PGS to Replace Main Production Riser on Varg in March

Petroleum Geo-Services expects to replace the damaged main production riser on the Varg Field during March 2005. This requires the manufacture and installation of a new riser. Pertra AS, a wholly owned subsidiary of PGS, operates the Varg field.

As earlier reported on November 8, 2004, production from the Varg field will continue at lower rates of approximately 15,000 barrels per day until the main production riser is replaced.

Revenues for PGS' floating, production, storage and offloading vessel Petrojarl Varg, which is producing the Varg field, will also be reduced due to the lower Varg production.

The Varg field is located in Production License 038 (Block 15/12) in the Norwegian sector of the North Sea. Pertra AS is the operator of Production License 038 with 70% interest while co-venturer Petoro AS holds the remaining 30%.