Cost Cutting Programme at PKN ORLEN

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") Central Europe's largest downstream oil company, hereby announces that its Management Board has made a decision to develop and implement a comprehensive operational cost cutting programme throughout PKN ORLEN. This cost cutting programme is aimed at improving efficiency and building PKN ORLEN's value through a continual reduction of operational costs. The target reduction has been defined as PLN 800m per annum calculated on the 2002 cost base.

The implementation of the cost cutting programme will start on July 1, 2003 and is planned to be completed by the end of 2004. The Programme's full effect should be noticeable in the 2005 financial year. Only 9 per cent of the PLN 800m accounts for personnel costs.

The feasibility of the cost cutting programme has been thoroughly assessed by the Reporting Directors at PKN ORLEN under the supervision of McKinsey.

The Management Board of PKN ORLEN believes that the reduction of operational costs will improve the Company's profitability and market value. As a result of the Programme, PKN ORLEN should strengthen its competitive position in Poland and CEE.