Letter of intent with Independent Logistics Operator

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN"), Central Europe's largest downstream oil company, announces that on 14th April 2003 it made a decision that it is going to transfer PKN ORLEN's logistics assets into Niezalezny Operator Logistyczny (Independent Logistics Operator), which will be the foundation of a joint venture (JV) to be established between PKN ORLEN and IVG Terminal Silesia Sp. z o.o , as was disclosed on 8th April 2003.

It is intended that this JV shall acquire part of the logistics assets which had previously been spun off from the organisational structure of PKN ORLEN, and whose book value may reach around PLN 600m. The assets may include storage depots, long-distance pipelines to the Ostrow Storage Depot and IKS Solino, PKN ORLEN's stake in IKS Solino, as well as assets owned by IVG Terminal Silesia Sp. z o.o.

The creation of the JV is intended to:
Lower PKN ORLEN's logistical operating costs;
Generate cash for PKN ORLEN following the partial sale of the logistics assets;
Establish Niezalezny Operator Logistyczny (Independent Logistics Operator ) and make its comprehensive logistics services available to all market operators;

The JV shall specialise in providing storage, pipeline transmission and fuel reloading services. The JV's name, headquarters as well as value of contributed assets and valuation method are still subject to ongoing negotiations.