope you enjoy this as much as I do. As I have mentioned here before, there is no better job in the world from my point of view. I will be writing more on the topic of the attention economy and work hard to focus my readers attention as finely as I can.

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Monday, December 04, 2006

Writing as an art form.

I enjoyed writing what I have called the final research report, it tops out at a little over 23,000 words and is the culmination of many of the ideas and issues regarding the oil and gas industry. One thing that I have learned, and enjoy about the skill of writing, is that generally the author does not know what he / she is writing about until such time as the work is completed in their mind, and they sit down and read it from cover to cover, literally for the first time.

I have experienced this phenomenon before in my writing. I thoroughly enjoy the final reading as there is some almost secret point that has been hidden deep in the subconscious that is being said in the words. I know I will be the first to see what that is, and it will be I who will be the most excited to discover it. This proposal did not disappoint.

The idea that came to the forefront is the copyright itself, and specifically, its application in what would be considered a unique way. The copyright has become a major sticking point with the industry and is deemed by myself to be of extremely high value. The point about ideas is that good ideas take an immense amount of intellectual effort to complete. The copyright is a monopoly granted to the writer for the lifetime of the writer + 70 years after death.

The point that I understood from my writing about the copyright is this. The copyright is far more valuable to industry then it is to me. My desire to keep it in tact and close care of it is also in the best interests of the industry. Why, for 2 reasons for sure, and their may be more, however, what I've learned in the development and writing of this proposal are these:

  1. The level of technical risk that is inherent in these developments is high.
  2. To focus the attention of the industry on the project owned by the copyright holder.
To expand on these concepts a little further, this copyright helps to focus the energy industries efforts on these software developments. For them to spend any money and resources on a pirated software venture would be wasteful and still born from the word go. Companies are not in the business of taking risks and the risks associated with sponsoring a pirated software venture are 100% in this instance.

Therefore industry is left with their resources being pooled to address, and mitigate the technical risks associated with these software developments. A handy benefit for the industry. From my point of view, I have done the industry a big favour by consolidating this intellectual property in one location. I doubt they will share in this opinion, however, it is time to start working together to solve these problems and building these solutions. I hope that they see this too.

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