Velesto posts RM60mil loss in Q1, seeks work for two idle rigs 

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KUALA LUMPUR: Oil drilling company Velesto Energy Bhd made a RM60mil loss in the first quarter ended March 31 as only 28% its rig fleet were working on projects, compared with 84% a year ago.

But three contracts awards this year have increased the group’s fleet utilisation rate.

The company said that three out of six available drilling rigs are under contract, while another jack-up rig is scheduled to start work in June.

“The two remaining rigs are being proposed for a number of ongoing tenders,” Velesto said in a filing with Bursa Malaysia today.

Velesto said in Malaysia, most of the drilling contracts for the year have been awarded, but there is a small number of new contracts which are expected to be tendered out and awarded within this year. “The Group is gearing to participate in these tenders to further improve asset utilisation,” it said.

But the loss of its drilling rig Naga 7 after an incident on May 3 off the coast of Sarawak continued to weigh on its outlook.

Velesto said the incident area is secured while the Group is working with the insurance underwriters and Protection & Indemnity (P&I) Club on the way forward. “The rig and other related liabilities are adequately covered under the Hull & Machinery insurance and the P&I Club, respectively,” it said.

“Progressing on the insurance claims, Velesto Drilling Sdn Bhd, as the insured under the H&M policy has on May 31 issued a notice of abandonment of the submerged rig, Naga 7 to the H&M insurers, pursuant to the H&M policy and currently await their response,” it added.

While the price of crude oil has risen substantially over the past one year, Velesto remained cautious on its outlook amid the slower than anticipated pace of recovery in the global economy as well as in the oil and gas industry.

“The Board is of the view that the financial performance for 2021 will continue to be challeng



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