Sales of next part of crude oil obligatory inventories

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN”, “Company") informs that within the process of changing the formula of keeping crude oil obligatory inventories by PKN ORLEN, the Company sold a part of inventories, through assigning the keeping of the inventories to the third party.

On 28 December 2012 PKN ORLEN concluded with Whirlwind Sp. z o.o. („Whirlwind”)  the agreement for the sale of crude oil (“Sales Agreement”) and the agreement for order of creation and keeping of crude oil obligatory inventories (“Agreement for creation and keeping of inventories”).

On the basis of the Sales Agreement PKN ORLEN sold crude oil valued at ca. USD 383 m (i.e. ca. PLN  1 185 m based on USD/PLN average exchange rate as of 28 December 2012, stated by National Bank of Poland). The crude oil price was established according to market quotations.

On the basis of the Agreement for creation and keeping of inventories Whirlwind will be providing service of keeping of crude oil obligatory inventories to PKN ORLEN account, whereas PKN ORLEN will guarantee storage of inventories in current location. The Agreement for creation and keeping of inventories was concluded for the period to 28 January 2014. The Company takes into account the possibility of its renewal for the next period.

Above Agreements were concluded after receiving by PKN ORLEN the approval of Material Reserves Agency for the transaction.

Moreover PKN ORLEN signed with Whirlwind an agreement, under which the Company will grant Whirlwind a short-term loan (“Loan”) in the amount of ca. PLN 272 m, interest at market conditions. Granted loan will cover VAT, which Whirlwind is obliged to pay in connection with Sales Agreement.

Whirlwind is a SPV, established at the request of RBS Polish Financial Advisory Services Sp. z o.o., which is a subsidiary of Royal Bank of Scotland N.V. Whirlwind in its statutory activities includes turnover of crude oil.

See also: regulatory announcement no 56/2010 dated 30 March 2010.