HAIFA, Israel, August 23, 2010 /PRNewswire/ --

- Consolidated Net Profit for the Second Quarter of 2010 Totaled $32 Million Compared With Net Loss of $8 Million in the Second Quarter of 2009 - Consolidated Adjusted EBITDA for First Half 2010 Totaled $113 Million Compared With $71 Million in Same Period Last Year - Consolidated Adjusted EBITDA for Second Quarter Totaled $80 Million Compared With $23 Million in the Same Quarter of the Previous Year - Consolidated Operating Income for Second Quarter Totaled $50 Million Compared With a Zero Balance in Same Quarter Last Year - Adjusted Refining Margin for the Second Quarter at USD/bbl 4.6, 31% Higher Than USD/bbl 3.5 Average Reuter's Quoted Mediterranean Ural Cracking Margin

Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter the Company, ORL), Israel's largest integrated refining and petrochemical group, announced today its financial results for the second quarter 2010, ending June 30, 2010. Results are reported in US Dollars and under International Financial Reporting Standards (IFRS).

- Adjusted refining margin USD/bbl 4.6, 31% higher than USD/bbl 3.5 average Reuter's quoted Mediterranean Ural Cracking Margin - Consolidated adjusted EBITDA at $80 million compared with $23 million in the same quarter of the previous year - Consolidated adjusted EBITDA in the Refining and Trade segment totaled $33 million in the second quarter of 2010 compared with $8 million in the same quarter of the previous year - EBITDA from Petrochemicals segment totaled $47 million in the first quarter of 2010 compared with $18 million in the corresponding quarter of the previous year.

Note: This period saw volatility in the price of crude oil and its products, with crude oil prices in April rising to levels not seen since the end of 2008. Until the Euro devaluation financial market crisis, Brent crude oil was trading at a price of $85 a barrel. In May of this year, crude oil prices declined significantly and those rose again in June to $75 a barrel.

As accepted by major leading international refiners and marketers of oil and its products, the results are presented as reported as well as net of the accounting provision for inventory gains or write offs, in addition to buying and selling timing and derivative accounting methods under IFRS. This is in order to enable a common base for comparison of the Company's ongoing operations.

SECOND QUARTER 2010 ($ million)

Operating Profit EBITDA 4-6/10 4-6/09 4-6/10 4-6/09 Refining Segment 30 (5) 39 6 Adjusted Trade Segment (6) 2 (6) 2 Petrochemicals 26 (1) 38 6 Segment - Polymers Petrochemicals 5 10 6 12 Segment - Aromatics Petrochemicals 2 - 3 - Segment - Lube-Oils

Adjusted refining margin for Q2 2010 totaled USD/bbl 4.6, compared with the average Mediterranean Ural Cracking Margin quoted by Reuters of USD/bbl 3.5. Adjusted refining margin for Q2 2009 totaled USD/bbl 2.5 compared with the average Mediterranean Ural Cracking Margin of USD/bbl 1.4.

Adjusted consolidated EBITDA for Q2 2010 totaled $80 million compared with $23 million in Q2 2009. The increase is attributed to the improved margins in the refining and petrochemical segments of about $69 million, as well as an increase in sales of about $18 million. This was offset by a decline in other revenues of about $12 million and a rise in fixed costs of about $18 million.

Financing income for Q2 2010 totaled $4 million, compared with a financing expense of $6 million in Q2 2009.

The consolidated net income for Q2 2010 totaled $32 million, compared with a net loss of $8 million in Q2 2009.

KEY DEVELOPMENTS

- Following the completion of the acquisition of Carmel Olefins (CAOL) shares, the Company has consolidated the headquarters and operational activities of CAOL with ORL and is pursuing a rapid achievement of the merger benefits between the companies. - In June, the company activated the second and final stage of converting the HVGO desulphurization plant. Activation of Stage 2 is expected to increase the Company's production of diesel fuel by an additional 3-4%. - Significant progress was made during the period in completing the connection of the natural gas pipeline to the Company's facilities. This project, which is expected to be completed by the end of 2010, will enable all of the Company's facilities to run on natural gas and is expected to yield operational efficiencies. - As part of the company's strategic plan, carried out various projects in the areas of the environment as well as the reliability, safety and security of the facilities, totaling approximately $113 million. - The company recently completed a financing agreement designated to provide for the credit needs of the company until the end of 2012. The financing agreement was signed between the Company and a consortium of financing bodies led by Bank Hapoalim (totaling up to $600 million) and an American financial institution, with financing guaranteed by the U.S. Export Credit Agency (totaling up to $300 million).

FIRST HALF 2010 ($ million)

Operating Profit EBITDA 1-6/10 1-6/09 1-6/10 1-6/09 Refining Segment 28 17 47 37 Adjusted Trade Segment (8) 3 (8) 3 Petrochemicals 31 - 55 14 Segment - Polymers Petrochemicals 13 16 16 20 Segment - Aromatics Petrochemicals 5 - 6 - Segment - Lube-Oils

The utilization rate for the first half of 2010 was at 93.7%, compared with 85% for same period in 2009. Quantity refined totaled 4,489 tons compared with 3,771 tons in the same period of the previous year. Output in petrochemicals segment for the first half of 2010 was as follows: Polymers, approximately 363 thousand tons; Aromatics, approximately 266 thousand tons; Lube-Oils, approximately 34 thousand tons.

Adjusted refining margin for the first half totaled USD/bbl 3.9, compared with the average Mediterranean Ural Cracking Margin quoted by Reuters of USD/bbl 3.5. Adjusted refining margin for 1H 2009 totaled USD/bbl 3.5 compared with the average Mediterranean Ural Cracking margin of USD/bbl 2.4.

Adjusted consolidated EBITDA for the first half totaled $113 million compared with $71 million in the same period of the previous year. The increase is attributed to the improved margins in the refining and petrochemical segments of about $72 million, as well as an increase in sales of about $22 million. This was offset by a decline in other revenues of about $14 million and a rise in costs of about $38 million. The rise in cost is attributed to fluctuations in the exchange rate, one- off expenses and changes in transport and energy costs.

Financing expenses for the first half totaled $8 million, compared with a financing income of $9 million in the same period of the previous year.

The consolidated net income for the first half totaled $29 million, compared with a net income of $67 million in the same period of the previous year.

Mr. Yashar Ben Mordechai, CEO of Oil Refineries: The flexibility of ORL's facilities along with the investments made in the past two years to improve the Company's production abilities and diversity are positively impacting this quarter's results. This flexibility helps us maximize our operational capabilities by enabling us to adjust our production to more profitable sectors within our company at any given time and as needed. Indeed, the increased integration of the petrochemicals sector along with the finalization of our acquisition of CAOL is producing significant synergies. In addition, improvements made, such as facility conversions and upgrades as well as the activation of stage 2 of converting the HVGO desulphurization plant, which has now been operational since June, are also contributing to our results. We expect that stage 2 will contribute to overall margins of the company's diesel fuel production by about 3 - 4% in total.

Mr. Ben Mordechai added: With the arrival of the natural gas pipeline, along with the establishment of the hydrocracker, which is expected to be operational in mid-2012, the Company will become a leading player in the area and will be able to leverage additional opportunities in global markets

Mr. Yossi Rosen, Chairman of the Board of Oil Refineries: ORL's EBITDA and operating profit demonstrate the effectiveness of the Company's strategic plan, which is based on upgrading the Company's facilities and developing flexibility. This flexibility allows the company to take advantage of rising opportunities while enabling it to weather market volatility, all while yielding good results over time. The arrival of the natural gas pipeline to Haifa Bay, expected later this year, will enable the company to operate in a more environmentally sustainable way. Construction of the hydrocracker is an important part of the Company's strategic plan and will convert Oil Refineries into a unique and leading refinery in the area, integrating the capabilities of its petrochemical industries with its refining capability at a high level.

Mr. Rosen further added: The $900 million financing package for further investments as part of the Company's strategic plan was secured. This package will finance the investment in the hydrocracker (expected to cost $500 million), the refinancing of the Company's debt and the investments in environmental and safety initiatives. This is the largest financing plan implemented in the Israeli market and will help enhance the Company's long-term sustainability.

Conference Call

The Company will also be hosting a conference call later today, Monday, August 23rd, 2010. On the call, management will present a presentation reviewing the first quarter highlights and industry trends. The presentation is available for download from the Company's website http://www.orl.co.il: Investor Relations Financial Reports.

To participate in the conference call, please call one of the following teleconferencing numbers. Please begin placing your calls at least 10 minutes before the conference call commences. If you are unable to connect using the toll-free numbers, please try the international number.

US Dial-in Numbers: 1-888-668-9141

UK Dial-in Number: 0-800-917-5108

Israel Dial-in Number: 03-918-0644

International Dial-in Number: +972-3-918-0644

at: 14:00 UK Time, 9:00 ET, 6:00 PT, 16:00 Israel time. A replay of the call will be available after the call on the Company's website at http://www.orl.co.il.

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest integrated refining and petrochemical group. It is one of the leading refineries in the Eastern Mediterranean area and integrates, on-site, petrochemical businesses. ORL runs sophisticated and state-of-the-art industrial facilities with a refining capacity of 9.8 million tons of crude oil per year and a Nelson Complexity Index of 7.4, providing a variety of quality products used in industrial operation, transportation, private consumption, agriculture and infrastructure. The Company's petrochemical sector produces Polymers (through its ownership of Carmel Olefins Ltd), Aromatics (through its ownership of Gadiv Petrochemical Industries Ltd), and Lube-Oils (through its ownership of Haifa Basic Oils Ltd). The Company's shares are listed on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit http://www.orl.co.il.

The above noted in this release includes forward-looking statements based on Company data, as well as Company plans and estimations based on this data. The activity, results and other data may be substantially different in reality given uncertainty and various risks, including those discussed under risk factors in the Company's financial statements and Director's reports.

Condensed Consolidated Interim Statements of Financial Position USD thousands June 30, June 30, December 31, 2010 2009 2009 (Unaudited) (Audited) Current assets Cash and cash equivalents 19,272 16,827 34,961 Deposits 65,060 99,274 77,637 Financial derivatives 13,958 337 - Investments in financial assets at fair value through comprehensive income 96,532 102,130 107,034 Trade receivables 471,971 306,644 360,876 Other receivables and debt balances 68,863 65,959 62,495 Inventory 1,004,515 785,256 1,016,453 Current tax assets 8,006 43,845 3,957 Total current assets 1,748,177 1,420,272 1,663,413 Non-current assets Investments in equity-accounted investees 16,322 34,971 13,673 Investments in available-for-sale financial assets 9,130 9,238 10,909 Loan to Haifa Early Pensions Ltd. 70,133 69,769 76,053 Long term loans and debit balances 3,479 2,625 3,951 Financial derivatives 139,080 74,038 120,671 Employee benefit plan assets 9,682 5,378 9,993 Property, plant and equipment 1,900,585 1,137,838(*) 1,891,659(*) Deferred expenses 8,434 315(*) 1,366(*) Intangible assets 86,782 20,663 93,187 Total non-current assets 2,243,627 1,354,835 2,221,462 Total assets 3,991,804 2,775,107 3,884,875

(*) Reclassified

Condensed Consolidated Interim Statements of Financial Position USD thousands June 30, June 30, December 31, 2010 2009 2009 (Unaudited) (Audited) Current liabilities Loans and borrowings 866,475 678,484 603,685 Trade payables 553,725 302,229 542,025 Other payables and 122,267 67,169 105,903 credit balances Financial derivatives 249 35,174 28,051 Provisions 13,427 13,192 11,582 Other liabilities 13,350 - - Total current liabilities 1,569,493 1,096,248 1,291,246 Non-current liabilities Debentures 820,791 698,583 853,205 Bank loans 290,039 187,847 358,310 Liabilities for finance 8,591 8,285 8,768 lease Other long-term - 7,678 15,973 liabilities Financial derivatives 13,277 656 3,111 Employee benefits 61,822 50,388 63,871 Deferred tax liabilities 141,402 87,872 138,464 Total non-current 1,335,922 1,041,309 1,441,702 liabilities Total liabilities 2 ,905,415 2,137,557 2,732,948 Capital Non-controlling - - 17,183 interests Share capital 586,390 472,478 586,390 Share premium 100,242 - 100,242 Reserves 33,636 33,345 35,571 Retained earnings 366,121 131,727 412,541 Total equity attributed 1,086,389 637,550 1,134,744 to shareholders of the Company Total capital 1,086,389 637,550 1,151,927 Total liabilities and 3 ,991,804 2,775,107 3,884,875 capital

Condensed Consolidated Interim Statement of Comprehensive Income USD thousands Six months ended June 30, June 30, 2010 2009 (Unaudited) Revenue 3,582,810 2,192,401 Cost of sales, refinery and services 3,491,686 2,013,733(*) Revaluation of open positions in derivatives on prices of goods and margins, net (38,032) 47,863 Total cost of sales 3,453,654 2,061,596 Gross profit 129,156 130,805 Selling expenses (55,874) (34,450)(*) General and administrative expenses (34,417) (16,202)(*) Negative goodwill arising on a business combination - - Profit from revaluation of a prior holding due to increase in control - - Loss from the loss of material impact in a former equity-accounted investee, net of tax - (7,091) Operating profit (loss) 38,865 73,062 Finance income 59,277 44,271 Finance expenses (67,716) (35,798) Finance income (expenses), net (8,439) 8,473 Company's share in profits (losses) of equity-accounted investees (net of tax) 342 3,838 Profit (loss) before taxes on income 30,768 85,373 Tax benefits (taxes on income) (2,084) (18,763) Profit (loss) for the period 28,684 66,610 Items of other comprehensive income (loss) Actuarial gains (losses) from a defined benefit plan, net (104) 6,679 Foreign exchange translation differences (818) (27) Group's share of other comprehensive income of an equity-accounted investee - 10,433 Change in fair value of available-for-sale financial assets, net of tax (1,459) 823 Other comprehensive income (loss), net of tax (2,381) 17,908 Comprehensive income for the period: 26,303 84,518 Earnings (loss) per share (USD) Basic and diluted earnings (losses) per ordinary share (in USD) 0.012 0.033 (continued) Three months ended Year ended June 30, June 30, December 2010 2009 31, 2009 (Unaudited) (Audited) Revenue 1,878,039 1,208,043 5,141,480 Cost of sales, refinery and services 1,828,033 1,139,078(*) 4,842,805(*) Revaluation of open positions in derivatives on prices of goods and margins, net (42,676) 46,618 38,606 Total cost of sales 1,785,357 1,185,696 4,881,411 Gross profit 92,682 22,347 260,069 Selling expenses (29,785) (14,130)(*) (74,067)(*) General and administrative expenses (19,827) (8,306)(*) (36,175)(*) Negative goodwill arising on a business combination - - 137,000 Profit from revaluation of a prior holding due to increase in control - - 77,561 Loss from the loss of material impact in a former equity-accounted investee, net of tax - (7,091) (7,091) Operating profit (loss) 43,070 (7,180) 357,297 Finance income 29,694 (14,501) 61,223 Finance expenses (26,026) 8,609 (86,866) Finance income (expenses), net 3,668 (5,892) (25,643) Company's share in profits (losses) of equity-accounted investees (net of tax) 163 (753) 4,892 Profit (loss) before taxes on income 46,901 (13,825) 336,546 Tax benefits (taxes on income) (14,630) 5,844 12,698 Profit (loss) for the period 32,271 (7,981) 349,244 Items of other comprehensive income (loss) Actuarial gains (losses) from a defined benefit plan, net (232) 6,512 4,859 Foreign exchange translation differences (494) 227 77 Group's share of other comprehensive income of an equity-accounted investee - 15,232 10,433 Change in fair value of available-for-sale financial assets, net of tax (6,892) 823 2,270 Other comprehensive income (loss), net of tax (7,618) 22,794 17,639 Comprehensive income for the period: 24,653 14,813 366,883 Earnings (loss) per share (USD) Basic and diluted earnings (losses) per ordinary share (in USD) 0.013 (0.004) 0.175

(*) Reclassified

The following tables present selected information of the Group for the six months ended June 30, 2010 compared to the corresponding period last year

Refining Trade Six months ended June 30 2010 2009 2010 2009 Revenue 2,645 1,640 96 230 Inter-company operations 488 189 - 18 Total sales 3,133 1,829 96 248 Cost of sales 3,054 1,718 101 244 Inter-company operations 22 19 - - Total cost of sales 3,076 1,737 101 244 Gross profit (loss) 57 92 (5) 4 Selling, general and administrative expenses 34 28 3 1 Inter-company operations - - - - 34 28 3 1 Operating profit (loss) for segments 23 64 (8) 3 Loss from loss of material impact in an equity-accounted investee Amortization of the excess cost arising from acquisition of investees Operating profit Finance income (expenses), net Share in profits (losses) of investees, net of tax Profit before income tax Income tax Profit for the period (continued) Petrochemicals Polymers Aromatics Oils Six months ended June 30 Revenue 2010 2009 2010 2009 2010 2009 Inter-company operations Total sales 535 177 268 146 39 - Cost of sales - - 22 19 - - Inter-company operations 535 177 290 165 39 - Total cost of sales 249 99 22 1 11 - 224 66 237 136 22 - Gross profit (loss) 473 165 259 137 33 - Selling, general and administrative expenses 62 12 31 28 6 - Inter-company operations 30 11 17 11 1 - 1 1 1 1 - - Operating profit (loss) for segments 31 12 18 12 1 - Loss from loss of material impact in an equity-accounted investee 31 - 13 16 5 - Amortization of the excess cost arising from acquisition of investees Operating profit Finance income (expenses), net Share in profits (losses) of investees, net of tax Profit before income tax Income tax Profit for the period (continued) Adjustments to consolidated Consolidated Six months ended June 30 2010 2009 2010 2009 Revenue - - 3,583 2,193 Inter-company operations (510) (226) - - Total sales (510) (226) 3,583 2,193 Cost of sales - - 3,437 2,062 Inter-company operations (505) (221) - - Total cost of sales (505) (221) 3,437 2,062 Gross profit (loss) (5) (5) 146 131 Selling, general and administrative expenses - - 85 51 Inter-company operations (2) (2) - - (2) (2) 85 51 Operating profit (loss) for segments (3) (3) 61 80 Loss from loss of material impact in an equity-accounted investee - (7) Amortization of the excess cost arising from acquisition of investees (22) - Operating profit 39 73 Finance income (expenses), net (8) 9 Share in profits (losses) of investees, net of tax - 4 Profit before income tax 31 86 Income tax (2) (19) Profit for the period 29 67

The following tables present selected information of the Group for the three months period

Refining Trade Three months ended June 30 2010 2009 2010 2009 Revenue 1,413 855 28 172 Inter-company operations 242 104 - 18 Total sales 1,655 959 28 190 Cost of sales 1,601 946 32 187 Inter-company operations 11 10 - - Total cost of sales 1,612 956 32 187 Gross profit (loss) 43 3 (4) 3 Selling, general and administrative expenses 20 11 2 1 Inter-company operations - - - - 20 11 2 1 Operating profit (loss) for segments 23 (8) (6) 2 Loss from loss of material impact in an equity-accounted investee Amortization of the excess cost arising from acquisition of investees Operating profit (loss) Finance income (expenses), net Share in losses of investees, net of tax Profit (loss) before taxes on income Tax benefits (income tax) Net profit (loss) for the period (continued) Petrochemicals Polymers Aromatics Oils Three months ended June 30 2010 2009 2010 2009 2010 2009 Revenue 274 92 141 89 22 - Inter-company operations - - 11 10 - - Total sales 274 92 152 99 22 - Cost of sales 123 48 17 5 8 - Inter-company operations 110 40 120 78 11 - Total cost of sales 233 88 137 83 19 - Gross profit (loss) 41 4 15 16 3 - Selling, general and administrative expenses 14 4 10 6 1 - Inter-company operations 1 1 - - - - 15 5 10 6 1 - Operating profit (loss) for segments 26 (1) 5 10 2 - Loss from loss of material impact in an equity-accounted investee Amortization of the excess cost arising from acquisition of investees Operating profit (loss) Finance income (expenses), net Share in losses of investees, net of tax Profit (loss) before taxes on income Tax benefits (income tax) Net profit (loss) for the period Adjustments to consolidated Consolidated Three months ended June 30 2010 2009 2010 2009 Revenue - - 1,878 1,208 Inter-company operations (253) (132) - - Total sales (253) (132) 1,878 1,208 Cost of sales - - 1,781 1,186 Inter-company operations (252) (128) - - Total cost of sales (252) (128) 1,781 1,186 Gross profit (loss) (1) (4) 97 22 Selling, general and administrative expenses - - 47 22 Inter-company operations (1) (1) - - (1) (1) 47 22 Operating profit (loss) for segments - (3) 50 - Loss from loss of material impact in an equity-accounted investee - (7) Amortization of the excess cost arising from acquisition of investees (7) - Operating profit (loss) 43 (7) Finance income (expenses), net 3 (6) Share in losses of investees, net of tax - (1) Profit (loss) before taxes on income 46 (14) Tax benefits (income tax) (14) 6 Net profit (loss) for the period 32 (8)

Company Contact: Rony Solonicof Chief Economist and Head of IR Tel. +972-4-878-8320 Contact IREn@orl.co.il Investor Relations Contact: Ehud Helft / Porat Saar CCG Israel Tel. (US) +1-646-233-2161 / (Int.) +972-52-776-3687 info@ccgisrael.com

SOURCE: Oil Refineries Ltd

CONTACT: Company Contact: Rony Solonicof, Chief Economist and Head of IR,Tel. +972-4-878-8320, Contact IREn@orl.co.il, Investor Relations Contact:Ehud Helft / Porat Saar, CCG Israel, Tel. (US) +1-646-233-2161 / (Int.)+972-52-776-3687, info@ccgisrael.com