Mandatory Reserves

In 2008, we stored mandatory oil reserves at the Production Plant in Płock, in underground storages of IKS “Solino” SA and at the Mažeikiai refinery. We stored finished fuel at 23 locations in Poland and in one of the leased terminals in Lithuania.

According to Czech legislation, mandatory reserves in the Czech Republic are stored by a competent government agency.

Poland

2008 was the final year for implementing the amended Mandatory Reserves Act in terms of securing an increase in crude oil and liquid fuel reserves up to the target value corresponding to 76 times of daily net crude oil import.

Moreover, early in 2008 we had to obtain an additional increase in crude oil reserves in order to comply with the requirements of the International Energy Agency, involving a new method of calculating the amount of reserves.

In 2008, ORLEN Group stored 76-day mandatory reserves at the Production Plant in Płock, in underground storages of IKS “Solino” SA and at 23 storage facilities across Poland. 14-day reserves were covered by the Material Reserves Agency.

The Czech Republic

According to Czech legislation, mandatory fuel and crude oil reserves are stored by a dedicated government agency.

Lithuania

At the end of 2008, AB Mažeikiu Nafta stored 41.5-day mandatory reserves, i.e. half of total annual reserves. The other half was covered by the State Agency Storing Mandatory Reserves, financed from government funds. Until the end of 2009, AB Mažeikiu Nafta has to cover 60-day reserves, whereas the Lithuanian State Agency will reduce its reserves to 30 days.

Oil reserves were stored at the Mažeikiai refinery, whereas finished products – at two terminals leased in Lithuania.