Petroleum Geo-Services Announces New FPSO Contract

PGS will produce this field with its floating production, storage and offloading (“FPSO”) vessel Petrojarl I. The duration of the contract is expected to be between 26 and 30 months with the first 18 months guaranteed by Statoil. PGS will be compensated for its production services at a dayrate expected to average approximately $162,000 per day, including a provision for certain upgrades to the processing facilities and the potential use of a shuttle tanker. Production is expected to commence around July 1, 2001.

Reidar Michaelsen, Chairman and Chief Executive Officer of Petroleum Geo-Services, stated, “We are extremely pleased to be awarded this important long-term contract in Norway. In addition, this is the tenth consecutive contract the Petrojarl I has been awarded since it was commissioned in 1986. The continuous use of this FPSO since its entry into the harsh environment market confirms that quality, high technology FPSOs can be redeployed numerous times during their economic life.”

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 marine seismic data. Such 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 oil and gas from offshore oil and gas 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.