as well. So this is an on-the-record session. By design we want to make sure that we allow at least 10 minutes for Q&A at the very end. It's great to have so many high-level participants in the first and second row, and we invite you to pepper our panel with questions. Welcome to the 2018 CNN Money Roundtable. This is the third year in a row that we've decided to put our spotlight on energy, because there is such great interest in the subject. I wanted to bring up a graphic of Norsi Brandt going back to Davos 2016. Some of those that are sitting in the audience know exactly what I'm talking about when we felt that period there at January, third week of January 2016 when we touched on Brandt $28 a barrel, WTI went down to $26 a barrel, and we've had some fits and starts, but if you look at the end of December 2016 after the alliance and agreement by OPEC and non-OPEC producers, the trend line has been up, and then you get to the end of 2017 again, the renewal of the agreement for another 12 months, so better than 20 producers signing on the dotted line to continue. There were plenty of naysayers out there, but this was a fundamental shift to where the mentality is in terms of collaboration between Saudi Arabia and Russia and bringing the other producers into a very solid agreement, but there are implications, and the kind of three major themes to focus on this evening is whether the Saudi Arabia-Russia alliance can stay glued together for all of 2018. Number two, will the United States, according to the Energy Information Administration suggests, have that production surge throughout the year, maybe from 9.8 to 10.5 million barrels over the next 12 months? And finally, we have a roundtable discussion tomorrow on the great energy transformation. The amount of money that's going into the renewable space is averaging about $300 billion a year, but is it enough to start disturbing demand for crude and natural gas over the next 10 years or not? We have a whole range of predictions, so it would be terrific to hear from our distinguished panelists. Before we do so, I wanted to run some sound from two roundtables that I was conducting in Abu Dhabi last weekend at the Atlantic Council. We had the Arena General Assembly, which is renewable energy, and finished at the World Future Energy Summit as well. Broad-ranging topics looking at the transformation that I was talking about. We have a clip here from the Minister of Energy from the UAE, Suhail Mazrui, and also the Minister of State for Petroleum Resources of Nigeria, Emmanuel Kachaku. Let's take a listen to what they think about the agreement that was signed at the end of 2016, and then we'll bring our panelists up. If we can roll that, please. We still have a little bit more than 100 million, if we believe, on the five years' average, to be removed. And until we do that, I don't think we should talk about the price going up. There is no need to panic, there is no need to do anything, even if the price goes 70 or a little bit above 70. For a day or a week, that doesn't mean that the whole year is going to be 70. Certainly there is a collective resolve to do whatever we can, collaboration, multi-tasking, relationship building, engagements, and obviously discipline in terms of the decisions that have been reached by OPEC to try and protect that. But I don't think the philosophy is going to protect a price. I think the philosophy is going to protect a business model. Business model, meaning we recognize the impact of shale producers, we recognize the fact that there is competition for market share. Okay, so the thoughts of Immanuel Kachaku and Suhail Parajal Mazrui. I thought that was very interesting with the Minister of State for Petroleum Resources in Nigeria suggested. We still have to look at the anticipation of the impact of the increase in U.S. shale production, and that's a topic, of course, we're going to address. Let's introduce each one of our panelists and give them a nice round of applause as they do come up for the third time running. We're great to have him at the center of our debate and appreciate his support. His Excellency Halid al-Fali, the Minister of Energy Industry and Mining at the Kingdom of Saudi Arabia. Mr. Al-Fali is right here. His Excellency Alexander Novak, the Minister of Energy of the Russian Federation. The U.S. Secretary of Energy and the former governor of Texas, Rick Perry. It's great to have you back in Davos. His Excellency Dharmendra, make sure I pronounce the last name. Pradhan, Minister of Petroleum and Natural Gas of India. And let's welcome back to the CNN Money Roundtable. Dan Jurgen, Vice-Chairman of IHS Market and, of course, the distinguished Osher of the Energy Business. Gentlemen, we have about 56 minutes, so plenty of time to debate. We want to save about 10 minutes for discussion from the very distinguished panelists. There's going to be people coming in because of the finishing remarks, as I noted before, from President Macron as well. And I think there's a few journalists in the audience that we should be aware of as well. There's going to be simultaneous translation for His Excellency Minister Novak, who's going to be speaking in Russian. So please have your translation devices near you, so you make sure you can pick them up from the very beginning. Thank you very much. I think it would be apropos if we can to start with Secretary Perry. You heard from Emmanuel Kachukou at the very end of his comment there saying, we have to look at the dynamics. We can't overreact as OPEC known OPEC producers and adjusting the agreement that's in place right now. But it's seen that shale and U.S. production, Mr. Secretary, could be the spoiler in 2018. Can we believe the estimates of going from 9.8 million barrels a day up to say 10.3 or 10.5 million barrels a day? That seems like it could be a spoiler. It's quite a step. But I think it's always important. I like to refer people back to a little over a decade ago. And he may have even showed up here in Davos, a young fellow by the name of Matt Simmons, who made a pretty good living traveling around the world, giving a speech, talking about peak oil. Fatih, you remember, we had found all there was and that was it. We needed to be transitioning and what have you. And I always try to remind everyone that technology and innovation around the world can really turn all of this on its head very quickly. I think, as it's done, to directly answer your question, I don't particularly think that it is going to be a spoiler, the American Shell production. And partly, as we were speaking earlier, that there's a lot of reforms going on in the world, certainly in the kingdom with what the Crown Prince is doing there. You think about Mexico and the reforms that are happening, Mr. Prothan, and what's happening in India. And I think that those reforms have the potential to really drive consumption, to drive innovation.  What do you think of this idea, though, that because of the restrained production from both Russia and Saudi Arabia today, because of the agreement they've collaborated with, it allows an open door for U.S. production to surge. And do you agree with the numbers from the EIA today of going from 9.8 perhaps to 10.5? Partially because of demand, partially the market needs it. But are you in agreement with those numbers that we're seeing? Well, certainly, you know, I would like to stand here and tell you that the numbers are absolutely correct. My friend Harold Ham might say, well, you might want to take another look at those. But you know, the fact is the numbers are what the numbers are right now. But again, I don't get to spun up that the world economy cannot absorb what we're producing globally. Okay. I would like to bring up a graphic actually from the EIA. Not just to look at 2018, I think that would be incorrect if I did so. This is from the IEA looking at U.S. production going back to 2009. And all the way up to 2021. To be fair and clear, these are all U.S. products. We're not just talking about oil here. So over 7 million barrels a day to perhaps 14 by 2021. And that's all products here. Minister Al-Fale, that's pretty substantial. Does it keep the Kingdom of Saudi Arabia list a little bit worried about what we see in the market today? I think, John, you have to put it in context. If you go back to the 1970s, the U.S. production of crude oil approached 10 million barrels. If my memory serves me correctly, I was much younger back then. And the world demand and the global market was much smaller. And yet there was enough room for the rest of the producers. So for the U.S. to regain and even to exceed some of its market share in a much bigger market doesn't necessarily present a threat to other producers. I think you also have to look at this in the context of what is happening elsewhere. If you look at the Americas from Canada all the way to Brazil in the south with Mexico decline, Venezuela decline. You will find out between 2014 and 2017, despite all of the talk about shale and this revolution and the tectonic shift it's creating and game changer. The Americas production is actually flat within 100,000 when I looked at the numbers. This is over a period when there has been significant growth but decline elsewhere. So I think we need to think of the globe in totality. There is growth in demand of one and a half million barrels give or take over the last few years. We've grown since this downturn about five million barrels in demand. We're approaching the century mark of 100 million barrels per day obviously for the first time in history. And I don't see signs of significant slow down. That ultimately will need to slow down because it is a finite resource that we're talking about today. But it's going to grow at a healthy rate between a million to a million and a half for a few more years and then it will decline a little bit. So I am thinking that in the next 25 years or so we're going to see another 20 million barrels of demand. We're going to hit 120. I remember here probably in this room where one of my colleagues back then said we're going to peak at 95 million barrels of demand. And here we are talking about 100. So I don't think we should worry. Obviously the oil market is very sensitive to inventories. We saw that two years ago. And if we don't keep our eyes on the inventory we could go out of balance. And in the long term it's a very healthy market and I think we can accommodate the kind of numbers that are coming out of the U.S. even if they are as bullish as that chart shows. Aren't you getting lucky though to be honest with you because you had this huge disruption coming from Venezuela and some of the other Latin American producers. It's just fortunate as the U.S. starts to rev up that Venezuela is stalling horribly as an OPEC member because of the political dislocation there. If you didn't have that it would be a different game. Correct. But that's the nature of the market. I mean I think after Venezuela recovers and we wish them the best. They're a member of OPEC and we have good relationship with them. Somebody else unfortunately may start declining. So I wouldn't say that everybody is going to be on plan. And if everybody is on plan which is a good thing I think we just need to be careful about managing our production. I think leaving it free for all and just pushing production to the max. We tried it for a couple of years and everybody felt the pain. Certainly all of the producers felt the pain but in 2015 even consumers because of the secondary impact on demand for industrial goods, on the global economic indicators like deflation, like low interest rates. Even consuming countries were complaining about the state of the world industry and calling on us to do something that is good for producers and consumers. So together with Minister Novak, with OPEC, with other producers around the world we came together and we created a framework that required a little bit of sacrifice. If you want to call it this and cutting production between 3-5% amongst the countries and we've seen the recovery in the oil market to everybody's advantage. Let me follow up with Minister Novak then. I interviewed you right after the close of the meeting in Vienna on November 30th and you said if this price starts to creep up we may have to rethink what we've signed on to for all of 2018. We're almost at $70 a barrel for North Sea Brent. Do you think it's time to revisit and be a little bit more cautious and not leave a huge vacuum for the U.S. shale and traditional producers to take your market share? Thank you John. First off I'd like to follow up on what my esteemed colleagues said, what the ministers said about the shale oil. I would also like to cite a couple of arguments but I fully agree with everything they said. We should not be afraid of shale oil production in general in the general energy mix and in the general supply and demand on the market. As my friend Halid said we have 100 million barrels a day. This is the market demand as it stands today and shale oil is 5.7 million barrels of shale oil per day which is 5-6% even if they add 6 more million barrels by 2021 as you showed it on the slide. Well this will add 2-3% to the overall demand so you should understand that this is merely one way of satisfying the market. There may be many different ways of producing oil. There can be shale oil, traditional oil production, deep water shelf, arctic shelf. There are so many different ways. We should also bear in mind that every year to sustain the existing level even for that we need to restore our production at 4-5% from the existing level and this is a huge investment that the market demands. So we do understand that given a higher price certain project will become more profitable for instance such as the shale oil project in the United States. But we are not worried by it because we understand that over the long term we need to meet the growing demand. And apart from having losses that our annual production sustains we will need at least 10 years to increase our production so we need to ensure that projects are implemented to provide 20 million barrels of oil per day for the next 10 years and maybe another 10 million to cover the growing demand or maybe even more 20 million as Mr Alfalic said that he is expecting that in the next 25 years the growth is going to be up to 20 million barrels per day and this is a huge figure and we will have to put a lot of work into it and the deal that we have reached between the OPEC and non-OPEC producers that was concluded under the leadership of the Minister from Saudi Arabia and we had other non-OPEC nations on board. So this deal shows that the countries in order to achieve their goals and in order to balance the market they are ready not only to overcome economic difficulties but also political difficulties. It was really difficult to reach an accommodation. There were other political disagreements in place not economic but political in nature and the fact that 24 countries have reached this accommodation goes to show that this tool is efficient, it works and it can be used in the future. Finally, as far as the prices are concerned, we don't see the price today as the main criterion for achieving the results that we have enshrined in this deal. Our main objective and we have discussed it with the ministers that took part in negotiating this agreement, our objective is to remove the surplus from the market and this objective is slowly but steadily being implemented. We can see that the result is nearly enhanced and so all of our subsequent actions will depend on that but not on something that we see in a short-term perspective, higher prices perhaps. Although this factor should play a role and be taken on board but the key fundamental indicator is the surplus oil on the market and the supply and demand balance. Let's do a quick follow-up with you if I may. You're not overly concerned about the price but I know the Russian producers are worried about the volume that they're holding back off the market here to support this agreement with Saudi Arabia, your good self and the other OPEC and non-OPEC producers. Aren't you a seeding market share to the gentlemen to your left to let them kind of rev in for the sacrifice of the 24 producers that you're suggesting? Is it the wise strategy over the long or medium term? Considering that the overall balance is shifting and it's shifting for the better, we are emerging from this historic crisis that has dragged on for many years. And even if we consider the shale oil production, the overall balance is positive. And we can see that the demand exceeds the supply even in winter period even though we usually had higher risks because we thought the demand would be lower. But even during the winter period we can see that surplus is reduced on a weekly basis. We have seen this trend for the past several weeks so we believe that this situation is positive also for our economies and for our companies. Naturally every deal will run its course and will end at some point and will have to go back to a market situation. So we also believe that depending on the balance between supply and demand that the key would be fair competition when it comes to production, when it comes to downstream, both in the oil and in the gas sector. And in any sort of activity and so we are in favour of avoiding protectionism, we are in favour of fair competition whereby the consumers and the producers will have a win-win situation where the producers could meet the growing demand and provide enough supply. Thank you very much. Let's bring in Minister Pradhan. The Secretary of Energy was talking about your reforms. We see demand as Minister Al-Fali was suggesting rising to about 1.5 million barrels a day and it's been pretty consistent. A million of that by the way is coming from Asia itself and that would include India. How long does the demand for traditional oil and gas remain strong? You're almost importing 5 million barrels a day because we often talk about this energy transition. Minister Modi talked about the investments into renewables. Is this going to continue rising at this pace for the next five years? John, let me put some bare facts. How do we analyze IEA has some observation on our consumption? Today our consumption is around 200 million metric ton per annum. Today my refining capacity is around 247. IEA's observation on our market is by 2040 our requirement will be up to 500 million metric ton. We know the emerging technology on renewables and India is heavily, Prime Minister Modi is very focused on one area. We have positioned ourselves. We'll add on 175 gigawatt of renewable energy by 2022. We have to have a balance in our own basket. I can predict for the next 20 years India will be depending on conventional energy, the fossil fuel, hydrocarbon. All our reliable partner in this journey starting from Kingdom, Russia. And recently we have started receiving the cargoes of sale oil from America. So we are depending. We are a consuming country. The next IEA's another observation on Asia specifically on India is for the next 25 years. The incremental requirement 25% of incremental requirement will come from India. Our growth, our per capita energy consumption is very low. We are a growing country. We are a developing country. We are a young nation. I'm a strong believer. My requirement is going to want to grow and sizeable of that growth will meet out by conventional sector. And I will continue to depend on this import and being a consuming country. I was listening to the different argument, the balancing. You use the term disruption. I will use the term the balancing, whether it is sale oil, whether it is our reliable friend from Kingdom. My expectation as a consumer will be the price should not pinch our domestic economy. We must appreciate more capex on exploration and production area. So the producing country also look into the interest of consuming country. This balance must be the final point, the main point of the production balancing. Okay, very good. What do your forecast show us, Dan, in terms of demand holding up? We are nearly 100 million barrels a day. We often talk about this onset of peak demand and I see a huge range of expectations. We know where Minister Alfale stands. Where is your head today in early 2018? I find it very ironic on the one hand this discussion about peak demand, which is sort of shifted into discussion about transition. On the other hand, we're seeing about as strong demand as we've ever seen in oil. And you kind of say this year, last year we added 90 million new cars. About 99% of them were gasoline powered cars. So in terms of when there's a peak or a plateau, at least based upon what we see today, it's not tomorrow. It's not next week. It's not next decade. Maybe it's around 2035, 2040 and it's going to be at a higher level than we are today. Okay. Would you agree with the minister that we're looking at a range of 120 million barrels a day? Yeah, we could be looking at that. And remember also on top of that, we have declines. So there's a lot of oil that has to be replaced. So there's a lot that has to be done to meet the demands of growing nations and the big consumers today. Let me put you on the spot a little bit here. Does the recovery that we're talking about in the United States spoil the rally? Because we've gone from 60 to almost 70 after the OPEC agreement, as you know, with the non-OPEC players at the end of November. It's so interesting how markets can change so quickly. Not so long ago, $60 was a target. Now it's a floor and it's really turned around rather fast. I think you look, we've never seen such bullish positions in the financial markets, which I think are certainly part of what's happening. So it's run up very fast. It's a market shift. But we'll see what happens over the course of the year, but probably not going to see prices remain like this for the whole year. What does that tell us? It's lower or higher if I can put you on the line. I know they're not going to remain exactly $69 a barrel. I think that's pretty good. It's not necessarily in that order. I think if nothing dramatic happens, I think we'll see this large shale component coming in. And it's maybe reasonable to think about it instead of a $50 to $60 world, a $60 to $70 world over the course of this year. $50 to $60 is a range you were suggesting. The other thing to remember is, or high 50s, remember, look at the optimism here in Davos in terms of the economy. Optimism is embedded in the snow. Oh, and that's because of the strong economy. So that's what's also driving the demand right now. OK.  What are your thoughts about the year? Can you protect 50 as the floor for 2018 or not? Protect what? The floor of $60 a barrel. I knew you heard me on that. I thought you said 50. John, I thought you said 50. You said 50, you scared me. No. You work so hard you don't want to give up 60, right? Actually, we didn't target 70. We didn't target 60. We, as Minister Novak said, we have a fixed target, which is to bring balance into the market. Inventories is the main indicator of that balance, as well as supply and demand being essentially in line. And we're not there yet. Price is an outcome and not an input. Price will be the outcome of reaching that balance market, and the market will balance around the price that brings enough investment flows, enough to meet the incremental demand that we've been talking about today, as well as to offset the decline. The combination of incremental demand and decline is upwards of 4 million barrels a year, year after year after year, and it goes more as shale takes up more of this lack, because its decline rates are higher than conventional oil. But that is going to require going back on investment. Investments used to be annually in the area of $700 billion four or five years ago. It's gone down by more than half. It's increased, I think, by 7%, 8% the last year. In 2017, we haven't seen a significant flow. So the price signals obviously are not enough for investors to start putting the kind of projects that will meet the incremental demand that we talked about and to offset the decline. And we need to give it time for that to happen. So this could be a boomerang, though, so if you're lacking the investment, we should be talking about a downward trend in prices with the new U.S. production surging. But a rise in a price if this investment doesn't trickle in in 2018? Well, the kind of investment I'm talking about are the long-cycle projects, which will take five to seven years to bring the fields on production. You know, the most bullish estimates are going to give you 500 to 800,000 year-on-year and I question the sustainability of that from geologic, from supply chain, from marketing, from outlet, from investment flows. Time will tell. But even if that happens, talking about four to five million barrel totality annually, comprising both incremental demand and decline, I don't think it's enough. So I don't lose sleep over it. I think it's necessary. We just need to be careful that we don't go out of balance for a few months and cause the glut to surface again and the markets to overreact. And that's where having the framework, you know, being a continuous framework between OPEC and our partners from outside OPEC so that we keep our eyes on the ball constantly and manage this market, this fragile market delicately and stay on course. Good. Do you have buy-in, as you were suggesting at the end of the OPEC meeting, for all of 2018? Are you going to have people in June of your membership going to look, you know, this price is too high? We should go back to the drawing board and ease back a little bit. I don't think people are going to complain about price. I think people may fear that the price will trigger slow demand and a flood of supply from the source we've been talking about, which is shale. We will have that discussion. I mean, it's a highly hypothetical situation. From what I've seen, and we just had a meeting in Oman with the member countries, everybody is focused on staying the course until 2018. We're going to have a week-long gathering in Vienna in June. We will review the monitoring committee report, the technical committee report, the OPEC secretariat. We'll look at the forecast from agencies like the IEA, the UICIA. We'll have a conference for the Vienna seminar. I mean, the OPEC seminar in Vienna. All of these will be good data sources for us to just see which direction we're traveling and make sure we're on course. But I think it's highly, highly unlikely that we will change and exit. I think that will be the time probably to fine-tune what is the target, what is an appropriate normal stock level. When we talk about five years, which five years? Because the running average five years up to 2017, for example, includes some pretty inflated inventories for the last two years. So I think we have to sit down and understand what the market needs in terms of inventory, set that target carefully, and then look at the trajectory for the second half of the year and start talking about a gradual smooth exit so we don't shock the market during the low-demand season in 2019. Okay. Secretary Perry, let me bring you back into this. This is a subject that Minister Alfali touched upon. A lot of people don't think, and when I had the chart up there going to 2021, the surge, but by 2025, the U.S. can't sustain that level of output. Give us a taste of what you think. Does it all peter out, and it's over-aggressive Americans just going after whatever they can in the time being, and then it starts to decline at the second half of the decade? I like to remind people of my remarks when I started and that we shouldn't buy into these terrible numbers that say, oh, 2024, 2025, we're going to run out of oil because the fact of the matter is that the technology that we may see in the pipelines, but I want to go back to talk about, feast is better than famine. And I recall famine pretty good back in the mid-70s and what it did to the global economy. And I think it's really important for the individual sitting on this stage and the fossil fuel producers and what we are doing, our countries are doing, what those producers are doing out there to give opportunity to the world, particularly in some of the countries that haven't had the opportunity to grow on the manufacturing side to the opportunities for their citizens, and that is a great and a good story. And I know it's interesting for us to sit here and speculate what the price of oil is going to be or the volumes are going to be, but I will suggest to you that for the global community and for the prosperity of the global community, it's very important for these countries, particularly these fossil fuel producing countries because that is what is going to drive our economies going forward. As we develop our renewables, as we look at the alternatives that are out there, whether it's nuclear and having that again be back substantially in the mix, but I think it's so important for the global community to understand that the fossil fuel producers and what they are making available for better quality of life and for opportunities are what I'm really interested in. And it's why that Minister Alfala and Mr. Novak and Pradhan and I were blessed to be in countries with a pretty substantial ability to deliver to the people of the globe a better quality of life through those fossil fuels. Good. You almost finished your answer, though. I just want to go back into you have the concern that because of the price we see today, the investment is flowing back in to the shale sector, but overall, that we see this surge up and then it declines more rapidly than it should. It's not being managed with the kind of the discipline we have here because it's a free market. So what happens over the next 12 years? To answer your question in a simple one word, no. I don't have a concern about that. And why not? Well, I don't have a concern about it because I think that the market has the ability to respond to this. And I think when we have a bit of a surplus is a bit more feast right now than we do famine, I think that's good for the globe. Okay, very good. Let me follow up with... Fatih Birhul just got re-elected as the Executive Director of the International Energy Agency, which is good news. He has a microphone. He's sitting in the front row to participate here. Give us a sense of the tipping point because we talk about peak demand, but when's the tipping point from renewable energy investment start to hit demand for fossil fuels? What are the IEA surveys showing us today, Fatih? If you can weigh in on this. And we had this conversation in Abu Dhabi as you recall in the three roundtables. We have it everywhere, this question, if you pick the one question. But before that, let me just mention something, some of the colleagues mentioned, the shared revolution. Is it real or not? Since some of the colleagues questioned the shared revolution's effects, as somebody since 2009 highlighted the shared revolution, it is possible implications. And I call it at that time, 2009, the silent revolution, in my view, which became very, very loud now, just two numbers. In terms of gas, shared gas, only a few years ago, United States was ready to import a lot of LNG. And today, United States is the number one gas producer of the world. This is a shared revolution. Number two, in terms of oil, I think the shared oil production today is about six million barrels per day. These are concrete barrels. And this is the reality. And I think if we can put U.S. together with Venezuela and Mexico to give a different picture, I don't think that it is a right analysis to understand the shared oil dynamics. Now, what it is not is the following. United States will not be the largest oil exporter of the world. Saudi Arabia and other many Middle East countries will continue to meet the growth in oil demand in Asia and Asia. Because all this oil production in the United States will be, bulk of them, will be used in the United States. And some of them will be exported, but the biggest exporters will say Saudi Arabia and other Gulf countries. Now, having said that, I believe shared relations coming and very strongly, and we will see more and more impacts of that in the next years to come. When it comes to demand, I mean, the electric cars discussion as colleagues mentioned, and the peak oil demand came at the same time, the debate. Now, to be honest with you, since 2014 when this discussion started, global oil demand increased more than 6 million dollars per day. And not only that, more importantly for me, the share of oil in the global energy mix also increased. So therefore, I do not see that the electric cars alone will lead a peak oil demand because the old cars today, passenger cars, constituted only 25 percent one-fourth of the global oil consumption. The growth is coming from trucks, from jets, from ships, and most importantly from petrochemical industry. So therefore, we believe that the oil demand growth may slow down, but it will still grow, so therefore we need the oil coming from all these three countries, from the US, from Russia, Saudi Arabia and others, to meet the growth in the demand and compensate the decline in the existing fields. So we shouldn't give wrong signals to the investors. Okay, Dan, in fact, if we look at the pace of disruption today that's taking place, and you just look at the digital disruption or an Uber that's in the market or the introduction of the smartphones over the last 10 years, are we going to wake up and say, boy, that panel was just really sleeping through a major disruption that the investment going into renewables is high, electric car introductions are going to be very strong. First of all, in terms of demand for oil, fuel efficiency standards are going to be more important for the next couple of decades than electric cars, I think. Secondly, you're confusing, or not you're confusing, but there's a tendency to confuse renewables and oil. With renewables, you're talking about wind and solar, you're talking about electric power, you're not talking about the uses of oil, and that's an important distinction to keep in mind. I think the third thing to, you know, and just to think how much this world has changed, as we're sitting here, I'm thinking how the world's changed. The minister Pradhan's home state was the first state in India to receive US oil. US is exporting LNG to India. Meanwhile, we've been wondering whether this cargo of Russian molecules of gas are going to arrive in Boston. It's about to arrive, not arrive. It's pretty amazing that that would be happening in terms of LNG. And just one other thing to keep in mind about how sort of striking this is, you know, Secretary Perry, Texas is not only a big producer of oil, but it's also the biggest producer of wind. But just to think what's happened in one state. Eight years ago, Texas was producing one million barrels a day. Today it's producing almost four million. If it was an OPEC, it would be the fourth largest producer. Yeah, indeed. You could put it into the ranks. So you don't worry about this tipping point because I think we're going to see, obviously, more investment. We're going to see an electric power system in the future where the investment looks like it's going to be large. Still, people are putting coal in, nuclear in Abu Dhabi. But we're going to see a tilt towards two things, renewables and natural gas in terms of electric generation. That's what looks ahead. Their cars will be more efficient. They'll be governments are pushing electric cars. But there are other things that are happening in the automobile fleet, too. There will be vehicles, ride hailing services. So it's a mixture of a lot of different things that's going to happen. And undoubtedly, in some ways, 10 years from now, the energy system will look a lot like it does today. And in some ways, it'll be looking, start looking quite different because it's always changing. In fact, though, I read, in fact, in an interview with the Stanford professor suggesting that in the U.S. market, you could have 40% of the fleet by 2030 being electric, particularly if we get the autonomous vehicles on. That number is just too big. It could be 40% autonomous or electric. It's not going to happen. The fleet is very big to begin with. On the world today, we have 1.3 billion. We'll have over 2 billion by 2040. And there will be electric cars in it. And maybe a growing share of autonomous will see how fast that really comes in. I was going to direct it into Secretary Perry, though, because in the United States, there's a lot of construction that's happening at a faster pace. What are your views on this in the introduction of the electric cars into the mix here? Well, I think it's really important. I think the technology, you're going to see a lot of focus on smart grids on autonomous cars. Electric is going to be a part of that, but I tend to agree with the idea that you're going to displace in the period of time that we've got combustion engine automobiles is a that's a bit of a fairy tale that's not going to happen. Now, are electric cars a good thing? And are you going to see a lot of focus on the development of them and the construction of them? Absolutely. I got to think that a couple of countries that are sitting up here on the stage may be really involved in that. Certainly, the U.S. is really involved in the development of electric. Battery storage is the issue for me that it's the most intriguing. It is truly the holy grail here and finding the answer to battery storage which our national labs are working on and very diligently and private sector partners working on that together. I just think the disruptive nature of the globe that we live in today and things that again, I go back to that peak oil thing that occurred a decade plus ago and I don't buy into that here is what the world is going to look like in five years or in ten years and that we have the ability to look over the horizon and see the future that clearly. It's exciting to be able to live in this world where there are many disruptions out there and that there's some bright young man or woman somewhere that's coming up with some ideas and things that we haven't even thought of yet. What's the level of the money going into renewables in India? Such a gigantic economy with population-wise with almost 1.3 billion people. If you look at your investment today and the reforms you're pushing, what's the level of investments you're dedicating now to renewable energy in terms of what Prime Minister Modi said yesterday? As you said 175 gigawatt of strategy we have planned out of that 60 gigawatt we have already producing we're investing a lot of in solar, in wind in the biofuel in the second generation ethanol in bio-CNG Ulshal yesterday Prime Minister Modi made a point we need new technology, we need low cost investment these are the challenges we have but I can cite one example few years back the per unit cost of renewable energy was few dollars today it is few cents this is the innovation, technology new capital, competition these are the area is creating a new model and with this kind of renewable intervention I also visualize still the conventional resource will be needed whether it is coming from cell revolution whether it is coming from conventional fossil fuel will be continuing to require it sizable, you are a net importer depend on import will be continuing on the market I want to pick off a couple of different items before we take questions from the floor number one is great interest in the IPO in the second half of 2018 I think Saturday Remco is looking for a $2 trillion valuation is this market agreement that we have with OPEC non-OPEC producers and this price range that we see $60, $70 make that valuation much more obtainable because the market seems to be very concerned about the level of price when it is applying the valuation to Saudi Remco Saudi Remco is a great company first of all in terms of scale in terms of capabilities in terms of what it can do that has been well proven for decades now and the company will be listed when the time is right we are ready from a corporate standpoint and also then a lot to prepare the nation also from a government to company relationship however the valuation of Saudi Remco is something for the markets to do it's not for either the company or the government of Saudi Arabia and all the speculation and the numbers are just that speculation I would though zoom out and talk about something which is not just relevant for Saudi Arabia it's relevant for all producers especially the big ones who have decades if not generations worth of natural resources below the ground that we want to get optimum value and the kingdom by current conservative calculations we have over 260 billion barrels of oil under the ground and Remco has an exclusive right to produce most of these and that will be of course codified through a concession agreement there will be a part of the IPO prospectus when it's issued but for the kingdom for the nation we're more interested in optimizing the value of those 260 billion barrels plus a few hundred trillion cubic feet of gas and making sure that the markets provide us the optimum value for those so the framework that we're talking about how to steward not only our natural resources within our borders not only how do we manage it not only how does the company operate and what is the framework and what is the contractual relationship with the state and what is the global framework within which we market the boom and bust the feast and famine that secretary Perry referred to has been proven to be destructive it's destructive for the industry it's destructive for consumers I'm sure Fatih Birol worries about this as much as we do and it's bad for jobs it's bad for consumers to plan with the fuel and the aviation industry or the shipping industry and fuel prices are we going to pay so we want to moderate that while living within a market framework while allowing the private sector to lead including a privatized or partially listed Aramco we want as policy makers as global citizens we also want to create a framework that hopefully will be lasting to optimize that value and within that optimum value for consumers and certainly from a selfish standpoint for the government and the Kingdom of Saudi Arabia Aramco will find its own fair and optimum valuation okay I sat with the Crown Prince at your investment summit back in October and we didn't make up the numbers of the 5% hoping to raise 100 billion dollars on a 2 trillion dollar valuation let's be candid is it too ambitious this is a young Crown Prince that wanted to set the tone have an international listing go for the top line listing and perhaps it's too ambitious or not I think first of all you need to look at Saudi Aramco listing within the context of a much wider reform agenda there is a privatization of state-owned enterprises there is a reaching out to the private sector both domestic and international to be part of the future that we're creating in the Kingdom of Saudi Arabia and there is also a determination to showcase the best of Saudi Arabia its people, its enterprises and certainly Saudi Aramco is on top of that list so I wouldn't talk about the valuation as a single target I mean it's important obviously we want to make sure that the investors that come in do recognize what they're getting into and do provide the right value but as I said as Royal Highness, myself everybody else who is involved realize that this is going to be a market determined process we cannot set what is the share price going to be of Saudi Aramco every IPO is a process of discovery of how the market perceives the value of the company and our company Saudi Aramco is going to be part of its valuation as the perceived value of oil so also coming to a common understanding and making sure people realize that this is the most precious commodity that has powered the global community to the development stage we're in today over the last 120 years or so and it's going to be with us for a long, long period of time perhaps a longer period of time as we as we consume these resources in an appropriate way and I predict that with time the value of the resources will go up and hopefully that will be taken into consideration against unfortunately some ill-advised commentary about oil nearing its end which is very, very destructive I think not just to the oil industry but I think to the interest of the global community. Okay a question to Minister Novak you're sitting next to a gentleman to the left of you that represents the United States there's sanctions on Russia as we speak how much is it hurting investment or is it standing as an impediment at all in the energy sector for Russia and do you hope you can get a breakthrough here off of those sanctions ? John I did not know what sort of questions you would be asking but I knew for sure you were going to ask me about this one everybody is interested in this one we are at the World Economic Forum and we are discussing the global economic problems that need to be addressed and when we talk about the sanctions sanctions do not enable one to address global economic problems one should understand that as far as we are concerned for Russia frankly because of these sanctions we it gave our industry a certain impetus additional impetus and we managed to redirect the flow of investments to reboot our enterprises to be perfectly frank it makes us slightly uncomfortable we have grown accustomed to living in a market economy we've grown accustomed to not seeing any interference with our businesses and now that the businesses have to look over the shoulders and look at the sanctions and think about whether someone who is following this is going to look at it in the wrong way obviously it makes us feel slightly awkward but in terms of investments in terms of a moral stance there are certain minuses in that but I believe that after all all of us have to strive to solve global problems of humanity to make sure that we meet the energy demand because you know about the figures that 2.4 billion people don't have access to regular sources of energy ordinary sources of energy and all of the largest energy producers should meet this demand we have to overcome the problem of lack of access that many countries don't have to technologies and there are many fine examples of our corporation in the oil sector we have shown together with those countries that joined the cooperative accommodation with OPEC this creates a positive economic agenda and the good mood that you see here at the World Economic Forum in many ways is predicated on the fact that the economy is growing and largely what accounts for it are the steps taken to balance the market to make the situation more stable on the market to create more possibilities to forecast the market situation to attract more investments and we have to state that this effect is there Mr. Barkindo is present here today he took a proactive part in this initiative and I can see that he is sitting here and listening to us I'd like to thank him very much for taking part in this processes we can implement such cooperation in many other areas when we finish this joint cooperation in terms of market balancing we already spoke with the colleagues we need to continue our interaction we see tangible positive results which we can achieve in our cooperation in developing bilateral networks creating new technologies that would enable us more to develop our markets one more thing I'd like to draw your attention to is that in the gas sector we have this cooperation in the framework of the forum of gas exporting countries where 13 or 14 countries get together that are members of this forum so they get together and discuss everything that happens in the gas market there are no agreements in place for action or market sharing but it is exceedingly useful and helpful the same thing needs to be done in the world sector as far as the gas sector is concerned since it has already been raised by my colleague from the left as you mentioned since we are sitting here together I believe it would be helpful because the United States for the first time in 2017 became a gas exporter so it would be very helpful if the United States could get on board in these consultations and discussions aimed at some positive results so we can develop the markets and create an enabling environment for developing these industries so together we could do a lot more so next year at this economic forum we could have the very same positive mood let's wrap it up with Secretary Perry and then we'll take a couple questions from the floor is that an offer you can take or is that be seen as collusion with the Russians certainly and I don't just mean a political issue but it's also an antitrust issue so how do you handle it? we live in a competitive world I think if one of the reasons that there's I'm certainly glad that the professor asked us to come to participate I'm very excited that President Trump is going to be here tomorrow to address all of you and the world I think one of the things people are interested in is when the administration talks about America first what does that mean and I'll suggest to you I can tell you in one word it's competition that the United States wants to be competitive that when your country is looking for a place to purchase LNG that you think about America first and it's that competition that we have together and I think it's important that we have rule of law, that we have transparency and our dealings and what have you we're not always going to agree there's going to be times that we're in conflict with each other but in the grand scheme of things sitting on this stage being partners being part of the fossil fuel producers of the world and it's very important that we find the places that we can work together when I think about these two countries and the competition that we've had before but I also think about the places where we work together the United States is on we come to Russia and you help us put our astronauts into space and there's these opportunities to work together to find I think the future of the world is bright I think part of that brightness is because of the competition that we have between our countries but at the end of the day we are part of this global community and working together for a better future for the citizens of the world is really what we're all here for thanks, do you want to take any questions? we'll just be really quick and then we'll get a microphone to you and we'll go for five minutes on the questions my question is to Minister Al-Falih and Secretary Perry and it's about the reputation of the industry we've heard a lot about the reality here about how oil is still a very important and growing part of the mix about how the rise of natural gas in the U.S. not only being economically beneficial to emissions to the lowest in 25 years and countries that have tried to sideline it like Germany have had rising emissions but the man in the street doesn't know that this month the city of New York sued the five oil majors for the damage caused by the hurricane and the New York Times editorial page praised that and John I'm afraid CNN isn't immune I saw last night your new eco program you said dirty fossil fuels and you had a picture of a gnawing donkey an oil well so I think OPEC may be not communicating well enough we as the industry the private sector are certainly not communicating the role of our product but what about government's role in really explaining to the public the importance of oil and gas and that not all fossil fuels are the same thank you very much let's have Minister Al-Falih is that an amazing precedent that they were going to sue oil companies Aramco wasn't on that list but it's almost putting it in the syntax category of alcohol and tobacco to have institutional investors not invest in oil and gas does this even spill into the Aramco IPO if people are not buying them and that's the image well I'm sure whoever is suing would probably cry foul if they couldn't find gasoline next door as they tried to get to their car or the electricity was turned off because gas wasn't available so there is a lot of hypocrisy in some quarters and I think we have to realize that this is part of reality and the way to confront it I think is to work proactively and in a positive way rather than complain about it we in the kingdom of course have been working through the climate change community and the negotiations and the COP negotiations and we believe the Paris agreement brings the maximum balance we could get under the circumstances of accommodating fossil fuels recognizing that they are part of the clean fuel menu that will be given to humanity for decades to come the companies Saudi Aramco and other companies to work together and they created the OGCI alliance and it was announced in the United Nations climate summit and there is over a billion dollars of funds going into clean technologies mostly around oil and gas Aramco on its own is investing a significant amount of money and it's starting to make the news with breakthroughs and internal combustion that are going to create an order of magnitude improvement in efficiency and reduction in carbon intensity and this is done jointly with the auto industry and as a result the auto industry is starting to say hold on the petroleum based fuel transportation from well to wheel bases in many ways depending on where the electricity where is coming from is better for the climate than the alternative solutions on offer today Mazda was just in the news a couple of days ago talking about this so I think the way Majid to deal with it is not to complain to each other in places like this but to engage with the consumers, with industry with the public, with policymakers and to use facts and figures and to invest in technology to communicate especially to the young people because they matter the most Secretary Perry certainly the legal profession is always looking for a new and interesting angle this looks like a new one and an interesting one and I'll be one of the last people in this room to defend the New York Times so the point is this the United States is leading the world in the reduction of emissions I happen to have been the governor of a state the 12th largest economy in the world we're in a standalone country and I remind people we were at one time but the point is that during that period of time from the early parts of the 2014 emissions went down in that 12th largest economy in the world by some 60% in NOx some 50% for SO2 we saw the emissions going down we saw the carbon dioxide by 20% during a period of great growth and the story there is you can have economic development, economic growth job growth, improved quality of life and at the same time drive down emissions we also during that 14 year period of time led the nation in the production of wind energy we produce more wind in the state of Texas now than 5 countries those are powerful stories that need to be told around the world and the driving force behind the biggest part of that reduction was a transition from old inefficient power plants to cleaner burning natural gas and that is what we want to be a part of is what the fossil fuel industry wants to be a part of is new technologies being able to deliver to the world cleaner burning fuels because the fact is you're either going to have a world where people have to choose between keeping themselves warm or being able to have a job and that's not a option that I think any of us want and the fossil fuel industry will be one of the real drivers of that going into the future led by LNG as we see with you our surgeon experts I'm not going to be able to take the question from the floor but from one of our hosts here Minister I'll follow you to final remarks my final remarks is optimism you know the market globally looks good the economy as we've heard the last couple of days looks better than it has in more than a decade and that is going to drive prosperity around the world and that will spill into energy demand we need to invest in the supply side of the industry to meet it also technology is another part innovation that is happening around the world is accelerating and it's not going to slow down and it's going to provide some of the solutions that we're talking about about extracting more providing it with better environmental impact I would end just by putting back in context what my friend Fatiha Birol took out of context I was not disputing the amazing revolution of shale whether it's gas or oil in fact we're importing it into Saudi Arabia I was simply saying that in the overall global supply demand picture it's not going to wreck the train we should not be scared and I think you that's the core job of the IEA is not to take it out of context and what I'm observing as I read the weekly newswires commenting is there is an oversized focus on shale so if there is a news item that it's going up by 50 or 100,000 barrel this week or last month over the month before you see an impact on the markets by 10% perhaps sometimes or 5% so all I'm saying is at the end of the day as secretary as minister Novak said if it goes from 5% to 7% to 8% we welcome it we're working together and monitoring supply, demand, declines elsewhere just like we absorbed all of the deep offshore which came from not a dissimilar technological and industrial revolution of the 1980s this will be accommodated and absorbed in a growing demand and a well stewarded energy industry with policy makers like ourselves openly communicating, sharing information sharing data and taking appropriate action as in our perceived best interest great, nice start of applause for the panelists I appreciate all the input thank you very much my only apologies we couldn't take more questions from the floor but it was a great analysis, thanks very much


Cool. Good morning, everyone. How's everyone doing today? Good. Good. Is everyone excited after that first keynote? How good was that? Just a quick round robin. Is there any locals in the room? Any locals? Any locals? Brisbane, Brisbane, Surfers, Surfers. Cool. Good stuff. So how far away is everyone come? Over East or? Far and far away, far away. Cool. Very nice. Very nice. All right, so today we've got me, Simon, and James. We'll do introductions very shortly. We're going to be talking about how Flight Centre and Doghouse do outsourcing and how we partnership and how we make that work. There's about 30 to 40 minutes worth of slides. If you have any questions, keep them up here and we'll answer them all at the end. We might try out Google Slides question feature as well, which should be pretty cool. So we'll give that a spin. Take a seat. Take a seat. Cool.  I am Simon. I'm a digital producer at an agency called Doghouse. Our room is just next door. And I've been in digital agencies for about 10 years now, about eight of those I was a developer and about four or five of those I was a Drupal developer. And we also have... I might steal that. Thank you. I'm a senior developer, Drupal developer at Flight Centre in the digital experience team. I have about four years sort of working with the company and sort of deal with our sort of say architecture performance and code standards. So a super quick intro about Doghouse, just so we have some context on who I am and what we do there. So we've been in the industry about 10 years. We set up in 2006. We have 26 staff, 17 of which are developers. So we're very developer focused. We have UX and very talented UX and very talented solutions as well. We are developer focused. They are spread across two offices. We have one in Perth, where a lot of us have come from today. And we also have one in Melbourne as well. So Force Flight Centre alone over the last year or so. We've done three and a half thousand hours worth of development, which is down to a very great relationship that we have. And on average in the Perth office, there's not many people when we go through around two cartons of beer, because that's the kind of people we are. So yeah, James is going to give a little intro about Flight Centre. Thank you. So just out of curiosity, how many of the audience here has booked with Flight Centre before? Show of hands? Awesome. So we're not just Flight Centre as well. We've probably been to this side occasionally. But we also have a few other brands just to give an idea of the scope of the things that we deal with. So Student Flights, Crews About, has anyone heard of Escape Travel? Us as well. Travel Associates. Travel Money as well, Travel Money Oz. And we also have international sites. But just to give you more of a scope about how we work in sort of a drooper world. I'm just going to skip in here. We've got quite a big code base. In fact, we have 80 sites on a single dot group, which for some of you might be a bit of an eyebrow razor. We see about 100,000 lines of code entering into our code base every month. There's a lot of removals as well, but that gives you an idea of how much flow we see throughout our code. We have about 160 custom modules. So we have a lot of custom setup for business logic, for performance optimization, especially given that we've got that many sites running on the code base. And we see about 200 pull requests a month. So we have about 200 pieces of work on the go in a month. Not at the same time, but it gives you an idea of the kind of features that we're dealing with every single month. And we have about 51 developers on the code base at a time. So that's including internal and outsource teams as well. So we've got a lot to manage. It's a lot more than dog eyes. Quite a bit. So I'm going to start talking about our team structure because that's quite important at Flight Setup. We usually have project teams, sometimes varying in size, but we have a designer, sometimes taking on both UX in the UI role, multiple devs, a BA and a team leader. Sometimes the BA and team leaders sort of merge roles depending on how the team's resource. So each of these teams sort of have a focus and goal. They take on multiple project after project, try and work instead of an agile short sprint method. Each one of these have different focuses. So one of these teams might be for platform architecture and site health, another one for performance. And there's a corporate team as well and a global team at Flight Center. So with these different teams, we have these sort of fluctuating goals. The business is sort of a bit of a fluctuating basis, you can imagine. Travel industry can be a bit full-on sometimes. You have different products open up, different suppliers having different flights cheaper. There's a huge deal on. It changes quite often. So how do we deal with, say, changes in the business? So like, if business comes up with, we've got a new product line, what do we do? We've already got all these teams already working on their projects. We need to spin up a new team so that we can deal with this product line and actually deal with it in an agile fashion. But then comes the question of resourcing, which I'm sure many of you have been through before. And there's two possible options we can go through in corporate land to begin with. And these are the more conventional methods, so you can hire someone new. Or you can resource from one of your other teams to bring up this new project. Because sometimes business sees something new and it's like, ooh, shiny, this is our priority now. And that can sometimes shuffle away from your other teams. So this obviously has some pros and cons. Some of the pros are bringing on a new hire. Obviously you're bringing in innovation, some new ideas. They could end up being a long-term asset to the team. And ultimately, it's a good investment for the future. But there is some cons. Sorry, I flipped the wrong slide. And that's one, finding the right person. Has anyone here dealt with a new hire before and sometimes it hasn't worked out? Yep, I see a hand up at the back there. It can be problematic. And then the training and outskilling, there's a lot of time. Also in corporate, we've got a lot of systems. We've got a writer passage just to set up your environment. So if you survive that, that's 50% of the way there. But then we also have misfires. And that can be, if someone comes on for a week, they actually had a better offer. Weekend, they're already out. We have to search for someone else. That can be a bit of a headache. Then there's also the resourcing from inside the company. So the plus side is you're bringing on standards. You don't have to upskill them, but you're crippling your other project. And that's where outsource is a bit of a silver bullet here. What happens is now we have, if we bring on an outsource team like Doghouse, we have a whole team of skilled developers that are good at working together because team dynamic is one of the hardest things to get right. Especially when you've got all those different roles like designers, devs, BA. They can be process aware. If we've worked with them in the past, which we have, they've built up a knowledge base and they're familiar with our code base. And so we can spin them up and down as we go as well. And so that's really good for those fluctuating ideas that come from the business. So now we're actually able to have a team and resource to then meet that business goal. So now we're outsourcing, which is pretty sweet. But the catch comes in is to how do we make it work. It's one thing to say, well, we've got a team resource, but then where do we go from there? Because in actual fact, the business goes, okay, cool, but we ask for this. So some of the things that we need to maintain obviously is good code quality, efficiency, reliability, meeting those business needs and obviously not crippling our platform in the process. Because we've got a big amount of things going on at Flight Centre with all those different brands and sites. It's a high-risk platform. So I'll first give some context about our project structure. So some of these next slides will make a bit more sense. So in the outsourcing, we have a team of developers and project leads. And they will work externally. And we've got an internal team member, project lead, usually project manager, sorry. And they'll coordinate with the outsourcing team. So communicating from internal stakeholders, managing the project, make sure it's hitting all the business requirements and ticking the boxes. They may sometimes also bring in other designers and developers just to help funnel that project into something that is in line with, let's say, our design ideas, our scope, also our architecture and our stack. Because it can be a little complicated sometimes. So that's over there, Simon. Thank you. Cool. So let's talk about talking. So one of the main things that we realise along this process is that communication is one of the key things behind making this work. So bad communication can result in many, many things. Obviously one of the key things is an architecturally unsound solution. We've also got incorrect solutions. So you might have done something really fantastic, but have you actually solved the right problem? You might have solved another problem. And inability to use the platform. Now this is very vital in Flight Centre. The Flight Centre websites are humongous. We didn't quite realise how big they went until we got into this. There's a lot of systems, a lot of modules, a lot of different ways of doing things. And having that understanding within the business is vital. And having that communicated to you is also vital as well. So what actually is bad communication?  So one of the things that is across any business really is communication siloing. Whether you've got offices across the country, across the globe, wherever it may be, when you turn around and have a quick chat to the developer next to you, to your lead developer across the room, and say, oh, how do I do this? Maybe I should do it this way. And they go, oh, okay, cool. Right then you've made a decision and someone over the other side of the country has absolutely no idea what you've just talked about. So some of the ways that we've solved this is through documentation and chat and assumptions make an ass out of both you and I. So one of the things that we do is we have a chat tool. We have a centralized chat tool, which I'll go into in just a second. And it's all about breaking down walls. So the outsourced team, us and Flight Center, we are one. We're a partnership. We work together on things. We solve problems together. We drink together. We're a partnership. We might as well be the same organization. So some of the things that help us do that is Slack. Now, I'm a big believer in Slack. I've wrote a blog article about this and how to adopt Slack. So Flight Center have their own Slack and we join that Slack. I'm going to keep saying Slack quite a lot here. And each project has their own project team, their own project channel so we can join that and see what's going on. There is also a release channel. So whenever there is a release done on Flight Center, it gets posted up there through one of the bots. And that also gives an incentive for people to review the code and see what everyone's doing, whether it's us and other outsourced partner or Flight Center themselves. We also use Hangouts for daily catch-ups, which I'll talk about later on. And we also use Jira and pretty much the entire Lassian suite of tools. We use Confluence for an internal documentation, as do Flight Center. We use Bitbucket and Flight Center use GitHub, but same, same. So the other thing that we come across is knowledge hoarding. Now that's kind of like, all right, I have this piece of information and that's my piece of information. I don't want to tell anyone. That's my trade secret. But us, Flight Center, we're all the same trade. There are no trade secrets. So not having this big umbrella of yourself thinking, I don't need to tell anyone, it would be good if you could tell everyone. And the system is complex. Now, the Flight Center system, as I've already mentioned, is extremely complex. There's a lot of documentation around that. And we've also created our own documentation around that as well. And that gives everyone the beauty of when they join the project. They know what's going on. There's no days and days of, oh, how do I use this module? Should I use this module? Should I write this line of code? Et cetera. So we break it down. We work as a team. We give knowledge wherever it is needed. And we also, because we're a team, we take ideas. If Flight Center have an idea of how we can change a process or how we should develop a little bit better, we'll take that on board. And equally, if Flight Center have an idea that are, have you thought about doing it this way, they'll take it on board. We're a partnership. It's not, they tell us what to do and we do it. We, there's some liaison going there. Because best practice can come from everywhere. Flight Center have been doing this a long time. We work together to make the best practice. So some things that we like to do is clear documentation. I spent a very long time creating a process flow diagram, which is the most mammoth thing I've ever seen in my entire life. But it clearly defines what to do. So on JIRA we have a few columns. And what to do when you move between each of those columns, who to talk to, who to assign it to. Flight Center have this really awesome command tool called Flow, which centralizes all of their Git commands. So rather than saying Git commit and doing all of the things that you need to do, you do Flow commit. And it does all of the commands that any developer would do. So you know every developer is doing the same thing. And keeping all that documentation in-house to make sure that when we upskill, they do it as well. Face to face is one that we love to do. I don't know if anyone knows, but Flight Center just moved to a new office in South Bank. And on the floor that James is on there is a slide. It's very Google, but it is awesome. So yeah, I'm hopefully going to do some pictures and stuff on it, maybe a blog post, but we'll see how that goes. And they'll also come to Perth as well. We've had James visit us in the Perth office. And it just breaks down that you're not just some text. You could just be a robot. There's a face there. There's a personality there. Maybe they're into the same thing as you and you very quickly build up a bond. And finally, constructive criticism. James is actually really good at this.  He'll actually say, OK, this may not be so good. How have you tried this way? It's not just because we're outsourced, doesn't mean that you tell someone what to do. You help them do it. Ultimately, the code goes into Flight Center's code base. It's their product. It's their code. So help each other to get better. So an agency worth their weight will create documentation. If you're outsourcing and this agency is not creating documentation, you might want to start questioning what they're actually doing with their time. We have a very big documentation code base and it helps onboard new members. And it helps build some trust as well. When Flight Center says, oh, we have a new project, it's humongous as we're going through at the moment. And they say, oh, all right, we need to start next week. We can start next week. We can start tomorrow because we have that documentation build up. If you have an agency and they say, oh, can you give us a few weeks because we need to onboard new people, maybe they're not the right agency for you. All right, so through bad communication, that's what you get. And then through good communication, you solve those issues. So you're able to consult with internal developers and build the right solution. Now that's developers, designers, Flight Center have designers within their own team. They have UX, so building their own IAs and stuff like that and making sure that the work that we do, the wireframes that we do, work within the stuff that they need to do. We also have the ability to readily communicate with project managers. So project managers, we will be assigned a project manager. And our developers can speak to them. Our developers can speak to other developers. They can speak to designers. There's no barriers there. Obviously, a project manager sometimes firewalls really dumb questions, but nine times out of ten, it speaks to the developer and see how we go. And obviously the final one is the platform. Getting to grips with that platform is always difficult and communication always helps solve that. So thank you, Simon. So the next really major thing in making this work is process. As a big company, we've got a level of accountability in making sure that what we put out as the digital aspect of it is sound. It meets the business requirements. It's efficient. It's not going to damage any of our other products. So in this, we have to define a little bit of a process that... And we've knocked this out several times, had a few changes to it, and this seems to work for us. So I'm going to separate this into two parts. So doghouse up the top and flight center down the bottom. So let's start a project. Usually we get something that comes in from the business, usually something with quite wide scope, lofty ideas, as business does. No real limit there. But it's then having to bring in those stakeholders and start developing that idea So we start having the inception of the actual project itself. We start defining some brief rounded, some goals, a bit of a scope. And it usually happens internally just to begin with, just to give it direction so we're not in meetings, out of meetings, having lots of stakeholder discussions just to try and find out what the business actually wants. But then once we've got that idea, we start communicating it to our partners. And that can often go through levels of refinement because there's often new ideas, different ways of doing things, different technologies that we haven't thought about. We're very, very used to our own stack. And as you can see with that many custom modules that I mentioned earlier, we're very familiar with modifying it, but we might not necessarily be thinking about new ideas. And this is where some of those new ideas and exploration can come on, especially from outsourced guys as well because you guys touch a whole bunch of different things. Beyond what flights and it does. And those can sometimes spark a lot of new ideas. So when scoping those details as well and communicating with the outsourced team, our project manager may bring some of our devs in, different stakeholders, designers, just to help funnel that discussion in the right direction. So I'll pass on to Simon. All right, so we've got this brand new project. Sometimes it's fluffy. Just we want a new web page on our IK call. What do you want? So what we do is we go and define that solution. We haven't done any work here. We're just confirming the solution. You need to make sure as an outsourced partner that you're delivering what the client actually needs. It's no different to any other client. So we've got the task and we're going to break it down. We've got the project and we're going to break it down into tasks. And then what we do is again, no different to any other project. We start estimating those tasks. And through that process, we start working out how long each one is going to take. What more information do we need? Is there some documentation missing? Is there some new knowledge there? Sometimes Flight Center has some new ideas coming in that we need to bear in mind. Start to use React. Start to use a new platform website where everything's just a white label and they rebrand it. So trying to take all of these things into account when doing the work that we need to do. So we're going to start some work and we're going to just draw down into a task. So when working on a task, it's really quite important that we don't cut off that discussion, that communication that happened earlier on. I think we mentioned about chatting and that inter-team communication. This never stops. And this is where it's really important to bring on to go through a task. You'll find that there's things that you come up against and problems, there's sometimes architectural issues, sometimes design issues as well as just testing out your solution. And this is where communication with the internal guys is really quite important. And our project manager helps coordinate that a little bit but also just having that open communication tool of Slack. So throughout this process, I mentioned earlier that we use Hangouts. So every single day we have a Hangout. A daily stand-up. If anyone's familiar with agile methodologies, I can't say that word. You know exactly what I'm talking about. These have to be a maximum of five to ten minutes. If your stand-up is going longer for ten minutes, there's something greater wrong with the project. A stand-up is just for talking about what you did yesterday, what you're going to do today and if there's any blockers. It also gives space for everyone to understand that every single day there's a partnership, there is work going on, and it gives the perception that every day I have to do something for Flight Center and Flight Center every day have to do something for Doc House. And in terms of who owns that, it's always the outsource partner. It's the outsource partner job to deliver something. It's not Flight Center's job to chase an agency to see how things are going, what's the status with this, when are we going to get this? It's our job, my job to make sure that they understand every step of the way how things are going, and any outsource agency should be doing that. So throughout the development life cycle, both through our already established processes and some help from Flight Center, we've established a means of reviewing code, both reviewing code and functionality. So you make sure that the code that you're delivering is both safe and also that you're just proud of the code, right? That your code is going into this great website, you need to make sure that you're happy with what you're doing and also that ultimately your reputation is upheld. If you commit bad code and all of a sudden the whole entire website is taken down, obviously Flight Center have their own means which we'll go into shortly to make sure that doesn't happen, but then all of a sudden everyone's saying, oh, that outsource agency screwed up this one line and took our whole website down. You need to try and avoid that, so make sure you have your own internal processes to make that, to stop that happening. However, QA is not always required. Sometimes there's moments when there's just, there's an extra line at the bottom of the file or there's, the if is slightly wrong. Sometimes just code formatting and stuff like that, you don't need to go through the entire process again. You have to apply some common sense to this and obviously that's a communication issue. Making sure that you communicate, hey, I've got this issue. Does it read to go through the entire code review process again? Obviously code review takes time, you have people doing things and sometimes code reviews can take half a day to a day. Does it really, does something need to be delayed that much just for something that might not be so small? So on the flip side, we have reviews internally as well. We have to do this to obviously say to our business, hey look, we signed off on this, we can put it out onto our stack. And also it means that we test it like we go through it and review it against our knowledge of our design, our development, and we can properly break it down. So we do it in two steps. We have a functional design review and we also have a code review. And we do try to provide a lot of feedback through that. And as we mentioned earlier, this is one of the really key things is building constructive knowledge. So not saying, no, this isn't right, try it again. Or even things that you think you might have mentioned before. It's about remembering that these guys are building stuff on your code base.  We've got to build up their knowledge base so that they can keep building better and better solutions. We do that with internal devs. We do that with these guys as well. So once those requirements are met, so we've checked to make sure it ticks all the boxes for business, ticks all the boxes for sort of architecture, we have to sort of own that deployment as well. That's just the nature of our stack. And usually in the corporate world, that's the nature as well. There's a bit of control when it comes to websites about how it's deployed. So we take that on. And once it's deployed, we go into a review process. So that's both internally and with our partners as well to make sure that it's on production. The business case is checked against. We check the architecture, the performance of the site, making sure the platform is working as it's intended. And once that's all sort of signed off and any feedbacks are given, then we can go through and start retro-ing the process. So in the agile world, retro-ing is pretty important to make sure that your process isn't really creating bumps. It can do with parts of the process or even just the beginning of the process and how the things are signed off as well. It's about making this whole thing a lot smoother. And we go through iteration and iteration of this. And it's really important to make sure this timeline, because there's a lot of steps, works efficiently. And once we get that working efficiently, things move a lot quicker. So we really try and aim down at stopping repeating issues. So we've talked about a lot here. So I'm just going to quickly recap. So you've got your task, you've got your estimation done, and you're going to start that task.  You'll be doing stand-ups every day. And we have stand-ups across the whole project. So in that one stand-up, we'll be talking about many different things. We have a backlog of work and we work through them. If we're working on two projects, we'll be in the same stand-up. We then do our own code reviews, our own QAs as well. And with the help of Flight Center, we've worked out a really cool way that they have a dashboard on JIRA where anyone that works on the Flight Center project goes to and they can see if there's a code review waiting and they'll pick up a code review. Anyone can review code, right? You don't need to know the system in its entirety, I guess. Knowing the system does help to a certain degree, but if you know PHP, you know Drupal, you know what you're doing. We do QAs, so for everything, we write QA steps and we've, again, we've got documentation on how to write QA steps to make sure that they meet. And, yeah, at the end, we go for a retro every two weeks to make sure that we've captured everything that we've done wrong, everything we've done good to make sure that we don't have any repeat offences. So there is a little bit more to this, though, more than just getting good code. So innovation. We visited Flight Center a few months ago and we demoed a piece of software called Sketch and it kind of blew their minds, really, that, oh, my God, there's more to life than Photoshop. As it happens, Flight Center now very rigorously trying to adopt Sketch and that's partly because of the knowledge that we've imparted on them. So being an agency, we have the luxury, I guess, of sometimes being brave, sometimes we fail, sometimes we learn new things of how to do things and we can help Flight Center do that. Equally, Flight Center, sometimes they have their own technology group and they have their own learnings, which they can feed back to us. Flight Center now trying to use React and we have to, and it's a partnership trying to work out how we do that, how Flight Center do that. So just some quick mutual benefits. So rather than using local agencies, we just have a quick flight across. We can quickly spool up new projects because we have the team there, we have the knowledge there to quickly do things. Knowledge sharing between the agency and the client. The Flight Center have a lot of devs, they have a lot of brains there and Doghouse have a lot of projects so it's good to match those two together. We have a diverse talent, so we don't just have developers, we have BAs, we have UX, we have to help them work stuff out. And yeah, improving both parties code and process as well, so Flight Center have helped us improve, we've helped Flight Center improve and of course every businessman in the room knows about contractual obligation. I have a notification which has got rid of her. Cool, so finally, how do you convince your boss to do this? You need to be outsourced or be outsourced. So you need a use case. You can't just go in there and be like, I want to outsource or we need to go get an outsource partner. It doesn't just work like that. You need a business case. You have to think at a business level. You need to have a problem that needs a solution. So on the idea of going along to outsource, you then need to really convey to your business what the situation is. So you've met capacity. You need more devs. You usually low on time in our scenario and the market's moving rapidly. So you need the fresh ideas as well and you need a team that can work together and you also need a team that's process aware because we've got a lot of those and they know our stack. That's pretty important as well because we have a lot of uptime. So hitting those points and making sure these tick all those boxes, that's really important to business. So from our point of view, from the agency point of view, maybe you have gaps in your schedule not through lack of work but sometimes projects have a review process with clients and you have some time to fill. Maybe long term you're thinking maybe this is a good idea and maybe you have the processes already in place internally. Doghouse already had a code review process. We already had deployment processes. We already had documentation processes. So it kind of makes sense that maybe we can step into this big corporate world. So a $10 an hour developer is not outsourcing. They do what they're told. Nothing more, usually less. They'll usually give you the code in a zip file or something worse. There's no process there. There's no accountability. There's no project manager. There's no time frames. There's no hangouts that just make me a module and you'll get a module. That's not how outsourcing works. Outsourcing is a partnership between client and an agency. So on a part of our action plan here, just reiterating why do we want to make it happen. So you want to analyze the demand because you're going to need to know what you're filling and so you need the resource. And as I mentioned, you're low in time but you have that still that has pressing business need. And you've got to really break down that spin-up time. How much it's going to cost is an alternative to bring people in and new hires and resourcing from internally and what it's going to mean to your current projects. And so then you start outlining those potential benefits that outsource can bring. So one of the key things as well is innovation. We've been at flights and we've been doing this for a while and sometimes we get caught up in the limits of our platform. We just go, cool, we've done this before or this is the way we're going to do it and we just keep building the same thing. And what it means is that eventually we start building up trailing technical debt because we just keep building on top of something which actually it was efficient when we started but it's not now. It doesn't actually meet that growing amount of sites that we have. So innovation is really important. Just as a little thing, hopefully we can give out the slides after this, there's actually a hidden puzzle in here. So if you download the stack here and take a look at this in the notes it's a bit of a puzzle and it has to do with this exact point. So hopefully if any of you guys download it see if you can work it out. Cool, so going back to what we've already shown you is can you do it? Does your business allow you to do it or does your business allow you to make room to do it in future? It's not necessarily that you have the process in place but can you build on the processes to allow this to happen in future? So just some final tips, we're nearly there. Just going back to that puzzle, it's a really cool puzzle about who can see what and how to communicate who can see what without communicating it. It's really cool, so yeah, when the slides go up have a look in the notes section for that slide and it's really cool. So just some final tips. The client needs a gatekeeper, both an agency and a client needs a gatekeeper and an agency needs a PM. That's to ensure that the entire outsource code is good, it meets scope and actually does what you need it to do both from our side, has our developer built what we need the client to do and has the agency built what we've asked them to do. You also need process and to be transparent it's not about we made a mistake let's just quickly do something else it's about talking to them and saying but we messed up how do we resolve this as a group. You also need to allow the employees to communicate directly. Now that doesn't necessarily mean that every single day, every single hour you're having a conversation it's just about have you exhausted all of your internal knowledge to fix this problem? If yes, have you spoken to the internal project manager, me or whoever it might be within your agency and seeing has anyone come across this problem before? If not, how about have a chat to this developer? And within each client there will be certain people that are specialists in certain things. So yeah, thank you very much for watching and paying attention. So we've got about 10, 15 minutes. Is there any questions? Yes. Thank you. Now I'm still seeing the same as a threat by internal developers to these kind of companies. How do you go about allowing those to use? I can probably answer that one. So, especially for Flight Center we've got so many different needs that the business has and we've proved ourselves as being reliable and we've actually had a few scenarios where projects have been outsourced completely and then they have no awareness of the tools and the systems that the company has. And so what happens is what's built has no context to everything else your company owns. It becomes a little difficult after that point to keep that model and structure happening. So we're there to really provide some of that integration but also to help build and expand. So they have a high level of trust in us and then they trust us to go and find and bring on extra skills that we need. So it's about really keeping that trust internal as well, understanding that you have a unique relationship with your business and nothing's going to beat that. And it's always about showing that you represent these really tight integrations with the rest of your platform as a business. And then one of the other things that we find helps and I know that sounds really stupid but just that human factor, just go and meet the people that you're doing the work for. Go hang out with them, go see how their internal processes work and just demonstrate that as a business, obviously there is risk because there's always risk but how you can mitigate those risks and have a plan put together for, say you know what, stuff will go wrong, it may go wrong, but this is how we're going to solve it and that's how we find the awesome trust. And we always want to say yes as developers. We like saying yeah we can do that. And you know sometimes resource, time, allocation, we just can't do that. So we want to be able to keep saying yes to our business but also be able to expand that need and we need partners like Doghouse to make that happen and we need to trust them. Any other questions? Yes. Yeah, I think so long because we see Council, James, at Doghouse the only agency you work with or do you have other partners? No we have other partners as well. Do you balance that in terms of other separate projects or often that can be tricky when you have model agencies living in different places in the project? Definitely and I think that comes down to understanding your outsourced team. One of the things, the core strengths that we found with Doghouse is they're really good at projects and teams. They work well together and they execute really well together. Some of our other outsourced partners are really good at our constant tickets that come in and work. So it's about understanding those two different needs and finding out which outsource is better suited for those needs. And we really discovered that we have different strengths there and we can rely on Doghouse for those big projects and those really meeting tasks and they're really good. Yes. I have two more questions. All right, cool. I'm sorry about the agency, how do you support any of your work? I suppose there's flights in a phase and if there's any kind of risk mitigation there, is there a proper overnight or do you need to schedule stuff with them? So not to give too much away, but Flight Centre, they have a support retainer as like any other client would and they essentially, they have a set amount of hours that we are contractually obliged to deliver. Once those run out, if they run out, we say, hey, these are run out, do you want to buy some more or maybe you need to maybe have a project and we can do an estimation for that and that's how we're now working. So they'll come to us with a project and we'll estimate it like a new client almost, an existing client and we'll say, all right, there's two weeks worth of work there, there's six weeks worth of work there and we've scheduled that in. If Heaven forbid Flight Centre were to drop us overnight, there's no issue there because we've got other projects coming in and we've scheduled those around. So there is risk there and look at some stage, Flight Centre does account for a large chunk of our billables so we've gone back to Flight Centre and to be transparent, we say, right guys, we need a roadmap. So what's the business doing over the next 12 months? What resourcing do you need and opposed to going down a traditional retainer route, we look at a project. So we can actually map out what resources we need from UX, PM, DEV and that reduces the accountability. But you're right, it is risk and you can't work in this high-end corporate world without sort of taking on some business risk. One more question. Yes. How do the relationships start? Probably in a pub, I imagine, if this relationship is aimed to go by a pub. I'm not actually sure how we... an email. There you go. As easy as that. Just send an email to Flight Centre and they'll pick it up. Again, more than likely. More than likely. Yeah, definitely. Cool. All good? Yeah. Just a quick grab-up. So just a heads-up, there is something going on, it's called BOF, a pair of feathers. Everyone knows about it. So make sure that you have a look at the whiteboard outside. There are different topics. If you're interested in one of those topics, you just show up and it will be a conversation. It won't be a presentation. You could contribute to that or you could ask your questions about those topics. Thank you. Let's go to the next panel. And just as an aside, me and James are here over the next two days. So if you don't have any more questions, just come and grab us. We're more than happy to have a chat. Thanks. Cheers.