Letter of intent PGNiG & PKN ORLEN
The leading Polish extraction company ,PGNiG and the biggest domestic fuel producer and distributor ,PKN Orlen, intend to perform together on investments and projects in the field of oil and gas extraction and logistic infrastructure related to these sectors. On 14 July 2006 representatives of Management Boards of both PGNiG and PKN ORLEN signed a letter of intent of co-operation.
The companies intend to commence work together on mutual projects in the field of exploring and extracting of petroleum, oil, and natural gas in Poland and abroad. In the course of negotiations solutions will be worked out, which will help to expand the scope of exploring and extracting works in Poland, and develop opportunities for obtaining raw materials abroad.
PGNiG and ORLEN also declared their intention to conduct negotiations with regard to activities aimed at increasing the sales of compressed natural gas (CNG) for supply to vehicles. The companies will also asses the possibility of co-operating on a project to import liquified natural gas (LNG) into Poland.
The signatories agreed that a co-ordination team composed of representatives of both companies would be established by the end of July. During the next few months the team will engage in discussions concerning the matters raised in the letter and will present recommendations to Management Boards of both companies.
This letter of intent does not restrict any individual act of either party within the scope of their statutory activity.
Signatories:
Polski Koncern Naftowy ORLEN S.A.
Leader of Polish economy and one of the largest corporations of the petroleum industry in Central & Eastern Europe. It converts petroleum oil into lead-free petrols, diesel oils and heating oils, aviation fuels, plastics and a wide range of petrochemical products. The revenues of the corporation consisting of more than 70 companies total 40 million PLN per annum. Shares of PKN ORLEN are listed on the Warsaw Stock Exchange, London Stock Exchange and in off-exchange trade on the American OTC market.
The company manages six refineries in Poland and in the Czech Republic. At present, the acquisition of the Lithuanian refinery Mazeikiu Nafta is under way. PKN ORLEN has an expanded logistic infrastructure and the biggest retail network in Poland, which consists of over 2,700 fuel stations operating in Poland, Germany and the Czech Republic.
In performance of the strategy of building its own value and reinforcing its competitive position, PKN ORLEN actively seeks possibilities of building its own extraction segment and access to deposits. The extraction plans of the Company provide for a gradual increase of the volume of obtained raw material from 0.4 million tons in 2007 to 4.3 million tons in 2005.
Polskie Górnictwo Naftowe i Gazownictwo SA (Polish Oil and Gas Company)
PGNiG is one of the key Polish enterprises operating in the power sector. It is also a company of strategic importance for the functioning of national economy and energy security and one of the biggest Polish employers, which employed as a Capital Group more than 30,000 persons in 2005.
The PGNiG Capital Group is a leader in all areas of the gas sector which covers the exploration of natural gas and petroleum oil deposits in Poland and abroad and the extraction of natural gas and petroleum oil in Poland as well as import, storage, trading and distribution. In foreign countries, the PGNiG Capital Group is engaged in the exploration and identification of geological structures containing hydrocarbon deposits in the form of natural gas and petroleum oil.
On 23 September 2005, the Polish Gas and Oil Company had its debut on the Warsaw Stock Exchange.
