disruption of our production processes, internal communications, interactions with customers and suppliers and processing and reporting financial results; the theft or misappropriation of intellectual property; corruption, loss of, or inability to access (e.g., through ransomware or denial of service) confidential information, trade secrets, proprietary information, personal information, and other critical data (i.e., that of our company and our third-party providers and customers); reputational damage; private claims, demands, and litigation or regulatory investigations, enforcement actions, or other proceedings related to contractual or regulatory privacy, cybersecurity, data protection, or other confidentiality obligations; diminution in the value of our investment in research, development and engineering; and increased costs associated with the implementation of cybersecurity measures to detect, deter, protect against, and recover from such incidents. Furthermore, the need for rapid detection of attempts to gain unauthorized access to our digital infrastructure, often through the use of sophisticated and coordinated means, presents a challenge we must face and any delay or failure to detect cyber incidents could compound potential harms. This could result in significant and compounding losses due to the cost of remediation and reputational consequences.
Our efforts to comply with, and changes to, laws, regulations, and contractual and other actual and asserted obligations concerning privacy, cybersecurity, and data protection, including developing restrictions on cross-border data transfer and data localization, could result in significant expense, and any actual or alleged failure to comply could result in inquiries, investigations, and other proceedings against us by regulatory authorities or other third parties. Customers and third-party providers increasingly demand rigorous contractual provisions regarding privacy, cybersecurity, data protection, confidentiality, and intellectual property, which may increase our overall compliance burden. With respect to certain potential incidents, such as a cyber-attack or data breach, we are covered under a cybersecurity insurance. However, no assurances can be made as to whether the insurance policy is sufficient in coverage or amount to cover all our potential liability.
The uncertainty of the impact an endemic or pandemic disease , such as the COVID-19 pandemic, may have, makes it impossible for us to identify all potential risks related to the pandemic or estimate the ultimate adverse impact that the pandemic may have on our business.
The COVID-19 pandemic and the actions taken by third parties, including, but not limited to, governmental authorities, businesses, and consumers, in response to the pandemic adversely impacted the global economy and created significant volatility in the global financial markets. The COVID-19 pandemic resulted in significant volatility in the financial and commodities markets worldwide, including the dramatic drop in the price of crude oil during 2020. In the event of a potential resurgence of the COVID-19 pandemic, responsive measures may be implemented and further disruptions to the global economy, demand, supply chain and others may occur.
As of the date of this annual report, we believe we have implemented adequate operational measures (such as remote working procedures) to avoid or minimize major disruptions to our business. However, our operations rely on our workforce being able to access our wells, structures and facilities located upon or used in connection with our oil and gas blocks. The uncertainty of the impact that an endemic or pandemic disease may have makes it impossible for us to identify all potential risks related to an endemic or pandemic disease and we cannot assure if, and to what extent, our business, financial condition, cash flows or results of operations may be adversely impacted by any potential resurgence or outbreak of the COVID-19 pandemic, or any other regional or global outbreaks related to any other endemic or pandemic disease.
The COVID-19 pandemic and its unprecedented consequences amplified, and may continue to amplify, the other risks identified in this annual report.
We operate in an industry with climate related risks.
The oil and gas industry, where we operate, is particularly exposed to risks arising from climate change and the energy transition, such as volatility of products prices, possible new regulations that may restrict our operations, or increase our costs to operate, and an increase in extreme weather events that affect our ability to operate. In 2022, we made a climate risk assessment for the entire company, which includes a site-specific working plan on physical and transitional risks to efficiently increase the climate resiliency of our operations.
