Halliburton faces approximately $35 million in costs due to a cyberattack in August.
In the third quarter, American multinational oilfield services company, Halliburton, reported an adjusted net income of $641 million on revenue of $5.7 billion. However, the company faced a significant setback when it was hit by a cyberattack in August, leading to data theft and the temporary shutdown of certain systems.
The attack is suspected to be linked to the threat group known as RansomHub, one of the most active in the world this year. As a result, Halliburton incurred charges of $35 million, and the incident impacted its free cash flow due to delayed billing and collections. The company's CEO, Jeff Miller, announced a 2 cents a share impact on the company's adjusted earnings due to the cyberattack and storms in the Gulf of Mexico.
The oil and gas sector, of which Halliburton is a significant player, has been expressing growing concerns about cybersecurity. The sector's critical infrastructure and the potential for severe disruptions from cyberattacks make it a prime target. Key concerns include operational disruptions, data protection, physical safety risks, and regulatory compliance.
Despite the cyberattack, Halliburton's expectations for free cash flow and cash returned to shareholders remain unchanged. The company does not expect to have significant new expenses related to the incident during the fourth quarter, according to CFO Eric Carre. Halliburton has also completed the implementation of SAP S4 in its first country, but plans to delay the project three to six months due to lessons learned from the cyber event. Related expenses will increase by $20 million to $30 million.
Moody's, a credit rating agency, issued a report in October noting that cybersecurity is an important focus in the oil and gas industry, with concerns about risk due to high insurance costs. Halliburton's CEO, Jeff Miller, expressed gratitude to the company's employees for their efforts during the attack and to customers for their support and collaboration.
It is worth noting that only 51% of companies in the oil and gas sector have standalone cyber insurance coverage, indicating a potential gap in preparedness against such attacks. The FBI and Cybersecurity and Infrastructure Security Agency issued a warning about RansomHub more than two months ago, underscoring the importance of vigilance in the digital landscape.
In conclusion, while the cyberattack on Halliburton has had a financial impact, the company remains optimistic about its future financial condition and operating results. The incident serves as a reminder of the increasing importance of cybersecurity in the oil and gas sector and the need for robust measures to protect against such threats.
- The oil and gas industry, including Halliburton, faces growing concerns about cybersecurity due to the critical infrastructure and potential for severe disruptions from cyberattacks.
- Key concerns in the sector include operational disruptions, data protection, physical safety risks, and regulatory compliance, as highlighted by the Halliburton cyberattack.
- Despite the financial impact of the cyberattack, Halliburton plans to proceed with the implementation of SAP S4, although at a delayed timeline due to lessons learned, at an increased cost of $20 million to $30 million.
