Times have been tough for the oil and gas (O&G) industry. Since the collapse of oil prices in 2014, the global O&G industry has been looking to reduce operational costs and increase both productivity and efficiency, all the while dealing with heightened security requirements.
Times have been tough for the oil and gas (O&G) industry. Since the collapse of oil prices in 2014, the global O&G industry has been looking to reduce operational costs and increase both productivity and efficiency, all the while dealing with heightened security requirements.
Increasing security spending, though, is tough when margins are down as cost-cutting efforts are in effect. At the same time, recent cyber and terrorist attacks on O&G facilities have only highlighted the need for stronger security, both physical and cyber.
The Current Market
The global oil and gas security and service market size is estimated to reach US$33.9 billion by 2020, at a CAGR of 5.2 percent from 2015 to 2020, according to a report by MarketsandMarkets.
“If you look at the places where we’re being asked to provide security it’s been driven by either incursions or terrorist activity, locally or on other sites. Growth is being driven by direct reaction to this activity and feeling the need to protect their facilities to a higher and greater level,” said David Montague, Security Sales Director for EMEA at
FLIR Systems.
According to Bob Fryklund, VP of Research and Analyst at IHS Markit Energy, security in the O&G business has changed dramatically in recent years. This has been a result of the O&G business itself evolving due to the globalization of issues and trade and digitization.
Regardless, Fryklund said, “Security is still focused on the big five: operations, financial, environment, people and information, but the problems are more widespread and more inter-connected. Operation risks now contain components of cybersecurity, plant/facilities, third parties, environment and personnel. There has been strong growth in magnitude and in accountability for risks.”
Although the market is growing, new regulations, political turmoil and instability in the Middle East, alternative energy sources such as renewable energy, and stability and maturity of technologies to fulfill O&G companies’ unmet needs and operational concerns are still hampering growth, according to Derek Tan, Director of the Security Technology and Integration Center of Excellence in APAC at
Johnson Controls.
North America Leads Market Share
North America is expected to have the largest market share in O&G security; however, Latin America will grow at the highest CAGR from 2015 to 2020, according to MarketsandMarkets.
In terms of technology adoption, North America has been active in adopting the cloud and mobile technologies.
“There has been growth over the past several years in the North American market as exploration for oil and gas on the continent has expanded. Offshore drilling sites, onshore drilling sites and pipelines across North America have grown over the past decade as North American oil has contributed to a larger percentage of the world’s energy sources,” said Rob Borsch, Team Lead for Oil and Gas Practices at
Genetec.
Increased Confidence in the MEA
Despite the political and local instability in the Middle East and Africa (MEA), companies such as FLIR Systems is seeing a significant increase in demand from areas like Iraq.
“There’s more investment now that troubles are over and more confidence in the area. People seem to be investing more money. So I would say we’re seeing significantly more interest in our products in that region,” Montague said.
Montague pointed to increased demand in Africa as well, particularly for offshore O&G platforms. “Growth has been steady in that area for the last five or six years, so there’s continued interest — no decline that is significant.”
Pirates are one of the biggest challenges for offshore platforms in Africa. “If we look at the offshore platforms, we see people requesting radar particularly. We’ve seen a need for more long-range detection — radars and long-range thermal cameras — so people approaching these platforms with small vessels, such as pirates, can be detected,” Montague explained.
Dealing With Cybersecurity Threats
Cyberthreats have proven to be no joke, with hackers taking over critical systems and putting at risk a lot more than just data.
“Recent cyberattacks on national and organizational structures that targeted SCADA systems as well as desktop systems highlight the potential for significant impact on installations. The potential for systems to be compromised, leading to critical failures, is great. Coupled with increasingly converged security systems that may be vulnerable to attack, the risks from cyberattacks are high,” Barker said. “Factors such as user error, outdated systems and the use of portable devices such as tablets and smartphones increase the risk.”
Fryklund noted, “Cybersecurity is a bigger threat as we move to more automation and we send more data across the internet on operations. Much of the production data for wells is now sent over the internet. In refineries and chem plants, data on operations is sent. The ability to access it remotely provides opportunities for disruption and the ability to shut down power and communication.”
As such, it is imperative that the O&G industry is up to the task of shielding against cyberattacks and is capable of dealing with the risks of the digital transformation.
“The Framework for Improving Critical Infrastructure Cybersecurity, drafted by the NIST (National Institute of Standards and Technology), is a set of standards and best practices intended to assist critical infrastructure organizations in addressing cybersecurity risks. This framework helps companies adopt risk management best practices, and helps them to develop bespoke guidelines that effectively address cybersecurity risks,” Borsch said.
From a physical security standpoint,
network cameras are a point of vulnerability if not properly secured.
“Hacked network cameras can lead to the potential distribution of denial-of-service (DDoS) attacks, which could affect IT applications as well as security and safety services,” explained Andrea Sorri, Business Development Director of Government, City Surveillance and Cirtical Infrastructure at
Axis Communications. “It’s important to partner with a supplier that’s prepared to support you at every level. At Axis, cybersecurity is at the heart of everything we do. We have strict requirements for our own products and we’re working diligently with our partners to fight this threat.”