What it is that we are doing.

We are moving to provide the organizational structure, software and industry infrastructure for the producer firm to achieve the most dynamic, innovative and profitable means of oil and gas operations. This is done through an innovative business model that is defined and supported in the People, Ideas & Objects ERP software. The innovative business model is built around the industry standard Joint Operating Committee the legal, financial, operational decision making, cultural, communication, strategic and innovative framework of the industry. By adopting these frameworks in our software and aligning them with the hierarchies compliance and governance frameworks. We achieve a speed, innovativeness, accountability and profitability in our producer firms.

We are user community based software developments. We have developed a unique revenue model and used it as the basis of our user community vision. A vision that empowers the user community with the capabilities to enact change within the industry. Creating a change dynamic in the organizational structure of the dynamic, innovative and profitable oil and gas producer. Software is the cement that holds organizations together in the 21st century. Once the software is operational in your organization it is also the biggest constraint to any future changes. Without an empowered and capable user community these constraints will disable the oil and gas producer to make any changes in their tactical or strategic operations. Much as what we see today in their response to the decline in natural gas prices and will see in response to the oil price declines. Without the enabled and capable user communities ability to foresee the difficulty in the producer firms. Determine the correct changes that need to be made to the software to enable the producer firms to avoid the negative situations. We will see the negative behaviors continue on in a never ending cycle of failure. Much as we have seen in the continued operation of the natural gas business since the collapse of the commodity prices.

The user community has been empowered with the level of capabilities and power that they need in order to make these types of changes in the oil and gas industry. Without the user community vision they would be just any other user group that people would participate in and push some paper around. That is not the type of user community that we are developing here at People, Ideas & Objects. First of all through the revenue model the user community will be provided with the resources to undertake the substantial work that we are discussing. Secondly they are the go-to group in terms of the changes that are needed by the producers. People, Ideas & Objects are committed to the user community in terms of listening only to them in terms of what to develop. We engage in no Service Level Agreements with producers and have no direct relationship with them other than the license agreement that they use our Intellectual Property for and we generate our fees from. If they need something it is the user community they need to turn to. Thirdly, under license from myself the user community is in control of the Intellectual Property that makes up the software. Therefore they are able to prepare derivative works and provide the solutions that are necessary to meet the industries needs today and tomorrow.

By using the Joint Operating Committee in the Preliminary Specification we have shown that its use is able to deal with the administrative and accounting issues of the industry. But what is more important is that it is able to solve the operational issues as well. And particularly the way that the decentralized production model would solve today’s problem regarding low oil and gas commodity prices. As well as other operational difficulties. Use of the Joint Operating Committee is a powerful tool for a software developer. And in the hands of a user community it will provide extensive value beyond the trillions of dollars that we can already quantify today.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

"The Big Crew Change" and Our User Community

Some have begun calling the issue of the turnover in the earth science and engineering disciplines over the next few years “The Big Crew Change.” The difficulty of course is that it is expected that upwards of 50% of the existing technical resources will be retiring in the short term. This of course can’t be handled by the universities as there are only so many people that are oriented to petroleum geology and engineering and it takes at least ten years to effectively train an individual. Therefore the industry has a clearly identified issue however, with the bureaucracy, they are clearly able to see the issue, as in low commodity prices, but unable to think of anything to do about them or implement any plan to deal with the issue. This post deals with the Preliminary Specifications method of dealing with the “Big Crew Change” and the user communities involvement during development.

Simply in the case of technical resource restrictions of the like that the industry is faced with. The only method of dealing with the issue is through specialization and the division of labor. If we look at the configuration of the oil and gas producers as they are today we see that each and every producer is developing their earth science and engineering capabilities to deal with every contingency that they are responsible for as operator of the properties. Therefore they have to build in contingent resources in order to ensure that they are able to deal with the ability to meet the demands of what the makeup of their properties might require. This surplus capacity leads to unused and unusable surplus capacity that the producer incurs on a day to day basis in their earth science and engineering resources.

If we aggregate the unused and unusable surplus capacity of the industry we have a sizeable amount of resources that are made available to us if we reorganize the industry. If we dispatch the concept of operatorship to the scrap heap. And introduce the idea of pooling of the technical resources within the partnership represented in the Joint Operating Committee. We can effectively eliminate the unused and unusable surplus capacity within the industry.

In addition we can have the individual producer firm focus on areas of specialization and further provide a division of labor in the earth science and engineering disciplines that will enable us to deal with the “Big Crew Change.” If we assume that these technical disciplines continue with their current progress. The status quo requirement of a producer will require each producer to cover off each of these new technical specializations themselves. Rendering the producer firm uncommercial in the marketplace due to the overhead caused by the expanded earth science and engineering resource requirements. Approaching this issue in the pooling fashion of the Preliminary Specification, where each producer specializes and then pools with their partners, is the only reasonable manner in which to deal with the “Big Crew Change.”

The user community has a distinct role in the development of this solution. The pooling of these technical resources is handled in the Research & Capabilities and Knowledge & Learning modules of the Preliminary Specification. It will be there that the specifics of the producers capabilities are listed and promoted between the members of the Joint Operating Committee in order to be selected as the key member to deal with the specific technical demands as they occur. The software developments in these modules will need to have the know how and understanding of how to create and enable these new and innovative interfaces in the oil and gas industry and that will come from the user community.

It is the resolution of the big issues that the industry faces that the user community is addressing in the developments of their software. That is the importance of this user community in the industry. They are the ones that are able to make the changes in the makeup of the industry. To reorganize the resources in different ways in order to solve the problems that we face. And that is the power that is provided to you the user community through the user community vision. And this must be how the oil and gas industry develops from this point forward. As we can see the bureaucracy is failing on all major elements of the industries needs. And through People, Ideas & Objects, the user community and our service providers the bureaucracy needs to be removed and replaced.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

The Speed Limits on Change, Have Been Erased

We are about to move into the Christmas season and all will slow down for the next couple of months. I think that it will be an appropriate time for people to assess the situation in terms of the future of the oil and gas industry and which side they want to be on. The bureaucracy, or to be with People, Ideas & Objects user community. I would suggest that each individual in the oil and gas industry has to make this decision at some point in the next few years. You're either with us, or against us, there is no common ground with the bureaucracy. Theirs is a form of organization and means of operation that is finished. I think the writing is on the wall with both oil and gas prices falling now, incurring financial losses and producers having no ability to deal with the problems.

Bureaucracies can't, won't and don't change. The level of change necessary within the industry to address the issues presented by the drop in these commodity prices. Require such high levels of organizational and structural change that the time, energy and capabilities to complete these changes are beyond what can be expected of these bureaucracies. Or, they have the choice in which they could implement the Preliminary Specification. Which they won’t do because it is effectively suicide for their like and its way of life. They have had almost a decade to deal with me. They have chosen at each opportunity to not deal with me. I now chose not to deal with them. Theirs is a value proposition and opportunity without any future. We would only be dragged down into a death spiral with them.

That is to say that for an individual to be choosing to stay with the bureaucracy is not an irrational choice. For personal reasons someone may be at the end of their career and looking to top out of their pension plan. Who could argue with that. Some may feel that we are to much change. Which they are uncomfortable with and therefore will stick with what they know. There are many reasons that people will reasonably choose to stay with the bureaucracy. There is a job that needs to be done while we are in our software developments and it will be up to somebody to do it while we are otherwise busy. The bureaucracy will be around for a while longer and these people can finish out their careers there.

In terms of the choice of moving to People, Ideas & Objects I can only assure you that it will be interesting and it is probably best to think of it as an adventure. I don't think anything of this scope and scale has ever been undertaken in the industry before. We won't be boring. I think it is evident that the demand for industry level change is in the air and we can leverage that to have our budget funded. I don't expect anyone to have to make any financial sacrifice in order to participate in these software developments. There is career risk however, that is something that will be within your control. And what exactly is the bureaucracy offering you in the future with their flawed business model?

In 2015 the speed of “things” is going to become an order of magnitude faster. The future will belong to those that are prepared. That will be the only manner in which to earn a living. Being prepared for what’s next. If you sit and wait for things to involve you, I think you’ll be living in the poor house and subject to the negative consequences of change. Information Technology driven change in commercial enterprises will be the trend in the next 20 years that will not stop. People, Ideas & Objects is configured to be that change driven agent in oil and gas. Your participation with us is your choice. The fact of the matter is that 2015 will be the year that people will look back and consider that that was the year that it all started to happen. That’s when Information Technologies in all industries began to make the economy more productive and businesses more profitable. That’s when things really began to change.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

General Comment on the "Shaky" Economy

From time to time I have made my views known on the state of the general economy. This is an important issue to People, Ideas & Objects, the user community and the service providers as the economic trend that began in 2008 works its way through the economy. I recently posted that I saw things beginning to look a bit “shaky” again. I think we can now put some definite facts on that “shaky” hypothesis. If you select the Perez label from this blog you will find the posts that discuss Professor Carlota Perez’ theories on Information Technology based change. She has been one of the leading researchers in the area of economic change as a result of innovations. Her analysis shows the phases that economies progress through in order to implement the type of changes necessary to accept a new technology. For the oil and gas industry to accept People, Ideas & Objects, the user community and the service providers a higher level of general economic pain would be necessary in her model. Once this occurs we can reach the highly productive, highly rewarding new economy that awaits us. Much like the industrial revolution which her theories are based upon.

In my last post regarding the general economy I suggested that the best description that I have heard about why the great depression occurred was that it was the failure of governments. Since 2008 we have seen the heightened role of governments in the general economy of all countries. Possibly Japan is the best example of this as they have been in a poor economic situation since 1992. And it was in 1992 that they had a remarkably high level of government involvement of 30% of GDP in their economy. And today that is at an unbelievably high level of 40%. Whether its Japan, Europe, the U.S., or China it seems that the news regarding the economy is usually directed by the government. The reliance on markets is something that got us into the difficulties of 2008, is the thinking. And markets is what needs to be regulated out of the system. We are so far from being a capitalist or free system that it is frightening to think how far we have come. Canada should be held out as the last good hope.

Of course the ability to deal with the problem is not being addressed by these governments. Addressing the debt of these countries is the issue. In a zero interest rate environment no one has reduced their debt or balanced their budget. Each country continues on in an unsustainable manner borrowing, or now printing, their way out of the difficulties they face. European debt commands less of a discount rate than the U.S. This is only evidence that its a confidence game. Are you really going to buy that European paper? Japan has now fallen into a recession. The U.S. dollar is surging as there is probably an ongoing flight to quality.

However, one of the most effective economic indexes in these trying times has become the Baltic Dry Index. The cost to move freight collapsed in 2008 as there became an overcapacity of container ships. You can’t idle containerships. Their hull’s will become infested with mussels and can become unusable due to the high fuel costs needed to propel them. Therefore they are deployed for just the fuel costs. Hence the Baltic Dry Index will drop in times of low economic activity. The Baltic Dry Index collapsed in 2008 and hasn't really recovered. It is once again under stress. Governments can’t control the microeconomic levels of supply and demand of individuals and businesses. And therefore we could be heading into another downturn.

What tools are at the government's disposal to fight another downturn? In a word, nothing. All the bullets have been fired that can be. At some point the market will do what it thinks is in its best interests. If that involves an individual cashing in that bond then that is what it will do and the government, if it still exists, will pay the owner what its worth, or what it can.

This will go down as the next big example of the failure of centralization. The movement to markets will be the solution and decentralized decision making within those markets the answer. Centralization and bureaucracies are both failures. Why we have to turn to them is something that we just seem to do. Once they fail however we seem to make the right choice and turn to the marketplace as the solution. The Preliminary Specification has three marketplaces, the decentralized production model, and provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

What it Would be Like to Participate in the Developments Part II

In our prior post we were discussing the user community participants involvement in the software development of the Material Balance Report of the Partnership Accounting Module of the Preliminary Specification. Today I want to discuss that further and talk more in detail about some of the things that user community participants will be involved in during these software developments. If we look at a production volume it is a pretty simple thing. That is until we qualify it. Is it a daily or monthly, gross or net, partners share, royalty share, inventory, fuel or meter loss, or any number of the possibilities in the oil and gas domain. You have products in various stages of process. A variety of different interested parties that all have some need for the data whether that is regulatory or ownership related. And finally you have the science of engineering being applied to the chemistry of the petroleum products in the development of the plants that process the production. I am certain that we have not determined the full scope of every permutation and combination that these variables provide in the industry at this time. However one day we will. To say that any production is the same shows the lack of understanding of the unique nature of the oil and gas industry.

The Material Balance Report is designed to report on the process of production and distribution of the products from the point of production to their disposition within the various systems. It is the report that has been used in the oil and gas industry, from the operational side since the beginning. Accounting rarely involves themselves in the report. What is different about the Preliminary Specification and the Material Balance Report is that the accounting for production, revenue and royalties as well as all of the production administration processes, marketing and other processes that depend on the Material Balance Report for their information are automated based on the data within the report. By tying the accounting information into the production data we are imputing the integrity of the production data to be consistent with the integrity of the accounting data. Subject to the usual amendment process of course.

Understanding these two principles in the Material Balance Report is the role of the user community participant to define the population of possibilities that could occur under the above scenarios. Once those possibilities are defined, ensure that the Material Balance Report has an effective user interface designed to deal with each instance of that population of possibilities. Then they will go about the process of developing the process management software that will be used to manage those processes, in an automated fashion, for the service providers to use for their oil and gas clients.

I know enough about this process that I know this can be done. I also know it can't be done in the current environment where every producer firm is an island of accounting capabilities on their own. Each Material Balance Report must balance to the accounting system. And each Material Balance Report must balance to the next Material Balance Report up the system that the producer may have nothing to do with. And that Material Balance Report will have to balance to the accounting of the producers who own those facilities, who are dependent on the volumes in the predecessor Material Balance Report. This dependency can be dealt with through our proposed service providers who are focused on one individual process and are representing the industry for that one process. It is in that way that we can bring the integrity of the accounting that we are providing the producer firms to a much higher level than what is attainable in the current bureaucratic nightmare of fudged accounting. I’m sure everyone in that area knows what I mean when I say that.

We have the budget designated for the development of this system. It is well beyond what has been attempted before. We will also keep developing the system over the 20 to 30 years that People, Ideas & Objects are operational in oil and gas. What is key to its development are the users within the user community. They are the ones that are defining what the system will do and how it will operate. They are the ones that know and operate the industry and it will be they in the People, Ideas & Objects user community who determine what their systems need to be to do their jobs.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

What it Would be Like to Participate in the Developments

Lets assume for a moment that you are a user community participant that has an interest in the Material Balance Report of the Partnership Accounting Module of the Preliminary Specification. Your participation in the user community is oriented around the opportunity to take the Material Balance Report and automate many of the accounting and administrative processes that are dependent on the data in that report. Data and information that is used in the revenue, royalty and production accounting areas. Also in the product marketing and nominations of the products for delivery into pipelines. And determining the product balance in inventories of the commodities. There are many processes that are derived from this data. The Material Balance Report in the Partnership Accounting module holds a special significance to all of these subsequent processes in that the integrity of the data that is published in the report is unimpeachable and therefore the appropriate input for any and all of these subsequent processes. And of course we say unimpeachable from the point of view that these data elements may be subject to amendment, and these amendments would also be automated in the processes.

As a user who has worked within this area for many years you have always marvelled at the physical effort necessary to process the data and information within this domain. Seeing the broad scope of operations in terms of the number of people involved in the accounting and administration of these processes, and the never ending but necessary amendment process, you have always thought that there must be a better way. You knew that it always could be done however the costs and the time commitment necessary for someone to map out all of these processes and make a system work that deals with these is well beyond the scope of what is possible for any one individual oil and gas producer. And that will remain the case for the foreseeable future. However, People, Ideas & Objects are aggregating the resources of the industry in order to apply the solution industry wide, and therefore the scope and scale of this issue are addressable. As a result you have joined the user community and are involved in the developments of these systems.

While in the user community you will be working with other user community participants who have similar skills and understanding of the oil and gas industry. What is interesting is the different perspectives, focus and areas of issue between the users. Everyone has a different history in terms of their understanding and experience in working in the industry. And although that understanding and experience is in many ways the same, the differences can be either enlightening or create tension. Luckily we are all made aware that conflict is the source of creative breakthroughs in terms of solving the difficult issues that we face. And we can see that the Material Balance Report will be a creative and lively environment.

Everyone is well aware of the issues involved in the development of this area of the Partnership Accounting module. We can all agree on what the issues are and to a large part how to solve them. However the devil is in the details and that is where we need to get to and spend the time and energy necessary to make the Material Balance Report of the Partnership Accounting module the system that we know is possible. There are few opportunities in ones career to make the kind of difference that we have here with the People, Ideas & Objects software developments. This will make a significant difference in the lives of those that work in the oil and gas industry. No more of the tedious filing of amendments and chasing data. Instead people will be focused on solving problems, providing leadership, collaborating, being creative, doing research, generating ideas, designing and planning. Things that we need to be doing in order to ensure that we provide the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Time is What we Have.

Preparation by the user community participant is one of the ways that we are using the time that we have available to us. In our previous post we noted that in the time that we have we are committed to the developments of the user community. That this is our priority and our focus. As opposed to handing off the development and implementation of the software to an accounting firms technology group. And having them go through the motions of getting user group by in. We are developing the user community as one of our key competitive advantages for the long term. During this three year user community development. Of which we are almost through our first full year. We have identified the areas where an interested candidate can invest their time and energy to become a more productive user community participant when we begin our software developments.

User community participants are drawn from all areas of the oil and gas sector. From all of the professions that are involved in the industry. When we begin software developments what we will need is for you to relate your experience and knowledge of how it is you do your job to our software developers. To design and configure the best way in which the systems that you will use will be developed and implemented. In order to do that we are now looking to augment your knowledge and understanding with some understanding of the technologies and software development process that we will be using. This will aid in the communications between the user community and our software developers. It is far easier for the user community to learn the basics of the technologies than it is for the software developers to learn the broad scope of understanding of the “how to” knowledge of the industry and each discipline that are involved in the user community. An otherwise essentially impossible task.

We therefore ask that the user community participant undertake to invest some of their time and energy in understanding the current software development processes. Some of the tools that are used in that process and their capabilities. This includes specifically the IDE’s (Integrated Development Environments) that are available in the marketplace which include Netbeans, Oracle’s JDeveloper and Eclipse. These are free to use and will generally be part of any course that you take in the university programs that we recommend that you also invest your time and energy in. It is those university programs that we suggest will give you the overall understanding of the technologies that will provide you with the ability to see the larger picture of what the technologies can do. We have suggested upwards of 5 to 6 university level technology courses in database and Java technologies will give the user community participant the understanding of the development process, the technologies, the communication skills with the software developers and the understanding of the Preliminary Specification necessary to make the application what it can be.

I would like to point out at this time that our budget assumptions in terms of the charge out rate for the user community participant are $195 / hour. This reflects not only our commitment to the development of the community but our expectation in terms of the outcome from it. We are looking for the senior level input of those in the industry who have the wherewithal to participate in what we think will be a permanent career change. These charge out rates also assume that there would be some elements of specialization and division of labor being applied to the role so that an individual would be able to organize themselves into small groups of specialized user community participant providers. Also, these user community participants are the key elements in the founding of the service providers who are the replacement to the administrative and accounting capabilities of the producers. And are supported by what we estimate to be the $40 to 60 billion in annual G&A expenses currently incurred by the North American oil and gas producers. We therefore feel our expectations are not only in line, but to be minimal in terms of the earnings potential of the user community participant. However, these costs incurred by the user community assume that we continue to keep our value proposition in mind. And that is that we provide the oil and gas producer with the most profitable means of oil and gas operations. Our value proposition is how we are able to prosper. Therefore our focus must be appropriately aimed and remain so.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

A User Perspective From the Service Provider

No matter the situation regarding the oil and gas industry. Whether our budget is funded earlier than our plan specifies in January 2017. The user community will have time to develop in the appropriate manner. Time is the option that we have at our disposal and we are using every minute of every day to further develop the user community. That is our priority and our focus and nothing will take that away. Whatever time is required will be what will be committed to the development of the user community. And not to contradict myself or apply any pressure to the community, it is also the user community development that holds up the remaining parts of this project. Therefore even if we were to secure the budget for the developments of the software, if the user community is not ready to begin developments we will sit on that money and wait for the appropriate time to start. Our commitment to quality and user community developed software is unquestionable.

What kind of oil and gas industry do you want to work in. One that the bureaucracy is in control and unaccountable. Then you can stop reading now you have what you want. Or is it a dynamic, innovative and profitable industry that is driven by the people and ideas that are employed within the industry. One where change is the constant and the systems that you are contributing to the design and development of are a critical part of that organizational dynamism. You see this in other industries that have changed as a result of Information Technology. Music is nothing like it used to be. You the user gets the music you want where you want when you want it. Too bad about the record executive though. Uber will get you from point a to point b without a word, or a need to grab your wallet. And now Apple Pay is the last great hope for the credit card companies existence. Why can't there be a solution along those lines for the oil and gas industry?

The only reason that hasn't happened in oil and gas is because you're not involved. It needs the user to be involved in the development of these software applications to make them effective for the work that is done by you the user. The Preliminary Specification dictates a business model of how the industry would operate if we adopted the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. It provides solutions to the big problems in the industry like the decentralized production models ability to make the producers price makers. And a solution to what is now being called the “Big Crew Change.” In terms of how it provides the support for your job. The desktop and mobile applications that you need to make what you do for the producer firm dynamic, innovative and profitable. That has to come from the user community and that is why we are so focused on the development of the user community at People, Ideas & Objects. It is the source of our quality in terms of our software.

Consider the revised structure of the industry under the Preliminary Specification. With the producers stripped down to the C class executives, the earth science and engineering resources, some land and legal, and some support staff. Where the administrative and accounting resources have been reallocated to service providers. Assuming you would be moved to an accounting service provider. What would it be like doing your job within a service provider where the entire industry is your client base. What applications would you need in order to do your current job there and process the mountain of data and information that you would be faced with. A completely different kettle of fish. One which the sciences of Information Technology on top of your industry knowledge and accounting education would be necessary to add real value for your producer clients. It is assumed that we'll approach this change with a division of labor where the computers will do the storage and processing. And the users will conduct the leadership, problem solving, creative, collaboration, research, idea generation, design and planning type of work. Then we begin to see the special role the user community takes in these software developments. And how the never ending developments of new and better ways of processing that data will constantly bring greater value to the producers. If it is this type of vision that interests you, and there is a bureaucrat lurking in your life, you'll know what to do.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Our Tactical Plan for the User Community

It is clear to People, Ideas & Objects that the prospective user community participant will not subscribe or participate in these developments until the funds are secured. This has always been understood to be the case. We do however expect that the leadership team will begin their participation at any time. It was on the basis of the leadership teams existence that we would be able to prove to the investor community that we were able to provide an alternative means of organization to them. And then raise our budget on that basis. That was before we were presented with this opportunity to raise our budget in 2015 based on the decline in oil prices. That is, with both the oil and the gas sides of the business performing poorly. Investors will be looking for alternatives to the bureaucracy and therefore the budget can be raised, our leadership team, user community and the Preliminary Specification developed in that order.

If we understand the scope and scale of the Preliminary Specification it involves the work that is done within the oil and gas industry, there is little that is conducted outside of the application. Once we adopt the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer there is little within the industry that is untouched as a result. Therefore we need to include these elements within the application to ensure that it operates in an integrated and functional manner. Therefore the user community will be drawn from the entire population of the oil and gas industry personnel. They will also bring to the application their needs and desires of “what” and “how” they do their jobs. This way we can build the applications, whether for the desktop or mobile, so that they are done efficiently and effectively.

If it takes at least six months to fully comprehend the role the user has within the producer organization. And this is based on the many years of industry experience that a user may have acquired. You can see the value that the user brings to the software development process. When we expect that the costs of user community developments will total $667 million. Total 2,000 man years of time and involve a population of approximately 3,000 individuals. We can see the scope of the undertaking that we are contemplating. And this is what is budgeted for in the initial commercial release. We expect that the user community will continue on in an ever changing and constantly improving manner for the entire time the application is operational in the oil and gas industry. Participation as a user community participant should be considered as a new career choice.

This is in stark contrast to the current model of hiring a number of consultants from the various accounting firms to conduct user development, installation and integration of ERP software. These somehow never have the resources required to complete the user development attributes. As is evident by our budget we're not going that way. We do however have a budget for Oracle consultants. These are primarily for our developers in terms of understanding the Oracle product line.

If you feel that this scope and scale is out of line with what is reasonable in the oil and gas industry I would point out that our value proposition is in the trillions of dollars. And those trillions of dollars are on top of the costs that have already been incurred by the industry. So our value proposition is valued in pre tax profits. We are providing the oil and gas investor with the most dynamic, innovative and profitable means of oil and gas production. That imputes everything involved in the industry to attain production. Therefore the investors investment in us will leverage off the many investments that have been made in the past one hundred years. That is the power of software today, however software is useless unless it is in the hands of an enabled and empowered user community.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Rememberance Day

There is no posting today in recognition of Remembrance Day.

What a Mess

There are no doubt a few bloody noses and some angry people as a result of my words Friday. I've made it pretty clear that I share the bureaucracies belief that they won't participate in this software development project, the user community or the service providers. They have ignored me up until now. That is the normal procedure you follow with respect to a pest. But when that pest becomes a danger, as we have now that the Saudi’s are dropping the price of oil and the bureaucrats are going to be losing money, and therefore won't have a leg to stand on, they will therefore be looking to exterminate that pest. So yesterday I made sure that they know I’m ready for the fight. Let us begin, and may the best business model win!

And this battle will be short lived and intense. I think the investors are going to be looking quickly for an alternative. Prospective members of the user community could help in sending our message out further and faster. That would help everyone. Other than that keep your head down and watch the show. I promise it will be enjoyable and there is no reason for anyone else to be involved in this fight. It’s just me vs. the bureaucrats. The Preliminary Specification vs. the status quo. And the referee will be the investors who have to call the fight to determine who the winner is. And the winner will be the one that operates the industry on a go forward basis.

That is for the foreseeable future. The next 20 to 30 years. A continuation of the bureaucrats and their losses, with no strategy, vision or prayers as to how to make money other than for themselves. Or a vision of how we provide the industry with the most dynamic, innovative and profitable means of oil and gas operations. One based on the Preliminary Specification which is defined and controlled by the user community. The choice is stark. The scope and scale of change is significant, approximately equivalent to the changes that are being experienced in the oil and gas industry itself. This is the choice that the investors are being asked to be make and what the fight will be about. There are trillions of dollars at stake, and maybe so much more.

There is the point of our user community. Which is our primary focus and will always be. User defined software developments are substantially different than other software developments in my opinion. The user community is our source of quality and success. They will be the reason that the industry achieves the dynamic, innovative and profitable means of oil and gas operations. Our cultivation of the community will continue until we have it developed to the level that it can begin developments of the software. And it will never stop developing for the 20 or 30 years that we are the means in which the industry is operated.

We started this week noting that we were taking on what we have now quantified and qualified as the “fight” against the bureaucracy. This is in order to raise our budget in what we describe as the “opportunity” that we find ourselves in.  An opportunity present now that the Saudi’s are “teaching” the shale producers the lesson of “production discipline.” I have set the context and the tone this week. This battle will continue on through the better part of 2015. And believe me you have the right candidate to provoke and antagonize the bureaucrats in your corner. There is nothing that I enjoy more than a fight and I am itching for this one. This however will not take our focus off the development of the user community. And starting Monday we will begin again with our discussion of the user community. The fight will play on in 2015 and there is not too much that will happen in 2014. And with that I should announce I will be taking six weeks off from December 1, 2014. Time which gives the bureaucrats a chance to clean the place up from the mess they made yesterday.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

"I Did It My Way"

Today I want to address the eight hundred pound gorilla in the room. And that is our budget. It’s controversial and contentious because no one has seen anything like it in the ERP marketplace of the oil and gas industry before. Lets also be clear we will be looking to raise the full $4 billion in funds in order to begin the developments of the Preliminary Specification. I am certain that our costs will be in the range defined in the outer limit of our budget. And for a number of reasons detailed later in this post we will be looking to raise the full amount. The issue and the controversial aspect of the budget is the payment of the Intellectual Property royalty to me, and the net profits. These two items total half of the budget and nothing of its kind has ever been proposed, or paid, in the industry before.

As detailed in earlier posts and elsewhere; the time that I have spent on this project is significant. I started it in 1992. If the industry can come up with a timely solution to its problems that competes with the Preliminary Specification they can begin the process that I started way back when. This blog reflects much of the ten years of applied research that was done in order to take the idea of using the Joint Operating Committee as the key organizational construct of the dynamic, innovative and profitable oil and gas producer. An idea that I first published in August of 2003. And moving it to the situation we have today. Some people may consider that I am lucky that the oil and gas prices declined and the decentralized production model just happened to meet the needs of the industry. I don’t care. I'll have the royalty payments that prove that the industry needed the solution to solve the trillions in potential revenues that they were losing. I have always been able to generate significant value in the work that I do. It’s no coincidence that I also generate significant controversy. The money is how I keep score.

So we can continue on with the controversy and the losses in the producer firms. To me it only matters that the industry provides me with the up front payment of the budget first and foremost. The first reason of course is to pay myself the royalty. Secondly I will deliver the program in its first commercial release in a timely manner and as a result earn the profits that are identified in the budget. If I fail or have difficulties, then the profits that I realize will be diminished. The issue of the up front payment also has to do with the fact that the bureaucracy have chosen, in every instance, not to work with me. Even when faced with the difficulties in their business. Reasonable people faced with the difficulties in their business would have turned to those that have solutions. They will never do that. If I have to be accountable to the bureaucracy in any way it will surely be my demise. By moving the money under my stewardship as the first act of the industries participation in these developments. Ensures that I will be able to deal with the issues as they arise. And the bureaucrats can continue to manage the industry for the short time they have left.

It is our commitment to the user community and the service providers who are providing the removal and replacement to the bureaucracy that will be the keys to the transition. Technology is disintermediating industries all over the world. Just ask the record store manager, or his distributor. Yesterday I detailed how the industries investors were led down the primrose path to build the industry while prices were low. So that when prices did turn higher they would reap what they sowed. This was a farce and the investors were fleeced. The bureaucracy have played the ultimate ponzi scheme and I’m saying to the bureaucrats you're busted. We're offering an alternative. And in reality its a pretty inexpensive alternative compared to what the bureaucracy is currently charging the investors, and will be charging them in the future with no vision or strategy. And, no prayers. So maybe the people in industry think that our scope and scale is out of line with what is historical in the industry. That paying for Intellectual Property is inconsistent with the industries history. I think we've had enough history from the bureaucracy, and I'm declaring that they're toast.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

"Its Just a Flesh Wound"

Those were some of the last words of the “Black Knights” in the movie “Monty Python and the Holy Grail.” They're what immediately came to mind when I read the response of the oil and gas producers to the Saudis discounting of oil for import into the U.S.

What happened on Tuesday was the Saudis began discounting the oil that they sold into the U.S. marketplace. This was in contrast to price increases that were made in the rest of the world. Isolating the U.S. market, and I think specifically the shale producers. Making it unquestionably the shale producers that are the focus of the Saudis concerns regarding the global overproduction of oil. That if the shale producers in the U.S. want to produce at capacity, then the Saudis will produce at capacity, as will the whole of Opec. That is the message that was sent on Tuesday.

On Wednesday the producers responded in a consistent fashion. In a Bloomberg Businessweek article. Saying more or less that “Its just a flesh wound” is not far off from their actual comments. Here is a quote from the Businessweek article.

Executives at several large U.S. shale producers, including Chesapeake and EOG Resources Inc. (EOG:US), have vowed to maintain -- and even raise -- production as they reported earnings this week. They say their success in bringing down costs means they can make money even if prices slump further.

Its obvious to me that the Saudis are playing the long game and the shale producers are playing the short game. This is how I see the situation playing out in the next few quarters. First of all the oil prices are trading on rumor and innuendo. There is no stated policy at this time by anyone in the marketplace. Once there is a stated policy the market will move to reflect that policy. Opec is meeting on November 27, 2014. Which very interestingly happens to be three days after the Americans announce their negotiations with Iran regarding nuclear weapons. What we might see is no change in the announced production quotas and no concern by Opec for the markets pricing. We might also see no date for another Opec meeting set. This will throw the bottom of the market open for a freefall. Finding the low of the oil price market within the 2014 year end period of time. Just about the time that the accountants will retrospectively be looking to value the reserves of the producers for their annual reports. Creating even larger losses for the producers.

Playing the short game when they should be playing the long game, the producers are falling into the Saudis hands here by making the foolish comments that they are making. The investors who are concerned at the losses that the producers have been creating in the gas side of the business, are now beginning the process of losing money on the oil side of the business as well. Investors have already had enough of the fiscal irresponsibility created by these bureaucrats. They don't need to increase, and by a substantial margin, their losses by these fools losing money on both the oil and gas sides of the business. The investors will be forced to act and within a short period of time to deal with the problem within the oil and gas bureaucracy. And that’s where we, the Preliminary Specification, the user community and service providers come in.

The Saudis are playing the long game and can do so for a significant period of time. They have almost one trillion U.S. dollars in reserves. An effective weapon when you consider the enemy is screaming at you with no arms and no legs.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Herding Cats

It is the tradition in the oil and gas ERP software marketplace that the software provider will raise their capital from the investment community and banks. For a variety of reasons People, Ideas & Objects have chosen not to participate in those methods of raising capital. Those reasons are detailed in our Revenue Model and essentially state that the oil and gas community is too small of a market in which to leverage any investment. The producers themselves know this market is small and have frequently abused the fact that the software provider, who has invested all their investors money, has a limited market to sell to, and as such has very little if any bargaining power. The investment community is wise to this and that avenue is most certainly off limits to us when they see the scope and scale of our budget.

That leaves us with dealing with the producers themselves. Something we have chosen not to do ourselves, again. I have frequently referred to this job as herding cats. You have a handful of producers moving in the right direction, you try to get a few more, and then a shiny object attracts the attention of the others and they're gone again. I have stated in the past that I won't be doing this anymore and I stand by that claim. Working with the producers at this time would be nothing more than working with cats. The added difficulty to this process is that when the CEO was interested in what we were selling. He would naturally pass it down to the CFO and IT manager for further evaluation before any decision was made. The IT manager has no interest in eliminating his department and his job. And the CFO has no interest in having all of his staff moved to the service providers. Which are the results of implementing our software. It is the solemn oath of a bureaucrat that “thou shall not reduce ones staff unnecessarily.” Therefore the recommendation that the CEO will receive will be one of thumbs down. And no matter how much we appeal to the CEO he can’t make the move without the staff, it would create a mutiny in short order.

Therefore we need to create a situation that we can appeal to the investors who own the industry. Those that have significant influence in the operation of the industry as well. We have seen these people, they work quietly in the background and generally get what they want. What we have to do is to appeal to their sensibilities and provide them with a compelling value proposition that deals with the issues and opportunities that exists in the oil and gas industry. Some might argue that these people don't have the influence in the industry that they once had. I say you're listening to a bureaucrat who thinks that they have the upper hand in the relationship. That is because they have had the upper hand for a while now. What we are offering the oil and gas investor is an alternative means of organization based on the Preliminary Specification, defined by the user community and operated by the service providers. This alternative is offered as a removal and replacement of the bureaucracy and has a value proposition valued in the trillions of dollars. This value proposition is so high because the issues and opportunities are so grand as a result of the abuse that the bureaucracy has incurred through their belief that they have the upper hand.

So what are these issues and opportunities. Certainly the profitability under the Preliminary Specification is one of the opportunities. However, the investors were told that during the 1980’s and 1990’s that survival in the industry was the name of the game. And that the building out of the industry in the long term, so that when the time came and higher prices would arrive, they would be in position to realize the benefits of those higher prices. Those higher prices did arrive in the 21st century. And the bureaucracy realized the benefits through stock options and bonuses that were valued in the billions. However, the investors did not necessarily profit as a result of the higher prices. The costs of production in many cases exceeded the gains in the prices. Where was the benefit for the investors that was promised them as a result of building out the industry? It seemed to have been contributed mostly to the bureaucrats in higher bonuses and stock options. Now the prices are in steep decline and the bureaucrats pray for cold winters. That is the scope, scale and the depth of the bureaucrats capabilities. Prayers. I think this year they have seen how stupid they looked last year praying for a cold winter and now don’t even ask for that. So the investors stock valuation did not trade up on the increase in commodity prices because the bureaucrats were unable to increase the profits that were made. The investors would have been better off investing in the commodity exchange, not the stock exchange. Now the stocks of the companies are being significantly affected as a result of the declines in the commodities. And what do the bureaucrats say and do? I haven't received any calls. And I don't expect any from any of the bureaucrats. It’s paragraphs like this one that make them angry. Which is the only emotion they can express.

So when we say we are looking to fund our budget by the oil and gas investors we think we have a group of like minded people who are interested in what we have to offer. They can direct the individual producers to participate in these developments and fund our budget. After all we offer the industry the opportunity to implement a continental wide price maker strategy. One that is driven by the individual producers profits. What a concept. The thing I like about it best is that I don't have to herd cats.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

The Origins of two Different Perspectives

There is a clash of two different perspectives when we discuss the impact of the Preliminary Specifications decentralized production model. The shutting-in of properties to reduce the market supply of commodities is contrary to the current practice within the industry. For one thing it is not currently possible to shut-in properties due to the impact on the producer in terms of their overheads. They are using the high throughput production model which requires production to continue at capacity to deal with their fixed, high overheads and infrastructure. However, the bureaucrats also believe that the manner in which to deal with low oil or natural gas prices is to curtail capital expenditures until the market responds. In terms of the low natural gas prices, which have continued for many years now, someone should ask the bureaucrats how this strategy is working. And now that Opec is also producing oil at capacity, will that strategy of reducing capital expenditures work for oil?

The strategy of curtailing capital expenditures is an engineering inspired strategy. By reducing the number of wells that are drilled during subsequent years the surplus capacity in the marketplace will be absorbed and prices will rebound to the point where profits will return. This has worked in the past. However, it has taken many years before the changes in prices have been seen. Participation by the producers is not always equal either. Some producers feel it is an opportune time to expand their market share, and as such expand their capital expenditure programs. I have described this strategy as a blunt instrument due its inability to achieve the desired result within a reasonable period of time. In theory we have seen the natural gas producers operating under this scenario for the past six years. The time in which natural gas prices have collapsed from their traditional 6 to 1 pricing to the current 20 to 1 in comparison to oil. If the strategy was valid it would have worked by now.

The origins of the Preliminary Specifications decentralized production model are more from the business side. In that profits are what dictate production. And profits are what drive the investment in producers. If producers are not profitable, in theory, why would an investor continue to participate in the producer. Therefore the producer would cease to operate in the marketplace. Production discipline is therefore imputed through the market mechanism that only production that is profitable is produced. Producers that adhere to that principle will receive a welcome response from the investment capital markets.

Engineers and geologists have been the operational and executive members at the helm of the oil and gas industry for the better part of its history. The business is a science and that is the way that it should be operated. However, in terms of the production output of the industry it needs to be profitable. Its not a science experiment, its a business. And the business needs to generate economic value. Something that has been lost in the day to day mindset of the industry. This is evident in the activities of the current “must have” asset. Today its shale. Yesterday it was heavy oil. Before that it was SAGD. And before that it was… whatever. Today producers have to employ production discipline in order to bring this science experiment into the commercial realm.

The accounting I think has been at fault. I think People, Ideas & Objects developed out of the need to address the shortfall in the accounting and systems in the industry. My hypothesis is that in the 1960’s when computers were introduced, accountants asked themselves what they’d be used for. The accounting, tax, royalties and compliance requirements were the natural needs. This continued for a few decades and the isolation of working on those topics created a separation between the compliance and governance of the firm, which has become the exclusive domain of the current accounting function, and the business of the business. By reintroducing the Joint Operating Committee as we are in the Preliminary Specification. We are moving the compliance and governance frameworks of the hierarchy into alignment with the legal, financial, operational decision making, cultural, communication, innovation and strategic frameworks of the Joint Operating Committee. Once we complete this alignment then we achieve the speed, innovativeness, accountability and profitability that we desire in our organizations. This clarity in accounting will provide the engineering and geological resources with the ability to better understand the business that they operate. Allowing them to compete in the profitable oil and gas industry.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Budget Developments

It's now November 3, 2014 and we are two months away from recording our first of three years of user community development. It is at this time that I would assert that People, Ideas & Objects have established some credibility in terms that we are user community based software developments. It is our primary focus and will be until we have the community established to the point where we can rely on it to drive the developments of our Preliminary Specification. A difficult undertaking and one that I think is worthwhile in the history of the oil and gas industry. Establishment of the user community will enable us to build the kind of software that solves the current issues and opportunities in the industry. And take on the challenges in the future.

Today the user community has an opportunity within the oil and gas industry that needs to be resolved. It has been our plan that we would prepare, organize and present ourselves to the investors of this industry with an alternative means of organization of the oil and gas industry. That they could then choose to select either the current bureaucracy or, People, Ideas & Objects Preliminary Specification, the user community and service providers as the alternative that they wanted to run the industry. That this decision would be made in January of 2017 and if we were chosen, then fund our budget at that time. That was and is the plan. Our commitment to the development of the user community will continue in the same manner that I had planned for 2015 as was the case before.

However, this issue with Opec pushing the oil prices down has thrown the cat amongst the pigeons, as they would say. Oil is no longer able to carry the losses in the natural gas side of the business and the producers are going to be showing even poorer financial performance than in the past few years. Producers stock market capitalizations have reflected significant losses in market value. Our appeal to the investors may never be as promising as they might be in the next six months.

Therefore we will be active in terms of our attempts to raise our budget within this time frame as well as maintain our focus on developing the user community. If there is a point where we are overloaded in terms of commitments we will defer to the user community developments as our priority. We are only chasing this opportunity to raise our budget for its timeliness. The issue of the bureaucracies performance will be well within the mindset of the investor in January 2017 as much as it might be in the next six months, maybe more. Time in terms of raising our budget is on our side. We cannot afford to waste any time in terms of the development of the user community. The ultimate delivery of our product, the user community, the service providers and solving the problem for the industry relies on our diligence in terms of developing the user community. By taking this opportunity to chase our budget might provide us with the opportunity to knock a year off our timeline by starting our developments in January 2016, IF we can develop the user community within that short of period of time.

Once again I see within our logs that we are beginning to have the success in the development of the user community. People are beginning the early part of the process of joining the user community by reviewing this blog and the wiki. Learning what they can about the ideas on how to run the industry in a better way. And beginning to think how they too can participate and improve upon it. I think this could be some of the most exciting work that has been undertaken in the industry. Putting the bureaucrats in the unemployment lines. And building a new and better way to operate the oil and gas industry.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Recalculating Our Value Proposition

Members of the user community need to update their value proposition in terms of the changes that are occurring in the oil side of the business. If oil is being affected by the Saudi’s in the manner that we spoke of in yesterday’s post. Then the value proposition that is provided by People, Ideas & Objects, the user community and service providers is enhanced substantially. We haven't discussed how the calculations of our value proposition is prepared for a while so I thought now might be a good time to prepare an update.

Simply we should calculate the incremental value of the People, Ideas & Objects software that the user community develops, and the service providers implements and operates for the oil and gas industry. That calculation begins by determining what incremental value is generated above the current base case. What we can deem the base case consists of is the current bureaucracies “price taker” strategy in both the oil and the gas sides of the business. We also need to calculate the incremental value that is earned by the producer through the specialization and division of labor that are attained through the continuous development of the administrative and accounting capabilities within the domain of the industry.

Lets deal with this last point first, specialization and the division of labor. These are two of the many tools that the user community can apply as the resource that determines “what” and “how” the People, Ideas & Objects software will do. Using automation, process management, computers, and other tools to continuously refine the specialization and division of labor of the administration and accounting processes and capabilities of the oil and gas industry. These will eliminate the bureaucracy and achieve higher levels of output in terms of the oil and gas production from the same resource base.

The second element of our value proposition is our decentralized production model which enables the oil and gas producer to become a “price maker.” This is in direct contrast to the “price taker” strategy that the bureaucracy has accepted throughout its administration of the industry. With shale based reserves moving the oil and gas industry into an era of abundance it is necessary to move the industry mindset from its current belief that demand is insatiable. To one where production is easily obtained and that can overwhelm demand. And therefore the need to allocate production on the only reasonable and fair methodology, that being profitability of the producing property, is necessary.

Therefore to price this aspect of our value proposition it is assumed that we have the capacity to double the current natural gas prices and bring the natural gas reserves into a profitable situation for the producers. If we doubled the value of all the natural gas reserves, including the shale based reserves, we would easily obtain our claim that our value proposition is in the trillions of dollars. Based on yesterday’s post we are now able to make the similar claim in the oil side of the business and could add incremental value from that business. As a result, our claim that we provide trillions of dollars in value to the dynamic, innovative and profitable oil and gas producer is what every member of the user community could and will be saying to differentiate their services from those otherwise unprofitable bureaucrats.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here. 

Raging Against the Bureaucracy

To be able to join the user community and participate in the development of the software of People, Ideas & Objects you really need to have a deep felt rage toward the bureaucracy. I know I have it and many other people do too. Especially the investors that we will be appealing too to provide us with the financial resources to support the user community and build the software. Now I know its inappropropriate to rage against anyone in this politically correct world. However if we look at the oil and gas industry today we see a very disturbing trend. I think it started when the oil and gas prices took off in the early part of this century. The budgets of the various departments of the firms became a little soft and no one has been able to remember the type of size or configuration of what a profitable oil and gas producer looks like.

What has happened since the early part of this century is that the empire builders have begun to understand the game as it is played. And instead of building a company, the domain of budgets and the number of people are all that bureaucrats are concerned about. Simply the stuff that makes their blood flow. What we have now in my estimation, at least in Canada, is at least half of our organizations are bureaucratic waste. That’s correct I think if we lost half the people in the industry we would be far better off than we are today. Now if you're still reading this you belong in the user community as the people that have stopped reading have found it too painful to listen to, those being the bureaucrats.

One needs to ask themselves for what purpose does a bureaucrat exist today? Well there are the friends that keep the bureaucrats self confidence high. And there are the wife and kids, and the private school that they no doubt attend. These are the things that provide for the reasons for the existence of a bureaucrat. But my question was more oriented to the use and productivity within the organization and specifically from the point of view of a dynamic, innovative and profitable oil and gas producer. They are but a cost, and a healthy cost at that. And they incur costs, many of them in the manner of time and energy of others. But in terms of productivity within the producer firm it would be a tall tale for one to believe that bureaucrats provide any value to the producer firm.

Take the situation that we find ourselves in today. Technology provides a means in which to deal with the administration and accounting of an oil and gas producer. And the Preliminary Specification aligns the compliance and governance frameworks of the hierarchy with the seven frameworks of the Joint Operating Committee. Enabling greater speed, innovativeness, accountability and profitability. Why with the technology that can be developed today are we still constrained by bureaucracies? Are bureaucracies and technology not mutually exclusive? Doesn't one eliminate the other? Yes they do. And that is why I write to you from outside the industry. There is no bureaucrat operating in the oil and gas industry today with a vested interest in developing the technology to eliminate themselves. They have the game fixed in their favour and as far as they are concerned it will stay that way.

So it comes down to the question of... “do you hire the bureaucrats to run the oil and gas industry, or do you spend the time, energy and money to build the systems, user community and service providers to offer an alternative to that archaic, lethargic, unchanging, and losing proposition the bureaucrats? Guess which side I'm on. Your suspicions were correct that not everyone could be part of the user community or the service providers. We don't need any bureaucrats to run the industry. We can do it much better with fewer people. And some may say that’s a bad thing because we will be putting a lot of people out of work. And I say, in this case we should look at it as significant progress.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.

Some Thoughts on Our Future

Reading the content of this blog we can see that we all have much to do. How it will be done is through the individual actions of those that will make up the user community. They are the key to the success of the oil and gas industries future. If we want a dynamic, innovative and profitable oil and gas industry, we need the individuals within the user community to form and provide the knowledge and understanding of “what” and “how” they want their People, Ideas & Objects software applications to look like and operate. Software is the ingredient that defines and constrains what an industry can and can't do. Our user community will be able to define what the industry can do in the software that they build, and make the necessary changes through their actions.

People, Ideas & Objects appeal resonates with a broad audience in the oil and gas community. Frustration with the bureaucracy is an age old complaint that doesn't require too much argument for people to agree with. Our appeal is much broader than that. People, Ideas & Objects Preliminary Specification, user community, and service providers project a vision of the ways and means of the oil and gas industry that is compelling and complete. A vision that deals with the issues of today such as low natural gas prices and the high demand for earth science and engineers. But also provides the framework in which to deal with the issues and opportunities of tomorrow. This is where the user community and service providers come in. Their ability to institute change within the frameworks to deal with the current and prospective situations in the industry will provide the industry with much needed capabilities.

The oil and gas industry has changed. The shale based reserves have endowed the industry with the reserve base for the next few generations. However they are not profitable. And within today’s business model they are of no commercial value. The oil and gas industry, or the bureaucracy refuses to even discuss this issue. Choosing to muddle along hoping for a cold winter or something that will fix it. At the same time ignoring People, Ideas & Objects. Ignoring us because we preclude them from the future of the industry. Theirs is a self interested or selfish point of view that is inconsistent with the scope of the problem that is facing them.

From our lofty perch up here in Canada we can see the devastation of the great “hope and change” experiment that the United States has been involved in since 2008. We had a similar one in the 1960’s, 70’s and 80’s under our Prime Minister Pierre Trudeau. We are still paying for the cost of that experiment. From what we see up here we can’t believe that the U.S. has fallen so far, so fast. And in a related way the great experiment with alternative fuels and renewable energy is proving to be what it is. Therefore I hope that the U.S. can get back on track and remember that the progressives are really that dangerous. And that the damage from them isn't too costly. And that the natural gas business can become the fuel that powers the next great leap.

I’d like to think that that is the case. And with a new organizational configuration the shale gas reserves could become the engine that drives the U.S. and Canada forward. If so it will have to do so profitably. There is no way that the industry can continue to lose money on natural gas at the rate that it is for the past few years. What the industry is involved in now is not rational. And what is tragic is that the industry carries on without a single thought about the rationale about doing so.

I think we have come to a point in our organizational evolution where the big organizational behemoths have finally proven incapable of dealing with the speed and scope of the changes that we face. What is needed is a new method in which to organize ourselves to solve our issues and profit from our opportunities. I propose the Preliminary Specification, the user community and the service providers.

The Preliminary Specification and user community provides the oil and gas producer with the most dynamic, innovative and profitable means of oil and gas operations. People, Ideas & Objects Revenue Model specifies the means in which investors can participate in these user defined software developments. Users are welcome to join me here. Together we can begin to meet the future demands for energy. And don't forget to join our network on Twitter @piobiz anyone can contact me at 403-200-2302 or email here.