SWOT Analysis of Spectra Energy

adam November 25, 2012 Oil & Gas No Comments

Spectra Energy Corporation is an eminent name in the industry of Oil and gas pipelines. The Spectra Energy was founded in 2006 and headquarter of the company is located in Houston, Texas. The company owns more than 5,000 employees. According to statistics of 2011 Spectra Energy has gained the revenue of more than $5,000 billion US dollars. The company basically offers its services in three main areas of natural gas industry that includes accumulation of gas and processing, distribution process and transmission and storage process of gas. Spectra Energy has been included in list of S&P 500 index by Standards and Poor’s in late 2006.

Strengths

• Spectra Energy owns the biggest pipeline system of US that is Texas Eastern Pipeline that helps to transfer gas from Texas to city of New York.

• Acquisition of shares of Southern hills Pipeline and Sand Hills pipeline.

• Spectra Energy offers services for natural gas with help of its highly skilled professionals and integrated latest technology.

• The company is resolute to make sure that natural gas is supplied quickly and efficiently to North America.

• Other companies have to deal with regional barriers and government restrictions to operate in region that control the competition in area.

• Spectra Energy acquired enough cash from company operations that help them to support Capex.

• Spectra Energy Corporation holds strong portfolio of midstream business.

• Spectra Energy has acquired two shippers for project of Texas Eastern Appalachia.

• Spectra Energy also holds the largest business portfolio with its operations in Western Canada.

Weaknesses

• Spectra Energy possesses limited liquidity.

• The large part of revenue of company depends on operations in North America only.

• The operations of company are regulated by government policies.

Opportunities

• With help of integrated renewable energy, company can incur high benefits and increased revenue. Renewable energy also helps company to control its fuel consumption and can control cost of operations.

• US seek participation of companies for program of energy independence. The objective of program is to reduce the import of oil and acquire self sufficient resources in this regard. Spectra Energy can also use this call of energy independence to reduce its spending cost and to enhance it revenues.

• Higher demand of clean energy such as natural gas worldwide also enhances the business of company.

• Spectra Energy is intended to expand its operation in other part of us and worldwide.

• With strategic acquisition Spectra Energy can enhance its business portfolio and increase its revenue to greater extent.

Threats

• Government regulations changes with time and this can reduce the growth of business and increase the risk cash flow in future.

• Increased concern for environmental issues among people and environment organizations can offer problems in operations of company.

• Competitive landscape is another threat for Spectra Energy corporation operations.

• Due to increasing competition in market Spectra Energy has to face competitors like Abraxas Petroleum Corporation, Advantage oil & gas Ltd, Apco Oil & Gas, Atlas Resources Partner, CAMAC Energy Inc and Baytex Energy Corp.

References

• Official website of company http://www.spectraenergy.com/ Retrieved 5th November, 2012.

•Financial analysis http://www.google.com/finance?cid=712976 Retrieved 5th November, 2012.

• Annual reports http://investors.spectraenergy.com/phoenix.zhtml?c=204494&p=irol-reportsAnnual Published 2011. Retrieved 5th November, 2012.

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