Yale Team Defeats 15 Other Schools to Win National Energy Finance Challenge

A team of five members of the Class of 2008 won the National Energy Finance Challenge at the University of Texas’s McCombs School of Business in Austin last month. The group — Akshay Dhiman, Ganga Kannan, Jeff Levi, Kate McGill, and Vinod Pathrose —  defeated 15 other schools to claim the title, and the $8,000 prize money, at the third annual event.

The event was a marathon case study, followed by a grilling by the competition’s judges, who weren’t told which school each team represented. The SOM group — known as the Black Admirals, a nod to an early clandestine British survey of Saudi Arabian oil — received the case, authored by an employee at Chevron, on Tuesday September 11 at 6 p.m. and was required to have their answers to it ready by the same time two days later — in Austin. In that intervening period, the team members estimate they spent about 125 total hours working out solutions for a case that required them to evaluate the business opportunities and liabilities of a mid-tier energy company (called Indargo) operating in three fictitious Southeast Asian countries (Caltiga, Tuledor, and Gowan). “It was a no-sleep kind of thing,” said Levi.

The contest hinged on how well the teams created financial models for Indargo and the recommendations they made on how the company should proceed in each country, which were differentiated by conditions on the ground such as a socialist government or high AIDS rates and rampant corruption. “It was essentially realistic,” said Kannan. “It really forced us to know the industry. We had to know how the demand structure in Southeast Asia was changing, the role of national oil companies, the changing business model these companies are increasingly facing. We had to know the need for alternative fuels and how it was impacting the industry. They didn’t specifically ask for this but there was a clear expectation we had to embed this knowledge and apply it to the case at hand.”

The competition was broken down into two rounds, with four teams advancing to the finals. Yale came in first, followed by Harvard Business School, Purdue, and Northwestern’s Kellogg School. “The judges said the logic of our strategy was much stronger,” said Pathrose. “Another team argued that the company should sell its best refinery and build a bio-diesel facility. I think we were more sensitive to the business issues than some of the other teams.”

One recommendation by the SOM team was to take the bio-surplus (soybeans) of one of the countries, and move it offshore to a facility that would turn it into a lubricant. The idea was that they could utilize the resource while creating leverage if the country threatened to nationalize the oil industry. “It worked out well for the country, worked out well for the environment, and it worked out well for us,” said McGill.

The members of the group say they benefited from the fact that they were not all headed into the energy sector, with the team assembled to be well-rounded rather than especially deep in one area. And since the finals consisted of a presentation before the judges, who then questioned them, they chose to each learn every part of the case rather than just focusing on one part — a strategy that differentiated them from some of the other teams. “Jeff and Akshay did most of the finance but they made sure we could all answer those questions,” said McGill. “And then we practiced grilling each other. We actually anticipated a lot of the questions the judges asked. It was no sweat to be able to throw the answers out.”

“Of all the groups we came across the most as a group, a team of five, rather than a bunch of individuals,” added Levi.

Doing well at an energy competition translated to immediate interest from energy companies. Chevron, ExxonMobil, Merrill Lynch commodities, and McKinsey — all co-sponsors of the event — had recruiters there looking for potential hires. “We were all offered multiple jobs,” said Pathrose.

“It was part competition, part recruitment festival,” said Kannan.

For Levi, the win marked the second high-profile victory in the last couple months. On August 22 he was part of the team that won the CNBC FastMoney MBA Challenge. Yale SOM defeated Texas in the finals of that competition. Texas not only hosted the Energy Challenge, but also sent a team to compete. “They’re probably a little sick of me by now,” Levi said. “But they put on a great competition. It was a great experience for all of us.”