How Million-Dollar Decisions Are Made in Vaca Muerta: An Interview with Fausto Caretta (PAE)
Episode 4 | Fausto Caretta & Federico Esseiva
Every day, million-dollar decisions are made—decisions whose results will only become visible ten years down the line, at best. Data is analyzed and scenarios are simulated to reduce uncertainty as much as possible. All of this takes place in a unique extraction context with the potential to revolutionize the country’s energy matrix: Vaca Muerta. Fausto Caretta, Upstream Managing Director at Pan American Energy, is one of the decision leaders navigating this landscape every day. This new ‘Decision Leaders’ interview reflects his key insights and lessons learned.
With a straightforward and clear way of speaking, Fausto Caretta shows the calm confidence of someone who is sure of every move. Something crucial for those who bear such a high level of responsibility in making decisions in Vaca Muerta. That confidence is forged through years of experience: Fausto has spent the last two decades in strategic roles across four continents. In addition to his current position at PAE—the leading private producer, investor, and exporter in Argentina’s energy sector—he has held roles at YPF, Eneva, and Schlumberger.
To better understand how decisions are made in the energy industry, how leaders manage uncertainty, and how they time their decisions for maximum impact, Federico Esseiva, partner at Tandem, spoke with this executive who is not only passionate about the oil industry but has also led projects across the globe: from the Amazonas to the Middle East to the Neuquén Basin.
Strategic Decision-Making in Oil & Gas
FE: You’ve worked in many countries, markets, and companies. What have you learned about how organizations make decisions?
FC: Decision-making depends heavily on the context and the DNA of each company. Every organization is shaped by cultural traits—geographic, corporate, or ownership-related. What has changed over time is the adoption of technology. Today, we have access to information in a much more dynamic and agile way. In the past, decisions relied more heavily on experience—or as we say, gut feeling. Now we have tools that complement that instinct.
FE: What do organizational improvement processes look like in the energy industry?
FC: In capital-intensive industries like energy, an execution decision moves massive resources. Walking that decision back has serious consequences. That’s why a solid maturation process is critical. Analyzing all available information to ensure that when the time comes to decide, the level of uncertainty is as low as possible.
Advice for Decision-Makers in Vaca Muerta
FE: How do you make million-dollar decisions in Vaca Muerta?
FC: Each well in Vaca Muerta costs about 15 million dollars. Building a plant for a typical concession requires an investment between 200 and 300 million. So, when you decide to drill hundreds of wells and invest in infrastructure, you’re talking about billion-dollar decisions. If you don’t consider all the political, legal, environmental, and social factors, execution becomes extremely difficult—and the quality of the decision comes into question. To get it right, being fast isn’t always the answer. Sometimes, taking steady, deliberate steps is better.
FE: Why is that prior analysis period so important? What factors are specific to geographies like Vaca Muerta?
FC: Good decisions rely on solid technical studies, proper risk evaluation, a clear contracting and execution strategy, and sustainable assumptions.
The payback period for a Vaca Muerta project is around 7 to 10 years, depending on the price of oil or gas—whatever the commodity is. So, when you invest hundreds of millions in a concession, you’re essentially betting on the next president… and the one after that. Political, economic, and commodity cycles aren’t aligned. If a geologist or engineer says they’re ready to move forward but the rest of the elements aren’t at the same maturity level, that decision will be premature.
There are thousands of variables that can destabilize a decision. Social license, for instance, is fragile. I’ve worked in highly sensitive regions like the Amazonas, where an environmental mistake can be extremely costly. History shows that most major project failures come from underestimating complexity.
Innovation and Artificial Intelligence in Energy
FE: What’s your view on the role of AI and other innovations in decision-making within Oil & Gas?
FC: I think AI is a great tool, but what really interests me is machine learning—the ability to learn quickly as an organization. Every experience is extremely costly, but if you can simulate scenarios and learn without having to execute them, you gain a huge advantage. AI allows you to map uncertainty and make more informed decisions, aligned with the risk profile of the company’s portfolio.
FC: Fausto, thank you very much for sharing your insights and teachings with us.
FE: It’s a pleasure to talk with you. Thank you very much for the invitation.
The energy industry demands high-impact decisions, where the margin for error is minimal and uncertainty is built into the system. Voices like Fausto Caretta’s remind us that deciding isn’t just about execution—it’s about anticipation, thoughtful preparation, and taking the right step at the right time. Because in Oil & Gas, a decision doesn’t just involve millions of dollars—it carries human, environmental, and strategic weight.
At Tandem, we’re proud to support organizations facing this level of complexity through our High-Impact Decision Solutions. Not just in energy, but in any industry where the right decisions make the difference between capturing an opportunity or amplifying a risk.
If you’re interested in more perspectives on how leaders make decisions in complex environments, we invite you to read our interview with Rodrigo Puga, SVP of Internal Medicine at Pfizer, and how he approaches decision-making in the pharmaceutical industry.