Petroleum Geo-Services Announces Weaker Than Expected Fourth Quarter Results Despite Improving Market Conditions

Houston, Texas; Oslo, Norway; January 12, 2000: Petroleum Geo-Services ASA (NYSE:PGO; OSE:PGS) announced today that while it expects to remain marginally profitable during the fourth quarter of 1999, it does expect to report earnings significantly below current market expectations as a result of lower production volumes and revenues associated with the Ramform Banff floating production, storage and offloading facility and lower margins within the seismic business.

The Ramform Banff has resumed production after several weeks of reduced production resulting from an accident involving the oil offloading system and one of the shuttle tankers which prevented normal offloading of production. The Ramform Banff was not involved in this accident and no oil was spilled. This situation occurred during the most severe North Sea weather conditions encountered in some time.

Reidar Michaelsen, Chairman and Chief Executive Officer of PGS commented, It is unfortunate and disappointing that the Ramform Banff suffered unexpected interruptions in production as the vessel was just beginning to achieve stable production at a relatively high level. While we were disappointed with the performance of this asset during 1999, we still see great potential in the Banff field.”

He went on to say, “Within the seismic business, the fourth quarter results reflect the extremely weak market conditions that prevailed when contracts were awarded earlier this year. The backlog going forward is stronger and should continue to improve if spending levels accelerate during the second half of 2000, as expected.”

The Company expects to release its 1999 results on February 16, 2000 and will follow that earnings release with the standard investor conference call to further discuss the results and general market outlook.