Cancellation of Concession for research of hydrocarbons between Government of Montenegro and JPK, a subsidiary of HELLENIC PETROLEUM S.A.

Regarding publicity concerning the above matter, the following should be noted:

HELLENIC PETROLEUM and its subsidiary JPK have not received any formal notification from the government of Montenegro of its intention to cancel the agreement for concessions in the underwater region of the Country and the possible declaration of a new competition (Block 3 – Ulcini region).

As is well known and in accordance with the relevant contract, JPK has undertaken the contractual obligation to conduct exploration to locate possible deposits of hydrocarbons in three regions of southern Montenegro (Blocks 1 & 2 in the region of Prevlaka and Block 3 in the region of Ulcini). The obligations being disputed concern drillings in Block 3 – Ulcini, which have not yet been carried out by JPK and its associates chiefly due to the inability of the Government to set up the legislative framework governing Exploration and Production of Hydrocarbons in Montenegro.

Within the framework of continuous consultations the Management of the company has repeatedly requested the government of Montenegro to carry out appropriate legislative measures for the creation of an institutional framework in line with international practice. Analogous representations have been made on a political level by the Greek diplomatic mission there.

Unfortunately, despite the long consultations between the two sides, there has been no positive response from the government of Montenegro up to now.

According to foreign publications the President of the Government, Milo Djukanovic, is said to have declared that the new energy law is expected to be passed around the end of 2006.

The HELLENIC PETROLEUM Group will respond accordingly once it has received official government notification.