Exclusive interview: Velesto sets its sights on Malaysia and Southeast Asia gas drilling plays

As global energy security concerns keep the demand for oil and gas alive, Malaysia’s Velesto Energy, owner of premium jack-up rigs and hydraulic work-over units, has dived into its expectations for 2026, highlighting its belief that the jack-up rig market will remain on stable ground during the year, enabling it to pursue new drilling assignments, with Malaysia and Southeast Asia at the heart of the firm’s growth quest.

With a focus on safety, efficiency, high fleet utilization, and financial discipline to stay on top of the offshore drilling game, the Malaysian rig owner continues to operate at top-tier performance levels, sustaining above-99% uptime across the fleet alongside a strong safety track record, according to Megat Zariman Abdul Rahim, President and Executive Director of Velesto Energy, who holds a Bachelor of Science in Electrical Engineering from Worcester Polytechnic Institute in the United States.

The company’s President elaborated: “The turnaround groundwork established over the past year has reinforced Velesto’s operational stability and cost structure. Our strengthened balance sheet allows us to remain disciplined in capital allocation while preserving the ability to enhance shareholder returns as market conditions improve.

“In 2026, we will continue to focus on executing well within our core competencies, enhancing rig competitiveness through technology and operational excellence, and delivering consistent value to customers while safeguarding long-term shareholder returns.”

During his latest interview with Offshore-Energy.biz, Velesto’s boss pointed out that Malaysia would remain the firm’s operational and capability base, supported by continued domestic upstream activity. However, he also pinpointed Southeast Asia as the region that offers “steady opportunities,” especially in gas-driven shallow-water developments across Thailand, Vietnam, and Indonesia.

Megat Zariman Abdul Rahim underlined: “Gas development remains a key driver of drilling demand across the region as national oil companies prioritise domestic supply and long-term reserve replacement.

“Our regional growth approach remains selective, prioritising markets where demand fundamentals are resilient, premium jack-up capability is valued, and contract visibility supports sustainable returns. This ensures expansion remains aligned with the strengths of our premium rig fleet while preserving financial discipline.”

As the Malaysian drilling player keeps prioritizing disciplined execution in proven operating environments while retaining the flexibility to evaluate selective opportunities where the risk profile and commercial returns are appropriate for its business, the rig owner’s President told Offshore Energy that further expansion would not only be measured and return-driven, but also aligned with the firm’s operational strengths and technical capabilities.

Velesto’s Executive Director outlined: “Asset-light growth opportunities form part of Velesto’s disciplined approach to regional expansion across Southeast Asia. This enables Velesto to respond to market opportunities with greater flexibility while maintaining financial strength. In an environment shaped by cost pressures, market volatility, and geopolitical uncertainty, our priorities remain clear.

“We will continue to operate safely and reliably, maintain commercial and capital discipline, remain agile in allocating resources, and ensure the business is positioned to perform through the cycle and deliver sustainable value to stakeholders.”

Given the company’s commitment to curbing greenhouse gas (GHG) emissions, the rig owner’s boss emphasized that diesel consumption would remain the primary source of operational emissions across offshore rigs. As a result, the firm’s near-term approach revolves around efficiency improvements within existing assets through enhanced power management, digital monitoring of fuel consumption, and optimization of equipment performance.

Megat Zariman Abdul Rahim added: “We have also adopted data-driven solutions to support preventive maintenance and operational consistency, helping to reduce inefficiencies while maintaining safety and reliability. Velesto recently commissioned the world’s first robotic arm installed on its jack-up rig – NAGA 6, enhancing safety and operational efficiency through automation.

“Beyond this, we continue to evaluate practical decarbonization technologies such as greater automation, drilling robotics, and hybrid power concepts, including the potential use of battery energy storage systems to manage load demand. Any technology adoption is assessed against clear technical and financial feasibility criteria and aligned with Velesto’s Net Zero strategy roadmap.”

Velesto’s President believes that a fully electric offshore drilling rig powered solely by renewable energy remains “a long-term prospect,” as offshore drilling is energy-intensive and requires a high level of reliability, which current renewable solutions are not yet able to provide on a standalone basis.

The Malaysian player’s Executive Director stated: “In the near term, progress is more likely through incremental steps. This includes the use of hybrid solutions such as onboard energy storage to manage load demand, shore power when rigs are docked, and the gradual adoption of cleaner fuel blends.

“Over time, as technology matures and supporting infrastructure develops, options such as green fuels may become more viable. Any transition will need to be technically proven and financially feasible for offshore drilling operations.”

While disclosing that the jack-up drilling market is expected to remain relatively stable, supported by ongoing shallow-water exploration and development activities, the company’s President has underscored that the demand fundamentals remain intact in key offshore regions, even though competition and regional rig supply movements are anticipated to keep influencing pricing.

In light of this, he is convinced that disciplined contract selection and cost control will be important to sustaining performance, as energy security continues to support upstream investment in the near to medium term, despite growing expectations operators are facing in relation to emissions and efficiency.

Against such a backdrop, contractors with strong operational reliability, premium assets, and the ability to deliver consistent performance will be better positioned to capture sustainable opportunities across the region, based on the views expressed by Velesto’s President.

Megat Zariman Abdul Rahim concluded: “Looking toward 2050, offshore drilling is likely to evolve gradually. Oil and gas will continue to play a role in meeting global energy needs during the transition, alongside growing renewable capacity. Progress will depend on steady improvements in efficiency, technology adoption, and emissions management, supported by collaboration across the industry and with policymakers.

“For Velesto, this reinforces the importance of maintaining a high-quality fleet, improving efficiency, adopting practical technologies, and remaining financially disciplined so we stay competitive and relevant through the transition.”

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