MOUNTAIN VIEW, Calif., April 30, 2015 /PRNewswire/ -- In the last five years, high crude oil prices ensured sustained drilling for oil sands, shale gas and tight oil in North America, subsequently causing historic oil and gas production rates. This resulted in revenue growth rates in excess of 10 percent for the nondestructive testing (NDT) inspection service market. However, with oil prices sliding fast, 2015 will witness restrained demand for NDT inspection services in the region. It is expected that the demand for NDT inspection services will decline by 25 to 30% because of lower investment in not only exploration and production but also in related midstream infrastructure, leading to slower revenue growth rate over 2014. The North American oil and gas NDT inspection services market expects to grow between 0.3 and 6.0 percent over the next five years depending on the exact oil-price situation.
New analysis from Frost & Sullivan, Strategic Analysis of the North American Oil and Gas NDT Inspection Services Market (http://www.frost.com/nee2), finds the market earned revenues of $2.85 billion in 2014 and estimates this to reach $3.29 billion in 2019.
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While the overall North American market for NDT inspection services expects to experience tepid growth, there are segments that offer long-term, sustainable growth.
"With capital expenditure budgets dwindling, operational expenditure projects are anticipated to drive the market," said Frost & Sullivan Measurement & Instrumentation Principal Lead Nikhil Jain. "Even as growth in the upstream and a part of the midstream NDT inspection services market is expected to decline in the short-term, the downstream segment will be the silver lining."
Over the past five years, the bulk of investments were made to support increased drilling activity with the construction of infrastructure such as gathering systems, tank batteries and new wells. This created high-growth opportunities for NDT inspection service providers in North America in the upstream and midstream end-user segments. Going forward, the need for investment in transmission pipelines, which are running at dangerously high utilization rates, and the need for investment in maintaining the already constructed infrastructure, will generate business for NDT inspection service providers in this market.
"From a regional perspective, the Bakken Shale region in North Dakota and the Permian basin spread across Texas are the highest-growth markets," pointed out Jain. "In Canada, Alberta and British Columbia are likely to be the most lucrative destinations for NDT inspection service providers going forward."
Strategic Analysis of the North American Oil and Gas NDT Inspection Services Market is part of the Test & Measurement (http://www.testandmeasurement.frost.com) Growth Partnership Service program. Frost & Sullivan's related studies include: Electromagnetic Compatibility Test Equipment and Services Market in North America, Analysis of the Global Condition Monitoring Equipment Market, Analysis of Global NDT Equipment Market, Strategic Analysis of Middle East and North Africa NDT Inspection Services Market, Analysis of Global NDT Training Services Market, Emerging and Non-traditional NDT Equipment Market, and Analysis of Global Ultrasonic NDT Equipment Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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Strategic Analysis of the North American Oil and Gas NDT Inspection Services Market
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