HBS Takes First Place in Energy Finance Challenge Case Competition

A team of second-year HBS students claimed victory at the National Energy Finance Challenge at the McCombs School at the University of Texas at Austin.

On Friday, October 3, five HBS students competed against 14 other schools in the annual National Energy Finance Challenge case competition at the McCombs School of Business at the University of Texas in Austin. Christine Telyan, Puja Jain, Marwan Chaar (OD), Ravi Sarin (OA), and Anh Pham-Vu (OJ) took home first prize-the first time HBS has done so.
“Proved Reserves,” as the team was affectionately known, received the case study on Tuesday, September 30 and had 36 short hours to prepare their extensive analysis. Team members had to rely heavily on their LEAD skills to survive in cramped quarters with little sleep. But they managed, and their efforts were rewarded by the team of judges that included Chevron, ExxonMobil, El Paso, Merrill Lynch Commodities, Constellation Energy, McKinsey, Peabody, and Tesoro.

The case, authored by a member of Chevron’s venture capital group, asked students how a mid-tier integrated oil and gas company should respond to federal mandates that require ethanol blending in gasoline. Teams were tasked with evaluating the qualitative and quantitative implications in the near and long term. They then were expected to present to a panel of judges and answer questions on the spot.

The case described a real world issue that many oil and gas companies are wrestling with today. How these companies leverage their core competencies to deal with an innovation that can potentially disrupt their business may determine who leads the next era of energy production in the US.

Each of the team members brought a distinct set of skills to the competition. Jain, a former McKinsey consultant who spent last summer in BP’s Alternative Energy group, provided insight into the biofuels business and fielded the judges’ questions about the team’s analysis with grace under pressure. Pham-Vu, who has worked for mostly every high-profile company one can think of, provided rapid-fire financial modeling and strong morale for the team (see picture). Sarin, of Bain Capital, was a well-spring of strategic ideas and effectively guided the team on presentation style. Chaar, a former electricity trader, gave the team credibility when he donned his chemical engineer’s hat and explained to the judges the technological “simplicity” of syngas creation and conversion. Telyan, who previously worked at CERA, spearheaded the team’s overall analysis and brought a critical dose of reality and understanding on how large oil and gas companies actually think about their business.

There were many memorable moments in the competition. While explaining the team’s recommendation for long term strategy to the judges, Anh casually remarked that “Biofuels production benefits from tremendous economies of scale, so we need to build big. And since we’re in Texas, we mean REAL big.” When questioned about their technology choice, Marwan proceeded to explain the roots of the Fischer-Tropsch process in the Second World War, stunning the room and even the team into silence. But perhaps most memorable were the celebrations that followed on Sixth Street.need we say more?!?

The team received a generous prize for their efforts in addition to the opportunity to network with some of the leading energy companies in the industry. The team would like to thank their faculty advisor, Forest Reinhardt, for his continued encouragement and important research in the field of energy and the environment. Extra thanks to Gregg Gulinson (OC) for helping organize and plan the trip down to Yale in addition to his non-stop play on the pitch.