Custom – Designed Project Evaluation Methodology
We achieved a strong increase in the return on investments in Vaca Muerta through a custom-designed project evaluation methodology.
About Vaca Muerta
Vaca Muerta is the company's largest asset for oil and gas exploitation. A geological shale formation located in the Neuquén basin in the provinces of Neuquén, Río Negro, La Pampa and Mendoza, in Argentina.
The problem to solve:
The problem the company detected was it used different approaches to evaluate each operation or project, which caused them to make decisions with non-homogeneous criteria and with an insufficient evaluation of uncertainty.
What we did:
- We detected opportunities for improvement in all investment and project evaluation processes.
- We designed a customized and specific decision-making methodology for the client.
- We ensured the methodology included an analysis of probabilistic uncertainty, which would enable to understand it, instead of assuming assumptions, to bet on a winning scenario.
- We implemented that methodology in a development decision as a pilot.
- We installed the methodology in the company, through a massive training plan, involving over 500 collaborators.
- We ensured that the necessary capacities to make the decisions which have the greatest impact on its P&L remained in the company.
What was the impact:
- In the pilot project in which we implemented the methodology, a 12% improvement in the NPV was achieved, resulting in over 300 million USD.
- As of the implementation, decisions of a large number of highly relevant projects in Vaca Muerta were made with this new methodology.
The change in the decision-making method, through the development of the decision-makers’ talent, represented a direct saving of several million dollars.
- An increase in financial results was evidenced, thanks to efficient, effective, reliable and agile decision making that permeates the entire organization.