Development And Presentation Of The Interdisciplinary Course Petroleum Project Evaluation: Integrating Entrepreneurial And Business Concepts Into A Petroleum Engineering Curriculum.

The interdisciplinary course, PET 4460 – Petroleum Project Evaluation, offered at Montana Tech, was a direct result of the changing landscape in the petroleum engineering field. The course combined engineering concepts that students learned in other courses with entrepreneurship and other business concepts that entry-level petroleum engineers must possess in order to be successful. Faculty from the Business and Petroleum Engineering departments developed the course over a two-year time span with input/feedback from the Petroleum Engineering Department’s industrial advisory board as well as input from upper-level management from many of the businesses operating in the petroleum arena. The subjects covered in the class were designed to cover topics from “beginning to end” in petroleum project evaluation. The course begins with an overview of project management principles and then continues with coverage of subjects such as entrepreneurial startup financing and capital formation, land ownership, oil and gas contracts, cash flow analysis, financial statement analysis, and the use of futures contracts to hedge risk, to name a few. The course culminated with a hands-on project using the lessons provided in the course combined with commonly used industry software to “tie everything together.” The paper examines the development of the course, the need for interdisciplinary cooperation, the delivery of the course, and assessment of the course effectiveness. Introduction and Background Today’s outstanding engineer must have the knowledge of many sciences and disciplines. Interdisciplinary skills help an engineer to cope with the changing social, economic, and political conditions that influence technology and its development 1 . Engineering is a profession that serves many functions of design and problem solving. These engineering functions support the goals of business and entrepreneurship, and in turn engineering is supported by entrepreneurship. The ideas and designs created by engineers are only useful if they fill a need and have a market, such as creating machines for improving industry or solving troublesome problems. As Thomas L. Magnanti, dean of engineering at the Massachusetts Institute of Technology has stated, “We in engineering don’t study entrepreneurship per se; we do entrepreneurship. We create products and processes that people use. Bringing together management and engineering provides an ideal combination 2 . This basic relationship is not often demonstrated in the delivery of college engineering courses. The lectures and labs for engineering courses tend to focus on the scientific method and the application of principles and tools to solve problems. For engineering training to be complete it must also emphasize that successful engineering takes place within the framework of business and entrepreneurship. Engineers are [an] excellent source of high growth potential P ge 11453.2 entrepreneurial and technology commercialization ventures, with their creative product and technology ideas 3 . However, a recent study of executives in design and construction found that 65% of the executives had an engineering background and their analytical skills were not focused on the traditional business focus of finance, accounting, organizational behavior, law, marketing, and human resources 4 . Engineering and technology students are increasingly more interested in creating their own companies, but do not traditionally have the [entrepreneurial] skill sets necessary to evaluate opportunities and create successful businesses. The rate of success in bringing undergraduate, graduate, and professional engineered products to market has been hindered by a lack of business expertise 5 . The PET 4460 class developed at the Montana Tech of the University of Montana was designed to emphasize this crucial relationship of engineering and entrepreneurship. Webster's dictionary defines an entrepreneur as "one who organizes, manages, and assumes the risk of a business or enterprise." Traditional engineering curricula are typically weak in entrepreneurship studies. Instruction in engineering theory and practice is present in all engineering classes, but too often the links between engineering methods and business and entrepreneurial needs are not addressed. Although few students go to work, immediately after graduation, for a small company (or start one themselves) [any entrepreneurial] skills that they learn are valuable in large companies as well, such as IBM, which is organized into units where entrepreneurship is encouraged 6 . Gifford Pinchot coined the term intrapreneur in 1985 to describe this new paradigm of releasing the entrepreneurial spirit within an established corporation. Whether the objective is to develop individual entrepreneurs or to inculcate intrapreneurship in a company there is clearly a need for courses such as Montana Tech’s PET 4460. One of the objectives of Montana Tech's interdisciplinary course, PET 4460, Petroleum Project Evaluation, is to introduce senior-level petroleum engineering students to the concept of entrepreneurship by exposing the students to the "big picture" of how their engineering decisions tie into their company's profitability. More specifically, the constantly changing landscape of the worldwide petroleum industry (i.e. reengineering, mergers, and downsizing) has created an environment in which young engineers will be expected to demonstrate intrapreneurship and leadership, by dealing with business issues and implementing policies that will contribute to the company's success and bottom-line. Genesis of Pet 4460 Petroleum Project Evaluation When he became department head in 2003, one of the first endeavors that Professor John Evans participated in was to travel to the board rooms and offices of the companies that hire Montana Tech petroleum engineering graduates. These companies ranged from major petroleum firms (Chevron/Texaco, Shell, Exxon/Mobil), to larger independents (Burlington, Anadarko) as well as service companies (Schlumberger, Halliburton). Evans wanted to discern what Montana Tech could do to make its petroleum engineering graduates a "better product." The overwhelming number of responses from company representatives fell into three areas: new engineers need to be more proficient in business/economic analysis, petroleum engineering curricula needs to be more oriented towards the "business" of oil and gas and engineering students need to improve their communication skills. Evans took this information to his faculty members as well as faculty from Tech's Business department and the first iteration of the class was developed and presented to the departmental Industrial Advisory Board P ge 11453.3 (IAB) in 2004. The course was enthusiastically endorsed by the IAB, and, with further development, was first taught during the Spring Semester of 2005. The notion of creating a course that would make engineers more aware of the business and entrepreneurial environment and creating more value for an entry-level engineer was one of the driving forces behind the development of the course. "This class is an attempt to prepare our petroleum engineering graduates for employment with a growing number of companies that require their employees to fulfill more than one job. It is our job as educators to give engineers a broader context to the foundation of engineering and exposing students to the entrepreneurial side of things is a major piece of the puzzle," says Evans. "Historically, Montana Tech graduates were quite adept at the technical side of things, but they needed a broader background in the ability to synthesize engineering data from a business perspective," continued Evans. History of Entrepreneurship Education at Montana Tech Entrepreneurial education at Montana Tech came about with the start of a movement by the school to diversity into programs that reflected the technologically based role and scope of the institution. The school has long enjoyed a heritage deeply rooted in engineering and particularly engineering in the extractive industries. Currently the school would be classified as a small comprehensive college with just fewer than 2,000 students. The engineering side represents about 50 percent of the student majors while the non-engineering students are able to select from a number of degree options including business, math, sciences, nursing, computer science, and others. The business offerings have seen some significant changes over the past two decades. Montana Tech offered students a fairly traditional business administration until the late 1980s when the Board of Regents required the campus to phase out the degree. For a number of reasons, including the state-funding model, Tech decided to pursue other business related degrees. Starting in 1990, the Department of Business and Information Technology (BIT) developed a bachelor’s degree program titled “Technology and Business Development,” which the framers purposely designed as entrepreneurial type program that matched the role and scope of the university as well as a program that did not directly compete with the business administration programs offered at the neighboring state funded campuses. The business department wasn’t particularly fond of the name of the new business program and in the late 1990’s the opportunity presented itself to change the business offerings at the school and Montana Tech started the new century by offering a bachelors program in Business and Information Technology with three options including Business Information Systems, Management, and Entrepreneurship. Historically, the entrepreneurship program at Montana Tech has been led by an individual professor, which appears to be the case in many entrepreneurship programs 7 . Looking into the future, Solomon, et al. described a changing pedagogy based on the broadening market interest in entrepreneurial education, which partially explains this cur