**Exhibit 15.1**
**PETROLEUM GEO-SERVICES ASA**
**AUDIT COMMITTEE CHARTER**
***Purpose:***
The Audit Committee is appointed by the Board and shall act as preparatory body in connection withthe Board’s supervisory role, with respect to financial control and external audit, to preparematters for which the Board of Directors maintain responsibility and decision making. The AuditCommittee supports the Board in the administration and exercise of the Board’s responsibility forsupervisory oversight in accordance with:
 •  The Norwegian Public Limited Companies Act and Norwegian securities legislation;  •  Applicable provisions of the U. S. Securities Exchange Act of 1934 and regulationsstipulated by the U. S. Securities and Exchange Commission (SEC) in the Exchange Act; and  •  Applicable listing standards of the securities exchanges on which the Company’ssecurities are listed.
The primary function of the Audit Committee is to act as a preparatory body for the Board inconnection with the Board’s monitoring of:
 •  The integrity of the financial statements of the Company and related disclosures, basedon adequate books, records and internal controls and selection and consistent applicationof appropriate accounting policies;  •  The independent auditors’ qualifications, independence, and performance;  •  The performance of the Company’s internal audit function; and  •  The compliance by the Company with legal and regulatory requirements.
***Membership:***
The Audit Committee shall consist of three independent members, each of whom shall serve at thediscretion of the Board of Directors. The members of the Audit Committee shall meet theindependence, expertise, experience and financial literacy requirements of Norwegian law andapplicable provisions of the Securities Exchange Act of 1934 and the listing standards of the NewYork Stock Exchange.
The Company shall disclose as required by the SEC whether at least one member of the AuditCommittee is an “audit committee financial expert” as defined by the SEC.
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The simultaneous service on the audit committees of more than two other public companies requires aBoard determination that such simultaneous service does not impair the ability of such member toeffectively serve on the Company’s Audit Committee.
***Responsibilities:***
The Audit Committee shall consider and propose to the Board of Directors, for presentation andelection by the Annual Shareholders’ meeting, the independent auditors of the Company. The AuditCommittee shall also consider and propose the independent auditor’s remuneration to be fixed by theAnnual Shareholders’ meeting.
The Audit Committee shall support the Board in the administration and exercise of the Board’sresponsibility for supervisory oversight of the work of the independent auditors (includingresolution of disagreements between management and the independent auditors regarding financialreporting), which shall keep the Audit Committee informed of all aspects of its work for theCompany.
Subject to the approval of the Board of Directors, the Audit Committee shall:
 •  pre-approve all auditing services and permitted non-audit services to be provided by itsindependent auditors and shall not engage the independent auditors to perform the specificnon-audit services restricted by law or regulations; and  •  to the extent it deems necessary or appropriate, to retain and compensate independentlegal, accounting or other advisors.
The Audit Committee shall ensure that the Board of Directors have the necessary material to maketimely decisions with respect to the matters reviewed by the Audit Committee and otherwise theAudit Committee shall make regular reports to the Board.
The Chairman of the Audit Committee, whom shall be appointed from amongst the members of the AuditCommittee, shall attend the Annual General Meeting.
The Audit Committee shall review and reassess the adequacy of this Charter annually and recommendany proposed changes to the Board for approval. The Audit Committee shall conduct an annualperformance evaluation of its activities.
The following shall be the principal duties and responsibilities for which the Audit Committeesupports the Board in the administration and exercise of the Board’s responsibility for supervisoryoversight:
***As to Financial Statement and Disclosure Matters:***
All of the following shall apply to the Company’s reporting under US GAAP and separately to itsreporting under Norwegian GAAP.
 •  Review and discuss with management and the independent auditors the Company’s quarterlyfinancial statements, including the Company’s disclosures in its management’s      Revised December 10, 2004 Page 2 of 6
 

 

    discussion and analysis of financial condition and results of operations, prior to theannouncement of the Company’s quarterly results, and the results of the independentauditors’ review of the quarterly financial statements.  •  Review and discuss with management and the independent auditors the annual auditedfinancial statements, including disclosures made in Management’s Discussion and Analysis ofFinancial Condition and Results of Operations, prior to the filing of the Company’s AnnualReport on Form 20-F (or the annual report to shareholders if distributed prior to thefiling of the Form 20-F, or under any equivalent Oslo Stock Exchange requirements).  •  The Audit Committee’s review of the financial statements shall include:
 i.  major issues regarding accounting principles and financial statementpresentations, including any significant changes in the Company’s selection orapplication of accounting principles, and major issues as to the adequacy of theCompany’s internal controls and any special audit steps adopted in light of materialcontrol deficiencies;  ii.  discussions with management and the independent auditors regarding significantfinancial reporting issues and judgments made in connection with the preparation of thefinancial statements and the reasonableness of those judgments;  iii.  consideration of the effect of regulatory accounting initiatives, as well asoff-balance sheet structures on the financial statements;  iv.  consideration of management’s judgment about the quality, not just theacceptability, of accounting principles, and  v.  the clarity of the disclosures in the financial statements.
The Audit Committee shall also discuss the results of the annual audit and other matters requiredto be communicated to the Audit Committee and the Board of Directors by the independent auditorsunder professional standards.
 •  Receive and review a report from the independent auditor, prior to the filing of itsaudit reports with the SEC and with the Oslo Stock Exchange, on all critical accountingpolicies and practices of the Company, all alternative treatments of financial informationwithin generally accepted accounting principles that have been discussed with management,including the ramifications of the use of such alternative treatments and disclosures andthe treatment preferred by the independent auditor, and other material writtencommunications between the independent auditor and management.  •  Review and discuss the Company’s earnings press releases, as well as financialinformation and earnings guidance provided to analysts and rating agencies.  •  Discuss with management the Company’s major financial risk exposures including regard tobusiness interruption and the steps management has taken to monitor and control suchexposures, including the Company’s risk assessment and risk management policies.      Revised December 10, 2004 Page 3 of 6
 

 

 •  Discuss with the independent auditors any audit problems or difficulties encounteredduring the course of the audit work, including any restrictions on the scope of theindependent auditor’s activities or access to requested information, any significantdisagreements with management, and management’s response. The Audit Committee should reviewany accounting adjustments that were noted or proposed by the auditor but were “passed” (asimmaterial or otherwise); any communications between the audit team and the audit firm’snational office respecting auditing or accounting issues presented by the engagement; andany “management” or “internal control” letter issued, or proposed to be issued, by theaudit firm to the Company.  •  Review disclosures made to the Audit Committee by the Company’s CEO and CFO during theircertification process for the Form 20-F about any significant deficiencies in the design oroperation of internal controls or material weaknesses therein and any fraud involvingmanagement or other employees who have a significant role in the Company’s internalcontrols.
***As to Oversight of the Company’s Relationship with the Independent Auditors:***
 •  Obtain and review a report from the independent auditors at least annually regarding (a)the independent auditors’ internal quality-control procedures, (b) any material issuesraised by the most recent internal quality-control review, or peer review, of the firm, orby any inquiry or investigation by governmental or professional authorities within thepreceding five years respecting one or more independent audits carried out by the firm, (c)any steps taken to deal with any such issues, and (d) all relationships between theindependent auditors and the Company.  •  Evaluate the qualifications, performance and independence of the independent auditors,including considering whether the auditors’ quality controls are adequate and the provisionof permitted non-audit services is compatible with maintaining the auditors’ independence,and taking into account the opinions of management and personnel responsible for theinternal audit function. Such evaluation should include the review and evaluation of thelead partner.  •  Confirm the rotation of the lead (or coordinating) audit partner having primaryresponsibility for the audit and the audit partner responsible for reviewing the audit asrequired by law.  •  Recommend to the Board policies for the Company’s hiring of employees or formeremployees of the independent auditors.  •  Discuss with the independent auditors matters of audit quality and consistency and anysignificant auditing or accounting issues presented by the audit engagement on which theaudit team has consulted with their national office.  •  Meet with the independent auditors prior to the audit to discuss the planning andstaffing of the audit.      Revised December 10, 2004 Page 4 of 6
 

 

***As to Oversight of the Company’s Internal Audit Function:***
 •  Review the significant issues raised in reports to management prepared by the Company’sinternal auditors and management’s responses.  •  Review at least annually the internal audit resources and its mission, responsibilities,independence, budget and staffing and any recommended changes in the planned scope of theinternal audit.
***As to Compliance Oversight Responsibilities:***
 •  Obtain from the independent auditors assurance that Section 10A(b) of the Exchange Acthas not been implicated, nor have any similar provisions under the Oslo Stock Exchangerules. Section 10A(b) relates to illegal acts that have come to the attention of theindependent auditors during the course of the audit.  •  Obtain reports from management, the Company’s internal auditors and the independentauditors concerning whether the Company and its subsidiary/foreign affiliated entities arein conformity with applicable legal requirements, including the Company’s Code of BusinessConduct and Ethics and its procedures for complying with the US Foreign Corrupt PracticesAct. Review reports and disclosures of insider and affiliated party transactions. Advisethe Board with respect to the Company’s policies and procedures regarding compliance withapplicable laws and regulations and with the Company’s Code of Business Conduct and Ethics.  •  Establish procedures for the receipt, retention and treatment of complaints received bythe Company regarding accounting, internal accounting controls or auditing matters, and theconfidential, anonymous submission by employees of concerns regarding questionableaccounting or auditing matters.  •  Discuss with management and the independent auditors any correspondence with regulatorsor governmental agencies and any published reports, which raise material issues regardingthe Company’s financial statements or accounting policies.  •  Discuss with the Company’s General Counsel legal matters that may have a material impacton the financial statements or the Company’s compliance policies.
***Meetings:***
The Audit Committee shall meet as often as it deems appropriate and necessary, but not lessfrequently than quarterly. The Audit Committee will meet when called by the audit committeechairperson or by two members or when requested by the chairperson of the Board of Directors or theCEO. The audit committee chairperson and one member shall constitute a quorum.
The Audit Committee shall meet periodically with management, internal audit and the independentauditors in separate executive sessions, and also in executive session with only the AuditCommittee members. The Audit Committee may request any officer or employee of the
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Company or the Company’s outside counsel or independent auditors to attend a meeting of the AuditCommittee or to meet with any members of, or consultants to, the Audit Committee.
***Reports to the Board of Directors:***
The Audit Committee shall report regularly to the Board. The Audit Committee shall prepare andsubmit minutes from its meetings to the Board of Directors. Such minutes shall containrecommendations for Board action when appropriate.
The chairperson of a subcommittee shall ensure that the Board of Directors, at least every quarter,receives a report on the work of the subcommittee and that all matters before the subcommitteerequiring the decision of the Board of Directors is placed on the agenda of the Board of Directorsand that adequate documentation in support of the decision is provided to the Board of Directors.
***Limitation of Audit Committee’s Role:***
The CEO is responsible for preparing and presenting to the Board of Directors the Company’s annualand quarterly financial statements, and the independent auditors are responsible for auditingand/or reviewing these financial statements. While the Audit Committee has the responsibilities andpowers set forth in this Charter, it is not the duty of the Audit Committee to plan or conductaudits or to compile the Company’s financial statements and disclosures or to determine that theCompany’s financial statements and disclosures are complete and accurate and are in accordance withgenerally accepted accounting principles and applicable rules and regulations. These are theresponsibilities of management and the independent auditors.
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