Valaris Business Model Canvas

Valaris's operations depend heavily on its equipment and technology suppliers. These collaborations are crucial for keeping its extensive fleet of offshore drilling rigs modern and efficient. For instance, in 2024, Valaris continued to invest in upgrades and maintenance, relying on these partnerships for access to advanced drilling systems and essential spare parts.

These supplier relationships are key to ensuring Valaris can meet the rigorous demands of the offshore energy sector, including stringent safety standards and the need for innovative solutions. The company’s proactive engagement with suppliers in 2024 to manage potential impacts from tariffs highlights the importance of a resilient global supply chain network for critical components.

Valaris's key partnerships extend to its major customers, including global energy giants like ExxonMobil, TotalEnergies, and BP, who secure Valaris's offshore drilling services for their exploration and production activities. The company also benefits from a strategic alliance with Saudi Aramco through ARO Drilling, which strengthens its presence in the Middle Eastern market, evidenced by the 2024 lease extensions for several jackup rigs with ARO Drilling.

Valaris's core operations hinge on securing and managing drilling contracts. This involves a proactive approach to customer engagement, participating in competitive tenders, and diligently overseeing a substantial contract backlog.

The company's commercial success is evident in its backlog figures. As of the second quarter of 2025, Valaris had secured approximately $4.7 billion in new contract backlog for 2024 and 2025, highlighting its ability to win and retain business in a dynamic market.

Valaris's key activities extend to managing its extensive fleet, which includes high-specification offshore drilling rigs. This involves strategic fleet optimization, including the retirement of older units and the acquisition or repurposing of modern assets to meet market demand. For example, in 2024, Valaris retired several semisubmersibles and sold a jackup rig, streamlining its operational capabilities and enhancing efficiency.

Securing and executing drilling contracts forms the bedrock of Valaris's operations. This requires proactive engagement with clients, participation in competitive bidding processes, and meticulous management of a substantial contract backlog. As of the second quarter of 2025, Valaris had secured approximately $4.7 billion in new contract backlog for 2024 and 2025, demonstrating its commercial success.

Valaris places paramount importance on operational safety and environmental stewardship. This commitment is demonstrated through rigorous safety protocols, comprehensive employee training, and initiatives aimed at reducing its environmental footprint, including CO2 emissions. The company's dedication to these principles is often recognized within the industry.

Developing and managing its global talent is another critical activity for Valaris. The company employs individuals from 74 nationalities across 14 countries, investing in extensive training programs focused on safety, well-control, and leadership to ensure a skilled and engaged workforce and to reduce attrition.

Valaris' proprietary technology is a cornerstone of its business model, enabling enhanced drilling efficiencies and specialized services. The company actively invests in innovations like managed pressure drilling (MPD) and advanced subsea technologies.

This technological edge allows Valaris to undertake complex offshore projects, providing a significant competitive advantage. For instance, their advanced rig designs and digital solutions contribute to improved operational performance and safety across their fleet.

Valaris's key resources include its technologically advanced offshore drilling fleet, comprising around 50 units as of early 2024, and its highly skilled workforce, essential for complex operations. The company also relies on proprietary technology, such as managed pressure drilling, and its extensive global operational footprint across 14 countries.

Financial capital and a substantial contract backlog, reported at approximately $4.7 billion as of Q2 2025, are crucial. This backlog ensures revenue visibility and financial stability, enabling strategic investments in fleet modernization and technological advancements.

Valaris boasts a significant global operational footprint, enabling them to serve clients in virtually every major offshore oil and gas basin worldwide. This extensive reach is crucial for companies operating internationally and seeking consistent service across different regions.

Their strategic presence in key locations such as the Middle East, North Sea, Australia, and Trinidad provides a competitive advantage. For example, in 2024, Valaris maintained a substantial fleet active in these vital offshore markets, demonstrating their capacity to mobilize assets and personnel efficiently wherever their clients require them.

This combination of global capabilities and strong local positions allows Valaris to offer tailored solutions and foster enduring relationships with their customer base. Their ability to adapt to local market demands while leveraging worldwide resources is a cornerstone of their value proposition in the offshore drilling industry.

Valaris offers a technologically advanced and versatile fleet, including ultra-deepwater drillships and modern jackups, capable of meeting diverse offshore drilling needs. Their commitment to operational excellence, evidenced by a 97% offshore revenue efficiency in Q1 2024, ensures reliable performance and high asset utilization for clients.

The company's global operational presence across key regions like the Middle East and North Sea, coupled with a focus on safety and sustainability, provides a competitive edge. Valaris actively works on CO2 emission reduction and local workforce development, aligning with the growing demand for responsible energy practices.

Valaris’s value proposition is further strengthened by its highly skilled and proficient drilling crews, who benefit from substantial investment in training and development. This focus on expertise ensures efficient and safe project execution, even in complex operational environments.

Valaris prioritizes transparent reporting on safety and environmental performance, a crucial element for clients emphasizing ESG criteria. This commitment is evident in their annual sustainability reports and numerous safety awards, reinforcing trust and accountability.

For instance, in 2023, Valaris reported a Total Recordable Incident Rate (TRIR) of 0.35, significantly below industry averages, showcasing their dedication to operational safety and client assurance.

Valaris fosters strong customer relationships through dedicated account management and collaborative project execution. This focus on partnership is evident in their proactive approach to understanding and meeting client needs, often through custom rig modifications and transparent performance reporting, as seen in their 2024 contract awards and feedback initiatives.

The company's commitment to long-term partnerships is further solidified by strategic alliances, such as the ARO Drilling joint venture with Saudi Aramco. This deepens integration and aligns interests, creating a more stable and mutually beneficial relationship beyond standard contractual agreements.

Industry conferences and networking events are vital for Valaris to directly engage with clients and showcase its offshore drilling expertise. These gatherings provide a platform to present new technologies and service offerings, fostering direct connections that can lead to new contracts. For instance, participation in events like the International Offshore Petroleum Conference and Exhibition (IOPPEC) allows Valaris to demonstrate its commitment to innovation and operational excellence to a global audience of industry leaders and potential partners.

Valaris utilizes a multi-faceted channel strategy, prioritizing direct engagement with major clients through dedicated sales teams and participation in industry tenders. The company also leverages its website for broad communication and its joint venture, ARO Drilling, for targeted market access.

These channels are critical for securing and managing the high-value contracts that define the offshore drilling industry. Direct sales teams navigate complex negotiations, while tender processes and industry events showcase capabilities and foster relationships.

The Valaris website serves as a transparent hub for fleet status, services, and financial performance, with Q1 2024 revenue reaching $785 million. ARO Drilling, in particular, is instrumental in accessing the Saudi Arabian market and securing work with entities like Saudi Aramco.

Independent Oil and Gas Producers represent a crucial segment for Valaris, encompassing smaller to mid-sized exploration and production companies. These entities often require flexible and diverse drilling services, capable of operating across various water depths and challenging environments.

Valaris's ability to cater to this segment is demonstrated through its successful contract acquisitions with companies such as Jadestone Energy and Eni. These partnerships highlight Valaris's reach beyond the supermajors, securing valuable business from a broader spectrum of industry players. For instance, in 2024, Valaris continued to secure contracts with independent producers, reflecting the ongoing demand for their specialized offshore drilling capabilities.

Valaris serves a diverse clientele, from major international oil companies seeking deepwater expertise to national oil companies like Saudi Aramco, with whom they have a strategic joint venture, ARO Drilling. Independent producers also represent a significant segment, requiring flexible services, as evidenced by contracts with companies such as Jadestone Energy in 2024. Furthermore, Valaris is actively pursuing opportunities in the energy transition, specifically carbon capture and storage (CCS) projects, deploying rigs like the VALARIS 123 for initiatives such as the Porthos CCS project in the Netherlands.

Valaris incurs substantial costs for moving its offshore drilling rigs to new contract locations and then bringing them back offline. These mobilization and demobilization expenses can be particularly high for international projects, often involving complex logistics and regulatory hurdles.

These significant lump sum payments, while crucial for project execution, are typically not included in the reported contract backlog figures. For instance, in 2024, Valaris continued to manage these costs as part of its operational expenses for securing and completing drilling contracts worldwide.

Valaris's cost structure is heavily influenced by rig operating and maintenance costs, which include fuel, parts, and essential upkeep for its fleet, even when idle. Personnel and crewing expenses, covering salaries, benefits, and training for its global workforce, are also significant. In 2023, Valaris's total operating expenses were $2.9 billion, with labor being a major driver.

Mobilization and demobilization costs for moving rigs between contracts, especially international ones, represent another key expense. Capital expenditures for fleet modernization, regulatory compliance, and technological integration, such as Managed Pressure Drilling (MPD) capabilities, are also substantial investments to maintain asset competitiveness.

General and administrative expenses, encompassing corporate overhead, legal fees, and administrative staff costs, are managed with a focus on optimization. For example, in Q1 2024, Valaris saw a reduction in these expenses due to lower compensation and professional service fees.

Mobilization and demobilization fees represent significant revenue components for Valaris, supplementing the core day rates charged for offshore drilling services. These lump-sum payments cover the substantial costs and logistical complexities associated with relocating rigs to and from project sites. For instance, in 2023, Valaris secured contracts that included such fees, contributing to the overall profitability of their operations.

Valaris's revenue is primarily driven by its contract drilling services, where clients pay day rates for the use of its offshore rigs and crews. These contracts are typically long-term, creating a substantial and predictable revenue backlog. For example, Valaris reported a contracted revenue backlog exceeding $11.5 billion as of the first quarter of 2024, highlighting the stability of this revenue stream.

Additional revenue comes from mobilization and demobilization fees, which cover the significant costs of moving rigs between projects. Valaris also generates income through bareboat charter agreements, leasing its rigs to joint ventures like ARO Drilling, providing a steady, recurring income. In Q1 2024, Valaris's total revenue was $575 million, with these leasing arrangements forming a key part of that figure.

The company also realizes revenue from asset sales, such as the disposal of older or non-strategic rigs, which helps optimize its fleet and provides capital for reinvestment. These disposals are crucial for maintaining a modern and competitive asset base in the offshore drilling industry.