The agreement for keeping of crude oil obligatory inventories has expired

Polski Koncern Naftowy ORLEN S.A. ("PKN ORLEN") informs that on 28 March 2013 the agreement for gathering and keeping of crude oil obligatory inventories (“Agreement”), concluded on 28 March 2012 between PKN ORLEN and z Ashby Sp. z o.o., headquartered in Warsaw (“Ashby”), has expired.

Due to the abovementioned and realization of the Act of 16 February 2007 on stocks of crude oil, petroleum products and natural gas, the principles of proceeding in circumstances of a threat to the fuel security of the State and disruption on the petroleum  market (Journal of Laws no. 52, item 343 as amended) PKN ORLEN purchased crude oil owned by Ashby. The value of transaction amounts to ca. USD 366 m (i.e. PLN 1 194,4 m, based on the average USD/PLN exchange rate as of 27 March 2013, as stated by the National Bank of Poland). The crude oil price was established according to market quotations.

Transfer of payment by PKN ORLEN and transfer of crude oil ownership to PKN ORLEN was made on 28 March 2013.

On the day of conclusion of the Agreement, PKN ORLEN hedged purchase price of crude oil with futures contract. Through the settlement of the hedging transaction purchase price of crude oil will be increased by ca. USD 37,8  m (i.e. PLN 123,4  m, based on the average USD/PLN exchange rate as of 27 March 2013, as stated by the National Bank of Poland). As a result of these operations PKN ORLEN will recognize in the first quarter 2013 purchase of crude oil in the amount  of ca. USD 403,8  m  (i.e. PLN 1 317,8  m, based on the average USD/PLN exchange rate as of 27 March 2013, as stated by the National Bank of Poland).

Additionally within the period of the agreement of gathering and keeping of crude oil obligatory inventories Ashby made payments to PKN ORLEN for guaranteeing of inventories storage.

All amounts presented in the announcement do not include VAT.

Ashby is a SPV which in its statutory activities includes turnover of crude oil. Ashby is in 100% controlled by RBS Polish Financial Advisory Services Sp. z o.o., which is a subsidiary of Royal Bank of Scotland N.V.

See also: regulatory announcement no 60/2012 dated 29 March 2012.