PGS Says Varg Production Returns to Normal

Petroleum Geo-Services reported earlier that the main production riser on the Varg field was damaged, reducing oil production from that field to a maximum of approximately 15,000 barrels per day thereby. This reduced production has negatively affected the tariff based portion of revenues associated with PGS' FPSO Petrojarl Varg which is producing the Varg field offshore Norway.

A new riser has been successfully installed this week and normal production levels have been obtained.

Due to maintenance work on Petrojarl Foinaven, production will be reduced by approximately 20-25,000 barrels per day for a two week period in March. The production on Foinaven also was somewhat lower than expected in January.

As previously disclosed the total oil production from PGS' four FPSO's is expected to be in line with 2004.