Protecting the oil and gas industry from digital threats

Padlock against circuit board/cybersecurity background
(Image credit: Future)

The oil and gas industry is a cornerstone of the global economy, providing millions of jobs and powering the energy needs of homes, businesses, and transport systems across the globe. The industry has heavily embraced digital transformation, and investment in digital technologies is set to surpass $20 billion this year, with an acute focus on IoT, analytics, remote monitoring, and cloud computing.

Amidst this growing digital transformation, the sector is in the crosshairs of sophisticated cyber threats. The industry's unique structure, divided into upstream, midstream, and downstream segments, each with unique characteristics, adds complexity to the cybersecurity challenge.

The upstream segment, responsible for the exploration and extraction of raw materials, is often spread across vast geographical areas, making cybersecurity oversight a daunting task. The midstream sector, tasked with transportation and storage, faces similar challenges, compounded by the reliance on third-party vendors. Meanwhile, the downstream segment, which focuses on refining and distribution, often relies on legacy systems, lacking effective measures to fend off modern cyber threats.

So, navigating the intricate cybersecurity landscape of the oil and gas industry is no easy feat. Let's delve deeper into this sector's unique challenges and explore how businesses can fortify this critical industry against the ever-evolving cyber threat landscape.

Justin Woody

Justin Woody is Senior Director Industrial Strategy at Claroty.

The unique challenges of cybersecurity in the Oil and Gas industry

One of the primary challenges of cybersecurity is driven by the industry's struggle with fluctuating costs. The price of oil and gas barrels is subject to various influences, including geopolitical tensions, economic fluctuations, and environmental factors. The industry is also influenced by growing political headwinds against new oil and gas developments, with protests for oil bans and pipeline permit cancellations. This volatility creates a challenging landscape for long-term planning and investment, particularly in upstream operations directly tied to oil prices.

Even sophisticated extraction methods like offshore drilling and oil sand refining may halt when prices drop significantly. This financial pressure often leads companies to cut back on expenditures, and cybersecurity initiatives are often among the first to be pruned. However, this short-term cost-saving approach can later lead to substantial financial losses, reputational harm, and regulatory penalties.

The depletion of exploration and production sources further exacerbates the struggle with fluctuating costs. Many traditional sources of oil and gas have already been explored to the point of depletion, leading to more expensive and complicated methods such as oil sands, offshore drilling, and fracking. These methods not only raise the cost of finding new sources, making upstream companies even more exposed to the price of oil, but also increase the industry's reliance on operational technology (OT) systems, industrial control systems (ICS), and supervisory and data acquisition (SCADA) systems. The interconnectivity of such systems has further expanded the attack surface, making them more vulnerable to cyberattacks.

Regulations and standards represent another significant challenge. In the wake of recent cyberattacks, like Colonial Pipeline and the ARA refining hub attack, regulatory changes have been introduced, such as the new TSA directive for pipeline owners and operators, IEC standards, ISO/IEC 27001, and NIST CSF. Keeping up with this constantly changing regulated environment can be costly for organizations, especially for small and mid-sized companies lacking dedicated compliance teams or partnerships with cybersecurity vendors.

Most importantly, the industry grapples with ageing infrastructure, especially upstream and downstream sectors. Much of this infrastructure requires significant repairs or replacements, but the prohibitive costs often deter companies from taking necessary action. These legacy systems, often lagging behind on critical software updates or security patches, are left vulnerable to cyberattacks, further amplifying risk.

Given these challenges, it's evident that a robust cybersecurity strategy is an essential component for the survival and success of the oil and gas industry.

Best practices for making Oil and Gas resilient to advanced threats

Addressing the unique security challenges of the oil and gas sector necessitates a deep understanding and comprehensive visibility of all cyber-physical systems (CPS) within the OT environment. A detailed, real-time inventory of assets across drilling sites, platforms, pipelines, plants, and refineries is the cornerstone of industrial cybersecurity. Without this visibility, securing unknown or misunderstood assets becomes an insurmountable task.

Seamlessly integrating existing IT tools and workflows with OT is another crucial aspect. Since CPS in the oil and gas industry often rely on proprietary protocols and legacy systems, they may not be compatible with traditional IT systems. Instead of expanding their technology stacks, companies should seek solutions that mesh with their existing infrastructure, extending IT tools and workflows to OT environments.

Moreover, it's vital to extend IT security controls and governance to OT. Operational environments such as SCADA systems, ICS, remote terminals, and human machine interfaces often lack cybersecurity controls and consistent governance in IT environments. Companies should strive for unified security governance to bridge this gap, fostering operational and cyber resilience.

Most importantly, it’s critical for oil and gas companies to employ network segmentation. By segregating critical systems and sensitive data, companies can restrict the movement of malware and limit the impact of attacks. Segmentation also allows for the implementation of tailored security policies, effectively catering to the distinct needs of each subnetwork.

Adopting these practices can help oil and gas companies, whether upstream, midstream, or downstream, to effectively safeguard their critical infrastructure and devise cybersecurity strategies tailored to their unique needs. With full visibility and control of their OT environments, companies can meet dynamic regulatory standards, mitigate industry challenges, and, most importantly, prevent catastrophic cybersecurity incidents.

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Justin Woody is Senior Director Industrial Strategy at Claroty.