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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

global phenomenon.

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-

cal environment.

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