PV Drilling Projects 2026 Performance to Surpass Record 2025 Levels Amid Aggressive Expansion and Strategic M&A Plans

PetroVietnam Drilling and Drilling Services Corporation (PV Drilling – Stock Code: PVD) held its 2026 Annual General Meeting of Shareholders on April 21 at the Rex Hotel in Ho Chi Minh City, revealing a highly optimistic outlook for the upcoming fiscal years. During the meeting, the company’s leadership, led by CEO Nguyen Xuan Cuong, projected that the business results for 2026 would not only meet the set targets but likely exceed the high-performance benchmarks established in 2025. This confidence is underpinned by a robust recovery in the regional drilling market, strategic asset acquisitions, and a significant proposed capital increase aimed at bolstering the company’s competitive edge in international markets.

Robust Q1 2026 Performance Sets the Stage for Upward Revisions

The meeting opened with a detailed review of the preliminary financial results for the first quarter of 2026, which suggest that the company is currently on an accelerated growth trajectory. According to CEO Nguyen Xuan Cuong, PV Drilling estimated its Q1 2026 revenue at approximately 3,500 billion VND, with pre-tax profits exceeding 400 billion VND. These figures represent a substantial year-on-year increase, with revenue growing by roughly 130% and pre-tax profit rising by 104% compared to the same period in the previous year.

Given this strong start, the Board of Directors indicated that the 2026 business plan—which was originally drafted with conservative assumptions in late 2025—will likely be adjusted upward. The initial 2026 plan targeted a consolidated revenue of 11,185 billion VND and a post-tax profit of 800 billion VND. When compared to the actual 2025 performance, which saw revenue of 11,553 billion VND and a post-tax profit of 1,052 billion VND, the initial targets appeared to suggest a slight contraction. However, Mr. Cuong clarified that the original targets were based on a conservative Brent oil price assumption of 56 USD per barrel, significantly lower than current market realities. With current market dynamics and high rig utilization rates, the company is confident that 2026 will eventually outperform the record-breaking results of 2025.

Strategic Market Outlook: Navigating Geopolitical Shifts and Supply Gaps

The leadership provided a comprehensive analysis of the global and regional energy landscape. The 2026 outlook is framed within a global economic growth forecast of 3.1% to 3.2%, as estimated by the IMF and OECD. However, this growth is accompanied by significant uncertainties, including geopolitical tensions in the Middle East and the Russia-Ukraine conflict, trade protectionism, and potential disruptions to energy supply chains.

In Southeast Asia, the drilling market is currently in a state of delicate supply-demand balance. CEO Nguyen Xuan Cuong noted that while rig rental rates saw a minor dip in the first quarter of the year, they are expected to trend upward, stabilizing between 95,000 USD and 110,000 USD per day in the subsequent quarters. A critical factor identified by the Board is the long-term stagnation in new rig construction. For nearly a decade, the industry has seen almost no new jack-up rigs being built. This lack of investment, combined with the fact that several major international drilling companies are divesting from the sector to focus on renewable energy transitions, has created a potential for a localized rig shortage in the near future.

PV Drilling views this "market decline" as a prime opportunity for strategic expansion. "This is a favorable time for PVD to execute M&A activities," Mr. Cuong stated. He explained that geopolitical conflicts have put financial pressure on certain international entities, making their assets available at attractive valuations. By acquiring used rigs, PV Drilling can expand its fleet at a fraction of the cost of new builds. The CEO pointed out that a new rig currently costs approximately 200 million USD, requiring a day rate of at least 200,000 USD to be economically viable. In contrast, PVD’s strategy of acquiring and upgrading existing assets allows it to remain highly profitable even at day rates of 90,000 USD.

Regional Dominance and the "Lo B – O Mon" Catalyst

A significant portion of the meeting focused on PV Drilling’s geographical strategy. The company is increasingly prioritizing long-term contracts in stable regional markets such as Malaysia and Indonesia to mitigate the cyclical nature of domestic projects.

In Malaysia, PV Drilling has established a formidable reputation, particularly through its long-standing partnership with the state oil giant Petronas. The company’s rigs in Malaysia are operating under stable, long-term agreements, and its technical expertise is highly regarded among Petronas’s group of contractors. Similarly, in Indonesia, PV Drilling has established joint ventures and currently operates two rigs under multi-year contracts. While the Indonesian market presents complexities regarding legal regulations and taxation, the company remains committed to adapting its operations to capture the vast potential of the archipelago.

Domestically, the company is positioning itself to be the primary service provider for Vietnam’s "Block B – O Mon" gas-to-power project chain, a cornerstone of the national energy security strategy. Beyond Block B, other major domestic projects such as Su Tu Trang Phase 2B and Dai Hung Phase 3 are expected to provide a steady pipeline of work through 2050. The Board emphasized that for a single well, drilling rig costs typically account for 35-40% of the total expenditure, with technical services making up another 35-40%, and logistics/support services covering the remaining 20-30%. PV Drilling aims to capture a larger share of this value chain by offering integrated services beyond mere rig rental.

Ambitious 4.2 Trillion VND Investment and Capital Restructuring

To sustain its growth momentum, PV Drilling announced a massive investment plan for 2026 totaling 4,229 billion VND. This capital expenditure is earmarked for:

• The acquisition of additional multi-purpose jack-up rigs.
• The purchase of Hydraulic Workover Units (HWU) for well intervention and repair.
• Investment in Managed Pressure Drilling (MPD) equipment to handle complex geological conditions.
• Infrastructure upgrades for the existing fleet to maintain a high operational efficiency rate, which currently stands at over 99%.
• Buying out partner stakes in various Business Cooperation Contracts (BCC) to gain full control over strategic assets.

To fund these ambitious plans, the Board of Directors proposed a significant capital increase and a "no dividend" policy for 2025. The company intends to issue nearly 372 million bonus shares to existing shareholders at a ratio of 66.9% (shareholders owning 100 shares will receive 66.9 new shares). This move will increase PV Drilling’s charter capital from 5,563 billion VND to approximately 9,282 billion VND. The funding for this issuance will be drawn from the company’s development investment fund, which is expected to have a balance of 3,719 billion VND by the end of 2025.

The leadership argued that this capital increase is essential to align the company’s charter capital with its massive asset base and to enhance its financial standing when bidding for large-scale international projects. By retaining the 2025 post-tax profit of 1,052 billion VND (specifically the 708 billion VND available after statutory fund contributions), the company ensures it has the necessary liquidity to execute its 2026 investment strategy without over-relying on high-interest debt.

Operational Efficiency and Future Readiness

Reflecting on the success of 2025, the Board highlighted that the company’s fleet operated at near-maximum capacity, with an uptime efficiency of over 99%. This technical excellence has been a key differentiator for PV Drilling in the international arena. For 2026, the company plans to maintain five jack-up rigs in continuous operation, with the PV Drilling IX rig scheduled to begin operations in the second quarter. Additionally, the TAD (Tender Assist Drilling) rig, PV Drilling V, will continue its long-term campaign in Brunei.

The company is also diversifying into well-repair services. A dedicated well-repair rig, currently under investment, is expected to be completed by June 2026. The demand for such services is particularly high in Malaysia and is growing in Vietnam, with major clients like Vietsovpetro and Cuu Long JOC expressing interest.

Leadership Transitions and Long-term Vision

The 2026 AGM concluded with the election of the Board of Directors for the 2026-2030 term. The shareholders approved the appointment of Mr. Mai The Toan, Mr. Nguyen Xuan Cuong, and Mr. Nguyen Duyen Hieu as board members. Notably, Mr. Nguyen Duyen Hieu also serves as the CEO of PVTrans (Stock Code: PVT), signaling a potential for closer synergy within the PetroVietnam ecosystem. Ms. Ngo Thi Hai Anh was also elected to the Supervisory Board.

In his closing remarks, Chairman Mai The Toan reaffirmed the company’s commitment to a "cautious yet aggressive" investment strategy. He noted that while the macroeconomic environment remains volatile with high interest rates and fluctuating USD/VND exchange rates, PV Drilling’s transition from a domestic-focused entity to a regional player has provided a natural hedge against localized economic downturns.

By focusing on high-tech services, maintaining a young and efficient fleet, and capitalizing on M&A opportunities during market shifts, PV Drilling is not just aiming to recover to pre-2015 levels but is actively building the foundation for a sustainable, high-growth era that aligns with the global energy transition through 2050. The 2026 fiscal year stands as a pivotal point in this journey, where strategic capital accumulation meets a favorable market window, promising significant value creation for shareholders in the years to come.