Czech Government Decision - ORLEN wins bid for Unipetrol

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN"), Central Europe’s largest downstream oil company, informs that it has received today a letter from WestLB a financial advisor to Czech National Property Found (“NPF”) and a state agency Ceska konsolidacni agentura (“CKA”), which states that the Czech Government has selected PKN ORLEN as the successful bidder in the auction for the 62.99% stake in Czech downstream oil and petrochemicals group, Unipetrol a.s. (“Unipetrol”) held by the NPF. Therefore PKN ORLEN will also acquire associated receivables toward some of the Unipetrol Group companies and a 9.76% stake in Unipetrol’s producing subsidiary, Spolana a.s. (“Spolana”), held by CKA.

PKN ORLEN has agreed to pay approx. CZK 11.3 billion for the 62.99% stake in Unipetrol, CZK 1.0 million for CKA’s 9.76% stake in Spolana and approx. CZK 1.7 billion for CKA’s receivables with a total nominal value of approx. CZK 3.1 billion and EUR 9.5 million and USD 4.9 million, as of April 1, 2004.

This transaction strengthens PKN ORLEN’s position as the leading Central and East European downstream oil and petrochemicals player, and further demonstrates that PKN ORLEN is spearheading consolidation in the region.

Following the acquisition of the NPF’s stake in Unipetrol and in accordance with Czech law, PKN ORLEN will launch a mandatory tender offer to acquire the interests of minority shareholders in Unipetrol and its listed subsidiaries.

PKN ORLEN has agreed on the basis of the agreements with ConocoPhillips Central and Eastern Europe Holdings B.V., one of the major oil and gas worldwide companies (“ConocoPhillips”) and Agrofert Holding, a.s., the second largest chemicals group in the Czech Republic (“Agrofert”), following the successful completion of the privatization process, to procure as a majority shareholder in Unipetrol the sale by Unipetrol some of Unipetrol’s assets to ConocoPhillips and to Agrofert.

A large portion of the funds for the financing of this transaction is already provided in the form of the currently available credit facilities. The reminder will be arranged for within the time periods indicated in the payment schedules relating to the transaction. The completion of the transaction will not result in any violation of any covenants under the syndicated credit facility agreement. The banks have already offered us their assistance in financing the transaction in question.

PKN ORLEN will provide investors with more details on this transaction upon signing of Share Sale and Purchase Agreement with NPF.

The transaction is expected to close by the end of the third quarter of 2004, once necessary regulatory approvals have been granted.

About PKN ORLEN SA
PKN ORLEN S.A. is one of the largest companies in Central & Eastern Europe, with listings on the Warsaw and London Stock Exchanges, and trading on the OTC market in the U.S.A. It is Poland’s largest refiner of crude oil and marketer of world-class petroleum and related products. It has a substantial wholesale and retail distribution system that includes the largest network of service stations in Poland. It also has significant financial investments in the telecommunications sector in Poland.