OPEC bulletin 8–9/17
So, an MBA could provide managers with this know-how
and the proverbial big picture?
The right MBA can at least make a significant contribution here.
Could you expand on that a little? What benefits does
an MBA with a specialization in energy management
Yes, with pleasure. There are different dimensions to consider in this
context. One of the most significant is the breadth of knowledge. In
other words, the big picture you just mentioned. Let me give you an
example: Oil prices are low, so one might think that the traditional
energy sector is struggling and that renewable energies stand to ben-
efit from this. However, the situation is far more complex. While it is
true that the big oil companies are suffering as far as their upstream,
ie oil-producing, activities are concerned, they are greatly benefiting
from lowoil prices on the downstreamside of things—when it comes
to refining, gas stations, etc—as people are buyingmuchmore. As a
result, renewables are coming under pressure, as well because there
is less demand for them when oil prices are low.
What is more, one problem with renewable energies is that
they frequently fail to meet peak demand since they are subject to
natural fluctuations. When the wind does not blow or the sun does
not shine, no energy is produced. And this is where coal, gas and
nuclear energy come in: They can helpmeet peak demand, and they
can do so at very short notice. On some markets, an increase in
the demand for renewables would, therefore, go hand in hand with
greater demand for fossil fuels. This can be changed only through
innovation, particularly in the field of efficient energy storage.
All this goes to show just how complex the situation is. And it
becomes even more complex in view of the fact that energy sup-
ply has long ceased to be a regional issue. Nowadays, energy is a
And apart from the “breadth”?
A high-quality MBA program also offers depth of knowledge. It goes
without saying that essentially an MBA with an energy specializa-
tion is a general management program. And that is a good thing.
However, in the course of working on their master’s thesis, for
instance, students are given the opportunity and the flexibility to
explore in greater detail topics they are particularly interested in,
allowing them to become subject-matter experts. Moreover, our
students and our lecturers come from many different areas of the
energy industry. Thus, participants also greatly benefit from the
insights that their colleagues bring to the program; and carefully
chosen experts, who are their teachers, help them develop their
understanding of the latest industry trends and developments.
Very often, people’s decisions are based not only on facts
but also on their attitudes and perspectives. Here, an MBA offers
a unique setting; it brings together individuals who share sim-
ilar concerns and skills, providing them with an opportunity to
exchange views and opinions with one another in a non-hierarchi-
What other dimensions are there?
Getting risk management right is also crucial. Spreading risks is a
good idea, especially when you operate in highly volatile and unpre-
dictable markets. Diversification is key in this context. In order to
get risk management right, it is fundamentally important to take
action at different levels. To begin with, there is strategic risk man-
agement. This is where traditional oil and gas companies might
experience considerable pressure in the coming years.
Although fossil fuels will very likely continue to be in great
demand for a long time, their business model is under pressure.
One way of managing this risk is to invest in other areas of the
energy industry. The more diverse your portfolio, the better you will
be able to compensate for the loss of a segment. Needless to say
that the success of such measures largely depends on your ability
to assess risks accurately — which is something you can learn.
Then, there is, of course, financial risk management. Here, the
key question is: What can my business do as far as financial hedg-
ing is concerned, and which of the available options are the best
in my particular case?
And finally, there is risk management at the executive level.
How can I make sure to always achieve the best results possible
for my business when interacting with the outside world, eg in the
context of negotiating with clients or partners, and at the same time
pursue an internal leadership strategy that safeguards my interests
and those of the workforce.
All of these issues are repeatedly addressed in the course of
an MBA program, and being able to share your experience with
your fellow students and ask them for advice is, of course, hugely
What feedback do you get from students?
When I meet our students on graduation day and ask them what
they have benefited from the most, many tell me that they now have
a much better understanding of the global interplay of a wide vari-
ety of topics. Above all else, however, they stress that they have
learned to regard failures and wrong decisions as chances for new
beginnings, ie as entrepreneurial opportunities. It is this mindset
that enables people to create something revolutionary and, in doing
so, make a contribution to meeting the global challenges facing us
in the 21