Chevron Corporation CVX has strengthened its offshore Malaysia development plans after its subsidiary, Hess Exploration and Production Malaysia, awarded Velesto Drilling a $51 million contract for integrated rig, drilling and completion (i-RDC) services, according to Offshore Magazine. The contract supports the 2026-2028 North Malay Basin Full Field Development campaign, reinforcing ongoing efforts to sustain gas production from one of Malaysia's key offshore energy hubs.
The award marks another important milestone in the long-standing collaboration between the companies and further expands Velesto Drilling's role in the North Malay Basin development program. As part of the agreement, the NAGA 8 jackup rig will be deployed for the campaign after completing its current assignment in Malaysia.
CVX Expands Malay Basin Development Through Its Subsidiary
Hess Exploration and Production Malaysia, now a Chevron subsidiary following its acquisition of Hess, continues to operate several gas-producing assets offshore Malaysia. The latest contract highlights Chevron's commitment to advancing the development of the North Malay Basin while maintaining operational continuity across its offshore portfolio.
The North Malay Basin remains one of Malaysia's most significant offshore gas-producing regions, supplying natural gas for domestic industries as well as regional energy markets. Development activities in the basin have progressed through multiple drilling phases designed to sustain production and maximize recovery from existing producing fields.
By awarding this integrated drilling contract, Chevron continues to support long-term field development while streamlining offshore operations through an integrated service model.
Velesto Drilling Secures Second i-RDC Contract for North Malay Basin
The latest award represents Velesto Drilling's second i-RDC contract for the North Malay Basin Full Field Development.
Under the i-RDC framework, the contractor delivers a bundled package that combines drilling rig services, drilling operations and well-completion services under a single contract. This integrated approach is intended to improve operational efficiency while reducing project interfaces between multiple service providers.
The contract further strengthens Velesto's position within Malaysia's offshore drilling sector and reflects continued participation in Chevron-operated development campaigns across the North Malay Basin.
NAGA 8 Jackup Rig Selected for Multi-Year Development Campaign
According to the news, to execute the newly awarded project, Velesto Drilling will allocate the NAGA 8 jackup rig for operations associated with the North Malay Basin campaign.
The drilling program is scheduled to begin next month, allowing the rig to transition directly from its current assignment. NAGA 8 is presently completing drilling activities for Jadestone Energy (Malaysia) under the East Belumut Phase 9 infill drilling project.
Following completion of the existing work scope, the rig will move into the Chevron-operated campaign, supporting drilling and completion activities through the planned 2026-2028 development period.
The deployment ensures continuity for the rig while supporting Chevron's long-term offshore development objectives in Malaysia.
North Malay Basin Remains a Strategic Offshore Gas Hub
The North Malay Basin gas fields, located offshore Peninsular Malaysia, form an important component of Malaysia's offshore natural gas production network.
The region has undergone phased field development programs focused on maintaining production from mature assets while maximizing hydrocarbon recovery. These drilling campaigns continue to play an important role in supporting reliable gas supplies for domestic industrial demand and regional energy markets.
As development progresses, integrated drilling campaigns remain central to improving operational coordination and execution across multiple offshore wells.
The latest contract reinforces continued activity within one of Malaysia's most active offshore drilling regions while supporting future field development objectives.
Integrated Drilling Model Supports Operational Efficiency
The i-RDC structure adopted for the North Malay Basin campaign combines several critical offshore services into a unified operational framework.
Rather than managing separate drilling, rig and completion contracts, the integrated model enables a single contractor to coordinate multiple project components. This approach is intended to improve workflow efficiency, reduce operational interfaces and simplify project execution throughout the drilling campaign.
For long-term offshore developments involving multiple wells, integrated contracting models can provide greater operational consistency across different phases of field development.
The North Malay Basin campaign continues this approach, building upon previous integrated drilling programs in the region.
Velesto Extends Presence in Malaysia's Offshore Drilling Market
The new contract further extends Velesto Drilling's footprint within Malaysia's offshore energy sector.
Its continued involvement in the North Malay Basin demonstrates the company's established role in supporting offshore gas development programs operated by Chevron. Securing a second i-RDC award for the basin also reflects the continuation of an existing working relationship on one of Malaysia's most active offshore development projects.
The multi-year nature of the campaign positions the company for sustained operational activity while supporting ongoing offshore drilling efforts in the region.
Recent NAGA 8 Contract Termination Offshore Indonesia
Before receiving the North Malay Basin award, Velesto Drilling and PETRONAS North Ketapang agreed earlier this week to terminate a contract involving the NAGA 8 jackup rig for offshore Indonesia.
With the Malaysian development campaign scheduled to begin next month, the rig will transition from its current Malaysia assignment into the Chevron-operated North Malay Basin program.
The new deployment ensures that NAGA 8 remains engaged in offshore drilling operations while supporting continued field development activities in Malaysia.
Chevron Advances Offshore Malaysia Development
The integrated drilling and completion contract awarded by a Chevron subsidiary reinforces the ongoing development of the North Malay Basin Full Field Development campaign. By selecting Velesto Drilling and deploying the NAGA 8 jackup rig, Chevron continues advancing offshore gas development in Malaysia through an integrated operational model designed to support drilling efficiency and sustained production from one of the country's key offshore gas regions.
CVX's Zacks Rank & Key Picks
Currently, CVX has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might consider some better-ranked stocks, such as Par Pacific PARR, Delek US Holdings DK, both sporting a Zacks Rank #1 (Strong Buy), and Cheniere Energy LNG, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Par Pacific is valued at 3.88 billion. It is a diversified energy company that owns and operates petroleum refineries, logistics assets and retail fuel businesses across the United States. Par Pacific focuses on refining, transporting and marketing fuel products while serving regional markets with reliable energy solutions.
Delek US Holdings is valued at $3.87 billion. It is a diversified downstream energy company engaged in petroleum refining, renewable fuels, asphalt production and logistics operations. Delek US Holdings operates multiple refineries in the United States and is committed to delivering safe, reliable energy while investing in cleaner energy initiatives.
Cheniere Energy is valued at $56.52 billion. It is a leading U.S. producer and exporter of liquefied natural gas (“LNG”), supplying energy to customers across more than 40 international markets. Cheniere Energy operates major LNG export terminals in Louisiana and Texas and focuses on providing reliable, lower-carbon energy solutions.
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