Velesto jack-up rig picks up multi-million extension deal for drilling work in Asia

Malaysian rig owner Velesto has been awarded a long-term contract extension with an estimated value of $74 million for one of its jack-up drilling rigs by Kuala Lumpur-based Carigali Hess Operating Company, which is a joint venture between PCJDA Ltd and Hess Oil Company of Thailand Ltd.

NAGA 8 rig; Source: Velesto Energy

According to Velesto Energy’s Bursa Malaysia announcement, Velesto Drilling – a wholly-owned subsidiary of Velesto Malaysian Ventures, which in turn is a wholly-owned subsidiary of Velesto Energy – has received a contract extension from Carigali Hess for the provision of the NAGA 8 jack-up drilling rig.

The extension, which will enable the rig to carry out operations for another 18 months, will start on April 19, 2024, and last until October 18, 2025. However, the exact date for the end of the contract is subject to any further extensions that may be mutually agreed upon between Velesto and Carigali Hess.

The original three-year contract for the rig was announced on November 5, 2019. Designed by Keppel FELS in Singapore, the 2015-built NAGA 8 is a premium independent-leg cantilever jack-up rig with a drilling depth capability of 30,000 feet and a rated operating water depth of 400 feet.

Carigali Hess is engaged in gas production in Block A-18 of the joint development area administered by the Malaysian-Thailand Joint Authority (MTJA), which is located approximately 150 km northeast of Kota Bahru in approximately 60 m of water.

The block entails central gas processing facilities at the Cakerawala production platform (CKP), a riser platform (CKR), a bridge-linked wellhead platform (CKA), and a booster compressor platform (CKX) which is also bridge-linked to facilities at the central processing area. There are also a number of remote wellhead platforms (WHPs).

Velesto secured multiple new deals for its rigs over the past few months. In May 2023, the firm’s rigs were hired by Petronas Carigali for operations in Malaysia. The deal with the Malaysian energy giant has an estimated combined contract value of $128 million.

The following month, Velesto secured work with an estimated combined contract value of $10.9 million for a rig with Vestigo Petroleum, a subsidiary of Malaysia’s Petronas Carigali. Recently, the company confirmed a deal with Jadestone Energy, which comes with an estimated combined contract value of $6.1 million.