A case of Corporate Spying

Oil and natural gas intellectual property (IP) includes a company’s trade secrets, proprietary information, and research. This ranges from drilling equipment to pipeline insulation, which if stolen could result in lost revenue, lost employment, damaged reputation, lost investment for research and development (R&D), and interruption in production.

Who might steal your IP?

  • Domestic and foreign commercial rivals
  • Domestic and foreign start-up companies
  • Foreign Intelligence Officers (spies)
  • Disgruntled employees (insider threat)
  • Organized criminals

A good description of actual economic espionage was reported by the FBI. In 2012, two Chinese nationals were arrested by the FBI for attempting to pay $100,000 to a Project Manager employee for “Pipeline Insulation,” a trade secret belonging to a well-known US company. The two individuals were seeking the technology to open a plant in China to compete with US companies. They solicited the company’s employee via a newspaper ad seeking “technical talent” with 10 or more years’ experience in “Pipeline Insulation” and a willingness to work in Asia.

The Chinese nationals used low-tech and careless methods of collection. Given the high risk of getting caught, these individuals displayed minimal concern for possible repercussions of their actions. Outlined below are espionage indicators noted during the course of the FBI investigation:

  • Supplying a company insider with a requirements list through unclassified e-mail.
  • Seeking specific types of information at selected companies.
  • Targeting a 24-hour operational facility with the highest production of trade secrets, allowing for more opportunities to acquire technology.
  • Providing inconsistent information when confronted by plant management for trespassing.
  • Asking that trade secrets be provided on a thumb drive.
  • Knowingly purchasing documents with proprietary markings with the intention to remove the information.
  • Seeking a consultant who can travel to China two to three times a year to support plant developments

The example above is but a brief summary of threats in today’s world. Companies hold IP in drilling fluids, pipeline testing, chemical plant unit design, waste disposal, power generation, rig automation, geoscience data and analytics and much more.   These are all valuable commodities to bad actors bent on stealing them for profit or stealing market capture. This puts companies at extreme risk of loss of market share, profit and employment of US citizens. Now is the best time to review your physical security and cybersecurity defenses.

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