Announces First Oil on Kyle

Houston, Texas; Oslo, Norway; May 26, 2000: Petroleum Geo-Services ASA (NYSE:PGO; OSE:PGS) announced today that it has successfully demobilized the PGS Petrojarl I FPSO from the Blenheim/Bladon field, operated by Talisman. After a brief dry-docking, the vessel has been moved to the Kyle field under an early production contract for Ranger Oil. PGS achieved first oil on May 24, 2000 within a record 20 day period. The Kyle field contract represents the ninth consecutive field on which the Petrojarl I has been deployed over the past 14 years. Following the early production contract on the Kyle field, PGS expects the Petrojarl I to return to the shipyard for a required five year class survey. Subsequent to the yard stay, expected to last approximately 90 days, the vessel will receive a certified life extension of 15 years. Once the docking is complete, PGS expects to redeploy this vessel on a new long-term contract, most likely in the North Sea.

Bjarte Bruheim, President and Chief Operating Officer of PGS, stated, "PGS is pleased to achieve first oil on this field in record time. The contract performance demonstrates that with PGS’ excellent engineering and operational execution, the Company can redeploy high technology FPSOs safely, economically, and rapidly in harsh environments, often at minimal upgrade cost. The extraordinary performance demonstrated on the transition between these two marginal oil fields is proof-positive of PGS’ redeployment strategy.”

Bruheim went on to say, "We remain extremely confident that this contract will be followed by a longer term contract in the same harsh environment. With current oil and gas prices at or near ten year highs, many of our customers are anxious to commence oil production on various fields as soon as possible. We believe that an asset such as the Petrojarl I capable, at recent oil prices, of generating over $1.4 million per day of revenues for our customers has a substantial value. In addition, the deepwater FPSO market in the Gulf of Mexico appears to be very promising and should create significant growth going forward. With PGS’ operational performance and safety track record, and our unique ability to provide reservoir imaging technology, we firmly believe that PGS is the preferred provider of deepwater floating production and reservoir management solutions. PGS currently owns and operates the world’s largest fleet of high technology, harsh environment floating production systems."

Petroleum Geo-Services is a technologically focused oilfield service company principally involved in two businesses: geophysical seismic services and production services. PGS acquires, processes, manages and markets 3D, 4D and 4C seismic data. This data is used by oil and gas companies in the exploration for new reserves, the development of existing reservoirs, and the management of producing oil and gas fields. In its production services business, PGS owns four floating production, storage and offloading systems and operates numerous offshore production facilities for oil and gas companies. FPSOs permit oil and gas companies to produce from offshore fields more cost effectively. The Company also provides data management solutions, 4D reservoir monitoring and characterization studies and other specialized geophysical services. PGS operates on a worldwide basis with headquarters in Oslo, Norway and Houston, Texas.