Retail Network Strategy 2005-2009

Polski Koncern Naftowy ORLEN S.A. (‘PKN ORLEN’), Central Europe’s largest downstream oil company, announces that on 1 March 2005 the Company’s Supervisory Board approved “PKN ORLEN 2005-2009 Retail Sales Development Plan for Poland”.

The strategy assumes three fundamental strategic targets:

• Strengthening of market position
• Increased operational efficiency
• Creation of an efficient organizational structure

These targets will be achieved through the segmentation of the network into two standards: Premium and economy, managing of the distribution channels and changing of the stations managing manner. The offering for institutional customers will be adjusted to their individual expectations.
The planned structure of the network is c.a. 1,000 Premium stations (under ORLEN brand) and c.a. 900 economy stations. As part of this, 50 Premium and c.a. 130 economy stations will be renovated or built annually, with the acquisition of c.a. 40 Premium stations and c.a. 70 economy stations annually. The planned capital expenditure is average annualised c.a. PLN 390m in 2005-2009.

Key operating and financial objectives (2009):

• Market share at least 30%
  
• Sales volume ~4.9bn litres/p.a.
• Intensification of the FLOTA programme (share in sales revenue) at least 20%
• Average fuel sales per station (company-owned stations [CODO]) >2.5m litres/p.a.
• Non-fuel margin’s share in total retail margin (company-owned stations [CODO], Premium standard) ~ 30%
• ROACE >17.5%

A presentation of the new strategy may be accessed on-line on the PKN ORLEN’s Web site (www.orlen.pl)