Execution of JV agreements with Basell

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN"), Central Europe's largest downstream oil company, announces that on February 28, 2003, in execution of the provisions of the joint venture agreement between PKN ORLEN and Basell Europe Holdings B.V. dated September 30, 2002 (the "Joint Venture Agreement"), following the satisfaction of all of the conditions precedents referred to in the Joint Venture Agreement, a number of legal transactions was performed which were necessary in order to establish joint venture between PKN ORLEN and Basell Europe Holdings B.V. using existing wholly owned subsidiary of PKN ORLEN under the name Poliolefiny Polska Sp. z o.o. (the "Joint Venture Company").

In particular, on February 28, 2003, the extraordinary meeting of the shareholders of the Joint Venture Company was held during which PKN ORLEN as the sole shareholder of the Joint Venture Company performing the prerogatives of the shareholders' meeting adopted, inter alia, the resolution concerning increase in the share capital of such company from the amount of PLN 50,000.00 up to the amount of PLN 907,398,000.00 by creation of 1,814,696 new shares with the nominal value of PLN 500 each. In such increased share capital (i) 907,298 new shares were subscribed for by PKN ORLEN in exchange for the in-kind contribution being its organized part of enterprise comprising in particular of real estate property, installations and equipment, as well as working capital, used for the production and distribution of polyolefins, and (ii) 907,398 new shares were subscribed for by Basell Europe Holdings B.V. in exchange for the cash contribution. Taking into account the number of shares of the Joint Venture Company held by PKN ORLEN prior to the adoption of the resolution concerning increase in the share capital, following the registration of the increase in the share capital PKN ORLEN and Basell Europe Holdings B.V. shall held the same number of shares in the Joint Venture Company.

Also on February 28, 2003, the Joint Venture Company has accessed as the new party to the Joint Venture Agreement described of the current report of PKN ORLEN No. 85/2002 dated September 30, 2002.

Additionally, the number of the agreements were concluded today between Joint Venture Company and the companies being members of Basell Group, as well as agreements between Joint Venture Company and PKN ORLEN or companies being members of PKN ORLEN Group. A significant number of such agreements were concluded between Joint Venture Company and affiliates (dependant entities) of PKN ORLEN, on the basis of which such affiliates shall render specific services required for its operations; such agreements by their nature, terms and conditions are linked with daily operations to be carried out by the Joint Venture Company.

Among the agreements concluded on February 28, 2003 by the Joint Venture Company, having currently status of affiliate (dependant entity) of PKN ORLEN, the following agreements shall be qualified as the material agreements as defined in the Council of Ministers' Order dated 16 October 2001 concerning current and periodical information being provided by issuers of securities (the "Order"):

Agreement between Joint Venture Company and Basell Polyolefins Company N.V./S.A.

Joint Venture Company and Basell Polyolefins Company N.V./S.A. ("BPC") on 28 February 2003 entered into the off-take agreement for exclusive sale by Joint Venture Company and purchase by BPC of polyolefins grades manufactured by the Joint Venture Company.

The quantity of polyolefins grades to be sold by Joint Venture Company and purchased by BPC is determined by BPC annually in accordance with the procedure provided in the agreement. Such annual quantity shall be limited by capacity of the Joint Venture Company's new plant under construction amounting to 400kT of polipropylene per year and 320kT of poliethylene per year as well as by capacity of the existing poliethylene plant amounting to 105kT per year.

This agreement will become effective upon the date of successful completion of construction of Joint Venture Company's new plants and will remain effective until the date of termination of the Joint Venture Agreement.

PKN ORLEN can directly enforce rights of Joint Venture Company in respect of BPC's off-take obligations under this agreement.

This agreement is considered to be material within the meaning of the Order since in spite of impossibility to calculate exact value of such agreement, it is estimated that such value for the period of its initial five years shall be in excess of 10% of the own capitals of PKN ORLEN.

Agreement between PKN ORLEN and Joint Venture Company for Supply of Propylene

PKN ORLEN and Joint Venture Company on 28 February 2003 entered into the propylene supply agreement for supply by PKN ORLEN to Joint Venture Company of propylene produced by PKN ORLEN at its existing and future monomer production facilities in Płock.

The quantity of propylene to be supplied by PKN ORLEN to Joint Venture Company is determined by Joint Venture Company annually in accordance with the procedure provided in the agreement. Such annual quantity of propylene starting from the 3rd year following the date of successful completion of the construction of the Joint Venture Company's new plan should not be less than 300kT. PKN ORLEN guarantees Joint Venture Company supply of 380kT of propylene in any year.

This agreement has become effective on February 28, 2003, and will remain effective for so long as PKN ORLEN or any of its affiliates owns shares in the Joint Venture Company and for the consecutive period of 5 years thereafter but in any event for the period of not less than 15 years after the successful completion of construction of the Joint Venture Company's new plants.

This agreement is considered to be material within the meaning of the Order since in spite of impossibility to calculate exact value of such agreement, it is estimated that such value for the period of its initial five years shall be in excess of 10% of the own capitals of PKN ORLEN.

Agreement between PKN ORLEN and Joint Venture Company for Supply of Ethylene

PKN ORLEN and Joint Venture Company on 28 February 2003 entered into the ethylene supply agreement for supply by PKN ORLEN to Joint Venture Company of ethylene produced by PKN ORLEN at its existing and future monomer production facilities in Płock.

The quantity of ethylene to be supplied by PKN ORLEN to Joint Venture Company is determined by Joint Venture Company annually in accordance with the procedure provided in the agreement. Such annual quantity of ethylene starting from the 3rd year following the date of successful completion of the construction of Joint Venture Company's new plants should not be less than 340kT. PKN ORLEN guarantees Joint Venture Company supply of 430kT of ethylene in any year.

This agreement has become effective on February 28, 2003, and will remain effective for so long as PKN ORLEN or any of its affiliates owns shares in the Joint Venture Company and for the consecutive period of 5 years thereafter but in any event for the period of not less than 15 years after the successful completion of construction of the Joint Venture Company's new plants.

This agreement is considered to be material within the meaning of the Order since in spite of impossibility to calculate exact value of such agreement, it is estimated that such value for the period of its initial five years shall be in excess of 10% of the own capitals of PKN ORLEN.

Services, Utilities, Materials and Facilities Supply Agreement between PKN ORLEN and Joint Venture Company

PKN ORLEN and Joint Venture Company on 28 February 2003 entered into the agreement for supply by PKN ORLEN to Joint Venture Company of services, utilities, materials and facilities. On the basis of the agreement PKN ORLEN shall supply joint Venture Company with services, utilities materials and facilities in such quantities which enable Joint Venture Company to operate its plants. With respect to the supplies of such services, utilities, materials and facilities PKN ORLEN shall be obliged to treat Joint Venture Company not less favorably as PKN ORLEN treats other users of such services, utilities, materials and facilities supplied by PKN ORLEN.

This agreement has become effective on February 28, 2003, and will remain effective for so long as PKN ORLEN or any of its affiliates owns shares in the Joint Venture Company and for the consecutive period of 5 years thereafter but in any event for the period of not less than 15 years after the successful completion of construction of the Joint Venture Company's new plants.

This agreement is considered to be material within the meaning of the Order since in spite of impossibility to calculate exact value of such agreement, it is estimated that such value for the period of its initial five years shall be in excess of 10% of the own capitals of PKN ORLEN.

Performance of the above transactions on February 28, 2003, shall enable to Joint Venture Company to commence its operations of production and distribution of polyolefins starting from March 1, 2003.