Cybersecurity is a risk factor with an unprecedented impact on the Oil and Gas industry

Oil and natural gas products' extraction, transportation and refining technologies use pretty complex systems based on cutting-edge technologies. Those systems, however, are vulnerable to cyber-attacks, making cyber security critical to the resilience of the oil and gas industry.

The oil and gas industry is vital to the global economy and countries' national security. For this reason, protecting their infrastructure from cyber-attacks is critical and fundamental to maintaining the security of people and societies and the stability of the economy and markets.

A successful cyber-attack against oil and gas companies is a significant risk factor of great importance as it could have serious consequences such as business interruptions, financial losses, reputational damage to companies or the industry, and even environmental impacts. Cyber threats are multiplying and evolving, putting critical infrastructure security at a crucial juncture.

Especially when geopolitical conflict arises, such as the war in Ukraine, the oil and gas sector, being the operator of critical infrastructure, is the target of cyber-attacks essentially against nation-states that attack them with political, economic, and strategic motivations. The Cyber Resilience in Oil and Gas initiative sets out six guiding principles for cyber resilience specific to the oil and gas industry:

1. Cybersecurity as a business enabler

Oil and gas companies should create a comprehensive cyber governance model. There will need to be an adequate proportion of employees, executives and board members who have completed cyber security awareness training programs. These include board members, C-suite executives, IT, engineering, HR and finance staff. There should also be several collaborative engagements with cyber business units. Critical cyber security control actions should be identified. This may include measures related to executive management accountability and responsibility for efforts to address cybersecurity risk.

2. Resilience by design

Oil and gas companies should promote cybersecurity resilience to become part of the corporate culture. They should require corporate management to implement cybersecurity resilience standards and values and document progress toward that goal. By design, companies should require many business unit processes to adopt and integrate cyber resilience practices. They should demand a high percentage of employees to be cyber-educated and immediately aware of the risk involved. They should also require many projects that, by design, serve as a model covering cyber resilience. They should also plan for the average time to detect, respond to, and recover from a critical cyber incident that could result in a failure or outage of companies' systems.

3. Corporate responsibility for cyber resilience

Oil and gas companies must consider cyber risks to the organizations and the broader ecosystem. They should examine the organizations' cyberculture and practices and explore how to manage these risks. Cyber resilience should explore the cyber-related risks that organizations introduce into the ecosystem, the potential negative impacts and the corresponding reputational risk. They should also assess the immediate and downstream effects of cyber risks on all aspects of the businesses. Finally, they should plan how to communicate a potential cyber threat.

4. Holistic risk management approach

Oil and gas companies should ensure that cyber risks are managed and mitigated across the oil and gas ecosystem by providing adequate mandates, funds, resources and accountability for cyber resilience programs and exposures. Cyber resilience should consider the risks to the organization, whether financial resources and personnel are sufficient to meet the appropriate holistic cyber risk management objectives, whether the current risk management approach incorporates cyber risks from the supply chain, and how the organization manages unknown cyber threats.

5. Ecosystem-wide collaboration

Firms should encourage and empower the management team to create a collaborative culture to effectively oversee, monitor and control cybersecurity risks across the ecosystem. Cyber resilience should be explored for how the organization engages with collaboration platforms and cyber resilience action groups, whether the cyber resilience action plan covers the organization's ecosystem, and how the lessons from collaborative activities enhance organizational and ecosystem cyber resilience practices.

6. Ecosystem-wide cyber-resilience plans

Oil and gas firms should encourage and empower the management team to create a collaborative culture to oversee, monitor and control cybersecurity risks across the ecosystem. For cyber resilience, it should be explored how the organizations engage with collaboration platforms and cyber resilience action groups, whether the cyber resilience action plan covers the organization's ecosystem, and how the lessons from collaborative activities enhance organizational and ecosystem cyber resilience practices.

Cyber resilience is essential to conducting business in the oil and gas sector

Digitization has improved almost all aspects of the oil and gas business chain, creating unprecedented industry efficiencies and new operating models. However, the chain is vulnerable to cyber-attacks, with the potential to have potentially catastrophic consequences, including physical, environmental and security issues.

Both individually and across the industry, companies in the oil and gas industry need to develop their cyber resilience further. The six principles of cyber resilience will help organizations systematically and comprehensively adopt resilient practices and corporate cultures while preparing them to meet the growing threat of cyber-attacks.

We may need to be prepared

Oil and gas organizations that implement strong governance ensure resilience by design, build a resilient culture and holistically consider cyber risks when allocating resources will be better positioned to deal with cyber-attacks. Enhancing cyber resilience will reduce risk across the oil and gas industry and enable automation and digitization to improve efficiency and enhance reliability by making supply chains healthy and competitive.

In the opposite case, if there is an inability to apply the six points mentioned and, therefore, a failure to deal with cyberattacks, whether you are an investor or trader, you should be prepared to face significant risks, the scope of which is unknown to date. A few years ago, the pandemic proved how easy it is to create instability from a threat that no one could or did not want to accept as a large-scale risk. But in the end, it was a risk with a broad and significant global impact, which managed to paralyze the societies and economies of the entire planet.

The risks of large-scale cyber-attacks are also real risks that everyone must accept that they exist—especially those who manage the critical sectors of society and the economy. If there is no adequate preparedness to be dealt with them, be prepared. Cyber-attacks are likely to have a broad and significant impact as critical energy sources and infrastructures, such as oil and gas, can be targeted, creating an unprecedented disruption to societies, economies and markets.