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Energy & Environment

In The Increasingly High-Tech Oil Business, Cyber Security Is Becoming Essential

Some say it’s a recent shift, one companies have to make for long-term survival.


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Cisco Systems
With increasing investments in efficiency-boosting technology, the oil and gas industry is focusing more on cyber security.

For decades, drilling for oil and gas has involved a good deal of sweat, dirt and dangerous equipment.

But now, it's increasingly going high-tech.

More and more companies are putting their data on the “cloud” and going digital in other ways. It's good for the bottom line – but is it safe? That’s a question the industry is tackling as it considers the role of cyber security in the oilfield.

To understand where the oil industry is headed, you have to understand how far it’s come.

In 1942, a government educational film called “The Evolution of the Oil Industry” painted an almost romantic picture of how the earliest wildcatters looked for black gold: “enterprising oil men” who weren’t able to get their hands on steam drilling equipment built “ingenious but primitive” drilling machines. The documentary noted that drilling with these improvised devices was “painfully slow.”

Now, it’s a little more advanced.

“A lot of times we'll go on a rig and they'll have 10,000 sensors,” says Thanh Nguyen, Data Center Practice Manager at Accudata Systems, a Houston information technology company.

“For those 10,000 sensors, it doesn't make sense to run a wire for each one, so we're connecting it wirelessly.”

Oil and gas companies are increasingly investing in cloud technologies, mobile devices and the like. Buzzwords like “Big Data” and the “Internet of Things” are becoming key to how they make money.

Nguyen's job is to help companies manage all that. He talks about one project for an offshore drilling company, one he says he can't identify by name.

“They built an operations center off of I-10, they can see all of their rigs, all the flows going in and out of the environment on screens,” he says. “So they're leveraging all this technology, giving them green, yellow, reds, really easy-to-see type of information in real time.”

An example of oilfield tech: a “360 virtual reality spherical app” developed for Shell by Dallas company 900lbs of Creative

That kind of technology makes it cheaper and easier to drill, which is a blessing in a downturn. But the more the industry looks like Silicon Valley, the more it becomes vulnerable to cyber attacks, or to a sloppy employee accidentally releasing some very valuable data.

Companies are taking these risks more seriously, in part because the downturn has given them time to.

At a recent cyber security conference in Houston, Apache Corporation's Vice President of Information Technology Mark Maddox said a couple years ago, it just wasn't top of mind.

“We were too busy to be secure in some cases, we were too busy to be good in some cases, because it was about just growth and expansion and speed more than returns,” he said, noting that attitude has changed at Apache.

He described a real shift from cyber security as an afterthought to an essential part of doing business.

“Two years ago, 90% of the decisions were made for convenience or speed or efficiency over security,” he said. “Now, I would say 90% of the decisions are made for security over that, and that’s a big change in the industry.”

Companies aren't just responding to possible threats.

In a recent survey of oil and gas risk managers, the majority of those that responded said their companies had lost confidential information, or had their operations disrupted by a security breach within the last year. (That independent survey was funded by a company that sells cyber security services.)

Charles McConnell, head of Rice University's Energy and Environment Initiative, says going forward, companies can't afford to treat cyber security like a luxury, and they can't wait for a big attack or security lapse to take it seriously.

“If it happens, when it happens, I think companies that have those kind of situations may not get the benefit in the marketplace of fixing it and then being okay,” he says. “But in fact, it might be their final problem, because they won't last.”

McConnell says the energy marketplace now demands tech security. He calls it a “fabric of the industry,” and companies that don't plan accordingly will, as he puts it, “end up in the dust.”

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