In 2024, decisions were made in Vaca Muerta that involved investments exceeding 9 billion dollars. Each year, the projected investment grows as new processing and export projects advance, development expands and accelerates in various areas, and new infrastructure becomes necessary. The opportunity is vast, but achieving a good return is not “obvious”. Many complex decisions must be made amidst significant uncertainty. Therefore, the projects that will yield the best business results are those with high-quality decision-making processes. 

Introduction

Vaca Muerta is one of the world’s largest unconventional gas and oil reserves, possessing both the resources and the scale. It has the potential to become a strategic asset, not just for companies, but for Argentina as a whole. However, it also presents conditions that demand more than just enthusiasm and resources. The region is characterized by long investment payback periods, global volatility, and macroeconomic, political, commercial, subsurface, and technical uncertainty. 

The resource itself does not guarantee business success. Large opportunities, significant investments, and high uncertainty require “great,” (or mature) decisions. 

The challenge involves a wide variety of interconnected decisions: the type of commercial contracts, the selection of zones based on subsurface characteristics, development schemes (landings, spacing, lengths, wells per pad, etc.), key service provision schemes, sand management, evacuation and processing infrastructure, and activity planning, among others. All of these are affected by multiple uncertainties and must collectively result in a profitable business. A sound decision must not only be profitable today but also resilient, maintaining profitability even when the context changes and price scenarios no longer guarantee margins. Those who manage these factors inefficiently will be left out or face losses. The challenge is to decide with maturity. We will now explore what that means. 

The landscape of players is changing. With many international companies progressively withdrawing, a growing number of local companies are undertaking enormous-scale projects, far larger than the business dimensions they were previously accustomed to managing. The relevant question is: do these companies currently have the decision-making capabilities—in terms of structure, culture, processes, competencies, and tools—in place for these “large” decisions?

The value at stake: The risk of a bad decision and the difference between a “Good Enough” and a “Better” one

According to studies by IPA (Independent Project Analysis), an organization exclusively dedicated to the research and benchmarking of large-scale investment projects:  

• 45% of projects exceed their maximum estimated costs. For example, in a theoretical Vaca Muerta project with a Capex estimated between $800 million and $1 billion USD, there is almost a 50% probability that costs will exceed $1 billion, and every “extra” dollar spent will diminish profitability. 

• 80% (¡!) of projects experience delays in their promised execution deadlines, with average delays ranging from 20% to 50%. For instance, if a project promises to reach a production of 24 MM m3/d in 20 months but is delayed by 7 months (a 35% delay), what is the monetary value of that delay to the business?  

The result is that immature decisions lead to poor results and diminished profitability. Making a mistake when the risk is small is not the same as when $9 billion are at stake. In Vaca Muerta, the scale of errors is also different. 

Unfortunately, there are no recorded statistics on the value “left on the table” in these types of projects. A profitable project may be considered a good decision, but it could often have been a better one, yielding many more millions of USD for shareholders. 
Many examples exist. For instance, conservative well-curve models are often used (without visualizing their upsides). This leads to the definition of installations, capacities, plant types, evacuation methods, and other elements that later prove insufficient. This results in gas or oil being produced later or incurring huge surcharges to extract and process it, either of which means a return of many fewer millions of USD. 

The New Decision Map: From Incremental to Transformational 

Developments in mature field operations required defining sequential incremental well campaigns year after year, interventions on old wells, and small, pre-planned expansions of processing capacity. While these decisions were complex, they were unlikely to cause a drastic change in business performance. Furthermore, it was a “known” business for many operators. 

With Vaca Muerta, many operating companies are still navigating a profound shift in the game when it comes to decisions, and they are on a steep learning curve. Today’s decisions represent strategic bets that mobilize billions of dollars, commit to 10, 15, or 20-year horizons, and are made under even more uncertain market conditions. This complexity involves:

Portfolio and commercial decisions:

Choosing where to invest based on a view of future prices and markets, regulatory frameworks, capital constraints, political changes, etc. Questions include: How can a business portfolio be defined to be resilient to many of these uncertain scenarios? What is the right balance between gas and oil? Should we enter the LNG market, and if so, when? Should we participate in Midstream projects or rely on third-party infrastructure? Should we favor dry or rich gas, and in what proportions? Should we secure firm contracts or bet on the spot market? Should we export or focus on the domestic market? 

Technical development decisions:

What is the maximum flow rate to aim for? How many landings? What delineation plan? What spacing and drain lengths should be used? How many wells per pad? What contracts should be used for fracture sets and rigs? How will we manage sand? What will be the capacity and design of the plants? What about the pressure and compression strategy? What evacuation system for gas and liquids? And we could continue with many more decisions. The web of decisions is extensive and complex; each one could lead to a good or bad business, and it also depends on how their interrelationships and dependencies are considered. 

To further clarify the current level of complexity, a few additional points are worth noting. Large-scale projects require the sustainability of the business over very long periods. LNG contracts, for example, can demand a 20 to 30-year gas supply. The macro variables in this context—political factors, prices, etc.—are highly uncertain. Subsurface and development uncertainties are also growing. While some knowledge has been acquired from already developed areas, these long-term projects require moving from the blocks’ “core” zones to their margins. We know less about the subsurface in these marginal areas, and the results can be quite different in terms of flow rates and fluid composition.

What has been learned cannot be extrapolated linearly to these new development zones; in fact, doing so would be risky. For LNG to be viable, the international market demands that we be highly cost-competitive against other potential supply locations. Therefore, ensuring margins will depend on a demanding race for cost efficiency in these operations. 

This provides sufficient evidence of the increased scale and complexity of these businesses and, consequently, the need for mature decision-making processes that maximize value and mitigate significant risks. In this context, making sound decisions is not a luxury; it is a necessity. 

The Main Challenges of Decision-Making in Vaca Muerta 

In Vaca Muerta, some decisions seem good until they aren’t. Projects that, on paper, have every reason to work, but when executed, fail to deliver the expected returns. What happens on that journey between planning and reality? Where is the value that seemed so clear in the analyses lost? 

In our experience working with companies that do business and operate in Vaca Muerta, we have identified some key factors that cause decisions to erode business value. We will now identify and describe what we believe are the most relevant factors. 

From Hard Turns to a Roadmap  

In contrast and from a broader perspective, many local companies tend to operate with a more opportunistic and reactive approach to changes in context than companies in other regions or global majors. The country’s historical volatility necessitates paying close attention to where things are headed and reacting quickly to change course when needed.  

The internal dynamic involves shareholders who are highly engaged in defining these course changes, which they then ask of their management and technical teams. The technical teams respond to these requests as they come. This is often done with great agility but not necessarily with the perspective and deep analysis needed to properly mature decisions and address their uncertainties. 

The critical point in Vaca Muerta is that these decisions require greater long-term stability and, as previously described, are much more complex. They require greater foresight and maturation time to be effective. Decisions made on a whim do not allow for mature analysis.  

Of course, companies fear losing agility and responsiveness and are also averse to rigid processes and distributed decision governance, which they perceive as slow in large corporations. The solution is not to create a binary choice between these opposites. There is room for gradations or shades of gray, and the risk of continuing with sudden turns is significant. 

When decisions are not framed within broader planning (a roadmap that provides direction for the business) the technical effort, no matter how rigorous, becomes limited. What is decided today under pressure may have nothing to do with what the shareholder wants to execute six months from now. 

So, what can be done? A concrete way to start is by establishing strategic criteria that guide where it is worth investing time and resources and where it is not. This does not take away the shareholders’ freedom but helps structure the business’s direction and encourages technical teams to become more involved in that thought process. It requires a proactive shift from management teams—an attitude to put questions on the agenda that provide certain guidelines.

This means stopping the practice of waiting for “the next directive” and starting to anticipate scenarios. It means understanding that something that doesn’t look like a business today can become one very quickly if one or two key conditions change. And that being prepared—with options thought out, modeled, and contrasted—allows for faster and better decisions when the moment arrives.

This necessitates building what we call a proactive decision agenda. This is a tool that organizes which topics need to be matured now, which ones need to be monitored, and which ones are worth pausing. Because in an environment like this, the difference lies not in having more certainty but in being more prepared. This dialogue process is not a super-structured and bureaucratic planning process, but it does help align and provide space for a more anticipatory analysis of worthwhile business opportunities. 

Illusory certainties that destroy value 

Shareholders and top executives demand numbers with certainty and simplicity to make decisions. Technical teams want to make promises that look good but are not so ambitious that they will later be held accountable for failing to meet them. Their technical “ego” also drives them to state certainties with conviction. Contractors promise seductive “contract-winning” deadlines and costs that are impossible to achieve. Estimates for investment projects are filled with these issues: optimistic biases, overconfidence, padding, egos, and more. All are part of a deterministic view with overly precise predictions of what will happen. 

Meanwhile, in the “real world” of Vaca Muerta projects, everything is complex uncertainty with significant impact. From a technical standpoint, questions persist about reservoir behavior in less-explored areas, the true effectiveness of new technologies, sand, and service availability. Economically, factors such as inflation, exchange rates, global supply chains, and changing financing conditions are all present. In the commercial arena, gas and oil prices, fiscal frameworks, and partner decisions are largely uncontrollable. Organizationally, talent management and operational logistics remain important challenges. Politically and socially, governments, unions, and communities can substantially affect the project’s evolution. And this list is by no means exhaustive. 

The decision-maker sees only certainties, while the reality to be processed is pure uncertainty. The results are poor due to the deviations they can show or the business opportunities they fail to capture. Again, what is particular about this situation in Vaca Muerta? The impact across these dimensions is enormous.  

The cause of deviations is rarely a flawed execution. Instead, it usually stems from initial decisions that did not fully recognize the critical uncertainties that could define the final value of the business. It is not a matter of incompetence but of a cultural tendency toward overconfidence: we underestimate the complexity of the unknown and overestimate our ability to predict the future. 

Analyzing these uncertainties, their correlations, and their potential impacts does not mean avoiding the definition of goals and targets. Instead, it means doing so with an understanding of the spectrum of possibilities, which makes any defined target less “at risk” than in a deterministic model. Additionally, confronting uncertainties forces us to consider project design alternatives that improve value in the “initial play” (the approved plan). It also allows for the maturation of other design alternatives that provide more agile and aligned flexibility in the face of possible contextual changes. These are no longer seen as sudden turns; adjustments can be made faster and at a lower cost.   

A mature decision is not one that is always right but one that understands how much it can be wrong without breaking. A decision that has tested its resilience knows the negative impacts it can absorb and clearly recognizes which variables its success truly depends on. 

The labyrinth of the single option 

In the accelerated pace of day-to-day operations, moving forward is often valued more than stopping to rethink. Therefore, in many teams, key decisions revolve around a single option chosen almost by inertia: what seems logical, what is known, or what intuitively feels correct. This option quickly becomes “the alternative” and is executed without being compared to other options or validated to determine if it was truly the best possible decision. 

When genuine alternatives are not developed, one is not deciding; one is simply confirming a previous assumption.This phenomenon is common and understandable. Teams feel pressure to make progress and demonstrate it to stakeholders. The analysis then becomes oriented toward justifying the chosen option rather than questioning whether a better way to approach the project existed. 

An intuitive consensus forms early, and we stop asking questions that could potentially add significant value: Is this the best order to develop the block zones? Should we advance delineations to gather better information before a full-scale development? Can we choose zones to test different spacing schemes and drain lengths before fully committing to one option? Have we already defined the fracturing method, or should we gather more information? What plant designs can we envision to provide flexibility for different liquid composition scenarios?  

Once the business case is in place, asking these questions can feel tedious. Some feel it is a waste of time, while others feel it questions their expertise. Each unasked question represents a potential loss of project value. If you have participated in these definition processes, have you ever seen value lost because options were not discussed and put on the table? 

Frequently, a different approach could have significantly increased the project’s net present value (NPV). Modest improvements, such as a 5% increase in NPV, can translate into millions of dollars. However, when alternatives are not rigorously explored, that potential remains inaccessible. This is precisely when it becomes essential for the team to step out of its comfort zone and dedicate more time to exploring other strategic and creative options. 

Decisions in silos 

One of the biggest challenges in complex projects like those in Vaca Muerta is not a lack of technical knowledge, but how that knowledge is coordinated among different departments to make an integrated decision, rather than a collection of individual decisions. Each discipline has its own metrics, timelines, and priorities, and when a truly integrated view is not established, what should be value-adding ends up being fragmented.  

The Drilling team wants to drill quickly to reduce the cost per well. But if it prioritizes speed without coordinating with the Completions team, it can compromise well mechanics and affect productivity.
Completions, in turn, might choose a more economical sand without realizing that this choice will impact fracture quality.
The Reservoirs team focuses on certifying reserves, which can lead it to advocate for scenarios that maximize volume but not economic value.
And Facilities, meanwhile, may oversize a plant by applying individual margins at each stage, failing to see that, collectively, this unnecessarily increases CAPEX and creates a suboptimal design for uncertain scenarios. 

None of these decisions are inherently “bad”. The failure lies in the coordination between them. Each department does what it believes is necessary, but the sum of the parts ends up being less than the whole. 

In many development teams, this lack of alignment creates friction and rework. However, the real impact is seen when one takes a broader view and analyzes the overall result: the project is not as efficient or profitable as it could have been.  

The lack of integration also occurs when disciplines that should be involved from the beginning are left out. What happens if a development is defined without consulting the commercial department, only to find later that there is no market or the contract does not support the development’s pace? What happens if Supply is not aware of the project’s key timelines, critical items, and their risks? Or if HSE or Community Relations join the project late, after decisions have already been made that require everything to be reconfigured? 

When alternatives are designed without considering the real complexity of the environment, decisions may seem optimal on paper but fail to hold up in the field. Worse still, they can generate tensions that are not visible in a spreadsheet but end up impacting deadlines, costs, or implementation capacity. 

To solve this, it is necessary to build a working logic where the whole takes precedence over the parts. This means making the trade-offs between departments visible. It means being able to have uncomfortable conversations whose result is a stronger project. It means establishing a figure who takes a global view, connects specialties, and understands the complete strategy, not just their own segment.  

This is the role of the project leader with an integrated perspective. They are not a boss but an orchestrator of value. Because in large projects, the quality of coordination is as important as the technical quality. Therefore, if the context changes, as it often does, this role also allows for orderly adjustments, preventing each department from trying to protect its own interests at the expense of the whole. 

Closing the gap: deciding better is both possible and necessary 

What Vaca Muerta projects demonstrate, time and again, is that making good decisions is not about having better data or more resources. It is about having better processes. There are proven methodologies that allow for the alignment of visions, the anticipation of uncertainties, the generation of real alternatives, and the coordination of different disciplines through an integrated approach. 

These processes not only organize the conversation; they mature the decisions. And in that maturation lies the key difference. Shifting from reactive decision-making to planned decision-making means investing more time in the early project phases: more analysis, more conversation, and more questioning at the opportune moment. It means investing earlier instead of paying the cost in the execution stages with back-and-forth, redesigns, adjustments, and avoidable frictions. As the chart shows, a well-defined project does not guarantee success, but a poorly defined project almost always guarantees problems. 

The result? More profitable projects that are less exposed to risk, with greater compliance to deadlines and budgets, and a better-balanced portfolio. This is not an empty promise; it is what the data shows. Improving the quality of the decision-making process can translate into an 8% to 12% increase in NPV, a time acceleration of up to 35%, and an improvement in budget compliance of nearly 40%. That is much more than efficiency; it is tangible value for the business. 

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Federico Esseiva, Partner at Tandem and Agustina Coppiello, Senior Consultant at Tandem.

fe@tandemsd.com / ac@tandemsd.com