PGS Production –An Overview

PGS Production –An Overview
Espen Klitzing, President PGS Production
Pareto Securites- FPSO Conference
London, March 9, 2006

PGS Production – Company Background
• FPSO contractor since 1986
• Acquired by PGS in 1998
• Operating from Trondheim and Aberdeen
• 580 employees
• Largest FPSO contractor in the North Sea
– 4 owned and operated FPSOs
– 2 leased shuttle tankers and one storage
tanker
• Maximum production capacity 339,000
barrels of oil per day
• Joint Venture with Teekay on global
Mobile Productions unit developments

From Wellhead to Refinery
PGS Production owns and operates 4
harsh environment FPSOs plus 40%
ownership in 1 benign water FPSO
PGS Production operates
2 DP shuttle tankers
PGS Production can also take on responsibility
for 3rd party operation of client owned FPSOs
PGS Production installs and
operates subsea equipment

Key Skills
Design
Project Execution
Operations

Petrojarl I – A Unique Success Story
”The development of the Glitne field represents an
important milestone for Statoil.
The ability to develop a marginal field in a commercially
attractive way 14 months after contract award to first
oil is a remarkable achievement (..)
The use of a well-proven technology and extensive
operating experience has enabled PGS Production to
maximize production, enhance performance, provide
high quality and maintain high regularity throughout the
contract period”
Statoil – Kent Høgseth, Glitne Field Manager
• Operations since 1986 on 10 different fields
– Only 4.5 months without contract
• Over 100 Mmbbls produced with 98% operational uptime
• In excess of 1,500 offloadings performed with no accidents or oil spill
• The only FPSO which has been re-deployed in the North Sea

Strong Operations performance
• PUT development 2004 and 2005 by vessel
2004 2005
– Petrojarl I 85,2% - 93,7%
– Petrojarl Foinaven 92,8% - 87,7%
– Petrojarl Varg 87,2% -89,1%
– Ramform Banff 95,9% - 95,2%
– All 90,5% - 91,4%
• Production Utilization Factor (PUT) equals actual produced oil as a
percentage of the maximum oil production from the facilities
installed on the field defined as actual produced volume plus
identified production losses.

HSE Statistics - PGS Production – 1.1 – 31.12.2005
FPSOs
PETROJARL I
PETROJARL
FOINAVEN
PETROJARL
VARG
RAMFORM
BANFF
Lost Time Injuries 0 0 0 0
Medical Treatment Injuries 0 3 2 1
Days since last Lost Time Injury (LTI) per 01.01.06 1518 2039 932 1088
Tankers
PETRONORDIC
PETROATLANTIC
Lost Time Injuries (LTI) 0 0
Medical Treatment Injuries 0 0
Days since last Lost Time Injury (LTI) per 01.01.06 1140 1029
Important milestones
09.01.2005: Ramform Banff – 2 years without Lost Time Injury
02.06.2005: Petrojarl Foinaven - 5 years without Lost Time Injury
14.06.2005: Petrojarl Varg – 2 years without Lost Time Injury
04.11.2005: Petrojarl I - 4 years without Lost Time Injury

Production
As of December 31, 2005
Group Revenues
Marine Geophysical
Onshore
Production
Group Adjusted EBITDA
• Production
– 24% of Group
revenues in 2005,
20% of Adjusted
EBITDA
$ million
80
70
60
50
40
30
20
10
0
Production
Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Q4 05
Revenues
Adjusted EBITDA
Operating profit (ex. Impairments and Other Inc./Exp.)
• Revenues down 2%
in Q4 05 vs Q4 04,
Adjusted EBITDA
flat
• Leading North Sea
FPSO contractor

Production – Q4 Highlights
Petrojarl Foinaven
BBLS/Day
100 000
80 000
60 000
40 000
20 000
0
Q4
03
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
• Average daily production Q4
– 67,800 BOPD
• Q4 production 39% up from Q3
2005 and down 5% from Q4
2004
• Q3 2005 production volumes
impacted by maintenance
activity
Ramform Banff
BBLS/Day
• Average daily production Q4
14 000
12 000
10 000
8 000
6 000
4 000
2 000
0
Q4
03
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
– 9,200 BOPD
• Q4 production down 7% from
Q3 2005 and down 20% from
Q4 2004
• Revenue based on minimum
day rate provision

Production – Q4 Highlights
Petrojarl I
BBLS/Day
35 000
30 000
25 000
20 000
15 000
10 000
5 000
0
• Average daily production Q4
– 14,300 BOPD
• Q4 production up 23% from
Q3 2005 and up 8%
compared to Q4 2004
Q4
03
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
Petrojarl Varg
• Average daily production Q4
BBLS/Day
– 27,300 BOPD
30 000
25 000
20 000
15 000
10 000
5 000
0
Q4
03
Q1
04
Q2
04
Q3
04
Q4
04
Q1
05
Q2
05
Q3
05
Q4
05
• Q4 production up 36% from Q3
2005 and up 83% from Q4 2004
• Lower than anticipated output
from Varg
– Postponement of well
intervention
– Well/reservoir performance

PGS Production - Two pronged strategy
HARSH ENVIRONMENT
Focus on core area
(harsh environment)
operations through
redeployment and new
projects
• Retain position as the leading North Sea
FPSO contractor
• Redeployment of existing units in core
area
• Actively seek to develop new projects
NEW AREAS
Growth strategy with
focus on new areas
through organic growth
and structural moves
• Market expansion beyond North Sea
region
• Target selective FPSO projects based on
converted tanker solutions
• Explore opportunities through JV with
Teekay

The FPSO Fleet
Petrojarl I
Field:
Client:
Glitne, NCS
Statoil
Petrojarl Foinaven
Field:
Client:
Foinaven, UKCS
BP
Petrojarl Varg
Field:
Client:
Varg, NCS
Talisman
Ramform Banff
Field:
Client:
Banff, UKCS
CNR
Ikdam (40% Interest)
Field: Ikdam, Tunisia
Client: Lundin

Redeployment Upside in Unused Capacity
Barrels per day
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
Ramform Banff Petrojarl I Petrojarl Varg Petrojarl
Foinaven
• The four FPSOs have
a total production
capacity of 339,000
barrels per day
Average production 9M 2005
Available Capacity
Note: Part of the excess oil capacity is currently used to produce water

PGS Production – Current Contract Position
Current “most likely” contract period for PGS Production fleet
1997 1999 2001 2003 2005 2007 2009 2011 2013
Petrojarl I
Petrojarl
Foinaven
Petrojarl Varg
Ramform Banff
Original firm period
Jan 2006 est.
1997 1999 2001 2003 2005 2007 2009 2011 2013
All vessels contracted until at least 2008
Source: PGS Production 2006

Key Assumptions in Estimating Contract Periods
• Petrojarl I
– Based on current production profiles from Statoil
– Assumes new well is drilled in 2007
• Petrojarl Foinaven
– Based on current production profiles from BP
• Petrojarl Varg
– No production from Varg South
• Ramform Banff
– Rates on current contract applicable for production through 2014
– Based on current production profile from CNR

Joint Venture between Teekay and PGS Production
Teekay Petrojarl Offshore
• PGS Production and Teekay will jointly
engage in the business of owning and
operating Mobile Production Units
• The new set-up will be organised as a
50/50% joint venture company
• The agreement does not extend to PGS’
existing FPSO fleet and Teekay’s
FSO/existing midstream fleet
• Combines resources from PGS Production
AS and Teekay Shipping

Teekay Petrojarl Offshore
World Wide Supplier of Mobile Production Solutions
• Become a world wide supplier of Mobile Production Solutions
• Strengthen marketing and business development activities in and
outside the North Sea area through established networks
• Access to fleet of suitable tankers for FPSO conversions

Acquisition of tanker marks beginning of new era
Main particulars
• Length
260.0 m
• Breadth
46.0 m
• Depth
21.8 m
• Draught
12 m
• Deadweight 124,472 t
• Storage 850,000 bbls
• Built 1986
• Hull
Double/double
• DP
Class I
•Double hull (DP I) shuttle tanker purchased in January 2006.
•Currently on bareboat lease back to Knutsen OAS for a 12-month firm period.
Aframax Aframaxtanker suitable suitable for for FPSO FPSO projects projects in in all all geographical geographical areas areas

Typical FPSO design based on Rita Knutsen

Examples of projects under evaluation / tender
Goliath
(Eni)
Maureen
(Apache)
Yme
(Talisman)
Jack
Chevron Texaco)
Ngu Vang
(Hoan Vu JOC )
Song Doc
(Truong Son JOC )
Bukit Tua
(ConocoPhillips)
Siri
(Petrobras)
Chinook
(Kerr McGee)
Gendalo
(Unocal)
Jeruk
(Santos)
PIPA II
(Petrobras)

Production Business Renamed Petrojarl if De-Merged
An FPSO Brandname With Long Traditions
• 20 year since Petrojarl I started test production on Oseberg - a
breakthrough for FPSO in the North Sea
• All but one of the vessels share the Petrojarl name.
• The name Petrojarl reflects both the long traditions and the forward
looking strategy in the PGS Production business

Production – Guidance for 2006
• Total oil production expected to be slightly
lower in 2006 than 2005
– Varg production expected to increase
– Expected decline on Foinaven and Glitne
– Banff expected to continue at minimum day
rate
• Operating expenses, including
maintenance, expected to be broadly in
line with 2005

Looking Ahead
• 20 years experience of operating FPSOs
• FPSO market expected to grow considerably in years ahead
• The Teekay Petrojarl Offshore joint venture is well positioned to
capture growth opportunities
• Key ambitions
– Maintain strong North Sea position
– Capture redeployment upside
– Further strengthen excellent operations track record
– Double FPSO fleet by 2010