PGS Selected to Promote License Round in West Africa

Petroleum Geo-Services ASA has entered into an exclusive agreement with the Government of Sao Tome and Principe to assist them in promoting their offshore acreage in future license rounds.

PGS will acquire and market high quality 3D seismic data ahead of future Sao Tome license rounds. The company will also assist the Government of Sao Tome and Principe with marketing the exploration opportunities and prospectivity of the Sao Tome shelf to the international oil industry. The most popular area of interest is expected to be concentrated in the northern part of the shelf which lies adjacent to a number of world class oil discoveries in deepwater Nigeria -- the most recent discoveries are located in Block 246.

Petroleum Geo-Services' acquisition and marketing of seismic data will be completed in phases and is dependent on the timing of the license rounds and subject to the levels of industry prefunding.

The agreement covers all of Sao Tome's territorial waters, including an area known as the Sao Tome -- Nigeria Joint Development Zone (JDZ). Until recently, this area was the subject of a territorial dispute between the Sao Tome and Nigerian governments. The JDZ was created as a result of negotiations between the two governments. Soon to be ratified, this will serve as a legislative framework for permitting and promoting oil and gas exploration on the acreage.

Reidar Michaelsen, chairman and chief executive officer of Petroleum Geo-Services, commented, "This represents another example of PGS' strategy to work with local governments and the international oil and gas industry to increase interest and accelerate exploration and ultimately the development of new hydrocarbon provinces around the world. This agreement is similar to agreements PGS has successfully employed in Nigeria and Brunei previously."

The republic of Sao Tome and Principe lies in the deepwater Gulf of Guinea. It is a large under-explored territory situated within a proven hydrocarbon system. The northern part of the territory contains a deepwater extension of the Niger Delta and is situated near world-class oil fields found offshore Nigeria, such as Akpo and Agbami. The recently discovered La Ceiba field in Equatorial Guinea proves that a separate hydrocarbon system also exists to the east of Sao Tome.

The Island Republic currently has no proven oil or gas reserves, either onshore or offshore, and therefore no upstream oil industry. Its downstream oil industry is wholly dependent on imported refined petroleum products.

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, time-lapse and multi-component 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. PGS' PetroTrac(TM) suite of advanced geophysical technologies allows oil and gas companies to better characterize and monitor their reservoirs in order to enhance production and ultimate recovery of hydrocarbons. In its production services business, PGS owns four floating production, storage and offloading systems (FPSOs) 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. PGS operates on a worldwide basis with headquarters in Oslo, Norway, and Houston.


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