Newpark Resources, a key supplier to the oilfield industry has disclosed that it fell victim to a ransomware attack that disrupted access to critical systems and limited the functionality of certain business applications, last week.
The company, which provides drilling tools and equipment to oilfields, as well as other energy-related industries such as pipelines and petrochemicals, disclosed the incident in a regulatory filing with the U.S. Securities and Exchange Commission (SEC).
According to Newpark, the ransomware attack was detected on October 29, 2024. The company’s statement detailed that an unauthorized third party had gained access to some of its internal information systems. In response, Newpark quickly activated its cybersecurity response plan, engaging both internal resources and external advisors to investigate and contain the incident.
“Upon detection, the Company activated its cybersecurity response plan and launched an investigation internally with the support of external advisors to assess and contain the threat,” Newpark stated in the SEC filing.
The incident, the Newpark Resources cyberattack, has caused disruptions across various internal systems and has limited access to key applications essential to Newpark’s operations. This includes systems for financial reporting and other corporate functions. Despite these challenges, the company reassured stakeholders that its manufacturing and field operations have remained largely operational, thanks to established downtime procedures put in place to mitigate such risks.
However, the scope and impact of the attack, particularly regarding potential financial implications, are still being assessed.
Understanding the Financial Impact on Newpark Resources
While the attack’s full financial repercussions have yet to be determined, Newpark indicated that, based on the current assessment, it does not expect the incident to materially affect the company’s overall financial health. However, the company has committed to updating its disclosure should any significant changes arise as it continues to evaluate the extent of the attack.
The statement emphasized: “Based on the Company’s current knowledge of the facts and circumstances related to this incident, the Company believes that this incident is not reasonably likely to materially impact the Company’s financial condition or results of operations. Should any of the relevant facts and circumstances substantively change, the Company will make any required disclosures.”
Rising Cybersecurity Threats in the Energy Sector
Newpark Resources is not alone in facing ransomware threats. The oil and gas industry, which is critical to global infrastructure and the economy, has been a frequent target of ransomware attacks. The industry’s significant role in the global economy and its susceptibility to operational disruptions make it particularly attractive to cybercriminals who aim to exploit the potential for ransom payments to resume vital operations.
High-profile cyber incidents in the sector over recent years highlights the widespread nature of this threat. In 2021, the Colonial Pipeline cyberattack disrupted fuel supplies across the Eastern United States, causing panic buying and fuel shortages. Similarly, other companies such as Shell, Halliburton, and Oiltanking have experienced ransomware incidents that prompted federal agencies to tighten cybersecurity regulations. These attacks have led to stronger mandates for companies in the energy sector to adopt more robust cybersecurity protocols.
Global Concerns Over Cybersecurity in Energy
The need for improved cybersecurity in the energy sector extends beyond North America. For instance, in September 2024, Iranian Vice President Mohammad Reza Aref expressed concern over the country’s increasing vulnerability to cyberattacks targeting fuel stations. His comments came amid discussions of fuel price hikes, which only add to the pressure on a sector already strained by cyber threats. Cyberattacks on Iran’s fuel stations have caused nationwide disruptions in fuel supply, illustrating the impact that similar incidents could have on other nations if such attacks are not effectively mitigated.
At a recent ceremony for the introduction of Iran’s new Minister of Oil, Aref highlighted these breaches and called for urgent security enhancements to protect the country’s energy infrastructure. As incidents like these grow more frequent, they draw attention to the shared cybersecurity challenges faced by oil-producing nations globally.
Strengthening Cybersecurity for Energy Infrastructure
The U.S. government, along with other global authorities, has made significant strides in establishing tighter cybersecurity measures for the energy sector. This includes mandating critical infrastructure companies to adhere to stricter cybersecurity standards, increasing threat monitoring, and encouraging information-sharing between the government and private sector to better identify and prevent potential threats. Companies within the sector are now more likely than ever to implement strong cyber defenses and prepare for the possibility of attacks, as the regulatory landscape continues to evolve.
As for Newpark Resources, the company’s swift response to the ransomware attack demonstrates the value of having a prepared cybersecurity response plan in place. By quickly activating its incident response plan, Newpark was able to limit the attack’s impact on its core operations and continue its manufacturing and field work with minimal disruption.
