|Status : Published||Published On : Sep, 2021||Report Code : VRSME9058||Industry : Semiconductor & Electronics||Available Format :||Page : 200|
The testing, inspection, and certification market in the oil & gas industry was USD 14 billion in 2020, registering a CAGR of 2.2% during the forecast period 2021-2027.
Testing in TIC means an industry activity that assures manufactured products, individual components, and multi-component systems are suitable for the predetermined purpose. Inspection and testing are the operating parts of quality control, which is the most critical factor for the survival of any manufacturing company. Quality control directly supports other factors such as cost, productivity, on-time delivery, and market share. The testing, inspection, and certification market report is composed of conformity assessment agencies, which provide services from audit and inspection to testing, verification, quality assurance, and certification.
Globalization has led to product standardization norms and has penetrated developed technologies across various industries such as building & construction, oil & gas, electronics, and automotive industries, etc., resulting in the growth of the TIC market during the forecast period 2021-2027. Moreover, the growing middle-class population, rapid urbanization, population migration from rural to urban areas globally, mandatory safety regulations, upsurge in the illicit trade of counterfeit and pirated products, advancement in networking and communication technology, the inclination of outsourcing testing, inspection, and certification services has propelled the growth of the TIC market in oil & gas industry. Nevertheless, TIC provides various advantages related to its credibility and image, compliance with legal and regulatory requirements, less turnover of employees, high level of cost control improvement, and fast improvement of different processes. Oil & gas are the main industries in the energy market and play a significant role in the world’s economic fuel resources. The advent of new and advanced technologies, processes, and systems required for producing and distributing oil and gas are complex, thus requiring inspection and testing at regular intervals, the TIC market is anticipated to witness growth, irrespective of industrial seasonality.
The COVID-19 pandemic resulted in a short-term decline in demand and revenue in the first quarter of 2020. Moreover, TIC is playing a crucial role by offering assurance that the products and services offered to the customers will provide safety and health standards. Business organizations in the TIC market are intensifying IT infrastructures and developing business continuity plans, implying that the testing, inspection, and certification market are holding the substantial potential to bounce back from the COVID-19 outbreak. This is because TIC services will enhance and protect brand reputation, verify products’ safety, and enables trade.
Insight by Sourcing Type
Based on sourcing type, the TIC market for the oil & gas industry is bifurcated into in-house and outsourced. Among the two segments, the in-house segment dominates the market and is anticipated to hold the largest share during the forecast period 2021-2027. Deploying in-house testing and inspection will offer companies to have complete control over the entire process in terms of technology, skilled personnel, and testing and measurement equipment. Thus, enabling organizations to handle TIC activities like on-site availability, ability to employ talent, and establish custom practices as per the needs and desires of the organizations.
Insight by Service Type
Based on service type, the TIC market for the oil & gas industry is segmented into testing, inspection, and certification. Among these segments, the testing segment holds the largest share in the testing, inspection, and certification market in 2020 owing to the diverse product standards, stringent regulations, increasing need for improved safety, growing industrialization, and a need to protect the brand. There is a high use of testing practices in the oil & gas industry which results in maintaining high-quality parameters and meet the requirements of consumers. Thus, companies from different industries are increasing their operational expenditure on the investment of testing equipment which offers market growth in the TIC market. Moreover, testing and certification services are required for oil & gas equipment in electrically operated equipment, LP-gas, service station,
Insight by Industry Vertical
Based on industry vertical, the TIC market for the oil & gas industry is divided into refineries, tank farms, pipelines (onshore and offshore), compressor stations, chemical and petrochemical plants, offshore structures and platforms, production and processing on platforms, gas liquefaction plants, loading facilities, and others. Offshore and onshore production and storage facilities should be safe and have a strong presence throughout the life cycle of an asset. There should be a continuous inspection for pipelines and should be safe for the people and environment. TIC services in the pipeline segment of the oil & gas industry are done on material technology, pipe production, hazards/ risks analysis, welding technology, strength calculation, and design, corrosion and explosion protection, water protection, etc.
The TIC market for the oil & gas industry is characterized by various industry trends such as growing investment in AR and VR, mounting adoption of connected devices and cloud-based technology, increasing mergers and acquisitions by the industry players, and sustained consolidation of suppliers leading to globalization.
The growing government-enforced regulations, considerable industry standards, certification requirements, and huge penalties against non-compliance parties are projected to drive the demand for TIC in the oil & gas industry. Moreover, the increase in attention of manufacturing companies to offer quality products will enhance customer retention, innovation, digital transformation, increasing exploration of unconventional gas resources, mounting demand for interoperability testing for connected devices and IoT, globalization, and rise of global trade will boost the growth of the TIC market in the oil & gas industry.
The testing, inspection, and certification market face certain challenges like trade wars and growth fluctuations, huge investment for automation and installation of industrial safety systems, high cost of TIC owing to diverse standards and regulations globally. Moreover, ensuring people and site safety, processes need to be optimized from extraction which requires higher pressures and temperatures, a statutory inspection of production assets, and asset life extension are hampering the oil & gas industry. Furthermore, a lack of testing facilities and skilled personnel may hamper the growth of the TIC market.
Testing, inspection, and certification is a massive market that provides lucrative opportunities in technologies such as AI, robotics, drones, big data analytics, next-generation automation, and cloud and cybersecurity. Moreover, R&D in TIC will provide promising opportunities for manufacturers in the oil & gas industry which will provide growth in industrial applications and help in providing compatibility to TIC companies for future appraisal and development.
Geographically, APAC is anticipated to have a high CAGR during the forecast period owing to the rising investment in R&D, rapid urbanization & industrialization, huge manufacturing capabilities and exports, rising per capita income among the middle-class population, improved lifestyles, and increasing consumer awareness about the importance of quality certification, testing, and inspection. Nevertheless, the growing middle-class population has led to the growth in private consumption and mounting demand for safety and product quality, resulting in providing opportunities in the oil & gas industry.
Key players are adopting technological changes to improve their product portfolio and generate new revenues, optimize the operational cost, and enhance service efficiencies via process upgrades. The industry players are taking the COVID-19 crisis as an opportunity to restructure and revisit their existing strategies, focus on new services and delivery models to access the growing demand for automation, remote service execution, and improved digitization.
The business enterprises have started opening development centers in new locations to enhance market penetration which helps in building business relations with customers and clients. Moreover, the industry players in the TIC market have started building strategies like mergers and acquisitions product innovation, and geographical expansion to hold a major share in the market.
Intertek Caleb Brett, a London-based testing laboratory company, announced to expand its current inspection and testing services operations at St. James (Louisiana), with a new 5,000 sq. ft. laboratory. The laboratory is expected to handle operations related to the oil and gas sector such as crude oil quality analysis and testing in accordance with ASTM methodologies and retain the services, including indefinite and retain capabilities.
Some of the key players operating in the TIC market in the oil & industry: Intertek Group plc, Bureau Veritas, UL LLC, SGS SA, Eurofins Scientific, TUV Rheinland, DEKRA SE, TUV SUD, Applus+, and DNV GL.
Source: VynZ Research