Military command, part III

I want to follow up quickly on my military command entry and concepts. The points that I want to establish today are:

• Allies = Other producers, or members of the joint operating committee, or service based organizations.
• Each army can be parsed into further classifications such as Navy, Marine, Army and Air Force.
• Each participant in the joint operating committee organizations may have several roles, several tasks and several "superiors" and / or underlings reporting to them from various organizations.

First up are allies. Many military commands expand beyond the scope of the current army. In WWII the entire allied forces were under the command of General Eisenhower. The English and Canadian militaries, although separate from the Americans, were engaged in similar exercises and were coordinated as one. This is the type of application that I think is needed to solve the current and prospective energy issues. Working for a company you may be seconded to work for several different joint operating committees that your company has an interest in. This military analogy is only a more formal method of recognizing the loosely coupled nature of the missions, tasks, physical resources, and personnel.

Second separate tasks or specialty roles are segregated between certain military disciplines. In this analogy the Navy, Airforce, Marines and Army are replaced by the Geological, Engineering, Administrative and Field disciplines. As with the individual disciplines the military chain of command remains in tact through the various disciplines. As an Army Captain would have superior rank to a Navy Private, the Senior Geologist would also have a recognized authority and superior rank over a junior Engineer.

Each worker within the oil and gas industry is therefore tasked in many different situations with different rank and roles. The producer that is his / her employer will have the opportunity and latitude to second each individual to work in any capacity and area that they are authorized in. This dynamic component being actively managed through the Genesys system identity management. Each worker in turn may have several different producers, which is almost a given, to be assigned tasks from.

Lastly I want to raise a point that dovetails nicely with what Susan Hockfield, MIT President and Professor of Neuroscience has stated. Noting that the situation in energy was in a "Perfect Storm" and I quote.

"President Susan Hockfield unveils MIT's grand-scale initiative to confront the urgent challenge of our time: clean, affordable energy to power the world. In much the same way that MIT played a decisive role in the Allied victory in World War II, she calls for the Institute to muster its formidable forces to speed a transformation of the global energy landscape."

Note her tie in to the level of effort equivalent to MIT's in WWII. I share the concern and strongly recommend everyone to watch the MIT video of Professor Hockfield to understand better our concerns.

The analogy to the military has unfortunate connotations. However, it is by far the best manner of layering a component of command and control over the joint operating committee. The systems that we develop here are best suited for these interactions. So much of what we discussed here would be transparent and seamless to the user.

Nonetheless I think it is generally agreed that the hierarchy that is now in full command and control is not the organizational structure that will marshal a solution to energies "perfect storm." After all they don't even believe there is a problem.

Technorati Tags: Genesys, Military Command, Innovation, Energy

Dr. Giovanni Dosi, Sources Part IV, F & G

Part F. Determinants and Patterns of Investment in Innovation: Toward a Sectoral Taxonomy.

Up until this point Dosi has laid some groundwork for future classification of business types of which he describes in four sectors:

• Supplier dominated sectors: "innovations are mainly process innovations, embodied in capital equipment and intermediate inputs and originated by firms whose principal activity is outside these sectors proper." (Agriculture, Printing, etc.) p.1148
  
• Specialized suppliers: "Innovative activities relate primarily to product innovations that enter most other sectors as capital inputs." (Mechanical and instrument engineering.) p. 1149
  
• Scale sensitive Sectors: "Innovation relate to both processes and products and production activities generally involve mastering complex systems." (Transport equip, electronic durables, food, glass and cement.) p. 1149
  
• Science based sectors: "Innovation is directly linked to new technological paradigms made possible by scientific advances: technological opportunity is very high, innovative activities are formalized in R & D labs." (Chemical industries, drug companies, bio-engineering.) p.1149
  

In my thesis I suggested that oil and gas industry was moving from the Supplier Dominated Sectors to the Science Base Sectors. That this change is due to the demands of finding and producing oil and gas in remote areas with higher risks and smaller reserves. An era where the engineering and geological effort is substantially higher then what had been experienced before. Dosi suggests this leads to new and better methods. Methods that require the capability of the firm to learn and keep up with the changes in the underlying sciences and other innovative producers.

I believe it is fairly evident in this era of high commodity prices that their will be a new basis of leadership in oil and gas. One where the science of geology and applied science of engineering dominate the organizational decision making and competitive capability. Moving from one sector to another may or may not have happened in other industries before. One thing for certain is, that it won't be easy.

Technorati Tags: Dosi, Science, Innovation, Energy

Another call to action?

After almost a week off I'm back and fully charged.

The call to action that I am referring to here to is an article in last Friday's Calgary Herald. The article states that the junior oil and gas producers and royalty trusts are having difficulty making money. Peter Knapp of Iradesso Communications states "Everybody thought it was going to be easy to make a lot of money and that just isn't the case". With natural gas prices down almost 50%, they are also finding their costs are high. They also clearly and unanimously feel that the gas price will rise after June.

So how is this a call to action? I have suggested a solution to this problem is to innovate and move with the science. Not that this hasn't or isn't being done, it is just that we have hit a critical period in which the sciences are changing quickly. The capital being generated from higher prices is a reallocation of the resources to fuel innovation. A profitable firm in the future will be able to collaborate with a greater population of all resources to determine the most effective ways and means of exploration and production.

This is the role and responsibility of the joint operating committee. And for the "business" end of the oil and gas business to continue to ignore the joint operating committee in its organizational structure and systems, the industry I suggest, will continue to fail in making money. A further failure will occur in that the industry will be unable to deliver the appropriate amount of oil and gas to the market.

By my count that's 10 calls to action.

Technorati Tags: Genesys, Call-to-action, Innovation, Energy

Military command, part II, why project management isn't the solution.

Project management fares poorly in comparison to the global scope of accomplishment of military command and control. In "Organization, the key" I noted the use of military command and control type structures as the replacement to the bureaucratic hierarchy. This military analogy and metaphor needs to be implemented within oil and gas in order to facilitate a method and a means of getting things accomplished. Since, as we have discussed, software defines the organizational constructs, this command styled implementation is an element of this Genesys systems, and specifically the technology will be built to superimpose the military command and control style organizational structure.

The implementation here is not dissimilar to the military metaphor, with "orders" being simply replaced in the "work order" system of Genesys. All tasks, equipment, human and other resources are managed through the system to provide a means for things to be accomplished.

This system will also be responsible to maintain the encryption, authentication and authority of each transaction. Since we are talking about the commercial elements of an oil and gas concern then "role" and "rank" also need to be implemented to provide a seamless manner that work should be accomplished in. I will write about role and rank in this series many times.

Project management is limited in its application as a means of operating a going concern. It therefore fundamentally violates its basic premise, that is it's temporary. Other problems in attempting to retrofit a project management structure to manage oil and gas assets include, diversity, depth and scope of communications.

Project Management teams may not have the diversity of resources necessary to effectively manage the assets. Consider for a moment how many people it takes to drill a well. From the point of view that if you include all the individuals who would be paid for their skills in drilling that well. I am talking about the billing clerk at the water trucking company to the chairman of the joint operating committee. Project management can not facilitate the scope and diversity of the 100's and possibly thousands of people that are involved in getting something done.

Another area where Project management falls apart is in its depth of resources. In oil and gas it is generally considered, as it is with anything complex, that the quality of the well drilled will be as good as the least experienced individual on the platform. Mistakes happen and the reduction of mistakes takes on a greater role then risk management. The active participation in activities can also broaden the scope of the problem solving capability. It is my fundamental belief that the more eyeballs that review the situation the better. The virtual environment can marshal more resources in this fashion then the physical world can.

The last deficiency of project management that I will point out today is that it is generally limited to human resources. We have discussed on this blog the types of communication being asynchronous and synchronous. We have also discussed the four methods of those communications being person to person, person to process, process to person and process to process. We can not limit the scope of the organizational construct of the joint operating committee to just human resources. The physical assets and capabilities of vendors, suppliers, or anyone and anything involved in oil and gas must be managed with the utmost efficiency. If we preclude certain resources at this point then we preclude the holistic solution this system will be. And if we preclude the methods and modes of communication (asynchronous vs. synchronous and Person to person etc.) then we will certainly have limited the potential for this new way of working.

Technorati Tags: Genesys, Military Command

Top 10 management excuses from Petro Canada.

Since I have predicted that the second quarter of 2006 will not be a very good quarter. I thought I'd come up with some excuses for the management of Petro Canada to use for their poor performance.

• Number 10, My Porsche was delivered this past quarter.
• Number 9, It really is just about us.
• Number 8, Production was down, it's the oil business.
• Number 7, You won't believe the costs to do business these days.
• Number 6, Just be thankful oil isn't trading at $18.
• Number 5, Precisely, what do you expect?
• Number 4, Selling Syria may have been a mistake, the clerk responsible has been fired.
• Number 3, Employee costs were so high!
• Number 2, We were trying very hard to buy Canada Southern Petroleum so we could become an explorer.
• and the Number 1 reason we lost money this quarter,
  
• We got ours, too bad about yours.

Technorati Tags: Accountability, Bureaucracy, Leadership, Petro-Canada

A bad attitude towards locals.

Reading yesterday's Calgary Herald I see a trend that continues to shape the oil and gas industry in Canada, in a negative way. I mentioned in an earlier post the response I received regarding the research that was the basis of this blog's copyright. How I was promptly shown the street, informed that the industry only conducted research with large firms like Cambridge Energy Research Associates (CERA) and that CERA was ultimately hired to conduct the research based on my intellectual property. Thankfully I was able to publish the results of my research before Cambridge, and as a result, earned the full rights to the copyright and associated intellectual property.

Is it a lack of confidence or disbelief in our own capabilities that causes an industry to look outside for its own research and decision making. What I found disturbing is that it is not just the industry but also the Alberta Government. They hired a Texas based firm to review the prospects of building a super refinery in the province for around $10 billion. The results of the Texas based consulting firm was that Alberta did not have the capability to undertake such a task.

I find this rather insulting. That we have the industry "leadership" deferring to our competitors to determine the activities in this province is bad enough. To have the Alberta Government doing the same is regrettable. So forget about courage and leadership, just defer the decision to those that may have vested interests in building their own super refineries, and have them make the decision for you. At least you will have covered you ass.

This is the reason that this project is now a global operation. Little if anything can be expected from these "local business leaders". Which makes this whole situation kind of ironic, instead of working in developing things together, lets just defer to strangers why we shouldn't do anything.

Technorati Tags: Genesys, Petro-Canada, Innovation, Energy

Oh how the mighty have fallen.

Petro Canada that is. Seems they have attracted some other bidders in their hostile offer for Canada Southern Petroleum Ltd. Greg Noval of Canadian Superior Energy is making a competing bid and it will be interesting to see if Petro Canada has the gumption to make a revised offer.

Recall that this process was so that Petro Canada was able to call themselves an explorer, however, I am afraid they may soon be better known for the company they keep.

Technorati Tags: Genesys, Petro-Canada, Innovation, Energy

I have seen the future,

Google in general, and Google Spreadsheet in particular.

I was invited to Google Spreadsheets today, if you do not have a Google account, you need to get one and start using their services.

Brilliant implementation.

Technorati Tags: Google, Innovation

I found this quote on Good Morning Silicon Valley.

It speaks to the one identifiable risk I think exists in blogging.

"The problem I am concerned with here is not the Wikipedia in itself. It's been criticized quite a lot, especially in the last year, but the Wikipedia is just one experiment that still has room to change and grow. ... No, the problem is in the way the Wikipedia has come to be regarded and used; how it's been elevated to such importance so quickly. And that is part of the larger pattern of the appeal of a new online collectivism that is nothing less than a resurgence of the idea that the collective is all-wise, that it is desirable to have influence concentrated in a bottleneck that can channel the collective with the most verity and force. This is different from representative democracy, or meritocracy. This idea has had dreadful consequences when thrust upon us from the extreme Right or the extreme Left in various historical periods. The fact that it's now being re-introduced today by prominent technologists and futurists, people who in many cases I know and like, doesn't make it any less dangerous."

-- Jaron Lanier sees hazards in the hive mind

I have felt that in the collaborative environment the drive for consensus can overcome all obstacles, even the truth. And although I am guilty of applying this in my criticisms of Petro Canada I am basing my attacks on the theories of Dr. Thomas C. Schelling's works and most specifically "The Strategy of Conflict" for which he received the Nobel Prize for in 2005.

I can assure you as the copyright owner I am aware of the danger that the Mr. Lanier speaks of. I can also ensure those involved in these developments that I will exorcise this from of discipline in this blog and software development project if the problem should develop.

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

Java, the fourth component of the Genesys' technical vision.

Over the past couple of weeks I've identified elements of the Genesys' technical vision, initially commented on here. The technical vision provides a paradigm for the manner and type of application that operates in the Web 2.0 environment, and specifically in the oil and gas industry. Today, I am going to talk about Java, the fourth component of the Genesys technical vision, and then later in the next few weeks I will tie in why I believe the technical vision is so important in oil and gas.

Highlighting some of these features with a number of separate postings. I am attempting to show the different elements and there designed purpose in the Genesys application. I'll briefly note the three other components of the vision IPv6, Wireless and Asynchronous Process Management, and then focus on the fourth, Java. To aggregate stories I have written around this technical vision, just select the tag "technical vision" noted in the Technorati tags.

Some quick notes about the other three.Asynchronous Process Management (APM), or, how life rarely goes as planned. Asynchronous communication are designed to accomodate out of sequence events and deal with them as they occur. Processes that deviate from the norm can therefore be handled particularly well with Java's exception handling capabilities.

IPv6 eliminates the client server paradigm. With static addressing that enables anything and everything to be controllable, monitorable and any other ...able that you can think of.

Wireless and the ability to have a network in an instant. Where speed and "last mile" issues are eliminated through the use of the wireless Internet.

Java, number four on the technical vision list. Where to begin. As I indicated earlier, registration for the Java Introductory course is encouraged. Everyone needs to understand the concepts that have developed within the language. The ability to understand and to appreciate many of the future technologies and capabilities is dependent on these fundamental Java principles. Writting code is always fun as well.

Essentially what the technical vision points to is the elimination of the client server model. A model that is the foundation of the Internet today. Replacing this with the ability to manage and control any and all electronic devices. So what the fourth element of the Genesys technical vision, Java, provides is a "programming language" to deal with this new prospective world. And when we think of Java it is best to frame it in the context of a "programming environment".

Several of the critical components of Java are well known. The ability to write once and deploy anywhere is largely in place. What may not be fully appreciated is Java's strict typing, polymorphism, inheritance and object implemenation. Each of these links are to Dick Baldwin's online tutorials on how these components can be used to make such a difference. I highly recommend reviewing his site. Dick Baldwin is one of the better websites providing quality Java development education.

At this point in time the introduction of these four elements of Java are all that need to be introduced. What I want to achieve in this entry is to bring together why Java, wireless, IPv6 and Asynchronous Process Management are so very important in the very near future.

You can imagine a world where everything electronic is reporting, being monitored and controlled, and in a wireless environment how things don't need to get confused. Sudden system failure due to unseen events are a common theme in Hollywood and systems in general. This problem is what Java set out to solve by typing the language so strongly. I see Java as providing the ability to make this environment where any and all devices are operating, predictable. There is no area for ambiguity in many of these systems. How do you know you used the correct encryption algorithm to decode the production volume, from the right well? Java typing can differentiate anything and everything and that is why it is included in this technical vision. No other language is as strict in its interpretation of typing as Java.

Lastly I will note the value of inheritance in Java. Inheritance is where the ability to build off many other excellent frameworks and works of others. An excellent example of this is the GlassFish server Genesys is using as its base, or Java Enterprise server (v. 5.0). Testing and development was done from many different perspectives, and although it has little to do with oil and gas or accounting, it covers off many of the basic services that must be provided first. Once we write to a specification and achieve certification, then the evolution of the application will be managed without any glitches.

This is why Java is so important as a future programming environment. This technical vision exists today and only needs to be implemented in order for it be operational. Since Genesys is implementing this vision, only IPv6 needs to be deployed in all markets, something that is scheduled to occur soon, and certainly much sooner then this application will be completed by. Now that I have completed the high level review I will move on to more oil and gas and accounting specific applications of the Genesys technical vision. I encourage any and all readers to comment on this important aspect of what we are doing here, I look forward to your comments.

Technorati Tags: Genesys, Glass-Fish, IPv6, Java, Sun, Technical, Technical Vision

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