PKN ORLEN THIRD QUARTER 2007 RESULTS

In the last quarter, the refining industry operated under exceptionally unfavorable macroeconomic conditions. The model refining margin dropped by 11% and the URAL/BRENT differential fell by as much as 24%. These factors negatively impacted the Group’s operating results, by PLN 45m and PLN 101m respectively.

In Q3 2007 the PKN ORLEN Group generated revenues of PLN 17,265m, i.e. 16% more than in the comparable quarter of last year. This was mainly due to the consolidation of Mažeikiu Nafta and 14% growth in total sales.

Excluding the impact of one-off events such as the downtime at Mažeikiu Nafta and Unipetrol, the Group's EBITDA was PLN 1,625m, which represents a small 3.3% reduction compared to the same period of last year.

Disadvantageous macroeconomic conditions - falling refining margins, the strengthening of the Polish złoty, and refurbishment and modernization downtimes, reduced operating profit to PLN 834m, i.e. a reduction of 27% compared to Q3 2006.

The consolidated net result of the shareholders in the dominant amounted to PLN 562m this year. This significant reduction compared to last year is mainly due to the write-off that impacted the consolidated net result by PLN 213m. This was related to the fair-value revaluation of the shares in Unipetrol’s companies ( Synthesia, Agromohemie) which, under the recently signed agreements, are to be sold to the Czech company Deza.

In Q3 2007, the retail segment reported a 5% increase in operating results to PLN 161m. Compared to the same period in 2006, retail sales volumes grew significantly - by 15% in the Polish market, 10% in the Czech market and 4% in the German market. The segment also generated PLN 45m in savings under the OPTIMA program.

Revenues in the refining segment (production and wholesale) in Q3 2007 grew 22.3% due to increased wholesale of key products – petrol by 562 000 tons and diesel by 1 053 000 tons. The segment’s operating profit fell 49% compared to the same period of last year, impacted mainly by external factors - the already mentioned reduction in the URAL/BRENT differential and the crack spread (which totaled PLN 267m) as well as maintenance downtimes in Lithuania and in the Czech Republic (operating costs and reduced margins – approximately PLN 187m). The refining section of Mažeikiu Nafta generated an operating profit of PLN 35m, which was the consequence of further technical improvements in the replacement vacuum distillation and visbreaking installations, and the increased volumes of crude oil processed. The OPTIMA program yielded PLN 61m in the refining segment.

The petrochemical segment reported an increase in operating profit to PLN 294m, i.e. by 33% compared to the same period last year, despite an 8% reduction in total petrochemical sales. This segment's success was supported by a high sales volume of polyolefins by Basell Orlen Polyolefins and margin optimization in the corporation’s Czech-based companies. At the same time, the OPTIMA program yielded PLN 2m in savings in the petrochemical segment.

Demand for artificial fertilizer and PCV granulated products enabled the chemical segment to maintain operating profit at last year's levels.

In Q3 2007 operating profit was PLN 56m, compared to PLN 57m in Q3 2006. With the OPTIMA program in place, this segment saved PLN 8m.

Strategy implementation

• Restoring Mažeikiu Nafta's production capacity is progressing as scheduled. We recently completed the scheduled maintenance program which was started at the end of September. By the end of the year we are planning to launch the newly rebuilt vacuum installation.

• UNIPETROL – after three quarters of 2007 the company reported an almost complete implementation of the Partnership program planned for 2008.–The company has fulfilled 97% of the plan, increasing EBITDA by 135 m out of the planned 138m euro. The rebranding of the Benzina chain is progressing as scheduled – 129 out of 170 stations have received the new visual identity and standards this year.

• A very important and positive event this quarter was the signing of an agreement between Unipetrol and DEZA concerning the divestment of the non-core Agrobohemie and Synthesia businesses. As a result of the agreement, DEZA has withdrawn from court all of its legal claims against Unipetrol. This is very good news and means that PKN’s management is closing the remaining historical “open issues”.