Oil and Gas Industry Accounted for 25% of Victims in June’s NotPetya Ransomware Attack; Frequency of Incidents Growing by
350% Year on Year
ADIPEC 2017’s Security in Energy Conference Will Focus on Strategies to Mitigate Cyber Crime Risks and Deploy Defence Mechanisms to Protect Critical Industry Systems and Infrastructure
Abu Dhabi, UAE – 03 October 2017 – Organisers of the second annual Security in Energy conference, to be held in Abu Dhabi in November, say that oil and gas has been exposed as a prime target for cyber criminals after the industry was singled out during international ransomware attacks.
Co-located within the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), Security in Energy recognises the increasingly critical importance of IT systems to oil and gas operations, and follows two major ransomware attacks in the first half of 2017.
The second of these, the NotPetya attack at the end of June, appears to have specifically targeted oil and gas companies. According to analysis by Kaspersky Labs, just three business sectors accounted for around 80 per cent of targets. Oil and gas accounted for around 25 per cent, a close second to the finance sector, and just ahead of manufacturing.
“Cybercrime is a serious problem for any business, but recent incidents raise concerns that oil and gas companies will be high-priority targets for attacks,” said Christopher Hudson, President – Global Energy at dmg events, which organises ADIPEC in partnership with Abu Dhabi National Oil Company (ADNOC). “The Security in Energy conference provides a robust discussion specific to the needs of this industry, helping companies ensure that strong defences are in place.”
Recent reports predict the Middle East cyber security market will grow from US$11.38 billion in 2017 to US$22.14 billion by 2022. ADIPEC’s Security in Energy Conference delivers the latest market intelligence in energy security protocols, and places a spotlight on the best innovations, security practices and crisis planning within the industry.
Specific conference sessions will cover key topics in cyber security, including ransomware; the internet of things (IoT); the convergence of operating technology and IT; security and compliance risks in cloud computing; risk management for supply chain and business continuity and the use of big data and analytics. Keynote addresses will focus on the balance between investment and risk, and the impact of regional collaboration on oil and gas security, with discussions to include both defensive and offensive approaches to security.
The conference programme is planned to offer immediate relevance to oil and gas. For example, there will be a significant discussion of threats to critical infrastructure, where attacks could cause widespread operational disruption and safety risks. It will offer insights into and front-line protection strategies, whether for new systems, or by retrofitting of existing industrial control systems to build secure and resilient operations.
There will also be a dedicated Security in Energy zone within the ADIPEC exhibition halls.
“Illicit cyber activity is here to stay,” said Don Randall, Former Head of Security and Chief Information Security Officer for the Bank of England, who will be sharing his expertise during the conference. “But understanding the motivation of the perpetrators, with appropriate responses and education, can substantially reduce the risk and harm.”
The list of speakers will feature leading figures from organisations tasked with tackling cybercrime in the Middle East, including Ahmed Alshemaly, Director, Cyber Defense Centre, National Electronic Security Authority (NESA), United Arab Emirates; Eng. Ibrahim AlShamrani, Executive Director of Operations, National Cyber Security Center, Ministry of Interior, Saudi Arabia; and Mohammed Bushlaibi, Forensic Analyst, Telecommunications Regulatory Authority (TRA), United Arab Emirates. They will speak alongside renowned international experts.
According to Accenture’s High Performance Security 2016 Report, 96 cyberattacks were reported over 12 months by oil and gas company heads, while 55 per cent of oil and gas leaders say the need to fill cybersecurity gaps in end point or network security is their most pressing concern. The Cisco 2017 Annual Cybersecurity Report estimates that the frequency of ransomware attacks is growing by around 350 per cent each year. The tools to conduct an attack are easy to obtain and easy to use. Ransomware is even available as a software-as-a-service subscription.
While the number of attacks is increasing, there are concerns that some oil and gas companies have reduced their security budgets as they struggle to balance cost and risk at a time when finances are under pressure, leaving themselves dangerously exposed. The Security in Energy conference sessions will aim to bridge this awareness gap, emphasise the importance of building a solid defence platform against cyber-attacks and understanding the fallout of an attack and its implications to business.
"Cybercrime is a threat to the global economy,” said Sandip Patel, QC, a UK-based lawyer and leading international expert on prosecuting cybercrime cases in court, and one of the speakers at the Security in Energy conference. “Some estimates cost it at more than 445 billion dollars, but the true cost is far greater as many countries do not report on this."
By co-locating security within ADIPEC, one of the world’s most important strategic gatherings for top global oil and gas executives, Security in Energy ensures that the integrity of systems is part of a broader discussion of industry issues.
A company’s security protocols are generally in the capable hands of the CIO/CISO. However, in order for the protocols to be 100 per cent understood and delivered, it is the priority of the entire organisation, from the top-down and bottom-up, to ensure a solid framework and delivery. Bridging the vocabulary gap between security professionals and their CEO’s and senior management teams is vital to ensure they are all aligned on the ever-present security risks to their organisation.
“Reducing cost and improving efficiency are important messages in oil and gas today, and many companies are investing in technology to reduce their costs,” said Christopher Hudson. “Keeping that technology safe and secure needs to be a number one priority. It needs to be as much a concern for the Chief Executive Officer as it is for the Chief Information Officer.
“Security in Energy recognises that this is a core issue for a modern business, and cannot be pushed into a departmental silo.”
Held under the patronage of His Highness Sheikh Khalifa Bin Zayed Al Nahyan, President of the UAE, hosted by the Abu Dhabi National Oil Company (ADNOC), and organised by the Global Energy division of dmg events, ADIPEC is one of the world’s leading oil and gas events, and the largest in Africa and the Middle East.
ADIPEC will be held at Abu Dhabi National Exhibition Centre from 13 to 16 November 2017, with the Security in Energy Conference to be held on 14 and 15 November.
- ENDS –
Held under the patronage of the President of the United Arab Emirates, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, and organised by the Global Energy division of dmg events, ADIPEC is the global meeting point for oil and gas professionals. Standing as one of the world’s top energy events, and the largest in the Middle East and North Africa, ADIPEC is a knowledge-sharing platform that enables industry experts to exchange ideas and information that shape the future of the energy sector. The 19th edition of ADIPEC 2016 took place from 7-10 November at the Abu Dhabi National Exhibition Centre (ADNEC). ADIPEC 2016 was supported by the UAE Ministry of Energy, Masdar, the Abu Dhabi National Oil Company (ADNOC), the Abu Dhabi Chamber, and the Abu Dhabi Tourism & Culture Authority (TCA Abu Dhabi). dmg Global Energy is committed to helping the growing international energy community bridge gaps by bringing oil and gas professionals face to face with new technologies and business opportunities.
For media enquiries, please contact:
Senior Marketing Manager, DMG Events Global Energy
Twofour54, Park Rotana Offices, 6th Floor
PO Box 769256, Abu Dhabi, UAE
T: +971 (0)2 6970 515
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Mark Robinson (English): +971 (0)55 127 9764
Feras Hamzah (Arabic): +971 (0)50 798 4784
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It has been 21 years since Japanese upstream firm Inpex signed on to explore the Masela block in Indonesia in 1998 and 19 years since the discovery of the giant Abadi natural gas field in 2000. In that time, Inpex’s Ichthys field in Australia was discovered, exploited and started LNG production last year, delivering its first commercial cargo just a few months ago. Meanwhile, the abundant gas in the Abadi field close to the Australia-Indonesia border has remained under the waves. Until recently, that is, when Inpex had finally reached a new deal with the Indonesian government to revive the stalled project and move ahead with a development plan.
This could have come much earlier. Much, much earlier. Inpex had submitted its first development plan for Abadi in 2010, encompassing a Floating LNG project with an initial capacity of 2.5 million tons per annum. As the size of recoverable reserves at Abadi increased, the development plan was revised upwards – tripling the planned capacity of the FLNG project to be located in the Arafura Sea to 7.5 million tons per annum. But at that point, Indonesia had just undergone a crucial election and moods had changed. In April 2016, the Indonesian government essentially told Inpex to go back to the drawing board to develop Abadi, directing them to shift from a floating processing solution to an onshore one, which would provide more employment opportunities. The onshore option had been rejected initially by Inpex in 2010, given that the nearest Indonesian land is almost 100km north of the field. But with Indonesia keen to boost activity in its upstream sector, the onshore mandate arrived firmly. And now, after 3 years of extended evaluation, Inpex has delivered its new development plan.
The new plan encompasses an onshore LNG plant with a total production capacity of 9.5 million tons per annum. With an estimated cost of US$18-20 billion, it will be the single largest investment in Indonesia and one of the largest LNG plants operated by a Japanese firm. FID is expected within 3 years, with a tentative target operational timeline of the late 2020s. LNG output will be targeted at Japan’s massive market, but also growing demand centres such as China. But Abadi will be entering into a far more crowded field that it would have if initial plans had gone ahead in 2010; with US Gulf Coast LNG producers furiously constructing at the moment and mega-LNG projects in Australia, Canada and Russia beating Abadi’s current timeline, Abadi will have a tougher fight for market share when it starts operations. The demand will be there, but the huge rise in the level of supplies will dilute potential profits.
It is a risk worth taking, at least according to Inpex and its partner Shell, which owns the remaining 35% of the Abadi gas field. But development of Abadi will be more important to Indonesia. Faced with a challenging natural gas environment – output from the Bontang, Tangguh and Badak LNG plants will soon begin their decline phase, while the huge potential of the East Natuna gas field is complicated by its composition of sour gas – Indonesia sees Abadi as a way of getting its gas ship back on track. Abadi is one of Indonesia’s few remaining large natural gas discoveries with a high potential commercialisation opportunities. The new agreement with Inpex extends the firm’s licence to operate the Masela field by 27 years to 2055 with the 150 mscf pipeline and the onshore plant expected to be completed by 2027. It might be too late by then to reverse Indonesia’s chronic natural gas and LNG production decline, but to Indonesia, at least some progress is better than none.
The Abadi LNG Project:
Headline crude prices for the week beginning 10 June 2019 – Brent: US$62/b; WTI: US$53/b
Headlines of the week
Midstream & Downstream
A month ago, crude oil prices were riding a wave, comfortably trading in the mid-US$70/b range and trending towards the US$80 mark as the oil world fretted about the expiration of US waivers on Iranian crude exports. Talk among OPEC members ahead of the crucial June 25 meeting of OPEC and its OPEC+ allies in Vienna turned to winding down its own supply deal.
That narrative has now changed. With Russian Finance Minister Anton Siluanov suggesting that there was a risk that oil prices could fall as low as US$30/b and the Saudi Arabia-Russia alliance preparing for a US$40/b oil scenario, it looks more and more likely that the production deal will be extended to the end of 2019. This was already discussed in a pre-conference meeting in April where Saudi Arabia appeared to have swayed a recalcitrant Russia into provisionally extending the deal, even if Russia itself wasn’t in adherence.
That the suggestion that oil prices were heading for a drastic drop was coming from Russia is an eye-opener. The major oil producer has been dragging its feet over meeting its commitments on the current supply deal; it was seen as capitalising on Saudi Arabia and its close allies’ pullback over February and March. That Russia eventually reached adherence in May was not through intention but accident – contamination of crude at the major Druzhba pipeline which caused a high ripple effect across European refineries surrounding the Baltic. Russia also is shielded from low crude prices due its diversified economy – the Russian budget uses US$40/b oil prices as a baseline, while Saudi Arabia needs a far higher US$85/b to balance its books. It is quite evident why Saudi Arabia has already seemingly whipped OPEC into extending the production deal beyond June. Russia has been far more reserved – perhaps worried about US crude encroaching on its market share – but Energy Minister Alexander Novak and the government is now seemingly onboard.
Part of this has to do with the macroeconomic environment. With the US extending its trade fracas with China and opening up several new fronts (with Mexico, India and Turkey, even if the Mexican tariff standoff blew over), the global economy is jittery. A recession or at least, a slowdown seems likely. And when the world economy slows down, the demand for oil slows down too. With the US pumping as much oil as it can, a return to wanton production risks oil prices crashing once again as they have done twice in the last decade. All the bluster Russia can muster fades if demand collapses – which is a zero sum game that benefits no one.
Also on the menu in Vienna is the thorny issue of Iran. Besieged by American sanctions and at odds with fellow OPEC members, Iran is crucial to any decision that will be made at the bi-annual meeting. Iranian Oil Minister Bijan Zanganeh, has stated that Iran has no intention of departing the group despite ‘being treated like an enemy (by some members)’. No names were mentioned, but the targets were evident – Iran’s bitter rival Saudi Arabia, and its sidekicks the UAE and Kuwait. Saudi King Salman bin Abulaziz has recently accused Iran of being the ‘greatest threat’ to global oil supplies after suspected Iranian-backed attacks in infrastructure in the Persian Gulf. With such tensions in the air, the Iranian issue is one that cannot be avoided in Vienna and could scupper any potential deal if politics trumps economics within the group. In the meantime, global crude prices continue to fall; OPEC and OPEC+ have to capability to change this trend, but the question is: will it happen on June 25?
Expectations at the 176th OPEC Conference