The Times: Secrets of Shell and Rolls-Royce come under attack from China’s spies

December 3, 2007
James Rossiter

Rolls-Royce and Royal Dutch Shell have fallen victim to Chinese espionage attacks, The Times has learnt.

Sustained spying assaults on Britain’s largest engineering company and on the world’s second-biggest oil multinational occurred earlier this year as part of a campaign to obtain confidential commercial information, sources said.

News of the attacks on Rolls-Royce and Shell comes after a warning by Britain’s security services that China is sponsoring espionage against vital parts of the British economy, including breaking into big companies’ computer systems.

It is understood that Chinese-backed computer hackers broke into the internal computer network of Rolls-Royce in an attack that a security source said “nearly took them out”. Rolls-Royce engines are widely used by many of the world’s largest airlines and are deployed in transport vehicles of many Armed Forces in Nato, including those of Britain and the United States.

Shell, an Anglo-Dutch group, had to deal with a spying ring in Houston, Texas, security sources told The Times. Chinese nationals working for the company were preyed upon by state-backed operatives hoping to obtain confidential pricing information for its operations in Africa, the sources said.

African countries have been targeted by international oil companies in the commercial battle to tap into vast new oil reserves needed to support both the developed economies of the West and the rapidly expanding economy of China, which has vast coal reserves but little oil and gas.

The infiltration of the Rolls-Royce computer server was described as a “virtual attack”, a source said: “The Chinese – the People’s Liberation Army – have been up to it for a good while, but it has really come to the fore recently. They tried to get inside Rolls-Royce – their IT systems.”

Jonathan Evans, Director-General of MI5, has sent a letter to 300 chief executives and security chiefs in banks and accounting and legal firms telling them that they are under attack from “Chinese state organisations”, The Times revealed this weekend.

A summary of the MI5 warning, posted on the website of the Centre for the Protection of the National Infrastructure, says: “The contents of the letter highlight the following: the Director-General’s concerns about the possible damage to UK business resulting from electronic attack sponsored by Chinese state organisations, and the fact that the attacks are designed to defeat best-practice IT security systems.” It is understood that Rolls, in common with most other networks, has several layers of firewalls, with the most confidential information, thought to contain engine designs and repair codes, at the centre.

The infiltration of the Rolls network is thought to have occurred remotely after a specially tailored Trojan, a software code wrapped up in a virus, was downloaded into the site, allowing information to be relayed back out of the company’s IT server.

It is thought that the infiltration occurred in the UK. Rolls’s IT network extends, however, to its international operations, including Scandanavia and the United States.

The source said: “They did not get enough inside, but it was a sufficiently big attack to get very worried. They got to the so-called not very important information before being rooted out.”

Shell is understood to have uncovered a “special interest group” in Houston consisting of its Chinese nationals, who were encouraged to meet socially after work. The networking group was, however, “a front for recruiting Chinese nationals”. In what security experts described as a typical form of “social engineering”, there was targeting of Chinese workers whose families were still in China. They were told to help “for the good of the Motherland”, the source said, adding: “It was a form of threat. This particular European oil company was made aware and uncovered the spying operation, where the Chinese were put under moral pressure to give information.” Rolls-Royce and Shell declined to comment.

Garrod Haggerty, forensic technology partner in PricewaterhouseCoopers, the accounting firm, said that any company’s IT network infrastructure “should be robust, protected by firewalls and multi-layers of security” to make it difficult to launch an all-out attack on a network.

http://business.timesonline.co.uk/tol/business/markets/china/article2988228.ece

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