Throughout the Preliminary Specification we‘ve discussed our solution to one of the premier issues the oil & gas industry faces. That means the demand for earth science and engineering effort per barrel of oil increases with each barrel produced. This is best represented by the steep escalation of oil & gas exploration and production costs. In the short and medium term, it is difficult to expand the critical earth science and engineering resources. Add to that the anticipated retirement over the next twenty years of the current brain trust of the industry and the problem becomes a critical concern.
There are few short-term solutions to the current volume of geologists and engineers. It takes the better part of that time to train them to operate in the industry. Our resolution in the People, Ideas & Objects software applications modules involves what we’ve developed and called “Industrial Command & Control” (ICC) and the application of automation, specialization and division of labor. Specialization and the division of labor are well known economic principles that bring about greater economic productivity from the same volume of resources. Given that the volume of earth science and engineering resources is known for the foreseeable future, specialization and the division of labor will provide us with a tangible means to potentially increase the capability, capacity and productivity of the oil & gas industry, yielding multiples of today’s performance over the long term. With software defining and supporting organizations, today’s producers must approach a heightened level of specialization and division of labor through software in broadly dispersed North American markets.
People, Ideas & Objects ICC involves the implementation of specialization and the division of labor in the fields of geology and engineering. To deal with the needs of their "operated" properties, each producer firm is currently required to acquire all earth science and engineering capabilities. Providing in-house capacities and capabilities of these scarce resources to be deployed "just-in-time." When each producer within the industry pursues this same strategy, inefficiencies in these critical resources are introduced. This is due to the organizational structure built into the industry's overall capacity and capabilities. Leaving resource utilization rates lower due to the volume of unused and unusable resources locked within each producer firm.
What is proposed through the People, Ideas & Objects software application modules in Industrial Command & Control is that the producer's operational strategy avoids the “operator” concept. Instead, it pools these technical resources through each of their partnerships represented in their Joint Operating Committees. That way the inefficiencies that would have been present in the industry can be made available and used through industry wide, producer focused, advanced and advancing specialization and division of labor. Where many of the lower end processes are offloaded to service providers who specialize in that basic skill on behalf of many producers. This is done in a geographical area or other specialization. And each individual producer focuses on a specialized element of science as it develops and innovates upon that. People, Ideas & Objects believe producers will soon be unable to commercially support the full scale of engineering and earth science disciplines tasks and responsibilities as they currently have in house. This will be due to the shortages of resources, the cost escalation of these resources in the market due to their shortages, the expansion of demand from higher production volumes to achieve energy independence, the demands for more science in each incremental barrel of oil produced, the anticipated, substantial expansion of the sciences and the need to innovate upon that expanding science.
What these concepts demand is what the Security & Access Control module is designed to provide through Industrial Command & Control. The People, Ideas & Objects system must provide access to the right person at the right time and at the right place. This is with the right authority and the right information. With the ICC there will also be a manner in which the technical and all the resources pooled from the producers, interact with the appropriate governance, compliance and industry standard chain of command.
Before the hierarchy which was a commercial development of the 20th century, there was only the military structure in terms of large organizations. The main difference between the two is subtle but significant. Military structures are broader and flatter than hierarchies. That is one of the ideals we are seeking, but the more critical feature is the ability for the chain of command to span multiple internal and external organizational structures and to move resources from different areas of the military through standardization.
The nature of people interacting through an industry standard chain of command layered over the Joint Operating Committee will include all oil & gas disciplines. The contributions of staff, financial, field and technical resources will include all those employed by the industry today. As a background, we should recall that each individual has different access levels and authorizations to People, Ideas & Objects ERP systems. Assuming different roles and responsibilities, they would impose different access levels to data, information, processes and functionality. The Security & Access Control module is essential for implementing Industrial Command & Control across People, Ideas & Objects. This structure, particularly in a Joint Operating Committee, would weave multiple producer firms under one industry standard chain of command. Also, it provides an interface to ensure that all processes are monitored to ensure compliance, governance, and overall completeness.