Malaysia’s Velesto Energy Calls Off Sale of Naga 3 Jack-Up Rig
In a significant development within the offshore energy sector, Velesto Energy, a prominent Malaysian player known for owning premium jack-up rigs, has decided to retain its 2010-built Naga 3 jack-up rig, reversing plans to offload it. The sale was initially agreed upon in a sale and purchase agreement (SPA) with PT Indonesia Drilling Energy, inked on December 14, 2025. This turn of events is particularly noteworthy given the ongoing demand for drilling rigs in the region.
Despite the potential benefits from the sale, estimated at around RM1.4 million (approximately $342,440), Velesto’s board made the decision to terminate the agreement following a notice issued by its subsidiary, Velesto Drilling 3 (VD3L), on June 30, 2026. This decision comes after the agreement was in place for several months, highlighting the complexities and uncertainties inherent in the offshore drilling market.
The Naga 3 was slated for deployment in Malaysian waters through a partnership with TEXCAL Energy’s subsidiary, AFED TEXCAL Energy Ventures. This deployment was anticipated to support ongoing exploration and production activities, making the full integration of the rig into operations a crucial step for both Velesto and its partners.
With the SPA officially terminated effective July 7, 2026, the Naga 3 remains a part of Velesto’s fleet. Importantly, the company has indicated that this development will not have a material impact on its earnings or net assets for the financial year ending December 31, 2026. This suggests that the firm’s financial health remains robust, despite the decision to retain the rig.
Additionally, Velesto Energy has been proactive in securing new contracts, recently announcing engagements that include a noteworthy agreement with Hibiscus Oil & Gas. This marks Velesto’s first contract utilizing a third-party jack-up rig under a charter arrangement—underscoring the evolving strategies companies in the offshore drilling industry are embracing to adapt to market conditions.
The decision to call off the sale of Naga 3 not only reflects Velesto’s commitment to maintaining a strong operational fleet but also illustrates the strategic choices companies must navigate in the fluctuating landscape of offshore energy production. With ongoing projects and partnerships, Velesto seems well-positioned to leverage its assets for future growth.