People, Ideas & Objects see a window of opportunity to assert our solution to North American oil & gas producers' issues. This is in direct response to what we feel is a contrived and wholesale industry transition to SAP. This involves producers' officers and directors seeking to secure their management methods. Therefore, we would like to explain our advantages over SAP. We would like to make oil & gas investors aware of the $660 billion difference in value immediately if SAP is selected. People, Ideas & Objects Preliminary Specification provides a proven value proposition for North American producers. This is due to our focus on providing producers with the most dynamic, innovative, accountable and profitable oil & gas operations everywhere and always.
I have a distinct and original perspective regarding the North American producer population. Summarizing it as a failed, damaged and destroyed industry. The elements of that failure and why I can’t see the current administration doing much to repair its destroyed financial, operational and political frameworks. I fail to see how producers can continue without addressing these difficulties. Demands and expectations cannot be met. Another attribute of this perspective is that there’s no doubt as to where the fault lies in terms of responsibility for the damage and destruction. The producer's officers and directors. The amount of time it’s been in place. Our proposed resolution is to rebuild the industry under the vision of the Preliminary Specification with our user community and service providers.
As far back as the 1980s, producers sought to record as much of their costs as capital costs. This was done with minimal operating and overhead costs realized in the current period. These have built excessively large asset balances that reflect equally overreported profitability. This attracts excessive amounts of investor capital which industry relies on to create a systemic, unprofitable production profile. Which is ultimately expressed as overproduction, which leads to the systemic and highly detrimental, long term erosion of global commodity prices. Accentuated by sharp and repeated commodity price collapses in both oil & gas since July 1986. As an example, Alberta-based natural gas producers paid customers to take product off their hands. Or the COVID lockdown induced negative $40 oil in April 2020.
Producers have hardly anything on their financial statements except large volumes of property, plant and equipment and their supporting debts. Collectively these large balances across the industry do not generate, even at today's prices, the volume of revenues necessary to operate “real” profitable operations of a viable industry. It is reasonable to assume that oil & gas investors agree with that assessment as additional capital investment has been suspended since 2015. Since that time a mad scramble for cash has sought to make up for chronic working capital deficiencies. Seeking to alleviate the capital needs of their annual capital budget. Each year, it becomes more desperate and destructive to producers' long-term financial health and integrity. Producers have no capital structures, no support from the financial or banking communities, no faith, trust or goodwill from the service industry. An industry that they consistently and repeatedly destroyed. This process resulted in shortages of capacity and capability within the service industry, as well as short-long-term staff shortages within oil & gas itself.
When an industry is faced with difficulties like those presented, management usually resorts to layoffs to resolve the issue. And many have been conducted. There is a point to be made here about layoffs. The first round of layoffs should preserve the firm's capabilities. The long lead times for securing land, drilling and equipping a property for production can take up to ten years. To ensure this continues you only cut in the first year of this process, the assumption being these resources can be reclaimed next year when things improve. And if the difficulties continue you’ll cut those involved in the second year of that ten year process. The third and fourth years etc. Due to the investors' strike and critical cash shortage over eight years, it is reasonable to assume that the operational capacities and capabilities have not provided the necessary pipeline of new opportunities. The cupboards are bare. Those resources needed in the first year of processes may have been outside the industry for seven years and will be difficult to recruit. This deprecation and destruction will not be evident on a financial statement but will show when the need to resume operations is demanded of the organization. Extension of this thinking to the service industry makes it a particularly difficult aspect of producers' financial and operational difficulties. If these resources are lost, replacements will not be able to take advantage of the experience of the best of breed forerunners, which is an unnecessary tragedy. Then we need to add shale's steep decline curves. Rebuilding oil & gas is not a luxury, it’s a necessity.
Politically the producer officers and directors have taken a back seat to managing the industry for decades. They've left it to others such as governments and environmental groups to define their role in society. Producers have failed to provide any practical value or need for their products. They are therefore relegated to "muddling through" politically to ensure no one sees who they are. Frequently pointing the finger at others to redirect the focus.
What’s surprising is that nothing has been done about these difficulties. People, Ideas & Objects et al’s Preliminary Specification has been vilified and ostracized for our attempts to increase profitability and accountability to deal with these issues. People, Ideas, & Objects are the only group outside the investors to express concern about the current industry state. If it is as we suspect that SAP is being used to establish the existing permanent means of unprofitability and unaccountability that we documented in our RFP, then the possibility of People, Ideas & Objects survival over the next decade or even a generation while SAP proves this hypothesis is very low. Is this what’s desired? Will they be able to avoid our Intellectual Property? Or will producers avoid People, Ideas & Objects as a feature instead of a bug? And who will spend thirty years or more asserting an alternative ERP solution for oil & gas to replace SAP? In similar ways to Oracle in 2000, IBM in 2005, and People, Ideas & Objects, will they focus on enhanced profitability and accountability in the years to come?
There are some who might say that the Preliminary Specification is too expensive, and I can assure everyone that it will initially be expensive. Producers could have done something about that, however those opportunities are long past. Besides, our value proposition makes it the most attractive investment producers, officers and directors could make at this time, and maybe in their careers. A budget where oil & gas investors will be assured that producers are committed to profitability and accountability and that the issues are being dealt with. Looking at SAP in terms of its cost, it may be initially less costly, however there will be no returns in terms of the quantifiable or qualifiable profitability and accountability set out in their clean energy transition vision. This will result in continued unaccountable and unprofitable cannibalization of the value generated by oil & gas investors' investments. SAP acting as officers and directors "blind sleepwalking agents for whomever feeds them."
Time is now a scarce resource. What is necessary for the oil & gas investor is to be specific as to what is an acceptable solution for tier 1 ERP solutions in oil & gas. A successful implementation of People, Ideas & Objects, our user community, and their service provider organizations' Preliminary Specifications in conjunction with Oracle Cloud ERP for oil & gas is the only way to achieve this. All of these will be packaged into our Cloud Administration & Accounting for Oil & Gas software and service. No other alternative should be acceptable.
This discussion is in response to an article posted by World Oil regarding comments by the CEO Ben Van Beurden of Shell Plc at a conference in Europe. He stated,
“It may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing and as a very, very quick build out of alternatives,” Chief Executive Officer Ben Van Beurden told reporters at a conference in Stavanger, Norway. “That this is going to be somehow easy or over, I think is a fantasy we should put aside -- we should confront the reality.”
I responded to the World Oil article through X with the following comment.
No!
Another viable scapegoat is unacceptable. The ultimate capitulation of accountability here. The individual with more authority and responsibility to have dealt with this long ago! My pinned tweet above was refused by those in power. [Our July 2019 White Paper] Then in nine months they ran the price of oil to negative $40! Declared shale was a lost cause, sold it and focused on the ultimate unaccountability project in an unauthorized manner “clean energy.”
Today’s failure started long ago and we published our solution in August 2012. #failure
First of all, this is not a betrayal by Shell Plc, its investors or employees at any time. This is a comprehensive failure by Ben Van Beurden and his cohort of officers and directors of their “muddle through” club. Rotten fish stink from the head down. The company’s been led off the cliff and now he wants to use the convenient excuse that it's Putin’s fault. Consumers should learn to go without. This is not Shell's history and culture. Investors, employees, and annuitants have built a company that reached the highest standards of excellence. They’ve been betrayed by these self-serving officers and directors who’ve used and abused the industry to the point where the consumer is told to go without?
In light of the history of People, Ideas & Objects since the August 2012 publication of our Preliminary Specification, the people that need to go without are those that caused this damage and destruction. To blame this catastrophe on someone like Putin, who will only take advantage of any situation he can find, is ridiculous when it’s Ben Van Beurden and his cohorts who gave him the gold-plated offer to do so. Who has had the Preliminary Specification available to them as the solution to these specific issues since August 2012.
I trust my interpretation and perspective on oil & gas and its resolution are not misconstrued. It would be foolish and naive for anyone to believe that the human nature of self-interested individuals would reach so far as to define a scheme such as what I’ve accused producer officers and directors of. That’s not at issue, in my opinion. What is at issue is the unchecked pursuit of self interest by officers and directors has traveled too far along the scale of what is acceptable. And this is measured in the form of a status quo pursuit of damaging and destructive management methods. Due to its wide scope of effects, I find the damage itself to be unacceptable, as well as the fact that only the officers and directors have benefited financially from it. Not that I believe this is some anomaly of human nature or behavior. The structure of our user community and their service providers, indeed the entire sub-industry as I call this environment necessary to resolve this issue, is structured around self interest as the motivation to get things done. The key difference is our motivation is to provide for the most profitable means of oil & gas operations. The risks associated with this damage are too extreme to continue. Each barrel of oil contains the equivalent of 10 to 25 thousand man hours of equivalent mechanical labor. An amount of labor 27 to 68 times today's total population from today’s global production. An irreplaceable resource that powers our economy, life and civilization. It is my opinion that some things are better left within a range of acceptable standards and tolerated levels.
Oil & gas producers are dealing with standard business issues when overcapitalization of this scale is undertaken. It’s no mystery that we’ve traveled down this road. Officers and directors would have known this too. Their problem is that they’re culpable and liable even if they were unaware. As they were well aware of People, Ideas & Objects et al’s solution which we’ve been offering in the form of the Preliminary Specification for the past decade. In addition, they had a specific request almost a decade ago from their investors to upgrade to Tier 1 ERP systems. A history that reflects a risk that any further loss of faith (by consumers) in their administration would be costly. An administration with that deer in the headlights look, incapable of action, heading into the most difficult energy generation mankind’s ever known. Singing the praises of solar and wind. Ours is not the solution to this difficulty in the short term and that is the reason we began this process so long ago. We can now only restore the industry from what’s left.
Therefore the question becomes what is the resolution? Do we resolve this through radical surgery to save the patient? Or will a bandage and a slap on the back do? What’s the diagnosis? Is there an issue? Everyone has an opinion, and People, Ideas & Objects et al's are as follows. It is the 2015s that signal failure and the subsequent refusal of investors to support the capital structures of industry participants that mark this stage. Banks think similarly. An inability to conduct the appropriate level of business activity and diminishing capabilities. This is in the field through the service industry and through internal recruitment of earth science and engineering professionals. Maintaining production deliverability in this constrained environment is the next “potential” shoe to drop. As serious as each of these issues is, the one that is the root cause of all of them is the obstinate, persistent and failing strategy of “muddle through.” Nothing’s been done to deal with these when they were timely.
We’ll now discuss why a wholesale rebuild of the industry brick by brick and stick by stick will be necessary.
Culture Shock
Clean energy is not the message to be sending throughout the oil & gas and service industries. How can we leave oil & gas in the hands of those who don’t believe in shale's future, who have not safeguarded their investors' assets and diverted funds to unrelated industries that are commercially unproven and done so in unauthorized fashion?
Software defines and supports the organizational structure of the producer firm, but also constrains it. In consideration should those who were responsible for this damage be the decision makers as to which ERP system to use? SAP is offering the role of a “blind sleepwalking agent of whomever will feed them.”
Faith, trust and goodwill has been destroyed throughout the greater oil & gas economy. The need for producers to actively participate in rebuilding these is a necessity. Participate actively in the form of financial philanthropy. Producers broke it, Producers will need to fix it. Only then will they begin to respect what others built and not break it again. A.k.a. skin in the game. Capacities and capabilities are severely deprecated.
A culture that is unaware of the need to earn profits, but also how to do so. A culture that is capable of spending money and can not achieve the higher level performance trajectory necessary to qualify as profitable operations. A culture that is fundamentally unaware of the difference or the point of this argument.
A culture that assumed “investors” supplied all the cash needed. One that asked for more money from investors while at the same time, when asked about the money raised two years ago, stated “that’s history and just accounting!” And “profits don’t matter.” Unaccountability is a subculture.
What happens when the industry sees an initiative such as People, Ideas & Objects snuffed out for political reasons? What impact will be realized by those working throughout the greater oil & gas economy? Who will step up with any initiative on behalf of the oil & gas economy when the culture of “muddle through” is seen as permanent and intractable? This is not what an innovative industry needs.
These are just the highlights that come to mind at the moment. I like to think of myself as rational. Only a fool would enter a situation like this and attempt to resolve the issues this culture produces by working with this culture. This culture would consume anyone who tried. It would be an attempted mosquito bite where the mosquito's demise was certain.
We detailed how layoffs have cannibalized the internal processes from year 1,2,3… 8 of the producers due to the 2015 investor strike and coincidental eight-year working capital crisis. The same applies to the service industry. Therefore these processes need to be rebuilt and provide the opportunity to do so without this culture attached in any way. One that starts with year 1 of the process from the Preliminary Specification vision. We provide the most profitable means of oil & gas operations everywhere and always. Rebuilding the industry and infrastructure on the basis of a dynamic, innovative, accountable and profitable producer, industry and service industry, brick by brick and stick by stick. The way I look at what the industry consists of today isn’t worth keeping. Our opportunity lies in the fact that we don’t have to scrap it. Officers and directors scrapped it for us. They can rebuild it with SAP’s blind, sleepwalking agents and their vision of clean energy. Or investors can be specific about their demand for Tier 1 ERP systems and choose the oil & gas industry they desire. This is done by selecting People, Ideas & Objects, our user community, their service provider organizations and Oracle Cloud ERP.
As a result of the state of "muddle through," the industry has suffered far more than producers, officers, and directors may realize. Assuming the Preliminary Specification is approved. It won’t be due to which Tier 1 ERP provider they’ve chosen. I’d therefore question what role they’d have in continuing. Why should they continue and how ideally to leave the place in a position to be rebuilt? That's naive of me, I know.
People, Ideas & Objects have identified a threat that we feel is terminal to our existence as an operational software organization. In this threat, the officers and directors of the producer firms intend to implement an SAP configuration of the producers' own design. Choosing an ERP system from Tier 1 providers is an oil and gas producer's right and a specific requirement of their investors. It would be bold and audacious for me to suggest that an independent decision is not what a firm is entitled to make. When the performance and accountability of these officers and directors led to the comprehensive damage and destruction we see today. Which I've detailed throughout the Preliminary Specification. No one outside of the rarified air of producer firms' officers and directors has benefited from oil & gas activity these past decades. These firms have been structured to “appear” healthy to facilitate enhanced and innovative executive compensation. Therefore the broader threat of this continued non-performant, “muddle through” process of “putting cash in the ground” and “building balance sheets” would continue as soon as the producers comply with investors' demand for a Tier 1 ERP system by selecting SAP for the next generation, and People, Ideas & Objects fade into the distance as an operational software organization. We can already hear the call for producers to stop listening to their investors.
The fundamental new impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates … that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism.
Joseph A. Schumpeter (1942) Capitalism, Socialism and Democracy: 82 - 84
And
According to Schumpeter, this disruptive process of creative destruction is the foundation of the economic progress of society through time. Thus, Schumpeter provides a road map to the policy environment conducive to economic development—jurisdictions that allow the process of creative destruction to unfold, rather than those that put up barriers to protect the status quo, are the ones that grow faster and have stronger economic progress and development.
— The Essential Joseph Schumpeter (Essential Scholars) by Russell S. Sobel, Jason Clemens
Producers' methods of management have refused to consider any change to the Preliminary Specification, our user community and their service provider organizations. People, Ideas & Objects et al's focus is on providing the dynamic, innovative, accountable and profitable oil & gas producers with the most profitable means of oil & gas operations. It’s not enough to just own the oil & gas asset anymore, it's also necessary to have access to the software that makes the oil & gas asset profitable. On a comparative basis our vision, methods and Preliminary Specification detail the value proposition of “what, how and why” we provide these values in detail. Throughout our history I’ve had many failures in my attempts to deliver ERP systems to producers. I’ve recently realized that my failures, as did Oracle in 2000 and IBM in 2005, were market failures. Due to the inability to attract producers' support. All of my and the other vendors' market failures relate to our proposed enhancement of the accountability and profitability of producer firms. Additionally, the history of abuse by producer firms towards their existing ERP providers extends beyond what could ever be considered incidental or inconsequential to today’s oil & gas industries' damage and destruction, or the actions to now select SAP and seal this industry in perpetual bureaucratic malaise. On the contrary they were and are deliberate.
These actions have obstructed and completely eliminated other forces aside from People, Ideas & Objects. These include disintermediation, decentralization, creative destruction, spontaneous order and serendipity. The lesson I’ve learned is what I described in May 2004. Software defines and supports an organization, but also constrains it. This statement supports implementing the Preliminary Specifications ideas and its permanent ERP software development capability. However, producers soon realized that if the software never changed, their unaccountable ways would continue. However they’ve failed to consider the consequences of their lack of accountability and profitability on the long term health of the industry. They have continued to destroy the industry and all associated with it.
Today the game’s changed for these officers and directors. There is a direct and specific request from investors to change their ERP systems to Tier 1 providers. Through consolidation and the elimination of the startup, small and junior sectors of the oil & gas industry, their administrations will remain unchallenged for a generation, at a minimum. The establishment of their upcoming business ventures focused on clean energy will provide officers and directors with a clean slate of possibilities in terms of future obtuse accountability. If only they could secure software that meets their and investors' needs, SAP fulfills their dichotomy. They could then continue in whatever direction they choose.
Time is now a premium resource. What is necessary for the oil & gas investor is to be specific as to what is an acceptable solution for Tier 1 ERP solutions. We can only achieve this by successfully implementing People, Ideas & Objects, our user community, and their service provider organizations' Preliminary Specifications with Oracle Cloud ERP, or Cloud Administration & Accounting for Oil & Gas software and services. No alternative will be acceptable.
Alternatively, if these decisions are made to implement SAP, others will realize the consequences. The consequences will be a continuation of the status quo level of unacceptable performance, accountability and behavior displayed here for decades. If anyone believes that the officers and directors' reformed behavior of the past year (paying dividends and stock buybacks) will be permanent. Then they should ask themselves, why have they not implemented any solution to these issues since People, Ideas & Objects pointed them out? Compliance in the form of dividends is temporary, trust me. Cash being paid out of oil & gas companies for any discretionary reason will soon be stopped as soon as producers can say "they have complied." This cash will then resume its direct path back into more “traditional” pockets. The quantitative analysis of the difference between the value proposition offered through the Preliminary Specification is easily understood when we look at the industry today. And ask, what quantity of financial resources will be necessary to bring the existing infrastructure up to the needs of a profitable, energy independent North American oil & gas industry? Today producers have already begun to warn consumers to take precautions! A despicable response.
The issues are clearly visible to People, Ideas, and Objects. We were fortunate to have foreseen them and prepared the Preliminary Specification to address them with a viable, workable business model. Forward thinking only a few years ago is now timely. The pace of change in the industry demands that our offering's associated components be available. This includes our user community and software development capability as industry-wide, permanent ERP capacity and capability. Operationally we do not understand how the bureaucratic performance and accountability that we’ve seen over the past decades with the industry standard strategy of “muddle through” will provide any value for anyone outside of the officers and directors in the status quo configuration. We should consider adding SAP to the status quo. With the issues and opportunities around the replacement, refurbishment and expansion of the infrastructure necessary to achieve profitable energy independence in North America. SAP's stated product vision of a clean energy transition and compliant implementation are failures made to order. Failures for all concerned except that fortunate small cadre of officers and directors of the producer firms who have had the requisite authority and responsibility to do otherwise.
Intellectual Property, research and our user community are the three competitive advantages that People, Ideas & Objects have defined and built our offering upon. The configuration is designed to accelerate the development and implementation of our software. It is also designed to achieve user-based software quality and continuously improve and enhance our software development. This community evolves and resolves issues and opportunities based on Intellectual Property. Providing a dynamic, innovative, accountable and profitable means of oil & gas operations everywhere and always. Setting the foundation for profitable, North American energy independence. This is the strategic position we’ve taken in this market. We have defined and resolved oil & gas industry issues and opportunities in the Preliminary Specification. This is to capture a substantial twenty five year value of $25.7 to $45.7 trillion due to our focus on profitability. We recently identified $660 billion in incremental value available to investors in the short term. The Preliminary Specification focuses on the Joint Operating Committee as the key organizational construct of the oil & gas industry. Which holds the legal, financial, operational decision making, cultural, communication, strategic and innovation frameworks. When we move the compliance and governance frameworks into alignment with the seven frameworks of the Joint Operating Committee, we achieve organizational speed, innovation, and profitability in producer firms.
Commercialization of this Intellectual Property is licensed to People, Ideas & Objects. It is focused on profitability and accountability in oil & gas and resolves the issues present in the industry today. With this IP supporting our user community through its license, our software and service providers can continually adapt to oil & gas needs. This is done through Cloud Administration & Accounting for Oil & Gas. This created substantial conflict between our firm and the producer's officers and directors. We feel our conflict with the producers has grown and expanded to include their investors and bankers. In addition, the service industry, producers' staff and the energy consumer are all disappointed and frustrated with producers' performance. Are all disappointed in the lack of profitability, accountability, action on these issues, deprecated capacities and capabilities and the loss of North American energy independence available only a short time ago. The handful of people who personally prospered financially at the expense of all these others are now identified as the individuals who did nothing but “muddle through.” Who had the responsibility and authority to ensure these things didn’t happen but didn't care and refused to consider the criticism of People, Ideas & Objects and the Preliminary Specification. A solution they know is appropriate however eliminates their ability to personally prosper disproportionally and exclusively.
Investors expect Tier 1 ERP systems to be implemented to alleviate profitability and accountability concerns. We suspect producer officers and directors are orchestrating a move to meet investor demands. Through the implementation of SAP systems, we believe they are unprepared and inconsistent with industry needs. SAP, which lacks an oil & gas vision and specification of "what, how, and why," has been selected due to its ability to fit into the current methods of poor accountability and profitability used by these officers and directors by way of its custom implementation at each producer firm. SAP held their 11th annual oil & gas conference on September 12, 2022. Highlights of SAP's oil & gas materials include.
Companies will work together in meeting production, profitability, and safety targets (possibly as “pay for outcome.”)
Ultimately, they are shifting to core profitable and sustainable value pools and minimizing their exposure to the market volatility.
I see these as one of three potential SAP alternatives.
It may be an extension of their Performance Management feature set that’s been available in the marketplace. Indicating no change in the status quo of the prospective SAP users or oil & gas investors.
To suggest that SAP is offering a solution to the oil & gas industry that caters to the definition and needs of the officers and directors, as People, Ideas & Objects allege, as the reason for this potential selection process proceeding. They are in fact offering themselves and will become blind sleepwalking agents of whomever will feed them. However, SAP also needs to walk both sides of the streets in this transaction. If they’re not promoting and providing a methodology of enhanced profitability then I would see that as problematic for many reasons. Knowing producer bureaucrats as I do, SAP would only be setting themselves up as a future viable scapegoat of the producers' officers and directors as to why they subsequently failed, post SAP integration. For example, the viable scapegoat of “SAP did not implement appropriate profitability and accountability methods, they failed.” (By mentioning this alternative one can see how much I’ve personally enjoyed the interactions and the experience I've gained from the officers and directors of these producer firms.)
Or, someone devised a method of oil & gas profitability that “borrows” heavily from the Intellectual Property being commercialized by People, Ideas & Objects. Under the name of “pay for outcome” or “sustainable value pools” and “minimizing their exposure to the market volatility.”
Regarding the last option, as a software company People, Ideas & Objects would never violate any Intellectual Property of any other software or service-oriented company. When software firms depend on the pristine nature of their Intellectual Property, they are above reproach and maintain a historical legacy evident throughout. An example of this is the legacy on our blog and wiki. We know that those dependent on IP for their revenue streams are of the same mindset.
I am also convinced that the officers and directors of the producer firms are wise to the needs of innovation and development in the software field. They also need IP to succeed in the marketplace as a science-based business. That producers would evaluate software offerings on the basis of the origins and pedigree of the IP proposed to be employed in their organization. To ensure that it does not infringe upon others' Intellectual Property. And can therefore continue to use those products through their appropriate life cycles. Ensuring that their reputation of being upstanding, law abiding citizens that would never use others' property would not need to be mentioned here. This may be seen as a feature of the producers today. Their inability to access People, Ideas & Objects Intellectual Property by ignoring it is another viable scapegoat as to why they can’t attain that desired accountability and profitability.
We noted earlier that the eight-year-long cash and working capital crisis in oil & gas led to the cannibalization of producer business processes. Oil & gas producers and service industry deal with layoffs at the beginning of the business development process to avoid disrupting production. However, eight years of officer and director inactivity have cut into these industries' capabilities and capacities. There’s been a proliferation of advanced processes as noted in this World Oil article. This trend won't end there either. The move to the Internet of Things will open new opportunities for capabilities that would have seemed impossible and unimaginable eight years ago. For example, Elon Musk's Swarm network. Which enables access and control of oil & gas remote facilities via the Internet of Things (IoT).
The first advantage of having a Preliminary Specification is that we can set the direction we’re headed with a vision and viable business model. However, we cannot lock that into the 2012 environment that existed at the time of the initial specifications publication. And this is why People, Ideas & Objects, our user community, their service provider organizations and Oracle Cloud ERP are configured to provide the industry with permanent software development capability for oil & gas through our Cloud Administration & Accounting for Oil & Gas service to ensure a dynamic, innovative, accountable and profitable industry.
Within producer firms today, officers and directors expect investors to provide the financial resources to “build balance sheets.” Similar assumptions were made with respect to business in general, the service industry and other vendors providing producers with market solutions that spontaneously appear on command. As a participant in the ERP market space I am witness to these assumptions and methods used throughout the producer population. It’s incumbent upon producer firms to ensure that any competitive advantage that a supplier had, would be extracted and distributed to their competitors in order to sponsor price competition in that product or service. This is a well known fact and is now one of the impediments to the industry standing on its own two feet and innovating. It is why it can’t, won’t and will not ever under the current administration. We’ve seen the game played too many times to know the outcome. It is for this reason that People, Ideas & Objects depend on Intellectual Property to safeguard and protect our efforts against this behavior. This is in the short to long term.
The long and short of it is that nothing will be done while this culture exists. It must be ripped and replaced by a culture with the following characteristics.
It needs to respect the participation of others in order to secure a dynamic, innovative, accountable and profitable oil & gas economy.
Everyone in the industry now knows and understands why “real” profitability in the industry is such a critical necessity, everywhere and always. Profits fuel growth and prosperity for all throughout the greater oil & gas economy.
Provide generic, aggregate producer information to vendors in terms of the anticipated capital expenditures by region, product or service classification as detailed in producer reserves reports.
It needs to pay its suppliers as if they were business partners and not extend accounts payable schedules to the ridiculous levels we’ve seen recently. All to provide officers and directors with the chance to continue their foolish endeavors.
These are just a few of the functions of the Preliminary Specification as it stands today. I could go on but the point is that it's just basic business and culture! Everyone points to the producer's responsibility and undertaking. The current culture fosters a behavior where officers and directors sit atop a primary industry and hand out the pennies to those that will beg the loudest and provide the greatest (personal) favors. A culture where “power tends to corrupt and absolute power corrupts absolutely.”
Coil tubing providers and Packers Plus are exemplary examples of another phenomenon in their struggle for producer acceptance. Being denied entry into the industry for decades due to their ground breaking technologies. A lack of funding has prevented ERP development over the past few decades. The protracted argument over People, Ideas & Objects over the ideas contained here. Which began with enhanced profitability and accountability, which were consistently argued against as if profits didn’t matter. That is why there’s been nothing beyond a Preliminary Specification developed. Therefore, Intellectual Property is all that’s needed to seize the higher ground from those who thought profits were irrelevant. Imagine an industry that utters the words “profits don’t matter!” In ERP you’ll only get what you’ve paid for and producers have paid for nothing and therefore achieved their objective of abysmal accountability ensuring their unprofitability.
There’s no capacity and capabilities in the oil & gas ERP tier 1 marketplace. Producers are left with two development choices that meet investors' basic demands, SAP or People, Ideas & Objects et al. Only we have an oil & gas vision, understanding, plan and Preliminary Specification. Most significant of all, is our nine years (as of 2023) of user community development based on a compelling and powerful user community vision. A product offering that may be jeopardized due to producers' "compliance" with investors' demands for tier 1 ERP providers by selecting SAP. Eliminating People, Ideas & Objects and our user community from the market due to our pursuit of accountability and profitability for producer firms. Which is the primary point of friction between us and the producer's officers and directors.
What will happen in oil & gas when SAP needs replacement in ten, fifteen, twenty or thirty two years? Who will provide solutions at that time? Will they have spent the time and effort necessary to solve the industry's issues? Regardless of who it is, their IP will need to be spectacular to avoid the Preliminary Specifications and its derivative works, while also building value for the industry as a whole. Just as SAP is expected to do at the moment. Will that person or group focus on accountability, profitability and energy independence in North American oil & gas? Or follow SAP’s lead by providing producer officers and directors with exactly what they want, unacceptable levels of accountability and continued specious profitability. Producers can make their own ERP selection decisions and I’m pleased with my actions over these years in taking the fight to them. I’ll leave you with these quotes from Joseph Schumpeter and Milton Friedman about the importance of “just” a Preliminary Specification.
The first thing to go is the traditional conception of the modus operandi of competition … in capitalist reality as distinguished from its textbook picture, it is not that type of competition which counts but the competition from the new commodity, the new technology, the new source of supply, the new type of organization … which strikes not at the margins of the profits and the outputs of the existing firms but at their foundations and their very lives … It is hardly necessary to point out that competition of the kind we now have in mind acts not only when in being but also when it is merely an ever-present threat. It disciplines before it attacks. The businessman feels himself to be in a competitive situation even if he is alone in his field.
Joseph A. Schumpeter (1942), Capitalism, Socialism, and Democracy: 84–85.
And
Can capitalism survive? No. I do not think it can … Its very success undermines the social institutions which protect it, and “inevitably” creates conditions in which it will not be able to live and which strongly point to socialism as the heir apparent.
Joseph A. Schumpeter (1942), Capitalism, Socialism, and Democracy: 61.
Only a crisis - actual or perceived - produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.