Sunken rig’s wreck removal done as recycling ops near the finish line with Boskalis’ help

Malaysia’s rig owner Velesto, a subsidiary of Velesto Energy, has confirmed the wrap-up of wreck clearance, with recycling activities expected to follow suit shortly for one of its jack-up rigs that tilted due to an incident and subsequently sank in 2021. The majority of removal operations were carried out by Boskalis Malaysia, a subsidiary of the Dutch offshore services provider Boskalis.

The incident, involving Velesto’s NAGA 7 jack-up rig, occurred on May 3, 2021, due to the rapid penetration of one of its legs into the soil formation while working for ConocoPhillips at Salam-3 well off the coast of Sarawak. As a result, the rig tilted and submerged on March 4, 2021.

While the rig could not be saved, the 101 personnel on board at the time did not suffer the same fate, as they were safely transferred to shore. The 2015-built Naga 7, designed by Gusto MSC, was built in China as a three-legged jack-up capable of operating in water depths of up to 375 feet.

As the incident resulted in a total loss of the asset, the contract with ConocoPhillips was terminated. As the NAGA 7 rig was covered by insurance, Velesto recovered the loss of the jack-up from Hull & Machinery Insurers with recognition of the insurance claim of RM 560.9 million (around $125.5), as announced by the Malaysian player in February 2022.

The company highlighted that the wreck removal of the NAGA 7 jack-up rig drew to a close on July 4, 2024, based on requirements of the Marine Department. On September 3, 2024, the firm received the certificate of completion and release order from the Marine Department, confirming that the removal order had been complied with.

According to the Malaysian player, all removal operations, except for the earlier removed helideck, were carried out by its contractor, Boskalis Malaysia. The operations for the removal of the wreck started off the coast of Sarawak at the end of May 2023 and were conducted over two seasons in 2023 and 2024.

Moreover, these operations encompassed the removal of the wreck, removal of debris, and closing activities, with the remaining recycling activities currently anticipated to close by December 2024. After the completion of the wreck removal activities, the rig owner does not expect further significant financial or operational impacts arising from the removal activities, unless unforeseen circumstances intervene.

“The company is pleased to report that the Contractor has informed that necessary actions have been undertaken to ensure the safety and security during the wreck removal operations, and no significant adverse environmental impacts were recorded during the removal operations,” emphasized Velesto.

The Malaysian firm recently teamed up with Petronas and NOV to optimize drilling operations by including robotics and boosting its jack-up fleet with a rig automation system. This collaboration came a month after Velesto disclosed plans to pool resources with SLB to boost rig capabilities with digital tools to improve drilling performance.

The firm also finished a mandatory five-year special periodical survey (SPS) for one of its jack-up rigs, which is on a drilling assignment in Sarawak with Petronas.