Nabors to Return to Venezuela With One Rig in Early 2027 Under Multi-Year Contract
Key Facts
Nabors signed a multi-year contract to operate one rig in Venezuela, with deployment set to begin in early 2027, in what the company said would resume its drilling operations in the country. The company announced the agreement in its third-quarter results statement issued on October 27, 2026. Chief Financial Officer Miguel Rodriguez said during the results call that the rig was coming from the United States and had been idle. He added that its start-up was planned for early next year to support the customer’s schedule. Management said Venezuelan operations were expected to add to the international gross margin it reports each quarter, without specifying the rig’s financial contribution.
The new rig represents a limited addition to Nabors’ current activity in Venezuela, where the company said 9 rigs were operating in the third quarter of 2026. The number exceeded 85 in 2013, according to Rodriguez, a decline that reflects the contraction in activity over the past several years. The company is tracking more than 20 additional opportunities to operate rigs in the country. The current announcement, however, covers one multi-year contract and one rig. The company did not disclose the contract’s value, expected revenue or a timetable for developments on the other opportunities.
Rodriguez said Nabors had not left Venezuela entirely during the downturn and had retained a small but resilient group of local employees to maintain its rigs. This local base provides context for the company’s return to operations with a rig that had been idle in the United States. Activity comes in a sector whose infrastructure has been damaged by a lack of investment and maintenance, according to the U.S. Energy Information Administration. Venezuela’s crude oil production reached 742,000 barrels per day in 2023, down a cumulative 70% from 2013 levels. The U.S. administration attributed the decline in the energy sector to mismanagement, sanctions and the economic crisis, and the resulting deterioration of infrastructure.
The Venezuela contract coincides with Nabors’ international drilling business posting a record adjusted daily gross margin of $19,060 in the third quarter of 2026. The margin rose $1,526, or 8.7%, from the second quarter, according to the company’s results. Nabors attributed the improvement to strong field performance and contributions from a recently deployed rig in Argentina and a new rig under the Sanad project. The average number of active international rigs was 94.9 in the third quarter, compared with 93.4 in the second quarter and 89.2 in the same period of 2025. The company said its Venezuelan operations would add to the international margin, but provided no rig-level financial details.
At the group level, Nabors’ third-quarter revenue rose 7% from the previous quarter to $872 million, while it recorded a net loss attributable to shareholders of $11 million. The results provide broader operating context for the contract but do not identify its separate financial impact. In Venezuela, U.S. crude oil imports stopped shortly after sanctions were imposed on the state oil company in January 2019. The U.S. Treasury Department granted Chevron exemptions in November 2022 to resume exports from its joint ventures, and shipments restarted in January 2023. The Nabors contract remains an announcement about drilling services, while those dates concern Venezuelan oil exports to the United States.
Nabors shares closed at $77.8 on October 22, then $81.03 on October 23 and $82.29 on October 26. The stock recorded $81.32 on October 27, before closing at $89.87 on October 28. These prices cover the days around the release of the third-quarter results, issued on October 27, and management’s call the following day. The company’s disclosure does not attribute the share-price movement to the Venezuela contract. It also did not specify the revenue or earnings tied to the agreement.
For the fourth quarter of 2026, Nabors expects an average of between 92 and 93 international rigs and an adjusted daily gross margin of about $19,500. The company said it expects further margin improvement despite the suspension of 5 rigs at its joint venture project in Saudi Arabia, Sanad. For 2026, it expects consolidated adjusted free cash flow of between $100 million and $110 million, including cash consumption of about $20 million at Sanad. The announced start-up date for the Venezuela rig is early 2027. The company is tracking more than 20 additional opportunities in the country, with no announced timetable for other contracts.