Operations Management

Operations Management

I am pleased to present the 14th module of our Preliminary Specification. Operations Management should be seen as an entirely different module from the Preliminary Specification. Other modules enable producers to capture, analyze, and report on their data, gain insight from them, and make informed decisions. The Operations Management module enables producers to actively engage with their producer and Joint Operating Committee organizations. To conduct their operations based on the decisions they make, the strategies they employ, and the unique competitive advantages that come from their land & assets. As well as coordinating the markets' earth science and engineering capabilities. 

The Operations Management module is at the crossroads between two separate and distinct operations and corporate groups that have developed over the past decades in oil & gas. These two groups work at opposite ends of the producer firm where the corporate silo is interested in the SEC, regulatory and tax requirements. They have not fulfilled their role in providing valuable operations information on an overall producer basis or to each Joint Operating Committee. Operations and technical environments have sought to mitigate the lack of business knowledge, understanding and information passed into operations. This in many ways has created the broad industry issues that have manifested themselves. 

We're rebuilding the oil & gas industry through the development of Preliminary Specification and Cloud Administration & Accounting for Oil & Gas. End-to-end planning, implementation, and optimization of the exploration and production process need to be undertaken and implemented. That will be done through the producer and Joint Operating Committee in this Operation Management module. This module more than any other is a producer-facing module. The key difference between what may exist today is that the Preliminary Specification will be populated with actual, factual accounting and administrative data and information. Not recycle costs or other estimates from reserve reports or elsewhere. We’re replacing what exists today in the industry and producer firms. Replacement of what has been done is necessary to rebuild industry culture towards profitability and performance.

Preamble

How does the producer firm focus on innovatively producing profitable oil & gas? The Preliminary Specification relieves them of their non-competitive tasks of administration and accounting. Supported by our user community and their service provider organizations, producers will no longer need to build and maintain their unshared and unshareable capacities and capabilities to meet the requirements of those aspects of their business. Engineering, geology and business operations in terms of exploration and development are their domains of expertise. Based on their ability to deploy their distinct competitive advantages of their land & asset base and to coordinate the markets earth science & engineering capacities and capabilities. 

North American oil & gas producers are in a state of organizational collapse which is catastrophic for all concerned. With internal and field capacities and capabilities that are severely deprecated, producers are incapable of maintaining their activity levels, assets and productive deliverability for the mid to long term. Their capital structures are and have been unsupported for almost a decade. The amplification of the accelerated shale decline curve has placed the North American economy and society in a situation where the status quo is proving incapable of even recognizing their difficulties. Leaving what will become a long term consequence of their inaction to be detrimental to the most powerful economy ever known to man when it's dependent on foreign sources of oil & gas. The opportunity to mitigate this is through the active disintermediation and rebuilding of the industry by way of the development of the Preliminary Specification. This is done by our user community, their service provider in People, Ideas & Objects Cloud Administration & Accounting for Oil & Gas software and service.

2023s natural gas price shows the one thing producers assured us they controlled. Production discipline doesn’t and has never existed under their current culture of “muddle through.” To them, producing unprofitable production is considered a right and a privilege. As a result, producers cannot determine whether a property is profitable. Their ERP systems are not structured to capture property data, especially the detail involved in overhead and depletion. Capital costs are intended to build balance sheets, not pass these capital costs onto consumers. The issue that People, Ideas & Objects Preliminary Specification is designed to resolve, is chronic, systemic overproduction of oil & gas since July 1986. Despite natural gas becoming a weapon of war and shale decline curves appearing in all basins, this anomaly of overproduction by the North American natural gas producers continues.

People, Ideas & Objects propose the vision of the Preliminary Specification and its 14 modules built upon Oracle Cloud ERP. Designed, developed, supported and serviced for the long term through our user community and service provider organizations. A rebuilt industry that provides the most profitable means of oil & gas operations, everywhere and always. Profitable operations are the only source and means of capital that is large enough to satisfy the demands of what oil & gas will require throughout the greater oil & gas economy up to the year 2050. What we know and understand of the current administration's is that when pressed, they never listen or act. They'll say anything to satisfy the present concern, do absolutely nothing, eventually regressing back to their cultural norm. Which is consistent with and part of their dedicated "muddle through" strategy.

Review of this Operations Management module will leave most people thinking that the scope and scale of the application is well beyond what's possible or practical. I would certainly understand that commentary and ask you to view this differently. It is the 21st century and we are building applications for the issues that plague the industry today, the next generation and the future. I see the Operations Management Module using the Preliminary Specification and leveraging it in ways that are the basis of the type of innovation that Oracle, People, Ideas & Objects, our user community and their service providers will be able to conduct with producers and Joint Operating Committees in the future. We are leveraging this opportunity to integrate a monitoring and control system for producers to manage their Joint Operating Committees. This will enable them to be the dynamic, innovative, accountable and profitable properties and producers they’ll need to be. 

The perspective that I see in these types of applications delivery, such as our Operations Management module provides to the producers. Will no longer contain a box of diskettes, digitized manuals available on the world wide web and supported through a help desk Monday’s to Friday’s from 8 - 5. It’s not from the early 1990s, and is worthless today. This is one of the reasons we've focused on our user community as our key competitive advantage and their service provider organizations. They’ll need to be available 7/24 supporting the Preliminary Specification, ensuring they’re operational and troubleshooting issues prior to any producer calling or discovering the issue. Capable of resolving difficulties in industry operational, technical, administrative or accounting domains. 

People, Ideas & Objects find today's producer expectations of our ERP competitors surreal. Paying for nothing, expecting miracles, casting aspersions when Service Level Agreement (SLA) expectations are not achieved. In addition, there is no producer participation beyond SLA execution. My expectations of our user community are for it to lead the development of new business models within the industry. I also expect it to provide the value proposition that the Cloud Administration & Accounting for Oil & Gas software and service is designed to deliver. The user community is taking proactive steps to address the issues and opportunities facing the industry. This is to ensure they’re providing North American dynamic, innovative, accountable and profitable oil & gas producers with the most profitable means of oil & gas operations. This role has been capitulated by producers through their culturally systemic “muddle through” strategy and must be undertaken.

We see this as the future of enterprise software. Business' dynamic nature can't be managed through a generic configuration conceived decades ago and not amended. Software to manage the enterprise alone is an inherently dangerous assumption. Nothing of complexity, substance or significance works in that way. People, Ideas & Objects is a comprehensive software and service offering that is a permanent capability of North American producers. This is the level at which the software industry has reached. It is the promise it has always had. Officers and directors assume it will be available by flipping a switch. Conversely this does not imply that producers will continue to define the terms of what they expect in a Service Level Agreement. They will sit back and criticize any deficiencies. It is too late to settle for old failed processes in a world where software dominates the workplace. It’s no longer enough to just own the oil & gas asset, it’s also necessary to have access to the ERP software and services of People, Ideas & Objects et al’s Cloud Administration & Accounting for Oil & Gas, which makes the oil & gas assets profitable. This must be an all hands on deck commitment by all for success to be achieved. That is Oracle Cloud ERP, People, Ideas & Objects, our user community, and their service provider organizations. This is for development, implementation, service and support of the Preliminary Specification. Dynamic, innovative, accountable and profitable producers and the service industry will all need to participate actively.

With the Preliminary Specification we are seeking a transformation in the profitability, performance and culture of the producer organization and Joint Operating Committees as we’ve detailed throughout. These will need to undergo a transformation that is far more radical than what the status quo culture can comprehend. How this transformation will happen will be through their efforts in this Operations Management module. Through this process, they will be able to reduce their process and activity timelines, as well as raise their performance criteria and expectations consistently throughout the century. Tighten up the interactions between the tier 2 and 3 sub-industries to optimize the producers and Joint Operating Committees production and exploration processes. An industry-wide rebuilding process that will need to be and can only be conducted and funded through oil & gas production profitability. Where producers can compete effectively on North American capital markets. They will also maintain affordable, reliable, abundant and secure domestic sources of oil & gas for consumers. 

People, Ideas & Objects

We are Enterprise Resource Planning software developers for oil & gas. Our competitive advantages include our user community, Intellectual Property and research. Delivered through our Cloud Administration & Accounting for Oil & Gas software and services. It’s no longer adequate to just own the oil & gas asset, it’s also necessary to have access to the ERP software and services of People, Ideas & Objects et al’s Cloud Administration & Accounting for Oil & Gas that makes the oil & gas asset profitable. 

Our user community

Our focus and priorities are on the People, Ideas & Objects user community. We have established our user community with a comprehensive vision. This ensures that they can make the changes that provide for the most profitable means of oil & gas operations, everywhere and always. Three significant attributes of their structure provide them with the means to do so. 

The method and means of communication that producers, Joint Operating Committees and service industry representatives will use to engage our user community will be through this Operations Management module. This communication and collaboration portal will simply be a representation of a stand alone, dedicated, collaborative module established throughout the Preliminary Specification. This module will enable enhanced and focused communications.

Service provider

Each user community member is licensed to establish one or participate in the ownership and operation of many service provider organizations. Service providers enable the change People, Ideas & Objects et al make to oil & gas producers' cost structure. Moving from fixed, producer-based, overhead, accounting and administrative capacity and capabilities. To variable, industry-based, overhead, accounting and administrative capacity and capabilities. Variable dependent on profitable production. Service providers are independent organizations owned and operated by our user community members that manage an individual process operation within the Preliminary Specification. Applying their services and competitive advantages in the form of quality, specialization and the division of labor, automation, innovation, leadership, integration, deployment of their tacit knowledge, issue identification and resolution, creativity, research, ideas, design, planning, thinking, financing, observing, judgment, reasoning, conflict and contradictions, collaboration and compromise.

Using these unique skills and industry understanding to apply their process across the industry data set. Populated through a reallocation of the producers current accounting and administrative resources these people will be the ones that deliver the software and services of Cloud Administration & Accounting for Oil & Gas to North American based producers and those they interact and transact with. 

As with our user community, service providers will use the Operations Management module as a portal for communication between themselves and the larger oil & gas community. Collaborating on issues and opportunities of concern and information pertinent to the various stakeholders identified in this module. Communications for enhanced software and services development, integration, issues and opportunities.

Oracle

People, Ideas & Objects have selected Oracle as the base Information Technology provider for the Preliminary Specification. Using Oracle Cloud ERP as the foundation, with all of their underlying technologies, which hold the premier spot among enterprise technology providers. Oracle recently began moving towards heavily automating processes to build substantial value for organizations throughout the business world. Partnering with J.P. Morgan Chase to employ their credit card to record corporate expenses during expense reporting processes. When an employee uses this credit card they can designate the charges destination and Oracle will process it to ensure it fits within the companies eligibility policies. The individual will not have to spend hours filling out expense reports. Others won’t need to review them and charges will be paid appropriately. Eliminating the many thousands of hours consumed in expense reporting annually to a few milliseconds of processor time. Additional process automations are being undertaken for logistics with providers in those industries, for example. 

These automations will be comprehensive in nature and will build upon themselves as users realize the combinations and permutations of the various processes and how they’re related. The value earned by those firms that move to this architecture and organize themselves in this manner will reap substantial rewards in performance, productivity and profitability.

This is the same undertaking that People, Ideas & Objects, our user community and their service provider organizations are conducting with the development and implementation of the Preliminary Specification. The difference between what we propose in the Preliminary Specification and what Oracle does is that they provide generic business processes. We tackle North American producers' specific oil & gas attributes. Having the full stack of unique oil & gas and generic business process automation handled and improved continuously for enhanced productivity and profitability. 

People, Ideas & Objects targets North American oil & gas producers as the market for our Cloud Administration & Accounting for Oil & Gas software and service. We have further defined this market to include Exxon Mobil and Chevron down to the startups that began at the breakfast table this morning. This appears to be an impossible and misguided ambition when we consider that Oracle Cloud ERP and their underlying technologies are among the most comprehensive and technically difficult Information Technologies to support and use. We agree. Our user community and their service provider organizations, however, provide the software and services needed to support all producers. We would ask, under this configuration, what would preclude a small startup oil & gas organization from realizing the benefits of using People, Ideas & Objects for expense reporting? This is with the Oracle / J.P. Morgan Chase credit card integration we just highlighted.

This theme is evident and became abundantly clear during Oracle’s CloudWorld 2022 conference. It was there that they unveiled the comprehensive nature of their offering and the drive to move in this direction. It is this drive that led to the rewrite of the Preliminary Specification and the inclusion of the Operations Management module. People, Ideas & Objects believes that Information Technology has never fulfilled its promise. This is due to the lack of maturity in the underlying technology base. Oracle has worked diligently since its founding to put that architecture together and make it robust. And they can now turn it towards what everyone expected Information Technology to provide. It would be a shame for those companies that have become disenchanted with Facebook to believe that Information Technology is a false promise and will never deliver. The time has come to understand the time we are in, and to act accordingly.   

Oracle CloudWorld 2022

Being bold is the way to win, that being timid could wipe you out.

Safra Catz, CEO Oracle 

End-to-end transformation is another common theme throughout this conference. What purpose would it serve to trim around the edges and try to resolve truly existential issues with the oil & gas organizational methodology used today? One of the many points this conference reflected on is that now is the time to act. Bold action at this point will enable organizations to realize the benefits of Information Technology disruption. Safra Catz's Keynote Presentation stated that it is not time to issue a White Paper. The time required to evaluate options will be too costly. The lead time for considering opportunities and researching issues has passed. The time to implement a “plan” is now. The producer's plan needs to be bold. It has to address the issues that are causing significant difficulties throughout North America's oil & gas economy. There are existential issues confronting the current producers organizational method, which has failed and has no support or future. And the only plan available is Oracle, People, Ideas & Objects, our user community and their service provider organizations. In the form of the Preliminary Specification.

Oracle is the Premier Tier 1 ERP Provider

What has been difficult to express in the Preliminary Specification is the robust platform it is built upon. Oracle Cloud ERP is the premier tier 1 ERP solution in the marketplace. Which is difficult to understand if you've never seen it in action. Their products, technology and the Redwood interface must be seen. This is to understand that it is People, Ideas & Objects et al purpose to stand on the shoulders of this absolute giant. This URL refers to Oracle’s Best Practice Demo Series. In this series, there are several videos to learn about Oracle Cloud ERP quality, fit and feel. I cannot recommend highly enough that everyone should view "Simplify Your Month-End Close by Automating Joint Venture Management” to learn the details of how comprehensive and high quality Oracle’s Joint Venture Management product is. It is the most comprehensive Joint Venture Management system available today. And I am not aware of any North American producer using it. 

Please note there are a series of five slides at the bottom of this page relating to this text.

The Preliminary Specification defines seven distinct Organizational Constructs. Our key Organizational Construct is the Joint Operating Committee. This is the organizational structure to deal with Joint Ventures, the cultural method to represent partnership organizations established in oil & gas. When we move the current corporate model culture into alignment with the Joint Operating Committee, everything within the producer and industry changes. Nothing in oil & gas remains consistent with management's operations today. We are aligning the business directly on to the operational and technical cultures of how the industry has operated for 100 years. This is a culture derived from oil & gas operations partnerships everywhere. 

It is our hypothesis that in the 1960s when computers were introduced accounting became one of its uses. Soon after tax, royalty and regulatory environments were established, ERP systems focused on the corporate organization. They had nothing to do with the oil & gas business. A separation between business and technical areas grew and became a source of conflict. This precipitated a lack of communication and two independent islands competing for control. Operations dominated out of necessity and corporate elements were left to satisfy cash demands. That is what we’ve eliminated in the Preliminary Specification by aligning the business to the operations and technical culture. The Operations Management module outlines what and how that will be accomplished.

We use Oracle’s recommended architectural method of “additions” to the base of all Oracle products. This way none of the code between their efforts and ours will cause any difficulties being released into commercial software if there are changes in either environment. Exploiting the full potential and value of object-oriented programming. At the same time I can state unequivocally that both Oracle and People, Ideas & Objects are relational database developers first and foremost. 

Recently Oracle implemented a quarterly update schedule for Oracle Cloud ERP where incremental changes and upgrades are scheduled for release each quarter. People, Ideas & Objects will be participating in this quarterly release schedule for our own updates and have noted an added benefit as a result of the Preliminary Specifications structure benefiting from the Organizational Construct under the title “New Growth Theory.” That we are sharing the “non-rival” costs of the infrastructure of accounting and administration across the North American producer population. Therefore the need for each producer CFO to be heavily involved in these ERP changes each quarter can be reduced to a less onerous task when the industry can plan and implement the upgrades on a shared or non-rival basis. Innovation is incrementally increased through iterative developments. They are not big bang changes unless the organization is challenged by existential threats such as the oil & gas producer organizations are today.

We are not rebuilding an ERP system from scratch to achieve the Preliminary Specification. We are defining and catering for specific oil & gas related software developments needed to deal with oil & gas issues and opportunities today and in the future. Configuring and augmenting Oracle Cloud ERP to do so. Reorganizing the industry to function efficiently and profitably. The Operations Management module combines business, operations and technical groups into one functioning organization using the same data. Establishing the team environment necessary to collaborate within the producer organization and each Joint Operating Committee. This is deemed necessary to move forward in a challenging and difficult future. Where the most dynamic, innovative, accountable and profitable producers are provided with the most profitable means of oil & gas operations, everywhere and always.

Oracle Supply Chain Management

As mentioned earlier, the underlying use of Oracle’s Joint Venture Management solution will form the basis of what we develop in the overall Preliminary Specification. Each module of the Preliminary Specification outlines significant elements of the Oracle Cloud ERP suite of applications. These elements provide the starting point for the work we’ll do for oil & gas. We are not recreating the wheel, only building upon it. And leveraging Oracle’s defined method of development architecture that uses their Oracle Cloud Fusion Applications and Fusion Middleware as the tools to enhance our additions and not through individual stand alone applications. We can accept this architecture as Intellectual Property is one of People, Ideas & Objects' three competitive advantages. Our proprietary content is published and protected. In the Operations Management module, we'll use Oracle Supply Chain Management as the primary base offering. In addition, we'll incorporate many other Oracle applications and features incorporated through connections with other modules in the Preliminary Specification. 

To understand Oracle Supply Chain Management offering, review the following YouTube videos. 

Oracle developed their cloud-based Supply Chain Management solution through the development and integration of their enterprise hardware manufacturing business purchased from Sun Microsystems. This development brings Supply Chain Management capability into Oracle Fusion Middleware and ERP Applications. These were and are the sources of Oracle Cloud ERP today. One of the unique characteristics of Oracle’s hardware manufacturing process is that each order is "Configure to Order (CTO)" and delivery is made to 156 countries. Approaching the development of their Supply Chain Management module in this manner is consistent with Oracle’s past methodologies. What is commonly referred to in the software development industry as “eating your own dog food,” or using software you develop yourself, Oracle Cloud ERP is used throughout Oracle’s organization. 

At People, Ideas & Objects our user community provides the most profitable means of oil & gas operations, everywhere and always. That is the motivation behind what we do. Can producer profits from a "real" perspective motivate our user community to keep their focus and commitment throughout the development, implementation, service and maintenance of the oil & gas industry? I believe they’ll only need to reflect back on this period. They'll understand that the disaster that is oil & gas, the service and tertiary industries, and what will become of the industry in the next decade is a result. This catastrophe is entirely attributable to producers' lack of "real" profitability. When producers create real wealth and prosperity. It demands that the greater oil & gas economic structure participates in that creation, its wealth and prosperity too. Contrast this to today where only producers officers and directors are satisfied. Therefore it is reasonable to suggest that our user community is motivated. But there’s more. Our user community are the only people licensed to prepare derivative works to the Preliminary Specification software and services. They are the principles of the service provider organizations they own and operate. These organizations service and support producer firms with People, Ideas & Objects software. 

Innovation is one of our major initiatives and one of the seven Organizational Constructs of the Preliminary Specification. Innovation needs to be structured and developed within an organization before its realization. Therefore much of the design and development of People, Ideas, & Objects is focused on the innovation demands of an organization for both the producer and the greater oil & gas industry. Dynamic, innovative, accountable and profitable producers will approach the dichotomy of their profitability vs affordable, abundant and reliable energy they'll innovatively provide to the consumer. 

It is here in innovativeness that Oracle presents a previously unrealized and otherwise unavailable benefit of Oracle Cloud ERP. Oracle Cloud ERP's quarterly upgrade cycle is a feature. A feature in which People, Ideas & Objects have architected the Preliminary Specification and oil & gas producers will fully realize. Innovation is iteration and user involvement working hand in hand to progress forward. 

In Sources, Procedures & Macroeconomic Effects of Innovation by Professor Giovanni Dosi, we learned.

… the conditions controlling occupational and geo - graphical mobility and or consumer promptness / resistance to change, market conditions, financial facilities and capabilities and the criteria used to allocate funds. Microeconomic trends in the effects on changes in relative prices of inputs and outputs, including public policy. (regulations, tax codes, patent and trademark laws and public procurement.) p. 1121.

As Dosi notes, enhanced financial facilities provide real value for producers in the 21st century. Iteration on the integrated and aligned business, operations and technical ends of the producer and Joint Operating Committee is where the Operations Management module seeks to bring the disparate elements of the Preliminary Specification together for active management and control.

This next point ties into our earlier quote from Safra Catz regarding now is the time to be bold. The Operations Management module is an innovative type of application being envisioned that is a necessity when the Internet of Things (IoT) enables and begins comprehensive automation. What People, Ideas & Objects traditionally call the ability to monitor and control devices. We now prefer to use Oracle’s classifications of “Pull of Data” and “Push of Instruction.” This is a world of exponential data and complexity, risk and uncertainty with unimaginable rewards and opportunities. As the slide title states it is a journey not a destination. The journey begins with Operations Management and continues with the assistance of People, Ideas & Objects, our user community and their service provider organizations and Oracle established as a permanent ERP software development and integration capacity and capability within the oil & gas and tertiary industries.

The nature of unanticipated and foreseeable catastrophes is documented on the next slide. To the far right is the anticipated frequency of these and the time necessary to prepare for the catastrophic event. I’m unable to categorize the oil & gas industry into any of these situations. A four decade run of destruction, fueled by investor capital sourced through specious means and no action reflects to me that this industry has been built on the basis of catastrophes (boom / bust cycles) where the culture has accepted and accommodated a “hair on fire” situation as normal. However, when we review the financial statements of producers. A random sample of 10 or more producers. Can anyone point out the heroes and which ones are the zero’s? Over the course of a decade try to determine from these financial statements what the state of the industry is in? Was it a boom or bust and did the company win or lose? 

People, Ideas & Objects have painted a radically different vision of how administrative and accounting processes are managed throughout North American oil & gas. Turning overhead cost structures from fixed to variable based on profitable production. Enabling producers to shut-in any unprofitable production and reap substantial value from our software and service provider organizations. 

The question becomes how is this opportunity realized? Will a strategy of “muddle through” get us there? Or do these need to be undertaken purposefully? In the way that the fourteen modules of the Preliminary Specification establish and enhance Oracle Cloud ERP.

People, Ideas & Objects acknowledges the broader Oracle community of developers and users in the Oracle Cloud ERP, Oracle Autonomous Database and Java environments. This is a resource pool we can draw upon during our development, implementation and operations. This will provide further value and performance for North American oil & gas producers. We hope to contribute to this community through the challenges we face and need to resolve during this process. And the overall task of seeing an industry rebuild itself on performance and profitability.

Enabling Technologies

Internet of Things (IOT)

There are three inherent characteristics of the IoT that mark the changes in “what and how” the Internet is operated. The first is the ability to acquire unique individual addresses through IPv6, the next Internet iteration. Enabling an addressable range of 2 to the power of 128. Which is a sizable volume higher than the current IPv4 addressing capability of 2 to the power of 32. As a result, each device on the Internet can have its own unique identifiable location. Therefore it is identifiable and accessed by that one specific device in that one location in that one factory in that country… There are current workarounds being offered where IPv4 masks IPv6 addressing which is adequate for some purposes, however for IoT it is inadequate. IPv4 addressing is quickly running out of unique addressing and the cost to acquire an address reflects its rarity. The second and third enabling capabilities of IoT are the capacity for monitoring, or as Oracle describes “Pull of Data” and control, or Oracle’s term of “Push of Instruction” those devices that are connected and easily identified, and hence only that device, through their unique addressing.

The Internet has changed business in remarkable ways that today appear quite advanced from the prehistoric age of only a decade ago. Yet the corporate implementation of Information Technology is poor as the maturation of the underlying technologies have come of age. What appear to be dramatic developments and improvements have little effect on organizations' productivity and performance. Issues and opportunities that existed then remain unresolved and unrealized today. Information Technology has never been realized and business has false expectations. Having the latest version of the Windows operating system will not increase productivity. It is the application of Information Technology through the business model, the business strategy and making it work for us beyond the install script. This is where the value proposition lies. IT is not the solution but a tool to prepare the business solution.

In saying that, this next phase of the Internet will be difficult to ignore in my opinion. The Internet of Things (IoT) is one of three underlying technologies that provide oil & gas with People, Ideas & Objects Operations Management module opportunities. With the disparate nature of geographical regions and locations, process-based manufacturing demands a highly sophisticated infrastructure. This complexity and control has been well managed to this point by the producer firms. Questioning its continued management is reasonable when the service industry's capacities and capabilities have suffered such severe destruction. The recent strategy of the producers to focus on clean energy is disconcerting and reflects the uncaring nature of its officers and directors in approaching the oil & gas business. 

Applying IoT to the business model of the Preliminary Specification where the Joint Operating Committee is the key organizational construct. One of seven distinct Organizational Constructs that form the oil & gas industry culture we're building. It’s the natural consequence of a reasonable approach due to the value gained. Automation, specialization and the division of labor would need to be redefined by optimizing these three enabling technologies in the Operations Management module. A process that we’ve proposed and applied throughout our development. It would be redundant to undertake the process of developing the Preliminary Specification only to immediately return upon its completion to implement the IoT opportunity. Therefore it is within our budget that we are undertaking the Operations Management module at the discretion of our user communities and during our initial development.

Communications

Starlink

Technology has recently become available to enable this Operations Management Module. Elon Musk’s Starlink is a product launched by SpaceX. Although operational with 4,487 satellites, (7/2023) it has not fully deployed its planned 42,000 satellites. What we are witnessing is the deployment of new technology that enables the Internet to be available anywhere within the domain of our proposed North American marketplace. The speed at which this technology is deployed is remarkable.

Currently there are a variety of ways to connect to the Internet. With North America being the domain of People, Ideas & Objects, we are addressing a large geographical area. Producers will have remote operations and may have a variety of methods to connect to the Internet at some of their operations. None of these will be standard across the continent. With SpaceX, People, Ideas & Objects, will standardize the connectivity of all locations. In addition, we will enhance all producers' data and reporting capabilities through our Cloud Administration & Accounting for Oil & Gas. The advantages of doing so are substantial and they fall within the objectives of what we seek to achieve here in the Preliminary Specification. Although complex in its makeup, the Operations Management module is a contributor to the producer's automation, innovation and profitability.

Swarm

LOW COST GLOBAL DATA FOR IOT

Swarm provides low-bandwidth satellite connectivity for only $5/month using ultra-small satellites in low orbit. Swarm satellites cover every point on Earth, enabling IoT devices to affordably operate in any location.

In direct response to Starlink's high cost, SpaceX purchased a dedicated IoT network provider. The Swarm network is a configuration of 160 low orbit satellites. Although the bandwidth is lower than Starlink's, that is not an issue for the Internet of Things. Whether the need to capture small numbers of data variables on a real time basis throughout the day, or to gain the real advantage of IoT, which is the ability to “Pull of Data” and “Push of Instruction” devices. Network requirements are substantially less demanding than typical users' data requirements. No one will watch videos or browse the web on Swarm. The Swarm network is the means by which Starlink offers text-based cellular phone coverage in areas without it.

The cost of Swarm compared to Starlink is telling. Starlink is $2,500 for the equipment and $500 / month for the service. Swarm can bring these costs down by 96%. To have each Joint Operating Committee connected, no matter how remote, which is what I believe would be the requirement, would be far less costly to achieve a full implementation of IoT through SpaceX’ Swarm network. As an incidental cost, it would cost $100 for the hardware and $5 monthly for the service. What this purchase includes in terms of network configuration and IP addresses is unknown. 

As an example of the use of the Swarm network’s use in the Preliminary Specification and its application of IoT. People, Ideas & Objects have expanded the functions and process management of the Material Balance Report to the highly engineered document that it always should have been. The issue has always been that the value generated for one company is limited compared to the significant costs to engineer it appropriately. With our budget aggregation and distribution of the application across the industry, this value add is a critical feature of the Preliminary Specification. Information Technology has now matured to undertake a task of this nature. As originally written in 2012, the Material Balance Report used monthly production numbers. Now with IoT and the Swarm network the ability to capture daily production volumes and re-engineer the field data capture process away from SCADA would be attainable. This would not only be possible but an advantage. It’s not that daily production volumes are used for financial calculations today. They could be used in the Material Balance Report to calculate next month's revenue and royalty accruals. This is based on the reported daily volumes, on the known characteristics of production and the prices of those products. Increasing the accuracy of accrual with no man hours incurred in any aspect of the accrual process. 

The objective of the Material Balance Reports is to automate the flow of data from the IoT device all the way through to the financial statements. Once the Material Balance Report achieves balance using the specified methods, it signals the readiness for the automation of high-quality, balanced data.

The use and value of IoT, both Starlink and Swarm networks will be determined through our user communities' innovativeness and their interactions with the dynamic, innovative, accountable and profitable oil & gas producer firms. Any suggestion other than this obvious accounting accrual possibility limits the value of the IoT in terms of the Preliminary Specification. In terms of what the engineering possibilities are is certainly unknown to me. We can only assume that better information on a timely basis with remote Pull of Data and Push of Instruction is a benefit to that discipline. As a result, I am confident that there would be much more that our user community could generate in terms of value.

Joint Operating Committees subscribe to the Swarm network. The issue with defining the allocation of nodes to the Swarm network is the monthly demand for data. The network's maximum monthly use is limited to 600 kb, or .6 MB or 300 pages of text. Reflecting that only small packets of data are transported across the network. Whether that is Pull of Data or Push of Instruction, the IoT device, it is reasonable to assume that a small Joint Operating Committee would only demand one node and distribute the service to a number of addresses, whereas larger ones would need several to accommodate higher bandwidth requirements. Standardization and deployment of these technologies across the industry would create an infrastructure for innovation. When it becomes standard practice, a part of the business and available at reasonable costs through our user communities and service providers, the industry would be operational at a higher throughput capacity.

A proof of concept of the Swarm network, and an endorsement of its much lower cost model, is the fact that Swarm networks are currently deployed in oil & gas. 

Moving to the key Organizational Construct of the Joint Operating Committee we’ve made a fundamental change in recognizing and aligning administrative and accounting to the operational culture Using these three enabling technologies, IoT, Swarm network, and Oracle, we foresee dramatic increases in data, processes, and the number of service industry firms that producers use and opportunities. Much the same as our user community service providers will leverage such value from their work.

Cloud Administration & Accounting for Oil & Gas

Upon completion of the development of the Preliminary Specification, we will deploy our Cloud Administration & Accounting for Oil & Gas Software & Service. The configuration of the necessary network will be a significant component of our Cloud offering. Our Security & Access Control module aligns with People, Ideas & Objects' objective of delivering the right information to the right individuals at the right time and on the right device, regardless of their location. Since the Material Balance Report and the Operations Management module rely on data provided through the IoT via Swarm, it is crucial to ensure seamless connectivity.

To fulfill our value proposition, we have the capability to establish a dedicated Swarm-based network exclusively for Cloud Administration & Accounting for Oil & Gas Software & Service. Swarm has included this option in their offering, enabling us to construct, launch, and deploy a global IoT network tailored to our requirements for a fee of $25 million. Considering the significance of safeguarding the data and information of North American producers, this investment represents a small sum for such critical infrastructure in terms of security and reliability.

Producer / Joint Operating Committee Operations

It is through the Producer Operations interface of the Operations Management module that the user can access the aggregate data of the entirety of their interests in their various Joint Operating Committees. This view contrasts with the similar interface available when the user drills down to an individual Joint Operating Committee. It is here that we see the two distinct and operationally diverse perspectives of how the Operations Management module prepares for both producers as corporations and as participants in a Joint Operating Committee. 

Access to the Operations Management module within the producer would be tightly assigned to those concerned with profitability everywhere and always in their operations. Exposure to the firm's data and information contents under Producer Operations shows the majority of the Preliminary Specification modules are reported through this portal view. Populating the appropriate decision makers with actual, factual data and information from the business, operational, science and technical domains. Based on these factors, determine what decisions need to be made, when and how they need to be implemented to achieve and maintain profitable production.

Please note that People, Ideas & Objects have determined that the producer firm's data and information demand a higher security classification than the Joint Operating Committee does. The difference is that producer information is restricted to them, and only to a small subset of designated, authorized individuals. The Joint Operating Committee often deals with publicly available information and proprietary data shared among Joint Operating Committee members. It is recognized that Joint Operating Committee information will reflect the gross capital and operational expenditures and revenues of the property. In addition, it will reflect only the specific producer's interest share of those costs and revenues. 

People, Ideas & Objects have been critical of the fact that “recycle costs” and independent engineering reports are relied upon far too heavily to make business decisions. However, what would they use when business information is more corporate in nature? Information that reflects estimates of overhead costs and does not represent capital costs allocation? Combining the producer firm's business, operations and technical data, information and resources is needed. This is to resolve the issues that have manifested themselves in the damage and destruction caused. 

If there is a culprit in this it is the inadequacy and poor quality of accounting data and information, producer ERP systems and the organizational structure. This is primarily a product of the 1960s. And as we’ve repeatedly stated, the obscure and opaque nature of this has been deliberate and orchestrated by producers' officers and directors. This is for their personal financial advantage. When such damage is done to an industry, where nothing is done to remediate these issues, where the calling is to muddle through, where only scapegoats, dishonesty and blaming are provided and the one specific group who have the fiduciary responsibility, authority, accountability and resources to deal with the issues. And it is only that group that benefits financially over all others? As a member of that group, what level of accountability would these officers and directors seek to instill within the organization they’re responsible for? Revealing their skeletons would never happen.

We should take a moment here and understand that the source of this issue and the lack of accountability is the cultural means of oil & gas operations throughout North America. It is therefore going to be the point of greatest resistance in terms of pushback and force applied by the status quo. This is to maintain their turf. We need to note and understand the Operations Management module's significance. This is in terms of the need to forcefully amend this culture of oil & gas and eliminate what exists culturally today. This will be one of the points of greatest resistance during our Preliminary Specification development. McKinsey notes in the February 28, 2014 article "Change Leader, Change Thyself."

McKinsey research and client experience suggest that half of all efforts to transform organizational performance fail either because senior managers don’t act as role models for change or because people in the organization defend the status quo.2 In other words, despite the stated change goals, people on the ground tend to behave as they did before. Equally, the same McKinsey research indicates that if companies can identify and address pervasive mind-sets at the outset, they are four times more likely to succeed in organizational-change efforts than are companies that overlook this stage.

The Producer Operations function is the portal that brings together actual, factual, timely, and accurate information for producer firms. It is not the original source of this information. All of it is drawn from other modules of the Preliminary Specification, other systems of the producer firms, Joint Operating Committees and public sources. A source of undisputed facts about the state of affairs that can be relied upon and decisions based upon. It is a means to control operations through our Industrial Command & Control and IoT implementation. This is to take any actions necessary to remediate issues, capitalize on opportunities, innovate and ensure profitability. 

If we look to the future and the changes being implemented and opportunities created through the development and implementation of the Preliminary Specification. Which involves the Internet of Things, the Swarm network, and Oracle's comprehensive and mature technologies. The shared and shareable nature of service providers' administrative and accounting capabilities and capacities. Their implementation of advanced automation, specialization and division of labor. The challenging and difficult future that oil & gas faces in the next 25 years. We see the need for these changes first and foremost. Organization is needed to capture them. What we also see is an exponential increase in data volumes and an order of magnitude increase in complexity and risk. If oil & natural gas prices are subject to overproduction in early 2023, after all that we have been through, after all that is happening in the marketplace at that time, after all the assurances they had things under control, we find the Officers and Directors do not have any capacity, capability, willingness or desire to even admit they have an issue. Change is inevitable in some form. We can orchestrate it constructively with deliberate actions such as what People, Ideas & Objects et al describe. Or we can accept what foreign sources of oil & gas define as limits to our overall economy. 

When our service providers provide objective, standardized data and processes they provide industry with a method of measurement, understanding, assurance, accuracy and timeliness that would not be possible without them. As a shared resource the costs of the service providers will be substantially less than what is required to build and maintain similar internal capabilities for each individual producer. Standardized and objective administrative and accounting doesn’t affect producer firm competitiveness. It is the strategy, land, assets, and coordination of the market's earth science & engineering capacities and capabilities that will determine the producer's competitive nature. 

Standardized, objective data and information in the administrative and accounting components across the industry will help producers enhance performance and innovation on that shared understanding. In itself, this is necessary because standard, objective accounting indicates that a Joint Operating Committee does not produce a profit. The producer will know that it is in their best interest to shut-in any unprofitable production to maximize their corporate profitability, save their reserves for the time when they can be produced profitably, ensure the costs of their reserves do not have to incur the additional costs of any future losses, minimize their production and storage costs and remove marginal production from the commodity markets. That indeed their profitability assessment is based on the same standard, objective method that all other North American production is assessed under.

Financial Marketplace

The Operations Management module provides producer staff in all areas of the business access to the information they need to operate. It contains standardized, objective financial, operational, and technical information. Access to the necessary information may be limited here as the Financial Marketplace module, from the producer perspective, is more focused on the corporation's cash and financing needs. It is not, as conceived here, an accounting information module. There will be a greater role for this section of the module in the individual Joint Operating Committee sections as cash balances, inventories and cash calls require their information. The ability to execute transactions such as cash calls would be a feature.

As with the Resource and Petroleum Lease Marketplace modules, the Financial Marketplace uses the Preliminary Specifications Marketplace Interface. The Marketplace Interface is a virtual representation of these three markets in a simulation with individuals participating as avatars of themselves. Marketplace Interface fully supports conducting and engaging participants within various marketplaces. This is part of the ERP capabilities provided by the Preliminary Specification. The importance of the Marketplace Interface is not necessarily fully understood and comprehended at this point in time and place. I see this as an opportunity and medium in which people can engage with the full support of an ERP business environment available to them. Something that falls within the immediacy of a telephone conversation with another individual and a meeting arranged next week with all hands. The Marketplace Interface provides a more dynamic environment that fulfills immediate needs with support from ERP systems. 

The most valuable and relevant aspect of our Marketplace Interface is two critical elements of economic development. These elements are lost due to software and Internet deployment across the globe. Serendipity and spontaneous order cannot occur when participants are thousands of miles apart. With the Marketplace Interface, virtual real estate can be established by vendors and participants to demo their products and services. Participants at those demos may discover one another and find similar needs. Either provide feedback to the vendor to address their needs or innovate upon products different from what is demonstrated. They can however use a conceptual difference that the vendor has demonstrated in their own product of service. Innovation is iterative and the foundations of the organizations and facilities of those organizations are critical to the success and failure of their innovation efforts. 

Resource Marketplace

How are operations conducted? Who is available? Who is selected? These are the questions asked and answered in the Resource Marketplace module. Having a global view of the producer's operating environment the user will be able to engage tactically and strategically to ensure profitability is first and foremost in the minds of everyone involved including the service industry, within the producer firm, Joint Operating Committee and elsewhere.

The Resource Marketplace module has strong connections with both the Preliminary Specifications Research & Capabilities and Knowledge & Learning modules. The two modules are involved in the development of the producers' competitive advantages of their coordination of the markets earth science & engineering capacities and capabilities. And the deployment of those resources into Joint Operating Committees. To innovate efficiently. Thus, they don't repeat the same mistakes throughout the organization. For example, not everyone in the organization chases ideas. Resources deployed in innovation can only be achieved through tried and tested practices etc. 

Oil & gas has a resource constraint problem in the engineering and geological sciences that has been identified but remains unresolved. Currently, the Mind Trust is rapidly retiring and university intake is inadequate to replace them. There is the fact that each incremental barrel of oil & gas demands more engineering and geology to produce. The expectation that North America will sustain energy independence. Rebuilding and refurbishing demands technical resources. However, first we have to overcome the industry difficulties today. Engineers and geologists will be at the forefront of industry future and innovations. 

The Preliminary Specification resolves the issue in the following ways. Specialization and the division of labor are both the solution and the aggravating factor. To resolve the resource issue, specialization is the only method capable of satisfying the industry's resource constraints. That, we believe, will only lead to the point where each producer will be uncommercial in their attempt to maintain their just-in-time earth science & engineering capacities and capabilities. The scope and scale of these specialized needs will outweigh their commercial viability. It will therefore be necessary to establish specialized providers in the industry to fill out generic processes. These will be sourced as required by each Joint Operating Committee and incorporated into the workflow. The producer will become highly specialized in an area that they can build value for their land & asset base. And in addition, they will be able to deploy their capacity and capability as a highly specialized resource back into the industry as a service provider themselves. This will help to defer the costs of maintaining, enhancing and expanding that capability. 

It is in the Resource Marketplace module that we introduce the concept of Pooling the technical resources of all the producers in the Joint Operating Committee. Pooling is our replacement for the operator role. This will become untenable after the further specialization and division of labor necessary to deal with the shortfall in these resources.

Industrial Command & Control

Superimposed across the producer and service industry population are generic classifications of the roles and responsibilities of the professions involved in the exploration and production process. These generic roles, responsibilities, authorities and accountabilities can be assigned to those that qualify and can undertake that task within a producer firm or Joint Operating Committee. Using Work Orders and Job Orders, we can document the work, its assignment, and its completion. 

Additional features such as delegation of authority and other enhancements are included in the Industrial Command & Control system in the Preliminary Specification. Consistent with the method People, Ideas & Objects has chosen to deal with the resource constraints in the engineering and geological fields. The ability to augment and deploy a producer's or Joint Operating Committee's capacities and capabilities through specialized resource markets is another stated use of Industrial Command & Control. 

AFE

The Authority for Expenditures (AFE) is the standard way of establishing budgets for capital outlays. It documents the approvals of all participants in the Joint Operating Committees and reports those expenditures based on the agreed-to budgeted amounts. Supplementals and other features are included in these processes. 

As with all the other processes detailed in the Operations Management module, these are dynamic in nature and populated with live data. In the business context, the user can easily roll back to reports representing the last accounting period or production month.

Work Order

The Work Order has a dual function and process defined and developed in the Preliminary Specification. The first role is to facilitate working groups within the producer population to conduct research and development on various science and engineering-based principles. These working groups have waned in the past few decades and will soon be needed in massive volumes to establish a higher level of iteration between the underlying sciences and technologies developed, and the market innovations derived from them which will then form the basis of new science, etc. Our Work Order provides the ability to create an ad-hoc organizational structure that is flexible enough to consider the various forms of contributions during participation in a working group. The aim of establishing these working groups is to manage them without the bureaucratic legacy that has defeated their purpose. When people who participate are audited for vastly longer periods of time than their participation.

The second role of the Work Order is directly related to the deployment of resources in the manner necessary for the producer. This is to acquire and deploy the engineering, geological and service industry resources necessary to conduct such work. To budget, record, accumulate and bill deployed resources costs. To source and coordinate the market for incremental engineering and geological resources.

There is a feature in the Preliminary Specification described in the Security & Access Control module. This feature defines the organization's Industrial Command & Control. It is here that the Oracle role system of their database is used to designate the authority and capabilities of each individual role and or responsibility. This is within the organization. It also defines how those are conducted. These roles and responsibilities are established and standardized industry wide through our user community. By adopting these in the Work Order, we can establish an organizational structure for these tactical organizations. This will be established by the producer firm’s or Joint Operating Committees deployed to complete a task. Cobbling together and assigning the appropriate roles, responsibilities and authority of the individuals during their tenure on the specific Work Order.

Purchase Order

This is an established method of purchase order processing that has existed for 75 years or more. Oracle Cloud ERP has facilities for these with the ability to be augmented as we need them to fit the oil & gas industry. Changes are included in the area of Joint Operating Committee capabilities which will include enhanced holdbacks etc.

Job Order

Our Job Order is another development in the Preliminary Specification. If we look at the Work Order from the perspective of sourcing and deploying resources, managing the budget and recording hours for internal and consulting roles being sourced. The Job Order is purely a tool to tactically document the execution of commands to fulfill operational tasks in an authorized manner. Action cannot be taken without a Job Order. A Job Order will be completed with the appropriate individuals informed of the job order and their designated authorities, etc. Based on its own email system, it manages only Job Orders and establishes their documentation and implementation.

General 

Lastly People, Ideas & Objects are user community-based software development. Extensive and innovative attributes can be developed as the need arises. They may include additional features, functions and processes that enhance the Operations Management module. I am only defining the broader picture here, not the specific details.

Petroleum Lease Marketplace

Petroleum Leases are the legal foundation of producers' and Joint Operating Committees land & asset base. And therefore a distinct element of their competitive advantage. As with our other two marketplace modules, participation within our virtual marketplace of Petroleum Leases is of interest to producers and Joint Operating Committees. Those people, vendors, governments and producers that operate within this marketplace are actively creating the data and information represented in the Petroleum Lease Marketplace module. Through the Operations Management module, the producer or Joint Operating Committee can engage in this marketplace to exercise their strategy and employ their competitive advantages. It is here that operations and participation within the marketplace can be enacted with the decisions and actions they deem necessary. 

The module organizes unimpeachable, standardized, objective, business, operational and technical data into one location. This is for making decisions and taking appropriate actions. There are many sources of information both public and private scattered throughout producer organizations. The same data resides in disparate systems and accessibility is not always available as expected. This module is to eliminate redundant and / or incorrect data being produced. This is where the right people have access to the right information, with the right authority at the right time. This is at the right location and on the right device. To approach this from a system wide perspective of the industry, where each individual producer's makeup is fundamentally unique, with different systems, containing different information, serving different needs would be an impossibility. What is similar in this Operations Management module is that the data, information and systems needs of each producer are all consistent. This is not part of their distinct competitive advantage. Therefore to approach this from a rebuilding of the industry perspective as People, Ideas & Objects et al are. Standardization of data and information, but also systems becomes a possibility that would otherwise be unattainable and certainly untenable. A rebuilding that uses the industry's administrative and accounting resources on a shared and shareable basis. Where the costs to build this infrastructure are shared across the industry and standard, objective systems are available in return.

Which brings us to the larger question of what People, Ideas & Objects are doing? What is necessary to mitigate oil & gas issues? What is needed to resolve the high overhead costs of the industry? What is necessary to present a platform that the industry needs to rebuild itself into the dynamic, innovative, accountable and profitable industry it is supposed to be? Ensuring that North America achieves profitable energy independence everywhere and always. This is certainly not liable to be done based on what the systems approach has been in the past. And to further that point, what is operating within the industry today that can be considered valuable and worth saving? An industry that has destroyed itself. The arm’s length distance that we can maintain by making the Preliminary Specification is the necessary rebuilding of the industry into the dynamic, innovative, accountable and profitable industry that we need. It will be much simpler and quicker to do from a clean slate. Uncontaminated by its past failed culture and legacy of “muddle through.”

From my perspective active producer participation is not an option but there will be many who may choose not to participate. Whether that is individuals or producers they’ll have their reasons and we can’t please everyone. If they’re towards the end of their career or their firm is facing difficulties it would be understandable. What we’ve done is introduced mechanisms where everyone can participate and yield some monetary benefit as a result of their participation in this effort. From our Profitable Production Rights, our user community and their service provider organizations, producers attain far lower overheads through the sharing of administrative and accounting infrastructure through our Cloud Administrative & Accounting for Oil & Gas software and service. Secondly, they’ll have our price maker strategy ensuring that the marginal cost of any production is covered. To produce only profitable oil & gas production, everywhere and always. Each of these has substantial monetary and value benefits to participating producers. Participating in benefits both the oil & gas and the Information Technology industries. Alternatively what reason will be provided to producer investors as to why a producer is not involved in enhancing organizational profitability? And what alternative investment are they proposing that provides a better return on investment?

Therefore the Operations Management module is the core of where a producer can manage and implement their distinct competitive advantages of their land & asset base and coordination of the markets of earth science & engineering resources. This demands that both feet be placed firmly in this future so that the sinking of the current industry doesn’t pull everything down with it. To hedge one's bets or to await the results of others' efforts may be possible. However, I think those producers that hedge may be left behind as the industry's trajectory accelerates. Those that hedge or wait may not comprehend the new dynamics, its next iteration or compete with those that participated. 

To suggest that a wait and see strategy might be appropriate to determine if this initiative is successful is a mistake. There won’t be anything that will or could be tried again. Officers and directors of the producer firms have left it far too long for me to establish the Intellectual Property of the Preliminary Specification as the only viable option within the industry. After decades, 2023s natural gas prices have proven they have no alternative plans and no idea what it is they’re even doing. Any future initiative will need to avoid the Intellectual Property contained within the Preliminary Specification and its derivative works. Time has been consumed that could have been used more productively. All due to their “muddle through” and “do nothing” strategy and operating procedure.

Profitable Production Rights

As with the service industry experience during COVID, producers have shown their understanding of business extends to the closest group to them that has money to cover their costs. At one point the service industry became the preferred choice and was hollowed out by producers not paying them for 18 months. SLB and Halliburton left the continent to pursue global opportunities. Domestic suppliers were relegated to cutting up their equipment for scrap metal and selling horsepower to other industries to pay their bills. Investment capital and banking are foreign concepts in the service industry as one could imagine. The producers' reputation has been sealed by this bureaucratic configuration. The need for capital in the service industry will have to be undertaken by them on the basis of "producers broke it, producers will need to fix it” out of the goodness of their hearts, philanthropically. This was the experience of ERP systems vendors in the early 1990s. And since then the oil & gas ERP industry has been unable to raise capital as we can't prove how earnings could come about with producers operating in the manner that they do. 

People, Ideas & Objects have always sourced our revenues from oil & gas production. This has been a futile exercise that we’ve failed to overcome as we actively disintermediate the industry. The upside has been that we’ve proved that the industry has existential issues associated with the current organizational structure and management. And the only way forward is to stop using today's methods. The Preliminary Specification is the only oil & gas specific ERP application proposed to be built on a tier 1 provider, Oracle Cloud ERP. It is distributed to all producers through our Cloud Administration & Accounting for Oil & Gas software and service. Therefore novel methods of funding need to be developed to finance the development of the Preliminary Specification to build it. Profitable Production Rights maintain the direct source of proceeds from oil & gas production. 

We therefore developed the Profitable Production Right which provides its rights holder with the ability to license a producer with exclusive access to the People, Ideas & Objects et al Cloud Administration & Accounting for Oil & Gas software and service for one BOE/day. Profitable Production Rights hold exclusive access to these services as they finance and build the facility. We believe that the Preliminary Specification provides Profitable Production Rights holders with two advantages. To participate in the oil & gas and IT industries simultaneously by providing access to the Preliminary Specification. This is the only system that offers the means to produce oil & gas in North America profitably, everywhere and always. It’s not enough to own the oil & gas asset anymore, it's also necessary to have access to the software that makes the oil & gas asset profitable. Secondly we believe that as a result of our Intellectual Property and the market situation we are the only system alternative that has identified these issues and built a solution to them. Therefore, Profitable Production Rights gain a material value proposition in the form of a production right. This allows a producer to have the contracted boe / day processed through the Cloud Administration & Accounting for Oil & Gas software and service. Only Profitable Production Rights owners have access to the software and service. They can license, transfer, assign and market their Profitable Production Rights based on the market established for those rights. Rights holders will negotiate with producer firms their share of this value proposition.

It is therefore imperative that each producer in their Operations Management module has the means to secure the appropriate amount of Profitable Production Rights in order to manage their production profile. This will be part of the Petroleum Lease Marketplace section of the Operation Module as an element of that market. 

Areas of Mutual Interest

Defining the producers' or Joint Operating Committees agreed to commitments in terms of their Areas of Mutual Interests in graphic form. A producer can monitor and control their land position with their working interest partners through the Petroleum Lease Marketplace. If an AMI is established in an area that is expanding they need to know what their obligations are and what the consequences of participation will be. 

Bringing these to the attention of those with the roles, responsibilities and authority in the Operations Management module from the Petroleum Lease Marketplace module is appropriate. By maintaining operational control with high-quality, unimpeachable information on future obligations and opportunities, producers will not be subjected to unwanted consequences. 

Lease posting, bidding, rentals etc.

What is the status of the Petroleum Leases held by producers? Although not an active part of the lease securing or management processes. Providing unimpeachable data and information about the producers' land holdings is necessary for a clear understanding of their competitive advantage. 

Furthermore, access to public land information will be available to producers. Determine the land position of others, what are the posting and bidding positions of adjoining lands to the producer properties. In addition, what are the opportunities in areas of general interest for other producers? 

Market Acquisitions and Divestitures 

What would it take for our user community and their service provider organizations to build a market for all publicly announced properties and divestitures of firms and agents in the industry? To have this data and information organized as a single source of searchable information. This is where discovery, serendipity and spontaneous order would bring about new opportunities on top of what’s already available and conducted in the industry. As a shared resource the robustness of this service would be exceptional. What could be undertaken from a systems development point of view by one individual producer would not be worthwhile as the costs would outweigh the benefit and make the expenditure uneconomic. Spontaneous order and serendipity need to be restored to increase industry dynamic. When people find one another through sales and purchases that were previously unknown, more business and innovations will develop. New markets can be created and value generated innovatively.

Performance Management

To resolve many of the difficulties in oil & gas today. It is necessary to add financial performance based on the actual, factual accounting information of the property. This is in addition to the operational and technical data aggregated within this Operations Management module. Delivering it to decision makers within producer firms and Joint Operating Committees. To be able to rely on this information as the undisputed truth of the property's performance will add clarity and precision to industry decisions. With the implementation of the Internet of Things (IoT), as discussed earlier in this module, monitoring and controlling operations will be considerably more remote. Therefore, based on the decisions made from these three distinct sources of information, the producers will be able to become dynamic in ways that were never imagined before. 

Partnership Accounting

There are two distinct modules based on accounting within the Preliminary Specification. Partnership Accounting and the Accounting Voucher are used to report for the producers and Joint Operating Committees, and to capture data and transactions. The two critical aspects that differentiate accounting between what is done today and what is proposed in the Preliminary Specification are that financial statements are provided for each and every Joint Operating Committee and overhead costs have been converted to variable instead of fixed. These financial statements are based on the actual costs of the property. They include an allocation of capital in the form of depletion that allows the property to compete for capital on the North American capital markets. Secondly, overhead is the actual overhead incurred by the property. There are no overhead allowances as the Preliminary Specification has converted the producers' fixed costs of accounting and administrative capacities and capabilities into the industries' variable costs of accounting and administrative capabilities and capacities. Variable based on profitable production. Providing the producer with the ability to shut-in any unprofitable production, as determined by the detailed financial statements for the property, which if it is shut-in it will incur a null operation, no profit but also no loss, to maximize their corporate profitability and achieve many other monetary benefits.

What may become obvious to many readers is that this is a different environment for accounting resources. We no longer just record transactions and report on them. If we refer back to the beginning of this module's description we find that the “pull of data” and “push of instruction” from the Internet of Things will have severe implications on oil & gas accounting. The volume of data will be unprecedented at any point in the industry's history. If we’re to obtain the benefits of automation and turn the computers to begin working for us then we’ll need to grasp this opportunity on a holistic scale and implement it broadly. Not everyone fits into this redefinition, however the future of the dynamic, innovative, accountable and profitable oil & gas industry depends upon it. 

This vision cannot emerge spontaneously. There is no such thing as spontaneous order in a world where software and global markets operate. The Information Technology infrastructure exists and businesses and industries must ensure that they implement and realize the benefits. Otherwise others who can operate in this environment will leverage the opportunity to their benefit. As a result of their obstinance, the producers' officers and directors have already lost all Intellectual Property rights related to the People, Ideas & Objects Preliminary Specification. We are the only ones capable of providing North American producers with the most profitable means of oil & gas operations. How else could anyone do so? It would take, as I did, a decade of research to figure out another method to do so. Whoever would have the additional difficulty of avoiding the Intellectual Property within the Preliminary Specification. The fun part comes when officers and directors' indifference persists for another dozen years or more. This is to make sure their investors have nothing left to lose.

Financial Statements

For purposes of the Operations Management module the producer will be able to view the makeup of their organization from any perspective they need. Having the ability to aggregate the specific Joint Operating Committees they desire to get a more holistic view of the larger asset to evaluate. These Financial Statements will enable the user to analyze the costs incurred against what’s planned and expected from their operational and technical sources of information. Reconciliation of these three sources of data and information may lead to previously unknown unknowns. 

While marginal commodity prices may occur these financial statements would show the progression towards any unprofitable operations. It therefore provides a window for the Joint Operating Committees to determine when the threshold of potentially falling into a period of non-production due to the lack of commercial operations begins. As a result of the early foresight provided, those who may have to shut-in production will be able to examine their costs and determine with these modules three sources of data what a creative and appropriate plan might be for the property. To return it to profitable production by increasing its production, reducing its costs or enhancing its reserves. Limiting the time the property is shut-in and providing the time to more effectively plan and consider what may be the most effective method to return it to production. 

Pro-forma Worksheet

Sketching out a what-if scenario based on the actual historical situation is the general purpose of any pro-forma worksheet. "What if we changed this” and would that make a material enough change to make the property commercially viable again? Will provide historical data that sets the scenario on a factual basis that will ensure that uncertainty is eliminated. The implication of any changes to the financial statements can be difficult to understand in the full scope of comprehensive operations. This is due to the pro-forma following the accounting methodology used in the preparation of the financial statements. The implementation of any pro-forma changes will follow and show the full implications of these accounting methods and therefore mitigate any surprises that the accounting world springs onto its users. 

The Partnership Accounting module provides comprehensive accounting information. Whether it's Oracle Cloud ERP related information or People, Ideas & Objects' oil and gas integration. This information is available to authorized Operations Management module users. It is structured to provide the producer firm's performance and drilled down to the individual Joint Operating Committees or any combination of those. I hesitate to suggest that this information can be catered to in revised formats that meet any specific user's needs. That runs counter to its purpose. We strive to represent financial performance from the perspective of capital markets. Having ad-hoc reporting would be advantageous if it did not distort financial performance to make things appear better than they actually are. Therefore, Operations Management modules users must have their requirements addressed by our user community. This is to verify that they’ve implemented and prepared the software and services they wish to see, as well as to ensure that financial integrity is maintained in any ad-hoc reporting. In any scenario, capital markets will be the priority for the property's financial performance.

Accounting Voucher

Among the two pure accounting modules of the Preliminary Specification, the Accounting Voucher introduces several new dynamics to the petroleum industry. Introducing the Accounting Voucher as an encapsulated document that holds the information that supports transactional information captured, approved and recorded in the accounting system of the producer or Joint Operating Committee. To deal with resource constraints in the earth science & engineering disciplines People, Ideas & Objects have used a variety of methods to deal with the issue. These are listed in the Organizational Construct section of our Wiki. The predominant Organizational Construct affecting this change in the Accounting Voucher is specialization and the division of labor. Specialization and division of labor are the only proven methods to increase organizational productivity. Therefore each producer will need to contribute their highly specialized technical resources to the Joint Operating Committee to provide for the full set of necessary resources. These may be augmented through outside consultants who specialize in the lower level skills of these disciplines. Providing producers with the opportunity to specialize in their distinct competitive advantage. 

Therefore what People, Ideas & Objects have done in the Accounting Voucher is provide a “role” in Oracle Cloud ERP which provides for the authorization necessary to incur costs on behalf of the producer or Joint Operating Committee. And therefore within a Joint Operating Committee there may be multiple technical resources that have authorized expenditure authority on their behalf. As a result, an Accounting Voucher in this instance is a Joint Operating Committee-based voucher with overall budgetary authorization granted through the AFE process. However multiple firms may have this secondary or tertiary authorization, within the scope of the AFE to approve specific expenditures to be purchased and payments authorized. That Accounting Voucher is therefore part of each accounting system of the Joint Operating Committee working interest owners. 

The Work Order, mentioned elsewhere, is an Accounting Voucher that has been modified and enhanced to conduct processes generically. This fits the description of an Accounting Voucher's use as a Template. Essentially, it inherits Accounting Voucher capabilities as it incurs costs and allocates them in either of its two approaches. Our developers will, at our user communities' direction, build the necessary infrastructure to meet the needs. This will instill the Work Order as a permanent industry-wide Accounting Voucher Template to manage their costs. 

Data, Information and Performance

We can step back for a moment and reflect on how much time and frustration are consumed by collecting data, moving it from one location to another, interpreting, and recalculating it. What can we do to stop this financial drain that no one can support the continuation of? Could we isolate the actual, factual information necessary? We could store that data in one location of the producer and have the system interpret it in the manner necessary for each of its users. Relational Database theory is designed for this purpose. Does the potential explosion of data as a result of upcoming technologies demand we look at these issues and address them? The development of the Preliminary Specification, our user community and the reorganization of administrative and accounting resources into their service provider organizations brings about this opportunity to set the foundation for realizing a more constructive basis for understanding the producer firm. And possibly the most valuable aspect of this information change for producers would be the quality of the decisions being made. These decisions are more precise, reliable and factual. 

There is another critical aspect to the reorganization of data and information. This is the producer firm's performance. How does a producer accelerate their throughput performance, trajectory and velocity? As the foundation of the industry, would clean data and information be standardized and objective, if everyone knew and understood its origin and purpose?

Or is “muddle through,” and “do nothing,” appropriate for the next generation of oil & gas officers and directors? They have their model and we should understand it now. We’ve seen them embrace Artificial Intelligence, digital twins and I can guarantee the next three buzz words coming out of the Information Technology industry will be immediately heralded as “the savior of the industry that’s already providing huge gains in performance.” Yes, it is that bad. This is addressed in the Preliminary Specification.

Material Balance Report

Another implementation of the Accounting Voucher is the Material Balance Report. This is a comprehensive approach to production reporting and balancing through to its ultimate disposition. The Material Balance Report is an Accounting Voucher Template augmented to deal with Joint Operating Committee unique needs. And then saved as its own Accounting Voucher Template, to be reused each month. As changes occur and additional production, facilities or dispositions are added to the specific Accounting Voucher its Template is updated to accommodate those changes for that and subsequent months.  

The key overall objective of the Material Balance Report is to reconcile oil & gas reporting volumes on the continent in an unimpeachable form. It is at that point that we have the basis to automate subsequent processes throughout their production months lifecycle. Whether that is production, accounting, administration, marketing, regulatory reporting or royalties. These are all dependent on the Material Balance Report data and information. 

Undertaking this from the global perspective of an industry initiative is possible, valuable and necessary. The costs are too high for one firm and the net benefit is not continental reconciliation as the basis of automation. This may be perceived as too ambitious. However it can be done and it is far easier than it sounds. In 1994 the Alberta government introduced their Royalty Simplification system that reconciled the entire province's monthly volumetric natural gas and liquids production on this basis. To the satisfaction of where the government was confident enough to assess royalty shortfalls based on volumetric reporting anomalies. What could be done three decades later is unknown, however improvement is assumed. To not undertake this will leave the industry at the mercy of manual processes that consume human resources in redundant processes that should be deemed unnecessary. These people are needed to make the appropriate decisions as to where and what needs to be done to profit.

Production

There is an abundance of opportunities for combining, comparing and reconciling the three sources of data and information that producers and Joint Operating Committees depend upon. Financial, technical and operational sources that are unimpeachable in quality are lofty objectives, however necessary to base future decisions. To be consumed with data in the future may be the operative word for unprepared producers. If we do not spend the time to organize and ensure that the data and information we are using and preparing is of this high quality, it's a simple manner that’s well known by most of “garbage in, garbage out.” Decisions need to be made at a scale that is logarithmic to what’s done today. These are the areas people will spend their time. If we are in an endless paper chase looking for the source of the actual data, that will be the eventual outcome of the current officers and directors' obstinance. These may be the two possible scenarios in the future of oil & gas. An endless paper chase, or leaving processing and storage to computers. We'll make decisions based on the understanding that everyone in the industry participated in building the Preliminary Specification. We'll also understand the data sources and disposition. Until this is completed there is no use in discussing Machine Learning or Artificial Intelligence. They depend on the data and information they have access to and as noted garbage in, garbage out. 

Production data is the most interesting challenge and we have set out to engineer the appropriate solution in the form of the Material Balance Report of the Preliminary Specification. For the upstream oil & gas business, the Joint Operating Committee can balance volumetric activity, gathering, processing facilities, pipeline, tank car or truck deliveries, etc on the basis of our Material Balance Report. It is well beyond the scope of what one producer can undertake as the cost would be horrendous and the value would be quite limited. On an industrial scale however it makes sense and is the foundation of critical value generation. This is a result of the specialization and division of labor between people and computers. Instead of feeding differing systems with the same data and occupying our time reconciling these we can engineer the appropriate solution and establish the appropriate roles for people to pursue. Roles such as enabling automation, innovation, leadership, integration, negotiating, financing, observing, reasoning, judgment, thinking, planning, ideas, researching, collaborating, creativity, issue identification and resolution to name just a few.

Field Data Capture

Could this be the area of focus in terms of the implementation of the Internet of Things and the rebuilding of oil & gas through implementation of the Preliminary Specification? SCADA systems have worked well for large, integrated producers and independents. In my opinion, their costs are excessive and the technology is nearing its end of life. Field Data Capture is critical to capturing production data. It is the foundation of securing production data in an unimpeachable form. However, how do they survive in a world of Swarm networks and the Internet of Things?

It will be a matter of perception whether I’ve opened Pandora’s box or the world of opportunity. The reality is with much of the acceptance of the Preliminary Specification. We stand at a crossroads where bureaucracy rules and their domain crumbles. They’ll continue to fight for the last few pennies of value they can extract at whatever cost to others. However, we have to move forward. It is this vision, as incomplete as stated here, and more broadly articulated in the Preliminary Specification itself that needs to be undertaken.

Resource Management

In the Operations Management module, People, Ideas & Objects proposes that producers' engineering and geological resources be deployed toward their strategic and tactical goals. Whether it be in any one of the three main subsections of this module, Producer / Joint Operating Committee Operations, Performance Management or Resource Management, how and where these people are deployed and their activities can be managed, monitored and controlled through this module. This is the purpose of the Operations Management module of the Preliminary Specification. We are not replacing what exists in the marketplace, we are rebuilding the oil & gas industry for profitability and performance. Therefore what is done today should be seen as redundant. It has failed and we are rebuilding the industry in this vision.

The Operations Management module is a senior management console enabling producers and Joint Operating Committees to manage their operations. Our system will collect, store, and make available financial, operational, and technical data and information of the producer and its Joint Operating Committees. Although much is discussed in the marketplace about data and information and their respective values. Not much is discussed about the disparity of sources within these organizations, the quality of the data or how it’s used. It's also not discussed if it's managed appropriately. The Preliminary Specification, overall, should be seen as an opportunity to begin the process of objectively standardizing, organizing and implementing the data and information of these organizations. Only then could value be discerned from these sources. After all, who knows? Officers and directors may have made excellent decisions, but they used flawed data.

The tools People, Ideas & Objects, our user community and service provider organizations have included and developed in the Operations Management module of the Preliminary Specification. These tools include Work Orders, AFE, Job Orders and others. Become available to invoke authority and fulfill management's responsibilities. These form the basis of the Operations Management sub-modules. To consolidate the interface of information and tools necessary to effectively operate their domain of responsibility. This is to document these and ensure compliance and reporting to regulatory authorities is handled.

It’s pertinent to reiterate two distinct types of information: the producer's domain and the Joint Operating Committee. As we’ve noted elsewhere in the Preliminary Specification, producer data and information is predominately proprietary and confidential to everyone inside of the producer firm. It is tightly controlled within the firm. The Joint Operating Committee contains information that is predominantly public and any proprietary information is shared between the producer participants of that property. The use of Oracle Cloud ERP provides assurance that the architecture of how all this information and data is stored and shared meets these requirements. It also meets North American regulatory requirements. Security levels are among the highest in terms of Oracle’s capabilities and capacities for its Oracle Autonomous Database. Their Java security model establishes it as the most secure development environment since nothing can be run outside the Java Virtual Machine. Part of our user community's tasks is to define a hierarchy of roles and responsibilities that define access privileges to data. Producers can assign the appropriate roles to appropriately authorized individuals to read / write those data elements. Compared to other vendors these security features may seem redundant and more trouble than they’re worth, however they provide comprehensive coverage. Oracle’s commitment to security continues as their firm uses Oracle products internally in a practice known as “eating their own dog food.” Please review the Security & Access Control module of the Preliminary Specification and the unique attributes we introduce and resolve there.

Research & Capabilities

The Research & Capabilities module of the Preliminary Specification captures and documents producer firms' explicit knowledge of their earth science & engineering capabilities and capacities. Their development and control over the innovative process, of which the Preliminary Specification has two primary innovative processes being managed. With deep connections to the service industry, collaborative efforts throughout the industry and its tertiary industries advance the science and technology of the oil & gas business iteratively. The interface between the Research & Capabilities and Resource Marketplace modules establishes these connections to fulfill the various roles and responsibilities for the completion of any initiative. As a science-based industry whose demands will become ever more complex and difficult, it will be the innovative advancement of that science and its interplay between the industries innovative technological development that in turn push the science forward. 

Control of this innovation process is a necessity as the tendency is to disallow innovation within the firm to ensure it does not become a free for all. Where experiments are tried by various different groups that may succeed or not, only to have them tried again and again each and every year. Highly wasteful, unproductive, un-innovative and costly undertaking. The ability to fully develop, test and deploy on a sample basis the innovations that are developed, to have those well documented in the Research & Capabilities module in order for people to see what the state of affairs are in terms of the innovations development and its pathways taken, as innovation is defined by its process of discovery and failure. To have explicit knowledge captured and where to turn to acquire the tacit knowledge to implement the innovation provides producers with the ability to stop wasteful “innovative approaches” being undertaken in North America today. What we’ve learned is that innovation is a defined process that can be replicated throughout the organization. It must be controlled and managed to ensure costs are not unnecessarily high. Innovation results can be achieved through the sharing of ideas through a science-based business that collaborates to move its science forward.

Explicit knowledge should be captured as robustly as possible. Providing information and knowledge about who and where tacit knowledge can be deployed. Acquisition of Intellectual Property through the Research & Capabilities module is an opportunity that must also be undertaken. People, Ideas & Objects Seven Organizational Constructs have Intellectual Property as one of the foundations of how the industry moves forward innovatively and otherwise. Without Intellectual Property being appropriately managed, no one can persist in bringing about new ideas when they take so much time and effort and are subject to so much risk of poaching in the marketplace. Conversely producers and Joint Operating Committees can mitigate the high costs of innovations through Intellectual Property's assertion that no derivative works are authorized without a license. Therefore unnecessary duplication of effort is eliminated in the marketplace. Yet at the same time the ideas are known and others can learn from and upon them. 

It is here within the Research & Capabilities and Knowledge & Learning modules that the producer or Joint Operating Committee can source and organize the team they need for the task at hand. Using the search facilities within their own firm, the Joint Operating Committee, the firms they’re associated with or the larger market of producers and consulting firms. Producers will be able to acquire the resources they need to ensure the task is completed through the Preliminary Specifications Work Order. With the Preliminary Specification we are using specialization and the division of labor to resolve the current and anticipated resource shortfall in engineering and geology. However, we believe that with this diversity of resources, the demands from enhanced specialization would put the producer firm beyond the point of commercially viable operations if they attempted to maintain these specialized resources internally. We have therefore eliminated the "Operator" designation of one producer within a Joint Operating Committee. This is because providing all of these specialized resources to the Joint Operating Committee is unworkable. And therefore People, Ideas & Objects established the “pooling concept” where all participants in the Joint Operating Committee commit their unique, specialized resources to the property and any shortfall is filled by the market of consulting firms or other producers. Establishing a second source of revenue for each producer firm that generates revenue to offset the increased costs of maintaining these hyper specialized engineering and earth science capacities and capabilities. Management of this entire process is the role of the Work Order of People, Ideas & Objects.

Knowledge & Learning

We should begin the discussion of the Knowledge & Learning module with an appropriate quote from Professor Richard N. Langlois in “Transaction Cost Economics in Real Time.”

In this sense, the ability of a large organization to coordinate the implementation of an innovation, which is clearly an advantage in some situations, may be a disadvantage in other ways. Coordination means getting everyone on the same wavelength. But the variation that drives an evolutionary learning system depends on people being on different wavelengths - it depends, in effect, on out-breeding. This is something much more difficult to achieve in a large organization than in a disintegrated system. Indeed, as Cohen and Levinthal (1990a, p. 132) point out, an organization experiencing rapid change ought in effect to emulate a market in its ability to expose to the environment a broad range of knowledge gathering 'receptors'. p. 120.

In terms of Organizational Constructs the Preliminary Specifications Knowledge & Learning module relies heavily on the Joint Operating Committee, specialization and the division of labor, Intellectual Property, Innovation and Markets. Five of the seven show a high dependence on cultural influences. This tells us that the implementation of this module will be difficult as cultural forces will resist these changes. To which we'll apply our standard approach of ignoring them as we’re rebuilding the industry. And secondly the module form will have strong cultural support once what exists is forcefully ignored. 

While the Research & Capabilities module is a producer-facing module that captures and documents the distinct competitive advantages of the firm's earth science & engineering capacities and capabilities. The Knowledge & Learning module is a Joint Operating Committee module designed to meet specific property needs. 

People, Ideas & Objects use specialization and the division of labor throughout the Preliminary Specification as an Organizational Construct. This is to focus the producer and Joint Operating Committees organizations on what they do best. These specializations are broad and diverse and include allowing computers to store and process information while allowing humans to do what humans do best. This is comprehensive and not just shuffling data about. We have specialized the process of innovation development within the producer organization to ensure they’re constrained, focused and controlled by results and deliverables. The Knowledge & Learning module focuses on the Joint Operating Committees ability to take the producer firms that are working interest owners of that property. And select from each firm what specific capabilities and innovations are available. Select what capacities are needed by that property and for what role they’re required. Organize and deploy them to ensure field objectives are achieved.

It should be noted here that the information, the capabilities that populate the Knowledge & Learning module for each Joint Operating Committee. Are not the full complement of what the producer has developed in terms of capabilities. Each of the producers' capabilities when developed and made available will be selected or tagged with the type of capability and its application. Therefore a capability involved in multilateral fracing will not be populated into a producing zone, operation type or region to the Knowledge & Learning module of a Joint Operating Committee without those characteristics. It will only receive the capabilities of those producers for the purpose of the project. 

It is this process of specialization in earth science & engineering resources that will cause producers to incur uncommercial operations under current management. Having the full breadth of skills in house will demand too extensive infrastructure and resource uptake for producers to remain viable. Particularly in the era of looming constraints on these resources. People, Ideas & Objects have therefore eliminated the “operator” designation and created the “pooling concept" to resolve these resource and specialization issues. This reorganization is necessary as the demand for these resources is subject to many changes outside the producers' control. The current brain trust is retiring and the university intake is not enough to replace them. Higher throughput is needed for energy independence and the demand for incremental earth science and engineering effort increases with each barrel of oil produced. Methods are necessary to deal with this issue. People, Ideas & Objects provides the only viable alternative to elevate an organization's throughput through specialization and division of labor.  

The question then becomes what amount is charged to the Joint Operating Committee for hourly resource charges through our Work Order system? What we have developed is a unique factor that represents the value of each producer's performance, capability, and value. This is in terms of their earth science & engineering capacities and capabilities. Revenue Per Employee will be used to determine the charge out rate of any of these individuals who will work at a Joint Operating Committee. This will be done through the Work Order system. A senior engineer will be charged at x% and a junior engineer will be charged at y% of Revenue Per Employee. The diversity in calculating Revenue Per Employee numbers throughout the North American producer population provides remarkable variance. It is the only factor that differentiates the producer's quality in terms of performance. Any overt attempt to increase the producers Revenue Per Employee factor would only create incremental shareholder value and spark competitiveness within the industry to increase this factor. The initial limited production of start-ups and small producers would require a floor price for these resources.

Preparation and development of the producer's specific capabilities, and most specifically their innovations. Are processes controlled and managed within the Research & Capabilities module. Seeking to reduce innovation costs by controlling, testing and developing them before deployment. And to ensure that the producer organization is not consumed by too many similar innovations repeated throughout their organization. Once the innovative procedures are documented in the Research & Capabilities and are ready to be deployed. It is through their availability to the Joint Operating Committees that each pertinent property working interest producer can access those capabilities. They can also select them to be implemented. It is the Knowledge & Learning module that is the method that innovations, capacities and capabilities are deployed within the property. Using the fully tested and documented processes which each Joint Operating Committee producer has established and made available for use.

What may appear to be freewheeling markets to some of the existing officers and directors of the producers today is nothing more than the difference between using the market to provide for what the producers need. As opposed to what is tightly controlled within producer organizations under the “operator” designation today. Freewheeling markets may be an apt description of innovative developments as they are perceived to be chaotic. However they should not be considered uncontrolled in the Preliminary Specification. I would suggest that in the Knowledge & Learning module the ability to maintain high levels of operational control is available through these interfaces. In the Operations Management module we see many aspects of operations that are not currently provided. The data and information from the financial, operational and technical domains have all been engineered during the People, Ideas & Objects et al software development process. This is to ensure their high levels of integrity and accuracy. The level of documentation of capacities and capabilities is done for a variety of different reasons and the purposes are comprehensive. The ability to deploy producer resources through standardized and agreed methods of what the program will consist of. This is once selection in the Knowledge & Learning module has been made. And lastly, control of the operation through Work Orders, AFE's, Job Orders and other means. This will appear messy at times, however reliance on the process will ensure the outcome.

People, Ideas & Objects believe that higher commodity prices are a reallocation of capital necessary to fund innovations and capital deployment. This is for that very long list of capital projects in North America. “Muddle through” doesn’t appear to have identified the problem and the firm's officers and directors continue to sail through clear blue waters, or so it seems. Conversely the Preliminary Specifications price maker strategy is designed to ensure that the actual, factual costs of oil & gas exploration and production are recorded within each Joint Operating Committee to ensure that they remain financially successful at all times. If they are no longer profitable, these properties are shut-in so that they’ll generate a null operation, no profit but also no loss. At that point the Joint Operating Committee can turn to the Knowledge & Learning module to determine what is the most effective course of action to remedy its lack of profitability, and return it to profitable production as soon as possible. In an environment of ever increasing costs the accuracy of actual, factual, standardized and objective accounting information will be critical.

A question I would ask at this point is who do we want to participate as partners in Joint Operating Committees? There has been an interesting trend in oil & gas renewal over the years. The 1970s and 1980s saw a landscape dominated by large corporations transition to independent and start-up producers become the dynamic growth arena in the 1990s. Today many of the producers from the 1980s and 1990s that set out as the independent producers movement in the oil & gas industry are no longer with us. The past few years have seen high levels of consolidation to survive oil & gas difficulties leaving even fewer producers than before. Consolidation has been highly beneficial for the clean energy industry but not much else. Now that officers and directors realize their misdirection into other industries is a mistake, will they ask for forgiveness? Will that allow us to trust them that much more? What we believe the Joint Operating Committees would best be represented by start-up and small producers. They are the ones that have driven the change in the industry and it is the change most needed today. Innovation demands that we expand the reserves base, increase revenues and reduce costs. What have we seen from the consolidated producers? Basically, they are misguided adventures and nothing more. People, Ideas & Objects Preliminary Specification uniquely caters to all sectors of the North American oil & gas producer population.

Conclusion to the Research & Capabilities, and Knowledge & Learning modules

These two unique modules are designed to deal with the distinct competitive advantage of the producer firms through what can only be seen as the most difficult and challenging period of oil & gas history that begins today through to 2050. The transition to profitability everywhere and always will be challenging when business discipline takes center stage in decision-making. And it will be there that better, actual, factual, standardized and objective information in terms of comprehensive financial statements and other information will be provided for each Joint Operating Committee by the Preliminary Specification enabling those decisions to be made through this Operations Management module. When there is little business information available, these resources resort to their own means of determining what the situation is. The status of the industry today is the consequence. 

To suggest this occurred accidentally would be incorrect. There is no doubt in my mind that the lack of funding of even reasonable levels to ERP providers in oil & gas was deliberate. Self-serving officers and directors who choose not to answer for their actions. Discovered they were successfully able to attain their lofty objective through purposely inadequate ERP systems, disorganization, comprehensive unaccountability, their excuses, lies and viable scapegoats. When was the last time officers and directors took responsibility for any aspect of their authority or the business they’re responsible for? They’ll state that “oil & gas is such a complex industry,” hide the details, confuse the point and claim they don’t have the data, which they don’t. Excuses that become too convenient and easy when endlessly repeated. 

In 2015 their investors said enough and ceased to fund the industry further. An industry that’s incapable of supporting itself through profitable operations. An industry where officers and directors are personally satisfied with what is generated in terms of cash flow from investors' prior investments, keeping them enthused for another year. They’ve lost common sense of what a business should do and how it should do it. Establishing corporate objectives such as “building balance sheets” and “putting cash in the ground” as reflections of how obscure and indecent their lunacy has become. 

Nonetheless the industry is in a state where its issues throughout North America are serious and demand resolution. The seriousness of difficulties is not only the volume of issues, but their consequences. I’ll first quote Professor Richard Langlois’ paper “Transaction Cost Economics in Real Time”

F.A. Hayek (1945, p. 523) once wrote that 'economic problems arise always and only in consequence of change.' My argument is the flip-side: as change diminishes, economic problems recede. Specifically, as learning takes place within a stable environment, transaction costs diminish. As Carl Dahlman (1979) points out, all transaction costs are at base information costs. And, with time and learning, contracting parties gain information about one another's behavior. More importantly, the transacting parties will with time develop or hit upon institutional arrangements that mitigate the sources of transaction costs. p. 104.

The serious nature of the consequences of continued inaction on behalf of officers and directors will have a severe impact on all those involved in North American society. Officers and directors are fine and thank you for asking. They are oblivious, uncaring and fundamentally inactive. “Mudding through” and “doing nothing” are the only strategies and tactics I've seen from this bunch. They can sit high above and criticize the Preliminary Specification because it didn’t have that feature or they didn’t like that one. They can wait for exactly what they're thinking when they’re “muddling through” certain some will provide it someday.

However we are undertaking a comprehensive rebuild on the basis of the Preliminary Specification vision. We will not compromise with them or deal with them in any detail. We’ll ignore their cultural influences and establish the performance-based culture we seek. A comprehensive rebuild at this time will be less onerous, and it will take far less time than dealing with their compromises and culture. And our user community will be far more successful in building from the ground up to break away from the losing traditions of today's oil & gas producer. What of anything that is occurring today in oil & gas is worthwhile?

I’ll reiterate that the Intellectual Property that underlies the Preliminary Specification is comprehensive. Any attempt by producers, officers and directors to circumvent our IP will be dealt with. It is unlicensed and unauthorized, and they are warned not to use it. Other software companies whose revenues depend on their Intellectual Property respect other software vendors' Intellectual Property. Therefore we feel the appropriate level of assurance is that none of our IP will be used by them. The implications of this are broad and consequential to the producer firms. They are therefore unable to breach what we have set out in any attempt to establish alternative ERP systems. As indicated earlier in this conclusion to the Research & Capabilities and Knowledge & Learning modules. Producer officers and directors are probably satisfied with that as it reinforces their method of operation permanently. Or until someone decides to build the Preliminary Specification under our Profitable Production Rights initiative. 

Finishing off the Research & Capabilities and Knowledge & Learning modules we have a quotation from Professor Richard Langlois that builds off of Harvard Professor Carliss Baldwin’s “Knowledge begets Capabilities, and Capabilities beget Action.” There is the quotation from Professor Richardson that capabilities are the “Knowledge, Experience and Skills” (1972, p. 888) to which we at People, Ideas & Objects have added “Ideas.” And this next quote from Professor Langlois helps to bring the clarity we need. From Professors Richard N. Langlois and Paul L. Robertson "Firms, Markets and Economic Change: A Dynamic Theory of Business Institutions."

In a metaphoric sense, at least, the capabilities or the organization are more than the sum (whatever that means) of the 'skill' of the individuals in the organization. In addition to the ‘skill’ of the firm's physical capital, there is also the matter of organization. How the firm is organized - how the routines of the humans and machines are linked together - is also part of a firm's capabilities. Indeed, 'skills, organization, and technology are intimately intertwined in a functioning routine, and it is difficult to say exactly where one aspect ends and another begins' (Nelson and Winter, 1982, p. 104). p. 106.

Performance Evaluation

The Operations Management module brings together an advanced toolset that producers and Joint Operating Committees can use to develop and test more advanced criteria for better performance. The combination of the Analytics & Statistics, Performance Evaluation and Artificial Intelligence modules within the Operations Management module is advantageous due to the combination of financial, operational and technical data and information. This data being the engineered and documented data that is the output of the process of building the Preliminary Specification. It establishes the objective and standard qualities necessary for its unimpeachable nature of what is presented and understood by its users.  

Working on the performance aspects of the producer and Joint Operating Committees the user of the Operations Management module doesn’t need to make decisions based on incomplete data or information. The reliability and understanding of the conclusions made are only as good as the data and information quality, its consistency and what users believe the data represent. To suggest that Artificial Intelligence will be of any value when the data and information it uses is questionable, is only the latest iteration of an Information Technology widget. This is the solution to a business problem. People, Ideas & Objects approach to Artificial Intelligence is fundamentally different. 

As I indicated in the Pro-forma Worksheet section of the Performance Management section of this module, the use of decision making based on factors outside of the accounting system framework, which is imposed when applying the Pro-forma Worksheet, would lead to incorrect assumptions and hypotheses. This is of particular concern when using the Performance Evaluation section to make performance based decisions on actual, factual data. However, this is not using the strict interpretation of the financial accounting system. This leads to incorrect decisions being made based on clean data regardless of the interpretation used. However taking the SEC’s perspective is not how innovation is developed. New and creative perspectives and ideas need to be developed and understood for their stand alone value to see their worth. Once proven in the Performance Evaluation section, testing the theory in the Pro-forma Worksheet would provide its business understanding and implications. 

This is the point of divergence between what investors believe they see in oil & gas, and what the officers and directors produce. The SEC coordinates with accounting standards bodies and audit firms to provide a generic understanding of financial accounting in North America. Such that when an investor analyzes an annual report from company A in industry B, they can use the same understanding and apply it to company C in industry D. They then can make the appropriate decision as to where to invest their money for the optimum return. When company A in industry B has jumped off the cliff in terms of financial accountings generic understanding. Pursuing facetious objectives such as "building balance sheets" and "putting cash in the ground," and generally having begun using their own criteria to exaggerate their financial performance, investors appropriately feel betrayed. 

The purpose of this use of an SEC standardized North American reporting system is substantial. It eliminates the need for investors to review each and every document for each potential investment they consider. When they understand the general framework of how the North American reporting system operates, they can defer to it and not have to spend the time reviewing the details at great cost to themselves and at the same time incur an unacceptable cost for the firm to cater to each and every potential investor's questions, their concerns and needs. Markets operate on information. Information in the form of price. When the market understands how that price is generated, it can function efficiently. 

It is the implications of the changes within the Pro-forma Worksheet that have to be considered in all cases. It is doubly so when the combination of many changes may have an overall negative effect on earnings that needs to be avoided. Or the changes that generate any detrimental consequences need to be removed. When producers can see what their investors in oil & gas understand, adjust their decision making to ensure profitability everywhere and always, and the consequences of those decisions being made, they will avoid future difficulties, miscommunications and errors with their investors. 

Analytics & Statistics, Performance Evaluation

These two modules consist of tools that provide their users with the ability to perform statistical analysis on the data and information they're authorized to access. The Performance Evaluation module is for the Joint Operating Committee and Analytics & Statistics provides the same tools for the producer firm as a whole. The difference is that the domain of data and information is constrained in the case of Performance Evaluation to the Joint Operating Committee members.

The means to build a library of tools to use personally, as a team, a Joint Operating Committee or a producer firm are available in each of these modules. The use and reuse of these formulas will provide accuracy, understanding and value to each organization. The domain of an individual's data is governed by their authority and responsibility within the organization of concern. It would be managed by Oracle Autonomous Database role definitions.

Artificial Intelligence

Chat GPT has demonstrated my concerns about Artificial Intelligence and its value. Producer firms have been using Artificial Intelligence in their organizations for up to three years and I cannot notice any marketable increase in their performance. I often tell people who seem so enamored with AI, the ones all over Facebook, that they should write a software program. Find out how difficult it is to conduct anything serious in technology and reconcile their AI vision with that reality. 

Our approach in the Artificial Intelligence module is cost mitigation in this initial phase of the technology introduction. Artificial Intelligence costs and resources are high. As with any innovation, costs need to be controlled and monitored effectively with the appropriate organizational means. In People, Ideas & Objects Preliminary Specification AI is a shared and shareable resource due to its software nature and high development costs. It is also due to the demand for high cost, quality resources that may be displaced from productive activities. If each producer incurs these costs on their own we’ll find the other factor consistent in today’s AI implementations. There are currently only 1% of AI initiatives that are successful. 

Separate and distinct from the Analytics & Statistics module. Artificial Intelligence in the Preliminary Specification is a shared and shareable resource available to producers and Joint Operating Committees. Based on the development of a packaged, proven number of algorithms tried and tested before availability. Artificial Intelligence is potentially a powerful tool that can add significant value to a science-based industry such as oil & gas. However, each and every producer throwing resources at this unproven technology will, I believe, ensure that it achieves its unproven nature. When it fails to deliver value after the commitment of significant cost, it will join Windows NT, Y2K, and Big Data in their hall of shame. With the high cost of AI and its success rate below 1%, sharing the costs of the infrastructure of these non-competitive resources, producers will be able to deploy it as they discern its value. 

Therefore if we provide a means in which service provider contributions were available, where collaboration across the industry as to the application and use of the AI algorithms, what are the possible enhancements etc. The need to control costs and share in success / failure can be managed once across the industry instead of at each individual producer. When and if the success and value of the AI resources break out into a meaningful and highly valuable discipline. The industry will be able to benefit from what it has learned in this initial phase. It will turn it into a competitive advantage and build individual capabilities in-house for what is deemed necessary. If it is deemed a success there would be an initial infrastructure in place from the collaborations and markets established through these service providers. This would be something to build upon. Today there appears to be only science fiction. 

There have been too many times that we’ve been led to believe that some whiz bang IT product or new version of software was promised to turn the world upside down. AI appears to be today's approach. People, Ideas & Objects approach is to initialize the technology within the science and technology based industry of oil & gas. Control its costs through the Organizational Construct of making it a non-rival cost, or part of Professor Paul Romer’s “New Growth Theory.”   

Operations Management Conclusion

Producers in oil & gas are faced with a challenging dichotomy. One in which profitable operations are the only acceptable means of production everywhere and always from this point forward. Much has been wasted in the past decades leading to unsupported capital structures. Damage and destruction are extensive. Only a comprehensive rebuild of the industry and its service industry based on the Preliminary Specification resolves the existential organizational issues facing the producer officers and directors. Continuation of “muddling through” does not appear to be capable of dealing with these issues or resolving the most difficult future the industry has ever faced. Officers and directors have certainly had time to do so. The other side of this dichotomy of providing profitable oil & gas operations everywhere and always is that the consumer needs reliable, secure, abundant and affordable energy resources. With North American energy independence fulfilled in the 21st century. With 10 to 25 thousand man hours of equivalent manpower contained in each barrel of oil equivalent. This resource supply is necessary for our civilization.

We’re unable to get there with the chronically unprofitable production of the past four decades. Investors have bowed out and the only source of capital large enough to finance industry capital demands is its profitability. In other words the oil & gas business in North America needs to be operated as a going concern. Only the Preliminary Specification has the plan to make that happen. We have no right to pass an industry on to the next generation until we can prove we managed the resource responsibly. Which means all of this valuable resource must be produced profitably. Each barrel of oil equivalent should be profitable in the “real” sense from this point forward as the resource is uniquely irreplaceable and is the blood of our economy. What right do we have to steal these resources from future generations? We are obligated to them to prove that we did not waste them by producing them profitably. We are also obligated to pass a viable, prosperous and profitable industry on to them. If we lose the script now it would not be difficult to foresee foreign sources of oil & gas demanding North America to play second fiddle to China, Russia or others in terms of our energy supply.

People, Ideas & Objects Operations Management module is designed to provide producers and Joint Operating Committees with a means to monitor and control their operations. Establishing a sound base of data and information necessary to ensure decisions and actions are conducted with precision and profitability in mind. Where the financial, operational and technical data of the producer or property are available for use. Technologies involved in the Internet of Things are deployed and operational to benefit these users. And resources are deployed based on budgets and plans generated and set through this module. The Operations Management module is the aggregation of and accumulation of the efforts undertaken in the Preliminary Specifications and its other 13 modules. It is presented in a format where information can be used effectively for profitable decision making.