Houston, Texas; Oslo, Norway; December 21, 2000: Petroleum Geo-Services ASA (NYSE: PGO; OSE: PGS) announced today that the upgrade on the Ramform Banff is now substantially complete. The Ramform Banff is expected to depart the shipyard before mid-January 2001 and be ready for production by the end of January 2001.
The three to four week delay is primarily related to the need to prepare updated documentation for United Kingdom authorities. In parallel, all five production risers from the Banff field have been removed for inspection, repair and partial replacement. This process is well underway, but there are still some uncertainties that could affect the first oil date. The Company expects that PGS’ insurance policy will cover a substantial portion of the costs related to the removal, repair and partial replacement of production risers. In addition to insurance coverage related to physical damage of equipment, the Company also maintains a loss of hire policy, which will provide cash flow for a maximum of 90 days during this upgrade.
Chairman and Chief Executive Officer of Petroleum Geo-Services, Reidar Michaelsen, said, “We are convinced that the work performed on the Ramform Banff during this shipyard stay will solve the problems that have previously limited production during harsh weather conditions. We are committed to the project and would like all safety and mechanical issues to be finalized during this shipyard stay. This delay is not significant to PGS’ earnings, especially in light of existing insurance coverage, and in reality the weather conditions during late December and early January would not make for an efficient re-connect in any case. We will continue to keep the market appraised of our progress towards first oil as we move into January 2001.”