Quarterly Report Regarding the Economic Financial- Activity of Conpet S.A

QUARTERLY REPORT REGARDING THE ECONOMIC FINANCIAL- ACTIVITY OF CONPET S.A.

March 31, 2020

(Period 01.01.2020 – 31.03.2020)

Prepared in compliance with Art 125 and Annex 13 of ASF Regulation no. No. 5/10.05.2018 on the issuers of financial instruments and market operations

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

CONTENTS

1.COMPANY PRESENTATION ...... 3

1.1. Report and issuer identification data ...... 3

1.2. Main activities ...... 4

1.3. The company’s mission vision and values ...... 4

1.4. Shareholding ...... 4

1.5. Company Organization ...... 5

1.6. Development Strategic Objectives ...... 5

2. CONPET- EXECUTIVE SUMMARY ...... 6

2.1. Operating activity indicators ...... 6

2.2. Economic-financial indicators ...... 7

2.3. Investments ...... 7

2.4. Company’s Stock Market Indicators ...... 8

3. ANALYSIS OF THE COMPANY’S BUSINESS ...... 9

3.1. Analysis of the operating activity ...... 9

3.1.1. Regulation Framework...... 9

3.1.2. The crude oil, condensate and rich gas business ...... 9

3.1.3. Assessment of the operating activity ...... 13

3.1.4. Mergers and reorganization of the company, acquisitions and disposals of assets for the period January- March 2020 ...... 15

3.1.5. Assessment of human resources and social dialog activity ...... 15

3.2. Investments conducted during January-March 2020 ...... 18

3.3.Analysis of the Financial Business ...... 23

3.3.1. Statement of the Financial Standing at March 31, 2020...... 23

3.3.2. Profit & Loss Account for the period January - March 2020 ...... 25

3.3.3. Profitability of the transport subsystems...... 28

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

3.3.4. The main economic-financial indicators ...... 29

3.3.5 Implementation of the revenues and expenditure budget for the the period January 1st - March 31st 2020 ...... 30

3.3. 6 Financial and non-financial key performance indicators ...... 31

3.3.7. Cash Flow ...... 36

3.3.8. Related party transactions ...... 36

3.4. Other aspects ...... 37

3.4.1. Situation of lands not included in the share capital ...... 37

3.4.2.Litigations ...... 37

3.5. Analysis of the Corporate Activity ...... 45

3.5.1. Capital Market Business ...... 45

3.5.2 The Executive Management ...... 48

3.5.3. Activity regarding the sponsorship concluded between January - March 2019 ...... 48

3.5.4. Coronavirus Pandemic Risk Issues (Covid-19) ...... 49

4. RELEVANT CORPORATE EVENTS ...... 49

5. PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS ...... 49

Annexes: ...... 50

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

1.COMPANY PRESENTATION

1.1. Report and issuer identification data

QUARTERLY REPORT the provisions of Article 67 of Law no. 24/ 2017 prepared in compliance with: regarding the issuers of financial instruments and market operations; Annex 13 of Regulation on 5/10.05.2018 on the issuers of financial instruments and market operations;

Date of the report 13.05.2020

Company’s name CONPET S.A.

Registered Offices No. 1-3 Anul 1848 Street, Ploiesti Prahova County, Zip Code 100559,

Telephone/facsimile number 0244 401360/0244 516451

E-mail/Internet [email protected] / www.conpet.ro

Tax Identification Number at the Trade Register 1350020 Office

Trade Registry Number J29/6/22.01.1991

The regulated market trading the issued Bucharest Stock Exchange, Premium category securities

Subscribed and entirely paid-up share capital 28,569,842.40 RON

Main features of the issued securities 8,657,528 shares with a nominal value of 3.3 RON/hares

571,396,848 RON (66 RON/share at Total market value 31.03.2020)

International Accounting Standard no. 34 - Applied accounting standard „Interim Financial Reporting”

Auditing The Interim Financial Statements concluded at 31.03.2020 have not been audited

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

1.2. Main activities

CONPET is a strategic company, part of the architecture of the national energy system, being the operator of the crude oil National Transport System via pipelines.

Since 2002, CONPET is the concessionaire of the operation of the crude oil, rich gas, condensate and ethane National Transport System, based on the oil Concession Agreement concluded with the National Agency for Mineral Resources, approved pursuant to. 793/25.07.2002. The Crude Oil, Rich Gas, Condensate and Ethane National Transport System (NTS) is being defined and regulated by Law no. 238/7.06.2004 - Petroleum Law and the Methodological Norms for the enforcement of the Petroleum Law approved under. 2075/2004 and is part of the state’s public property, being of strategic importance.

CONPET is a publicly owned company, listed at the Bucharest Stock Exchange, under COTE symbol.

1.3. The company’s mission vision and values

CONPET mission is the operation of the National Transport System via Pipelines under safe and secure conditions, free access to the system’s available capacity to all the inquirers, authorized legal persons, under equal conditions, on a non-discriminatory and transparent basis as well as accessing the related markets corresponding to the segments of the value chain of the oil industry.

CONPET vision targets the maintenance of its position of strategic player in the Romanian oil industry, acting as crude oil, ethane and rich gas carrier via pipelines and by rail.

The company’s Values are: professionalism, effectiveness and performance, social awareness and respect for the environment, ongoing training, adaptability and qualitative growth.

1.4. Shareholding

The synthetic structure in the shareholding at reference date 31.03.2020 is as follows:

• 58.7162%- The Romanian State by the Ministry of Economy, Energy and Business Environment; • 41.2838% - Other shareholders natural or legal persons

Shareholder’s Name Number of shares Percentage% The Romanian State by the Ministry of Economy, Energy and Business 5,083,372 58,7162% Environment Legal persons 2,361,663 27.2787% Natural Persons 1,212,493 14.0051% Total 8,657,528 100,0000%

Table 1 - CONPET S.A. Shareholding Structure at March 31st, 2020

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Chart 1 - CONPET S.A. Shareholding Structure at March31st, 2020

The share capital of CONPET at 31.03.2020 is of 28,569,842.40 RON and is divided into 8,657,528 nominative shares, each share with a nominal value of 3.3 RON/share.

CONPET did not perform transactions having as scope its own shares and, consequently, the company did not hold own shares.

1.5. Company Organization

CONPET was established in 1990, based on the Government Decree no. 1213/1990 regarding the set-up of joint-stock companies in the industry, by taking-over the entire assets and liabilities of I.T.T.C. Ploieşti, being the first company established in the oil industry in Romania, after 1989.

Following the take-over of all assets and liabilities of I.T.T.C. Ploiești, CONPET became the operator of the crude oil, rich gas, condensate and ethane National Transport System.

CONPET supplies transport services for its clients both via the National Transport System concessioned based on the Oil Concession Agreement of the National Transport System of crude oil, rich gas, condensate and ethane via pipelines, as well as by rail, from the loading ramps to the refineries, for the oil areas not connected to the major transport pipelines.

1.6. Development Strategic Objectives

The Administration Plan of the Board of Administration of CONPET, for the period 2018-2022 is based on a detailed analysis of the company’s activities, on its business segments.

The strategic objectives for the period 2018-2022, established and assumed by the administrative management within the administration component were defined in strong correlation with the strategic directions, the vision and expectations of the shareholders and the contextual lines of the

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Energy Strategy of Romania along 2018-2030, envisaging the years 2050. These are the following:

• increasing efficiency and improvement of the activity performance; • development of new activities, related and non related to the core business;; • defining the Company as a regional player; • outstanding management of the human resources; • implementation and development of the corporate government principles.

2. CONPET- EXECUTIVE SUMMARY

2.1. Operating activity indicators

The evolution of the product volumes (crude oil, condensate and rich gas), transported via the National Transport System (NTS), during January - March 2020, vs. the Income and Expenditure Budget and the similar period of 2019, by transport subsystems, is contained in the table below:

Achieved Budget Achieved Variation% Indicators January- January - January- Achieved/Budget (Thousand tons) 2020/2019 March 2020 March 2020 March 2019 2020 Transported quantities on 874 871 870 ▲0.3% ▲ 0.5% domestic subsystem Quantities transported on the 964 838 785 ▲15.0% ▲22.8% import subsystem Total 1,838 1,709 1,655 ▲7.5% ▲11.1%

Table 2 - Evolution of the volumes transported in January - March 2020 H1 as compared to Budget 2020 and the similar period in 2019

Chart 2 - Evolution of the quantities transported on the domestic and import subsystems (thousand tons)

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

2.2. Economic-financial indicators

The level of the main economic-financial indicators achieved in quarter I, as compared to the same period of the previous year and the Budget, is as follows:

January- March 2020 Variation% Achieved Achieved Variation January- Indicators 2020/ Achieve (% ) March Budget Achieved d Achieved/ 2019 Budget 2019 Turnover (thousand RON) 105,715 103,361 ▲ 2.3% 98,830 ▲ 7.0% Operating Revenues (thousand 113,696 111,834 ▲ 1.7% 105,928 ▲ 7.3% RON) Operating Expenses (thousand 96,601 98,671 ▼2.1% 90,510 ▲ 6.7% RON) Operating Profit (EBIT) (thousand 17,095 13,163 ▲ 29.9% 15,418 ▲ 10.9% RON) Operating profit margin (% 15.04% 11.77% ▲3.3 p.p. 14.56% ▲0.5% p.p. Operating Revenues) EBITDA (thousand RON) 29,258 24,862 ▲17.7% 26,751 ▲ 9.4% Operating Expenses/Turnover x 100 91.38% 95.46% ▼ 4.1 pp 91.58% ▼0.2 p.p. (%) Total Revenues (thousand RON) 115,652 113,280 ▲ 2.1% 107,906 ▲ 7.2% Total Revenues (thousand RON) 96,719 98,726 ▼2.0% 90,550 ▲ 6.8% Gross profit (thousand RON) 18,933 14,554 ▲ 30.1% 17,356 ▲ 9.1% Net profit (thousand RON) 16,303 12,305 ▲ 32.5% 14,449 ▲ 12.8% Average number of employees 1,549 1,579 ▼ 1.9% 1,611 ▼3.8% (pers.) Productivity (thousand 73 71 ▲ 2.8% 66 ▲10.6% RON/employee)

Table 3 - The main economic-financial Indicators achieved in January- March 2020 vs Budget and the ones achieved in the same period of 2019

2.3. Investments

The investment program for 2020 comprises, mainly rehabilitation and development works of the Crude Oil National Transport System.

The investment projects targets both enhancing efficiency of the transport activity as well as operation, under safe conditions, of the National Transport System.

During the three months period ended March 31st, 2020, CONPET S.A. achieved investments amounting 20,139 thousand RON. The degree of achievement of investments as compared to programme in the first quarter of 2020 and 2019, by ownership and total, is as follows:

January- March 2020 January- March 2019 Budget Degree Degree of Investment YEAR of Achieve Achieve achievem (Thousand RON) 2020 Program achieve Program d d ent ment % % Total investments, 97,500 20,139 17,621 114% 12,557 6,632 ▲ 89% out of which:

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Public domain 70,000 16,733 13,020 129% 11,299 5,481 ▲ 106%

Operating domain 27,500 3,406 4,601 74% 1,258 1,151 ▲ 9%

Table 4 - Evolution of the investments achieved in January- March 2020 as compared to the program and the similar period in 2019

Chart 2 - Evolution of the total investments achieved as compared to program

Chart 3 - Evolution of the investments in the public domain achieved Chart 5 - Evolution of the investments in the operating domain as compared to program achieved as compared to program

2.4. Company’s Stock Market Indicators

At 31.03.2020, CONPET SA had a market capitalization of 571.40 million RON, occupying the 20th position in the “Top 25 of issuers by capitalization”.

In the first three months of 2020, 4,371 stock transactions have been recorded, with a traded volume of 234,928 shares, the total value of the transactions being of 17.08 million RON. In the three months period, the minimum trading price amounted to 56.60 RON/share and the maximum price of 82.00 RON/share. On average, have been traded 3,789 shares/day, the average value of a trading day amounting to 275,481 RON/day (62 days). During the review period, the closing price of the shares of CONPET has decreased by 17.09%.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

3. ANALYSIS OF THE COMPANY’S BUSINESS

3.1. Analysis of the operating activity

3.1.1. Regulation Framework

CONPET S.A. is the operator of the Crude Oil, Rich Gas, Condensate and Ethane Pipeline Transport System (NTS) as defined and regulated by Law no. 238/07.06.2004 - Oil Law and the Methodological Norms for the enforcement of the Oil Law approved under GD no. 2075/2004. The transport service is being supplied under the natural monopoly regime based on the tariff set by NAMR.

3.1.2. The crude oil, condensate and rich gas business

CONPET S.A. supplies transport services for its clients both via the National Transport System concessioned according to the Oil Concession Agreement of the National Transport System of crude oil, gasoline, condensate and ethane, as well as via railway tanks, from the loading ramps to the refineries, for the oil areas not connected to the transport major pipelines.

Given the natural distribution of the oil fields spread over the entire Romanian territory, the National Transport System was built as to meet the transport needs from all those fields to the refineries. The system operation is being made based on the local dispatch centers, coordinated from the Company’s Central Dispatch. The pipelines transport system is approximately 3,800 km in length, out of which, to date, 3,161 km of pipelines are being used for the transport of crude oil, rich gas, condensate. The Crude Oil, Rich Gas, Condensate and Ethane Transport System via pipelines has in composition transport subsystems, grouped according to the transported products, as follows:

• The domestic crude and condensate transport subsystem, having in composition pipelines covering approx. 1,540 km, for the transport of crude oil and condensate from the production units of OMV Petrom operating areas throughout the country, to the refineries. The domestic crude oil and condensate production is transported via pipelines, by railway tanks, or combined (rail and pipelines).

• The rich gas transport subsystem is meant for the rich gas transport from the rich gas separation units in Ardeal (Biled and Pecica) to Petrobrazi refinery.

• The ethane transport subsystem provides the ethane transport from Turburea ethane separation platform to Arpechim Pitesti refinery. Currently, due to the lack of operability of Arpechim refinery, the subsystem is not used and only one portion of the pipeline is used for the transport of condensate from Totea warehouse to Petrobrazi refinery.

• The subsystem for the import crude transport provides the transport of crude oil from Oil Terminal Constanta to the refineries in Ploiești, Arpechim-- Pitești and Midia.

The crude oil, rich gas, condensate and ethane transport service provides the fulfillment of the tasks incumbent on CONPET from its own program, consequently, easing free access to the system’s available throughput, to all petitioners, authorized legal persons, under equal conditions, on a non-discriminatory and transparent basis. The available throughput represents the difference between the total physical throughput of the system and the crude oil scheduled for transport in the given year.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The transport contracts signed with the beneficiaries of the services are compliant with the regulated frame-contract approved by NAMR and provides the legal framework for the supply of the transport services.

The crude oil transport throughput is being performed from the sites of delivery by the producers/importers, from the extraction areas, or from Oil Terminal, to the processing plants (refineries) by the use of certain facilities both in the pumping sites, all in the receipt sites.

These facilities shall consist of: crude oil and condensate storage tanks, storage tanks for the storage of rich gas, technological pipes from the pumping/receipt warehouses, pumping aggregates (booster pumps, main pumps, actuators), crude oil and rich gas loading and unloading ramps, tank cars.

The transported volume by products - crude oil, rich gas and condensate, programmed and achieved in the first quarter 2020, as compared to the same period of 2019 and the extent of usage of the transport capacity, is as follows:

Variation Transport January- January- Indicators and products % Subsystems March 2020 March 2019 2020/2019 Domestic crude oil, condensate and light condensate - programmed quantities (thousand tons) 866 840 ▲ 3.1% - achieved quantities (thousand tons) 869 865 ▲ 0.5% - degree of achievement 100.3% 103.0% - - degree of use of the transport throughput 57.6% 57.3% ▲0.3 p.p. rich gas - programmed quantities (thousand tons) 4.8 4.6 ▲ 4.3% DOMESTIC - achieved quantities (thousand tons) 4.7 5.4 ▼13.0% - degree of achievement 97.9% 115.3% ▼17.4 p.p. - degree of use of the transport throughput 16.2% 18.6% ▼2.4 p.p. Total domestic subsystem - programmed quantities (thousand tons) 871 845 ▲ 3.1% - achieved quantities (thousand tons) 874 870 ▲ 0.5% - degree of achievement 100.3% 103.0% - - degree of use of the transport throughput 56.8% 56.6% ▲0.2 p.p. crude oil - programmed quantities (thousand tons) 838 609 ▲ 37.6% IMPORT - achieved quantities (thousand tons) 964 785 ▲ 22.8% - degree of achievement 115.0% 128.9% ▼13.9 p.p. - degree of use of the transport throughput 33.2% 27.0% ▲6.2 p.p. - programmed quantities (thousand tons) 1,709 1,454 ▲ 17.5% - achieved quantities (thousand tons) 1,838 1,655 ▲ 11.1% TOTAL - degree of achievement 107.5% 113.8% ▼6.3 p.p. - degree of use of the transport 41.3% 37.2% ▲4.1 p.p. throughput

Table 5 - Transported quantities by types of products and by transport subsystems 3 months 2020 - 3 months 2019

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The Evolution of the volume transported on transport subsystem is the following:

Chart 6 - Quantities transported on the transport subsystem.

The total quantity transported during January- March 2020 was higher by approx. 183 thousand tons as compared to the same period of 2019. In January - March 2020, the quantity transported on the import subsystem has increased by 179 thousand tons (22.8%), while the quantity transported on the domestic subsystem was at the same level as quarter I 2019 (Quarter I 2020: 874 thousand tons; quarter I 2019: 870 thousand tons). From the total of 874 tons of crude oil, gasoline and condensate obtained from domestic production, which have been transported and delivered to the refinery in QI 2020, the amount of 298 thousand tons was transported by rail (34%).

The evolution of the standardized technological consumption on products in the first quarter of 2020, as compared to the level registered in the same period 2019 is presented as follows:

January- March 2020 January- March 2019 Products Standardized Achieved Variation Standardized Achieved Variation Import crude oil: 0.2445% 0.1478% -0.09 p.p. 0.2513% 0,1213% -0.13 p.p. Domestic crude oil, condensate and light 0.3637% 0.3574% -0.01 p.p. 0.3666% 0.3108% -0.06 p.p. condensate Rich gas 7.383% 3.106% -4.28 p.p. 7.383% 2.714% -4.67 p.p.

Table 6-The evolution of technological standardized consumption as compared to achieved Quarter I 2020 vs. Quarter I 2019

The transport services of crude oil, rich gas and condensate have been provided under contracts concluded with traditional customers: OMV Petrom S.A., Petrotel LUKOIL S.A., Rompetrol

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Rafinare S.A. And with new clients: NIS Petrol S.R.L., Standart Logistic d.o.o și Serinius Energy România S.A.

Transport Tariffs

The tariffs for the supply of crude oil, rich gas, condensate and ethane are regulated and approved by the NAMR and are distinguished for each transport subsystem.

The tariffs applied for the import transport subsystem vary according to the installment of transported quantity, being practiced the bracketing tariff model and the refinery- the hand-over site. Between 2019 and 2020, the following tariffs were applied:

➢ Tariffs from transport services on domestic subsystem

Transport tariff Approved by Period (RON/ton) NAMR Order no.

June 19th, 2018 – December 30th, 2019 84.37 117/2018

Starting December 31, 2019 87.53 427/2019

Tabel 7 - Transport tariffs domestic subsystem

➢ Tariffs for transport services on import subsystem

Ploiesti Basin Arpechim (Petrobrazi and Petromidia Approved Installments Refinery Petrotel Lukoil Refinery by NAMR Period refineries) Order no. Thousand RON/ton RON/ton RON/ton tons/month June 19, 2018 < 120 38.85 38.00 27.00* 117/2018 December 30, 2019 > 120 16.60 16.00 24.74* Starting with < 120 40.40 39.50 15.00 427/2019 December 31, 2019 > 120 17.25 17.00 12.85 *) Starting 14.03.2019 up to 30.12.2019, for the transport relation with Petromidia refinery it was applied a tariff of 14.00 RON/ton for installment up to 120 thousand tons and 12.00 RON/ton for installment bigger than 120 thousand tons (approved by NAMR Order no.172/2019). Tabel 8 - Transport tariffs import subsystem

The transport tariffs include a modernization quota meant exclusively for the financing of the investments related to the National Transport System.

The company holds a monopoly position on the market of crude oil transport via pipelines, having no competitors in its core business. The transport services are being contracted with the clients, based on a frame contract approved by the National Agency for Mineral Resources.

The total value of the services, VAT excluded, invoiced to the beneficiaries during January - March 2020 is in amount of 105,002 thousand RON and in detail by every beneficiary, is as follows:

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Chart 7 - Transport revenues divided on clients

Other activities

Revenues from other activities represent 0.7% of the company’s turnover and are made up of: revenues out of leases of lands and telecommunication equipment, rail shunting services, revenues from sales of pipe material etc.

3.1.3. Assessment of the operating activity

In the table below is being presented the evolution of the transport services supply for the first three months of 2020, as compared to the same period of 2019 and as compared to the provisions in budget for the same period of 2020.

Achieved Budget Achieved Variation% Indicators January- January January- (Thousand RON) March - March March Achieved/Budget Achieved 2020 2020 2019 2020 2020/2019

Revenues on the domestic 76,874 76,624 73,733 ▲0.3% ▲4.3% transport subsystem

Revenues on the import 28,128 25,947 22,257 ▲8.4% ▲26.4% transport subsystem

Total 105,002 102,571 95,990 ▲2.4% ▲9.4%

Table 9 - Statement of the transport revenues

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Chart 8 - Evolution of transport revenues on subsystems

The procurement activity The procurement activity performed in compliance with the provisions of the Internal Procurement Norms of CONPET S.A.. and other internal procedurals.

Along January-March 2020 have been initiated procedures to achieve a total of 27 procurements required by the entities within the company and have been completed 13 procurement procedures by conclusion of contracts in total amount of 5,553,499.62 RON.

At the end of March a number of 29 acquisitions were in progress, in the total estimated value of 12,812,173.70 RON and 97,270 EURO, respectively: - 5 tendering procedures in total estimated amount of 3,919,123.09 RON and 91,000 Euro; - 14 simplified procedures in total estimated amount of 8,440,125 RON; - 2 negotiation procedures in total estimated amount of 125,491.46 RON; - 8 tendering procedures in total estimated amount of 327,434.14 RON and 6,270 Euro.

The tracking and recording of the procurement contracts and contract conclusion for realization of revenues The ongoing contracts and contracts whose execution has been completed, but with unexpired warranty on 31.03.2020, is as follows: - 151 works contracts (o/w 35 in progress, the rest being completed in terms of execution, but still covered by the guarantee period); - 140 services contracts (out of which 104 in progress, the rest being completed in terms of execution, but still covered by the guarantee period); - 67 product supply contracts (including 32 in progress, the rest being completed as execution, but still covered by the guarantee period); - 109 revenues contracts;

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

- 91 utility contracts. According to EGMS Resolution no. 3/23.10.2014, in Annex no.4 we present the situation of service procurement contracts with values higher than 100,000 Euro, concluded between 01.01.2020 - 31.03.2020. In QI 2020, no contracts were concluded for the purchase of works or products with values higher than 500,000 Euro.

3.1.4. Mergers and reorganization of the company, acquisitions and disposals of assets for the period January- March 2020

During QI 2020 there were no mergers and there have not been made purchases or alienations of fixed tangible assets consisting of buildings and lands.

Purchases of tangible and intangible assets in January - March 2020 were made in accordance with the investment program and the approved revenues and expenditure budget and are intended for rthe fulfillment of the company’s business.

The company has no open subsidiaries in Romania or abroad.

3.1.5. Assessment of human resources and social dialog activity

The number of employees on March 31st, 2020 was of 1,594 persons.

Following the adoption of measures on human capital resizing, the actual number of employees on March 31, 2020, compared to March 31, 2019 is down 59 people and 5 persons lower as the one recorded at December 31, 2019.

The personnel structure according to the level of studies and gender, at March 31, 2020 is presented in the table below:

% in total % in total % in total Studies Total Women Men employees employees employees

General education (8- 119 7.5% 12 0.8% 107 6.7% 10 grades) Secondary education 928 58.2% 83 5.2% 845 53.0% Higher education 547 34.3% 204 12.8% 343 21.5% Total 1,594 100.0% 299 18.8% 1,295 81.2%

Table 10 - Personnel structure by education level and gender

The number of personnel who graduated higher education represents 34.3% of the total number of employees, of which, a percentage of 12.8% is represented by women and 21.5% by men.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Chart 9 - Level of studies employees (women/men)

The evolution of the personnel structure by education categories and gender reveals that the company promotes a non-discriminatory behavior by employing female specialists with higher education and professional skills that contributes to the growth of the company’s activity results.

The employees of the company, at a rate of 99.1%, are members of the Free Union of Conpet. During January - March 2020, there have been no elements of a conflicting nature between employees and the management of the company.

The Personnel Risk and the Waging System

At March 31, 2020 the age structure is not balanced, the age group between 51-60 years has the highest percentage (47%) and is followed by the age group 41-50 years (32%) and between 31 - 40 (12%).

Chart 10 - Structure by age groups

The average age of CONPET personnel is high enough (49.14 years old), the advantage being that 54.58% of the personnel has over 20 years of experience in the company, which stands for the stability and professionalism, but also accumulation of knowledge and skills, some taking many years of experience to be gained.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The personnel-related risk is being represented by the fact that, in the future, the company can face lack of specialized personnel due to the retirement of the experienced employees.

The level of this analyzed risk was low; this is a high tolerability risk and for the control thereof have been set medium and long-term measures by way of the personnel policy and the monitoring of the personnel fluctuations (personnel input/output in/from the company).

It is also considered that the age group 41-50 years is well represented by the tier of employees who will meet the retirement conditions at the standard age in15 to about 22 years, staff with a rich background of knowledge and professional experience, over 80% of this tier with a seniority in society of over 10 years.

In this regard, the urgent need of vacant posts occupancy is carefully monitored, according to the needs required by organizational entity, the complexity and diversity of activities, skills needed and the responsibility related posts.

The Collective Labor Agreement

The Collective Labor Agreement was approved by Decision of the Board of Administration no. 33/18.12.2018 for a period of two years, starting with 01.01.2019 until 31.12.2020 and was registered with the Inspectorate of Labor Prahova no. 341/27.12.2018.

The rights of the employees in the new CLA were negotiated to ensure achievement of financial performance indicators set out in the Management Plan, succeeding, at the same time,to ensure a balance between the interests of employers and trade union, taking into account that the interests of employees and the management of the company can not be divergent, and that the most important resource of the company is human resources.

Up to 31.03.2020 no actions were initiated to amend the Collective Labor Agreement in force by additional acts.

The Activity of Professional Training and Authorization

In order to maintain and/or develop specific skills and basic skills of human capital, the training activities are carried out on an ongoing and planned basis, based on the professional training and authorization programs of the company, as a result of the conduct of a comprehensive process of identification and priorities setting of the CONPET SA staff training needs.

Training of company personnel is achieved mainly through participation in external courses, organized in collaboration with certified trainers for all fields of activity within the company. Also, training is conducted internally by trainers and/or experts of the company, with a good knowledge and experience relevant to the activity of the company. They hold training sessions and trainings to update knowledge and skills specific to the job.

Training of the employees has two components: training (technical, economic and other specialties) necessary to perform duties in the job description and a general one on training and/or professional licensing in various fields.

CONPET management assures annually by the Revenues and Expenditure Budget for the provision of training sources. Special attention is paid to the training of technical staff (maintenance and operations), mainly for new skills necessary to carry out the work safely the National Transport

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

System.

In this context, based on the requests of the heads of organizational entities or employees with responsibilities in specific fields of activity and the analysis performed by the Office of Personal Training, in the first quarter of 2020 the following courses were held: Type of training and professional authorization 2020 Employees Crt. no. Quarter 1 participants 1 Various fields authorizations (specific of activity) 6 2 Railway authorizations 58 3 Training 69 4 Inhouse authorizations 188 Total 321

Table 11 Professional Training and Authorization

The assessment of the professional performance of the employees

On December 12, 2019 the Board of Administration approved, by Decision no.26 a new Regulation on the assessment of the professional performance of CONPET SA employees - Annex 1 to the Internal regulation.

The new Regulation on the assessment of the professional performance of CONPET SA employees is in line with OGSG no. 600/20.04.2018 approving the Code of Internal Control Management, Law no.53/2003 rep. - the Labor Code, as well as with the Board of Administration requests that focus on the individual professional performance, basic principle in labor relations.

The new evaluation criteria, individual objectives, performance indicators, target values and weights associated to the work of 2020 of the employees in management positions, were subject to conclusion addenda to individual employment contracts of the employees, as laid down in each entity.

The action for evaluating the professional performance of employees for the activity carried out in 2019 took place between February 12 - March 31, 2020, in accordance with the Regulation for evaluating the performance of employees - Annex 1 to the Internal Regulation, valid for the activity performed by employees during the evaluated period .

The results of the evaluation were included in the Report on the evaluation of the professional performances of the employees of CONPET SA for the activity carried out in 2019 registered at no. 13293/14.04.2020. The report concludes that, in order to achieve the priority objective that must underlie the organization and development of human resources in CONPET SA, that of “improving the activity of human resources by designing new systems of evaluation, motivation/reward and career management within CONPET SA and the implementation of new tools and working methodologies”, the structure of the Deputy Director General designed and implemented in collaboration with the other entities a new employee evaluation system starting with 2020, which also includes the establishment of individual objectives and performance indicators for employees with management positions.

3.2. Investments conducted during January-March 2020

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The investment projects within Conpet SA mainly target the increase of the efficiency of the transport activity. From the modernization quota, CONPET finances investment objectives within the rehabilitation, modernization and development programs, agreed with the National Agency of Mineral Resources according to the “Petroleum concession agreement for the operation of the national transport system of crude oil, rich gas, condensate and ethane, including the main pipelines and the ancillary installations, endowments and facilities”.

During January- March 2020, have been achieved investments amounting 20,139 thousand RON, as compared to a program of 17,621 thousand RON. As compared to the annual program of 97,500 thousand RON, the investments achieved in 3 months represent 21%.

The value of the investment objectives achieved in the first 3 months of 2020, on assets belonging, as compared to the program and the same period of 2019, is as follows:

Budget January- March 2020 Budget January- March 2019 Investments year Level of YEAR (thousand RON) Achieved Program Achieved Program % 2020 Achievement 2019 Total investments, 97,500 20,139 17,621 114% 86,000 12,557 6,632 89% out of which: Public domain 70,000 16,733 13,020 129% 71,375 11,299 5,481 106% Operating 27,500 3,406 4,601 74% 14,625 1,258 1,151 9% domain

Table 12 - Investments achieved within 3 months 2020 as compared to the Budget and the similar period in 2019

The investments achieved in the three months period 2020, as compared to the program and the same period of the previous year, on financing sources, are being presented in the chart below:

Chart 11 - Investments achieved by financing sources

The stage of the main investment objectives ongoing in quarter I:

I. PUBLIC DOMAIN

• Sistematization of technological keyboards of the Ø10¾” F1 and Ø10¾” F2 pipelines Siliste-Ploiesti, respectively Ø8”+Ø10” Ploiesti Beltway and mounting of the cleaners reception installation on the Ø10¾”F1 Siliste-Ploiesti crude oil pipeline in the area of Gara de Vest Railway Station, Ploiesti city, Prahova County Prahova

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The concrete tank of the new smart pigging station has been completed. The smart pigging station was installed on the position and isometry works were performed on the station's installations.

• Replacement of Ø10 3/4’’ F1 + F2 Siliștea-Ploiești crude oil pipeline, L= 2 x 3481 m, in the areas Ilfoveni-Iuda forest, Racovita valley way, Habeni-Comisani, Mija. The pipelines on both wires were replaced, with a total length of 6,948 m pipeline and the coupling of the F1 wire on the Racoviță area was performed, following the coupling of the F2 wire, the Mija area to be performed.

• Replacement of the Ø10¾” F2 Siliste-Ploiesti crude oil pipeline in the Brazi Stadium – inside Petrobrazi Refinery area, Prahova County, on a length of approximately 1170 m and replacement of cleaning installation

There have been executed: - Common platform related to the smart pigging stations, filters and SKIDs - Foundations of smart pigging stations, filters - Pipe installation 10 ¾ ”on approx. 800 m SKID 10” will be replaced with SKID 20” PETROSTAR performs the redesign related to the replacement (foundation, isometers).

• Replacement of the 14 inch crude oil pipeline Bărăganu-Călăreți resulted following the smart pigging (on sections) on a length of 15,972 m, with a repair coefficient estimated over 0,8 The pipeline assembly works for section no. 12 (3,995m) started.

• Replacement of a section of about 500 m length pipeline 59/16 Copăceni - Vega Refinery and smart pigging stations Ongoing execution and design contract. The design stages were completed: obtaining approvals/agreements, approval of technical documentation in CTE Conpet, the Building Permit was obtained.

• Replacement of crude oil pipeline Ø 24ʺ Călăreți – Pietroșani (7 sections ) in total length of 5.9 km Pipeline assembly works were carried out at section 3 Nuci (1,654 m). A total of 1,302 m were installed at this objective, of which 816 m at Tr.3 - in execution - and 486 m at Tr.2 - completed, uncoupled. The Building Permit no. 2/03.03.2020 was obtained for section 1- Ialomita County.

• Replacement of crude oil pipelines 10 "F1 and F2 Siliște-Ploiești, on a length of about 300 m, located in Aricești Rahtivani, Prahova County Design and execution contract in progress. The Urbanism Certificate was obtained and the documentation for obtaining the approvals/agreements was submitted from the entities mentioned in it.

• Safe disposal works for the over crossing of Prahova river with the 12 3/4" and 14 3/4" pipelines Cartojani-Ploiești, Stejaru village, Brazi commune, Prahova - final stage, complex project. The Building Permit no. 1/17.01.2020 was obtained The site was handed over in order to start the execution of the works on 03.02.2020. Were carried out works downstream of the crossing, at submersible threshold no. 1 and submersible threshold no. 2.

• Smart pigging, pipe condition detection 12 "F1 and 12" F2 Călăreți - Petrotel

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Ongoing service contract. The site was handed over (04.03.2020) followed by its suspension (report approved in the process of signing the Addendum) due to existing travel restrictions, caused by the spread of COVID-19 coronavirus and as a preventive measure to ensure maximum safety of CONPET and LIN SCAN personnel.

• Modernization and monitoring of the cathodic protection system related to SNT domestic and import - stage 2 The design and execution contract was signed in December 2019, for 30 SPCs and their integration in the monitoring system in operation. The site for design was handed over for all 30 locations. The contract design stage is in progress.

• Crude oil tank R3 Calareti station Ongoing execution contract. Tank completed, calibrated. Approx. 80% gutter and tank perimeter sidewalk carried out. Completion remaining/ in progress arrangement of tank/tank dam and installation of power cables/ PSI system control.

• Crude oil tank Poiana Lacului station Ongoing execution contract. The bottom of the tank and the jacket were made and the access ladder was mounted on the tank. The Dom type cover and floating membrane were made at the location, followed by their installation. Decommissioning of old OMV pipes in the area and redesign of pipeline route, tank filling/emptying .

• Orlesti crude oil tank station The execution contract is ongoing. The bottom of the tank and 3 ferrules out of 7 were mounted, and the dome-type cover and the floating membrane were taken to the site. The contract was suspended at the request of the manufacturer during the state of emergency, 16.03-30.04.2020.

• Modernization of the thermal power plant and heating network - Baicoi Centru Crude oil station Design completed. The execution contract was signed in December 2019. At March 31, 2020, the physical stage is of 20%.

• Modernization of the thermal power plant - Calareti crude oil station Design completed. The execution contract was signed in December 2019. At March 31, 2020, the physical stage of the works is of 80%.

• Modernization of Ciresu ramp The permits from Braila County Council and Cireșu City Hall were obtained and in March 31, 2020 the construction permit and demolition authorization.

• Modernization of Berca ramp Ongoing execution contract. At March 31, the works were executed in proportion of 80%.

• Modernization of Imeci ramp Ongoing execution contract. The assembly works of the metal structure and the repair works for the buildings in the project are completed.

• Modernization of Marghita ramp Ongoing execution contract. The works were executed in proportion of 20%.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

• Modernization buffer warehouse Independenta The execution contract for the campus and septic tank module was signed in August 2019. The works provided in the execution contract have been completed. Reception and commissioning are due.

• Rehabilitation of Baicoi station building The execution contract was signed in April 2019. At the date of reporting the works are completed in proportion of 80%.

• Modernization of locomotive parking shed Biled Ramp The design and execution contract was concluded in April 2019, in progress. Design works in progress.

• Optimization of SCADA system and upgrade of Hardware and Software of the remotes transmission units (RTU) In September, 2017 has been initiated the implementation of the SCADA System optimization and the Hard and Soft upgrade of the data and automation Transmission System. At March 31, 2020 stages I, II, III, IV and V and V_A of the contract are completed. The estimated stage is of 76%, respectively the equipment is installed and the functional tests are performed in 25 locations and commissioning in 21 locations, out of a total number of 29 locations.

• Geographical patrimonial inventory system Stage 1 of the contract has been completed. Stage 2 of the contract is in progress. Implementation stage is estimated at 62%.

II. OPERATING DOMAIN

• Replacement of Ø8⅝” crude oil pipeline Vega-Brazi Refinery, in Petrobrazi Refinery- SKIDs keyboard area, Prahova County, on a length of approximately 800 m and replacement of cleaning installation Ongoing execution contract. There have been executed: - Common platform related to the smart pigging stations, filters and SKIDs - Foundations of smart pigging stations, filters and the 8” SKIDs - Pipe installation 8” on approx. 100 m

• Replacement of two pipeline sections Ø65/8” Urziceni - Claviatura Albești Paleologu, valve section Jilavele-Milepost 1,1900 m in length and Milepost 2 - valve road Armășești, 400 m in length Ongoing execution contract. The assembly of the new sections has been completed. Pressure tests were performed. The couplings of both sections were made in March.

• Modernization of Conpet SA headquarters building in Ploiesti, 7 Independentei Avenue. The execution contract is in progress of signing.

• Headquarters 2, CONPET - Electric Power Supply - power addition The design and execution contract was completed in August 2019. The project is physical stage of 92%.

• LDH 1250 HP transformation Execution is finalized, followed by commissioning in the second quarter of 2020.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

• LDH 700 HP transformation The design and execution contract was signed in June 2019 and the works are in progress.

Also, in the first quarter of 2020 was approved in CTE CONPET the solution study on the replacement works of the connecting pipes that cross the Danube, respectively wires C1 and C2 and the Borcea arm, wires C3 and C4.

Commissioning carried out in QI 2020 amounted to 16,628 thousand RON, of which: • 15,970 thousand RON out of the modernization quota; • 658 thousand RON out of other own sources;

The main objectives of investments completed and commissioned in the first three months:

• Replacement of crude oil pipeline Ø 10 3/4"F1 Bărbătești-Orlești, Budele area; • Cyber Security within the telecommunication system for similar SCADA channels (UPS monitoring, Climate control etc.).

3.3.Analysis of the Financial Business

The financial information presented in this report have been supplied based on the interim financial statements for the three months period ended March 31st, 2020, prepared in compliance with the International Accounting Standard no. 34 - „Interim Financial Reporting”

3.3.1. Statement of the Financial Standing at March 31, 2020

In the synthesis, the statement of the Financial Standing at March 31, 2020 is as follows:

March 31, 20 December 31, 2019 Variation Name of the element (thousand RON) (unaudited) (audited) 2020/2019 Intangible assets 485,148 476,209 ▲1.9% Current assets 305,724 290,858 ▲5.1% Total Assets 790,872 767,067 ▲ 3.1%

Equities 671,125 653,810 ▲2.6% Accrued income 1,046 1,074 ▼2.6% Total liabilities 118,701 112,183 ▲5.8% Total equity and liabilities 790,872 767,067 ▲ 3.1%

Table 13 - Synthesis of the company’s financial standing at 31.03.2020 as compared to 31.12.2019

The extended variant of the financial standing at March 31, 2020 is presented in Annex no. 1.

The total assets increased by 3.1% (23,805 thousand RON) as compared to the level recorded at December 31, 2019 following the increase of the fixed assets by 1.9% and the current assets by 5.1%.

The intangible assets recorded, at 31.03.2020 an increase by 1.9% as compared to December 31, 2019, generated by input of fixed assets by procurement in a value higher than the amortization registered in the first 3 months, approx. 8 mRON.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The current assets increased by 5.1% (14,866 thousand RON), from 290,858 thousand RON achieved at the end of 2019, to 305,724 thousand RON, value registered at March 31, 2020. The augmentation of the value of assets was mainly determined by the increase of the available cash (approx. 14 mRON). Trade receivables and other receivables records an increase of about 0.2 mRON.

At 31.03.2020, the cash availabilities in the modernization quota in bank accounts were amounted to 139,911 thousand RON, lower by 12,110 thousand RON as compared to 31.12.2019. The cash representing modernization quota is intended exclusively for funding the modernization and development works of public property goods.

The equities increased by 2.6% (17,315 thousand RON) as compared to December 31, 2019 reaching 671,125 thousand RON, the increase being determined by the following amendments: - The net result amounting 16,303 thousand RON reported for the period of three months 2020; - The net growth of the reserve representing modernization quota amounting 1,012 thousand RON.

Current liabilities, in amount of 98,866 thousand RON, are increasing by 6,535 thousand RON as compared to December 31, 2019, mainly due to the increase in trade liabilities and to the provisions for untaken annual leaves.

Structure of Debts

At March 31, 2020 and December 31, 2019, the trade receivables and other receivables look as follows:

Maturity term for the balance at December 31, March 31 March 31, 2020 Debts (thousand RON) 2019 2020 Under 1 1-5 Over 5 year years years Trade liabilities 27,179 30,856 30,856 - -

Other liabilities, here included 45,497 fiscal debts and social 43,790 40,609 3,181 - insurances related debts

Total 72,676 74,646 71,465 3,181 -

Table 14 Statement of Liabilities at March 31, 2020 vs. December 31, 2019

The statement of the personnel -related debts, fiscal debts and other maturity date debts look as follows:

Maturity term for the balance at March December 31, March 31, 31, 2020 Debts (thousand RON) 2019 2020 Under 1 Between 1-5 Over 5 year years years Salaries and assimilated 5,897 5,505 5,505 - - debts Salaries contributions 5,361 4,250 4,250 - - Current Corporate Tax 3,076 3,446 3,446 - - Royalty due to the State 8,059 8,090 8,090 - - Budget

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Maturity term for the balance at March December 31, March 31, 31, 2020 Debts (thousand RON) 2019 2020 Under 1 Between 1-5 Over 5 year years years VAT payable 3,074 3,300 3,300 - - Other interests and debts - 981 830 830 - - State Budget Payable Dividends 13,411 13,305 13,305 - - Leasing liabilities 5,469 4,922 1,741 3,181 Other liabilities 169 142 142 - - Total 45,497 43,790 40,609 3,181 -

Table 15 Statement of other liabilities, here included the fiscal debts and social insurances related debts

The debts recorded in the balance at 31.03.2020 stand for current liabilities, within the maturity term.

3.3.2. Profit & Loss Account for the period January - March 2020

In the 3 months period ended March 31, 2020, CONPET S.A. obtained a net profit of 16,303 thousand RON, higher by 1,854 thousand RON as compared to 3 months 2019 (14,449 thousand RON).

The financial result achieved in the period January - March 2020, as compared to the Budget and the achievements of the period similar to 2019 are the followings:

Variation Achieved Budget Achieved Achieved Achieved January- January- January- 2020 Indicators (thousand RON) 2020 March March March vs. vs. 2020 2020 2019 Budget 2019 2020 Turnover 105,715 103,361 98,830 ▲2.3% ▲7.0% Total Operating Expenses 113,696 111,834 105,928 ▲1.7% ▲7.3% Total operating expenses 96,601 98,671 90,510 ▼2.1% ▲6.7% Operating Profit (EBIT) 17,095 13,163 15,418 ▲29.9% ▲10.9% EBITDA 29,258 24,862 26,751 ▲17.7% ▲9.4% Financial revenues 1,956 1,446 1,978 ▲35.3% ▼1.1% Financial expenses 118 55 40 ▲114.5% ▲195.0% Financial profit 1,838 1,391 1,938 ▲32.1% ▼ 5.2% Total incomes 115,652 113,280 107,906 ▲2.1% ▲7.2% Total expenses 96,719 98,726 90,550 ▼2.0% ▲6.8% Gross Profit 18,933 14,554 17,356 ▲30.1% ▲9.1% Net Profit 16,303 12,305 14,449 ▲32.5% ▲12.8%

Table 16 - The main economic indicators achieved in the period January - March 2020 vs Budget 2020 and the same period of 2019

The statement of the profit and loss account for the three months period ended March 31, 2020 is presented in detail in annex no. 2.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Evolution of the financial results during January- March 2020, as compared to the same period of the year 2019 is being represented in the chart below:

Chart 12 - Synthesis of financial standing in January- March 2020 as compared to the similar period in 2019

Operating Revenues

As compared to the approved budget and the same period of the previous year, the total revenues of the operational activity in the first three months of the year is the following:

Variation Achieved Budget Achieved Achieved % Variation January- January January- January- Achieved Indicators (thousand RON) (% ) March - March March March % 2020/2019 2020 2020 2020 2019 Budget Total revenues from transport 105,002 102,571 ▲2.4% 105,002 95,990 ▲9.4% services

713 790 ▼9.7% Other Turnover Revenues 713 2,840 ▼74.9%

105,715 103,361 ▲2.3% Turnover 105,715 98,830 ▲7.0% Write-back to revenues of the reserve constituted based on 8,317 8,351 ▼0.4% 8,317 7,536 ▲10.4% the expenses with the modernization quota -336 122 - Other operating revenues -336 -438 - 113,696 111,834 ▲1.7% Total Operating Expenses 113,696 105,928 ▲7.3%

Table 17 - Statement of the operating revenues

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The turnover of the company holds a share of 99% of the transport revenues, the remaining 1% represents revenues from: rent of land and telecommunications equipment, wagon maneuvering, sale of tubular material, etc.

The company recognizes monthly, in the operating revenues, reserves from the modernization quota at the level of the amortization of the tangible assets financed therefrom. Within the first 3 months of 2020, the value of these revenues is of 8,317 thousand RON.

The operating expenses achieved within January-March 2020, as compared to the same period of the previous year and the budgeted provisions look as follows:

Achieve Achieve Achieved Budget Variation Variation d d January- January - (% ) %Achieve January- January March March Indicators (thousand RON) 2020/201 d/Budget March - March 2020 2020 9 2020 2019 Material expenses, out of 1,320 1,938 ▼31.9% 1,320 1,489 ▼11.3% which: 676 968 ▼30.2% -expenses with consumables 676 743 ▼9.0% 420 509 ▼17.5% - fuel expenses 420 474 ▼11.4% Other external Expenses with 4,280 4,618 ▼7.3% 4,280 3,903 ▲ 9.7% energy and water 36,804 37,649 ▼2.2% Personnel Expenses 36,804 35,240 ▲ 4.4% Value adjustments in respect of 11,719 11,698 ▲ 0.2% 11,719 11,332 ▲ 3.4% fixed assets, less rights of use Value adjustments on rights of 443 0 - 443 0 - use Expenses with external 27,127 28,111 ▼3.5% 27,127 25,530 ▲ 6.3% services, out of which: Maintenance (maintenance, 404 597 ▼32.3% 404 631 ▼36.0% current and capital repairs) - expenses with crude oil 15,754 15,765 ▼0.1% 15,754 14,230 ▲10.7% transport by rail - expenses with decontamination 104 212 ▼50.9% 104 77 ▲35.1% works 8,090 7,937 ▲1.9% - oil royalty 8,090 7,356 ▲10.0% - other services performed by 2,775 3,600 ▼22.9% 2,775 3,236 ▼14.2% third parties Adjustments regarding 4,535 4,692 ▼3.4% provisions and impairments of 4,535 4,770 ▼4.9 % the current assets Other operating expenses, out 10,373 9,965 ▲ 4.1% 10,373 8,246 ▲ 25.8% of which: 9,329 9,052 ▲ 3.1% - modernization quota expenses 9,329 7,591 ▲22.9% 96,601 98,671 ▼2.1% Total operating expenses 96,601 90,510 ▲ 6.7%

Table 18 - Statement of the operating expenses

In the first 3 months of 2020, the operating expenses amounted to 96,601 thousand RON, registering an increase of 6.7% (6,091 thousand) compared to quarter I 2019, mainly due to the increase in staff costs, electricity and natural gas costs and variable costs related to revenues achieved above the 2019 level (oil royalty, modernization quota and rail transport services).

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

As compared to Budget there have been increases in variable expenditures, which are determined on the basis of realized revenues (oil royalty and modernization quota) and savings in the following categories of expenditures: • personnel expenses: 845 thousand RON (2.2%); • expenditures with other services performed by third parties: 825 thousand RON (22.9%); • material expenses: 618 thousand RON (31.9%); • expenses with electricity, natural gas and water: 338 thousand RON (7.3%); • maintenance and repair expenses: 193 thousand RON (32.3%); • expenses with decontamination works: 108 thousand RON (50.9%).

The operating profit achieved at 31.03.2020, as compared to the same period of 2019 has recorded an increase by 1,677 thousand RON (10.9%).

EBIDTA records the value of 29,258 thousand RON, 2,507 thousand RON (9.4%) higher than the previous year.

As compared to the budget provisions, the operating profit registers a 29.9% decrease and the EBITDA indicator reflects a degree of achievement of 117.7%.

Financial profit recorded in the first 3 months of 2020 is up to 447 thousand RON compared to the budgeted one.

The gross profit and net profit recorded increases of 1,577 thousand RON (9.1%), respectively 1,854 thousand RON (12.8%) as compared to the period January-March, 2019.

3.3.3. Profitability of the transport subsystems

Chart 13 - Profitability of the transport subsystems

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

In the analyzed period, the profit resulting from transport activity on the two subsystems (domestic and import) increased, over the same period last year, by 2.8 million RON, from 18.0 million RON to 20.8 million RON, due to increased revenues from transport by 9.4%. The expenses showed an increase below the revenues increase index by 1.4 percentage points. The profit margin on the domestic subsystem reached 14.3% down to 0.5 pp as compared to 3 months 2019 and 35% in the Import subsystem, up to 3,0 pp.

The import subsystem profit realized in the period January - March 2019 increased by 2.7 mRON mainly due to the increase revenues out of transport services.

3.3.4. The main economic-financial indicators

Achieved Achieved Variation Name of the indicator Calculation formula Jan.-Mar. Jan.-Mar. 2020 2019 2020/2019 PROFITABILITY INDICATORS EBIT (operating profit) Gross sales margin 16.2% 15.6% ▲0.6 p.p. Turnover EBIT (operating profit) Margin operating profit 15.0% 14.6% ▲0.4 p.p. Operating Revenues EBIDTA (operating profit + value adjustments on tangible, intangible and EBIDTA in total sales assets) 27.7% 27.1% ▲0.6 p.p. Turnover Adjusted EBITDA EBIDTA adjusted in total sales 28.6% 27.1% ▲1.5 p.p. Turnover EBITDA EBIDTA in equity 4.4% 4.0% ▲0.4 p.p. Total Equities

Adjusted EBITDA EBIDTA adjusted in equity 4.5% 4.0% ▲0.5%p.p. Total Equities Gross result Gross Profit Margin 17.9% 17.6% ▲0.3 p.p. Turnover LIQUIDITY INDICATORS Current assets Current liquidity indicator (times) 3.1 4.2 ▼26.2% Current liabilities

Current assets - Stocks The quick ratio indicator (acid test) 3.0 4.1 ▼27.4% Current liabilities PROFITABILITY INDICATORS Net result x100 Rate of economic return (RER) 2.1% 1.9% ▲0.2 p.p. TOTAL ASSETS Net result x100 Rate of financial return (RFR) 2.4% 2.1% ▲0.3 p.p. Total Equities

Net result x100 Rate of commercial return (RCR) 15.4% 14.6% ▲0.8 p.p. Turnover Medium stock X90 Inventories turnover speed (days) 568.0 536.6 ▲5.9% Sales costs Duration of stocks rotation (times) Sales costs 0.16 0.17 ▼5.5%

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Achieved Achieved Variation Name of the indicator Calculation formula Jan.-Mar. Jan.-Mar. 2020 2019 2020/2019 Medium stock

Rotation speed of the clients debits Medium stock clients X90 27 33 ▼17.7% (days) Turnover

Rotation duration of the clients Turnover 3.3 2.7 ▲22.2% debits (times) Medium stock clients Average balance clients X90 Rotation speed of the suppliers 30.8 31.9 ▼3.4% debits (days) Procurement from suppliers of goods and services Procurement from suppliers of goods and Rotation speed of the suppliers services 2.93 2.82 ▲3.9% debits (times) Average balance RISK INDICATORS Borrowed capital Leverage degree indicator 0.47% 0 0 Total Equities

Table 19 - Main economic-financial indicators

3.3.5 Implementation of the revenues and expenditure budget for the the period January 1st - March 31st 2020 Implementation of the Budget QI 2020 is presented in the format and structure of MPFO no. 3818/2019.

Revenues and Expenditure Achieved INDICATORS Budget % QI 2020 (REB) QI 2020 I. TOTAL REVENUES, o/w: 113,280 115,652 102.1% 1 Total Operating Revenues 111,834 113,696 101.7%

2 Financial revenues 1,446 1,956 135.3% II TOTAL EXPENSES, o/w: 98,726 96,719 98.0% 1 Operating expenses, out of which: 98,671 96,601 97.9% A. goods and services expenses 26,840 24,987 93.1% taxes, fees and similar levies related B. 8,542 8,670 101.5% expenses C. personnel expenses, out of which: 37,649 36,804 97.8% C0 Salary related expenses 35,152 34,349 97.7% C1 Salaries 32,469 31,646 97.5% C2 Bonuses 2,683 2,703 100.8% Other personnel expenses, out of C3 0 62 - which: Compensation costs related to staff 0 62 - cuts Expenses related to the Contract of Mandate and other management and C4 602 602 100.0% control bodies,committees and commissions

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Expenses with contributions due by C5 1,895 1,791 94.5% the Employer D. Other operating expenses 25,640 26,140 102.0% 2 Financial expenses 55 118 214.6% III GROSS RESULT (profit/loss) 14,554 18,933 130.1% IV INCOME TAX 2,250 2,630 116.9% ACCOUNTING PROFIT REMAINING V AFTER THE DEDUCTION OF THE 12,305 16,303 132.5% INCOME TAX VI INVESTMENT FINANCING SOURCES 17,621 20,139 114.3% VII INVESTMENT RELATED EXPENSES 17,621 20,139 114.3% VIII SUBSTANTIATION DATA Number of employees estimated at the end 1 1,599 1,594 99.7% of the reporting period 2 Total average number of employees 1,579 1,549 98.1% Total expenses per each 1000 RON of 3 872 836 95.9% total revenues 4 Overdue payables 0 0 5 Outstanding receivables 285 17 6.0%

Table 20 Budget execution QI 2020

3.3. 6 Financial and non-financial key performance indicators

The financial and non-financial performance indicators of the administrators have been approved in the OGMS meeting dated December 18, 2018.

In accordance with the administration Plan of CONPET, chapter 7 “Performance indicators and criteria”, during 2018-2022, the performance indicators and objectives are being defined and set out as follows: Target values KPI weights Cr for the Performance t.n Performance indicator settlemen o. objective M.U. 2018 2019 2020 2021 2022 t of the remunera tion ratio A. Financial Key Performance Indicators: 25% Thous 1. Outstanding payments Level zero and 0 0 0 0 0 2% RON The decrease of the The maintenance of operating expenses = the share of (Operating expenses– expenses in the 2. % 80.8% 82.6% 82% 81.5% 81.3% 8% Impairments of assets and turnover at the level impairments of provisions)/ assumed by the Turnover Administration Plan Adjusted EBITDA = Operating profit - write-back of the reserve out of the The realization of modernization quota + adjusted EBITDA Expenses regarding the Thous target assumed by 108,443 90,316 95,987 98,872 101,785 3. settlement of the and 10% the Administration k RON K RON k RON K RON k RON modernization quota + RON Plan Impairments of tangible and

intangible assets, here included the revaluation differences.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Achievement of the 100% 100% 100% 100% Thous 100% labor productivity Accordi accordi Accordi Accordi and According 4. Labor Productivity level provided in the ng to ng to ng to ng to 5% RON to Annual annual approved Annual Annual Annual Annual pers Budget Budget Budget Budget Budget Budget

B. NON-FINANCIAL KEY PERFORMANCE NDICATORS: 75% B1 OPERATIONAL: 25% Framing within the specific consumptions for the crude oil transport (does not The target value is include the crude oil quantity lower than the value of Domestic crude oil ≤ 0.361% lost during provoked the maximal Import crude Lukoil ≤ 0.29% 5. % 3% breakdowns or in case of technological Import crude Petrom ≤ 0.143% breakage resulting in consumption, for crude Import crude oil Midia ≤ 0.108% contamination, where the oil owners do not ease access for remedy). Maintenance of the Monitoring of the annual annual electricity Max Max Max Max Max 3.3 electricity average specific average specific Kwh/ 3.3 3.3 3.3 3.3 6. Kwh/ 2% consumption for technological to Kwh/ Kwh/ Kwh/ Kwh/ to technological purposes consumption at a level to to to to of Max 3.3 Kwh/to Min. Realization 95% Achievement of the of the annual 7. investments financed out of Investments Plan % ≥95 % ≥95% ≥95% ≥95% ≥95 % 20% the modernization quota financed out of the Modernization Quota B2 OF CORPORATE GOVERNANCE: 50% Implementation/developmen t of the internal control 100% achievement of 8. management system in the actions included in % 100% 100% 100% 100% 100% 20% compliance with the legal the program requirements in force Duly reporting of the degree of achievement of the Framing within the 9. % 100% 100% 100% 100% 100% 20% performance indicators of reporting due deadlines the company Boost institutional integrity Minimum 90% by inclusion of the measures achievement of the 10. to mitigate corruption as an measures assumed by % ≥90 % ≥90 % ≥90 % ≥90 % ≥90 % 10% element of the management the approved Integrity plans Plan Table 21 - Performance indicators and objectives Quarterly review of the indicators is to identify possible deviations from targets and corrective action to be taken.

For the first three months 2020, the total degree of achievement of the performance indicators for administrators is of 102.9%.

In structure, the degree of achievement of the performance indicators reveals the following:

Degree of achievement of financial and non- financial key performance indicators Key Performance Indicators according to the Achieved contract of Variation 2020 Q1 mandate A. FINANCIAL KEY PERFORMANCE INDICATORS 25.0% 27.3% 2.3 pp B. NON-FINANCIAL KEY PERFORMANCE 75.0% 75.6% 0.6 pp INDICATORS B1 Operational 25.0% 25.6% 0.6 pp B2 of Corporate Governance 50.0% 50.0% 0.0 pp Total degree of achievement of the performance 100.0% 102.9% 2.9 pp indicators:

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Table 22 Degree of achievement KPIs administrators - QI 2020

The total degree of achievement of the key performance indicators has been exceeded by 2.9 pp, being favorably influenced by the financial key performance indicators by 2.3 pp and by the non- financial key performance indicators by 0.6 pp.

A) Non-financial performance key indicators (+2.3 pp):

Planned Quarterly targets of the financial indicators for 2020 are based on the approved Budget.

➢ Outstanding Payments Indicator At 31.03.2020 the company did not register outstanding payments. As compared to the scheduled values, the indicator has been 100% achieved.

➢ Indicator Decrease of Operating Expenses The indicator Decrease of Operating Expenses contributed favorably by 0.4pp. The objective of this performance indicator is to decrease the share of operating expenses in turnover. The turnover increase by 2.3%, as well as the decrease of expenditure have favorably influenced the achieved level of the indicator, the achievement degree in the first 3 months 2020 being of 105.1%;

➢ ADJUSTED EBITDA Indicator Adjusted EBITDA indicator favorably influenced by 1.8 pp the increase of the degree of achievement of the financial indicators. The indicator has recorded an increase by 4,706 thousand RON (18.4%) achieved mainly at the expense of the operating profit (increase by 29.9%). The achievement degree of the indicator in January- March 2020 is of 118.4%.

➢ Labor Productivity Indicator Labor productivity had a positive contribution of 0.1 pp.The increase in labor productivity by 2.8%, as compared to the planned one, has been realized by increasing the operating revenues by 1.7% and decreasing the average number of staff by 30 persons. The degree of achievement of this indicator in the first 3 months 2020 is fo 102.8%.

B) Non-financial performance key indicators (+0, 6pp) B1) Operational

➢ Operational Indicator “Falling under the specific consumptions for the crude oil transport” The addition of 0.6 pp of the non-financial key performance indicators, increasing the total compliance targets was at the expense of overcoming the operational indicator - framing within the specific transport crude oil consumption, due to specific consumption in transport lower by 18.5% as compared to the quarterly target. The achieved level of the operational indicator “Framing in the specific consumptions for crude oil transport” is being determined based on the quarterly reported data by the Transport Operations Unit. In structure, the achievement of specific consumption for the crude oil transport on crude oil types and refineries for the period January 01 - March 31 2020, as well as the average consumption reveals the followings:

Indicator’s Targets Q I 2020 Achievements Q I 2020 Achievement Degree Domestic crude oil ≤ 0.361% 0.298 %*) Domestic crude oil = 0.356% 0.243% 118.5%

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Import crude Lukoil ≤ 0.29% Import crude oil Lukoil = 0.152% Import crude oil Petrom ≤ Import crude oil Petrom = 0.143% 0.140% Import crude oil Midia ≤ 0.108% Import crude oil Midia = 0.105% *) Average technological consumption (calculated according to the share of each transport type).

Table 23 The specific consumption for the crude oil transport on crude oil types and refineries QI 2020

The achievement degree of this indicator in January 01 - March 31, 2020 is of 118.5%.

➢ The operational indicator “Monitoring the annual average specific consumption of electric power for technological purposes” The objective related to this indicator is represented by the maintenance of the annual average of electric power technological consumption at a maximum level of 3.3 KWh/to. This indicator is deemed achieved if the achieved level thereof has a lower value or equal with 3.3 KWh/to. If the realized value of the indicator is higher than 3.3 KWh/to, for the calculation of the total degree of fulfillment of the indicators, the individual level of the degree of achievement of this indicator is limited to 100%.

The average specific consumption of electric power in technological purpose achieved in January- March 2020 was of 2.64 Kwh/to, under the target level of 3.3 kwh/to, consequently, the achieved indicator is achieved 100%.

➢ OPERATIONAL INDICATORS, “Achievement of the investments financed out of the modernization quota” The objective of this indicator is the realization of investments financed from the modernization quota of at least 95% of the modernization quota constituted during the reporting period. The degree of achievement of the indicator is being determined based on the formula: Value of investments financed out of the modernization quota, achieved/Value of modernization quota achieved in the reporting year (modernization quota recognized in the expenses) X 100.

The degree of achieved of this indicator in the period January - March 2020 is of 179.4% (16,733 thousand RON of investments financed from the modernization quota/9.329 thousand RON modernization quota constituted in the 3 months period 2020). The degree of achievement of this indicator in the first 3 months 2020 is considered to be 100% as, even in the case of this indicator, the values over 100% are not taken into account in the calculation of the total degree of achievement of the indicators.

B2) Corporate Governance Indicators

➢ The indicator “Implementation/Development of the internal management control system in compliance with the legal requirements in force” The objective of this indicator is being represented by the 100% achievement of actions provided in the development program for the internal management control system.

In the period January - March 2020 all the activities in the development program of the internal control management system of CONPET S.A., with achievement due term in the first 3 months of 2020 have been achieved, consequently the achievement degree is 100%.

➢ Indicator Boost of institutional integrity by inclusion of the measures to mitigate corruption as an element of the management plans The objective of this indicator is to fulfill the measures undertaken by the integrity Plan approved to

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020 the extent of minimum 90%.

In the first 3 months 2020 the level of this indicator was of 100% (25 measures fulfilled up to 31.03.2020/25 measures proposed in the integrity Plan). The degree of achievement of the indicator in the first 3 months 2020 is of 100%.

➢ Indicator ” Duly reporting of the degree of achievement of the performance indicators of the company” The objective of this indicator is represented by the timely reporting of the degree of achievement of the performance indicators of the company.

In the first 3 months 2020 the level of this indicator was of 100% (1 timely reporting/total number of timely reporting (1) x 100.

According to OMPF no. 1952/2018 regarding the regulation of the procedure for monitoring the implementation of the provisions of EGO no. 109/2011 on the corporate governance of public enterprises, Annexes 1 and 3 for the Second Quarter 2019 were sent to the Ministry of Economy, Energy and Business Environment in time, on January 14, 2020, by address no. 1567. Consequently, the degree of achievement of the indicator for the period January-March is of 100%.

Directors with contract of mandate The financial and non- financial performance indicators for the Director General and the Economic Director have been approved by Decision of the Board of Administration no.33/18.12.2018 and for the Deputy Director General have been approved by BoA Decision no.8/19.03.2019, the targets and shares thereof for the period 2018-2022 are provided in Annex no.1 to the Addendum no.1 to the directors mandate contracts and are being individually calculated based on the calculation model contained in Report no.49228/17.12.2018.

For the first three months 2020, the total degree of achievement of the performance indicators for administrators is of 105.7%. In structure, the quarterly (QI 2020) degree of achievement of the key performance indicators reveals the following:

Degree of achievement of financial and non-financial key performance indicators Key Performance Indicators according to the Achieved contract of Variation 2020 Q1 mandate A. FINANCIAL KEY PERFORMANCE INDICATORS 50.0% 54.8% 4.8 pp B. NON-FINANCIAL KEY PERFORMANCE 50.0% 50.9% 0.9 pp INDICATORS B1. Operational 30.0% 30.9% 0.9 pp B2. of Corporate Governance 20.0% 20.0% 0.0 pp Total degree of achievement of the performance 100.0% 105.7% 5.7 pp indicators

Table 24 Degree of achievement KPIs directors with contract of mandate - QI 2020

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

3.3.7. Cash Flow

The Cash-flow Statement for the three months period ended March 31, 2020 is as follows:

(DIRECT METHOD) January– January– Name of the element (thousand RON) March March 2019 2020 A Net cash from operating activity 27,489 27,373 B Net cash from investment activities (13,145) (7,005) C Net cash from financing activities (229) 2,597 Net increase of the cash and cash equivalents=A+B+C (14,115) (22,965)

D1 Cash and cash equivalents at the beginning of the period 238,577 259,682 D2 Cash and cash equivalents at the end of the period 252,692 282,647

Table 25 - Synthesis of the cash-flows for the three months period ended March 31, 2020, as compared to March 31, 2019

The extended version of the Interim Statement of Cash Flows for the three-months period ended March 31, 2020 is presented in Annex no.3.

The value of the net cash flows from operating activities at March 31, 2020 records a slight increase as compared to March 31, 2019.

Cash outflows for payment of assets generated a net negative cash flow from investing activities in amount of 13.1 million RON. As compared to the same period of the previous year, the net cash flow records a negative value increasing by about 6.1 million RON.

The net cash from the financing activity registers in the analyzed period a negative value determined by the payments of historical dividends to shareholders (dividends distributed in previous years and not collected), as well as by the payments of financial leasing invoices.

Cash representing the modernization quota, of total availability in the balance at 31.03.2020 is of 139.9 mRON. Cash from the modernization quota has special use regime, respectively for investment related payments related to the National Transport System.

3.3.8. Related party transactions

Between 01.01.2020 - 31.03.2020 the Company carried out the following significant transactions with related parties:

Unsettled amounts Procurement Settlements Unsettled Partner at Period 01.01- Between 01.01 - amounts at December, 31 31.03.2020 31.03.2020 31.03.2020 2019 SNTFM CFR Marfă S.A. 5,075,103 19,795,569 17,044,947 7,825,725 *The amounts include VAT Table 26 - Purchases from related parties

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

3.4. Other aspects

3.4.1. Situation of lands not included in the share capital

The company has in its patrimony lands with an area of 554,538 sqm, held under 48 Ownership Certificates obtained during 2001-2005, with an accounting value of 12,348,115 RON, valued at the date of obtaining the certificates, in accordance with GD no. 834/1991 at the value of 26,708,233 RON. These lands have been recorded in the company’s patrimony on the expense of other equity reserves, without augmenting the share capital by the value thereof;

The Board of Administration has undertaken all steps in view of augmentation of the share capital by the value of land held based on the land ownership certificates.

Thus, under the lands appraisal reports, in compliance with the provisions of Art. 6 Para (3) of GD no.834/1991 ulterior completions and amendments, drafted by expert valuer, the Board of Administration has summoned the Extraordinary General Meeting of Shareholders, on 19.05.2016, in first call, namely 20.05.2016, in second call. At both EGMS meetings the quorum has not been met.

Although there have been convened two general meetings of shareholders, the Board of Administration has summoned a new EGMS for 05.07.2016, with the same Agenda. Following the cast vote by the shareholders present and represented, the proposal to augment the share capital has not been approved, due to the lack of necessary quorum for approval votes.

Subsequently, there have been undertaken all necessary steps for the augmentation of the share capital, on 26.03.2019, the EGMS has approved the initiation of the procedure for the augmentation of the share capital and the appointment by the Trade Register Office Prahova of an expert authorized to assess the lands brought as contribution to the share capital.

Based on the new appraisal report has been convened the EGMS, on 04.07.2019 in first call and 05.07.2019 in second call, with the Agenda - Approval of the augmentation of the share capital by maximum value of 101,763,954.60 RON, representing contribution in kind (lands) in amount of 59,751,935.10 RON and cash amounting to maximum 42,012,019.50 RON, from the current value of 28,569,842.40 RON at the value of maximum 130,333,797 RON, by issuing a number of maximum 30,837,562 new shares, nominative, dematerialised, at a price of 3.3 RON/share, equal to the nominal value, without share premium.

In both EGMS meetings has not been met the attendance quroum provided by the law, needed for the augmentation of the share capital with contribution in kind.

3.4.2.Litigations During the reporting period, CONPET SA was involved in a total of 67 litigations. Among them, 9 litigations have been completed, and 58 lawsuits are still pending in the courts. None of the litigations pending resolution present risks related to the stability and continuity of the company’s business. a). Litigations regarding the ownership of tangible assets of the company

CONPET S.A. is involved in a single process regarding the claim of ownership of certain real estate, respectively:

File no. 2782/229/2018 - Fetesti Court - in the course of settlement

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Trial stage: First court on merits Parties: Conpet SA –claimant Zacon Trandafir - respondent Object: Conpet S.A. has summoned the appointed Zacon Trandafir for the court to find the absolute nullity of the sale-purchase contract no. 1047/03.02.1999, concluded between Conpet S.A., as a seller and Zacon Trandafir as a buyer, ordering the defendant to pay the costs. Subsidiarily, the respondent Zacon Trandafir is required by CONPET to pay the value of the property at the fair market value determined by the report of a judicial technical expertise. Deadline: Suspended by law based on art. 42 para. 6 of the Decree of the President of Romania 195/2020 on the establishment of the state of emergency on the territory of Romania, for the entire period of the state of emergency. b). Litigations related to the owners claims of the land transited by the Crude Oil National Transport System

On 31.03.2020, CONPET S.A. had a number of 12 files before the courts in different procedural stages, having as subject the claims of the landowners related to the lack of use of the owned lands transited by the major pipelines that are part of the Crude Oil National Transport System. Among these, we list a number of 8 cases that we consider to be important in terms of the amount of the applicants' claims and representative through the legal content of the applications (the rest of the cases outlining some of the types of legal proceedings listed below):

1. Case File no.3451/108/2016** - pending Trial stage: Appeal - retrial By Decision no. 761/23.11.2017 the Court of Appeal of Timișoara admits the appeal of the applicant Territorial Administrative Unit of Pecica, Arad County, annuls the appealed judgment and sends the case for retrial to the Arad Tribunal. Decision no. 761/23.11.2017 was appealed by CONPET S.A. at The High Court of Cassation and Justice. Clarifications: The Territorial Administrative Unit of the city of Pecica has filed a petition requesting the court to order the obligation of the defendant CONPET S.A. to divert the crude oil pipeline that crosses a number of 22 plots of building land, intended for housing construction, to pay the amount of 65,000 Euro representing the value of the house located in the plot no. A141.7760/5/174, registered in the Land Register no. 306869, because this can no longer be used, to pay an annual rent, during the existence of the pipeline, as a result of the enclosing of the areas shown above by the right of legal servitude exercised by CONPET S.A. and to compell the defendant CONPET S.A. to pay compensation for the period 31.10.2014-31.05.2016 as a result of the limitation of the attributes of the ownership of the 22 plots of building land and the decrease of the fair market value of the land in the real estate market due to the restrictions imposed by Order no.196/2006 of NAMR regarding constructions. At the same time it ruled the obligation of the respondent Conpet S.A. as to adjust every 3 years the amount of compensations to the circulation value at that time of similar plots of land and to the provisions of the future orders of NAMR.

By the Report dated 07.06.2018 the High Court of Cassation and Justice declared Conpet’s appeal as inadmissible, being promoted against a final judgment, which does not fit into the hypothesis regulated by Art. 483 par. 1 Code of Civil Procedure. By the conclusion of 10.10.2018, the High Court of Cassation and Justice basically admits the appeal declared by the claimant-defendant Conpet S.A. against the civil decision no. 761/A of November 23rd, 2017 issued by the Timişoara Court of Appeal – Second Civil Section. By the decision no. 615/22.03.2019 the High Court of Cassation and justice - (Ro. ICCJ) admits

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020 the recourse introduced by the recourse petitioner-respondent Conpet S.A., annuls the attacked decision and sends the case for a new trial to the same appellate court - The Court of Appeal Timisoara. Deadline: Suspended by law based on art. 42 para. 6 of the Decree of the President of Romania 195/2020 on the establishment of the state of emergency on the territory of Romania, for the entire period of the state of emergency.

2. The file no. 1372/212/2017 - Constanta Court - in the course of settlement Trial stage: First court on merits Cruceanu Alin Florinel filed a petition for trial asking the court to rule the obligation of Conpet SA to pay damages equal to the market value of the real estate property – plot of land in surface of 460 square meters located in Lazu commune, 29, Luceafărului street, Constanta County and the plot of land in surface of 460 sqm located in Lazu commune, Luceafărului str. 31, Constanța county, the value assessed at the amount of 30,000 Euro, 134,700 equivalent in RON; to rule the obligation of Conpet SA to pay the value of the lack of use of the land in the form of an annual rent for the last three years; to rule the obligation of Conpet SA to pay the court costs for the resolution of the present petition. Subsequently, the claimant specified his action regarding the second head of claim, requesting the court to order Conpet SA to pay the amount representing the lack of use of the two real estate properties for the period between 10.12.2015 and the date of the final judgment through which the first head of claim was allowed. Conpet filed a counterclaim requesting that the claimant be forced to allow CONPET S.A. the exercise of the right of legal servitude established by the provisions of art. 7 et seq. of Law no. 238/2004 on the two lands owned by the claimant Cruceanu Alin Florinel, located in Agigea commune, Lazu village, Luceafărului street no. 29 respectively 31, Constanța county. The exercise of the right of legal servitude is to be done on a 2.4 meter wide corridor located along the Ø 20 ˝ major transport pipelines for crude oil of Constanța-Bărăganu for the purpose of permanent access to the pipeline for the day-to-day inspection of the pipeline condition, for performing any repairs and also for establishing the amount of the annual rent provided by law owed by us, the undersigned, to the claimant in exchange for exercising the right of legal servitude. Court hearing: Suspended by law based on the Decree no. 195/2020 dated 16.03.2020 on the establishment of the state of emergency on the territory of Romania, published in the Official Gazette of Romania no. 212/16.03.2020.

3. The file no. 18344/212/2017 - Constanta Court - in the course of settlement Trial stage: First court on merits Mitu Dumitru and Mitu Rodica file a petition for trial requesting that the obligation of Conpet to pay compensatory damages for the two plots of land located in the village of Lazu, the commune of Agigea, Constanța county affected by the route of certain pipelines that transport oil products, as well as the respondent's obligation to pay an annual rent for the deprivation of use on the land affected by the exercise of the legal servitude, starting with 20.06.2014 and of compensations in the form of an annual payment for the affectation of the use of the part of the land on which the pipeline is not located, with the obligation to pay the trial costs. Conpet formulated a counterclaim/reconventional petition requesting the court to rule the obligation of the claimants to allow the company CONPET S.A. the exercise of the right of legal servitude instituted by the provisions of art. 7 and following of Law no. 238/2004 on the two plots of land owned by the claimants. The right of legal servitude shall be exercised on a 2.4-meter-wide corridor located along the F2 Ø 20 ˝ Constanţa-Bărăganu crude oil major pipeline for the purpose of permanent access to the pipeline for the day-to-day inspection of the pipeline condition and for performing any repairs and to set the amount of the annual rent prescribed by the law owed by

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Conpet to the claimants in exchange for the exercise of the right to legal servitude. Also, Conpet made a guarantee call request from the Ministry of Public Finance and the National Agency for Mineral Resources (A.N.R.M.) so that, if Conpet S.A. Ploiești falls form claims regarding the claims of the claimants made in the petition for trial to compensate us with the amounts we will be obligated to pay to the claimants. Deadline: 20.05.2020

4. Case file no. 14960/280/2015 – the Pitești Court - in case of settlement Trial stage: First court on merits Cîrstea Stelian and Cîrstea Gherghina filed a petition of trial asking the court to rule the obligation of Conpet SA to pay the lack of use from the date of acquisition of land - namely 06.10.2014, lack of use that is provisionally valued at the amount of 1000 RON - following to increase iota application for summons after taking evidences and order CONPET SA to raise their pipelines and related facilities on land owned by the applicant and to the extent that it is not possible to be ordered defendant to pay a monthly amount equivalent to the value a rent for land occupied and damaged pipes and plants on it - the rent on the free market. The claimants increased their claims to the amount of 6,276 RON representing the deprivation of use since 06.10.2014 until present. Deadline: Suspended by law based on art. 42 para. 6 of the Decree of the President of Romania 195/2020 on the establishment of the state of emergency on the territory of Romania, for the entire period of the state of emergency.

5. Case File no. 220/262/2017 – Dambovita County Tribunal – pending Trial stage: Appeal Chivu Ion filed a petition requesting the court to rule the obligation of Conpet SA to divert the crude oil pipeline passing through his property in surface of 1,753 square meters located in Ocniţa commune T14, P114, the establishment of the access location with the obligation of Conpet SA to pay an annual rent related to both the access road and the pipeline that damages the land and damages for the land affected by the pipeline. Clarifications: By the judgment no.1000/05.11.2019 the Moreni Court partially accepts the main part of the petition. The court partially admits the counterclaim. The judgment was attacked with appeal by Conpet SA and Chivu Ion. Deadline: Suspended by law based on art. 42 para. 6 of the Decree of the President of Romania 195/2020 on the establishment of the state of emergency on the territory of Romania, for the entire period of the state of emergency.

6. Case File no. 21382/281/2015 - Ploiești Court – pending Trial stage: First court on merits By the Conclusion of 02.05.2017 the Ploiești Court suspends the trial of the case under art. 242 subsection (1) of the Civil Procedure Code. (Failure of the applicant to the obligations imposed by the court) In December 2017 the case was reinstated Iordache Margareta initiated a legal suit requesting the court to rule the obligation of the respondent Conpet to pay the value of the non- use of the claimant's property, land located in Blejoi commune, Ploiestiori village, Prahova county, for the last three years prior to the introduction of the action. Deadline: 20.05.2020

7. Case File no. 5413/204/2017 – High Court of Cassation and Justice – pending Trial stage: Appeal Dobrogeanu Dumitru and Dobrogeanu Păun Ioan filed a petition of trial asking the court to rule the

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020 obligation of CONPET SA to pay an annual rent for the land plots occupied by the two oil products pipelines (crude oil) starting 01.07.2014 and in the future, for the entire duration of the pipelines, to pay the compensation for the losses incurred by not reaching certain economic objectives on the remaining area between the two pipes after their restriction and the area along the national road DN1 (E60) and payment of court costs. The first part of the claim was estimated by the claimants at the amount of 48,000 Euro/year (220,000 RON), and the second part at the amount of 25,000 RON/year. By the Decision no. 2446/28.08.2018 the Prahova Tribunal admits the exception of the lack of passive capacity to stand trial, invoked by the defendant National Agency for Mineral Resources. Dismisses the claim, contrary to this defendant, as being made against a person without a procedural quality. Admits the exception of the lack of passive procedural capacity It rejects the request made against the respondent Conpet SA, as there is a case law. It finds that the respondents did not claim costs. The decision was appealed by Dobrogeanu Dumitru. Clarifications: By the decision no. 2804/11.11.2019 the Ploiești Appellate Court rejects the appeal declared by the appellant Dobrogeanu Dumitru as unjustified Admits the exception of the inadmissibility of the appeal. The court rejects as inadmissible the appeal declared by the appellant Dobrogeanu Păun Ioan. The decision was attacked with recourse by Dobrogeanu Dumitru and Dobrogeanu Păun Ioan. Deadline: --

8. Case File no. 1122/284/2019 – Răcari Court – pending Trial stage: First court on merits Sotir Mădălina Rebeca files a petition for trial requesting the court to order Conpet SA to compensate it with the sum of 25,000 Euro for the land area of 523 sq.m., category constructions courtyards, the land of the claimant located in the Commune of Cojasca, Dâmbovița county with cadastral no. 72587, under-crossed by Conpet pipeline. Conpet formulated the counterclaim/re conventional petition requesting the court: 1. The obligation of the claimant Sotir Mădălina Rebeca to allow the company CONPET S.A. the exercise of the right of legal servitude / easement established by the provisions of art. 7 and foll. of Law no. 238/2004 on the land owned by her, located in the commune of Cojasca, the village of Cojasca, Dâmbovița county. The exercise of the easement right is to be done on a 2.4-meter-wide corridor located along the oil pipeline with the diameter of Ø 14 3/4˝ Cartojani-Teleajen Refinery (Lukoil) for permanent access to the pipeline for daily checks of the condition of the pipeline and for performing any repair work. The exercise of the easement right is to be carried out throughout the existence of the pipeline located on the claimant's land but not later than the date of the termination of the concession oil contract concluded by us, the undersigned company CONPET S.A., with the Romanian State. 2. The establishment of the amount of the annual rent provided by the law due to us, the undersigned company CONPET S.A., to the claimant Sotir Mădălina Rebeca in exchange for exercising the right of legal servitude/easement starting from the date of the definitive decision given in the present case, rent consisting in the value of the annual use of the plot of land affected by the exercise of servitude/easement. Deadline: 12.05.2020 c). Litigations brought before the administrative court

CONPET S.A. has 3 litigations pending before courts, respectively:

1. Case File no. 6575/105/2017 – Prahova Tribunal – pending Trial stage: First court on merits

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

By intermediate Decision no. 442/23.02.2018, the Prahova Tribunal rejected the request of CONPET S.A. to suspend the measures of the Court of Accounts established by Decision No. 14/21.06.2017 to send the amount of 927.154,06 RON representing income to the state budget of exploiting the tubular material resulting from the decommissioning of parts of the tangible assets owned by the state public domain, together with interest and penalties relating thereto, up-to-date at the time of payment and sending to the state budget, the discounted value, of the amounts identified in view of the enlargement of the checks on the net amounts resulting from the exploit of materials related to tangible assets belonging to the state public domain, dismantled and decommissioned. CONPET S.A. appealed the intermediate Decision No 442/23.02.2018 at the Court of Appeal in Ploiesti. By sue petition, CONPET S.A. appealed against the Conclusion no. 78/09.08.2017 issued by the Court of Accounts of Romania requesting that the sentence of the Court orders:

1. Cancellation, in part, of the conclusion no. 78/09.08.2017 issued by the Court of Auditors of Romania, respectively: o Recital 2 relating to point II of the Appeal no. 27718/10.07.2017 (with regard to the measures no I.2 and I.3 of Decision no. 24/21.06.2017, to remove the irregularity listed in paragraphs 2 and 3 of the same decision), the findings of point A and B. 2. The partial annulment of the Decision no. 14/21.06.2017, issued by the Chamber of Accounts Prahova, namely: o The findings presented in point 2 regarding the decommissioning and valorisation of certain pipeline sections belonging to the National Transport System - part of the public domain of national interest, without previously being passed a decision of transfer from the state public domain to the private domain, for the purpose of drawing up the documentation of decommissioning and disposal;

o The findings presented in point no. 3 regarding the fact that in 2016 it was valorised by auction the recoverable buried pipe according to the procedure of recovery approved by the regulation on the conditions of participation in the auction and the way of conducting the tender for the valorisation of the buried and/or overhead metal pipeline material. The valorisation was made before the adoption of a government decision approving the transfer from the public domain of the state to the private domain for the purpose of valorisation, according to the law; o Measure no. 2 regarding the carrying out of the inventory for identifying the sections of the National Transport System that have been abandoned or decommissioned as a result of the investments made in the National Transport System within the rehabilitation, modernization and development programs realized and the transmission of the results of the ANRM for initiating the government decision to approve the passage from the public domain of the state to the private domain of the state in order to remove them from service. The regulation by internal procedure of the way of removing, dismantling and capitalizing the parts of the National Transport System decommissioned following the works of rehabilitation, modernization and development performed by the concessionaire; o Measure no. 3 regarding the transfer of the amount of 927,154.06 RON representing income to the state budget from the recovery of the pipeline material resulting from the decommissioning of parts of the tangible assets belonging to the public domain of the state, together with the related interests and penalties, updated at the date of payment. The extension of checks to identify all the net amounts resulting from valorisation related to tangible assets belonging to the public domain of the dismantled, decommissioned state and their transfer to the budget, at the present value.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

3. Canceling the measures laid down by Decision No 14/21.06.2017, issued by the Chamber of Auditors of Prahova county, points no. I.2 and I.3, 2 and 3 respectively, until the final settlement of the case. By the conclusion of 23.02.2018, Prahova Court rejected the request to suspend the execution of the administrative act as unfounded. The judgment was attacked with recourse by Conpet SA. By the decision no. 2946/19.09.2018 the Ploiești Appellate Court admits the appeal. The court annuls in its entirety the attacked judgement and sends the case for retrial to the same first court on merits. Final. The file regarding the application for suspension was registered at the Prahova Tribunal under no. 6575/105/2017 /a1 *. By the Decision no. 1850/09.11.2018 the Prahova Tribunal admits the petition, orders the suspension of the execution of measures 2 and 3 established by the Decision no. 14/21.06.2017, issued by the Prahova Chamber of Accounts until the final settlement of the case. Executory judgement The judgment was attacked with recourse by the Court of Accounts. By the Decision no. 145/15.02.2019 the Appellate Court rejects the appeal as unjustified Final judgement. In the case file, by Sentence no. 278/26.03.2020 the Prahova Tribunal admits the request for summons. Partially cancels the Conclusion no. 78/09.08.2017 issued by the Court of Accounts of Romania regarding recital 2 regarding point II of Appeal no. 27718/10.07.2017 (regarding the measures no. 1.2 and 1.3 of the Decision no. 24/21.06.2017, for the removal of the deviation presented at points 2 and 3 of the same decision), the findings from letter A and B. Annuls in part Decision no. 14/21.06.2017, issued by the Prahova Chamber of Accounts, regarding the findings presented in point no. 2, the findings presented in point no. 3, as well as measures no. 2 and no. 3 applied. Takes note that no costs have been charged. The decision may be appealed after communication.

2. Case File no. 689/42/2017 – High Court of Cassation and Justice – pending Trial stage: Appeal Conpet SA formulates a request for a court order against the fiscal administrative acts issued by the National Agency for Fiscal Administration - General Directorate for Solving Complaints - General Regional Division of Public Finances Galaţi - Buzău County Public Finance Administration by which additional fiscal obligations were established in the total amount of 5,505,101 RON, which consist of: 3,088,868 RON corporate tax; 1,528,159 RON interest/surcharges for late payment; 432,274 RON delay penalties; 283,613 RON value added tax; 130,782 RON interest/delay increases and 41,405 RON delay penalties (interest/delay increases and penalties were calculated until 31.12.2015) respectively: - Decision no. 114/06.04.2017 issued by the National Agency for Fiscal Administration - General Directorate for Solving Complaints, with headquarters at no. 17, Apolodor street, 5th District, postal code 050741, Bucharest, represented by Mirela Calugareanu and Alin Ghiurca; - Decision of Imposition no. F-BZ 436/31.10.2016, regarding the payment of additional tax obligations settled by the tax inspection to legal persons, issued by the General Regional Division of Public Finances Galaţi - the Public Finances Administration of Buzău, both of them being part of the National Agency for Fiscal Administration; - Fiscal Inspection report no. F-BZ 584/31.10.2016, concluded by the inspectors of the National Agency for Fiscal Administration - Regional General Directorate of Public Finances in Galati - the Public Finances Administration of Buzău - Tax Inspection Service, - The decision to impose no. F-BZ 436/31.10.2016. Clarifications: By the judgment no. 24/01.02.2019 the Ploiești Appellate Court partly admits the petition for trial. The court orders the partial annulment of the Tax inspection report F BZ 584 from 31.10.2016, of the Tax Decision F BZ 436/31.10.2016 and of the Decision 114/06.04.2017 regarding the following findings: -point I regarding the corporate tax amounting to 2,435,078 RON

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020 related to sponsorship expenses - point X - tax and profit amounting to 12,915 RON related to advertising and advertising expenses in the amount of 80,719 RON and VAT related to 19,372 RON. -point XI- tax and profit related to the expenses with the advertising and advertising in the related amount of 1,129,500 RON. - item XII - tax and profit related to expenses with rents in the related amount of 442,545 RON - - point XIII - corporate tax related to expenses with external trips in the amount of 207,614 RON. Keeps the challenged documents remaining. The decision was appealed with the recourse of Conpet SA, GRDPF Galați by the Public Finances Administration of Buzău and the National Agency for Fiscal Administration. Deadline: 06.05.2020

3. Case File no. 1474/105/2019 *– Prahova Tribunal – pending Trial stage: First court on merits The Municipality of Ploiești filed a petition for trial, requesting the court to rule the following: - the obligation of Conpet to pay the amount of 17,748 RON/month, representing the value of the deprivation of use, starting from 30.03.2016 and until the moment of concluding a contractual form with the respondent, amount that will be updated by the inflation index communicated by the National Institute of Statistics; - the obligation of Conpet to pay the RON equivalent of the amount of 72,110.17 Euro (VAT excluded), at the official RON/Euro exchange rate, communicated by the National Bank of Romania, valid at the date of payment, representing the value of the deprivation of use for the period 29.03.2013 - 29.03.2016; - the obligation of Conpet to pay the trial costs incurred by this trial. By the Decision no. 908/20.06.2019 the Prahova Tribunal admits the exception of the functional non-competence of the Prahova Tribunal - the Second Civil Section of Administrative and Fiscal Litigation and declines the case having as object the action of criminal liability, in favour of the Prahova Tribunal – 1st Civil Section. Deadline: Based on art. 42 para. 6 of Annex 1 to the Decree of the President of Romania 195/2020 on the establishment of the state of emergency on the territory of Romania, the tribunal finds that the trial of the present case has been suspended in its entirety during the state of emergency. d) Litigations related to the structure of the share capital

Case File no. 5212/105/2018 –Prahova Tribunal Trial stage: First court on merits The Proprietatea Fund SA filed a petition for trial requesting the court to rule the following: 1. To request Conpet to pay the amount of 734,747.04 RON representing the net value of dividends related to a percentage of 6% of Conpet’s share capital, respectively for a number of 524,366 shares held by the claimant by the registration date of AGOA Conpet on 25.04.2007 (i.e. 14.05.2007), for the financial year 2006. 2. The obligation of Conpet to pay compensatory damages, namely the legal interest related to the dividends from maturity due date requested in item 1 and until the date of the introduction of the petition for trial (i.e. (namely 09.11.2018) in the amount of 579,015.97 RON. 3. The obligation of Conpet to pay the legal interest related to the net value of the dividends, subsequently, from the date of the petition for trial and until the actual payment of the requested amounts, 4. The obligation of Conpet to pay the trial costs incurred by the present dispute. Clarifications: Conpet S.A. filed a Call for Romanian State Guarantee through the Ministry of Finance and A.A.A.S.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

By the Conclusion of 25.06.2019 the Prahova Tribunal rejects as inadmissible the request for guarantee call of the Authority for the Administration of State Assets, formulated by the respondent Conpet S.A. An appeal was lodged against this decision of the Court by Conpet and the Romanian State through the Ministry of Public Finance. By the same Conclusion from 25.06.2019 the court admitted in principle the request for a Call on Guarantee of the Romanian State through the Ministry of Public Finance, formulated by the defendant Conpet S.A. and rejected as unfounded the exception of lack of passive procedural quality of the Romanian State through the Ministry of Public Finance. The appeal was registered before the Court of Appeal Ploiesti with no. 5212/105/2018/2. By the Decision no. 515/05.11.2019 the Ploiești Appellate Court admits the exception of the inadmissibility of the appeal declared by the Romanian State through the Ministry of Public Finances. The court rejects this appeal as inadmissible. The court rejects the exception of the lack of interest and the exception of the inadmissibility of the appeal declared by Conpet SA. Dismisses this appeal as unfounded. Final judgement. By the Conclusion of 20.09.2019, the Prahova Tribunal suspends the trial of the case until the settlement of the appeals made against the decision pronounced on 25.06.2019. This conclusion can be appealed throughout the suspension. Deadline: 04.05.2020

3.5. Analysis of the Corporate Activity

3.5.1. Capital Market Business

The shares issued by CONPET S.A. are traded on the regulated market administered by Bucharest Stock Exchange, on the Principal segment, at Equity sector - category Premium, under “COTE” symbol.

At the end of the first quarter of 2020, the trading price of CONPET shares recorded a decrease by 16.58% compared to the closing price of the first trading day of the previous year.

In summary, the transactions recorded with CONPET SA shares on Bucharest Stock Exchange during January - March 2020 are as follows:

• 4,371 transaction have been performed, 71% more YoY (2,558 transactions). The total volume of shares traded amounted to 234,928 shares, 25.97% higher than the volume recorded during January-March 2019 (186,484 shares);

• The total value of trades amounted to 17,079,823 RON, by 15.78 % higher than the value recorded in the same period of 2019 (14,751,520 RON);

• The average trading price was of 74.75 RON/share, lower by 4.35 Ron/share versus the average price of the shares registered during the same period of 2018 (79.10 RON/share);

• The maximum limit registered by the trading price was 82.00 RON/share and was reached at the end of January;

• A peak of the transactions was recorded on 10.01.2020, when a total volume of 12,494 shares was traded, amounting 999,520 RON, representing 5.32% of the total volume of COTE shares traded during January - March 2020;

• The Market capitalization at the end of the first quarter of 2020 was of 571,396,848 RON, lower by 16.98% as compared to the value recorded in the same period of 2019

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

(688,273,476 RON). At 31.03.2020, as per TOP 100 issuers according to capitalization, CONPET ranked 20.

The main trading indices during January- March 2020 for the shares issued by CONPET are presented in the following table:

Indices Average price No. of No. of traded Value of trades Month (RON/share) transactions shares (RON) January 80.45 837 80,097 6,426,966 February 79.78 1109 51,218 4,003,038 March 65.01 2425 103,613 6,649,820 Cumulated 75.08 4,371 234,928 17,079,824

Table 27 - Main trading indices

The evolution of the average trading price of CONPET S.A. shares, during January- March 2020, is the following:

110.00

50.00 January February March

Average price (RON/share) Q1 2019 Average price (RON/share) Q1 2020

Chart 14 - Evolution of the average trading price of the shares

During January-March 2020 the average trading price of the shares of CONPET SA followed a steady trend, registering a decrease at the end of the analyzed interval. Within the first 3 months of 2020, the average trading price of CONPET shares was below the values recorded within the same period of the previous year.

Currently, the company CONPET S.A. is included in 7 out of the total of 9 stock indices of the Bucharest Stock Exchange, respectively BET, BET-TR, BET-XT, BET-XT-TR, BET-BK, BET-NG and BET Plus indices. Obviously, this triggers a boost of the investors’ trust in CONPET S.A., the company being considered a benchmark in the Romanian capital market.

RON volume

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Performance of the action first quarter 2019: CONPET: -16.58 % 100.00 BET index: -25.16 % 50,000 45,000 90.00 40,000 80.00 35,000

70.00 30,000 CONPET volum tranzactionare 25,000 60.00 CONPET 20,000 BET 50.00 15,000 10,000 40.00 5,000 30.00 0 ian. feb. mar. apr. 2020 2020 2020 2020

Chart 15 - Evolution of COTE share vs. BET index (rebased) (RON)

RON 100.00

90.00

80.00

70.00

60.00

50.00

COTE BET-BK BET-NG BETPlus BET-TR BET-XT BET-XT-TR 40.00

Chart 16 - Evolution of Cote share vs. stock indices (rebased) where it is included in 2019 Q1 (RON)

Own shares, issuance of bonds or other debt instruments

CONPET S.A. did not perform transactions having as scope purchase of own shares and does not hold own shares at the end of 2020 Q1. CONPET has not issued bonds or other debt instruments.

Dividends CONPET S.A. maintained the dividend policy, the gross dividend per share being of 7.05 RON, ranking second in top dividends distributed by the companies listed at the Bucharest Stock Exchange, category Premium. The dividend yield recorded at the date of dividend approval was of 8.92%.

The Ordinary General Meeting of Shareholders dated 29.04.2020 approved the distribution in the form of dividends of the amount of 57,757,444 RON from the net profit and of the amount of 3,298,140 RON from the reported result representing surplus realized from revaluation reserves.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The date of payment set by the OGMS was 25.06.2020.

The evolution of the gross dividend per share in the financial years within the last 4 years is the following:

8.04

7.29 7.05 6.84

2016 2017 2018 2019

Chart 17 Evolution of dividend per share (RON/share) during 2016– 2019

3.5.2 The Executive Management

Between January - March 2020, the executive management had the following composition:

Position Name and Surname Observations contract of mandate of 4 years, period Director General PhD Eng. CHIŞ Timur Vasile 07.11.2018 - 06.11.2022, inclusive of Legal Advisor DUMITRACHE contract of mandate of 4 years period Deputy Director General Mihaela - Anamaria 18.02.2019 - 17.02.2023, inclusive of contract of mandate of 4 years, period Economic Director Econ. TOADER Sanda 07.11.2018 - 06.11.2022, inclusive of Eng. DRAGNE Laurenţiu starting 03.04.2019 to 02.02.2020, Marian inclusive of Deputy Director General 2 starting 03.02.2020 as per Decision of Eng. TUDORA Dorin the Director General no. 41/31.01.2020 Director of Critical Eng. DRAGNE Laurenţiu starting 03.02.2020 as per Decision of Infrastructures and Marian the Director General no. 41/31.01.2020 Administrative Activities

Table 28 The Executive management between January - March 2020

3.5.3. Activity regarding the sponsorship concluded between January - March 2019

The sponsorship actions are being performed following the approval of the Revenues and Expenditure Budget as per the law, falling within the sponsorship expenses broken down by areas of interest.

CONPET SA seeks the actions of sponsorship to be as efficient in terms from social point of view and the financial assistance to be a real support and benefit for the applicant. The sponsorship

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020 policy of the company supports both traditional projects, those that have an important and lasting impact on the community, as well as requests for smaller scale, which promotes, through ideas and actions, the individual performance.

For the year 2020, in the Revenues and Expenditure Budget of CONPET S.A. have been provided sponsorship expenses in amount of 700 thousand RON.

Within the Board of Administration meetings there have been approved, in the period 01.01.2020 - 31.03.2020 sponsorships amounting to 350 thousand RON, as follows:

• 35 thousand RON – “Education, schooling and sports” • 280 thousand RON - “Health and medical field” • 35 thousand RON - “Other actions and activities”

In the health and medical field 2 objectives were sponsored: - The Romanian National Red Cross Society with the amount of 180 thousand RON, having as object, the development of a campaign to inform the population about the effects of the new CORONAVIRUS and to prevent CORONAVIRUS contamination, respectively the distribution to the population, throughout the country, of informative materials, but especially materials that can prevent infection with the new virus (protective masks, soap, hand sanitizer, napkins and other hygiene products).

- Ploieşti County Emergency Hospital with the amount of 100 thousand RON, in order to purchase ventilators for anesthesia and intensive care for the development in optimal conditions and maximum safety the medical activity in the hospital, in the current epidemiological context.

3.5.4. Coronavirus Pandemic Risk Issues (Covid-19)

Ever since the beginning of this situation, CONPET adopted special measures to protect the employees and limit a potential extension of the disease COVID-19. Thus, prevention and protection measures have been implemented in all workplaces where employees work. CONPET quickly and efficiently implemented all the emergency measures that were imposed to protect the health of the employees as well as to keep safe the administration of the Crude Oil National Transport System. In the context of the pandemic Corona virus (Covid-19), the company ensures business continuity.

4. RELEVANT CORPORATE EVENTS

March 5, 2020 The General Meeting of Shareholders approved the Revenues and Expenditure Budget and the Investment Program related to 2020;

April 29, 2020 The Ordinary General Meeting of Shareholders approved the annual financial statements for the financial year 2019 and the net profit distribution related to the financial year 2019.

5. PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS

The interim financial statements at 31.03.2020 and for the 3 months period ended 31.03.2020 were prepared in compliance with IAS 34 - Interim Financial Reporting.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

The interim financial statements do not include all information and elements published in the annual financial statements and must be read together with the annual financial statements prepared on December 31, 2019.

The interim financial statements at the date and for the three months period ended March 31st, 2020, included in this report, have not been revised by the external auditor BDO Audit SRL.

Accounting Policies The accounting policies and the evaluation methods adopted in view of drafting the financial statements are compliant with those used at the preparation of the financial statements for the year concluded December 31, 2019.

Annexes: Annex no. 1 Interim Statement of the Financial Standing at March 31, 2020; Annex no. 2 Interim global result statement for the 3 months period ended at March 31, 2020; Annex no. 3 Interim cash-flow statement for the 3 months period ended March 31, 2020; Annex no. 4 Statement of services procurement contracts with values higher than 100 000 Euro, concluded during 01.01.2020 - 31.03.2020.

Chairman of the Board of Administration CONPET S.A. Gheorghe Cristian - Florin

Director General PhD Eng. CHIȘ Timur Vasile

Economic Director Econ. Toader Sanda

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Annex no. 1 Statement of the Financial Position at March 31, 2020 - RON- March 31 December, 31 2020 2019 (unaudited) (audited) ASSETS Intangible assets Tangible assets 472,225,100 463,635,969 Intangible assets 5,727,589 6,339,896 Financial Assets 957,498 810,598 Receivables related to the deferred corporate tax 6,237,874 5,422,459 Total non-current assets 485,148,061 476,208,922

Current assets Stocks 8,245,900 8,169,862 Trade receivables and other receivables 42,468,161 42,248,700 Cash and cash equivalents 252,692,227 238,576,951 Accrued expenses 2,317,257 1,862,719 Total current assets 305,723,545 290,858,232 TOTAL ASSETS 790,871,606 767,067,154

Equities and liabilities Equities Subscribed and paid-up share capital 28,569,842 28,569,842 Legal reserves 5,713,968 5,713,968 Revaluation reserves 20,350,993 21,111,893 Other reserves 496,552,343 495,540,772 Retained earnings 103,634,781 43,997,162 Year’s Result 16,302,904 58,876,719 Total Equities 671,124,831 653,810,356

Accrued income Investment Subsidies 1,038,438 1,065,921 Accrued income 7,621 8,171 Total Accrued Income 1,046,059 1,074,092 Long-term liabilities Deferred corporate tax Long-term provisions 16,652,980 16,268,908 Other long-term liabilities 3,181,463 3,582,351 Total long-term liabilities 19,834,443 19,851,259

Current liabilities Trade liabilities 30,855,648 27,179,134 Current Corporate Tax 3,445,651 3,076,456 Other liabilities 37,163,339 38,838,402 Short-term provisions 27,401,635 23,237,455 Total current liabilities 98,866,273 92,331,447 Total liabilities 118,700,716 112,182,706 Total equity and liabilities 790,871,606 767,067,154

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Annex no. 2

INTERIM GLOBAL RESULT STATEMENT FOR THE 3 MONTH PERIOD ENDED AT MARCH 31, 2020

- RON- 3 months ended at 3 months ended at March 31, 2020 March 31, 2019 (unaudited) (unaudited) Operating Revenues Turnover 105,714,728 98,829,597 Other revenues 7,981,444 7,099,010 Total Operating Expenses 113,696,172 105,928,607

Operating Expenses Expenditure on stocks 1,319,670 1,489,066 Expenses with energy and water 4,279,697 3,902,397 Personnel Expenses 36,803,919 35,240,052 Value adjustments in respect of fixed 11,719,403 11,332,495 assets, less rights of use

Value adjustments on rights of use 443,419 - Value adjustments on the current assets (13,209) (20,249) Expenses related to external services 27,126,739 25,529,890 Adjustments related to provisions 4,548,252 4,790,423 Other expenses 10,373,021 8,246,213 Total operating expenses 96,600,911 90,510,287

Operating Profit 17,095,261 15,418,320

Financial revenues 1,956,308 1,977,681 Financial expenses 118,429 39,787 Financial profit 1,837,879 1,937,894

Profit before corporate tax 18,933,140 17,356,214 Expenses with current corporate tax 3,445,651 3,678,768 Expenses with (revenues from) deferred corporate tax (815,415) (771,697) Profit of the period 16,302,904 14,449,143 TOTAL GLOBAL RESULT 16,302,904 14,449,143 Result per share 1.88 1.67

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Annex no. 3

INTERIM CASH-FLOW STATEMENT FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2020

- RON-

3 months 2020 3 months 2019 Name of the Item (unaudited) (unaudited) Cash flows from operating activities: + Proceeds from services supply 116,333,511 112,396,964 Proceeds from interests related to 1,786,956 1,943,189 + banking placements + Other proceeds 1,162,130 1,927,629 Payments to the suppliers of goods and 28,291,655 26,990,927 - services Payments to and on behalf of the 37,997,651 35,405,002 - employees - VAT Payments 11,508,032 12,902,061 Expenses with corporate tax and 3,077,969 3,786,286 - specific tax Other payments regarding operating 10,918,518 9,810,120 - activities A Net cash from operating activity 27,488,772 27,373,386 Cash flows from investment

activities: + Proceeds from modernization quota 9,328,760 7,590,594 Payments for purchase of tangible 22,473,600 14,596,076 - assets B Net cash from investment activities (13,144,840) (7,005,482) Cash-flows from financing activities: Proceeds of dividends transferred to - 2,786,508 + Depozitarul Central - Paid dividends 105,501 189,949 Payments on the debt related to the 123,155 - - financial leasing C Net cash from financing activities (228,656) 2,596,559 Net increase of the cash and cash 14,115,276 22,964,463 equivalents

cash=A+B+C=D2-D1 D1 Cash and cash equivalents at 238,576,951 259,682,354 the beginning of the period D2 Cash and cash equivalents at 252,692,227 282,646,817 the end of the period

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

Annex no. 4

Statement of services procurement contracts with values higher than 100.000 Euro, concluded during 01.01.2020-31.03.2020

- RON-

Name of Contract Notice/invit Initial Initially set Final Title of Applied Beneficiary (if value after Crt. Name of ation to contract Start of the contract contract Scope of Contract the procurement different from potential no. Contractor tender value contract duration duration contract procedure the contracting addenda number (RON) (in months). (months). authority) (RON)

QUARTER I - 1 CONTRACTS VALUE QUARTER I = 996,930.00 RON

Smart pigging (expertise) and LINSCAN pipeline condition detection S-CA 47110/03.1 1 ADVANCED 12 3_4 F1 and 12 3_4 F2 29/19.02. TENDER - 996,930.00 996,930.00 04.03.2020 5 5 2.2019 PIP LINES Calareti-Petrotel and drafting 2020 of inspection reports

CUMULATED TOTAL - 1 CONTRACTS Cumulated value =996,930.00 RON

NOTE - In QI 2020, no contracts there have not been concluded contracts for the purchase of works or products with values higher than 500,000 Euro.

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 Quarterly Report January- March 2020

FINANCIAL STATEMENTS at the date and for the 3 months period ended March 31, 2020

according to the Minister of Public Finance Order no. 2844/2016 and the International Accounting Standard 34 "Interim Financial Reporting”

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368

CONTENTS:

Interim Financial Statements

Interim Statement of the Financial Standing 1 - 2

Interim Statement of the financial position 3

Interim Statement of changes in shareholders equity 4 - 5

Interim Statement of Cash-flow 6 - 7

Explanatory Notes to the interim financial statements 8 - 26

WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Statement a of the Financial Standing at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

INTERIM STATEMENT OF THE FINANCIAL STANDING AT MARCH 31, 2020

March 31st December, 31 Note: 2020 2019 (unaudited) (audited) ASSETS Non-current assets Tangible assets 4 472,225,100 463,635,969 Intangible assets 5 5,727,589 6,339,896 Financial Assets 6 957,498 810,598 Receivables related to the 13 6,237,874 5,422,459 deferred corporate tax Total non-current assets 485,148,061 476,208,922

Current assets Stocks 7 8,245,900 8,169,862 Trade receivables and other 8 42,468,161 42,248,700 receivables Cash and cash equivalents 9 252,692,227 238,576,951 Accrued expenses 2,317,257 1,862,719 Total current assets 305,723,545 290,858,232 TOTAL ASSETS 790,871,606 767,067,154

Equities and liabilities Equities Subscribed and paid-up share 10 28,569,842 28,569,842 capital Legal reserves 10 5,713,968 5,713,968 Revaluation reserves 10 20,350,993 21,111,893 Other reserves 10 496,552,343 495,540,772 Retained earnings 10 103,634,781 43,997,162 Year’s Result 10 16,302,904 58,876,719 Total Equities 671,124,831 653,810,356

Accrued income Investment Subsidies 1,038,438 1,065,921 Accrued income 7,621 8,171 Total Accrued Income 1,046,059 1,074,092

Long-term liabilities Long-term provisions 12 16,652,980 16,268,908 Other long-term liabilities 11 3,181,463 3,582,351 Total long-term liabilities 19,834,443 19,851,259

1 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Statement a of the Financial Standing at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Current liabilities Trade liabilities 11 30,855,648 27,179,134 Current Corporate Tax 11 3,445,651 3,076,456 Other liabilities 11 37,163,339 38,838,402 Short-term provisions 12 27,401,635 23,237,455 Total current liabilities 98,866,273 92,331,447 Total liabilities 118,700,716 112,182,706 TOTAL EQUITIES 790,871,606 767,067,154 AND LIABILITIES

These interim financial statements and the related notes, from page 1 to page 26 have been authorized for issue and signed by the company management at May 13, 2020.

Director General Economic Director, PhD Eng. Timur-Vasile Chis Econ. Sanda Toader

The attached notes, from 1 to 19, are integral part of these financial statements.

2 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Interim global result statement for the 3 month period ended at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

INTERIM GLOBAL RESULT STATEMENT FOR THE 3 MONTH PERIOD ENDED AT MARCH 31, 2020

3 months ended 3 months ended March 31, 2020 March 31, 2019 (unaudited) (unaudited) Operating Revenues 15 Turnover 105,714,728 98,829,597 Other revenues 7,981,444 7,099,010 Total Operating Expenses 113,696,172 105,928,607

Operating Expenses 16 Expenditure on stocks 1,319,670 1,489,066 Expenses with energy and water 4,279,697 3,902,397 Personnel expenses 36,803,919 35,240,052 Value adjustments in respect of fixed assets, less rights of use 11,719,403 11,332,495 Value adjustments on rights 443,419 - of use Value adjustments on the current assets (13,209) (20,249) Expenses related to external services 27,126,739 25,529,890 Adjustments related to provisions 4,548,252 4,790,423 Other expenses 10,373,021 8,246,213 Total operating expenses 96,600,911 90,510,287 Operating Profit 17,095,261 15,418,320

Financial revenues 1,956,308 1,977,681 Interest expenses on leases 82,606 - Other financial revenues 35,823 39,787 Financial expenses 118,429 39,787 Financial profit 17 1,837,879 1,937,894

Profit before corporate tax 18,933,140 17,356,214 Expenses with current corporate tax 13 3,445,651 3,678,768 Expenses with (revenues from) deferred corporate tax (815,415) (771,697) Profit of the period 16,302,904 14,449,143 TOTAL GLOBAL RESULT 16,302,904 14,449,143 Result per share 1.88 1.67

These interim financial statements and the related notes, from page 1 to page 26 have been authorized for issue and signed by the company management at May 13, 2020.

Director General Economic Director, PhD Eng. Timur-Vasile Chis Econ. Sanda Toader

The attached notes, from 1 to 19, are integral part of these financial statements.

3 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. (All amounts are expressed in RON, if not otherwise indicated)

INTERIM STATE OF THE CHANGES IN EQUITY AT MARCH 31, 2020 (unaudited)

Share Legal Revaluation Other Retained Year’s profit or Total Equities capital reserves reserves reserves earnings loss Balance at January 1, 2020 28,569,842 5,713,968 21,111,893 495,540,772 43,997,162 58,876,719 653,810,356 Net result of the year 16,302,904 16,302,904 Net increase of the - - - 1,011,571 - - 1,011,571 modernization quota reserve Surplus achieved - - (760,900) - 760,900 - - from revaluation The transfer of the profit related to the previous year - - - - 58,876,719 (58,876,719) - at the deferred result Balance at March 31, 2020 28,569,842 5,713,968 20,350,993 496,552,343 103,634,781 16,302,904 671,124,831

4 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. (All amounts are expressed in RON, if not otherwise indicated)

INTERIM STATE OF THE CHANGES IN EQUITY AT MARCH 31, 2019 (unaudited)

Share Legal Revaluation Other Retained Year’s profit or Total Equities capital reserves reserves reserves earnings loss

Balance at January 1, 2019 28,569,842 5,713,968 25,810,840 496,092,345 44,689,399 60,676,014 661,552,408 Net result of the year 14,449,143 14,449,143 Net increase of the 54,464 54,464 modernization quota reserve Surplus achieved (1,132,417) 1,132,417 - from revaluation The transfer of the profit related to the previous year 60,676,014 (60,676,014) at the deferred result Balance at March 31, 2019 28,569,842 5,713,968 24,678,423 496,146,809 106,497,830 14,449,143 676,056,015

Note: The position “Other reserves” also contains the reserve representing the modernization quota in amount of 458,936,040 RON at 31.03.2020, namely 457,924,469 RON at 01.01.2020. This reserve has a special regime, provided in GD no. 168/1998, this being destined exclusively to the financing of the modernization works and development works related to the goods belonging to the public domain. The modernization quota is being collected at the extent of capitalization and proceeds of the production and is being reflected in reserves accounts on account of the expenses. On a monthly basis is being written back to the revenues the modernization quota at the level of depreciation of the fix assets financed out of this source.

These financial statements from page 1 to page 26 have been authorized for issue and signed by the company management at May 13, 2020.

Director General, Economic Director, PhD. Eng. Timur-Vasile Chis Econ. Sanda Toader

5 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Interim cash-flow statement for the 3 month period ended at March 31, 2020; (All amounts are expressed in RON, if not otherwise indicated)

INTERIM CASH-FLOW STATEMENT FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 2020

- RON-

cash=A+B+C=D2-D1 D1 Cash and cash equivalents at 238,576,951 259,682,354 the beginning of the period D2 Cash and cash equivalents at 252,692,227 282,646,817 the end of the period

The value of the net cash flows from operating activities at March 31, 2020 records an increase slightly higher that the one reported at March 31, 2019.

Cash outflows for payment of assets generated a net negative cash flow from investing activities in amount of 13.1 million RON. As compared to the same period of the previous year, the net cash flow recorded a negative value increasing by about 6.1 million RON.

6 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Interim cash-flow statement for the 3 month period ended at March 31, 2020; (All amounts are expressed in RON, if not otherwise indicated)

These financial statements, from page 1 to page 26 have been authorized for issue and signed by the company management at May 13, 2020.

Director General, Economic Director, PhD. Eng. Timur-Vasile Chis Econ. Sanda Toader

The attached notes, from 1 to 19, are integral part of these financial statements.

7 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

1. Business Description and General Information

The company “CONPET” S.A. (“The Company”) is a joint-stock company, with a unitary system administration, as per Law no. 31/1990 on the companies, republished, subsequent amendments, is registered at the Prahova Trade Registry under no. J29/6/1991 and the Financial Supervisory Authority by the registration certificate no. 7227/1997. Address of the registered offices is Ploiesti Municipality, No. 1-3, Anul 1848 Street, Prahova County.

“CONPET” S.A. is the concessionaire of the crude oil, rich gas, condensate and ethane National Transport System, capacity acquired in 2002, following the conclusion with the National Agency of Mineral Resources, the competent authority representing the State’s interests in the oil resources sector, of an Oil Concession Agreement, approved by GD no.793/25.07.2002.

The company’s shares are being traded at the Bucharest Stock Exchange (BSE) starting September 5, 2013, under the “COTE” symbol.

Currently, the company CONPET S.A. is included in 7 out of the total of 9 stock indices, respectively in BET, BET-TR, BET-XT, BET-XT-TR, BET-BK, BET-NG and BET Plus indices.

At 31.03.2020, CONPET S.A. had a market capitalization of 571.4 million RON (118.4 million Euro), ranking 20 in “Top 25 issuers according to capitalization”.

Company Set-up CONPET is set up based on GD 1213/20.11.1990 regarding the set-up of the joint stock commercial companies in the industry, pursuant to Law no.15/1990 regarding the reorganization of the public economic units as autonomous administrations and joint stock companies, by taking over all assets and liabilities of the former Crude Oil Pipeline Transport Enterprise (Rom.I.T.T.C.).

The shareholder structure and number of voting rights at 31.03.2020 are: o The Romanian State by the Ministry of Economy, Energy and Business Environment, holder of 5,083,372 shares representing 58.72% of the share capital, o legal persons, with 2,361,663 shares representing 27.28 % and o natural persons, with 1,212,493 shares representing 14.00 %.

Company’s Mission CONPET mission is the operation of the National Transport System of crude oil under safety and efficient conditions, free access to the available capacity of the system to all inquirers, authorized legal persons, under equal conditions, in a non-discriminatory and transparent manner.

Other Information on the Company’s Business As per the Articles of Incorporation, the company’s core business is the transport of crude oil, rich gas, ethane and condensate via pipelines aiming at supplying the refineries with crude oil and derivatives out of domestic production, as well as with imported crude oil (NACE code 4950- “transports via pipelines”).

CONPET supplies transport services for its clients both via the National Transport System concessioned based on the oil concession agreement of the National Transport System of crude oil, rich gas, condensate and ethane, as well as by railway tanks, from the loading ramps to the refineries, for the oil areas not connected to the transport major pipelines. The crude oil National Transport System represents the ensemble of the major interconnected pipelines ensuring the collection of the oil extracted from the exploitation areas or of the imported, from the delivery sites to the processing units.

8 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

CONPET, as concessionaire of the crude oil National Transport System entitles as common carrier and has the obligation to provide, as per the legal provisions, free access to the system’s available capacity to all the inquirers, authorized legal persons, under equal conditions, on a non- discriminatory and transparent basis.

The crude oil National Transport System belongs to the public domain of the Romanian State and is being administered by NAMR. (as per the Oil Law provisions). It comprises a pipeline system of approx. 3,800 km and a transport throughput of 18.5 million tons/year.

The Legal Environment The activity in the oil sector is being regulated by the Oil Law no. 238/2004. The National Agency for Mineral Resources (NAMR) represents the interests of the State in oil resources domain and is the competent authority authorized to apply the dispositions of Law 238/2004. As per the Oil Law, the National Agency for Mineral Resources entitles as Concession Provider of the goods belonging to the public domain, concessioned to the operators acting in the oil industry. The main responsibilities of NAMR are the followings: - negotiates and concludes, on behalf of the State, oil agreements; - awards mining concession licenses and exploitation permits; - issues regulating acts, norms, instructions, orders and rules; - controls the compliance, by the holders of the concession agreements with the concession licenses and exploitation permits conditions; - manages the Crude Oil and Natural Gas National Pipeline Transport Systems and regulates the exploitation activities thereof by the system’s concession agreements concluded; - annuls the concession acts/administration acts; - approves the tariffs and the frame-contract for the transport of crude oil, rich gas, condensate and ethane.

The tariff for the supply of the transport service via the National Transport System of crude oil, rich gas, condensate and ethane The transport tariff stands for the exchange value of the transport service supplied by the holder of the oil concession agreement - as common carrier, for the transport, via the crude oil National Transport System, of one ton of oil along the oil take-over sites from domestic producers or from import to the delivery sites at the refineries. The transport rates are established in accordance with NAMR Order no.53/2008 for the approval of the guidelines regarding the criteria, methodology and settlement procedure of the regulated tariffs for the transport via the National Transport System are being prepared by NAMR, acting as competent authority. The company practices different transport tariffs for the two subsystems belonging to the National Transport System, namely the subsystem for the transport of the crude oil, rich gas, condensate and ethane from the domestic production and the subsystem for the transport of the imported crude oil. The tariffs practiced for the transport on the import subsystem are being established on refineries, according to the transported quantities, and on the bracket tariff model. The transport tariffs are being determined by allocation of the value of the transport service to oil quantities transported for the beneficiaries, on the corresponding distances, by using a methodology based on service cost determination, defined as the overall necessary revenues for covering the system transport operations, here included: - the operating cost, including: material expenses, personnel expenses, pipeline maintenance expenses, expenses with energy, costs related to the amortization of the fixed assets, the royalty and other taxes applicable to the transporter, expenses related to the provision of pipeline guard, expenses due to the landowners, other expenses; - modernization and development quota; - reasonable profit margin.

9 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

2. Preparation Grounds

(a) Declaration of Conformity These interim financial statements have been prepared pursuant to the Order of the Minister of Public Finances no. 2844/2016, for the approval of the accounting regulations compliant with the International Financial Reporting Standards (IFRS) (“OMFP 2844/2016) and IAS 34 - Interim Financial Reporting. These preliminary financial situations do not include all the necessary information in order to provide a complete set of financial statements in compliance with the International Financial Reporting Standards and must be read together with the annual financial statements of the Company, prepared at December 31, 2019. However, certain selected explanatory notes are included to explain the events and transactions that are significant for understanding the changes in the company's financial standing and performance since the last annual financial statements prepared on and for the financial year ended December 31, 2019. These interim financial statements have not been audited and have not been revised by an independent auditor. These preliminary financial statements have been authorized for issue and signed by the company management at May 13, 2020.

(b) Accounting Estimates and Professional Reasoning

The preparation of the financial statements implies the use, by the Company’s management, of various estimates, professional reasoning and hypotheses affecting the reported value related to assets, liabilities, revenues and expenses. The estimates and hypotheses are being permanently evaluated and are based on the past experience, as well as on other factors, here included predictions of future events considered to be reasonable in certain circumstances. The results of these estimates set the grounds for the professional reasonings regarding the accounting value of the assets and liabilities that cannot be obtained from other information sources. The actual results may be different from the estimates values. The significant reasoning used by the management for the application of the Company’s accounting policies and the main sources of uncertainty regarding the estimates have been the same with those applied to the financial statements related to 2019.

3. Accounting Policies

The accounting policies applied in these interim financial statements are the same with those applied in the financial statements of the Company at the date and for the financial period ended at December 31, 2019, except for the adoption of new standards effective from January 1, 2020.

10 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

4. Tangible assets

In the first 3 months of the year 2020 the intangible assets have evolved as follows:

Name Land plots Buildings and Operating Machinery Measurement Means Other Tangible Total and land special oil and and control of tangible assets in tangible improvements installations products equipment devices transport assets progress assets Gross accounting value at 22,584,099 298,859,495 42,072,846 105,048,289 80,836,708 33,978,495 6,916,493 58,153,146 648,449,571 January 1, 2020 Aggregate amortization at - (44,169,472) - (52,066,352) (61,498,222) (22,221,629) (4,555,901) (184,511,576) January 1, 2020 Impairment Adjustments of ------(302,026) (302,026) assets Net accounting value at January 1, 2020 22,584,099 254,690,023 42,072,846 52,981,937 19,338,486 11,756,866 2,360,592 57,851,120 463,635,969 Tangible inputs - 6,394,024 - 364,712 8,847,507 563,628 458,054 3,440,007 20,067,932 Amortization registered - (6,133,626) - (2,540,974) (1,684,734) (929,035) (190,432) - (11,478,801) during the period Net accounting value at 22,584,099 254,950,421 42,072,846 50,805,675 26,501,259 11,391,459 2,628,214 61,291,127 472,225,100 March 31, 2020 Difference - 260,398 - (2,176,262) 7,162,773 (365,407) 267,622 3,440,007 8,589,131 *The line item “Means of transport” includes the value of the rights to use the assets acquired in December 2019 in a financial leasing system, consisting of 30 cars necessary to carry out the company's specific activities. The net value of these fixed assets in the statement of financial position at 31.03.2020, is of 2,089,322 RON and represents the gross value in the amount of 2,228,610 RON, less the depreciation registered in the first three months of 2020, in the amount of 139,288 RON

11 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

The net value of the tangible assets at 31.03.2020 has increased as compared to 01.01.2020 by the amount of 8,589,131 RON. During the first three months of the year have been recorded tangible assets amounting to 20,067,932 RON and the depreciation of intangible was of 11,478,801 RON. The tangible assets put into use in the first three months of the year 2020 were of 16,627,925 RON.

In the fixed assets there are also included fixed assets held on the basis of a financial leasing contract concluded in December 2019, consisting of 30 cars necessary to carry out the company's specific activities. The duration of the financial leasing contract is of 4 years and the gross book value of the rights to use the leased assets of 2,228,610 RON is included in the same line item as the one in which the company's own underlying assets are presented, respectively “Means of transport”. Depreciation of leased assets, recorded in the first three months of 2020, amounts to 139,288 RON. At March 31,2020 the remaining value of these assets amounts to 2,089,322 RON.

At 31.03.2020 CONPET is recording in the company’s patrimony lands in surface of 733,649 sq.m. with an accountancy value amounting to 22,584,099 RON, namely:

➢ 554,538 sq.m. stand for lands with a book value of 12,348,115 RON held based on 48 Land Ownership Certificates obtained during 2001-2005, appraised at the date of obtaining the certificates, in compliance with GD no.834/1991 on the settlement and appraisal of various lands held by the state-owned commercial companies, at the value of 26,708,233 RON. These lands have been recorded in the company’s patrimony on the expense of other equity reserves, without augmenting the share capital by the value thereof;

➢ 155,411 sq.m. stand for lands with a book value of 3,144,984 RON, held based on 14 land ownership certificates obtained until 2001. The share capital of the company was augmented by the amount of these lands;

➢ 23,700 sq.m. is land with a book value of 7,091,000 RON, purchased by the Company under sale - purchase contracts. A part of the purchased lands are related to the administrative buildings and on the other purchased lands are being placed telecommunications towers in different locations over the country.

The lands held by the Company are located in Ploiesti, at the company’s administrative offices, and in the 24 counties covered by the transport pipelines or where the crude oil tanks loading ramps are being located.

The tangible assets also include the oil operating product, evaluated in the statement of the financial standing at the cost determined from revaluation, retreated by the application of IAS 29 ”The financial reporting in Hyper inflationary Economies”. During the first three months of the year 2020 no movements of oil have been recorded, its value on 31.03.2020 being of 42,072,846 RON.

Tangible assets in progress At March 31, 2020, the value of the property in progress is 61,291,127 RON and includes investment objectives set out in the "Investment Program 2020" such as: replacements for portions of pipes on lengths and different routes, securing works of oil pipes on over crossing or under crossing rivers, reservoirs upgrade, pumping stations and ramps upgrade, pumping systems upgrading and telecommunications works.

12 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

5. Intangible assets

Statement of intangible assets in the first three months of 2020 is as follows:

Name Assets related to the Licenses Other Total right of use, deriving and intangible intangible from leasing contracts software assets assets Inventory value at January 4,963,226 5,645,183 910,983 11,519,392 1, 2020 Aggregate amortization at (1,621,597) (2,646,915) (910,983) (5,179,495) January 1, 2020 Net accounting value at 3,341,629 2,998,268 - 6,339,897 January 1, 2020 Input of intangible assets - 71,713 - 71,713 Amortization registered (443,419) (240,602) - (684,021) during the period Net accounting value at 2,898,210 2,829,379 - 5,727,589 March 31, 2020 Difference (443,419) (168,889) - (612,308)

The net value of the tangible assets at 31.03.2019 has decreased as compared to the end of 2019 by the amount of 612,308 RON. In the first three months of the year 2020 have been recorded intangible assets amounting to 71,713 RON and the depreciation of intangible assets recorded during the first three months of 2020 was of 684,021 RON.

The depreciation method used is the linear one. Intangible assets include: software, software licenses, power connection to the electricity grid, water and usage rights recognized in accordance with IFRS 16.

Assets related to rights of use, recognized in accordance with IFRS 16 in intangible assets, resulted from leases and concessions contracts concluded with various owners of land and buildings and a lease of tank cars for the transport of petroleum products. Telecommunication equipment and cathodic protection stations are located on leased land in various locations in the country, and the buildings are used as work/command points, for gendarmes or for carrying out other administrative activities of the company. The rights to use the assets related to the lease and concession contracts were initially assessed on 01.01.2019, at the value of the leasing debt in the amount of 4,963,226 RON. Leasing liabilities have been determined as the present value of the remaining lease payments, applying a discount rate (“discount rate”) equal to the interest rate for the lessee at the date of first application of IFRS 16. In the first quarter of 2020 no movements were registered within these types of assets and the depreciation value was of 443,419 RON.

6. Financial Assets

Within the first three months of 2020 the financial assets evolved as follows:

Name Other fixed Receivables Total financial securities fixed assets Net accounting value at January 1, 2020 5,100 805,498 810,598 Inputs - 146,921 146,921

13 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Outputs - 21 21 Net accounting value at March 31, 2020 5,100 952,398 957,498 Difference - 146,900 146,900 At 31.03.2020, the value of financial fixed assets increased compared to January 1, 2020 by 146,900 RON, due to increase of fixed assets during the first three months of 2020.

The company holds equity in the equity capital of the Independent Monitor Registry in amount of 5,000 RON. Starting May 2019, the company has been an associated member, together with another companies, of the Romanian National Committee for World Petroleum Council (CNR-CMP), participating in establishing the heritage of CNR-CMP with a contribution amounting to 100 RON.

The financial fixed assets representing fixed assets, in the amount of 952,398 RON, consist of returnable guarantees paid by the Company for rented land.

7. Stocks

Name Consumables Services in Waste Total stocks progress products Gross accounting value at January 1, 2020 5,666,292 1,193,309 2,192,896 9,052,497 Adjustments for depreciation of stocks (845,290) - (37,346) (882,636) Net accounting value at January 1, 2020 4,821,002 1,193,309 2,155,550 8,169,861 Stocks inflows during the period 1,961,440 552,021 211,072 2,724,533 Consumption/outputs of stocks during the (1,298,233) (1,193,309) (170,161) (2,661,703) period Expense with (revenue from) adjustments for 13,108 - 101 13,209 depreciation of stocks Net accounting value at March 31, 2020 5,497,317 552,021 2,196,562 8,245,900 Difference 676,315 (641,288) 41,012 76,039

The stocks are made up of materials, spare parts and other materials that are to be used when performing the company’s business, including the ones comprising security and intervention stocks meant for the potential provoked and technical breakdowns. The stocks also contain waste products (recoverable) triggered by the pipelines replacement works and scrapping of fixed assets. The company registers in the services in progress the cost of the services transport supplied and not received by the beneficiary until the end of the period, on the account of the revenues related to services in progress.

8. Trade receivables and other receivables

At March 31, 2020 and December 31, 2019 the trade receivables and other receivables are the followings:

March 31st December, 31

2020 2019 Clients 39,363,009 39,276,991 Adjustments for depreciation of receivables (341,524) (341,524) Other trade receivables 286,780 283,838 Subtotal trade receivables (net value) 39,308,265 39,219,305 Other receivables 6,554,632 6,424,129 Adjustments for Impairment of other receivables (3,394,734) (3,394,734) Subtotal other receivables (net value) 3,159,897 3,029,395

14 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Total receivables 42,468,162 42,248,700

Clients’ structure per activities, is as follows:

March 31st December, 31

2020 2019 Clients-transport activity 38,762,221 38,623,179 Other clients - auxiliary activities 600,788 653,812 Total 39,363,009 39,276,991

Trade receivables are no interest bearer and have an average day collection of 28 days. The main trade receivables in balance at March 31, 2020 are to be received from: OMV PETROM S.A.– 33,662,645 RON (December 31, 2019: 34,405,183 RON), Petrotel Lukoil S.A.– 4,409,963 RON (December 31, 2019: 4,170,733 RON), Rompetrol Rafinare Constanța county– 665,532 RON (December 31, 2019: 0 RON). The transport services supplies performed to the clients hold a significant share (over 99 %) in the Company’s turnover. The major client of the Company, OMV PETROM SA, holds approximately 79 % of the total short- term receivables at March 31, 2020. Other receivables, in amount of 6,554,632 RON include mainly: amounts to be recovered from various natural and legal persons, the majority thereof pending before law courts as litigations (1,715,352 RON, namely 26.17 %), non-exigible VAT related to the unarrived invoices until 31.03.2020 (1,227,495 RON, namely 18.73 %), interest related to the under 3 months maturity deposits (1,001,756 RON, namely 15.28 %), as well as amounts to be recovered from the budget representing sick leave allowances (873,676 RON, namely 13.33 %).

Impairments for the depreciation of trade receivables are recorded for the doubtful clients, involved in litigation or insolvency, presenting default of collection thereof. At March 31, 2020, the value of these adjustments remains at the level from the end of the previous year, respectively 341,524 lei.

Impairments for the depreciation of other receivables are recorded for debits related to the legal files pending before the Law, paid fines and facing dispute. At March 31, 2020 the impairment value is in amount of 3,394,735 RON, at the same level than in December 31, 2019.

The Company’s registers impairments for loss of value of 100% from the value of the receivable for the clients facing dispute, insolvency and for other debits related to the established legal files or the fines facing appeal proceedings.

Statement on receivables seniority

Trade receivables March 31st December, 31 2020 2019 Clients, o/w: 39,363,009 39,276,991 Unmatured debts 39,004,699 38,885,905 Depreciated receivables 341,524 341,524 Outstanding and non-depreciated receivables, o/w: 16,786 49,562 - outstanding amounts less than 30 days 8,936 48,275 - outstanding amounts between 30 days and 60 days 3,823 0 - outstanding amounts between 60 days and 90 days 3,083 0

15 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

- outstanding amounts between 90 days and 270 days 944 1,287 Other trade receivables, out of which: 286,780 283,838 Non-depreciated receivables 286,780 283,838

Other receivables March 31st December, 31 2020 2019 Non-depreciated receivables 3,159,898 3,029,395 Depreciated receivables 3,394,734 3,394,734 Total 6,554,632 6,424,129

9. Cash and cash equivalents

At March 31, 2020 and December 31, 2019, the cash and cash equivalents look as follows:

March 31st December, 31

2020 2019 Current bank accounts 8,631,898 6,899,866 Bank deposits with maturity ≤ 3 months 244,034,089 231,666,573 Cash in the register 26,240 10,512 Other cash equivalents - - Total 252,692,227 238,576,951

At March 31, 2020, cash balance and cash equivalents increased by approx. 5.92 % as compared to December 31, 2019.

Availabilities in the accounts at the end of the third quarter include cash representing the modernization quota, with special use regime provided by the GD no. 168/1998, amounting to 139,910,460 RON. This is intended exclusively for funding the modernization and development works of public property.

10. Equities

The Share capital During the reporting period, the share capital of the company has not changed, remaining at the value of 28,569,842 RON, divided into 8,657,528 ordinary shares with a nominal value of 3.3 RON/share and corresponding to the one registered at the Trade Register Office.

The structure of CONPET S.A. share capital and shareholding at March 31, 2020 reveals the followings: March 31, 2020 December 31, 2019 Shareholders Number of Amount Number of Amount (%) (%) shares (RON) shares (RON) The Romanian State by the Ministry of Economy, Energy 5,083,372 16,775,128 58.7162 5,083,372 16,775,128 58.7162 and Business Environment Legal persons 2,361,663 7,793,488 27.2787 2,361,896 7,794,256 27.2814 Natural Persons 1,212,493 4,001,226 14.0051 1,212,260 4,000,458 14.0024

16 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Total 8,657,528 28,569,842 100% 8,657,528 28,569,842 100%

Legal reserves At March 31, 2020 the value of the legal reserve is of 5,713,968 RON (December 31,2019: 5,713,968 RON).

The reserve is established at the level of 20% of the share capital, according to Law no. 31/1990 and the Article of Incorporation.

Other reserves At March 31, 2020, Other reserves are in the amount of 496,552,343 RON, increasing by the amount of 1,011,571 RON as compared to December 31, 2019, due to the increase of the reserve representing the modernization quota. The reserve related to the modernization quota is in amount of 458,936,040 RON and holds the highest share in total other reserves (92.42%).

Revaluation reserves Based on the provisions of the Ministry of Public Finances Order no. 2844/2016 for the approval of accounting regulations compliant with IFRS in conjunction with the art. 210, paragraph (3) of Law no. 31/1990 on companies, republished, the company recognizes in the revaluation reserves favorable differences from revaluation of tangible assets.

At March 31, 2020, in the financial standing, the revaluation reserves are being presented at the net value of 20,350,993 RON, resulting after the diminution of the gross value by the related deferred tax recognized directly in the equities, as per IAS 12.

Retained earnings At March 31, 2020 the retained earnings amounts to 103,634,781 RON and contains mainly the net profit of the previous year transferred to the reported result in amount of 58,876,719 RON and the difference in value related to the tangible assets – oil operating product resulting from the application, from the first time, of IAS 29, in amount of 41,818,297 RON.

Profit of the period The year’s profit achieved in the first three months of 2020 amounts to 16,302,904 RON, 12.83% higher than the one recorded in the first three months of the year 2019.

11. Trade Liabilities and Other Liabilities

At March 31, 2020 and December 31, 2019, the trade receivables and other receivables look as follows:

Maturity date for the balance at December 31, March 31st March 31, 2020 Liabilities 2019 2020 Under 1 Over 5 1-5 years year years Trade liabilities 27,179,134 30,855,648 30,855,648 - -

17 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Other liabilities, here included fiscal debts and 45,497,209 43,790,453 40,608,991 3,181,462 - social insurances related debts Total 72,676,343 74,646,101 71,464,639 3,181,462 -

The goods and services suppliers for the operating activity are mainly represented by: SNTFM CFR Marfa, Cez Vanzare, OMV Petrom, Edenred Romania S.R.L, Tinmar Energy SA, Coral 33 All Prod SRL, OMV Petrom Marketing, Director Special Troops – DST SRL, Envirotech SRL, Orange Romania, VTG Rail Europe GMBP, Asigurarea Românească – ASIROM SA, Cadra Prest SRL, Con Metal CF SRL. The value of procurement of suppliers for operating activities in the first quarter of 2020 has a share of 60.12% in total procurement. The value of acquisitions of property in the first quarter of 2020 accounts for 39.88% of total purchases.

The statement of the employee-related debts, fiscal debts and other maturity date debts look as follows:

Maturity term for the balance at December 31, March 31, March 31, 2020 Liabilities 2019 2020 Under 1 Between 1- Over 5 year 5 years years Salaries and assimilated 5,897,321 5,505,194 5,505,194 - - debts Salaries contributions 5,360,849 4,250,079 4,250,079 - - Current Corporate Tax 3,076,456 3,445,651 3,445,651 - - Royalty due to the State 8,059,150 8,089,501 8,089,501 - - Budget VAT payable 3,073,760 3,300,132 3,300,132 - - Other interests and debts - 980,693 829,788 829,788 - - State Budget Payable Dividends 13,410,903 13,305,402 13,305,402 - - Leasing liabilities 5,469,234 4,922,360 1,740,898 3,181,462 - Other liabilities 168,844 142,345 142,345 - - Total 45,497,209 43,790,453 40,608,991 3,181,462 -

12. Provisions

March 31st December 31,

2020 2019 Provisions for litigations 6,824,129 6,481,556 Provisions for Employees Benefits 31,781,439 27,558,335 Other provisions for risks and expenses 5,449,047 5,466,472 Total 44,054,615 39,506,363 Long-term provisions 16,652,980 16,268,908 Short-term provisions 27,401,635 23,237,455

Provisions for litigations In detail, the provisions for litigations are: March 31st December 31,

2020 2019 Litigations for civil compensations 3,245,425 3,152,007 Litigation for third parties failure to respect certain contractual 46,214 46,214 clauses

18 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Other litigations 3,532,490 3,283,335 Total 6,824,129 6,481,556

In the first three months of 2020, the provisions for litigations have registered an increase by 342,573 RON, following the registration of provisions for newly opened litigations during the reported period and differences resulting from updating provisions in the preceding period.

The company is involved in several litigations for damages required by several owners, natural and legal persons. Besides the compensations, they request either the payment of an annuity following the exercise, by the Company, of the easement right on the lands owned by the claimants, or by the decommissioning of the pipelines and installations to be found on their lands. Following the restitution of their property rights, they are bringing proceedings in Court against the Company, invoking the lack of land use due to the fact that they are being crossed by the crude oil transport pipelines belonging to the public domain.

Provisions for Employees Benefits Changes in the structure of provisions for employee benefits consisted of: decreases, mainly due to retirement benefit payments and increases representing unpaid rest leave, variable allowances due to members of the Board of Directors and directors, according to mandate contracts and employee share of profit, related to the first quarter of 2020.

The highest share in the provisions for the employees benefits is being held by the Provisions for the benefits granted upon retirement, in amount of 17,110,714 RON, of which 16,652,980 RON stand for long-term liabilities and 457,734 RON stand for short-term liabilities.

At 31.03.2020, the provision for the employees share of profit amounts to 8,161,726 RON, of which the amount of 6,440,878 RON stands for provision related to 2019, to which insurance contribution for work is being added in amount of 144,920 RON, and the amount of 1,575,928 RON stands for provision for the service supplied by the employees in the first 3 months of the year 2020, including insurance contribution for work, constituted in the limits provided by the Budget.

Provisions for not taken annual leaves recorded a net increase of 1,925,644 RON for the days of the first three months of 2020, not taken until March 31, 2020.

At March 31, 2020, the provisions for payments given to members of the Board of Administration and directors are constituted, in accordance with the contracts of mandate and EGO 109/2011 on corporate governance, including the related contribution, as follows:

• 60,602 RON represents provision for rest leave not performed by the directors with mandate contract, corresponding to the years 2017-2019; • 2,405,611 RON represents provisions for the variable component related to 2019, of which 1,118,460 RON provision for the indemnities granted to the members of the Board of Administrators and 1,287,151 RON provision for the indemnities granted to the directors. • 641,085 RON represents provisions for the variable component related to the first quarter of 2020, of which 279,615 RON provision for the indemnities granted to the members of the Board of Administration and 361,470 RON provision for the indemnities granted to directors.

Other provisions At March 31, 2020, the balance of the position “Other provisions” in the amount of 5,449,047 RON consists of: the provision constituted at the level of the gain resulting from the capitalization of the pipelines recovered following the replacement works (repairs/modernizations) performed on the National Transport System, in amount of 5,154,122 RON (value established according to the Control performed by the Court of Accounts and completed in March 2020), provisions for environmental

19 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

expenses in amount of 150,000 RON and other provisions in amount of 144,925 RON.

13. Current and Deferred Corporate Tax

The expense with the current and deferred corporate tax of the company at March 31, 2019 and March 31, 2020 is being determined by a statutory rate of 16%.

March 31st March 31st

2020 2019

Expenses with corporate tax and specific tax 3,445,651 3,678,768 Expense with/(revenues from) deferred corporate tax (815,415) (771,697) Total 2,630,236 2,907,071

Reconciliation of the effective rate of taxation: March 31st March 31st 2020 2019 Profit before tax 18,933,140 17,356,214 - Corporate tax at a statutory rate of 16% 3,029,302 2,776,994 Effect on the corporate tax, of: - Non-deductible expenses 985,237 900,023 - Non-taxable revenues (189,480) (128,726) - Elements similar to the revenues 144,849 215,636 - Elements similar to the expenses (216) (216) - Spared corporate tax (4,293) (91,965) - Amounts representing sponsorship falling under the (4,000) (350,000) limits provided by law - Specific tax 11,022 11,022 - Profit tax bonus according to GEO no. 33/2020 (180,770) - Expenses with the ordinary corporate tax 3,445,651 3,678,768

The deferred corporate tax The deferred payable and recoverable taxes were calculated based on the temporary taxable and/or deductible differences determined for assets and debts as differences between the accounting value of the asset and/or the debt and the amount attributable in fiscal purposes. The company recognizes the deferred taxes on the account of an expense or an income except for the tax generated by an event directly accounted in the equities.

The statement of the movements related to the receivable/debt with the deferred income during the first three months of 2020 reveals the followings:

Deferred Net value at 31st of March corporate tax Net value at 1st Receivable Liability 2020 recognized in related to the related to the of January the profit and deferred deferred loss account corporate tax corporate tax Reevaluation of tangible (421,193) 144,620 3,394,857 (3,671,430) assets Provisions 5,283,969 672,908 5,956,878 - Adjustments of current assets 559,683 (2,113) 557,569 - Deferred corporate tax 5,422,459 815,415 9,909,304 (3,671,430) before offsetting Receivable/debt offsetting (3,671,430) 3,671,430

20 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Deferred corporate tax - to be recovered 6,237,874

Deferred tax payment, recognized on account of equity items on 31.03.2020 amounts to 3,671,430 RON and the deferred corporate tax to be recovered at 31.03.2020 in the statement of comprehensive income is of 9,909,304 RON. In conclusion, at 31.03.2020 the company has a net receivable related to the deferred corporate tax reaching 6,237,874 RON.

21 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

14. Result per share

The result per share in the first three months of the year 2020, as compared to the same period of the previous year is the following:

March 31st March 31st 2020 2019 Profit of the Financial Year 16,302,904 14,449,143 Number of ordinary shares at the beginning and at the end of 8,657,528 8,657,528 the period Basic and diluted earnings per share (Lei/share) 1.88 1.67

15. Operating Revenues

a) Turnover March 31st March 31st

2020 2019 Revenues from transport service, of which: 105,001,741 95,990,363 Revenues from transport services on the Domestic 76,873,413 73,733,474 Subsystem Revenues from transport services on the Import 28,128,328 22,256,889 Subsystem Revenues from rents 396,397 376,434 Other revenues included in the turnover 316,590 2,462,800 Total revenues out of turnover 105,714,728 98,829,597

Transport revenues are achieved out of the services supplied to clients for the transport of the crude oil, rich gas and condensate volumes at the tariffs approved by Order of the President of The National Agency for Mineral Resources (NAMR).

In the first three months of 2020, the quantities transported on subsystems, as compared to the same period of the previous year are the followings:

3 months ended 3 months ended March 31st March 31st 2020 2019 Domestic Subsystem 873,459 870,069 Import Subsystem 964,453 785,424 Total quantities (tons) 1,837,912 1,655,493

The total volume of transported products increased by 11% in the first three months of 2020 YoY, given the decrease by 0.4% of the quantity transported on the domestic transport subsystem and by 22.8% of the quantity transported on the import subsystem.

The tariffs for the supply of crude oil, rich gas, condensate and ethane are regulated and approved by the NAMR and are distinguished for each transport subsystem. The tariffs applied for the import transport subsystem vary according to the installment of transported quantity, being practiced the bracketing tariff model and the refinery - the hand-over site. In the reporting period, the following tariffs were applied:

22 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Tariffs from transport services on domestic subsystem: Transport tariff Approved by NAMR Order Period (RON/ton) no. June 19th, 2018 – December 30th, 2019 84.37 117/2018 Starting December 31st, 2019 87.53 427/2019

Tariffs for transport services on import subsystem: Ploiesti Basin Approved Arpechim (Petrobrazi and Petromidia by NAMR Installments Refinery Petrotel Lukoil Refinery Order no. Period refineries)

Thousand tons/month RON/ton RON/ton RON/ton June 19th, 2018 – < 120 38.85 38.00 27.00* December 30th, 117/2018 2019 > 120 16.60 16.00 24.74* Starting with < 120 40.40 39.50 15.00 427/2019 December 31, 2019 > 120 17.25 17.00 12.85

*) Starting March 14th, 2019 until December 30th, 2019 for the transport relation with Petromidia refinery It was applied a tariff of 14.00 RON/ton for the installment up to 120 thousand tons and of 12.00 RON/ton for the installment bigger than 120 thousand tons (approved by NAMR Order no. 172/2019).

b) Other operating revenues March 31st March 31st

2020 2019 Revenues out of modernization quota consumption 8,317,189 7,536,130 Other revenues (335,745) (437,120) Total Operating Expenses 7,981,444 7,099,010

Other operating expenses have registered an increase by 12.43 % in the first three months of the year 2020 as compared to the same period of the previous year, from 7,099,010 RON to 7,981,444 RON. Other operating revenues comprise, mainly, the revenues from the reserve related to the modernization quota, at the levels of depreciation of fixed assets financed out of this source. The revenues representing the modernization quota have registered an increase by 10.36 % in the first three months of the year 2020 as compared to the same period of the year 2019.

16. Operating Expenses a) Stocks and Utilities Expenses March 31, 2020 March 31, 2019 Expenses with consumables 1,095,855 1,217,014 Other material expenses 202,994 244,197 Other Expenses with energy and water 4,279,697 3,902,397 Merchandise expenses 20,821 27,855 Total Expenses relating Stocks and Utilities 5,599,367 5,391,463

b) Personnel expenses Personnel expenses include expenses for salaries, bonuses for employees, other personnel expenses, allowances related to the contracts of mandate of the members of the Board of

23 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Administration and Directors with mandate and expenses related to contributions due by the employer.

March 31, 2020 March 31, 2019 Salary expenses 31,645,812 30,190,629 Liabilities regarding the employees’ bonuses 2,703,178 2,691,651 Other personnel expenses 62,160 - Expenditure on the remuneration of directors with 601,620 546,921 mandate and of administrators Expenses with contributions due by the Employer 1,791,149 1,810,851 Total personnel expenses 36,803,919 35,240,052

The personnel expenses are detailed as follows:

Salary expenses March 31, 2020 March 31, 2019 Salary and related contributions expenses 31,551,662 30,057,482 Retirement support 94,150 104,202 Marriage support - 28,945 Salary related expenses 31,645,812 30,190,629

Expenses on basic salaries of personnel and related gains grew in the first three months of 2020, compared to first three months of 2019 as a result of the salary increase by 300 RON/employee at 01.10.2019. In accordance with the Collective Labor Agreement in force, the Company has also provided benefits for the employees consisting in retirement support, marriage support.

Liabilities regarding the employees’ bonuses March 31, 2020 March 31, 2019 Employees share of profit 1,195 0 Food stamps 1,326,420 1,347,930 Social expenditures under art. 25 of Law no. 929,107 899,266 227/2015 on the Fiscal Code,

further amendments and completions Other expenses as per the Collective Labor 446,456 444,455 Agreement. Total 2,703,178 2,691,651

The value of bonuses granted to employees has a slight increase (of 11,527 RON) in the first 3 months of 2020, compared to the same period of 2020, mainly due to death benefits granted according to the CLA. In accordance with the Collective Labor Agreement in force, the Company paid to the employees bonuses as social expenses under art. 25 of Law no. 227/2015 regarding the Fiscal Code consisting of tickets for rest and treatment, including travel, gifts to employees, aid for birth, funeral, serious illness, humanitarian and other social expenses as per the CLA.

Other personnel expenses March 31, 2020 March 31, 2019 Expenditure on compensatory payments 62,160 - related to the personnel layoffs Total 62,160 -

The position “Other personnel expenses" includes costs of severance payments, provided under

24 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

CLA, related to staff layoffs conducted in November 2019, outstanding in 2020. The company established a provision at the end of 2019

Expenses on remuneration of directors and administrators March 31, 2020 March 31, 2019 Allowance of the directors with mandate 328,158 273,459 Allowances of the members of the Board of 273,462 273,462 Administration Total 601,620 546,921

The expenses with the allowances related to the contracts of mandate of the directors and the administrators register an increase as compared to the first three months of the year 2019, due to the conclusion of a new mandate contract of the Deputy Director General in March 2019.

Expenses with contributions due by the Employer March 31, 2020 March 31, 2019 The company's contribution to voluntary pension funds 700,932 731,049 Company’s contribution to voluntary health insurance 358,957 383,788 Labour Insurance contribution and other contributions 731,260 696,014 Total 1,791,149 1,810,851

As a result of the salary increase in October 2019, the labor insurance contribution increased proportionally, so that in the first quarter of 2020 it is 35,246 RON higher than in the same period of 2019. c) Expenses related to external services March 31, 2020 March 31, 2019 Rail transport expenses 15,753,646 14,230,428 Expenses with royalties and leases 8,216,813 7,854,459 Third-party pumping expenses 1,223,336 1,243,778 Maintenance and repair expenses 404,506 631,128 Expenses with the decontamination, monitoring of 104,470 76,473 the environmental factors Travel, detachment and transfer expenses 274,439 360,363 Expenses related to the transport of goods and 7,143 11,474 personnel Postal and telecommunication expenses 135,893 125,464 Other expenses with services performed by third 1,006,493 996,323 parties Total expenses related to external services 27,126,739 25,529,890

The expenses with royalties and rentals comprise mainly the oil royalty due by the company, as holder of the oil agreement, to the State budget, under the law, for the use of goods public property of the State related to oil operations. It is calculated in accordance with the provisions of the Petroleum Law no. 238/2004, by applying a quota of 10% on the value of gross revenues realized from oil operations of oil transport and transit through national oil transport systems, as well as from oil operations performed through oil terminals in public ownership of the state. d) Other expenses March 31, 2020 March 31, 2019 Taxes, fees and similar levies related expenses 580,005 543,013 Compensations, fines and penalties expenses 9,464 9,726 Donations granted (Sponsorship) 350,000 4,000

25 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

Environmental protection expenses 11,088 28,826 Expenses with the establishment of the modernization 9,328,760 7,590,594 quota Other operating expenses 93,704 70,054 Other expenses 10,373,021 8,246,213

In the first three months of 2020, the expenses recorded with other taxes, fees and similar levies mainly include the expenses with the local taxes and expenses with the contribution to the special fund, due under the Law no. 448/2016 regarding the protection and promotion of the disabled persons. The company constitutes reserves regarding the modernization quota through other operating expenses in compliance with the provisions of GD no. 168/1998 further amendments and with the provisions of the Fiscal Code approved pursuant to Law no. 227/2015, further amendments and suppletions.

17. The net financial result

March 31, 2020 March 31, 2019 Revenues from interests 1,952,715 1,973,072 Other financial revenues 3,593 4,609 Total financial revenues 1,956,308 1,977,681 Interest expenses on leasing contracts 82,606 - Other financial revenues 35,823 39,787 Total financial expenses 118,429 39,787 Net Financial Result 1,837,879 1,937,894

The financial revenues have decreased by 1.08 % in the first three months of the year 2020 as compared to the same period of the year 2019. The financial expenses have increased as a result of registration of interest expenses related to leasing contracts, but they remained at a very low level compared to income. The net financial revenues have decreased by 5.16 % in the first three months of the year 2020 as compared to the same period of the year 2019.

18. Related Parties

Between 01.01.- 31.03.2020, the Company performed the following significant transactions with related parties:

Procurement from related parties Unsettled amounts at Procurement Settlements Unsettled Partner at Period 01.01- Between 01.01 - amounts at December, 31 31.03.2020 31.03.2020 31.03.2020 2019 SNTFM CFR Marfă S.A. 5,075,103 19,795,569 17,044,947 7,825,725 *The amounts are VAT exclusive

19. Ulterior Events

At 29.04.2020 was held the General Meeting of Shareholders (OGMS) that has approved the annual financial statements at the date and for the financial year ended 31.12.2019. At the same meeting,

26 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368 The Company CONPET S.A. Explanatory notes to the interim financial statement at March 31, 2020 (All amounts are expressed in RON, if not otherwise indicated)

the OGMS approved the distribution of the net profit for the financial year 2019 and of some amounts of the retained earnings.

In the context of the Coronavirus pandemic (Covid-19), despite its unfavorable evolution related to the registration of a massive growth of the confirmed cases, the number thereof increasing significantly from the date of conclusion of these interim financial statements until issuance thereof, both globally, as well as in Romania, in what concerns the company's activity there were not registered situations that would bear impact on business continuity. With a very reliable financial stability and a good ability to react, Conpet can quickly and efficiently implement all the emergency measures required to protect the health of its employees as well as to maintain, under safety conditions, the operation of the National Crude Oil Transport System. The company's management is constantly monitoring the potential impact of the coronavirus pandemic and is taking all possible measures to mitigate any adverse effects on Conpet's activity.

These financial statements from page 1 to 26 were authorized for issue and signed by the company management on May 13, 2020.

Director General, Economic Director, PhD. Eng. Timur-Vasile Chis Econ. Sanda Toader

27 WorldReginfo - e2755dfa-c35e-473c-a674-ce4c38c61368