Preliminary contract for the sale of shares in Flexpol

Polski Koncern Naftowy ORLEN S.A. (“PKN ORLEN”) Central Europe’s largest downstream oil company, announces that on 21 April 2004 a preliminary contract was concluded for the sale of all 9,600 shares in Flexpol Sp. z o.o. (“Flexpol”), with its registered office in Plock, representing 40% of the initial capital of Flexpol. The book value of the shares is PLN 4,800,000. The sale price is PLN 7,200,000.

There are the following conditions to be fulfilled before the promissory contract will be concluded:
• former sale by PKN ORLEN to the investor of both the devices/installation rented by Flexpol from PKN ORLEN and the real estate/property partially rented by Flexpol from PKN ORLEN. The above mentioned sale requires shareholders’ approval.
• UOKiK’s (the Polish Office for Protection of Competition and Consumers) assent for the investor to buy the shares.

It is estimated that from the sale of the shares and the repurchase of property (Flexpol’s devices and real estate) by the investor, PKN ORLEN will record a gross profit of around PLN 16,000,000. It is also assumed that Flexpol will pay its previous shareholders a dividend amounting to PLN 3,000,000 for the year 2003 (i.e. for PKN ORLEN the amount of PLN 1,200,000)