Velesto Energy Berhad Secures Major Drilling Contract in Vietnam

In a significant development for Velesto Energy Berhad, the Malaysian energy company has secured a lucrative drilling contract in Vietnam, marking a strategic expansion into the Southeast Asian market. Announced on May 20, 2025, the contract involves the deployment of Velesto’s Naga 4 jack-up rig to drill over 40 wells in Vietnamese waters. This contract, awarded by Phu Quoc Petroleum Operating Company, is set to commence in the first half of 2026.

The contract is expected to bolster Velesto’s rig utilization, which stood at 87% last year, and contribute positively to the company’s financial performance in 2026 and 2027. While the exact contract sum was not disclosed, this deal adds to Velesto’s existing orderbook of RM709 million, all of which are firm contracts as of the end of January 2025.

Velesto’s president, Megat Zariman Abdul Rahim, expressed confidence in the company’s operational capabilities, stating that the contract award reflects continued trust in their ability to deliver safe, efficient, and high-quality drilling services. This move aligns with Velesto’s mission to provide sustainable and reliable energy solutions, not only within Malaysia but also in international markets.

Market Context

The announcement comes at a time when Bursa Malaysia is experiencing mixed performance. On May 20, 2025, the benchmark index fell by 0.47% to 1,548.87, reflecting a broader trend of consolidation in the market. Despite stronger performances in major markets such as Hong Kong, China, and Japan, the FBM KLCI ended lower, mirroring the broader regional sentiment.

Velesto Energy Berhad, listed on Bursa Malaysia, saw its close price at 0.16 MYR on May 12, 2025. The company’s market capitalization stands at 1,355,580,000 MYR, with a price-to-earnings ratio of 6.53. The 52-week high and low prices were 0.305 and 0.13 MYR, respectively, as of May 18, 2025.

Strategic Implications

This contract is a testament to Velesto’s strategic focus on securing value-accretive projects that enhance earnings visibility and optimize fleet deployment. By expanding its operations into Vietnam, Velesto not only diversifies its geographical footprint but also strengthens its position as a key player in the global energy sector.

As Velesto prepares for the commencement of operations in 2026, stakeholders and investors will be keenly watching the company’s progress in executing this contract efficiently. The successful deployment of the Naga 4 rig in Vietnam could pave the way for further opportunities in the region, reinforcing Velesto’s commitment to sustainable energy solutions.

In summary, Velesto Energy Berhad’s new drilling contract in Vietnam is a significant milestone that underscores the company’s operational excellence and strategic vision. As the company gears up for this new venture, it continues to build on its mission of providing reliable and sustainable energy solutions on a global scale.