MBA Energy Concentration

The Business of Oil & Gas Exploration and Production (E&P) is an in-depth examination of the commercial aspects of this part of the oil and gas value chain.  The course introduces you to the wide variety of technical and engineering skills employed in E&P and relates how these aspects are employed in the pursuit of either lower unit cost, revenue maximization and/or lower risk. From there, the course brings into play skills developed by MBAs and used to frame E&P project economics, business line stewardship and investment risk profiles. At the conclusion of this course Energy MBAs feel comfortable working with exploration executives and project developers, bringing their skills sets to bear in pursuit of commercially successful E&P business decisions.

Module I

Dan Domeracki
Associate Director, UNC Kenan-Flagler Energy Center

The objective of this course is for students to understand practical application of consulting skills to topical strategic issues in the electric industry. While taught in context of the energy industry, the consulting content taught is applicable across sectors. The energy industry is undergoing fundamental disruption to a long-standing business model related to trends involving new technologies, sustainability, and shifting regulation and consumer expectations. The course focuses on these and other key strategic trends, the resulting operational and business issues faced by industry players, and how consulting projects play a role in addressing these issues. The scope  includes a brief review/summary of the overall business of power as context. While primarily focused on the electric sector, there is some coverage of broader energy industry including oil and gas. You also gain an overall understanding of the consulting craft. Cases demonstrate the consulting approach to addressing strategic issues through tangible project examples.

Module II

Chris Vlahoplus
Semi-Retired, Energy Consultant; formerly at ScottMadden

The fundamentals of project finance and its applications to energy projects are the focus of this course. Emphasis is given to how project finance supports business strategy for both cash constrained sponsors and financially strong companies. The course explains the reasons why project sponsors as diverse as AAA companies, private equity firms and individual real estate developers resort to project finance to fund their business strategies. It also explains how to use project finance in a disciplined manner, thereby avoiding defaults and costly restructurings.

A special section discusses the economics of project financing, its relationship to centralized finance and its use in leveraged economics. The course is case study-based, using cases written by the professor on oil/gas exploration, electric power, LNG, pipelines, biofuels and raw land development for a residential community.

Module II

Stephen Arbogast
Director, UNC Kenan-Flagler Energy Center

The objective of this course will be for students to better understand wind and solar energy projects as they are deployed in the U.S and the project finance environment that funds them, and be better prepared for  jobs in the sector. Students learn about each of the leading renewable technologies from the ground up in order to create a pro-forma projection for both a wind and solar project. This includes a review of wind and solar at the technology level so you learn more about how each natural resource is converted into electricity and the history of each technology over the past 40 years. Another key aspect of this review covers the various business models deployed by renewable energy developers and how the U.S. electricity markets drive energy project development.

Module II

Paul Holshouser
Senior Director of Project Finance, Distributed Sun

Energy Value Chain provides an overview of the energy business in all segments, from oil/gas exploration and production through the midstream and refining to electric power and renewables.  It covers basic technical literacy for each segment and then examines core business models and challenges. You are introduced to dry hole and depletion risks in exploration/production, the role of thruput contracts in the midstream, the upgrading of low value products in refining and the nature of regulatory regimes in the power/renewables sectors.

Module III

Stephen Arbogast
Director, UNC Kenan-Flagler Energy Center

An introduction to refining processes and their economic drivers are the focus of this course. It includes a broad overview of the fundamentals of refinery operation and how each process works to turn crude oil into commercially viable products. In addition, the role of NGLs, petrochemicals, aromatics and lubes will be highlighted as they integrate with refining. The course is interactive to let the students complete capital project evaluations and to fully understand project risks.

A special emphasis is placed on the energy transition to a lower carbon basis in the future. The course discusses how refiners are re-tooling their facilities to produce renewable fuels. The relative economics of such projects are reviewed to understand the importance of the regulatory economic drivers.

Module III

Ray Brooks
Executive Vice President of Refining, Marathon Petroleum Corporation and Senior Vice President, MPLX GP LLC.

The class discusses how regulated and unregulated electric utilities deliver electricity and make money. It covers the technical aspects of electricity generation, transmission and distribution. It then describes those aspects of the business that resemble a “natural monopoly” and regulatory regimes designed to allow utilities to deliver reliable power on a financially viable basis. Different approaches to de-regulation and the key profitability drivers of unregulated power generation are also discussed. Finally, the course examines the benefits and challenges of incorporating renewables into the electricity grid.

Module III

Bill Currens
Senior Vice President, Integrated Planning (Carolinas), Duke Energy

This course explores the economic, commercial and political aspects of the renewable energy business in the current energy transformation. Focus is on the business of wind, solar, energy storage, distributed energy resources and electric transportation. The scope covers independent power producers to utility-scale projects. We cover the players, who makes money and how, the impact of different business models,= and the strategy of future energy transformation.

Public policy, technology and consumer demand are key drivers of the business models we explore. An examination of power-grid operation and planning requirements are included to demonstrate and discuss the impact of increasing amounts of wind and solar power generation in the energy sector.

Module IV

Robert Caldwell
Retired, Former President of Duke Energy Renewables and Senior Vice President of Business Development, Duke Energy

The course presents the interplay of tax consequences unique to the energy sector with businesses where an MBA graduate is playing a lead managerial or financial role. Tax regimes are often unique as they apply to energy projects and operations. Some energy tax regimes are concessionary, offering material incentives to encourage investment. Other tax regimes are highly progressive and designed to capture for governments the substantial “economic rents” which energy firms occasionally produce. Executives across the energy value chain quickly learn to consider tax consequences when planning strategy, developing projects or restructuring their operations.  Knowledge of energy tax is thus essential to all who want to own or manage energy businesses.

Module IV

Jordan Mintz
Vice President-Tax and Chief Tax Officer, Kinder Morgan

This course deals with the practical application of management science techniques to the solution of complex problems in the energy industry. The energy business is characterized by certain features: the preeminent importance of unit production costs, significant dry-hole and catastrophic risks and a high degree of capital intensity. This makes daily optimization of production a critical success factor. It also implies a high degree of importance for risk assessment/management and efficient capital allocation. Decision Making in the Energy Industry teaches the management science techniques used by the industry to tackle these challenges. It covers identifying objectives, alternatives and constraints and incorporating them into a spreadsheet model; optimal allocation of scarce resources; and handling uncertainty with simulation and decision trees. Sample problems explore include optimizing refinery and chemical plant operations, determining optimal competitive bidding strategies, determining the optimal allocation of resources to potential projects, and determining peak/off-peak electricity prices. Although the emphasis on applications is on problems in the energy industry, the tools and techniques that will be learned are applicable to problems in virtually any area of any corporate or government entity.

Module IV

Phil Rogers
Clinical Associate Professor of Data Sciences and Operations, University of Southern California

Do all firms seek to minimize WACC as suggested by finance theory? How is investing in real assets different that financial assets? Can you find all types of debt on the balance sheet? Do all positive NPV projects attract capital? How can bias influence investment decisions? Do the metrics suggested in textbook prevail in decision making? Fundamentally, how is strategy expressed in financial management, and how does finance inform strategic options?

These are the types of questions we intend to address in “Industrial Finance,” a course which, taught by finance executives with over 60 years of practical experience, considers the frictions between finance theory and practice and the linkage to strategic decision making. Through lecture, exercises with break-out teams, guest speakers, and a capstone case study, students progress from investment evaluation for individual projects, to capital structure, to decisions around the corporate finance plan.

This course is intended for future finance professionals seeking a practitioner’s grasp of corporate finance, and for future executives who wish to understand how corporate finance can help in charting strategy. Instructors are energy industry practitioners and cases will be drawn primarily from the energy industry.

Alfred Harper
Upstream Treasurer, Exxon Mobil Corporation

Our global and national economies, and the fossil fuel firms operating within them, face a serious dilemma.  These economies and firms are dependent on the production/consumption of fuels which also are the principal sources of greenhouse gas (GHG) emissions.  Said differently, what these firms produce is indispensable today but seen as an existential threat to tomorrow.  What should these firms do to continue as viable business entities while also contributing to resolving the climate challenge?

This is a “Laboratory Course.”  This means it addresses sets of questions for which there are still no definitive answers.  The concept of this course is to provide clear problem statements and the set of  strategy options currently on the table to address them.  Doing this will reveal certain ‘gaps’ which to a large extent have prevented many fossil fuel firms (FFFs) from fully committing to ‘energy transition’ business models.  From there, students will have a chance to consider the technology, commercial development and public policy measures which would enable fossil fuel firms to better reconcile their need for current business success with the evolution required by the energy transition.

Stephen Arbogast
Director, UNC Kenan-Flagler Energy Center

Dan Domeracki
Associate Director, UNC Kenan-Flagler Energy Center

This course aims to prepare future executives for the challenges of resisting corporate corruption in a number of ways. First, it seeks to sensitize you to the warning signs that a firm’s financial control culture is weak. Inadequate financial control typically is symptomatic of a potential for scandal. Second, it aims to illustrate how younger employees come to be placed in vulnerable circumstances, and how inexperience renders them both more exposed and more expendable. Most importantly, it seeks to equip you with a tool kit of tactical options for resisting pressures to behave unethically. By the end of the course, students should be well prepared to see trouble coming and identify more options for handling it than futile struggle, acquiesce or resign.

Stephen Arbogast
Director, UNC Kenan-Flagler Energy Center