PGS and Sinochem Enter into Definitive Agreement for the Sale of PGS' Atlantis Subsidiary

Chairman and Chief Executive Officer of Petroleum Geo-Services, Reidar Michaelsen, said, "While the complexity of the Atlantis portfolio caused some unexpected delays in the completion of this transaction, we are very happy to have reached a definitive agreement with Sinochem for the sale of these assets. We have great respect for Sinochem and their negotiations team. We believe they will benefit greatly from the assets that Atlantis has only begun to develop."

Sinochem Chief Executive Officer, Liu Deshu, said, "We are very pleased with this significant acquisition. Throughout this process we have been impressed with the Atlantis management team, their expertise and vision. We are also grateful to PGS and their advisors who helped facilitate this transaction."

Liu Deshu further added, "The acquisition of Atlantis is a major step in our strategy to expand into the global upstream sector. It is also consistent with our goal of improving the competitiveness of
Sinochem's overall petroleum operations through vertical integration. We look forward to making Atlantis an integral part of our oil and gas business, as well as further cooperation with large Chinese and
foreign partners."

Michaelsen went on to say, "The sale of Atlantis will complete our program to sell non-core assets that we communicated a little over one year ago. During this period and including the expected proceeds from the sale of Atlantis, PGS will have realized more than $500 million from sales of non-core assets. Additionally, during the past year, PGS has reorganized its geophysical business, addressed certain issues relating to the Banff FPSO, refurbished and re-deployed the Petrojarl I FPSO on a new contract, secured additional work for the Varg FPSO and entered into a definitive agreement for a strategic business combination with Veritas. The sale of Atlantis will also satisfy one of the conditions to closing of the Veritas transaction. While it has been a very active and challenging period for our management team, we are very excited about the future opportunities and look forward to completing the Veritas transaction."

JP Morgan acted as financial advisor to PGS on this transaction. Watson, Farley & Williams acted as PGS' legal advisors. ABN AMRO acted as financial advisor to Sinochem, and Coudert Brothers acted as its legal advisors.

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 and provides associated data management solutions. 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. In its production services business, PGS owns four floating production, storage and offloading systems 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, Texas.

Sinochem is a multinational trading conglomerate and Fortune 500 company with core business interests in petroleum and chemicals trading, financial services and high technology. It operates on a worldwide basis with headquarters in Beijing and over 30 offices globally including London, New York, Hamburg, Dubai, Hong Kong and Tokyo.


The information included herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical and future trends, on general economic and business conditions and on numerous other factors, including expected future developments, many of which are beyond the control of the Company. Such forward-looking statements are also subject to certain risks and uncertainties as disclosed by the Company in its filings with the Securities and Exchange Commission. As a result of these factors, the Company's actual results may differ materially from those indicated in or implied by such forward-looking statements.