Velesto Energy, an offshore driller based in Malaysia said that the company’s contract with ConocoPhillips has been officially terminated after its Naga 7 rig sank off Malaysia’s water in May.
Due to the contract termination, Velesto Energy earnings for the financial period ending December 31, 2021, are expected to be reduced by an estimated amount of US$8 million.
The rig sank off the coast of Sarawak, East Malaysia after one of its legs penetrated the soil formation while jacking up at the ConocoPhillips Salam-3 well.
Valesto confirmed in August that its insurers considered the rig a total loss. Hence, the drilling contract with the United States based operator is considered terminated without notice as from the moment that the loss occurred.
The contract was awarded in March this year to drill up three wells. The deal was said to be worth around $8 million.