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March 10, 2016
Leaders in connected production operations will prioritize cybersecurity
By: Chuck Pierce

Internet of Things devices—when thoroughly integrated—can lead to highly efficient oil and gas production operations. Networked-connected assets, however, potentially opens doors for cyber intruders.

Automation, SCADA and Internet of Things devices allow oil and gas companies to optimize and remote-control equipment (e.g., turn pumps on and off, or change pump speed to react to well conditions), which can result in production gains of 1 to 4 percent. However, these systems need to be protected end-to-end with encrypted devices and networks so wells cannot be hacked.

The Industrial Control Systems Cyber Emergency Response Team reported 245 attacks in the United States against control systems from October 2013 to September 2014, with the highest percentage (32 percent) on systems governing energy production and distribution.1 This is one of many statistics that help explain why cyber security has become a major focus in corporate boardrooms.

While there is some concern about data not residing within company-managed facilities, most business people see the logic of cloud storage: It’s a way to adjust scale as needed and hold down rising costs for information technology. While some are still wary of entrusting data storage to outsiders, a useful analogy is to consider why most of us trust banks with securing our funds. Banks adhere to strict protocols and compliance and leverage economies of scale to provide the security for multiple customers’ funds. In the cloud, experienced service providers keep up with leading practices and scale security features into their services to maintain digital data security at the highest level, similar to the banks’ security approach.

Secure sharing of data among business partners is also an enabler of innovation. With the right platform and security features, companies can implement virtual spaces where business partners know their information is safe and can collaborate on devising better solutions. Suppliers of chemicals, for example, might design a more effective treatment when an oil company allows access to its production data, enabling the chemical company to apply analytics to improve its product design.

Cyber security is now a fundamental enabler for sustainable operations and making performance gains. The early adopters of secure systems are likely to have a more manageable cost structure, will be more likely to survive the low-price environment, and then thrive once oil and gas prices rebound.

1ICS-CERT Monitor Sept. 2014 - Feb. 2015.

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