People, Ideas & Objects use automation, specialization and division of labor to increase industry performance and productivity. These are joined with six other Organizational Constructs to form a culture of preservation, performance and profitability for North American oil & gas producers. We have applied this solution to the earth science & engineering disciplines to deal with the anticipated difficulties in accessing adequate numbers of these resources in the mid to long term. When using the Joint Operating Committee as the key organizational construct of the dynamic, innovative, accountable and profitable oil & gas producer. We are moving this earth science & engineering knowledge to where operational decision rights reside to increase accountability for decisions made. Therefore we have eliminated the “operator” designation to introduce our pooling concept.

The capabilities to house “state of the art,” “just in time” earth science & engineering resources necessary to operate each property within one oil & gas firm are believed to be beyond what will be commercially viable in the very near future. This is a result of the further specialization of earth science & engineering skills needed by each individual and each producer firm within the industry. With the current market situation, due to retirements and the inadequate number of people entering the professions, producers' resource costs are expected to increase. Additionally an anticipated increase in throughput is necessary to meet energy independence demands. The known fact is that each barrel of oil or gas demands more earth science & engineering effort as we consume the “easy” reserves first. When specialization is required, if each producer firm maintained the full scope of their capabilities necessary to achieve “operator” status, they would no longer be commercially viable businesses due to this increased demand from specialization and their limited supply.

Specialization and the division of labor is the only proven solution to increase performance and productivity. Introducing multiples of what is currently available. Another Organizational Construct of the Preliminary Specification is Professor Paul Romer's concept of non-rival costs, or sharing, as a further enhancement to specialization and the division of labor. With the Preliminary Specifications pooling concept, each producer on the Joint Operating Committee should be able to contribute their advanced hyper-specialized capabilities to the Joint Operating Committee. The objective being to enable the Joint Operating Committee to draw from the much larger pool of Joint Operating Committee producers' capacities of engineers and earth scientists. Also, it is meant to draw from market offerings to obtain the necessary "operator" capabilities. Additionally, there is the need for the removal and offloading to the marketplace of the lower level technical work and its payroll burden from the producer firms. This is done by service providers that specialize and divide labor based on geology and engineering skills. Enabling producers to specialize in those highly specific areas of competitive advantage that provide real tangible value creation.

To increase their competitive advantage and earn a return on their investment, the producer firm invests in developing their capabilities. Under the pooling concept this implies market coordination by using the Research & Capabilities and Knowledge & Learning modules of the Preliminary Specification. They are the critical competitive differentiator in the industry under the Preliminary Specification. They are also how within People, Ideas & Objects ERP software the producer earns a return on their investment in their capabilities. Through expansion of their petroleum reserves, production deliverability or reducing their overall costs on a barrel of oil equivalent basis. This is done in a highly competitive, dynamic and innovative environment. The answer in the short term is to ensure that these critical resource costs are recovered from oil & gas exploration and production on a day-to-day basis. Time and direct charges are recovered from the joint accounts for all of their time and expenses. That is to say that the people (representing the producers capabilities) who are pooled into a Joint Operating Committee, have been assigned a role within the Industrial Command & Control, Job Order and Work Order systems of People, Ideas & Objects et al Preliminary Specification. Whose costs are captured in the Partnership Accounting module. Consequently, the deployment of the producer's capabilities will result in a second revenue stream. That offsets the cost of building and maintaining these earth science and engineering capabilities.

This pooling concept is the solution People, Ideas & Objects have developed to replace the current "Operator" designation. Producers' ability to have just-in-time capabilities for all properties requires an industry-wide surplus of unused and unusable earth science & engineering capabilities to fulfill this just-in-time requirement. This has led to individual producers hoarding these resources to meet their just-in-time needs, causing low utilization rates industry-wide. The ability to pool producers' highly specialized resources into the Joint Operating Committee releases these otherwise unused and unusable capabilities. Facilitating an increased level of specialization for producers. An innovative oil and gas industry requires specialized knowledge, skills, experience, and ideas from all producers. Therefore each of these producers must be able to charge and recover their costs for these resources through a joint account as necessary. A charge made to a company's operations or capital expenditures to earn a return on the specialized capabilities it has built.

A note here to say that this falls under the domain of an ERP (Enterprise Resource Planning) solution for the following reasons. People, Ideas & Objects highlighted Professors Anthony Giddens and Wanda Orlikowski's Structuration Theory and Model of Structuration. In summary these suggest that software defines and supports organizations and therefore constrains them. Without software to define what an organization is and what it does, it would not exist commercially in the North American oil & gas marketplace. Sealing the producer firm in the long term definition of the Preliminary Specification would be as inappropriate as today’s business issues arising from the unchanging ERP software environment that exists. Therefore, People, Ideas & Objects, our user community, and their service providers will develop a permanent software development capability. This is based on the needs of the dynamic, innovative, accountable and profitable oil & gas marketplace. Ensuring the Preliminary Specification and the services associated with it are kept up to date and serving the greater oil & gas economy.