ORLEN Capital Group – company overview

November 2011

1 Agenda

 Company overview

Key segments

New businesses entry

Summary

2 Leading refining & petchem company operating in the biggest market in CEE

PKN ORLEN – POLISH KEY PLAYER IN CEE LEADING DOWNSTREAM COMPANY  Strategically located on key pipeline network. Access to the crude oil terminals in Gdańsk () and Butinge ().  Operates 7 refineries in Poland, Lithuania and the , including the largest and highly advanced one.  Capable to process any kind of crude oil in all refineries. Currently the most economic is REBCO processing.  Petrochemical assets fully integrated with the refining part.  Operates ca. 2 700 retail sites in Poland, the Czech Republic, and Lithuania.

SHAREHOLDERS STRUCTURE KEY FACTS

State Treasury PRODUCTION:  Refining ca. 31.0 mt/y 27,52%  Petrochemical ca. 4.1 mt/y

FINANCIALS IN YEAR 2010: 72,48%  Revenues PLN 83.5 bn Free float  EBITDA PLN 5.5 bn  Net profit PLN 2.5 bn

3 The strategy for 20092013 assumes further core business development, divestment of noncore assets and entry into new segements

MAIN OBJECTIVES OF PKN ORLEN GROUP PRIORITIES

Debt Release of capital employed through reduction working capital optimisation, assets 2009 – 2010 disinvestment in chemical segment, solving the issue of obligatory reserves Preparation for further growth : actions to improve financial performance, increase Efficiency Efficiency improvement as well as efficiency, reduce debt 2011 – 2013 improvement development and extension of the and finalize investments in and key value chain in core areas of activity core areas of activity investment s refining, retail and petrochemical Further efficiency of execution segments core assets, investments in new segments in order Entry into to increase the Diversification of activities , new strengthening the Group by limiting company value business areas the downstream contribution to the business

4 Agenda

 Company overview

Key segments

New businesses entry

Summary

5 Refining segment

ASSETS NELSON COMPLEXITY

Supersite (Plock)

Gold Mazeikiu (10.2; 10.3) Silver (MN, Litvinov)

Bronze (Kralupy)

Niche Plock Litvinov (5.5, 7.0) (16.3; 9.5) Trader

Trzebinia (0.5) Speciality (Paramo) Kralupy (3.4; 8.1) Jedlicze (0.1) ClosureCandidate Paramo (1.0) N/A (Trzebinia, Jedlicze)

Refinery (production capacity mt /y; Nelson complexity index) Refinery classification according to Wood Mackenzie (2007)

KEY FACTS  PKN ORLEN processing capacity: ca. 31 mt/y (Plock plant in Poland – 16.3 mt/y, – 5.1 mt/y and ORLEN Lietuva – 10.2 mt/y).  Market share*: gasoline (PL: 62%, CZ: 33%, LT: 85%) and diesel (PL: 55%, CZ: 33%, LT: 89%).  Nelson complexity index: Plock 9.5, Kralupy 8.1, Litvinov 7.0, ORLEN Lietuva 10.3.  Flexibility to process many kinds of crude oil.  Fuel production in line with 2009 Euro standards in all refineries.

* As of 30.09.2011

6 Petrochemical segment

ASSETS CORE BUSINESS – GROWTH DRIVERS  Strengthening position through full PX/PTA integration with refinery.  Europe’s most advanced petrochemical Polyolefins PX/PTA complex launched.  Building regional leader position. NON CORE BUSINESS EXIT

PVC  Limited synergies with refining activity.  Release of capital employed through Fertilizers Anwil sale.

KEY FACTS  PKN ORLEN production capacity: ca. 4.1 mt/y (Plock 2.5 mt/y, Unipetrol 1.6 mt/y).  Full integration of petrochemical assets with refining facilities.  Depending on the product we have between 40% to 100% market share in domestic consumption.  Polyolefins sales within Basell network.  PX/PTA production capacities: 400 th t of PX (paraxylene) and 600 th t of PTA (purified terephtalic acid) per annum, reflecting 20% of European production. Sales of PTA since 2Q2011.

7 Retail segment

ASSETS OPERATING DATA 2008 2009 2010 EBIT PLN m 6% 641 880 825

Sales volumes + 5% th t 6 229 6 713 7 025

KEY FACTS

 Biggest retail network (no of filling stations)*: Poland 1738, Germany 564, Czech Republic 336, Lithuania 35.  Market share*: Poland 32%, Czech Republic 14%, Lithuania 4% and Northern Germany 9%.  Twotier branding strategy (premium and economy)  „FLOTA POLSKA” & DKV/ORLEN fleet card for corporate customers; and „VITAY” loyalty card for individual customers – ca. 8,5 m participants*

* As of 30.09.2011

8 Agenda

 Company overview

Key segments

New businesses entry

Summary

9 „Multiutility” is a foundation for further PKN ORLEN value growth

STRATEGIC RATIONALES CONCEPT OF „MULTI UTILITY”

PKN ORLEN faces serious barriers for the further dynamic growth in the oil sector... Upstream (E&P) New  The dynamic growth through acquisitions and segments geographic expansion in 20022006 Electric power  Focus on organic development and efficiency generation improvement  Strong competitive pressure and high volatility in Refining margins

…hence the perceived growth opportunities in Petrochemicals Current PKN the new areas of growth… ORLEN’s  Higher profitability areas of Logistics  Stable cash flows activities  Strong competitive pressure and high volatility in Sales of fuel and margins petrochemicals  Operational synergies and diversification of activities  PKN ORLEN’s security Integrated fuel energy company

10 Growth of PKN ORLEN in upstream segment is based on three pillars

Regional Organic and Cooperation with focus inorganic growth partners

 Limitation of (mostly geopolitical) risks  Gradual development of diversified  Opportunity for rapid growth of  Building capabilities in stable assets portfolio knowhow and competencies environment  Acquisition of mainly minority equity  Participation in existing projects, Targets  Adjustment of activities to the stakes including cooperation with external available budget partners

 Central and Eastern Europe  Current exploration and production  North Africa projects

Examples  North America

Limitation of Focus on most project risk prospective assets

11 UPSTREAM Organic projects

1. Latvian shelf  Offshore project on Baltic shelf () on one of the biggest oil fields in the .  Project is being realized in cooperation with Kuwait Energy.  Large hydrocarbon reserves: 250m bbl. Project’s status:  Analysis of newly obtained 3D seismic data and choice of holes locations is in progress.  The drill is planned in 1 half of 2012.

2. Lublin region Latvian shelf  Onshore E&P project in Poland (Lublin area).  Exploration activities in the region conducted also by the biggest oil companies: Chevron Polish lowland Lublin region and ExxonMobil. Project’s status:  Data analysis and choice of drills’ locations is in progress.  The drill is planned in 2012.

3. Polish lowland  Onshore E&P project in Poland (Sieraków area) JV with PGNiG.  The most prospective exploration area in Poland, next to the largest discovered reserves of oil and gas in Poland.  Exploitable resources of ca. 26m bbl. Project’s status:  Exploratory drill is in realization.  Next 2 appraisal drills are planned – realization in 2012.

12 UPSTREAM Shale gas

Shale gas exploration licenses 1. Licenses  PKN ORLEN has 8 exploration licenses in Poland in the most prospective areas: 6 licenses in Lublin region (BełŜyce, Garwolin, Lubartów, Lublin, Wierzbica, Hrubieszów) and 2 licenses in central Poland (Łódź, Sieradz).

Projects’ status: Lublin region (Wierzbica)  First wildcat exploration vertical well started in October 2011.  Horizontal wells and multistage hydraulic fracturing in June 2012 after positive findings of samples. Lublin region (Lubartów)  First wildcat exploration vertical well is planned in December 2011.

2. Cooperation with experienced partners  PKN ORLEN aims to engage with an experienced partner for further exploration (letters of intent already signed with about 15 companies).

3. Shale gas deposits Potential shale gas area  5.3 trillion m3 of unconventional gas stretching across northern and central Poland is estimated by Energy Information Administration (USA).  Poland’s annual gas consumption is ca. 14 bn m3 (of which 2bn m3 by PKN ORLEN), 72% of gas is imported.

13 ENERGY New projects and efficiency increase of existing assets

Strategy’s directions  Achieving maximum synergies  Assurance of energy safety of PKN ORLEN  Modernization of current infrastructure for further development and adaptation for environmental requirements

NEW PROJECTS EFFICIENCY IMPROVEMENT OF EXISTING ASSETS 1. Construction of gas power plant in Wloclawek 1. Modernization of power plant in Plock  Advanced preparation of investment: the environmental decision,  Investment program at the level of PLN 1 bn within 23 years. agreement for connection to the energy network and the  Target is to meet environmental standards (emitted emissions are to permission to build energy block. be reduced by ~ 90%) and to the increase in power capacities (up till  Agreement signed with GAZSYSTEM for building a gas pipeline and 2017 planned 20% increase in electricity production capacities and 7% connection to gas network. CAPEX ca. PLN 22m, PKN will cover 25%. in thermal power).  Advanced stage of tender for building a block with infrastructure.  Decision about the selection of the contractor to be made in 1Q2012.  Decision about the selection of the contractor in 1Q 2012.  Startup in 2015.  Block building is planned for 2012. 2. Restructuring and modernization of energy  Planned startup in 2014.  Estimated CAPEX in the amount of PLN 1,5 bn. assets in Unipetrol 2. Potentially additional unit in Plock 3. Optimization in other foreign assets

14 Agenda

 Company overview

Key segments

New businesses entry

Summary

15 PKN ORLEN is an attractive investment

STRENGTHS DEVELOPMENT OPPORTUNITIES

 Attractive market of new EU countries with growth  Efficiency improvements through operational potential . excellence and integration of assets.  Leading position in the Central and Eastern EU  Further development in the core business and region in the downstream refining and value chain extension. petrochemical .  Release of capital employed through the sale of  World class refinery assets integrated with non core assets. petrochemical business .  Development of new segments through  The largest retail network . cooperation with sector partners.  Strategically located on key pipeline network. Access to the crude oil terminal in Gdańsk (Poland) and Butinge (Lithuania).

We take pole position for further growth

16 Thank You for Your attention

For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax: + 48 24 367 77 11 email: [email protected] www.orlen.pl

17 Agenda

 Supporting slides

18 From domestic leader to EU regional player

Domestic Business to 2002 „Internationalization” 20022005 Regional Business 2006+

Estonia Estonia Estonia

Latvia Latvia Latvia Lithuania Lithuania Lithuania

Poland Poland Poland Germany Germany Germany

Czech Republic Czech Republic Czech Republic

1999 2002 2006 +  Merger of Petrochemia Plock (Polish  Expansion into German retail market.  Acquisition of Lithuanian refinery Mazeikiu Nafta (from 2009 ORLEN Lietuva). largest refinery) with CPN (Polish largest  Joint venture with Basell – retailer) created PKN. Basell Orlen Polyolefins.  Implementation of segmental management.  IPO of 30% of equity on Warsaw Stock  Implementation of twotier branding Exchange and London Stock Exchange. strategy in retail segment in Poland and the 2005  Introduction of the new brand ORLEN. Czech Republic.  Acquisition of majority stake in Unipetrol  Strategy of ORLEN Capital Group for 2009 (Czech holding). 2013. 2000  Introduction and start of PKN ORLEN  CAPEX, OPEX, working capital and  Second public offer of PKN ORLEN on Retail Sales Development Plan for headcount optimization. WSE and LSE increased free float up to Poland.  Launch of petrochemical PX/PTA complex. 72%.  Introduction and start of Unipetrol Partnership Program.

19 Supply Routes Diversification Sea Oil Terminals in Gdansk and Butinge Guarantee Alternative Supply Routes

 Sea terminal [capacity] (70) Primorsk  [Ca Kirishi 6 Oil pipeline [capacity] 0] Yaroslavi Projected Oil pipeline [Ca 78] (18) 

[Ca 45] Refinery of PKN ORLEN Group Butinge DRUZHBA (14) [Ca 18] Mazeikiai [Ca  34] Naftoport (10.2; 10.3) Novopolotsk

Refinery (capacity m tonnes p.a.;  Rostock (30)  (8.3; 7.7)

[ [ Nelson complexity index) Holborn 22] Ca C a (3.8; 6.1) Schwedt Gdansk 25 (10.7; 10.2) (10.5 ; 10.0) ] Harburg 30] [Ca Mozyr     DRUZHBA (4.7; 9.6) (15.7; 4.6) Ca 120] [Ca 27] 0] [ Plock [Ca 55] [Ca 8 Leuna (16.3; 9.5) Litvinov ( 5.5 , 7.0) 4] (11.0; 7.1) 3 TrzebiniaJedlicze Ca Kralupy Drogobich [ Ingolstadt (3.4 ; 8.1) (0,5) (0,1) Brody IKL [Ca 10] (3.8; 3.0) [Ca (5.2; 7.5) 2 2 Bratislava DRUZHBA ] Burghausen [Ca 9] [Ca 20] Kremenchug Bayernoil (6.0 ; 12.3) ] Lisichansk (3.5; 7.3) 4 [Ca 9] (17.5;2 3.5) (12.8; 8.0) [Ca 3,5] (8.5; 8.2) Tiszaojvaro a [ Ca 29] Schwechat C

s [ (10.2; 6.2) Duna Petrotel Rafo ADRIA (8.1, 10.6) (2.6 ; 7.6) (3.4; 9.8) Yuzhniy Kherson Rijeka Petrobrazi Odessa(ex 4) (6.7; 3.1) Triest Novi Sad (4.4; 5.7) ADRIA (3.4; 7.3) (3.8; 3.5) Sisak (4.0 ; 4.6) Arpechim  (ex 12) (3.9; 4.1) (3.6 ; 7.3)  Pancevo Petromidia Novorossiys (4.8; 4.9) (5.1; 7.5) k Neftochim (ex 45) (5.6; 5.8)

Thessaloniki Izmit (3.2; 5.9) (11.5; 6.2) Kirikkale Izmir (5.0; 5.4) Elefsis (10.0; 6.4) Aspropyrgos (4.9; 1.0) (6.6; 8.9) Batman Corinth (1.1; 1.9) (4.9; 12.5)

Source: Oil & Gas Journal, PKN Orlen own calculations, Concawe,Reuters, WMRC, EIA, NEFTE Compass, Transneft.ru

20 ORLEN Lietuva maximizing the possessed potential

ASSETS

Sea terminal Ventspils (20,0 mt/y) (1 Latvia 4,3 m t/y) Pump station ) /y Illukste t Terminal m 0 (16,4 mt/y) ,, Sea terminal 4 Joniskis Polock (1 Biržai Storage depot Butinge MaOrlenžeiki ų Lietuva (14,0 mt/y) RefineryNafta Crude pipeline KlaipedaKlaipeda Products pipeline (9,0 mt/y) Rail transport Lithuania

KEY FACTS  ORLEN Lietuva manages ca. 500 km of pipelines in the territory of Lithuania (both crude oil and product pipelines).  Crude oil deliveries via sea to terminal in Butinge.  Products supply within Lithuania is managed by use of railway or tankers.  The potential product pipeline to Klaipeda would improve logistics of final products.  Costs optimization and improvement of operating parameters.  Postponing the date of advisor’s report on recommendation for the request of potential partners, for more detail analysis of the Company.

21 Unipetrol – continuation of operating efficiency improvement

ASSETS

e thylene

Litvínov 5.5 mt/y

Kralupy IKL Pardubice Pipeline 3.2 mt/y 1.0 mt/y 10 mt/y

Druzhba Mero Crude oil pipelines pipeline CEPRO production pipelines KEY FACTS 9 mt/y CEPRO depots

 Positive free cash flow as a result of ongoing strict cost control.  Continuation of the longterm trend in staff reduction.  Steadily growing market share in Czech retail from below 10% in 2005 to over 14% in 2011.  Revival of demand since 2010 allow to look optimistically to polyolefins market.

22 Relatively low rate of energy consumption per capita and need for new power plants indicates high potential for growth in the energy generation sector FORECAST FOR SUPPLY AND DEMAND FOR PEAK ELECTRICITY CONSUMPTION IN EUROPE, 20002007 POWER IN POLAND, 20052020, GW

Developed PKN ORLEN’s Rest Demand 1 2 countries markets Supply

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30 Electricity consumption Electricity consumption 28 CAGR 20002007, % per capita , 2007, ths. KWh 4,1 6,8 26 2,1 3,9 1,5 2,7 24 2005 2010 2015 2020  Currently energy consumption per capita on PKN ORLEN’s market is by ~ 40% lower than in developed countries 1. Forecasts indicate 23% increase in the electricity demand in Poland until 2030 p.a.  The profitability of the sector is increasing in the result of the expected imbalance between supply and demand  44% of existing power plants in Poland is over 30 years. Old units of 1115 GW (~3040% existing capacity) have been planned to be closed. Power capacities increase planned until 2020 of ~20 GW (includes both modernization of existing and construction of new plants). Top Polish energy companies (i.e. PGE, Tauron, Enea, Energa) have announced plans of extensive capital investments into increase of capacities, summing up to ~90 bn PLN  Despite the current economic slowdown, an increase in the wholesale electricity prices is expected in the coming years 1) Developed countries comprise: EU15, Norway, Switzerland and Slovenia. 2) PKN Orlen’s markets comprise: Poland, Czech Republic, Baltics) Source: EIA, IMF, PKN ORLEN analysis

23 New power plants are mostly required in the northern Poland

EXISTING AND PLANNED GENERATION CAPACITY UNTIL 2015 Concentration of generation sources

Cable from Power Plant Gdańsk (Lotos, PGNiG, Energa) Brown coal power stations Sweden (200 MW) Hard coal power stations Planned capacity El. Szczecin (8001000 MW) Planned LNG terminal El. Opalenie PGE (800 MW) (1600 MW) Dolna Odra Energa PGE ZEDO OstrołękaOstro le ka Włocławek Energa Jamal gas pipeline (1000 MW) PKN ORLEN PAK Płock refinery PAK  Northern Poland has a Enea Kozienice historical power deficit . PGE Kozienice (833 MW) Enea PGE Be lchat ów (2000 MW) PGE  The current production capacity Bełchatów (1600 MW) PGE Electrabel is concentrated mainly in the Tur(500ów MW) BOT PołaniecPo laniec Tauron south of the country. PGE Opole Tauron Tauron Wola (2000 MW)PKE PKE PGE Turów (400 MW) BlachowniaBlachownia  Some of the planned PGEOpole ŁagiszaLagisza Tauron SierszaSiersza (920 MW) HalembaHalemba JaworznoJaworzno Stalowa Wola greenfield capacities are ŁaziskaLaziska EdFRybnik /EnBW located north, near Anwil plant Rybnik CEZ Skawina Rybnik CEZ (9001000 MW) Skawina in Włocławek. (400 MW) RWE (800 MW)

24 Dividend policy: PKN ORLEN aims to pay dividends equal or higher than 50% of FCFE

Net profit + amortization Reference point for dividend policy – PKN ORLEN investment goals and opportunities:

Debt structure  taking into account mergers and adjusting to optimal level acquisitions FCFE  allowing for maintaining the optimal capital structure determined by the

Capex following ratios:  Covenant: Net Debt/EBITDA max. Net working 3.5 capital change  Gearing: Net Debt / Equity of 30% 40%

Dividend payout ratio 1999 2010 Dividend per share 1999 2010 50 3 40,0 2,5 40 2,13 30,0 2 30 25,1 1,62 20,3 1,5 20 15,4 1 0,65 0,14 10 3,3 3,0 0,5 0,12 0,0 0,0 0,0 0,0 0,0 0,05 0,05 0 0 0 0 0 0 0 1999 2001 2003 2005 2007 2009 1999 2001 2003 2005 2007 2009

25 Polkomtel Noncore investment of significant value

Shareholders’ structure Dividends

Dividend for the year: Paid in: PLN m 21.83% 24.39% 2006 2007 202 4.99% 2007 2008 245 24.39% 24.39% 2008 2008/09 305 2009 2009/10 137 2010 2010/11 373 PKN ORLEN Vodafone KGHM Węglokoks PGE  Cash inflow of PLN 3,7 bn for PKN ORLEN from sale of stake in Polkomtel in November 2011  Polish Office of Competition and Consumer Protection approved the transaction in October.  Preliminary agreement signed in June for the sale of 100% shares to Spartan Capital Holdings Sp. z o.o., including the entire 24,39% shareholding owned by PKN ORLEN.  The total transaction consideration implies an Enterprise Value of PLN 18,1 bn.  After deductions attributable to debt and dividend the net proceeds amount to PLN 15,1 bn .  Capital profit before tax will amount to PLN 2,5 bn.

26 Effective execution of twotier branding strategy as a response to market polarization

PKN ORLEN branding strategy

PREMIUM ECONOMICAL  Successful rebranding of heritage network of mixed brands into premium ORLEN and Poland economical BLISKA networks.

 Market research is to help to determine the final branding strategy. Czech Republic  Building a solid foundation for the future development of high quality ORLEN network. Lithuania

 Focus on economical STAR network with competitive prices and superior customer service. Germany

27 Disclaimer

This presentation (“Presentation”) has been prepared by PKN ORLEN S.A. (“PKN ORLEN” or “Company”). Neither the Presentation nor any copy hereof may be copied, distributed or delivered directly or indirectly to any person for any purpose without PKN ORLEN’s knowledge and consent. Copying, mailing, distribution or delivery of this Presentation to any person in some jurisdictions may be subject to certain legal restrictions, and persons who may or have received this Presentation should familiarize themselves with any such restrictions and abide by them. Failure to observe such restrictions may be deemed an infringement of applicable laws.

This Presentation contains neither a complete nor a comprehensive financial or commercial analysis of PKN ORLEN and of the PKN ORLEN Group, nor does it present its position or prospects in a complete or comprehensive manner. PKN ORLEN has prepared the Presentation with due care, however certain inconsistencies or omissions might have appeared in it. Therefore it is recommended that any person who intends to undertake any investment decision regarding any security issued by PKN ORLEN or its subsidiaries shall only rely on information released as an official communication by PKN ORLEN in accordance with the legal and regulatory provisions that are binding for PKN ORLEN.

The Presentation, as well as the attached slides and descriptions thereof may and do contain forwardlooking statements. However, such statements must not be understood as PKN ORLEN’s assurances or projections concerning future expected results of PKN ORLEN or companies of the PKN ORLEN Group. The Presentation is not and shall not be understand as a forecast of future results of PKN ORLEN as well as of the PKN ORLEN Group.

It should be also noted that forwardlooking statements, including statements relating to expectations regarding the future financial results give no guarantee or assurance that such results will be achieved. The Management Board’s expectations are based on present knowledge, awareness and/or views of PKN ORLEN’s Management Board’s members and are dependent on a number of factors, which may cause that the actual results that will be achieved by PKN ORLEN may differ materially from those discussed in the document. Many such factors are beyond the present knowledge, awareness and/or control of the Company, or cannot be predicted by it.

No warranties or representations can be made as to the comprehensiveness or reliability of the information contained in this Presentation. Neither PKN ORLEN nor its directors, managers, advisers or representatives of such persons shall bear any liability that might arise in connection with any use of this Presentation. Furthermore, no information contained herein constitutes an obligation or representation of PKN ORLEN, its managers or directors, its Shareholders, subsidiary undertakings, advisers or representatives of such persons.

This Presentation was prepared for information purposes only and is neither a purchase or sale offer, nor a solicitation of an offer to purchase or sell any securities or financial instruments or an invitation to participate in any commercial venture. This Presentation is neither an offer nor an invitation to purchase or subscribe for any securities in any jurisdiction and no statements contained herein may serve as a basis for any agreement, commitment or investment decision, or may be relied upon in connection with any agreement, commitment or investment decision.

28 For more information on PKN ORLEN, please contact Investor Relations Department: telephone: + 48 24 256 81 80 fax + 48 24 367 77 11 email: [email protected] www.orlen.pl

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