Service Agreement with KBC

PKN ORLEN S.A. (“PKN ORLEN”), Central Europe’s largest downstream oil company, announces that on January 3rd, 2002 PKN ORLEN went into a service agreement with the U.K. based KBC Process Technology Ltd. (“KBC”). The agreement will be realised throughout 2002 and follows the Profit Improvement Program (“PIP”) carried out on PKN ORLEN’s facilities in co-operation with KBC in 1999-2001.

The PIP’s objective was generation and implementation of the processing improvements aimed at lowering of the production costs by USD 0.40 per barrel of processed crude. The Program’s results have been fully achieved. The new service agreement foresees production costs to be lower by USD 0.10 - 0.15 per barrel of processed crude.