PGS Provides Update on New Builds in Spain

Friday, Jul 30, 2010

Reference is made to earlier announcements regarding the vessels under construction at the Factorias Vulcano shipyard in Spain. Petroleum Geo-Services ASA ('PGS' or the 'Company') announced, on August 25, 2009, that its subsidiary Arrow Seismic Invest III Ltd. ('Arrow') had terminated the shipbuilding contract for New Build number 533. PGS further announced on 4 September, 2009, that the yard disputed Arrow's right to terminate the contract, and that the dispute would be submitted to arbitration in Norway.

The arbitration court has now announced a ruling in favor of PGS. The yard was ordered to pay Arrow the full amount claimed for, EUR 39 563 000, with the addition of interest and full legal costs. The arbitration ruling is final and binding.

Arrow will immediately pursue its claim for payment in accordance with the decision of the arbitrators. Approximately EUR 32 million plus interest out of the amount awarded by the arbitrators is covered by bank guarantees.

Source: Petroleum Geo-Services