Malaysia's Velesto Energy has moved into an asset-light operating model for the first time after securing a drilling contract from Hibiscus Oil & Gas Malaysia using a third-party jackup rig. The contract covers Hibiscus' 2026 offshore drilling campaign in Malaysian waters and marks a strategic shift for Southeast Asia's largest owner and operator of jackup rigs.
The contract was awarded to Velesto's drilling arm, Velesto Drilling, and includes the drilling of eight plug and abandonment wells and one exploration well, with options for up to seven additional wells. Operations are scheduled to begin this month in the PM3 Commercial Arrangement Area offshore Malaysia, while optional work could extend into the North Sabah region.
Under the agreement, Velesto will provide a jackup drilling rig through a charter arrangement rather than deploying one of its own units. This approach allows the company to serve clients without committing its owned fleet, reducing capital requirements while maintaining operational flexibility.
Velesto chief executive Megat Zariman Abdul Rahim said the contract demonstrated the company's ability to support customers through different operating models while maintaining the same operational standards. "This award reflects Velesto's ability to support our clients in different ways while maintaining the same focus on operational excellence, safety and performance," he said. "As our first asset-light arrangement, it broadens how we can execute projects while maintaining the same discipline and consistency in how we operate."
Velesto currently operates a fleet of six wholly owned jackup drilling rigs and two hydraulic workover units. The new asset-light model expands the company's service portfolio and positions it to capture additional market opportunities in Southeast Asia's offshore drilling sector. Industry observers expect similar operating models to gain traction among regional drilling contractors as companies seek greater operational flexibility amid volatile market conditions.
Key Takeaways:
1. Velesto Energy enters asset-light operating model for the first time with Hibiscus Oil & Gas Malaysia drilling contract.
2. Contract covers eight plug and abandonment wells, one exploration well, and options for seven additional wells.
3. Operations begin this month in PM3 Commercial Arrangement Area, with optional work extending to North Sabah.
4. Velesto will charter a third-party jackup rig rather than deploying its owned fleet.
5. Company currently operates six wholly owned jackup drilling rigs and two hydraulic workover units.
