Moody`s Investors Service downgraded rating for PKN ORLEN

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN", “Company”), informs that, on 19 May 2009 Moody’s Investors Service (“Moody’s”, “Agency”) has downgraded PKN ORLEN's credit rating from “Baa3“ to Ba1/”negative outlook”. Credit rating downgrade concludes the review for possible downgrade initiated by Moody's on 20 January 2009.

The agency justifies the change of rating for PKN ORLEN by the deterioration in the operating performance and cash flow generation of the PKN ORLEN Group over the last 6 to 9 months, caused by weakened macroeconomic factors, what in turn influenced on deterioration of debt ratios for the Company. Moody's acknowledges that PKN ORLEN has benefited from reduction of working capital supporting cash flow from operations during fourth quarter 2008 and first quarter 2009.

Moody's positively notes the signature by PKN ORLEN of settlements with banks regarding credit agreements notwithstanding that the Agency assesses the risk of breaking credit covenants at the end of 2009 remains relatively high if the performance of the Company does not stabilize.

Financial liquidity of the PKN ORLEN Group is, according to Agency, at the adequate level. Moody’s noted the current works over potential transfer of obligatory reserves of crude oil and refining products from PKN ORLEN and other producers to the Polish State institutions, and possible positive impact of such a transfer on financial liquidity of the Company. Moody's has not factored the impact of this transfer in its rating assessment as the Agency assesses both the mechanics and the timing of this initiative as unclear at this stage.

The aim of PKN ORLEN’s Management Board is the fastest return to the investment rating.

At the moment PKN ORLEN’s Management Board does not find any danger for stability and financial liquidity of the Company. The Management Board highlights, that despite difficult situation on the global markets, due to optimization activities, cash flow from operating is at the stable level comparable to the previous year. As a result of increase of financial gearing due to Polish zloty depreciation, the Company is continuing actions aimed at further costs and capex optimization to protect itself against the risk of another breaking of credits covenants.

On 28 April 2009 the another rating agency for PKN ORLEN, Fitch Rating, confirmed rating at the level of BB+ with the stable outlook.

The change of Moody’s rating will not have any influence on financing costs of PKN ORLEN.

See also regulatory announcement no 38/2007 dated 27 June 2007.