The Government of the Republic of Lithuania has waived its right of first refusal with respect to 53.7022% shares in AB Mazeikiu Nafta

The Management Board of Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN S.A.") hereby announces that on 12 July 2006, the Government of the Republic of Lithuania (the “GOL”) irrevocably elected not to exercise its right of first refusal with respect to the 53.7022% shares in AB Mazeikiu Nafta (“Mazeikiu”) referred to in the share purchase agreement concluded on 26 May 2006 by and between Yukos International UK B.V. (“Yukos”) and PKN ORLEN. The GOL also irrevocably consented to the transaction between Yukos and PKN ORLEN. The GOL’s waiver or failure to exercise said right of first refusal was one of the conditions precedent to the consummation of the transaction between Yukos and PKN ORLEN.

Under the share purchase agreement with Yukos, PKN ORLEN will purchase 379,918,411 ordinary shares in Mazeikiu, each with a nominal value of LTL 1 (one), jointly representing approximately 53.7022% of Mazeikiu’s share capital, for a total price of USD 1,492,000,000 (the equivalent of PLN 4,571,786,400 converted at the rate specified in f/x table no. 102/A/NBP/2006 announced on 26 May 2006), that is, USD 3.927 per share. The performance of the Yukos agreement remains contingent upon the fulfillment of certain other conditions precedent, such as obtaining all necessary permits, in particular European Commission competition clearance. Furthermore, pursuant to the agreement with the GOL, PKN ORLEN will purchase from the GOL a further 30.6615% equity stake in Mazeikiu.

For references see also current report no. 33/2006 of 26 May 2006 and current report no. 37/2006 of 9 June 2006.

This report was prepared based on paragraph 5 section 1.4 of the Regulation of the Minister of Finance dated 19 October 2005 on the Current and Periodic Information to be Disclosed by Issuers of Securities (Polish Journal of Laws (Dz. U.) No. 209, item 1744).

The Management Board of PKN ORLEN S.A.