Agreements with Basell Orlen Polyolefins

Polski Koncern Naftowy ORLEN S.A. Central Europe's largest downstream oil company ("PKN ORLEN") hereby announces that on January 9, 2004 (i) the Management Board has been informed that on January 6, 2004, Basell Orlen Polyolefins Sp. z o.o. with its registered office in Płock ("JV Company"), a joint-venture company of PKN ORLEN and Basell Europe Holdings B.V. with its registered office in Haarlemmermeer, the Netherlands ("BEH") executed an advisory services agreement ("Advisory Services Agreement") between PKN ORLEN, the JV Company and BEH; and (ii) Polski Koncern Naftowy ORLEN S.A. entered into the agreement on construction and co-financing of infrastructure facilities with the JV Company ("OSBL Agreement").

The value of the aforementioned agreements exceeds EUR 500,000, and the JV Company is an affiliate of the issuer, as defined in the Ordinance of the Council of Ministers, of October 16, 2001, regarding the current and periodic information to be disclosed by issuers of securities (the "Ordinance") as PKN ORLEN holds 50% of the shares in the share capital of the JV Company, carrying 50% of the total number of votes at the Shareholders Meeting of the JV Company. Therefore, the information regarding the execution of such agreements should be reported in the form of a current report pursuant to § 5 Section 1 Item 8 of the Ordinance.

1. Advisory Services Agreement

Pursuant to the Advisory Services Agreement PKN ORLEN and BEH agreed to procure legal services and other services to the JV Company in consideration for a remuneration equal to the costs incurred by PKN ORLEN and BEH, evidenced by the invoices raised by the entities providing such services, increased by a margin of 5% for PKN ORLEN and BEH.

2. OSBL Agreement

Pursuant to the OSBL Agreement PKN ORLEN agreed to procure a design and construction of infrastructure facilities ("Facilities") in order to (i) allow PKN ORLEN to perform the liabilities under the agreements concluded with the JV Company on February 28, 2003 with respect to supplies of ethylene, supplies of propylene, supplies of services, utilities, media and facilities (as reported by the issuer in its Current Report No. 12/2003) and, consequently, in order to (ii) facilitate the commissioning and commercial operation of the polyethylene and polypropylene facilities to be constructed by the JV Company, which requires the provision of continuous supply of such materials and utilities.
The Facilities will be erected on land of PKN ORLEN, connected to the existing infrastructure of PKN ORLEN and will constitute the property of PKN ORLEN.

According to the OSBL Agreement, the JV Company shall reimburse PKN ORLEN for any expenses incurred by it in relation to the preparation of the design documents for the Facilities, their construction and commissioning, the total amount of such reimbursement being the equivalent of EUR 12,600,000.

In relation to the OSBL Agreement, on January 9, 2004 PKN ORLEN, the JV Company and Kredyt Bank S.A. acting as the Security Agent in connection with the funding provided to the JV Company by a syndicate of banks arranged by the Bank of Tokyo Mitsubishi, KBC, Societe Generale and Europejski Bank Odbudowy i Rozwoju, as reported by the issuer in its Current Report No. 97/2003, entered into a Direct Agreement. The aforementioned Direct Agreement imposes certain restrictions upon the ability of PKN ORLEN and the JV Company to discharge or suspend certain obligations under the OSBL Agreement.