London Business School signs $38m Kuwaiti contract

London Business School has won a $38m contract to train top managers of the Kuwait Petroleum Corporation, the largest executive education programme in the school’s history.

In financial terms, the five-year deal with the Kuwait state-owned oil group ranks in the top division of executive education partnerships worldwide, and is understood to be the largest ever signed by a UK business school.

“This is not just another contract,” says Andrew Likierman, dean of LBS. “It deepens our commitment to, and relationship with, the [Middle East] region.”

LBS opened a Dubai campus in 2007, where it teaches its executive MBA degree as well as executive training. Sir Andrew says that while many of its international peers have retreated from the Middle East since the financial crisis, the school is there “for the long-haul”.

The London school’s understanding of the region and its energy sector is a major reason behind the award of the contract, says Anas Meerza, general manager of Kuwait’s National Technology Enterprises Company (NTEC) which is in charge of the tender. LBS counts Saudi Basic Industries Corp and Oman Oil among its existing clients.

However, it is the school’s expertise in the field of leadership – the focus of the programme – that is most important, says Mr Meerza. “In the Gulf, nobody talks about leadership . . .[but] globalisation dictates that clear leadership is needed.”

Mr Meerza says that leadership is particularly needed at the Kuwait Petroleum given its role as the Gulf state’s leading revenue source, and following its unsuccessful dispute with Dow Chemical of the US. “There has been leadership of projects, but no clear leadership of the organisation,” he says. The International Chamber of Commerce arbitration ruled this May that KPC pay damages of $2.2bn to Dow over the breakdown of a planned joint venture.

The content of the LBS programme, which will involve around 300 managers from KPC, will be linked to the company’s strategic objectives, which include maximising sustainable production of oil and gas. “This contract is all about enabling Kuwaiti people to learn and employ strategies and leadership from world-class academics,” says Mr Meerza. Though LBS professors will lead the programme, those from other institutions will also be brought in to teach.

Sir Andrew says that the KPC programme is illustrative of the school’s focus on a smaller number of deep, longer-term partnerships. In the 2011 – 2012 academic year, LBS earned revenues of £16.7m from customised executive programmes, according to its most recent financial statement.

With the contribution of this contract – which starts next year – LBS may overtake the revenues of Ashridge Business School, the UK executive education specialist. Ashridge reported customised programme revenues in 2012 of £20.4m, the highest of UK schools taking part in the 2013 FT executive education ranking.

Following a string of recent major donations, LBS has raised nearly £59m towards its five-year fundraising target of £100m. A major expansion of the school is under way with the £60m refurbishment of Old Marylebone Town Hall.