Quantified KM value story 109 - Navidad Energy

The best place to find KM value stories is in well-metricated environments, where the effects of learning are easily measured. 

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Oil drilling is the ideal environment for seeing KM value. Drilling is very well metricated, and the time between learning something and measuring the results of that learning is measured in weeks and months rather than years. Drilling is also an expensive operation, so the value of KM tends to run into millions of dollars.

This slideshare from a 2015 presentation looks at organisational learning and KM in oil drilling, and the effects of learning curves on performance. Slide 12 discusses how the steepness of the learning curve affects overall performance, as we discussed here, and slide 14 makes the point that learning typically accounts for 55% of the cost of the first 6 wells in a drilling program.  This 55% can be reduced through good knowledge management. 

Navidad Energy introduced a KM program to address this potential value. They introduced a KM coach, captured lessons, created a lesson management system, developed and continuously improved operational best practices, and discussed lessons when planning and when changing shifts.

As a result, over a 13 month program, they delivered direct savings from their learning initiative of $9,2 million, with an ROI of 10:1.