PKN ORLEN has signed an agreement with KD Petrotrade FZE for crude oil deliveries via the "Druzba" pipeline.

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") informs that on 18 July 2007, PKN ORLEN signed an agreement with KD Petrotrade FZE (“Petrotrade”), headquartered in the United Arab Emirates, for crude oil deliveries via the “Druzba” pipeline to PKN ORLEN for two million four hundred tonnes (2.4 million) of REBCO crude oil annually (“the Agreement”). The Agreement is in force from 1 July 2007 until 30 June 2010. The conditions of the Agreement allow the contractual period to be extended for a further two years or more.

If monthly volumes fall below 90% of the contracted amount, or if there is a delay in delivery, a condition of the Agreement requires the payment of a penalty whose total value may amount to approximately PLN 1.2 million per month. Payment of the penalty does not exclude the right of PKN ORLEN to claim for compensation exceeding the value of the penalties.

On the day of the signing of the Agreement, the estimated value of the crude oil to be supplied to PKN ORLEN by 30 June 2010 amounts to ca. USD 3.9 billion (i.e. approximately PLN 10.6 billion, based on the average USD/PLN exchange rate as of 18 July 2007, as stated by the National Bank of Poland).

In accordance with the “Regulation of the Minister of Finance dated 19 October 2005 on current and periodic information to be published by issuers of securities”, the Agreement constitutes a “significant agreement” due to the fact that its value exceeds 10% of PKN ORLEN’s equity.

This announcement has been prepared pursuant to par. 5 section 1 subsection 3 and § 9 of the Regulation of the Minister of Finance dated 19 October, 2005 on current and periodic information to be published by issuers of securities (Journal of Laws No. 209, item 1744).