Partnership Accounting Part V, production volumes.

Up to now we have discussed many aspects of the unique Partnership Accounting requirements of using the joint operating committee as the central organizational focus. The nature of the oil and gas business is unique in many ways and this Partnership Accounting discussion captures many of the issues that an oil and gas system needs to address.

• Daily and monthly volumes defining a period of time.
• Spec vs raw, products and by-products.
• Processing and gathering fees based on (non) ownership.
• Imperial vs. metric reporting standards.
• Nominations, comingling of gas.
• Working interest owners earning different production values.

I suggest that adding these requirements to an already elaborate Production Accounting algorithm is going to be a challenge for the entire information technology world. However, it is also something that can be done. The only impediment is money.

Some history of how the industry has developed, and the influence that these historic attributes play. Once an agreement has been in place by the partners, a general framework of understanding how the operation is then established. These frameworks are legal agreements that are explicitly supported by the norms and culture of the oil and gas industry, both locally and internationally. These organizations in Canada include the Canadian Association of Petroleum Landman (CAPL) and the Petroleum Accountants Society (PAS).

Once these agreements and frameworks are in place, this is the precise point in time that real life conspires to make things complicated. These frameworks have also placed a number of processes in the hands of the companies to deal with these real life anomalies. Mail ballots, Construction, Ownership and Operation (CO&O) agreements define in detail what exactly the operation is. Company A will use Company B's gathering facilities for $4.50 / 103M3 etc. Sales agreements are defined between each individual producer with nominations being a process of balancing the sales and production processes. These also create unique accounting requirement for the property in the long run.

The influence of management here is significant. Each company has differing strategies for the area and each are attempting to optimize their assets. In other words differing perspectives of the same data and information. The compromise and details of each partner in each issue creates the unique accounting requirements for each partner for each asset. This system is being built to accommodate these needs. What is unfortunate is that this is the point that SAP, our competitor, wants the producer to get closer to the customer! I have worked in oil and gas for almost 30 years and I am still unable to find a "customer" as SAP defines here, and after many search parties have been lost, I am giving up in the search for an oil and gas customer.

By way of an example, I as an operator in a major area have the desire to expand the throughput of my gas plant. By drilling in other regions and zones, gathering of additional gas that may now be commercial. The land is held by another firm that has no facilities around the area and are beginning the process of searching for partners. A few years later our new partnership has made a significant gas find. The production is a rich gas stream that also happens to be sour. One company has an invested infrastructure to deal with their production, the other partner has only his production. These two firms will realize substantially different metrics regarding their investments in these properties. The partnership accounting for the joint operating committee has to consider these issues and attributes in a never ending evolution of the accounting requirements. Can you say Java?

What this Genesys system will do is provide the richest environments for managing these issues. In discussions regarding the Accountability Framework with SEC Chairman Christopher Cox it is noted that he is using XML to create a metadata standard for managing the accountability of companies reporting for SEC regulations. In essence using the power of the computers today to enforce compliance as opposed to the human influenced methods today. Genesys is developing the W3C standard for oil and gas reporting. As our budget includes $9,000 for membership in W3C for this purpose, then nothing will happen in this area until these funds are secured.

If the facility needs to account for the literal chemical composition of its aggregate production, almost impossible in a large facility, then that could happen. Or alternatively the legal framework could override the requirements of the actual production, very common in large facilities and less so in small ones. Most likely, the joint operating committee (JOC) will need to select a hybrid solution from the Genesys system in order to deal with the unique strategies and production requirements of each producer represented at the JOC.

Another certainty in this is the dying hierarchies are more then satisfied with their SAP software. SAP explicitly supports and recognizes the management, therefore becoming the ultimate software tools for bureaucrats and self serving pigs, like Petro Canada.

Technorati Tags: Accountability, Christopher-Cox, Genesys, Java, Partnership-Accounting, Petro-Canada, SAP, Technical Vision

Petro Canada, the definition of incompetence.

Wanting to remain fair and reasonable in my criticisms of our marketing target, Petro Canada. I want to provide an early response to some of the perceived unfairness that I may have leveled at the firm.

The nature of my criticism may appear to lead to circular thinking. This circular thinking can therefore lead to a variety of contradictions. But as in all philosophical endeavors, the ability to analyze these contradictions leads to a variety of issue resolutions and / or at least clarity. So here is a summary of my criticisms to date and how they may appear at first to be inconsistent. Only upon analysis to show that the "management" of Petro Canada have become self serving pigs at a trough.

# 1 Petro Canada can't make money in a high priced commodity market.

Although my analysis of the company has revealed that they really are losing money, they have not admited it in any of their financial disclosures or guidance. I have predicted the second quarter of 2006 will be the first quarter the company announces that its loosing money. If the management doesn't disclose the extent of their difficulties, they may be bunking with Enron's Jeff Skilling and Ken Lay much earlier then they realize. With these commodity prices, you would think that making money would be easy, but please recall that we are talking about Petro Canada.

The second aspect of not making money is generally a reflection of the management itself. If the management pay's too much to acquire its assets, losses due to the high cost of capital will eventually sink the company. Due to its history of nationalized assets and unilateral takeovers, this at first blush is not a criticism of Petro Canada's management, but we'll get back to this point.

# 2 Can't buy assets at market value.

Contrary to the previous note, the inability to negotiate or bargain with other groups is a skill and an art. For IBM to have acquired Price WaterhouseCoopers for $3 billion, after HP had a negotiated agreement to acquire PwC for $19 billion, shows much of what an effective management can do. Petro Canada can't negotiate a deal, so it takes it hostile. Motivated by the need to be perceived as an "active explorer" in the Arctic region, Petro Canada will do everything to secure those assets. The trouble of course is that they are unable to have them nationalized, or acquired for cheap prices as the strong arm of a third world country.

Just as I suspected, analysis of these points reveals a lot.

• The one uppermost point is that this management can't make money on confiscated assets!
• Petro Canada can't play nice with others. This bid for Canada Southern Petroleum Ltd. is for $113 million, or less then one half of one percent of Petro Canada's market cap. Talk about rearranging the deck chairs on the Titanic!
• Even in a high commodity market with little or no capital invested, Petro Canada can not earn an income?

All of those interested parties in seeing that this scar on the integrity of the Canadian government disappear, this pathetic example of a bureaucracy that is unaccountable, uncontrollable and unprofitable be dealt with in a timely manner. Please join me in this chorus and have the management removed, the assets returned to their rightful owners and start anew with this blog and software development.

The management however has courage. How else could you describe the obscene compensation noted below. How dare this management grant themselves the following options.
Total stock options granted 21,823, 535 as of March 31, 2006.

Average option price. $31.

Closing stock price. $51. (converted at $0.895 Canadian / US)

In the money value of stock options = 21,823,535 x (51 - 31) = $436,470,700.

Does anyone wonder why Petro Canada has resisted these software developments?

Technorati Tags: Accountability, Bureaucracy, Compensation, Conflict, Genesys, Leadership, Petro-Canada

May Business Report

Marketing
What a difference a month makes. Our marketing program has moved into its second phase with the recent convictions of Skilling and Lay. Petro Canada continues to provide ample material for analysis and comment, and we are anxiously awaiting the companies second quarter results. The results of this marketing are beginning to provide the exposure that we seek, particularly locally.

Through Google analytics we are able to find out many things about our audience and have begun to understand what information and commentary they are seeking. I am intoxicated by the numbers of visitors. Blogging is truly an impressive development.

I have started to use the Technorati service to help evaluate this blog's performance. We are still jumping around a fair amount, however this last month we have seen our ranking jump from the low 900,000's to the low 700,000's. Not bad for a six month blog, and considering the total number of ranked blogs has jumped to almost 42 million.

I have in mind the idea of setting up an occasional "guest" blogger that could participate on occasion. The problem is that the tone of the marketing campaign causes the volunteers to cringe a bit. Seeing how the industry has treated me and the need to go to such extents is generally understood and agreed too, they don't want to volunteer their head to the chopping blog.

Content
We set out to see what kind of pace we can attain in terms of the frequency of blog postings. With the stated May objective of writing one article per day, I am now putting this in place for the long term. The discipline to write one story per day is a rather torrid pace for one individual. But it has an indirect effect of increasing and focusing the quality and value of the entire process. Therefore I want to try and establish a new guideline for June, that being of 8 posts per week, and, one per day as new minimums in posting.

My Favorite entries.
Im adding a new component to the month business report. My favorite entries for the past month. I have to say a few jump out at me as being critical in the development of this solution. They are:

• SEC Chariman Christopher Cox's use of XML tags to administer the future accountability framework of regulated markets.
• The numerous volume of Calls to action being heard around the world.
• Adoption of environmental concerns and solutions as a key component of this blogs writings. That the software defines the organization. That we are designing the software now to increase the innovative performance of the oil and gas industry, and, improve the atmosphere.
• Layering of the military command and control structure.

Technical Architecture
No changes to the overall technical architecture were made in May 2006. GlassFish continues to soar in terms of its acceptance and value to the community. As the first Java Enterprise 5.0 server it has access to a broad market, but the response to GlassFish seems to be so much more then that. Sun has begun the process it seems of reuniting the Java community after many years of competing servers such as WebSphere and Bea's offering.

I remain fairly firm in my use of AJAX. I think this technology needs to mature and move away from the JavaScript underpinnings. I would prefer to see a JCP authorized dynamic language (Groovy) fill the role that JavaScript does in AJAX. Since Genesys' focus is on the server side, with associated applications providing the user facing geographical components, AJAX style language hybrids may be able to fill a need in the future.

I started using ecto as my blogging tool. Scary powerful stuff. Once you get used to it, it can reduce your time requirements substantially. I would also like to find a tool that can evaluate my writing and make recommendations on its readability performance. If anyone knows of a good tool like that I'd be pleased to know.

Budget

• Revenue to the end of April: $0.00

June 1, 2006 budget items. (All costs are in U.S. dollars and include the 33% premium for the development copyright fee.)

1. . Project management and development = $300,000
2. Sun Grid The first thing we need is a home for the code. The grid provides everything we need in this instance, and the Grid that I selected was Sun's. At $1 per processor hour, a very affordable way to secure the resources we need. I think that our first years requirements would be amply satisfied with 10,000 hours of processing for the remainder of 2006 calendar year. Total requirement = $13,300
3. Ingres Open Source database and part time DBA, Total requirements = $57,000, Collabnet, I would like to have a generous budget for this critical tool. Provides the code management, community process, project and issue management. Budget includes tools, appropriate setup and consulting services. Total requirements = $34,000
4. General and Administrative, first 6 months of operation Total requirements = $60,000
5. Membership in W3C Total requirements = $9,000
6. Total Capital and Operating budget, 2006... $484,000

Notes:

• Sponsors, producers, and user contributions and donations are accepted.
• Please recall that this community is and will be supported by the producers. Based on an annual $ assessment per barrel of oil. For 2006 the assessment was fixed at $1 per boe per day per year.
• A company such as Encana in Canada would therefore be expected to support the community to the tune of $700,000 for the 2006 calendar year.
• These Monthly Business Report budgets are being proposed on a pay as you go basis for 2006 to support the community and ensure the community develops in the manner that is expected.
• Your donations are greatly appreciated, no donations mean no development work is being done.

Technorati Tags: Business-Report, Call-to-action, Christopher-Cox, Environment, Genesys, Glass-Fish, Java, Marketing, Military Command, Petro-Canada, tagname

"Petro Canada was forced to make a hostile bid."

Its 1982 and Canada has just passed its new "Liberal" governments budget. Petro Canada, being the product of the Canadian government's attempt to emulate the rash of 1970's style third world countries. Commenced the nationalization of petroleum assets. Venezuela, Mexico's Pemex and Libya were the prototypical examples that the Canadian government used to nationalize the Canadian oil and gas industry under Petro Canada's "management". Under the premis of a "back-in" Petro Canada was handed many of the most handsome oil and gas properties in the country. The fact that they were owned by other companies was not an issue. And as is the case with other third world nations, why would Petro Canada assume things are different in 2006.

With the Federal treasury in tow, Petro Canada went on a spirited acquisition trail. Foreign energy producers like Shell, Texaco, Chevron and BP soon learned that Canada was not hospitable towards foreign investment, and hence found little market value for their assets. Having adopted discriminatory tax policies that favored Petro Canada, foreign companies sold at distressed prices to Petro Canada. So when Petro Canada used these two methods to acquire assets, we see the attitudinal reason for their lack of patience with Canada Southern Petroleum and their Arctic assets. (Remember Petro Canada must be known an explorer.) Or as I have stated before, Petro Canada and its management are entitled to their entitlements.

Petro Canada in today's Calgary Herald indicates that it has not necessarily given up on Canada Southern Petroleum Ltd. (Recall its "Wednesday's corporate strategy" today). However as they are quoted as saying,

"It was toward the end of the process that Canada Southern came back to us with their estimate of value, which was significantly different than what our's is."

Kinda reflects an un-constructive point of view. You want to buy, the vendor does not want to sell. These "bargaining" positions that others may take towards Petro Canada's offer are not typical in the third world, and are particularly inconvenient for the management of Petro Canada. If you listen carefully you can just about hear the management of Petro Canada, "if you don't sell then we'll nationalize your interests". And "if we can't nationalize you, we'll impose discriminatory taxes on you to force you to sell at prices we deem reasonable".

Just as this Tiger (Petro Canada) can't change its stripes, either can it's management. The pen may be mightier then the sword, however, I would say the WebLog is mightier then the pen!

Technorati Tags: Adaptability, Bureaucracy, Energy, Exploration, Genesys, Petro-Canada

To Kyoto, or not Kyoto, that is the question.

Firstly I don't think there is a sane person that believes the influence of Kyoto protocols was a positive or reasonable solution to the environment. When politicians and bureaucrats come up with solutions, they have a tendency to be the wrong solution to the wrong problem at the wrong time. The science not being fully established, yet, many fear that the need for action is now, just in case. Not an unreasonable or irresponsible point of view.

Is this the time for energy industry to take this initiative and make it theirs? What if they were able to establish reasonable targets, commercial frameworks and dare I suggest environmental improvements. The point I want to make here is I think this can be done "profitably".

The environment and energy industries are now one in the same. How the energy industry can stick its head in the sand until the environmentalists go home is as unreasonable as the Kyoto protocol itself. Its time for the energy industry to get in front on this issue and make it their problem. In Canada the unjust method of allocating Kyoto penalties would have had serious detrimental outcomes with respect to our industries performance, commercial viability, and unquestionably a decline in the environment.

The sad part of this entire debate is that it appears the solution to the problem is what the energy industry needs anyway. As the oil reserves decline in pressure, and hence their drive, secondary forms of pressure maintenance, such as water injection are introduced. To enhance these secondary methods many miscible and / or tertiary methods and agents are added to maintain the reservoir pressure, and influence the oil from the rock. These methods are successful in capturing as much as 40% of the oil in place. Natural gas, propane and butane are injected into the formation sustaining production deliverability and increasing the life of the field, something that is desperately needed.

CO2 or Carbon Dioxide the chemical that Kyoto has deemed as evil is one of the most effective miscible agents. Not only would CO2 maintain the formation pressure, the CO2 works to loosen the grip of the rock on the oil, freeing it to be captured in the production. How big are miscible floods in Canada? Very large with over 30 fields that are actively being flooded with these miscible agents. I think there are more then 3 CO2 floods in the province of Alberta as well. Miscible floods that are driven by CO2 gas that is sucked out of the earth's atmosphere.

This is hardly a failure of the energy industry to deal with the problem. So why have they left the issue to the politicians? I think this is symptomatic of the inability of the structured hierarchy to deal with the problems of today. The Alberta Government has had a significant influence in the development of miscible floods in Alberta for over 3 decades. Funding 100's of millions of dollars in royalty holidays and incentives to maintain long term oil deliverability for the province. They and the energy industry have done a fantastic job in making this engineering understood and productive for the companies and the citizens of Alberta. The Alberta Research Council has been able to develop the leadership on this initiative. They have even developed a handsome software application PRize 3.0 to evaluate reservoirs for the effectiveness of miscible flooding. No one who is familiar with these initiatives would argue the level of their success.

It is therefore, in my opinion, the failure of the hierarchy to deploy the necessary resources in the Kyoto debate, and the failure of the hierarchy to use what it knows to mitigate the environmental risks. I want this blog to include the environmental components of the earth's atmosphere as a critical part of its role. I am therefore adding the topic of the environment as a point of the discussion on an ongoing basis. After all what we are doing in building this software is to define the innovative high performing oil and gas organization. A key component of these high performing organizations must include a solution to the environmental problems we face. If we are building the software and design the solution in the software, then we can solve the problem.

Technorati Tags: Accountability, CAPP, Energy, Environment, Genesys, Leadership, Kyoto

When were Petro Canada's options granted?

A story in today's Wall Street Journal asks if there is any correlation between the time that stock options are granted and their pricing. Steve Stecklow asks of Dr. Erik Lie (pronounced Lee) in "Options Study Becomes Required Reading"

"it's uncanny how good these executives must be at predicting what will happen with future stock prices"

After considering the situation, and writing his doctoral thesis, Dr. Lie raised a very interesting point regarding the use of stock options. He asked if the companies that were under his study to provide the dates of the stock option grants.

"Dr. Lie says he tried to contact a few companies to ask about the dates they granted options but he couldn't get past their secretaries, and gave up. His paper concludes, "Although I show aggregate evidence that retroactive timing occurs, it is difficult, if not impossible, to prove that such timing takes place in individual cases".

Now I think that Dr. Lie has valuable theories here. So in the interest of science and better accountability we should help Dr. Lie in his quest. Does Petro Canada back date stock option grants? Lets have a call in and determine if we can find out. Petro Canada's phone number is 403-296-7691 and ask for Gordon Ritchie, Senior Director, Investors relations.

Please report any findings to this blog through the comments field of this entry.

Technorati Tags: Accountability, Bureaucracy, Conflict, Genesys, Petro-Canada, Thesis

Petro Canada news management.

I am sorry to report that Petro Canada have pulled their press release about the acquisition of Business Inteligence Software. Fortunately the press release can still be sourced through Google Finance.

Technorati Tags: Bureaucracy, Genesys, Petro-Canada

Organization, the key.

This blog is dedicated to ensuring the optimal organizational structure is provided for oil and gas. I have noted that information systems need to support and define the organization, how a technical vision can fulfill this promise, and some of the accounting related issues. I think that we have found some important issues that need to be debated and discussed on an ongoing basis.

One critical area that we have not discussed so far is how the organizational command and control is achieved. This being a particularly important element and one that touches on the technical vision, accounting and management related issues and joint operating committees 5 frameworks. (The five frameworks being legal, financial, operational decision making, cultural and accountability.)

Without the hierarchy to define who is responsible, accountable and authorized, little if anything will be achieved. Individuals are how organizations achieve their tasks. Who represents the organization, their validity, their security and authorization can all be encapsulated in the software and have much of these interactions operate seamlessly. But how do the people organize themselves?

Simple military styled command and control. By layering a matrix of military structure, from General's to Privates, over the joint operating committee, the how and who is sourced, tasked and completed.

There are many aspects of this new issue that need to be discussed. Today I am starting a new series on how this layering of the human, physical and tangible resources can be deployed in a military styled fashion under the tag Military Command. Enough said for today and much to think about.

Technorati Tags: Dosi, Energy, Genesys, Military Command

Competition vs. coopetition.

A very good friend noted the nature of the oil and gas business is not one for the sharing of intelectual property. Competition is the predominate culture of the industry. When anyone talks about culture and change we know that in any organization the two traditionally have not mixed. How cultural change occurs is usually by extreme forces that compel the culture to be dealt with. So how are these ideas of Brown and Hagels "Creation Net" able to function in the competitive culture of the oil and gas industry. Please don't hesitate to comment. This issue needs a vigourous debate to get to the ultimate solution. Here are a few thoughts of mine.

Here in Calgary we are on a two week supply of concrete. Monstrous trucks used to mine coal and heavy oil are having difficulty in sourcing the volume of rubber necessary to meet their tire wear demands. Caterpillar is selling most of its production into Asia which is creating shortages of adequate industrial equipment. And please don't even ask for a Waukesha Engine. This is not an environment that competition can prosper in. Just as President Ronald Reagan revolutionized economics with policies that define and support what globalization is, new economic forces are beginning to grow and redefine the supply / demand trajectories. These new economic forces, in my opinion, are not linear, but logarithmic and possibly even exponential to yesterday's performance.

Company's that want to participate in this new economic reality have to address their sphere of influence and increase their capacity through the "Creation Nets" that Hagel and Brown define. Their three key components for effective creation nets were defined as;

Uncertain demand for goods and services.
When your customers are down the block, servicing their demands was relatively easy. Today your customers are global and their demands unknown and unpredictable. Your ability to secure methods to control production, demand management and inventories are tools that are unable to deal with the real issues in this very near future.

A need for the participation of many different specialists if creation and innovation are to occur.
Expanding your sphere of influence to include groups that would have previously been considered your competition provides two benefits.

• Increase the volume and quality of brains towards the problems at hand, facilitating and spreading innovation.
• Allocate the finite resources to optimize the most efficient production on a global basis.

Rapidly changing performance requirements in the marketplace.
As I suspect, starting with the second quarter of 2006 Petro Canada's financial performance will shock everyone. How could a firm in this energy environment do the things that they have done, to have caused so much destruction? The evaluation criteria for success and failure will need to be redefined. That Petro Canada and Enron have both reported "earnings" has nothing to do with reality, or the future.

Conclusion:
If we don't align ourselves to solve these problems and address these cultural issues, then we are destined to suffer unnecessarily. The hierarchy and bureaucracy are in complete control. They are the most self serving and destructive forces in this new business environment. They exist to serve the powerful few and must be stopped.

In my plurality thesis I have defined that the software is either a constraint or facilitator to organizational performance. The culture of the oil and gas industry is derived from the joint operating committee. Its key value creators, the engineers and earth scientists are born of a sharing and collaborative academic culture. I don't want to change the culture of the industry, I want to realign it to where it belongs.

However, after a century of big business models. Models that enabled substantial organizational performance, those models have failed. Its now time to say goodbye to the bureaucratic culture and re-align the oil and gas industry to its more natural cultural influences of the joint operating committee and scientific roots. To meet the customers energy needs for the long term requires we build the software to support these "Creation Nets".

Unfortunately the financial resources necessary to build these applications are firmly held in the tight fist of the bureaucracy, so lets start cooperating.

Technorati Tags: Adaptability, Bureaucracy, Creation-Nets, Genesys, Hagel-Brown, Intelectual-Property, Petro-Canada, Plurality, Thesis

Petro Canada announces new, software?

Just a couple of days ago I ran a series of how a firm like HSBC in 1982 set out to become one of the world's largest financial institutions on the basis of its Information Technology strategy. Here we have Petro Canada announcing that it has purchased a "new" software application. Next we'll see announcements when the company has turned on the lights. I mean, why are they announcing that they purchased a new software application?

Maybe there's something exciting like the HSBC findings. That Petro Canada will be providing the world with a bold new strategy! I some how doubt it. The company that sold them the software, Information Builders and their oil and gas software offering can be seen here. They like Petro Canada have a unique vision regarding entitlements that I find best reflected in IBI's statement;

"That's why industry leaders such as Gulf Canada Resources Limited, Northwest Natural Gas, and Westcoast Energy, Inc. have turned to Information Builders to deliver crucial business information to managers, employees, customers, and partners."

Now if I am not mistaken Gulf Canada Resources Ltd. being purchased by Conoco Phillips in 2001. Westcoast Energy being purchased by Duke around the same time. Here we have Petro Canada making a press statement about the purchase of a software application that is so well utilized in oil and gas, that the vendor company cannot even bother to update its customer list from five years ago?

The accountability charges that I have made here are beginning to stick in Petro Canada's back side. The management being as progressive as they are, by selecting and making the acquisition of new software are directly responding to the charges that I have made in this blog. Petro Canada's attitude that the selection of the alternative "Information Builders" accountability framework is the preferred model to what I and SEC Chairman Christopher Cox are talking about. It is also evidence that they understand my thesis that the software defines the organization. By selecting a second rate vendor that has no real offering and making hay about it in the press is the best this bunch of half wits can generate.

However, like so much of their past activity, the transaction only fuels the concern that they are lost and should be dealt with promptly by the Petro Canada shareholders. I will leave it to my readers to determine if the charges that I have made in this blog are valid.

Technorati Tags: Accountability, Christopher-Cox, Conflict, Genesys, HSBC, Petro-Canada, Technical Vision, Thesis

To me Petro Canada is more disturbing then Enron.

There seems to be an attitude at Petro Canada that the company is involved in the oil and gas industry. If it is seen to be "active" for the sake of "activity", then the fleecing of the investors, based on the Enron model, can continue. Yesterday it was learned that the Board of Canada Southern Petroleum Ltd. rejected the Petro Canada offer, and in their response to the press, Petro Canada reflected that they thought the offer was fair and would not be amending it. Petro Canada is not attempting to be successful, its not attempting to be a failure, it is just involved in diversionary activities.

Lots of press that makes it "appear" that they are a progressive and prudent company. Recall that my prediction is that Petro Canada's second quarter will be an abysmal performance. How they report the validity of their "Panic" business model, and "hourly" strategy sessions will have a deep and compelling reflection of the firms character.

So in the activity column, Petro Canada is looking to augment their capability through the acquisition of some land in the Arctic. When the offer is rejected, they turtle and go home. The objective, to look as if they are an active explorer, being achieved in their minds, they can then turn to the stage producer to commence with the next show.

I found some pertinent analysis in Saturdays New York Times regarding the Enron trial. The quote was;

"The Enron case will forever stand as the ultimate reflection of an era of near madness in finance, a time in the late 1990's when self-certitude and spin became a substitute for financial analysis and coherent business models. Controls broke down and management deteriorated as arrogance overrode careful judgment, allowing senior executives to blithely push aside their critics."

Yesterday I promised my readers that I would summarize the Petro Canada story for them. In selecting the tag on this blog "Petro-Canada" will aggregate all my "Petro Canada" stories for the readers. This is why Chairman Christopher Cox's use of tags in the SEC's accountability framework is so powerful, its so damned simple.

It appears to me in the case of Petro Canada, they have added new elements to the Enron styled rule book, however, to me, this is only proof that history does repeat itself.

Technorati Tags: Accountability, Bureaucracy, Christopher-Cox, Compensation, Conflict, Energy, Genesys, Petro-Canada

Petro Canada, the series.

Well the word is out that both Ken Lay and Jeffrey Skilling are now convicted felons. The attainment of this key event in my marketing plan has finally come true, and I can now commence phase II. I will proceed with the analysis regarding Petro Canada, and determine why it is they have not been charged, yet.

In today's coverage of the Enron story, the Calgary Herald wrote;

"Meanwhile, Canadian Experts said that had Lay and Skilling run their company in this country the two would likely still be "walking free"".

And I can assure you, if Petro Canada were operating in Texas, they too would have been in prison by now.

I have prepared a long list of stories that I will be writing in the next few weeks about Petro Canada. These stories will focus on a systemic inability to account for their actions. When confronted with the facts, the company has skirted the questioning adeptly through obtuse reporting and what is best described as a shell game. I will start tomorrow with a summary of the accusations that I have made in this blog to-date and continue on with my reasoning why Petro Canada should be made to account to their shareholders and several other interest groups.

It is my opinion that all firms in their right minds would have assessed the risks and opportunities of the criminal charges and legislative environment created in the U.S. since Lay and Skilling were first discovered. It is my opinion that Petro Canada did that assessment and determined that it would somehow not affect them. It is clear now that they have a made a critical error in judgment and will now need to account for the $1 billion + in stock options ($199 million of which is in the money) along with a series of actions that have permanently crippled the company. But when you are asked to manage the nationalized oil and gas assets the Canadian Federal Government confiscated from the international producers, a pervasive mindset of being entitled to your entitlements begins to penetrate the minds of management and as we shall see, certainly not a commercial mindset at that.

I can assure you this blog has caught the attention of the management of Petro Canada. With Google Analytics there is not much of who and what your readership is interested in, Petro Canada as a topic scores highly on this blog. With the stated strategy that I am employing in this conflict as "I have a right to be sued" I can guarantee my readership the next ten days or so will be very entertaining. The first thing that may stand out is that Petro Canada is / was substantially smaller then Enron. But the scope of the executive compensation and cover up at Petro Canada is not only larger in monetary terms but far more serious. After all they knew what Lay and Skilling were up to. How do they propose to explain that they were not aware?

Finally I will tie in the actions of Petro Canada's management in making sure their continued entitlement's to their entitlements were not challenged by the thesis of this blog. This thesis being that the Joint Operating Committee was the natural form of organizational structure of oil and gas firms. That the bureaucracies were redundant is a given that is tacitly understood by everyone, but to define the Joint Operating Committee as the key organizational focus required the software to be built before the changes would occur.

Petro Canada's exclusive and lucrative party was being threatened by this thinking. They realized if the software wasn't built, then the risk would be eliminated and through their selfish and un-constructive thinking, have taken these concepts to make their party continue on indefinitely.

As custodians of the investors resources Petro Canada will be held to this higher standard of expectation.

Technorati Tags: Accountability, Bureaucracy, Conflict, Energy, Exploration, Genesys, Intelectual-Property, Petro-Canada, Plurality, Thesis

Number 9.

The number of calls to action increases by one more. This one more local. Mr. Murray Edwards is sort Calgary's version of the local boy done well. At 46 years of age he has amassed a fortune of several billion dollars and is currently holding down the following roles.

• President, Edco Financial Holdings Ltd.
• Vice-Chair, Canadian Natural Resources Ltd.
• Chair, Ensign Energy Services Inc.
• Chair, Magellan Aerospace.
• Owner, Resort of the Canadian Rockies Inc.
• Co-Owner, Calgary Flames.

Mr. Edwards is quoted in the May 2006 issue of Alberta Venture, in which he is the cover story "Who Cares About Respect"

"We're really big proponents of flat organizations where people have a sense of ownership."

So lets mark this down as number nine in a long lists of calls to action and welcome Mr. Edward's to the party, maybe one of his energy related firms will be the first to donate to these software developments.

Technorati Tags: Accountability, Adaptability, Bureaucracy, Call-to-action, Energy, Genesys, Plurality, Thesis

Is Petro Canada's executive compensation fair or reasonable?

No, but then again Mr. Ken Lay and Mr Jeffrey Skilling have been found guilty of 6 and 28 counts respectively of Fraud, Conspiracy and Insider Trading.

You be the judge.

Technorati Tags: Bureaucracy, Compensation, Conflict, Energy, Petro-Canada, Wharton

Who'll be the HSBC of the oil and gas industry, Part II

In HSBC we have a firm that has developed an overall global strategy to compete in the banking business at the highest levels. All based on the foundation of Information Technology and specifically their "Hexagon" system. So much so that the HSBC Hexagon Logo and the system are synonymous with the firm.

As of 2005 HSBC has continued in its strategy and are filing financial statements that are stellar to say the least. With $20.9 U.S. billion in pre-tax profits, overall, I rate this far superior to the earnings of both Microsoft and Google. I also have difficulty in assessing these as banking earnings, and would prefer to compare them to other technology companies such as Google and Microsoft.

That Hexagon brought HSBC's ambition of being the one of the worlds largest financial institutions into reality. Clearly this strategy has been implemented and optimized since 1982 when the system was conceived.

It's now 2006. Given the same situation in oil and gas, how could an aggressive producer use the Genesys system to enable them to be faster, more capable, more adaptable and more innovative then the next competitor. Using Genesys, its proposed software development capability, the joint operating committee as the primary organizational focus, who will be the first oil and gas producer to realize its benefits. Benefits that HSBC has proven are available with the appropriate IT strategy supporting the firms main strategies.

What I am restating here is the information that I have commented on many time in this blog. Information that I fundamentally believe in and would expect that will not be long in finding its audience. The world needs the energy resources. We have what the President of MIT is calling the perfect energy storm. One in which our current deliverability is not sustainable due to the prolonged "cheap" oil era. We as global business leaders need to form Genesys for the oil and gas industry, just as Hexagon was to HSBC.

Technorati Tags: Accountability, HSBC, Intelectual-Property, Technical Vision

Who'll be the HSBC of the oil and gas industry.

I was struck by the new logo and branding campaign that HSBC is revealing at their new location here in Calgary.

"The World's local bank."

I have to admit first off that HSBC is one of my favorite companies of all time. I was first introduced to the strategy and vision of its leadership in the second year of my MBA program. We were asked to review the company for one of many thousands of readings we reviewed. What was unique and struck me was that they had hired the head of information systems to be the new company president. This was the top president of the entire company, not a subsidiary or branch, the global operation. Gutsy move for a company to do, especially since this was well before the understanding of technology that should be present today in every board room.

Here are my edited notes of the reading.

Expectations and impacts of a Global Information System: The Case of a Global Bank from Hong Kong.

Introduction

The world's industries now must compete on a global scale. The opportunity and threats of the global marketplace provide industry with constant pressure to build world products, and tailor products to customers in diverse markets.

The banking industry has been particularly affected by the changes to globalization with the combination of competition, deregulation, the availability of cheap IT, and the shift towards a global outlook by large industrial organizations which have lead to dramatic changes in the strategy and structure of the banking industry.

HSBC's hexagon application is studied to determine how one bank has used IT to coordinate IT strategy, global assets and overall strategy to compete with IT as a cornerstone and on a global scale.

Expected impacts of global IS in the financial services industry.

The Hexagon system.

HSBC is an international bank with operations in 79 countries and 5500 offices. 120,000 employees, a size that only Citibank can match. IT has been an explicit part of HSBC's strategy, with 6000 worldwide IT staff heavily involved in product development. The Chairman and CEO, John Strickland is a computer programmer by training and began at HSBC in 1966. Hexagon began conceptually in 1982 headed by Strickland. A strategic threat was identified when Citibank and Chase were both able to provide corporate customers with terminals to access "in country" transactions and balance data on their accounts.

HSBC customers were well to do international travelers that may gravitate to the type of services being offered by Citibank and Chase. It was determined that HSBC would need to leapfrog the competition in terms of functionality, the concept was to provide the resources of a worldwide banking system right to the desktop manager. The ability to know real time information on the cash balances, receivables and securities balances worldwide would be the objective of Hexagon.

In 1985 the first operational version offering basic account information and payment instructions was installed at 5 Hong Kong banks. In 86 it was installed at locations in the US, UK, Singapore and Japan. The ability to send and receive email between branch manager and customer was added. In 1989 a functionally rich version of the application was distributed to 30 countries of the HSBC.

Currently the Hexagon system (circa 1997 I believe) is a global electronic banking service giving customers 7 x 24, 365 day service from the customers PC in multiple languages and operating systems. 500 other banks are using the Hexagon system and Hexagon is also tied into the international SWIFT and Automated Clearing House services of check clearing. JPMorgan uses the services for their private banking clients. Checks can be written online and sent in 40 different currencies.

These facilitate the international firm the ability to distribute money as required to any region within the world on their desktop.

Hexagon Performance Impacts.

To asses the impact of Hexagon on the HSBC we need to look first to their customers and secondly assess the performance of HSBC expected functional impacts of a global information system and finally examine HSBC's overall firm level service.

Customer Acceptance.

The growth of customers on the Hexagon system since its introduction to include 50% of all electronic international corporate banking transactions worldwide.

Impacts in terms of Hexagon's purpose.

Scale and Scope Economies.

The costs associated with incremental use of customers is marginal. Repositioning to other customers is a simple interface change to accommodate the needs of the new customer group.

Hexagon has helped HSBC to become the largest bank with assets of $452 billion vs. Citibank @ 310 billion and Bank of America @ 260 billion. It is also one of the largest in terms of its global reach with only Citibank operating in 98 countries as being larger. (Again 1997 I believe. )

Product Value

Hexagon offers customers opportunities to reduce costs by saving transactions processing steps. Many customers have their corporate financing departments tied into Hexagon and operating them as if they were part of the ERP systems. (i.e.; integrating payroll within the Hexagon systems)

If Hexagon provides value to its customers then they should be able to charge a higher fee for the service. Interest income plus other revenue were compared from 1990 to 1997 to HSBC and its competitors. A comparison of pretax profit also showed that HSBC margins grew from 21% to 42% during the seven year period and from third position to first.

Efficiency.

Operating costs usually associated with the staffing of operations are reduced due to the efficiency of the software.

In terms of the staff expense as a percentage of operating income, HSBC is in the middle of the pack. The conclusion is that Hexagon has not reduced average transaction expenses. When we examine premises and equipment expenses as a percentage of revenue, HSBC expenses are the lowest among the peer group of banks. This suggests that Hexagon has reduced the physical bank space required and as such does not show up when measuring Hexagon's transaction costs.

Organizational Effectiveness.

Hexagon integrates much of the back end operations of a bank. The securities and payments part of their operation.

Competitive advantage.

The full value of Hexagon depends on its geographical scope. The ability to provide service in each country a customer may operate in provides the value. Therefore someone wanting to compete on the basis of the same functionality as Hexagon needs to establish just as large a network of global reach as HSBC, which limits the competition to a very small amount of companies.

Success of HSBC

HSBC's explicit strategy includes a focus on the development of cutting edge IT applications to support its global operations. For 1997 HSBC pretax profits were $8 billion US. HSBC was the tenth largest in its peer group of 100 banks, and was number 1 in pretax profits for 1995 to 1997.

Discussion, Limitations and Implications for managers.

The results strongly suggest that Hexagon affects HSBC's performance by increasing economies of scale and scope, providing additional value to customers, increasing efficiency within HSBC and improving organizational effectiveness. In addition network externalities in the product provide disproportionately more value to the customer when every location at which the customers wants to do business is covered by the system.

These also create substantial barriers to entry for any competitor that may want or need to compete with HSBC. The configuration of the remaining aspects of the bank are different then most other banks around the world. The ability for HSBC to augment the value and advantages of the system by configuring their physical assets to compliment the Hexagon system are key in achieving many of the value propositions.

Limitations.

This research shows that firm level performance is affected by many factors. While our analysis focused on one broad product line, the quantitative and qualitative analysis, nor all of it together, proves that Hexagon positively affected HSBC's performance. The researchers however believe that Hexagon's value proposition is quite persuasive.

Implications for Managers.

This is further evidence of the extreme importance of IT infrastructure to their business. Customers will begin to demand faster transaction speeds, lower transaction costs and geographic scope. Only highly integrated global systems can hope to compete on this level.

Technorati Tags: Genesys, HSBC, Technical Vision

Dr. Giovanni Dosi, Sources Part IV, E

The externalities of the innovation process.

Dosi has been clear in establishing the public and private components of technology and the innovation process. Specifically the appropriability of the innovation process is endogenously and exogenously influenced. That innovation and science are linked, and each contribute and inhibit the development of the other. Oil and gas firms are now tasked with not only the development of the science, but must understand the sciences development. The same attributes apply to the process of innovation as much as they do to their underlying sciences.

In this section Dosi takes the public component and divides it into two forms.

"First, there are certainly "free-good" elements, in technological progress, essentially stemming from the free flow of information, readily available publications, and so on." p.1146

Secondly, the "un-traded interdependencies among sectors, technologies and firms and takes the form of technological complementarities, synergies, flows of stimuli and constraints that do not entirely correspond to commodity flows." p.1146

Here Dosi asserts the "production of bicycles drew technological knowledge from the production of shotguns". This does not necessarily warrant much in terms of further study. What Dosi is attempting to do here is lay some further groundwork that will be added to in part F and in part "G Some Conclusions". Therefore I am only adding or stating these components now in order to fill in some value in the next Dosi entry.

Technorati Tags: Dosi, Energy, Exploration, Genesys

Another morning, another call to action.

Mr. Olivier Appert, Chairman and CEO of IFP has written a fine conclusion that leads me to comment at the end of this blog.

"In order to meet the world's needs and demands for energy, while simultaneously observing our current energy supply and protecting the environment, the oil and gas industry will have to solve many complex technological problems in the coming decades and continue to innovate as it has done since its inception.

Recent scientific and technical advances, the fruits of collaboration between the worlds of research and industry, have led to a profusion of promising emerging technologies and represent key assets for preparing for the future, particularly in terms of managing the energy transition from oil and gas to new energy sources.

In the face of increasingly fierce competition, it is imperative these new challenges become integral to our research and innovation strategies. Developments will play a crucial role in guaranteeing genuine sustainable development for the world."

I can assure Mr. Appert that he is 100% consistent with the Plurality thesis I wrote in 2004. It was at that time however that the recognition of the capability of the oil and gas industry as represented by the hierarchy would fail in this critical task. That new and more innovative organizational forms are required. The joint operating committee being the global cultural manner of the oil and gas industry, is the financial, legal and operational decision making frameworks as well. The joint operating committee is summarily ignored by the hierarchy, who's only claim to fame is the accountability framework. If you hear a manager in a company complaining about Sarbane's Oxley, then you not only have a hierarchy in full control, but a hypocrite of the highest order. It is Sarbanes Oxeley that defines the scope and value of bureaucrats justification, salary and pension benefits.

So as I noted here yesterday, SEC Chairman Christopher Cox understands that the way to redefine the accountability framework is through the Extensible Business Reporting Language, and the SEC's tag library. What we therefore need to do, is first and foremost, build the software to define and support the joint operating committee as the natural form of organizational structure. Until we do this, these calls to actions are just words that soon will fade in there meaning in the face of the angry energy consumer who wants to know why they can not drive their car or heat their home.

This is serious, if your expect the current organization of the oil and gas industry to solve this, you first better explain it to them fore I have not seen the recognition that Mr. Appert's report is generally accepted.

Albert Einstein said two pertinent things.

1. Today's problems will not be solved by today's thinking.
2. Doing the same thing, over and over, expecting different results is the sign of insanity.

Technorati Tags: Accountability, Bureaucracy, Call-to-action, Christopher-Cox, Genesys, Plurality, Technical Vision, Thesis

Calls to action, a summary.

Occasionally I will post a summary of the number and quality of the Calls to Action I am finding today. Each of these have been reflected on in this blog and can be searched by their technorati tags.

To date: (no particular order)

• Thomas L. Friedman in his book "The World is Flat".
• Oxford Analytica.
• Chrisotopher Cox, Chairman of the Securities and Exchange Commission using XBRL.
• Harvard University.
• McKinsey Consulting.
• The Oil and Gas Journal.
• MIT President.

One would think that the oil and gas companies, investors, users or developers might want to start hitting the PayPal button, make a donation and we can start building this system.

Technorati Tags: Abstract, Call-to-action

Another day, another call to action.

The Wall Street Journal continues on its tradition of producing some of the finest articles. This one about the relatively new Securities and Exchange Commissioner (SEC). Mr. Christopher Cox. Not only has the new commissioner have a great name, but he also has a good idea that dovetails well with what this blogs purpose is.

"Build software that manages the accountability framework, then alignment with the financial, legal, operational decision making and cultural frameworks is achieved. The recognition that these frameworks are defined and constrained by the Joint Operating Committee are how the producer achieves the speed, innovation, capability and adaptability to meet the markets demand for energy." (Quoting myself here.)

Mr. Christopher Cox is interested in doing the same for the entire world's financial trading markets, which as SEC commissioner is his responsibility.

By making the types of comments that Commissioner Cox states in the WSJ article. It is clear to me that he is not only on the right track but will resolve the largest administrative nightmare of the public company reporting process. To me how Sarbanes-Oxley gets resolved from here is difficult. To make any major amendment to it would make it appear as the framework has become unmanageable and invite the Ken Lay's, Jeffry Skilling and Petro Canada's back for more hollowing out of the investors wealth.

How Sarbanes-Oxley legislation is eliminated from the process is by eliminating the need for the 800 plus forms to a handful of standard tags in the Extensible Business Reporting Language. I can only thank that the Commisionner understands the technological capabilities and can apply it to the SEC. I have spoken of meta tags and meta data before, however, I'll leave it to the inventor of the Internet, Sir Tim Berners-Lee to describe why Mr. Christopher Cox's and Mr. Paul Cox's (me again) ideas are workable.

When I speak about the demise of the bureaucracy I am saying the same thing that the Commissioner is saying here. He is laying the groundwork and infrastructure of how investors will be able to manage their assets in the future. Note that I did not state the Investors can manage their companies, but the Investors Assets.

That an investor could purchase an interest in a well, and as such have the entire accountability framework in alignment with the financial, legal, cultural and operational decision making frameworks as captured and defined by the regulation and the software that defines the Joint Operating Committee, and that working interest then is a tradable asset on the worlds exchanges, then we are talking about the new society.

If I have not made it clear at this I point, I'll state it explicitly. Genesys and this blog have adopted the SEC's XBRL tag library. Wow, so now we'll be compliant with the SEC, that was easy.

Technorati Tags: Accountability, Bureaucracy, Call-to-action, Christopher-Cox, Compensation, Energy, Genesys, Java, Petro-Canada, Plurality, Thesis

Another week, and another call to action.

This one from Oxford Analytica. And as there website reflects;

"Oxford Analytica is an international, independent consulting firm drawing on a network of over 1,000 senior faculty members at Oxford, and other major universities and research institutions around the world. Founded in 1975 by Dr. David R. Young, Oxford Analytica has built an international reputation for seasoned judgement on and analysis of the implications of national and international developments facing corporations, banks, governments and international institutions."

Seeing how they're derived from academia, and assert their independence as a key component of their offering. Oxford Analytica's conclusions and analysis would lead me to believe and trust in them more so then a Cambridge Energy Research Associates (CERA) report. CERA reports which are funded and directed by the energy industry itself, tend to have a self defining and self promoting style of research and conclusions.

It is fair to assume Oxford Analytica's report entitled "Cash rich oil majors focus on frontiers" has little direct financial support or influence by the oil and gas producers. A bias that is evident in many of the alleged research reports from CERA. Research reports that tend to be more focused on the next quarterly outcome, and Dr. Daniel Yergin's strong opinions of how much oil there is, or isn't.

Oxford Analyticas explicit conclusion is stated as;

"Technological lead will prove critical in the efficient exploitation of frontier oil provinces. Upgrading portfolios means majors will divest assets that provide material opportunities for small and medium-sized independents."

Kind of resonates with the fact that the large producers are unable to keep up to the marketplace demands for energy. Or perform in an environment of speed, innovation, capability and adaptability. But then I am just as biased as CERA is in that the hypothesis that I developed in September 2003, and attempted to have funded by Petro Canada et al, that the Joint Operating Committee was the natural form of organization for the oil and gas industry, and that organizations were defined by their software capabilities, was handed to CERA to research as I was hustled to the street by Petro Canada's management. It's just too bad that CERA is not only biased, but also very slow in reaching the research conclusion that I did in May 2004, and, Oxford Analytica have been able to agree upon currently.

If you can sense a bitterness at the attempted theft of my intellectual property by the criminal minds of Petro Canada and CERA you would be incorrect for two reasons. One I ended up with the copyright by publishing the research conclusions to my hypothesis first (the underlying foundation of this blog) . Secondly, I have a right to be sued, as stated here before and documented by Dr. Thomas C. Schelling, a right that I cherish more each day and pray will happen soon.

Technorati Tags: Bureaucracy, Call-to-action, CERA, Conflict, Exploration, Oxford, Petro-Canada

Adaptability, Sun may have something there.

I pirated the Sun CEO's comment that "adaptability" is a key component in business. I noted in an earlier entry that Petro Canada would be unable to adapt to an explorationist mindset due to the bureaucracy. Adaptabililty vs bureaucracy. That will be a major part of the new frontier. In pirating this new definition of the term "adaptability" I now realize that there is some underlying significant meaning.

When added to today's other critical business components of Speed, Innovation and Capability; adaptability establishes new performance criteria for individuals, societies and organizations.

One of the major discoveries in my research was based on Dr. Anthony Giddens Theory of Structuration. That society, people and organizations need to move and progress together, or there will be failure. It doesn't take a lot to realize the troika that Giddens defined is currently out of synch. With the bureaucracies of the organizations impeding the progress of people and society. That a failure will occur due to this non-synchronous state is a given, and I am betting that the bureaucracies will be dispatched to the trash heap sooner then most can imagine.

Dr. Wanda Orlikowski built upon the Theory of Structuration when she defined her Model of Structuration for Technology. Dr. Orlikowski's model asserts that a fundamental component of society is technology, that technology provides a duality and therefore is a constraint or inhibitor to successful advancement of society people and organizations.

I asserted in the development of my hypothesis that;

"hierarchical organizational structure(s) is(are) an impediment to advancement of the oil and gas company and society in general".

My research built upon the Theory of Structuration, Model of Technology Structuration and hypothesis to determine that "SAP is the bureaucracy". That organizations are defined and constrained by the software that supports the organization.

The purpose of this blog and the developments at https://genesys.dev.java.net/ are to define an organizational structure of Speed, Innovation, Capability and Adaptability in the global oil and gas industry.

Technorati Tags: Adaptability, Bureaucracy, Exploration, Genesys, Java, Petro-Canada, Structuration, Schwartz, Sun

Why does Petro Canada get all the attention?

To prove that the blogosphere is more powerful then the bureaucracies. The ability for these bureaucracies to survive does not exist. In an environment where innovation, adaptability, speed and capability are required, who needs bureaucrats.

The need to prove that Petro Canada is run for the betterment of the managers "stock" options. Or as I like to refer to them as "entitlement" options. The management can not expect that anyone is going to overlook their use of the treasury for their own purposes. Do they not recall Enron or Worldcom?

Its not personal, but Petro Canada's staff took the time and effort to make sure that I understood that any of the efforts I made in developing this software would be minimal and unsuccessful. That my time in the oil and gas industry was over and that I should find work in other industries. So its just so much easier to pick my targets after this treatment at the hands of their so called "senior" management. Since they have had the luxury of using their power to make my life miserable, all is fair in love and war.

That these organizations as represented by Petro Canada have failed. In every metric of financial, production and particularly earnings, they will begin to show signs of being severely strained. I believe a company that was successful in the exploitation era, is an abject failure in the exploration era. They can not change their stripes.

These failures are beginning to be evident in some of the companies already. Failure is the most advanced in Petro Canada, and therefore picking targets is easiest when they pretend to continue on for the betterment of their shareholders.

Technorati Tags: Exploration, Genesys, Java, Petro-Canada

Point taken, Chief Java Evangelist

Jonathon Schwartz is the Chief Java Evangelist, President and CEO of Sun Microsystems and in preparation for the Java One conference, he prepared a blog entry to discuss the comparison of the shipping container to Java.

Now I like to joke that Schwartz, McNealy and Gosling are second rate Java evangelists behind myself. Maybe what I should of stated in my comparison of the container and Google is that Google's favorite language is Java.

I am highly recommending that everyone and anyone register for a free web based introductory course on the Java Programming Language. Hosted by Sun employee, Sang Shin, register for the course and learn why most people believe the Java revolution is about to really begin. I'll be registering as well because I understand Mr. Shin so well that I am going to learn much from him.

[Learning] [Container] [Java]

Before Google, the container.

Sarah Murray wrote an interesting article in last weekend's National Post that was brilliant. Entitled "Birthday of the Box" it chronicled the birth, issues, development and effects of the shipping container. Celebrating it's 50th year, the ubiquitous shipping container has lead to many of the innovations and benefits of globalization up to this point. Noting the particular points of interest are as follows.

• 90% of global trade now travels inside them.
• It was the brain child of Mr. Malcom McLean, a North Carolina truck driver.
• Port operators and ship owners were reluctant to put their money into equipment, vessels and port infrastructure, and most importantly the longshoreman and dockworker unions dug their heels in. (Something that I can appreciate from the oil and gas industry.)
• Longshoreman in New York dropped from 30,000 in 1960 to 8,500 in 1986.
• Intermodalism impacted shipping to such an extent that OOCL Shenzhen is the largest vessel. Capable of the following capacity
• Christened on April 30, 2003 in Korea.
• Can travel at 25.2 knots at full load.
• Capacity is more then 8,000 containers.
• 8 million crates of bananas, or
  
• 200 million blouses in a single journey.
• Delivering choice to the global consumer.
  
• Making production of goods to flow to the lowest cost producer. An efficiency that benefits every human on the planet.
  
• Used containers are now converted to housing, schools and such in the developing world.
  

I agree with the author that all aspects of our lives have been impacted and improved as a result of the thinking of this North Carolina truck driver. The author notes that science is also benefiting in many odd ways. In 1992 a container of 29,000 plastic ducks crashed in the middle of the North Pacific. These ducks are helping scientists map and gain a better understanding of ocean currents as these ducks are noted and documented in their travels.

Sarah Murray is the author of an upcoming book called Moveable Feasts: the Incredible Journeys of the Things We Eat, ISBN. Although she mentions that the impact of information technologies on these innovations have also made the container fulfill the promise of its full value, I think she is missing a phenomenal parallel in terms of its impact. And that is Google.

That the container was able to revolutionize the "physical" world is credited to its roots and birth fifty years ago. Google to me provides the same value and impact from the "intellectual" world. As we have automated and "roboticized" much of our production, logistics, shipping and marketing, Google is the same revolutionary thinking. What could be thought today in this world could be implemented and acted upon by Google immediately.

As we pass from the physical to the intellectual worlds, 50 years from now, people will know and say the same things about Google, that we now know and say of the container.

[Google] [Container] [Revolution]