The Management Board of Grupa LOTOS S.A. hereby reports that on October 24th 2006 Grupa LOTOS S.A. concluded with PETRACO OIL COMPANY Limited of Guernsey an agreement for the supply to Grupa LOTOS S.A. of 9,000,000 (nine million) tonnes of REBCO crude oil, using Rosneft resources, in the period from January 1st 2007 to December 31st 2011. The agreement provides for an option to extend its term for another year. The expected value of deliveries to be made under the agreement until 2011 is approx. USD 2,600,000,000 (two billion and six hundred million U.S. dollars) (PLN 8,024,900,000 translated at the mid-exchange rate quoted by the National Bank of Poland for the US dollar as at October 24th 2006). The agreement provides for standard contractual penalties and its terms and conditions do not differ from the terms and conditions customarily applied in agreements of such type. Execution of the agreement is part of the Company’s strategy for the years 2006–2012, which provides for the diversification of oil supplies to be implemented through: - increased own production, - supplies delivered via the Druzhba Pipeline from countries east of Poland, - supplies delivered by sea from other sources. The agreement was deemed significant as its estimated value exceeded 10% of the shareholders’ equity of Grupa LOTOS S.A. Legal basis for the publication of the current report: Par. 5.1.3 of the Regulation of the Minister of Finance on current and periodic information to be published by issuers of securities of October 19th 2005.
Execution of Oil Supply Agreement between Grupa LOTOS S.A. and PETRACO OIL COMPANY Ltd.
Report no. 96/20052006-10-25