Memorandum of Understanding with MOL

The Management Board of Polski Koncern Naftowy ORLEN SA ("ORLEN") informs that today ORLEN and MOL Hungarian Oil and Gas Plc. ("MOL") signed Memorandum of Understanding whereby they agreed intention to initiate co-operation in the Central and Eastern European oil sector.

The parties believe that this co-operation would allow both MOL and ORLEN to benefit from synergies and could present the opportunity to compete more effectively with the major global operators in the sector.

The Memorandum of Understanding provides for an initial period of exclusive consultation between MOL and ORLEN in respect of potential co-operation. The parties have also agreed to establish working teams to assess the feasibility of further potential co-operative initiatives and to consider the structuring and timing of such initiatives.

Such potential co-operation may include the following:
intention of implementation of cross-shareholding arrangements, whereby each party would acquire 10-15% of the share capital of the other party;
assessment of the possibility of establishing an entity jointly owned by the parties initially to pursue joint business opportunities, including potential joint investments, and thereafter, subject to further review by the parties, to operate as a vehicle to manage selected segments of the business assets of both parties; and
intention of a merger between MOL and ORLEN to benefit from the potential economic opportunities.
The signing of the Memorandum of Understanding represents an early stage in the discussions between MOL and ORLEN. Such discussions will only be pursued following the signing of the Memorandum of Understanding, through the formation of advisory teams by MOL and ORLEN and the appointment of external advisors.

The aforementioned co-operation initiatives will only be implemented following the signing of definitive agreements and obtaining required corporate / shareholder / regulatory approvals, where required.

Despite the fact that this Memorandum of Understanding involves non-binding elements, the parties believe it will serve as a useful measure and look forward to productive discussions between the MOL and ORLEN teams.

The Management Board of PKN ORLEN S.A.