Russian-Norwegian Venture Awarded 3 -D Contract

Petroleum Geo-Services ASA announced that Exxon Neftegaz Limited awarded a major 3-D marine seismic contract to a Russian-Norwegian joint venture between Dalmorneftegeofizika Trust (DMNG) and PGS.

The work, which reportedly has already begun, is being performed in the Sakhalin - 1 and Sakhalin - 3 areas, offshore Sakhalin, Russia. The 3-D acquisition will be executed by the Russian high technology vessel Orient Explorer, owned and operated by DMNG. Large scale 3- D processing using IBM parallel supercomputers and PGS' proprietary 3-D software will be undertaken onboard the seismic vessel.

PGS owns the majority of the seismic equipment onboard the vessel.

This contract reflects the DMNG-PGS commitment to the region, with a seismic vessel that has been upgraded to the highest industry standards. The award also represents a breakthrough for DMNG-PGS' efforts, which are focused on providing high-tech seismic solutions to a number of major field development projects currently underway in Sakhalin. PGS is dedicated to this region and intends to deploy whatever equipment the oil industry demands to assure the successful rapid development of the existing reserves.

This contract award follows the announcement made by Exxon Corporation on June 10, that an agreement had been reached by the Sakhalin - 1 consortium and the Russian government to formally declare the Sakhalin Production Sharing Agreement effective and begin the evaluation work on the estimated $15 billion Sakhalin - 1 project. The Sakhalin - 1 consortium is proceeding rapidly by acquiring this 3-D dataset, with plans to drill at least one well during 1996.