Document:

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                                                                    EXHIBIT 4.20

                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May
14, 2003 is by and between Schlumberger Technology Corporation, a Texas
corporation ("STC"), and Hanover Compressor Company, a Delaware corporation
("Hanover").

                                    RECITALS

         WHEREAS, STC, Schlumberger Oilfield Holdings Limited, Schlumberger
Surenco S.A., Hanover, Hanover Compression Limited Partnership and Hanover
Cayman Limited are parties to that certain PIGAP Settlement Agreement dated the
date hereof (the "Settlement Agreement");

         WHEREAS, in connection with the Settlement Agreement, Hanover has
agreed to issue to STC $262,621,810 aggregate principal amount at maturity of
Hanover's Zero Coupon Subordinated Notes due 2007 (the "Notes"), which Notes are
being issued pursuant to an Indenture dated as of May 14, 2003 between Hanover
and Wachovia Bank, National Association, as trustee (the "Indenture");

         WHEREAS, the parties are entering into this Agreement as a condition to
closing the Settlement Agreement;

                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

         1.       Definitions. In addition to capitalized terms defined
elsewhere in this Agreement, the following capitalized terms shall have the
following meaning when used in this Agreement.

         "Commission" means the Securities and Exchange Commission.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended,
together with all rules and regulations promulgated thereunder.

         "Filing Deadline" means the 45th day after the date hereof.

         "Holder" means STC and its Permitted Transferees.

         "Permitted Transferee" has the meaning assigned to such term in Section
5.4.

         "Person" means any person or entity, whether an individual, whether in
his capacity as a trustee, executor, administrator or other legal
representative, sole proprietorship, corporation, limited liability company,
general partnership, limited partnership, trust, unincorporated organization,
syndicate, business association, firm, joint venture, governmental agency or
authority or any similar entity.

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         "Registrable Securities" means all Notes upon original issuance thereof
and at all time subsequent thereto until the earliest to occur of (i) a Shelf
Registration Statement covering such Notes having been declared effective by the
Commission and such Notes having been disposed of by the Holder in accordance
with such effective Shelf Registration Statement, (ii) such Notes having been
sold by the Holder in compliance with Rule 144, (iii) such Notes are no longer
owned by the Holder, or (iv) such Notes ceasing to be outstanding.

         "Rule 144" means Rule 144 promulgated under the Securities Act, as such
rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the Commission providing for offers and
sales of securities made in compliance therewith resulting in offers and sales
by subsequent holders that are not affiliates of an issuer of such securities
being free from the registration and prospectus delivery requirements of the
Securities Act.

         "Securities Act" means the Securities Act of 1933, as amended, together
with all rules and regulations promulgated thereunder.

         "Selling Expenses" means all fees and expenses of underwriters that are
a party to an underwriting agreement or similar purchase agreement with the
Holder, including discounts, commissions or fees of underwriters, selling
brokers, dealer managers or similar securities industries professionals that are
a party to an underwriting agreement or similar purchase agreement with the
Holder relating to the distribution of the Registrable Securities.

         "Subordinated Debt Offering" means an underwritten public offering of
subordinated debt securities of Hanover.

         "TIA" means the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission promulgated thereunder.

         "Trustee" has the meaning assigned to such term in the Indenture.

         2.       Shelf Registration.

         2.1      Hanover shall prepare and file as promptly as practicable (but
in any event on or before the Filing Deadline) with the Commission, and
thereafter shall use all reasonable efforts to cause to be declared effective, a
shelf registration statement on Form S-3 or an appropriate form under the
Securities Act relating to the offer and sale of the Registrable Securities by
the Holder from time to time in accordance with the methods of distribution set
forth in such registration statement (hereafter, an "Initial Shelf
Registration"). Hanover agrees not to file any other registration statement
(other than a registration statement on Form S-4 or Form S-8) prior to filing
the Initial Shelf Registration. Hanover further agrees not to request that any
other registration statement (other than a registration statement on Form S-4 or
Form S-8) be declared effective prior to the time that Hanover requests for the
Initial Shelf Registration to be declared effective.

         2.2      Hanover shall use all reasonable efforts to keep the Initial
Shelf Registration continuously effective under the Securities Act in order to
permit the prospectus forming part

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thereof to be used by the Holder until the Notes are no longer Registrable
Securities (the "Effectiveness Period").

         2.3      If the Initial Shelf Registration or any Subsequent Shelf
Registration (as hereinafter defined) ceases to be effective for any reason at
any time during the Effectiveness Period (other than because of the sale of all
of the Registrable Securities registered thereunder), Hanover shall use all
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within 45 days of such cessation
of effectiveness (i) amend the Initial Shelf Registration in a manner to obtain
the withdrawal of the order suspending the effectiveness thereof, or (ii) file
an additional "shelf" Registration Statement covering all of the Registrable
Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf
Registration is filed, the Company shall use all reasonable efforts to cause the
Subsequent Shelf Registration to be declared effective under the Securities Act
as soon as practicable after such filing and to keep such Registration Statement
continuously effective during the Effectiveness Period. As used herein the term
"Shelf Registration" means the Initial Shelf Registration and any Subsequent
Shelf Registration and the term "Shelf Registration Statement" means any
registration statement filed in connection with a Shelf Registration.

         2.4      Notwithstanding any other provisions hereof, Hanover will
ensure that (i) the Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act, (ii) the Shelf Registration Statement
and any amendment thereto (other than with respect to information included
therein in reliance upon or in conformity with written information furnished to
Hanover by or on behalf of the Holder specifically for use therein (the "Holder
Information")) does not, when it becomes effective, contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (iii)
any prospectus forming part of the Shelf Registration Statement, and any
supplement to such prospectus (in either case, other than with respect to the
Holder Information), as of any time when such prospectus is required to be
delivered under the Securities Act does not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

         3.       Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:

         3.1      Hanover shall prepare and file with the Commission on or prior
to the Filing Deadline a Shelf Registration Statement as prescribed by Section 2
hereof, and use all reasonable efforts to cause such Shelf Registration
Statement to become effective and remain effective as provided herein; provided
that before filing a Shelf Registration Statement or prospectus, or any
amendments or supplements thereto, Hanover will furnish copies of all such
documents proposed to be filed to the Holder and the counsel for the Holder and
will reflect the reasonable comments of such Persons in the Shelf Registration
Statement. Hanover shall advise the Holder promptly after it shall file a Shelf
Registration Statement or prospectus, or any amendments or supplements thereto,
of such filing, and after it receives notice of the issuance of an order
declaring the Shelf Registration Statement effective.

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         3.2      Hanover shall prepare and file with the Commission such
amendments and supplements to such Shelf Registration Statement and the
prospectus(es) used in connection therewith as may be necessary to keep such
Shelf Registration Statement effective during the Effectiveness Period and to
comply with the provisions of the Securities Act with respect to the disposition
of the Registrable Securities during such period in accordance with the intended
methods of disposition by the Holder set forth in the Shelf Registration
Statement.

         3.3      Hanover shall furnish to the Holder such number of copies of
the Shelf Registration Statement, each amendment and supplement thereto, the
prospectus(es) included in the Shelf Registration Statement (including each
preliminary prospectus) and such other documents as the Holder may reasonably
request in order to facilitate the disposition of the Registrable Securities.

         3.4      Hanover shall use all reasonable efforts to register or
qualify the Registrable Securities under such other securities or blue sky laws
of such jurisdictions as the Holder may reasonably request and do any and all
other acts and things which may be reasonably necessary or advisable to enable
the Holder to consummate the disposition in such jurisdictions of the
Registrable Securities; provided that Hanover will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3.4 or (ii) consent to
general service of process in any such jurisdiction.

         3.5      Subject to Section 5.1, Hanover shall notify the Holder, at
any time when a prospectus relating to the Registrable Securities is required to
be delivered under the Securities Act, of the happening of any event as a result
of which the prospectus included in the Shelf Registration Statement contains an
untrue statement of a material fact or omits any fact necessary to make the
statements therein not misleading, and Hanover will promptly prepare a
supplement or amendment to such prospectus or a post-effective amendment to the
Shelf Registration Statement so that, as thereafter delivered to the purchasers
of the Registrable Securities, such prospectus will not contain any untrue
statement of a material fact or omit to state any fact necessary to make the
statements therein not misleading.

         3.6      Hanover shall enter into such customary agreements (including
underwriting agreements in customary form) and take all such other customary
actions, including arranging for opinions of counsel and accountant's "comfort
letters," as the Holder or the underwriters, if any, reasonably requests in
order to expedite or facilitate the disposition of the Registrable Securities;
provided, however, Hanover shall not be required to enter into any agreement or
arrangement that prohibits Hanover from offering or selling any securities
issuable by Hanover for any period of time.

         3.7      Hanover shall make reasonably available for inspection by the
Holder, any underwriter participating in any disposition pursuant to the Shelf
Registration Statement, and any attorney, accountant or other agent retained by
the Holder or any such underwriter, all financial and other records, pertinent
corporate documents and properties of Hanover, and cause Hanover's officers,
directors, employees and independent accountants to supply all information
reasonably requested by the Holder, any such underwriter, attorney, accountant
or agent in connection with the Shelf Registration Statement.

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         3.8      Hanover shall advise the Holder promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any stop order by
the Commission suspending the effectiveness of the Shelf Registration Statement
or the initiation or threatening of any proceeding for such purpose and promptly
use all reasonable efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued as proscribed in
Section 2.3.

         3.9      Hanover shall cooperate with the Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust Company.
Hanover shall also enable such Registrable Securities to be in such
denominations and registered in such names as the Holder may reasonably request.

         3.10     Hanover shall, prior to the effective date of the Initial
Shelf Registration relating to the Registrable Securities, (i) provide the
Trustee with certificates for the Registrable Securities in a form eligible for
deposit with The Depository Trust Company and (ii) take such action to procure a
CUSIP number for the Registrable Securities.

         3.11     Hanover shall cause the Indenture to be qualified under the
TIA not later than the effective date of the Initial Shelf Registration, and in
connection therewith, cooperate with the Trustee and the Holder to effect such
changes to the Indenture as may be required for the Indenture to be so qualified
in accordance with the terms of the TIA. Hanover shall execute, and use all
reasonable efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to be
filed with the Commission to enable the Indenture to be so qualified in a timely
manner.

         3.12     Hanover shall, upon prior request from the Holder, participate
and make senior management reasonably available to participate, in any due
diligence and "roadshow" marketing efforts reasonably requested by the Holder or
any underwriter retained by the Holder.

         3.13     Hanover shall use all reasonable efforts (and in no event less
than Hanover uses with respect to its own securities) to cause the Notes to be
rated by both Standard & Poor's Ratings Group, a division of the McGraw Hill
Companies, Inc. ("S&P"), and Moody's Investor Service, Inc. ("Moody's") and
Hanover shall use all reasonable efforts to cause the Notes to remain rated by
both S&P and Moody's during the Effectiveness Period.

         4.       Registration Expenses. All expenses incident to Hanover's
performance of or compliance with this Agreement, including, but not limited to,
all registration and filing fees, fees and expenses of compliance with
securities or blue sky laws, printing expenses, messenger and delivery expenses,
and fees and disbursements of counsel for Hanover and all independent certified
public accountants and other Persons retained by Hanover, will be borne by
Hanover, provided that in no event shall Hanover be required to pay any Selling
Expenses or transfer taxes. In addition, Hanover will pay its internal expenses
(including, but not limited to, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review and the expense of any liability insurance obtained by
Hanover.

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         5.       Blackout Rights.

         5.1      The Holder shall not offer, sell or otherwise dispose of the
Registrable Securities unless it has provided to Hanover a written notice of its
intent to offer and sell the Registrable Securities at least two (2) business
days prior to the offer or sale of the Registrable Securities (the "Offer
Notice"). Hanover shall have two (2) business days following delivery of such
Offer Notice by the Holder to provide written notice (a "Blackout Notice") to
the Holder objecting to such offering or sale if the Board of Directors of
Hanover (or any authorized committee thereof) determines in good faith that it
is in the best interests of Hanover not to disclose the existence of facts
surrounding any proposed or pending material corporate transaction or other
material development involving Hanover at the time of the proposed offering (the
"Blackout Right"). If Hanover exercises its Blackout Right, the Holder shall not
offer or sell the Registrable Securities for a period of up to forty-five (45)
days (as specified in the Blackout Notice) from the date of the Blackout Notice.
Furthermore, Hanover shall be entitled to exercise the Blackout Right no more
than two (2) times and with respect to no more than ninety (90) days during any
365-day period (including any deemed exercise of the Blackout Right pursuant to
Section 5.3). If the Holder provides written notice of its intent to offer and
sell the Registrable Securities as provided above and if Hanover does not timely
provide a Blackout Notice in response thereto, then the Holder may offer and
sell the Registrable Securities during the thirty (30) days following the
expiration of the applicable two (2) business day period in which the Holder
could have given a Blackout Notice. If the Holder decides to conduct such
offering and sale of the Registrable Securities pursuant to an underwritten
public offering, the Holder agrees to make the appropriate officers reasonably
available during the two (2) business days following the delivery of the Offer
Notice to confer with Hanover to negotiate in good faith to agree on the
selection of the underwriters in the underwriting group and the legal counsel to
the underwriting group in connection with such offering and sale of the
Registrable Securities; provided, however, that the Holder ultimately has the
sole authority to select such underwriters and legal counsel. If the Registrable
Securities are not sold during such thirty (30) day period, the Holder shall not
thereafter offer or sell the Registrable Securities unless a subsequent notice
is given to Hanover as provided above. Notwithstanding anything in this Section
5.1 to the contrary, one (1) time during calendar year 2004 and one (1) time
during calendar year 2005, Hanover may, at any time other than during the two
(2) business day period during which Hanover may exercise a Blackout Notice as
set forth above or during the thirty (30) day period following the expiration of
such two (2) day period, give the Holder written notice that Hanover desires to
have 30 calendar days beginning the day after the date of delivery of such
notice in which to sell debt securities and the Holder agrees not to deliver an
Offer Notice or to otherwise offer, sell or otherwise dispose of Registrable
Securities during such 30 calendar day period.

         5.2      No later than the date that is two (2) business days after the
date that the Initial Shelf Registration is declared effective by the
Commission, the Holder shall give Hanover a written notice stating that either
(i) the Holder shall have a 30-day period beginning on the first business day
after such notice is delivered in which to sell Registrable Securities and
Hanover shall not offer, sell or otherwise dispose of any debt securities
issuable by Hanover or its subsidiaries (other than the offer or sale to a bank
or bank syndicate in connection with any revolving or term bank credit facility)
during such 30-day period or (ii) Hanover shall have a 30-day period beginning
on the first business day after such notice is delivered in which to commence an
offering of debt securities issuable by Hanover or its subsidiaries and the
Holder

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shall not sell any Registrable Securities during such 30 day period. In
the event that the written notice described in clause (i) of the first sentence
of this Section 5.2 is given, Hanover shall have a 30-day period beginning on
the first business day after the earlier to occur of (a) the end of the 30-day
period described in such clause (i), or (b) the earlier to occur of (A) the date
that the Holder closes the sale of any Registrable Securities (excluding any
over-allotment option granted in connection therewith) or (B) four (4) trading
days after the date that the Holder prices the sale of any Registrable
Securities (excluding any over-allotment option granted in connection
therewith), in which to commence an offering of debt securities issuable by
Hanover or its subsidiaries and the Holder shall not sell any Registrable
Securities during such 30-day period (except to the extent such offering of debt
securities by Hanover closes during such 30-day period (excluding any
over-allotment option granted in connection therewith)). In the event that the
written notice described in clause (ii) of the first sentence of this Section
5.2 is given, the Holder shall have a 30-day period beginning on the first
business day after the earlier to occur of (a) the end of the 30-day period
described in such clause (ii), or (b) the earlier to occur of (A) the date that
Hanover closes an offering of debt securities issued by Hanover or its
subsidiaries (excluding any over-allotment option granted in connection
therewith) or (B) four (4) trading days after the date that Hanover prices an
offering of debt securities issued by Hanover or its subsidiaries (excluding any
over-allotment option granted in connection therewith), in which to sell the
Registrable Securities and Hanover shall not offer, sell or otherwise dispose of
any debt securities issuable by the Company or its subsidiaries (other than the
offer or sale to a bank or bank syndicate in connection with any revolving or
term bank credit facility) during such 30-day period (except to the extent such
offering of Registrable Securities closes during such 30-day period (excluding
any over-allotment option granted in connection therewith)). In no case may
Hanover exercise its Blackout Right in a manner that prohibits the Holder from
selling Registrable Securities during the periods described in this Section 5.2.

         5.3      During the Effectiveness Period, any failure of a Shelf
Registration Statement to be effective when the Holder notifies Hanover of its
intent to sell Registrable Securities shall count as the exercise of a Blackout
Right by Hanover for as long as such Shelf Registration Statement is not
effective following such notice.

         5.4      Notwithstanding anything in this Section 5 to the contrary,
the Holder shall be permitted to transfer the Registrable Securities (provided
that such transfer is exempt from registration under the Securities Act),
together with the rights granted to the Holder under this Agreement, only to a
Permitted Transferee who delivers to Hanover, in connection with such transfer,
a written instrument by which such transferee agrees to be bound by the
applicable terms of this Agreement. A "Permitted Transferee" shall mean any
direct or indirect subsidiary of Schlumberger Limited or any entity that merges
or consolidates with or owns or acquires all of the equity securities or all or
substantially all of the assets of the Holder or any direct or indirect
subsidiary of such entity.

         6.       Indemnification.

         6.1      Hanover agrees to indemnify, to the extent permitted by law,
the Holder, each Person who controls the Holder (within the meaning of the
Securities Act), any agent, underwriter, legal counsel or other representative
retained by the Holder, and with respect to each such Person, its officers,
employees, partners and directors against all losses, claims,

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damages, liabilities and expenses (including, but not limited to, reasonable
attorneys' fees and expenses) caused by (i) any untrue or alleged untrue
statement of material fact contained in any Shelf Registration Statement,
prospectus or preliminary prospectus, or any amendment thereof or supplement
thereto or (ii) any omission or alleged omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished, or caused to be furnished, in writing to Hanover by the Holder or its
Affiliates (or with respect to indemnification claims by an underwriter, except
insofar as the same are caused by or contained in any information furnished, or
caused to be furnished, in writing to Hanover by that underwriter or its legal
counsel or representatives), expressly for use therein or by the Holder's
failure to deliver a copy of the prospectus or any amendments or supplements
thereto after Hanover has furnished the Holder with a sufficient number of
copies of the same. The payments required by this Section 6.1 will be made
periodically during the course of the investigation or defense, as and when
bills are received or expenses incurred.

         6.2      In connection with any Shelf Registration Statement in which
the Holder is participating, the Holder will furnish to Hanover such information
as Hanover reasonably requests for use in connection with any such Shelf
Registration Statement or prospectus and, to the extent permitted by law, will
indemnify Hanover, its directors, employees and officers and each Person who
controls Hanover (within the meaning of the Securities Act) against any losses,
claims, damages, liabilities and expenses (including, but not limited to,
reasonable attorneys' fees and expenses) resulting from any untrue or alleged
untrue statement of material fact contained in the Shelf Registration Statement,
prospectus or preliminary prospectus, or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
only to the extent that such untrue statement or omission is contained in or
omitted from any information so furnished in writing by the Holder for the
acknowledged purpose of inclusion in such registration statement, prospectus or
preliminary prospectus; provided that the liability of the Holder will be
limited in all events to the net amount received by the Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.

         6.3      Any Person entitled to indemnification hereunder will (a) give
prompt written notice to the indemnifying Person of any claim with respect to
which it seeks indemnification and (b) permit such indemnifying Person to assume
the defense of such claim with counsel reasonably satisfactory to the
indemnified Person. If such defense is assumed, the indemnifying Person will not
be subject to any liability for any settlement made by the indemnified Person
without its consent. An indemnifying Person who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying Person with respect to such claim. No indemnifying Person, in the
defense of any claim, shall, except with the prior written consent of the
indemnified Person, consent to entry of any judgment or enter into any
settlement (i) that does not include as an unconditional term thereof the giving
by the claimant to such indemnified Person a release from all liability in
respect to such claim in form and substance reasonable satisfactory to such
indemnified Person, or (ii) that imposes any equitable remedies, conduct
restrictions or affirmative obligations whatsoever on such indemnified Person
other than financial obligations for which such indemnified Person will be
indemnified hereunder.

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         6.4      The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified Person or any officer, director or controlling Person
of such indemnified Person and will survive the transfer of the Registrable
Securities. Hanover and the Holder also agree to make such provisions as are
reasonably requested by any indemnified Person for contribution to such Person
in the event the indemnifying Person's indemnification is unavailable for any
reason.

         7.       Compliance with Rule 144. So long as Hanover files reports
under Section 13 or 15(d) of the Exchange Act and any Registrable Securities
remain outstanding, then at the request of the Holder, Hanover will (a)
forthwith furnish to the Holder a written statement of compliance with the
filing requirements of the Commission as set forth in Rule 144, and (b) make
available to the public and the Holder such information as will enable the
Holder to make sales pursuant to Rule 144.

         8.       Miscellaneous.

         8.1      No Inconsistent Agreements. Hanover will not hereafter enter
into any agreement with respect to its securities which is inconsistent with or
which otherwise materially limits, restricts or interferes with the rights
granted to the Holder in this Agreement.

         8.2      Amendments and Waivers. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or waived at any time
only by the written agreement of Hanover and the Holder. Any waiver, permit,
consent or approval of any kind or character on the part of any of the parties
hereto of any provision or condition of this Agreement must be made in writing
and shall be effective only to the extent specifically set forth in writing.

         8.3      Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto will bind and inure to the benefit of the
respective successors and assigns of the parties hereto. Except as set forth in
Section 5.4, this Agreement may not be assigned (and any purported assignment
shall be null and void) without the prior written consent of the non-assigning
Person.

         8.4      Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.

         8.5      Notices. Any notices required or permitted to be sent
hereunder shall be delivered personally or mailed, certified mail, return
receipt requested, or delivered by overnight courier service to the following
addresses, or such other address as the Holder designates by written notice to
Hanover, and shall be deemed to have been given upon delivery, if delivered
personally, two (2) business days after mailing, if mailed, or one (1) business
day after delivery to the courier, if delivered by overnight courier service:

         If to Hanover, to:

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         Hanover Compressor Company
         12001 North Houston Rosslyn Road
         Houston, Texas 77086
         Attn:  General Counsel
         Fax:  (281) 405-6203

         If to the Holder, to:

         Schlumberger Technology Corporation
         300 Schlumberger Drive MD:23
         Sugar Land, Texas 77478
         Attn: General Counsel
         Fax: (281) 285-6952

         with a copy to (which shall not constitute notice):

         Gray Cary Ware & Freidenrich
         1221 South MoPac, Suite 400
         Austin, Texas 78746-6875
         Attn: Brian P. Fenske, Esq.
         Fax: (512) 457-7001

         8.6      Execution in Counterparts. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, and such counterparts together shall constitute one
instrument.

         8.7      Governing Law. This Agreement and the transactions
contemplated hereby shall be construed in accordance with, and governed by, the
laws of the State of New York.

         8.8      Consent to Jurisdiction. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the Borough of Manhattan in the City of New York, New York or any New
York state court in the event any dispute arises out of this Agreement or any of
the transactions contemplated hereby, (ii) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court, and (iii) agrees that it will not bring any action relating
to this Agreement in any court other than a federal court sitting in the Borough
of Manhattan in the City of New York, New York or a New York state court.

         8.9      WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM OR CAUSE OF ACTION
ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, OR
ANY DEALINGS BETWEEN ANY OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED

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HEREBY, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE, MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR OTHER MODIFICATIONS TO THIS
AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR TO ANY OTHER DOCUMENT
OR AGREEMENT RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY.

         8.10     Service of Process. Each of the parties hereto irrevocably
consents to the service of any process, pleading, notices or other papers by the
mailing of copies thereof by registered, certified or first class mail, postage
prepaid, to such party at such party's address set forth herein, or by any other
method provided or permitted under New York law; provided that if either party
hereto effects such service of process by any method other than transmittal
thereof via overnight courier, charges prepaid, such party shall simultaneously
transmit a copy thereof via overnight courier, charges prepaid.

         8.11     Reproduction of Documents. This Agreement and all documents
relating hereto, including, but not limited to, (a) consents, waivers,
amendments and modifications which may hereafter be executed and (b)
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, optical disk,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

         8.12     Remedies. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party shall be entitled to
immediate injunctive relief or specific performance without bond or the
necessity of showing actual monetary damages in order to enforce or prevent any
violations of the provisions of this Agreement.

         8.13     Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

         8.14     Final Agreement. This Agreement constitutes the complete and
final agreement of the parties concerning the matters referred to herein, and
supersedes all prior agreements and understandings.

                                       11

<PAGE>

         8.15     No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be used against any
Person.

                                    * * * * *

                            [Signature Page Follows]

                                       12

<PAGE>

The parties hereto have executed this Agreement as of the date first set forth
above.

                                    HANOVER COMPRESSOR COMPANY

                                    By:  /s/ John E. Jackson
                                        ----------------------------------------
                                    Name: John E. Jackson
                                          --------------------------------------

                                    Title: Senior Vice President and
                                           Chief Financial Officer
                                           -------------------------------------

                                    SCHLUMBERGER TECHNOLOGY
                                    CORPORATION

                                    By:  /s/ Dean Ferris
                                        ----------------------------------------

                                    Name: Dean Ferris
                                          --------------------------------------

                                    Title: Assistant Secretary
                                           -------------------------------------

                                 SIGNATURE PAGE
                          REGISTRATION RIGHTS AGREEMENT<PAGE>

                                                                    EXHIBIT 10.2

                           PIGAP SETTLEMENT AGREEMENT

         This PIGAP Settlement Agreement (this "Agreement") is made as of May
14, 2003 by and among Schlumberger Technology Corporation ("STC"), Schlumberger
Oilfield Holdings Limited ("SOHL"), Schlumberger Surenco S.A. ("Surenco"),
Hanover Compressor Company ("Hanover") and Hanover Compression Limited
Partnership ("Purchaser").

         WHEREAS, the parties hereto are parties to that certain Purchase
Agreement dated as of June 28, 2001, as amended by that certain Amendment No. 1
to Purchase Agreement dated as of August 30, 2001 (together, the "Purchase
Agreement").

         WHEREAS, Camco International Inc. ("Camco") has been merged with and
into STC.

         WHEREAS, any capitalized terms used and not defined herein (including
Annex A hereto) shall have the meanings ascribed to them in the Purchase
Agreement.

         WHEREAS, the WilPro Interest was transferred by Surenco to Hanover
Cayman, Limited ("Hanover Cayman") at the Closing under the Purchase Agreement.

         WHEREAS, pursuant to Section 1.7 of the Purchase Agreement, Purchaser
had the option in certain circumstances to put the WilPro Interest back to
Surenco. Purchaser and Surenco desire that Purchaser retain the WilPro Interest
and that the PIGAP Put be terminated and that certain other matters and issues
that have arisen or may arise among the parties be settled.

         WHEREAS, Hanover and certain of its officers and directors are named
defendants in private litigation arising out of or based, inter alia, on the
2002 restatements of Hanover's financial statements and the events giving rise
thereto.

         Now, therefore, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

                                    ARTICLE I
                            TERMINATION AND EXCHANGE

         1.1      PIGAP Put. The PIGAP Put is hereby terminated and neither
Surenco nor any of its Affiliates shall have any obligation to purchase or to
assume the WilPro Interest and from this day forward Surenco and its Affiliates
shall have no obligations or liabilities to Purchaser and its Affiliates with
respect to the WilPro Interest, including, without limitation, with respect to
the PIGAP Put and any provision of the Purchase Agreement relating thereto.

         1.2      Hanover Note. The Hanover Note is hereby amended, modified and
re-issued as the security (the "Security") representing the Zero Coupon
Subordinated Notes due March 31, 2007 in the form of Exhibit A issued pursuant
to the Indenture dated the date hereof between Hanover and Wachovia Bank, as
Trustee, attached hereto as Exhibit B (the "Indenture"). In connection with the
execution and delivery of this Agreement, Hanover shall execute and deliver

<PAGE>

to STC (i) the Indenture and (ii) the Security. In addition, each of STC and
Hanover shall execute and deliver the offset rights agreement attached hereto as
Exhibit C.

         1.3      Consent and Agreement. Each of Surenco, Hanover Cayman,
Williams International PIGAP Limited and WilPro Energy Services (PIGAP) Limited
shall execute and deliver the Consent and Agreement attached hereto as Exhibit
D.

         1.4      Registration Rights Agreement. Each of STC and Hanover shall
execute and deliver the Registration Rights Agreement dated the date hereof
attached hereto as Exhibit E with respect to the Zero Coupon Subordinated Notes
due 2007 issuable by Hanover pursuant to the Indenture (the "Registration Rights
Agreement").

         1.5      Financing Obligation. Any and all obligations of Hanover to
pay Surenco and its Affiliates up to Fifty Eight Million Dollars ($58,000,000)
pursuant to Section 1.2(a)(ii) of the Purchase Agreement are hereby terminated
and replaced with the non-recourse promissory note (the "Non-Recourse Note")
attached hereto as Exhibit F. Each of Hanover Cayman and Surenco shall execute
and deliver the Assignment and Security Agreement dated the date hereof attached
hereto as Exhibit G.

         1.6      Credit Support for WilPro. The obligation of Surenco and its
Affiliates to provide any additional funding, credit support or involvement in
connection with the refinancing of the WilPro Interest by Overseas Private
Investment Corporation and ABN AMRO N.V., as SACE Facility Agent and
Administrative Agent, is hereby terminated as set forth in Exhibit H hereto.

         1.7      Indemnification Agreement. Hanover shall execute and deliver
the Indemnification Agreement dated the date hereof attached hereto as Exhibit
I.

         1.8      Changes to Credit Agreement. The parties hereto agree that if,
prior to the Shelf Registration Statement (as such term is defined in the
Registration Rights Agreement) being declared effective by the Securities and
Exchange Commission (the "SEC"), (a) the definition of "Consolidated EBITDA"
contained in the Credit Agreement (as defined in the Indenture), as in effect on
the date hereof, is amended to add back expenses and losses resulting from the
settlement of litigation or the settlement with a Governmental Authority (as
defined in the Indenture) due to inquiries or investigations by one or more
Governmental Authorities (collectively, the "Settlements"), the definition of
"Consolidated EBITDA" contained in the Indenture shall be amended in the same
manner and (b) the definition of "Consolidated Indebtedness" contained in the
Credit Agreement, as in effect on the date hereof, is amended to exclude from
Consolidated Indebtedness any Indebtedness incurred as a result of the
Settlements, the definition of "Consolidated Indebtedness" contained in the
Indenture shall be amended in the same manner; provided that (i) any such
amendment to the Credit Agreement shall not effect the calculation of the
Consolidated Leverage Ratio under the Credit Agreement (other than such effects
caused by the changes to the definitions resulting from the amendments described
above), (ii) Hanover's efforts to effect the above amendments to the Credit
Agreement shall not effect or delay its efforts or obligations to file the Shelf
Registration Statement with the SEC and to cause the Shelf Registration
Statement to be declared effective by the SEC as provided in the Registration
Rights Agreement and (iii) all costs and expenses associated with

                                        2

<PAGE>

preparing any amendment or supplement to the Shelf Registration Statement and
filing the same with the SEC to effect the above amendments shall be borne by
Hanover.

         1.9      Accredited Investor.

                  (a)      STC is acquiring the Security under this Agreement
         for its own account and not with a view to any distribution of the
         Security in violation of the federal securities laws.

                  (b)      STC understands that the Security has not been
         registered under the Securities Act of 1933, as amended (the
         "Securities Act"), or any federal or state law by reason of specific
         exemptions under the provisions thereof, the availability of which
         depend in part upon the accuracy of its representations made in this
         Section 1.9.

                  (c)      STC is an "accredited investor" as defined in Rule
         501(a) of Regulation D under the Securities Act.

                  (d)      STC understands that the Security is a "restricted
         security" under applicable federal securities laws and that the
         Securities Act and the rules of the SEC thereunder provide in substance
         that it may dispose of the Security only pursuant to an effective
         registration statement under the Securities Act or an exemption
         therefrom, and it understands that Hanover has no obligation to
         register the Security except as contemplated by the Registration Rights
         Agreement.

                  (e)      Surenco is acquiring the Non-Recourse Note under this
         Agreement for its own account and not with a view to any distribution
         of the Non-Recourse in violation of the federal securities laws.

                  (f)      Surenco understands that the Non-Recourse Note has
         not been registered under the Securities Act or any federal or state
         law by reason of specific exemptions under the provisions thereof, the
         availability of which depend in part upon the accuracy of its
         representations made in this Section 1.9.

                  (g)      Surenco is an "accredited investor" as defined in
         Rule 501(a) of Regulation D under the Securities Act.

                  (h)      Surenco understands that the Non-Recourse Note is a
         "restricted security" under applicable federal securities laws and that
         the Securities Act and the rules of the SEC thereunder provide in
         substance that it may dispose of the Non-Recourse Note only pursuant to
         an effective registration statement under the Securities Act or an
         exemption therefrom, and it understands that Hanover has no obligation
         to register the Non-Recourse Note.

                                   ARTICLE II
                                     RELEASE

         2.1      Release by Schlumberger Parties. As partial consideration for
the agreement by Hanover and Purchaser (collectively, the "Hanover Parties") to
enter into this Agreement, each

                                        3

<PAGE>

of STC, SOHL and Surenco (collectively, the "Schlumberger Parties"), for itself
and for its past, present and future divisions, subsidiaries and Affiliates
(which includes Schlumberger Limited and its direct and indirect subsidiaries)
and each of their respective predecessors, successors, assigns and legal
representatives, officers, directors, agents and employees, and each of their
respective heirs, legal representatives, insurers and assigns (the "Schlumberger
Releasing Parties"), does hereby fully, finally and forever remise, release,
acquit and discharge each of the Hanover Parties, and each of their respective
past, present and future divisions, subsidiaries (including, without limitation,
Hanover Cayman) and Affiliates, and each of their respective predecessors,
successors, assigns and past and present legal representatives, officers,
directors, agents (other than PricewaterhouseCoopers, LLP) and employees, and
each of their respective heirs, legal representatives, insurers and assigns and
GKH (the "Hanover Released Parties") of and from all Released Claims, and hereby
quit-claims, waives any right to, and covenants not to sue any Hanover Released
Party with respect to any Released Claim, that any Schlumberger Releasing Party
has, had or may, can or shall have, hold, own or claim to have, own or hold,
upon or by reason of any matter, cause or thing whatsoever from the beginning of
the world to the day of the date of this Agreement. Notwithstanding anything
herein to the contrary, the Schlumberger Releasing Parties are not releasing any
Claims against PricewaterhouseCoopers, LLP, including without limitation Claims
asserted in the January 24, 2003 complaint captioned Plumbers & Steamfitters,
Local 137 Pension Fund and John Petti v. PricewaterhouseCoopers, LLP, Case No.
H-03-0300.

         2.2      Release by Hanover Parties. As partial consideration for the
agreement by the Schlumberger Parties to enter into this Agreement, each of the
Hanover Parties, for itself and for its past, present and future divisions,
subsidiaries (including, without limitation, Hanover Cayman) and Affiliates and
each of their respective predecessors, successors, assigns and past and present
legal representatives, officers, directors, agents and employees, and each of
their respective heirs, legal representatives, insurers and assigns (the
"Hanover Releasing Parties"), does hereby fully, finally and forever remise,
release, acquit and discharge each of the Schlumberger Parties, and each of
their respective past, present and future divisions, subsidiaries and Affiliates
(including Schlumberger Limited and its direct and indirect subsidiaries), and
each of their respective predecessors, successors, assigns and legal
representatives, officers, directors, agents and employees, and each of their
respective heirs, legal representatives, insurers and assigns (the "Schlumberger
Released Parties") of and from all Released Claims, and hereby quit-claims,
waives any right to, and covenants not to sue any Schlumberger Released Party
with respect to any Released Claim, that any Hanover Releasing Party has, had or
may, can or shall have, hold, own or claim to have, own or hold, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the day of the date of this Agreement.

         2.3      Complete Defense. Each of the Schlumberger Parties and the
Hanover Parties further understands and agrees that the releases included in
this Agreement shall be treated as a full and complete defense to, and will
forever be a complete bar to the commencement or prosecution of any and all
Released Claims arising out of any matter, cause or thing whatsoever from the
beginning of the world to the day of the date of this Agreement, which may be
brought, instituted or taken by any Schlumberger Releasing Party against any
Hanover Released Party or by any Hanover Releasing Party against any
Schlumberger Released Party.

                                        4

<PAGE>

         2.4      Unknown Claims. Each of the Schlumberger Parties and the
Hanover Parties understands and agrees that there is a risk that, subsequent to
the execution of this Agreement and the releases and indemnification included
herein, a Schlumberger Releasing Party or a Hanover Releasing Party will
discover, incur or suffer Released Claims which were unknown or unanticipated at
the time this Agreement was executed which, if known by a Schlumberger Releasing
Party or a Hanover Releasing Party on the date this Agreement is executed, may
have materially affected the decision of a Schlumberger Party or a Hanover Party
to execute this Agreement. Each of the Schlumberger Parties and the Hanover
Parties understands and agrees that, by reason of the releases and
indemnification agreed to by it herein, it is assuming the risk of such unknown
Released Claims and agrees that its release and indemnification of the persons
and entities referred to in this Article II applies to any and all such Released
Claims.

         2.5      No Admission. Each of the Schlumberger Parties and the Hanover
Parties further understands and agrees that entering into the Agreement (and the
releases and indemnification included herein) is not to be construed as an
admission of liability, or violation of any law or regulation or contract by any
Schlumberger Released Party or any Hanover Released Party.

         2.6      Full and Complete Settlement. The Schlumberger Parties and the
Hanover Parties each intend that the releases and indemnification agreed to by
it herein be complete and not subject to a claim of mistake of fact and that it
expresses a FULL AND COMPLETE SETTLEMENT of the Released Claims. Regardless of
the adequacy or inadequacy of the consideration paid, the release and
indemnification included herein is intended to settle or avoid litigation and/or
settle the Released Claims, and to be final and complete.

         2.7      Definitions. For purposes of this Article II and Annex A
hereto, the following terms shall have the meanings set forth below:

                  (a)      "Claims" shall mean any and all claims,
         counterclaims, demands, suits, proceedings, actions, causes of action,
         charges, losses, costs, debts, dues, attorneys' fees, sums of money,
         accounts, personal injuries, reckoning, bonds, bills, specialties,
         covenants, contracts, obligations, guarantees, liens, variances,
         trespasses, judgments, extents, executions, damages, controversies,
         liabilities, promises, agreements, acts or omissions, in each case of
         any kind or nature, at law or in equity, whether known or unknown,
         whether suspected or unsuspected, whether accrued or contingent,
         whether presently existing or having existed in the past or arising in
         the future.

                  (b)      "GKH" shall mean GKH Partners, L.P., GKH Investments,
         L.P., GKH Private Limited, HGW Associates, L.P., DWL Lumber Corp. and
         JAKK Holding Corp., each of their respective present and former
         parents, subsidiaries and affiliates, the present and former trustees,
         directors, officers, shareholders, general partners, limited partners,
         employees, agents, attorneys and representatives of each of the
         foregoing and the predecessors, successors and assigns of each of the
         foregoing.

                  (c)      "Hanover Litigation" shall mean the private
         litigation against Hanover (and any other party or parties) arising out
         of or based on the Hanover Restatements, including without limitation
         litigation brought under federal or state securities laws, the

                                        5

<PAGE>

         Employee Retirement Security Act, or as shareholder derivative suits
         and the litigation set forth on Annex B.

                  (d)      "Hanover Restatements" shall mean the restatements of
         Hanover's financial statements, which restatements were made and filed
         with the SEC during calendar year 2002, the press reports related
         thereto made prior to the date hereof and the events giving rise
         thereto that were expressly publicly disclosed in such filings and
         press releases prior to the date hereof.

                  (e)      "Released Claims" shall mean any and all Claims
         listed on Annex A.

         2.8      Indemnification.

                  (a)      General. The Hanover Parties hereby agree to jointly
and severally indemnify, defend and hold harmless the Schlumberger Released
Parties, including without limitation Rene Huck, with respect to all Losses (as
defined in the Purchase Agreement) suffered by any of the Schlumberger Released
Parties as a result of the assertion of any Claim by a person other than (i) a
Schlumberger Released Party or (ii) PricewaterhouseCoopers, LLP, against a
Schlumberger Released Party relating to, arising out of or in connection with
the Hanover Restatements, including a Claim made in connection with the Hanover
Litigation.

                  (b)      Process for Third Party Claims. The Schlumberger
Released Party seeking indemnification pursuant to Section 2.8(a) shall notify
Hanover of the assertion of any Claim by a person other than a Schlumberger
Released Party in respect of which indemnity may be sought under Section 2.8(a);
provided that the failure to notify Hanover will not relieve Hanover or the
Purchaser of any liability under Section 2.8(a) except to the extent that
Hanover demonstrates that its defense of such Claim is materially prejudiced by
its failure to receive timely notice. Hanover shall assume the defense of any
such Claim. The Schlumberger Released Party seeking indemnification may, at its
own expense: (a) participate in the defense of any such Claim, and (b) upon
notice to Hanover, at any time during the course of any such Claim, assume the
defense thereof with counsel of its own choice and in the event of such
assumption, shall have the exclusive right, subject to Section 2.8(c), to settle
or compromise such Claim. If the Schlumberger Released Party assumes such
defense, Hanover shall have the right (but not the duty) to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Schlumberger Released Party.

                  (c)      Settlement or Compromise. Any settlement or
compromise made or caused to be made by Hanover, Purchaser or any Schlumberger
Released Party, as the case may be, of any Claim referred to in Section 2.8(b)
shall also be binding upon Hanover, Purchaser or the Schlumberger Released
Party, as the case may be, in the same manner as if a final judgment or decree
had been entered by a court of competent jurisdiction in the amount of such
settlement or compromise; provided, that: (a) no obligation, restriction or Loss
(as defined in the Purchase Agreement) shall be imposed on any Schlumberger
Released Party as a result of such settlement or compromise by Hanover or
Purchaser without its prior written consent, and (b) no obligation, restriction
or Loss shall be imposed on Hanover or Purchaser as a result of such settlement
or compromise by any Schlumberger Released Party without its prior written
consent, which consent shall not be unreasonably withheld.

                                        6

<PAGE>

                                   ARTICLE III
                                  MISCELLANEOUS

         3.1      Amendment. Each of the Schlumberger Parties and the Hanover
Parties understands and agrees that this Agreement (including the releases
included herein) is irrevocable and may not be amended, modified, changes or
rescinded except in a writing agreed to by all parties to this Agreement.

         3.2      Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument. Facsimile signatures will be deemed to
be original signatures for all applicable purposes.

         3.3      Assignment. This Agreement may not be assigned (and any
purported assignment shall be null and void) without the prior written consent
of the non-assigning party.

         3.4      Successors and Assigns. Except as otherwise expressly provided
herein, all agreements contained in this Agreement by or on behalf of any of the
parties hereto will bind and inure to the benefit of the respective successors
and assigns of the parties hereto.

         3.5      Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this Agreement.

         3.6      Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflicts of laws principles thereof, except that if it is
necessary in any other jurisdiction to have the law of such other jurisdiction
govern this Agreement in order for this Agreement to be effective in any
respect, then the laws of such other jurisdiction shall govern this Agreement to
such extent.

         3.7      Consent to Jurisdiction. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of any federal court
located in the Borough of Manhattan in the City of New York or any New York
state court in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that it will not attempt to deny
or defeat such personal jurisdiction by motion or other request for leave from
any such court, and (iii) agrees that it will not bring any action relating to
this Agreement in any court other than a federal court sitting in the Borough of
Manhattan in the City of New York or a New York state court.

         3.8      WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES
ITS RESPECTIVE RIGHT TO A JURY TRIAL OF ANY PERMITTED CLAIM OR CAUSE OF ACTION
ARISING OUT OF THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, OR
ANY DEALINGS BETWEEN ANY OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER OF
THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS,

                                        7

<PAGE>

AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR OTHER MODIFICATIONS TO
THIS AGREEMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR TO ANY OTHER
DOCUMENT OR AGREEMENT RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY.

         3.9      Service of Process. Each of the parties hereto irrevocably
consents to the service of any process, pleading, notices or other papers by the
mailing of copies thereof by registered, certified or first class mail, postage
prepaid, to such party at such party's address set forth herein, or by any other
method provided or permitted under New York law; provided that if either party
hereto effects such service of process by any method other than transmittal
thereof via overnight courier, charges prepaid, such party shall simultaneously
transmit a copy thereof via overnight courier, charges prepaid.

         3.10     Reproduction of Documents. This Agreement and all documents
relating hereto, including, but not limited to, (a) consents, waivers,
amendments and modifications which may hereafter be executed and (b)
certificates and other information previously or hereafter furnished, may be
reproduced by any photographic, photostatic, microfilm, optical disk,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

         3.11     Remedies. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in its favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party shall be entitled to
immediate injunctive relief or specific performance without bond or the
necessity of showing actual monetary damages in order to enforce or prevent any
violations of the provisions of this Agreement.

         3.12     Complete Agreement. This Agreement and the Exhibits hereto
constitute the entire agreement of the parties hereto with respect to the
subject matter hereof and supercedes all prior and contemporaneous negotiations
and agreements, oral or written. All prior or contemporaneous negotiations or
agreements are deemed incorporated and merged into this Agreement and are deemed
to have been abandoned if not so incorporated. Each of the parties hereto
represents that no promises or inducements not herein expressed have been made
to any party or have caused any party to sign this Agreement (or agree to the
releases included herein). No representations, oral or written, are being relied
upon by any party in executing this Agreement other than the express
representations of this Agreement. All parties to this Agreement have negotiated
and participated in its drafting (including the releases included herein) and
the Agreement and terms hereof shall not be construed in favor of or against any
party as the drafter of the Agreement.

                                        8

<PAGE>

         3.13     Severability. If any provision or term of this Agreement is
held to be illegal, invalid, or unenforceable, such provision or term shall be
fully severable; this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised part of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from this Agreement. Furthermore, in
lieu of each such illegal, invalid, or unenforceable provision or term there
shall be added automatically as a part of this Agreement another provision or
term as similar to the illegal, invalid, or unenforceable provision as may be
possible and that is legal, valid, and enforceable.

         3.14     Investigation. Each of the Schlumberger Parties and the
Hanover Parties, through and by signature of an authorized officer below,
represents that it has read this Agreement (including the releases included
herein) and fully understands all of its and their terms; that it has conferred
with its attorney prior to signing the same, or that it knowingly and
voluntarily has chosen not to confer with its attorney; and that it understands
any rights that it may have and signs this Agreement (and agrees to the releases
included herein) with full knowledge of any such rights.

         3.15     Notices. Any notices required or permitted to be sent
hereunder shall be delivered personally or mailed, certified mail, return
receipt requested, or delivered by overnight courier service to the following
addresses, or such other address as STC designates by written notice to Hanover,
and shall be deemed to have been given upon delivery, if delivered personally,
two (2) business days after mailing, if mailed, or one (1) business day after
delivery to the courier, if delivered by overnight courier service:

         If to Hanover, to:

         Hanover Compressor Company
         12001 North Houston Rosslyn Road
         Houston, Texas 77086
         Attn: General Counsel
         Fax: (281) 405-6203

         If to STC, to:

         Schlumberger Technology Corporation
         300 Schlumberger Drive MD:23
         Sugar Land, Texas 77478
         Attn: General Counsel
         Fax: (281) 285-6952

         with a copy to (which shall not constitute notice):

                                        9

<PAGE>

         Gray Cary Ware & Freidenrich
         1221 South MoPac, Suite 400
         Austin, Texas 78746-6875
         Attn: Brian P. Fenske, Esq.
         Fax: (512) 457-7001

Delivery of notice to Hanover in compliance with this Section 3.15 shall
constitute valid notice to the Hanover Parties and delivery of notice to STC in
compliance with this Section 3.15 shall constitute valid notice to the
Schlumberger Parties.

               [The rest of this page is intentionally left blank.]

                                       10

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.

                                    SCHLUMBERGER TECHNOLOGY
                                    CORPORATION

                                    By: /s/ Dean Ferris
                                        ----------------------------------------
                                    Name: Dean Ferris
                                    Title: Assistant Secretary

                                    SCHLUMBERGER OILFIELD HOLDINGS
                                    LIMITED

                                    By: /s/ Johnson O. Afllaka
                                        ----------------------------------------
                                    Name: Johnson O. Afllaka
                                    Title: President

                                    SCHLUMBERGER SURENCO S.A.

                                    By: /s/ [illegible]
                                        ----------------------------------------
                                    Name: [illegible]
                                    Title: President

                                    HANOVER COMPRESSOR COMPANY

                                    By: /s/ John E. Jackson
                                        ----------------------------------------
                                    Name: John E. Jackson
                                    Title: Senior Vice President and
                                           Chief Financial Officer

                                    HANOVER COMPRESSION LIMITED
                                    PARTNERSHIP

                                    By: /s/ John E. Jackson
                                        ----------------------------------------
                                    Name: John E. Jackson
                                    Title: Senior Vice President and
                                           Chief Financial Officer

                                 SIGNATURE PAGE
                           PIGAP SETTLEMENT AGREEMENT

<PAGE>

                                                                         ANNEX A

                                 RELEASED CLAIMS

The following Claims shall constitute Released Claims for purposes of this
Agreement:

-        Any Claim under Section 1.2(a)(ii) of the Purchase Agreement.

-        Any Claim under Section 1.7 of the Purchase Agreement.

-        Any Claim under Section 5.11 of the Purchase Agreement.

-        Any Claim under Article IX of the Purchase Agreement to the extent such
         Claim relates to Sections 1.2(a)(ii), 1.7 or 5.11 of the Purchase
         Agreement.

-        Any Claim under the Letter Agreement dated August 7, 2001 from STC to
         Hanover relating to a delay or failure by PDVSA Petroleo y Gas, S.A. to
         consent to the transfer of the WilPro Interest (as defined in the
         Purchase Agreement).

-        Any Claim under the form of the Hanover Note immediately prior to its
         amendment, modification and re-issuance in connection with this
         Agreement.

-        Any Claims by the Hanover Releasing Parties against the Schlumberger
         Released Parties relating to, arising out of or in connection with
         WilPro, the WilPro Interest or the WilPro Companies (each as defined in
         the Purchase Agreement) other than pursuant to the agreements
         referenced herein entered into on or after the date hereof.

-        Any Claims relating to, arising out of or in connection with the
         Hanover Restatements or the Hanover Litigation that have or could be
         asserted by the Hanover Releasing Parties against the Schlumberger
         Released Parties or by the Schlumberger Releasing Parties against the
         Hanover Released Parties.

                                       A-1

<PAGE>

                                                                         ANNEX B

                               HANOVER LITIGATION

HANOVER CLASS ACTION LITIGATION:

<TABLE>
<S>      <C>
1        Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Hanover Compressor Co., et. al., No. H-02-0410 (S.D.
         Tex. Filed Feb. 4, 2002).

2        McBride v. Hanover Compressor Co., et. al., No. H-02-0431 (S.D. Tex. Filed Feb. 5, 2002).

3        Koch v. Hanover Compressor Co., et. al., No. H-02-0441 (S.D. Tex. Filed Feb. 6, 2002).

4        Schneider v. Hanover Compressor Co., et. al., No. H-02-0491 (S.D. Tex. Filed Feb. 7, 2002).

5        Goldstein v. Hanover Compressor Co., et. al., H-02-0526 (S.D. Tex. Filed Feb. 11, 2002)

6        Noyes v. Hanover Compressor Co., et. al., H-02-0574 (S.D. Tex. Filed Feb. 14, 2002).

7        Rocha v. Hanover Compressor Co. et. al., H-02-0594 (S.D. Tex. Filed Feb. 19, 2002).

8        Peck v. Hanover Compressor Co., et. al., H-02-0627 (S.D. Tex. Filed Feb. 20, 2002).

9        Mueller v. Hanover Compressor Co., et. al., H-02-0652 (S.D. Tex. Filed Feb. 21, 2002).

10       Langhoff v. Hanover Compressor Co., et. al., H-02-0764 (S.D. Tex. Filed Mar. 1, 2002).

11       Fox v. Hanover Compressor Co., et. al., H-02-0815 (S.D. Tex. Filed Mar. 5, 2002).

12       Rosen v. Goldberg, et. al., H-02-0959 (S.D. Tex. Filed Mar. 12, 2002).

13       Detectives Endowment Ass'n Annuity Fund v. Hanover Compressor Co., et. al., H-02-1016 (S.D. Tex. Filed Mar. 14,
         2002).

14       Montag v. Hanover Compressor Co., et. al., H-02-1030 (S.D. Tex. Filed Mar. 15, 2002).

15       Anderson v. Hanover Compressor Co., et. al., H-02-2306 (S.D. Tex. June 20, 2002).
</TABLE>

HANOVER DERIVATIVE LITIGATION:

<TABLE>
<S>      <C>
1        Coffelt Family, LLC v. O'Connor, et. al., 19410 NC (Del. Ch. Filed Feb. 15, 2002).

2        Harbor Fin. Partners v. McGhan, et. al., H-02-0761 (S.D. Tex. Filed Mar. 1, 2002).

3        Carranza v. O'Connor, et. al., H-02-1430 (S.D. Tex. Filed Apr. 18, 2002).

4        Steves v. O'Connor, et. al., 02-1527 (S.D. Tex. Filed Apr. 24, 2002).
</TABLE>

                                       B-1

<PAGE>

<TABLE>
<S>      <C>
5        Koch v. O'Connor, et. al., H-02-1332 (S.D. Tex. Filed Apr. 10, 2002).

6        Hensley v. McGhan, et. al., 2002-30987 (Tex. Dist. Ct. (Harris Co.) Filed June 20, 2002)).
</TABLE>

ERISA COMPLAINTS:

<TABLE>
<S>      <C>
1        Angleopoulos v. Hanover Compressor Co., et. al., H-03-1064 (S.D. Tex. Filed Mar. 26, 2003).

2        Freeman v. Hanover Compressor Co. et. al., H-03-1095 (S.D. Tex. Filed Mar. 31, 2003).

3        Kirkley v. Hanover Cos., et. al., H-03-1155 (S.D. Tex. Filed Apr. 4, 2003).
</TABLE>

                                       B-1

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