The New Energy Landscape: What Leading Companies Need to Know

  The New Energy Landscape: What Leading Companies Need to Know

      Booz Allen Announces Top Six Oil and Gas Industry Trends for 2014

Business Wire

MCLEAN, Va. -- October 22, 2013

Today’s oil and gas industry executives – including control room operators
monitoring use data, chief information security officers analyzing the
potential cyber security risks of a new IT system, and oil rig managers
discussing drilling sites with geologists – are making business decisions in
an interconnected landscape of risks and rewards. Success demands balancing
the dizzying array of new regulations, cutting edge technology, and emerging
threats and opportunities that are ever present in this industry.

“Partnering with our oil and gas clients, we examine the near and long-term
trends for this industry, and it is striking to see how regulation, the cyber
threat environment, and internal challenges are converging to shape the path
forward,” said Emile Trombetti, senior vice president, Booz Allen. “It is
critical that industry leaders consider how these trends provide challenges
and opportunities for their organizations that can ultimately help them better
prioritize and meet their strategic and business goals.”

Booz Allen Hamilton has identified the six key trends that are poised to
greatly impact the oil and gas sector of tomorrow, and that what every oil and
gas executive needs to know today.

Top Six Energy Industry Trends for 2014:

     The technology supply chain will increase the need for cyber risk
     management. Oil and gas companies recognize that embracing networked
     infrastructures allows them to more efficiently operate their business,
     and in doing so, they increasingly rely upon vendor materials, products
1.  and services. However, the industry is only now coming to terms with the
     cyber risk management challenges created by a more open network and
     increased reliance on the technology supply chain. Oil and gas leaders
     must address the weighty task of assessing the security of third-party
     vendors and protecting critical business assets from those who should not
     have access or who wish to disrupt the business.
     Cyber risk management will become more customized. Every oil and gas
     company stands to be hacked, and only so much can be done to thwart this
     threat. Companies must create unique approaches to minimize the impact of
2.   an attempted attack, and protect critical assets. In particular, oil and
     gas companies need to focus on developing comprehensive security risk
     management plans tailored to the circumstances when entering high-risk
     environments, such as ventures into new geographic locations, markets and
     Future competitive advantages depend on technological innovation. Until
     recently, oil and gas companies did not innovate beyond what was required
3.   to pull resources out of the ground with a reasonable amount of success.
     However, there has been a noticeable shift as companies begin to view
     technology as a new frontier for competitive advantage.
     Oil and gas companies are using the latest ideas, such as mobility, cloud
     computing, and knowledge management, and wrapping them around their
     current processes to make everything work better. However, as innovation
     takes off, companies must turn their attention to protecting the R&D that
     went into creating this intellectual property, which creates another
     layer of security that must then be implemented.
     Striking the right balance between strong cyber risk management and
     regulation will become more challenging. Regulations help companies
     secure themselves from cyber threats. However, regulations apply a
     one-size-fits-all method to security that does not take into account each
4.   company’s “attack surface,” the unique vulnerabilities that come with its
     specific business processes. Often there are competing priorities between
     addressing what is required by regulation and what is genuinely needed at
     the time to effectively protect the company’s systems from cyber
     Also, firms must always stay abreast of the constantly changing
     regulatory environment. Just as energy companies achieve compliance under
     current regulations, new regulations are developed. Oil and gas companies
     must balance a host of issues, such as compliance with environmental
     regulations, while balancing geopolitical issues that can have material
     impact on the bottom line.
     An aging workforce is creating unique risk management, infrastructure,
     and HR challenges. The oil and gas industry is facing a shrinking talent
     pool for those with specialized expertise. Most individuals who have the
     institutional and technological “know how” about their organization’s
     specific cyber risks and operations are looking toward retirement. This
5.   creates a knowledge gap that younger employees cannot meet on their own,
     and requires oil and gas leaders to work across their business to
     capture, retain, and integrate human capital intelligence. According to
     Ernst & Young, nearly 90 percent of senior human resources executives at
     22 top international oil and gas companies believe their industry faces a
     talent shortage and call the problem one of the top five business issues
     facing their companies.
     Data will continue to create differentiators. Oil and gas companies are
     facing an explosion in the amount and types of data that their assets
     generate, yet they risk being less competitive if they do not make this
     data work for them. Organizations must also understand that while their
6.   data presents business opportunities, it also raises certain challenges.
     For example, industry leaders must determine how to analyze and present
     their data in a way that allows the firm to create action, both in terms
     of driving business strategies and in understanding anomalies associated
     with their critical assets.

A recent ABI Research study predicted that cyber attacks against oil and gas
infrastructure will cost companies $1.87 billion by 2018: “Cyber Risk
Management is now a Board level risk that every company involved in Oil and
Gas production must address. Wherever there is an intelligent device, whether
it be a complex set of devices controlling a oil platform, or even a simple
device that controls the opening and closing of a valve on the pipeline, they
could be at risk of being controlled by an unauthorized entity. Oil and Gas
executives are becoming more resigned to the fact that much more must be done
in executing an effective cyber risk management program.”

Booz Allen works with a variety of oil and gas industry firms to provide a
carefully curated set of solutions that help them gain a competitive advantage
and manage a wide spectrum of issues. For example, Real Time Analytics
resources better inform capital project management programs and help companies
determine where and when to invest. Booz Allen’s industry expertise gives oil
and gas companies access to a diverse array of institutional experts around
the world who understand the clients’ unique challenges and opportunities.

About Booz Allen Hamilton

Booz Allen Hamilton is a leading provider of management consulting,
technology, and engineering services to the U.S. government in defense,
intelligence, and civil markets, and to major corporations, institutions, and
not-for-profit organizations. Booz Allen is headquartered in McLean, Virginia,
with a MENA headquarters in Abu Dhabi, employs more than 23,000 people, and
had revenue of $5.76 billion for the 12 months ended March 31, 2013.



Booz Allen Hamilton
Media Contact:
Carrie Lake 703-377-7785
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