Hess Corporation SWOT Analysis, USP & Competitors

Posted in Energy, Total Reads: 1251
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SWOT Analysis of Hess Corporation with USP, Competition, STP (Segmentation, Targeting, Positioning) - Marketing Analysis

Hess Corporation

Parent Company

Hess Corporation

Category

Oil and Gas

Sector

Energy

Tagline/ Slogan

Energy on the move

USP

A focused, higher growth, lower risk pure play exploration and production (“E&P”) company

STP

Segment

Markets in US, Europe, Africa and Asia

Target Group

Entities/individuals who require crude oil/natural gas, petroleum products and electricity

Positioning

Hess helps meet global energy demand while respecting the environment and protecting health and safety of stakeholders

SWOT Analysis

Strengths

1. Integrated operations across the entire energy value chain (exploration, production, purchase, transportation, and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products) gives it a competitive advantage (related to operational activities) in the global market
2. Strong oil and gas reserves, spread across all major petroleum basins in the world including those in the Gulf of Mexico, Europe, the Asia Pacific, and West Africa reduces its dependence on the maturing reserves of any single country or region
3. Its strong midstream and downstream operations network  adds a significant competitive advantage to the company
4. Its significant acreage position (approximately 640,000 acres in the Williston Basin with an overall working interest of about 70 percent) enables it to become significantly strong in the plays as well as the older oil fields
5.Its operating and net profits were high allowing it a robust profitability position, by virtue of its asset base and integrated operations

Weaknesses

1.Concentration of operations in the US makes its operations susceptible to the fluctuations in the US economy, which may lead to loss of revenue.
2.Substantial debts, which have been increasing, make it more difficult for Hess to pay principal and interest with respect to its debt and make it less lucrative to investors
3. Its declining reserves (maturing ones) are a cause of concern as other players in the market have stronger working assets with productivities that can lead to erosion of its market share

Opportunities

1.Strategic divestitures (of its downstream businesses, including retail, energy marketing and energy trading) and transforming into a pure play exploration and production (E&P) company will help it concentrate on its core strengths
2.Investments in unconventional energy sources (eg. the Bakken Shale, the Marcellus Shale, Eagle ford, Utica Shale and other unconventional plays in the US) to fuel future energy demands globally will give it a significant competitive edge in the oil and gas industry
3.Increase in consumption of natural/shale gas in the US can help Hess drive top-line growth and strengthe revenue contribution from the US market

Threats

1. Exploration Risks common to drilling and other exploratory activities can make the company incur significant losses of life, property etc. and affect the company’s profitability
2. Fluctuations in crude /natural oil price due to global oil price conditions can affect its operations and sales and bring about losses in its revenues

3. Stringent environmental regulations and laws in its home country and elsewhere where it operates, failure to comply to which can have adverse impacts on its finances and profitability

4. Declining demand for refined petroleum products in the US may pose a potential threat to the company’s continuing refining business, which is concentrated in the US

Competition

Competitors

1.Chevron corporation
2.ConocoPhillips
3.ExxonMobil Corporation

4.Marathon Petroleum corporation LLC



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