Reference is made to the Company’s announcements on this matter on 4 and 6 May 2021 and other announcements made in the Company’s quarter results on 25 August 2021, 29 November 2021 and 28 February 2022.
Velesto Energy Berhad ("Velesto" or "the Company") wishes to announce that the wreck removal of the Velesto NAGA 7 jack-up rig, which submerged off the coast of Sarawak on 4 May 2021, has been completed on 4th July 2024 based on requirements of the Marine Department. The Company has received on 3 September 2024, the Certificate of Completion and release order from the Marine Department on the successful wreck removal confirming that the removal order has been complied with.
With reference to the announcements made by the Company on this matter on 4 and 6 May 2021, the incident occurred at the worksite whilst operating for a client due to rapid penetration into the formation on 3 May 2021, when the rig tilted and subsequently submerged on 4 May 2021.
The removal operations, except for the earlier removed helideck, were carried out by the contractor, Boskalis Malaysia Sdn Bhd (“Contractor”) in accordance with applicable regulatory requirements and in close coordination with the relevant authorities. The operations for the removal of the wreck commenced offshore Sarawak at the end of May 2023 and were conducted over 2 seasons in 2023 – 2024. They involved removal of the wreck, removal of debris and closing activities, with the remaining recycling activities currently expected to close by December 2024.
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.
The loss of Velesto NAGA 7 was recovered from Hull & Machinery Insurers with recognition of insurance claim of RM560.9 million as announced in the Company’s quarter results announcement on 28 February 2022. The cost of wreck removal is not expected to affect the Group’s financial as covered by Protection & Indemnity Insurance taken by the Group. Barring unforeseen circumstances, with the completion of the wreck removal activities, the Company does not expect further significant financial or operations impacts arising from the removal activities.
The Company extends gratitude to all parties involved, including the clients, contractors, insurance brokers & underwriters, and regulatory authorities, for their cooperation and support throughout the removal process.
This announcement is dated 22 November 2024.