NEWSLETTER 02/2020

1. Iga Świątek Winner of the 2020 Roland Garros tournament! Congratulations!

2. Choice of oil and its brand for hybrid cars Selection of motor oil and its brand for use in the car with hybrid drive

3. Base oils The base oil determines the basic properties

4. Webinar LOTOS Oil has found a solution so as not to lose contact with customers at this difficult time and continues to promote the LOTOS oil brand outside .

5. Changing oil in industrial assemblies Lotos Oil Service is equipped with devices for changing oil in industrial assemblies. NEWSLETTER 02/2020

Iga Świątek winner of the 2020 Roland Garros tournament! Congratulations!

Iga Świątek is the first Polish woman to win the Grand Slam single championship. In the final match, after an excellent game, Iga defeated the American Sofia Kenin. The LOTOS Group has been comprehensively supporting Polish since 2019. It is a Strategic Sponsor of the Polish Tennis Association, the women’s, men’s and youth teams, as well as the Polish Championships in all age categories. Since August 2019, 1 the company has also been the Main Partner of . Earlier, from 2017 to 2018, it was also the Official Partner of Agnieszka Radwańska.

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The oil holding from Gdańsk is also a sponsor of the „PZT LOTOS Team - Nadzieje Polskiego Tenisa [Hopes of Polish Tennis]” project which helps the most talented players. The company supports National Tennis Day at the PGE National Stadium and the series of tournaments PZT LOTOS Polish Tour. The aim of the project is to help Polish players score invaluable ranking points without making long and costly trips. This year’s Roland Garros is a great achievement in the nearly 100-year history of Polish tennis. Iga Świątek is the first Polish representative to win the Grand Slam singles. And the greatest success in her career so far, being just 19 years old, is not losing a set in seven matches and reaching the semi-finals in doubles. She triumphed in Roland Garros junior doubles in 2018.

A month later, she won the singles title on grass in Wimbledon and in the autumn she also won gold in the Buenos Aires Youth Olympic Games in doubles. All that happened shortly after a seven-month break in the game due to an injury. Before all this, in 2016, she led the Polish team under 16 to its historic first victory in the Junior Fed Cup. Soon, in February, as one of the leaders of the senior national team, she will compete with Brazil in a fight for a spot in the play off phase of the final Billie Jean King Cup (formerly Fed Cup) tournament in Bytom. So far she has participated in WTA finals once (Lugano, 2019). Before Świątek, only two Polish women had a chance to triumph in the Grand Slam. In 1939, in the French capital city, Jadwiga Jędrzejowska reached the finals, a success which was repeated by

Agnieszka Radwańska in Wimbledon in 2012. Immediately afterwards, Agnieszka became the runner-up of the WTA Tour ranking for several weeks. Although Radwańska did not win the Grand Slam title, she won the WTA Finals in Singapore in 2015, a masters event featuring the eight best tennis players of the season. Three years later she ended her career with 20 WTA tournament wins in singles and two in doubles. In men’s tennis, the best singles grand-score result is the Wimbledon semi-final with Jerzy Janowicz in 2013. Earlier, he won a round in the Polish match with Łukasz Kubot. A few decades earlier, in the 1970s, in the

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quarter-finals of the most important tournaments of the season, Wojciech Fibak played four times and won the 1978 in doubles. He was followed by Kubot in 2014, who, with the Swede , also triumphed in Melbourne. Three years later he repeated this success in Wimbledon with the Brazilian Marcelo Melo. In 2011, in doubles, Mariusz Fyrstenberg and Marcin Matkowski were close to the Grand Slam title, reaching the US Open final. This doubles, called the ‚Polish Power’ by their rivals, took part six times in the World Tour Finals, ending the ATP season within the best eight pairs in the ATP Tour ranking. And in 2011, they even reached the final at the London O2 Arena. It is worth noting that Fibak has won the Masters tournament twice, in 1976 and 1978. In 2012, Klaudia Jans-Ignacik, playing in the finals together with Santiago Gonzalez from Mexico, was close to winning the mixed game in Roland Garros. Before Świątek won the Roland Garros, Veronika Baszak reached the grand final in junior women’s singles at the Australian Open in January. Perhaps she, like other young Polish players, will soon follow in Iga’s footsteps. But Iga is not the only Polish champion. After all, Magda Linette - ranked in the first 50 WTA Tour, won the first title in this cycle in Thailand in February. Nearing the Top 100 are Katarzyna Kawa, this year’s national senior champion, Magdalena Fręch and Maja Chwalińska (both members of LOTOS PZT Team). Young players also have some great examples to follow in the men’s tour. Hubert Hurkacz, ranked in the top 40 of the ATP Tour, is already well-settled among the world’s leading players. In 2021, the Polish Tennis Association will celebrate its 100th anniversary. Świątek’s victory in Paris gives hope for further Poles’ successes on the world’s courts, both in Grand Slam and perhaps also a medal in the Tokyo Olympic Games, postponed until next year” Congratulations to Iga and best wishes of further success to all our tennis players in the 2021 season!!!

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Choice of oil and its brand for hybrid cars

The concept of hybrid propulsion is based on the cooperation between the electric and internal combustion engine fitted in these vehicles. During the driving cycle, the vehicle is powered alternatively by one or the other engine. From the perspective of a lubricant, the key difference between the internal combustion engine in a hybrid car, compared to that in a conventional car, is its repeated 2 starting and stopping while driving.

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The oil therefore operates in a different temperature range, and there is also the risk of both water and fuel ingress into the oil sump. Motor oil for hybrid vehicles must therefore have excellent rheological properties, high oxidation stability, demulsibility and shall guarantee excellent corrosion and wear protection. These features are not new and are successfully met by modern, synthetic engine oils developed for petrol engines. To date, no requirements for quality classes included in trade specifications such as API or ACEA, have been designed for oils dedicated to lubricate engines in hybrid cars. As Toyota cars dominate the hybrid car market, oils labelled as ‘hybrid car oils’ are mainly those that meet Toyota’s latest oil requirements for such applications. Toyota, and other Asian companies, usually recommend the highest quality class of oil in API classification for their cars - including those with hybrid engines. Modern hybrid cars require, as a minimum, API SN quality oils of low viscosity, such as SAE 0W-20 and 0W-16, although many models also require SAE 5W-30 viscosity oils. For older hybrid car models which have been present on the market since the late 1990s, lower quality classes are required. In the years 2000-2005, the icon of hybrid cars - Toyota Prius - initially recommended synthetic oils of API SJ/SH class and later of SL/SJ class with 5W-30 viscosity, but mineral oils with SAE 15W-40 viscosity were also allowed. In 2005-2015, the recommendations included oils of SM/SL class, according to API in viscosity classes 5W-30, 5W-20 or 0W-20. Newer models require mainly SN class oils with SAE 0W-20 viscosity, and the latest models also require oils with SAE 0W-16 viscosity. In 2019, LOTOS Oil, as one of the Polish manufacturers, introduced into its offer LOTOS QUAZAR DYNAMIC HYBRID SAE 0W-20 engine oil of API SN/RC and ILSAC GF-5 quality intended mainly for hybrid cars manufactured after 2011. However, in many car models, other oils produced by LOTOS Oil can be used, including LOTOS SYNTHETIC C2+C3 SAE 5W-30 of API SN quality or LOTOS SYNTHETIC A5/B5 SAE 5W-30 of API SL quality. Oils of other manufacturers dedicated to hybrid cars are also available on the market, so it is worth considering the principles of engine oil selection for a given car. When selecting engine oil for a hybrid car, the most important criterion is the compliance of its quality properties displayed on the label with the specifications recommended by the car manufacturer - usually provided in the vehicle’s manual. When choosing an oil brand, it is worth remembering that the consumer enjoys a lot of freedom in this respect, which results from the principles of fair market competition in the European Union. According to those principles1: • in order to ensure proper operation of the vehicles, their manufacturers are obliged to provide information on lubricant requirements to anyone servicing or using the car, • a car manufacturer may not impose on the user the oil of his own brand or another specified brand, unless it is the manufacturer who bears the costs of the oil purchase (e.g. during the warranty repair), • a car manufacturer may, at most, recommend to the user its own or designated brand of engine oil. However, a car manufacturer has the right to impose specific oil quality, expressed in API, ACEA or OEM2, 1Prepared on the basis of: Purchase and use of • a car manufacturer may not reject warranty claims if other lubricants within european union, https://www. ueil.org/wp-content/uploads/UEIL_leaflet_web- products than the recommended ones are used in the version.pdf (accessed on 14.08.20) car, provided that they meet the required quality standard expressed in API, ACEA or OEM specifications, • each user is free to choose the oil brand as long as the product of a given brand meets the requirements of the car manufacturer expressed in API, ACEA or OEM quality standard, • in the event that the car manufacturer questions the quality of the lubricants selected by the user, the burden of proof that the oil does not meet the specified requirements lies with the car manufacturer.

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Examples of situations interpreted as an attempt by car 2 makers to restrict consumer choice of oil brand include: PSA, OEM (Original Equipment Manufacturer) – specifications - in the context of this article the Honda, Ford and Mazda in different markets presented in abbreviation used to describe engine or car technical bulletins of the Union of the European Lubricants manufacturers. Industry (UEIL) . Ultimately, all the manufacturers listed have declared their acceptance of the above mentioned rules for the selection of oil brand by the car user. The ultimate criterion in the selection of lubricant should be its quality in terms of consistency (guarantee of no differences between individual production batches) and quality in terms of compliance of its parameters with the required quality standards declared on the label. High quality of workmanship is guaranteed by manufacturers declaring the compliance of their products with the requirements of the industry quality management system EELQMS, during the development, manufacture and marketing of engine oils. A list of such manufacturers is available at https://www.sail-europe.eu/ registrations/lubricant-marketers. The list includes information about product brands manufactured in accordance with EELQMS requirements. The products of companies on the list of signatories of EELQMS compliance are independently and randomly tested for compliance with the requirements of quality standard included on their labels, which increases the probability of purchasing a reliable product. In addition, the likelihood of such compliance is increased if the engine oil has a formal certificate of approval 3UEIL OEM Bulletin PSA Sweden, https:// issued by the engine or car manufacturer, the so-called OEM www.ueil.org/wp-content/uploads/2016.12_ approval. OEMBulletin_PSA-Sweden.pdf (accessed on 14.08.20) 4UEIL OEM Bulletin Honda Motor Europe, Piotr Niemiec, Coordinator, Technology Department, LOTOS Oil https://www.ueil.org/wp-content/uploads/ UEIL_OEM_Bulletin_HondaMotorEurope_ December2013.pdf (accessed on 114.08.20) 5UEIL OEM Bulletin Ford, https://www.ueil.org/ wp-content/uploads/2019_April_OEMBulletin_ Ford-2.pdf (accessed on 114.08.20) 6UEIL OEM Bulletin Mazda Denmark, https:// www.ueil.org/wp-content/uploads/2017.02_ OEMBulletin_MazdaDenmarkcomplete.pdf (accessed on 14.08.20)

7 NEWSLETTER 02/2020 Base 3 oils

Lubricating oils consists predominantly of two basic groups of components: basic oils and additives. A mixture of base oils - usually two, seldom more - is the so-called base oil. Once the additives are added, it becomes a finished product. Base oil determines the basic properties which can be adjusted to a certain extent or improved by additives. These basic properties are primarily viscosity, viscosity index, flow temperature, evaporation (determined by the Noack method) and flash point. The chemical composition is also important, as is the sulphur content parameter.

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Base oils are manufactured according to different methods, have different properties and, as a result, also differ in price. The current classification of oils distinguishes five basic groups (Group I - V). Some of them (Group III and higher) are sometimes called synthetic oils, which is not entirely true and often leads to misunderstandings. Without going into the details of the manufacturing method, it can be said that the oils of the first three groups contain chemical compounds that are found in crude oil, but come in different proportions in Group I, II and III, and are purified of undesirable components. Group IV and V oils chemically consist of compounds produced by chemical transformations, therefore they are basically called synthetic. This is not always reflected in the commercial names of lubricants referred to as synthetic, full synthetic, and semi-synthetic, whereas their composition includes only Group I, II and III oils or a small addition of Group IV. The possibility of classifying Group III base oils as synthetic results not from the manufacturing method but due to their properties - coinciding with those of Group IV base oils. Are oils of higher groups better than those of lower ones? It depends on the application and requirements to be fulfilled by lubricants. For example, in the group of engine oils, apart from a number of other important properties, resistance to high temperatures and the so-called dispersibility, i.e. the ability to remove pollutants from the engine which are mainly external pollutants, products of oil destruction as well as erosion of engine structural materials, is of utmost importance. For example, a Group III oil will have better resistance to oxidation at higher temperatures, while dispersibility will be definitely better in a Group I oil. Another important parameter is the viscosity index, i.e. dependence of viscosity on temperature. The smaller the decrease of oil viscosity when temperature increases, the better. This feature is definitely better in groups with a higher number. Specific applications require specific oil viscosities, e.g. gear lubricating oils, especially industrial gear oils, have a significantly higher viscosity than hydraulic or turbine oils. From the point of view of base oils, it is more difficult to find high viscosity oils in higher groups. Which base oils are manufactured and marketed by LOTOS Oil? Our company is primarily a manufacturer of Group I oils, commonly known as mineral oils. They are produced by the non- destructive processing of crude oil, in several viscosity grades: SAE 10, SAE 30 as well as the brightstock (BS), i.e. oil produced not from vacuum distillate, but from vacuum residues and with

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high viscosity. Group I oils (SAE10, SAE 30 and BS), apart from their wide application in LOTOS Oil products, also find numerous customers all over the world. The production of brightstock is of particular importance - few refineries in the world have suitable equipment for manufacturing this type of oil. It is a product which is often scarce on world markets. Group I oils are used e.g. in engine oils with SAE 20W-50, SAE 15W-40 and single-season SAE 40 viscosities and higher. The combination of Group I base oils with Group III base oils results in oils with SAE 10W-40 viscosity. Moreover, they are widely used as industrial oils, mainly as gear oil due to their high viscosity. Lighter grades are used mainly as hydraulic and turbine oils. Another important category of LOTOS Oil products are lubricants. Group I offers a very broad range of applications due to its properties and competitive price. On account of structural changes in the oil industry resulting mainly from the growing importance of catalytic technologies, the availability of Group I oils on the market is increasingly limited. Admittedly, the oils of higher Groups II and III have displaced mineral oils from automotive applications, but a number of physical and chemical characteristics of Group I, together with their limited availability, make them a sought-after product on the market now and in the years to come.

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Webinar LOTOS Oil has found a solution so as not to lose contact with customers at this difficult time and continues to promote the LOTOS oil brand outside Poland.

We quickly adapted to the new reality. Product training for customers was transferred online.

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We conducted the following seminars in the form of webinars in English: 1. 1. A webinar dedicated to industrial products: „Modern hydraulic oils”. It was dedicated to discussing key challenges presented by machine builders and end-users alike, as well as the technical and operational parameters of hydraulic oils, and the Lotos Oil offer responding to those needs. We presented a new product in LOTOS Oil’s portfolio: HYDROMIL L-HM BA, which is a state-of-the-art oil dedicated to hydraulic systems in its category. The product has the latest Bosch-Rexroth RDE 90245 approval. 2. The second webinar in English concerned synthetic products dedicated to the automotive industry: „Optimisation of the LOTOS Oil offer in the synthetic engine oils segment”. Many aspects related to synthetic products were presented and the issues that customers have reported to LOTOS Oil technology engineers were discussed. • How LOTOS Oil understands the term ‚synthetic’ • Market trends - PCMO • The LOTOS Oil offer in the segment of synthetic oils - PCMO • Main factors influencing recent changes in the LOTOS Oil portfolio • The PCMO LOTOS Oil portfolio - optimization plan for 2020 • LOTOS Oil’s offer in oils - HDDO • Key factors influencing the planned changes in the HDDO portfolio The participants of the webinar included distributors from the following countries: Bulgaria, Morocco, Finland, Panama, Georgia, Ukraine, North Macedonia, Lithuania, Latvia, Estonia, Cambodia, India, Ireland, Portugal, Bosnia and Herzegovina, Sweden, Bangladesh, Albania, Georgia, Jordan, Belarus, Libya.

Webinar participants from Portugal Webinar participants from Bulgaria

Webinar participants from Russia Webinar participants from Russia

12 NEWSLETTER 02/2020 Changing oil in industrial 5 assemblies

Lotos Oil Service is equipped with devices for changing oil in industrial assemblies (turbine, hydraulic, gear or even heating). Depending on their „size”, i.e. tank capacity and the size of the entire assembly, a suitable filtering and pumping unit is used. For small volumes 50-200l - a 60l/min unit is used (3600l/h), for 200-500l assemblies - 120l/min (7200l/h), and for >500l - a 450l/min (27000l/h) unit which allows each system to achieve the circulation of not less than 10-fold, which determines the purification of the oil and of the assembly using an appropriate, optimal filter. After audits at the customer’s premises, for the purpose of technical inspection, we select the appropriate equipment to perform the task in order to efficiently change the oil even in assemblies with capacities of 10,000-60,000 litres! In each case, the question is whether oil filtration is the optimal solution? Or whether oil change comes with tank cleaning? What is the cause of rapid oil degradation? Does this degradation involve physico-chemical properties? Or is it due to external contamination? Or technological contamination? The Oil Service carries out an in-depth inspection of the causes of the problems in operation of assembly and of oil purity (in our own mobile laboratory). We examine many aspects including viscosity, TAN acid number, water content or purity class - (in ISO 4406 or NAS 1638 standards), as well as granulometric composition of contaminants. We compare infrared spectra and determine the content of elements from additives, contamination and wear. The measurements performed are the best tool to obtain a correct diagnosis and optimise the solution! It often turns out that oil can be purified by filtration and reused, under the supervision and with further regular monitoring of its condition; if this is done with certain frequency it is a super-safe and economical solution! We provide a wide range of oil change, lubrication and operating system maintenance services, oil and utilities filtration or oil analyses, tailored to your needs. In order to prevent problems from reoccurring, we can provide training to improve the operation of systems and oils. We will tell you

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why problems arise and how they can be solved. We indicate to the user the possibility of assistance with our products and services in order to avoid emergency situations when working towards the stability of the operation and production of machines and service systems. The dimensions of the unit and accompanying equipment allow for mobile use and quick access by service vehicle at the customer’s premises on the agreed date. The picture presents a 450 & 60 l/min unit and a 450 l/min unit loaded on a service vehicle, ready for transport to perform oil filtration in a 14,000l tank:

14 LOTOS Oil Sp. z o.o. ul. Elbląska 135 80-718 Gdańsk www.lotosoil.pl [email protected] +48 80 134 56 78 +48 58 326 43 00