Sale of shares in Naftoport

Polski Koncern Naftowy ORLEN S.A. (“PKN ORLEN”) Central Europe’s largest downstream oil company, announces that on 14 April 2005, on the basis of share transfer agreements, the Company sold 24 shares with a par value PLN 589,000 representing 30.77% of the initial capital of Przedsiebiorstwo Przeladunku Paliw Plynnych “Naftoport” SP. Z o.o. (“Naftoport”) to PERN “Przyjazn” S.A. (“PERN”).

The main stipulations of the agreement are:
- The price for one share: PLN 2,820,512.82
- The total price for 24 shares: PLN 67,692,307.68
- The payment will be secured by a pledge on the shares

The agreement will be effective if all conditions are simultaneously fulfilled:
- The President of the Antimonopoly Office shall give unconditional consent for allowing the concentration of ownership by way of the acquisition by PERN of the Naftoport shares, or not issuing a decision regarding this matter within the time-frame which is allowable for this decision. On 13 April 2005 PERN was informed that the President of the Antimonopoly Office gave such a decision.
- Giving approval to the resolution of Naftoport shareholders – this condition was fulfilled on 24 January 2005
- The preemptive rights relating to the sale of shares by any shareholder of Naftoport will not be exercised – the condition was fulfilled on 21 January 2005

On 1 February 2005, at an Extraordinary General Meeting of Naftoport, shareholders accepted the changes to the company agreement. The altered agreement secures PKN ORLEN business arrangements and the remaining shareholders within the scope of the delivery guarantee. At the same time PKN ORLEN, Naftoport and PERN signed long term commercial agreements which guarantee the security of crude oil delivery both by sea and inland. The above mentioned commercial agreements ensure the crude oil delivery opportunities by Naftoport on conditions not worse than before signing this agreement.

Following the above transactions PKN ORLEN will have a 17.95% stake in Naftoport. The remaining shareholders are:
- PERN – 67.95%
- Grupa LOTOS S.A. – 8.97%
- J & S Services Ltd. – 1.28%
- Port Polnocny – 3.85%

Except in respect to the execution of the share transfer and commercial agreements referred to above, no other relationship exists between the issuer and the issuer’s managing or supervising persons, and the sellers of the shares.