The plunge in the price of oil has provided a windfall in applications from the energy sector to the world’s top business schools.
Four of Europe’s leading MBA programs have told BusinessBecause they are seeing a surge in applications from the oil and gas industry, as managers and engineers seek to ride out an impending storm and escape likely job losses.
Despite a recent rally, oil prices have plunged from $115 a barrel in 2014 to around $47 today.
Graves & Co, the energy consultancy, estimates that more than 350,000 jobs have been slashed by oil and gas production companies worldwide since the crude price began crashing. Some 20,000 jobs cuts have been announced at Schlumberger, 10,500 at Baker Hughes and 9,000 at Halliburton. Shell and Chevron, meanwhile, have warned on further job losses.
“We’re certainly seeing an increase in applications from the oil and gas sector,” says David Simpson, MBA admissions director at London Business School (LBS), many from resource-rich countries such as Australia.
But he adds: “We haven’t seen huge evidence of people coming without work, like with investment banking a few years ago [during the financial crisis of 2008].”
Instead, oil and gas workers are looking ahead. “They have not been laid off yet — they are jumping before they are pushed,” says Paola Eicher, MBA recruitment manager at IMD in Switzerland. She adds: “It seems when an industry is in trouble, people want to get an MBA.”
He says: “I could see that a difficult time in our industry lay ahead.
“Low oil prices have begun to take their toll….We have operated at over $100 a barrel before, but the price dropped to half of that when I made my decision to come to the UK for my MBA.”
Three careers directors have told BB they expect a slowdown in recruitment in the oil and gas sector in 2016. “We’ve already seen MBA hiring in the energy sector slow due to oil prices,” says Lara Berkowitz, executive director of the Career Centre at LBS.
Business schools say some oil and gas applicants are looking to move into areas such as renewables, business development, and asset management.
“Some say they want to get as far away from the [energy] sector as possible,” says Nikki Harle, MBA admissions manager at EDHEC Business School in Nice.
Maria Kolesnikova enrolled in the MBA program at INSEAD, based in France, Singapore and Abu Dhabi, in summer 2014 when the crude price slide started. She had worked at Rosneft, Russia’s largest oil major, as an investment manager in Moscow, overseeing a $3 billion budget.
But Maria used the MBA to transition into a managerial development program at a global packing company in Paris. She says: “An MBA is very relevant for those who want to explore other opportunities.”
To entice fleeing oil and gas workers, business schools are rolling out energy-sector-specific scholarships. LBS offers an award of up to 50% of fees — currently £70,800 — to MBA applicants who are employed in the energy sector, among other awards. “We created these last year to try and attract them,” says LBS’ David.
Elsewhere, ESADE Business School in Barcelona offers a scholarship for an undisclosed sum to those with significant work experience in the sustainable energy industry. And Cambridge Judge Business School (CJBS) of the UK offers a £33,000 scholarship to help engineers from the energy sector transition into management.
“It’s thanks to that scholarship that we’ve raised our profile with engineers in the oil and gas sector,” says Conrad Chua, head of MBA admissions and recruitment at CJBS.