Petronas picks Velesto’s suite of rigs for Malaysian ops

Malaysian rig owner Velesto has secured new work for its jack-up drilling rigs for operations in Malaysia with the country’s oil and gas operator, Petronas Carigali.

Based on Velesto Energy’s Bursa Malaysia announcement on Friday, Velesto Drilling – a wholly-owned subsidiary of Velesto Malaysian Ventures, which in turn is a wholly-owned subsidiary of Velesto Energy – has received a letter of award from Petronas Carigali for the provision of jack-up drilling rigs.

The duration of the contract is two years for the primary period, which is expected to start in the first quarter of 2022. The deal also includes a one-year plus one-year extension option.

As per the terms of the contract, the offshore drilling contractor will provide its suite of NAGA rigs, subject to the rig availability and suitability based on Petronas Carigali’s requirements. These rigs are NAGA 2, NAGA 3, NAGA 4, NAGA 5, NAGA 6, NAGA 8.

All these rigs are premium independent-leg cantilever jack-ups with a drilling depth capability of 30,000 feet. Velesto’s NAGA 2 and NAGA 3 rigs have a rated operating water depth of 350 feet, while NAGA 4, NAGA 5, and NAGA 8 have rated operating water depth of 400 feet. Out of all six rigs, only NAGA 6 has a rated operating water depth of 375 feet.

The rig operator further underlines that the provision of these rig services – which is subject to a call out by Petronas Carigali – is expected to contribute to the earnings and net assets of the group during the contract period for the financial periods ending 31 December 2022 and 2023, however, the rig owner did not mention specific day rates.

These rigs have previously worked for Petronas. The NAGA 2 rig secured two contracts with the Malaysian giant last year – one in March and the other one in October 2021 – while the NAGA 5 rig was hired to work on one firm well with an extension option of one plus one well with the start date between 1 April 2021 to 14 April 2021.

It is also worth reminding that Velesto lost one of its assets in May 2021, after the NAGA 7 rig tilted and submerged due to rapid penetration into the formation, resulting in a total loss of the asset.

As the rig was working for ConocoPhillips off Malaysia when the incident happened, the contract was considered terminated without notice from the moment the loss occurred. Previously, this rig also worked for Petronas and Shell.