OSI Signs Fleet Contract with Royal Australian Navy; $8 Million Revenue for OSI Navigation Systems.

Business Editors

VANCOUVER, British Columbia--(BUSINESS WIRE)--March 4, 2004

Offshore Systems International Ltd. (OSI) (OTCBB: OFSYF)(TSX: OSI) announced today that its teaming partner, Nautronix Ltd., has signed the final prime contract to supply the Royal Australian Navy with a fleet installation of OSI's ECPINS-M(TM) electronic chart navigation system.

"We announced our selection by the Royal Australian Navy this past July, and we are pleased that the complex technical evaluations and prime contract negotiations are now fully complete," said John Jacobson, President and CEO of OSI. "This procurement further expands our track record in the naval market, and it will significantly improve the Royal Australian Navy's ability to operate jointly with NATO-member navies. We would like to thank our Australia-based partners, Nautronix Ltd. and Scientific Management Associates, for their efforts and guidance in bringing the selection and contract process to a successful conclusion."

The total contract value to OSI Navigation Systems is approximately CDN$8 million and the contract is organized into two phases:

-- The initial phase, representing approximately CDN$4.5 million

in revenue to OSI, includes delivery of software licenses and

some hardware installations beginning in September 2004.

Management expects this revenue to be realized during the next

12-18 months;

-- The second phase, representing approximately CDN$3.5 million

in revenue to OSI, includes delivery of further hardware,

training and the support services necessary for additional

installations of the first phase software. The timing and

scope of these deliveries is at the option of the Royal

Australian Navy, however management of OSI is optimistic that

this additional revenue can begin to be realized some 24

months after contract signing.

Mr. Jacobson added, "We are optimistic that this new relationship will bring further revenue opportunities within the Royal Australian Navy fleet. Our experience with prior customers suggests that deliveries proceed faster than originally contracted. In addition, the Royal Australian Navy is an impressive reference for us to other navies who may be considering replacement of paper navigation."

Certain contract conditions have been signed between OSI and the Royal Australian Navy. OSI and Nautronix expect to sign the final sub-contract arrangements in the next few weeks.

ECPINS(TM) and the Naval Military Navigation Systems Market

OSI's ECPINS product (Electronic Chart Precise Integrated Navigation System) is a world-leading system for the safe navigation of ships. ECPINS meets numerous international safety and quality standards and gives ship navigators a precise, real-time display of position and progress on electronic charts.

OSI estimates that there are approximately 2,600 vessels within NATO (North Atlantic Treaty Organisation) navies. Further, there are certain non-NATO countries that are potential customers for OSI Navigation Systems and which have naval fleets that total approximately 1,600 vessels.

To date, ECPINS-M (the military version) has been installed or is contracted to be installed on more than 250 naval vessels among customers which include the Canadian Navy, Royal Australian Navy, Royal Danish Navy, Royal Navy (U.K.), Royal New Zealand Navy, and U.S. Navy.

The Company estimates that the naval market opportunity for electronic charting systems is approximately Cdn $400 Million, exclusive of follow-on procurements and Coast Guard requirements. This market opportunity will materialize during the next several years, primarily driven by the need for NATO and allied fleets to evolve from paper-based charts to electronic geography, and the desire to standardize their respective situational awareness tools across all forces.

About Offshore Systems International Limited

Offshore Systems International Ltd. (OSI) was founded in 1977 and is a leader in delivering products and systems for situational awareness. The company provides display systems and geo-spatial data within mission-critical applications for several defense and commercial customers. OSI conducts its operations through three business units: Geomatics (data production and distribution), Navigation Systems, and Applications (products and services for command and control systems). OSI's common shares are listed for trading on the Toronto Stock Exchange (TSX: OSI) and OTC Bulletin Board (OTCBB: OFSYF). For more information, please visit www.osilcorp.com.

About Nautronix Ltd.

Nautronix Ltd. is based in Fremantle, Australia and is a wholly-owned subsidiary of Nautronix Plc, headquartered in Aberdeen, Scotland. Nautronix Plc is a marine technology solutions company specialising in through water communications and positioning technology. For more information, visit www.nautronix.com.

About Scientific Management Associates

Scientific Management Associates is based in Canberra, Australia and provides project support services to defence and industry world-wide. For more information, visit www.sma.com.au.

Forward-Looking Statements

This news release contains discussion of items that may constitute forward-looking statements within the meaning of securities laws including Section 27a of the Securities Act of 1933, as amended, and Section 21e of the Securities Exchange Act of 1934, as amended, with respect to achieving corporate objectives, developing additional project interests, OSI's analysis of opportunities in the acquisition and development of various project interests and other matters. These statements are made under the 'safe harbour' provisions of the Private Securities Litigation Reform Act of 1995 and, as such, involve known and unknown risks and uncertainties and other factors that may cause the actual results to be materially different from the results implied herein. Although Offshore Systems International believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurances that its expectations will be achieved. Factors that could cause actual results to differ from expectations include the effects of general economic conditions, changing foreign exchange rates, actions by government authorities, uncertainties associated with contract negotiations, and industry supply.

ECPINS and COP-IDS are trademarks of Offshore Systems Limited. All other trade names mentioned are trademarks and/or registered trademarks of their respective owners.