Cybersecurity in Oil and Gas – Thematic Research

The Colonial Pipeline attack in May 2021 was a wake-up call that highlighted the vulnerability of the oil and gas industry to cyber threats. Cyber threats have always presented a risk to oil and gas companies. However, several factors, such as COVID-19 and the industry’s digitalization, have heightened the sector’s vulnerability.

As critical national infrastructure, oil and gas companies are key targets for cybercriminals. Cyberattacks on oil and gas companies promise maximum disruption and extortion opportunities. As a result, leading oil and gas companies are fortifying their cybersecurity posture by investing heavily in this theme. Companies that maintain cybersecurity as a central tenet of their digital strategy stand to gain the most, however, companies failing to sufficiently invest in cybersecurity face financial and reputational harm. Finally, technology vendors that recognize the industry’s specific requirements, such as the challenge of protecting aging industrial assets, will become leaders within the oil and gas cybersecurity market.

What is the impact of cybersecurity on the oil & gas market?

The COVID-19 pandemic changed the operating environment of oil and gas companies and catalyzed internal change within the industry. More generally, the pandemic saw an increase in cyberattacks as attackers exploited the unprecedented nature of the situation to target cyber-naïve, remote-working employees.

Oil and gas companies are waking up to the challenge of ESG and increasingly recognize its importance to investment decisions within their businesses. Although ESG contains three pillars, environmental, social, and governance, the first aspect is often seen as oil and gas companies’ biggest weakness. Additionally, progress on environmental issues has been slow, with events such as COVID-19 and the Russia-Ukraine war shifting focus away from longer-term strategies such as the industry’s energy transition.

Technologies such as AI, blockchain, cloud computing, IoT, robotics, VR, and AR can offer tangible benefits to oil and gas companies. As a result, companies have heavily invested in these technologies in recent years to streamline their operations and gain an edge over their competitors. However, integrating these technologies into oil and gas operations also comes with significant risks. The digitalization wave in the oil and gas industry is creating new access points in industrial networks for hackers to exploit. As technology develops, from mobile to the cloud to IoT, the level of complexity needed for organizations to maintain a cyber-aware stance also increases.

What are the key cybersecurity value chains?

The key cybersecurity value chains can be divided into three segments: hardware, software, and services.

Hardware

With chips now being used in mission-critical servers and safety-critical applications, protecting chips from cyberattacks is becoming more critical and more expensive. Systems vendors such as Apple and Amazon are increasingly designing their chips rather than buying commercially developed devices and intellectual property (IP) created by third-party developers.

Software

The software element of the cybersecurity value chain comprises the following areas: identity management, network security, endpoint security, threat detection & response, cloud security, data security, email security, application security, unified threat management, and vulnerability management.

Services

The services element of the cybersecurity value chain comprises the following areas: managed security services, post-breach response services, and risk & compliance services. Services are typically outsourced because of the complexity of addressing cybersecurity-related issues, such as staying on top of vulnerabilities, identifying & responding to threats, and meeting compliance requirements.

Which are the leading oil & gas companies that are deploying cybersecurity?

The leading oil & gas companies that are deploying cybersecurity are BP, ConocoPhillips, Eni, Equinor, ExxonMobil, and OMV.

Which are the specialist cybersecurity vendors in the oil & gas market?

The specialist cybersecurity vendors in the oil & gas market are Kognitiv Spark, Mission Secure, Otorio, Sectrio, Siemens Energy, and ViaSat.

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Market Report Overview

Scope

• The detailed value chain is comprised of hardware, software, and services. The value chain is further broken down into chip-based security, identity management, network security, endpoint security, threat detection and response, cloud security, data security, email security, application security, unified threat management, vulnerability management, managed security services, post-breach response services, and risk and compliance services. Leading and challenging vendors are identified across all the value chain’s segments.
• Challenges the oil and gas sector is currently facing are outlined, and how these interact with the theme of cybersecurity are explored. Details of case studies of how oil and gas companies are boosting their cybersecurity posture are also given.
• Forecasts of cybersecurity revenues to 2025 are split by hardware, software, and services. An overview of key mergers and acquisitions between oil and gas companies and cybersecurity vendors between March 2021 to April 2022 is provided. Comprehensive industry analysis is also provided, looking at company filings, hiring, and social media trends related to cybersecurity within the oil and gas sector.
• A timeline highlighting key milestones in the relationship between cybersecurity and the oil and gas sector is given. A list of leading cybersecurity technology vendors, a separate list of cybersecurity vendors specific to oil and gas, and leading industry adopters are provided. Finally, thematic scorecards rank integrated oil and gas companies on 10 themes including cybersecurity.

Key Highlights

The Colonial Pipeline attack in May 2021 was a wake-up call that stoked cybersecurity concerns in the oil and gas industry

and beyond. GlobalData’s Emerging Technology: Sentiment Analysis Q1 2022 illustrates that the reverberations from this

event are still being felt. Cybersecurity was ranked the second most disruptive theme behind artificial intelligence (AI),

with just under 63% of respondents indicating that they expected cybersecurity to disrupt their industry in the next year. The critical nature of oil and gas infrastructure in an increasingly unstable world will heighten the risk of cyberattacks. On

March 21, 2022, President Biden said intelligence indicated Russia was exploring a cyberattack against the US. He urged

critical infrastructure owners and operators to “accelerate efforts to lock their digital doors.” The capacity for severe

disruption, combined with the convergence of OT and IT and inadequately protected oil and gas infrastructure, will see

oil and gas companies become prime targets during future conflicts. The ever-increasing threat of cyberattacks will drive an increase in cybersecurity spending. Global cybersecurity revenues

are expected to reach $198 billion in 2025, recording a compound annual growth rate (CAGR) of 9.5% between 2020 and

2025. The energy industry will be an important driver of increasing cybersecurity revenues globally. Cybersecurity is the most mentioned technology theme in oil and gas company filings. In 2021, cybersecurity appeared

over 10,800 times, an 11% increase from the previous year. This illustrates how events such as the cyberattack on the

Colonial Pipeline have increased engagement with this theme, making it a chief concern for the industry.

Reasons to Buy

• To understand the impact cybersecurity is having on the oil and gas industry.
• To identify the emerging trends in this theme and how these developments might advance in the future.
• Learn about the different use cases of cybersecurity in oil and gas and how cybersecurity relates to the sector’s challenges. View market forecast data for cybersecurity technology up to 2030.
• Source the leading cybersecurity vendors for the oil and gas sector from our winners lists and shortlist potential partners based on their areas of expertise. GlobalData’s thematic research ecosystem is a single, integrated global research platform that provides an easy-to-use framework for tracking all themes across all companies in all sectors. It has a proven track record of identifying the important themes early, enabling companies to make the right investments ahead of the competition, and secure that all-important competitive advantage.