HAIFA, Israel, May 21 /PRNewswire/ -- Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries" or the "Company") announced today its financial results for three months ending March 31, 2008.

The following reports are accounted for under IFRS is US dollars. During the first quarter of 2008 the Company expanded its segment reporting and, in addition to the segments reported, the Company added a Trade sector. The Company is implementing its strategic plan in all areas of activity.

First Quarter Highlights - Refining margin USD/bbl 3.7, compared to USD/bbl 6.8 in 2007; decline primarily follows industry-wide margin erosions - Average Mediterranean Ural Cracking Margin USD/bbl 3.7 - Expanded segment reporting during the quarter, added new reporting segment - Trade - Under new strategic plan expanding trade activities; includes trade in crude oil, products and derivatives - Under the strategic plan seeking additional areas for expansion - Announced progressing in joint review, with Israel Petrochemical Industries, Company's acquisition of 50% balance of shares of Carmel Olefins

Refining margin for the first quarter 2008 totaled USD/bbl 3.7, compared to a USD/bbl 6.8 refining margin in the first quarter 2007. The decline in refining margins year over year follows the industry-wide refining margin erosion. The quarterly Mediterranean Ural Cracking Margin average quoted by Reuters totaled USD/bbl 3.7 during the reported period.

Consolidated EBITDA for the first quarter 2008 totaled $33 million, compared to $72 million consolidated EBITDA in the first quarter last year.

Consolidated Operating Profit for the first quarter 2008 totaled $16 million, compared to a consolidated operating profit $51 million in the first quarter last year.

Operating profit from the Refining Segment totaled $5 million, compared to $41 million in the first quarter last year. The decrease in the Refining Segment's operating profit is mainly due to a $66 million decline in refining margins. Following the implementation of IFRS accounting standards the Company recorded, during the quarter, an accounting loss of approximately $11 million, compared to $33 million in the first quarter last year, resulting from the reporting treatment of prices of open positions products and refining margin derivative transactions. The decline in refining operating income was partially offset by the $22 million decline in the derivative losses, an increase in sales and refining quantities, as well as an increase in other revenues net, of higher operational expenses.

Operating profit from the newly established and manned Trade Segment totaled $2 million. Operating profit for the Petrochemicals Segment totaled $9 million, compared to $10 million in the first quarter last year. The Petrochemicals Segment includes the results of the Polymers Section, which generated an operating loss of $1 million compared to an operating profit of $5 million in the first quarter last year. The decline primarily follows an increase in manufacturing expenses associated with the activation of the new units, which are due to increase manufactured quantities, as well as a decline in product margins. This segment also includes the results of the Aromatics Section, which contributed a $10 million during the quarter, compared to $5 million in the first quarter last year. The increase in the aromatics' operating profit is primarily due to the increase in product margins compared to the first quarter last year.

Consolidated net income for the first quarter totaled $2 million, compared to $11 million in the first quarter last year. The decline in the net income is primarily driven by the above noted decline in the operating income.

Mr. Yashar Ben-Mordechai, Oil Refineries' CEO said "during the first quarter refining margins remained at low levels mainly resulting from the demand, some of which speculative, in the oil market which drove an increase in the oil prices. This increase was not accompanied by a similar increase in prices of oil products. On the other hand, during the first quarter there was an increase in demand for fuels and refined products in the local market. Oil Refineries' flexibility and broad knowledge, enables for the maximization and efficiency of the refining processes, while the revenues from the various segments enables for margin stabilization in volatile times."

Mr. Yossi Rosen, Oil Refineries Chairman of the Board noted, "The next stage in the strategic plan includes several parallel processes. As part of its implementation, the Company has set in motion an additional stage in several of the segments - we intend to continue and increase the trade segment, leveraging our accumulated knowledge and network of contacts to drive this area. Furthermore, this week we announced that we are ready to supply transportation fuel and diesel at Euro 5 standards, a step which will contribute to increased use of environmentally friendly fuels."

Mr. Rosen added that the Company is currently reviewing, together with Israel Petrochemical Enterprises, the possibility of merging the Company and Carmel Olefins: "the merger between the Companies, while leveraging the joint synergies, will provide Oil Refineries a competitive advantage."

Implementation and Progress in Strategic Plan Refining Segment - Completed organization and manning of segment - Launched several major projects: - Increasing flexibility of crude unit 4 - underway - Converting HVGO hydro-treater into mild Hydrocracker - underway - Building a Hydrocracker - Reactors ordered, planning process underway. Will be brought before the BOD for final approval in Sept. 08 - Various environmental protection projects (approx. $70m) - approved and underway - Erecting an electricity co-generation plant - configuration review stage completed, will be soon brought before Board of Directors for approval Trade Segment - Established advanced and modern trade center; initiated implementation of an information system to manage trade in fuel products. The segment started conducting trade activities already in the first quarter 2008. Petrochemical Segments - Increased manufacturing of Paraxylene and Benzene; the projects were approved and initiated implementation - Increased manufacturing of Phthalic Anhydride - under implementation - Initiating M&A in the area of manufacturing and logistics - purchased a share of Domo, a Netherland-based Polypropylene manufacturer. Advanced stages of review in additional European regions, the Mediterranean basin and the Far East Company Corporate - Raised $474m in debentures at the end of 2007 to finance projects - Company reviewing opportunities to take advantage of business opportunities overseas - Completed establishing and manning of business development and capital market team - Adopted and implemented internal anti-trust and securities' law enforcement plans

Conference Call

The Company will also be hosting a conference call later today at 10:00am ET. On the call, management will present a presentation reviewing the first quarter 2008 highlights and industry trends. The presentation can be downloaded from the Company's website www.orl.co.il : Investor Relations > Financial Reports prior to the call. 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 dial-in number.

US Dial-in Numbers: 1-888-281-1167 UK Dial-in Number: 0-800-917-9141 Israel Dial-in Number: 03-918-0688 International Dial-in Number:+972-3-918-0688 at: 10:00am Eastern Time, 3:00pm UK, 5:00pm Israel

A replay of the call will be available, after the call, on the Company's website at http://www.orl.co.il. Alternatively, for two days following the end of the call, investors will be able to dial a replay number to listen to the call. The dial-in numbers are: The dial-in numbers are: +1-877-456-0009 (US); +972-3-925-5942 (International).

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, operates Israel's largest oil refinery. ORL operates sophisticated and state-of-the-art industrial facilities with refining capacity of 9 million tons of crude oil per year, with 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 is also active in the area of Aromatics and Polymers through wholly-owned Gadiv Petrochemical Industries Ltd and 50% owned Carmel Olefins Ltd. ORL is traded on the Tel Aviv Stock Exchange under the ticker ORL. For additional information please visit the Company's website: http://www.orl.co.il

Oil Refineries Ltd. Consolidated Balance Sheet In thousand US Dollars March 31, March 31, December 31, 2008 2007 2007 (unaudited) (audited) Assets Cash and cash equivalents 1,858 47,507 259,325 Derivatives at fair value through profit and loss 10,389 794 6,513 Investment in financial assets at fair value through profit and loss 275,386 101,543 113,035 Trade receivables 469,185 437,771 394,470 Receivables and debit balances 121,628 98,092 84,029 Income tax 26,004 - 10,153 Inventory 1,161,466 673,076 1,042,545 Total current assets 2,105,916 1,358,783 1,910,070 Investments and long-term loans Investees 44,552 56,017 53,958 Loan to Haifa Early Pensions Ltd. 88,833 72,104 80,038 Long term loans and debit balances 2,039 1,767 6,202 Derivatives at fair value through profit and loss 65,055 - - Excess of funded amounts over the liability for severance pay, net 7,397 6,924 7,519 207,876 136,812 147,717 Fixed assets, net 1,005,136 967,228 978,412 Intangible assets and deferred expenses, net 22,140 12,572 22,924 Total non-current assets 1,235,152 1,116,612 1,149,053 Total assets 3,341,068 2,475,395 3,059,123

The notes to the financial statements are an integral part of the financial statements.

Oil Refineries Ltd. Consolidated Balance Sheet (cont.) In thousand US Dollars March 31, March 31, December 2008 2007 31, 2007 (unaudited) (unaudited) (audited) Current liabilities Credit from banking institutions and other credit providers 282,423 329,597 216,021 Trade payables 698,994 316,195 561,232 Other payables 100,690 78,427 92,253 Derivatives at fair value through profit and loss 22,808 9,677 - Income tax - 15,086 - Provisions 27,309 26,384 19,950 Total current liabilities 1,132,224 775,366 889,456 Long term liabilities Debentures 772,287 237,621 717,302 Bank loans 437,537 529,189 452,154 Deferred taxes 116,363 114,105 125,287 Liabilities for financing lease 8,403 7,039 7,763 Liabilities for severance pay, net 71,611 77,911 67,358 Total non-current liabilities 1,406,201 965,865 1,369,864 Total liabilities 2,538,425 1,741,231 2,259,320 Shareholders' equity Share capital - 2,000,000 ordinary shares of NIS 1 par value 472,478 472,478 472,478 Capital reserves 29,783 29,393 29,036 Retained earnings 300,382 232,293 298,289 Total equity attributed to equity holders of the Company 802,643 734,164 799,803 Total liabilities and capital 3,341,068 2,475,395 3,059,123

The notes to the financial statements are an integral part of the financial statements.

Oil Refineries Ltd. Consolidated Profit and Loss Statements In thousand US Dollars For the three months For the year ended ended March 31, March 31, December 31, 2008 2007 2007 (unaudited) (unaudited) (audited) Revenues 1,885,696 1,081,001 5,236,945 Cost of sales, refinery and services 1,833,520 969,930 4,805,066 Revaluation of open positions in derivatives on prices of goods and margins, net 11,141 33,128 20,156 Total cost of sales 1,844,661 1,003,058 4,825,222 Gross profit 41,035 77,943 411,723 Selling expenses 10,468 7,650 33,518 General and administrative expenses 14,732 19,164 68,027 Privatization grant - 28,360 28,360 Operating income 15,835 22,769 281,818 Financing income 69,425 7,941 34,625 Financing expenses (86,097) (14,676) (136,750) Company's share in earnings (losses) of investees (5,070) 1,971 6,913 Earnings (loss) before income tax (5,907) 18,005 186,606 Tax benefits (taxes on income) 8,000 (6,667) (44,937) Net earnings for the period 2,093 11,338 141,669 Earnings per ordinary share Net basic and diluted earnings per ordinary share (in USD) 0.001 0.006 0.071

The notes to the financial statements are an integral part of the financial statements.

Oil Refineries Ltd. Selected Pro-forma Consolidated Data from the Report of the Board of Directors on the State of the Corporation's Affairs for the Period March 31, March 31, 2008 2007 In millions of USD Unaudited Revenues Refining 1,562 902 Trade 79 - Polymers 108 74 Aromatics 137 105 ______ ______ Total 1,886 1,081 --------- --------- Cost of sales, refining and services Refining 1,543 844 Trade 77 - Polymers 104 64 Aromatics 121 94 ______ ______ Total 1,845 1,002 --------- --------- Gross profit Refining 19 58 Trade 2 - Polymers 4 10 Aromatics 16 38 ______ ______ Total 41 79 --------- --------- Sales, general and administrative expenses Refining 14 17 Trade - - Polymers 5 5 Aromatics 6 6 ______ ______ Total 25 28 --------- --------- Profit from operations Refining 5 41 Trade 2 - Polymers (1) 5 Aromatics 10 5 ______ ______ Total 16 51 --------- --------- ______ ______ Financing income (expenses), net (17) (17) ______ ______ Privatization grant - (28) ______ ______ Income before taxes on income (1) 16 Income tax 8 (7) ______ ______ 7 9 Company's share in earnings of investee companies (5) 2 ______ ______ Net income for the period 2 11 ______ ______ ______ ______

Contacts Company Contact: Investor Relations Contact: Rami Sasson, EVP Business Development Ehud Helft \ Fiona Darmon and Capital Markets, Oil Refineries GK Investor Relations Tel. +972-4-878-8114 Tel. (US) +1-646-797-2868 \ ContactIREn@orl.co.il (Int.) +972-54-566-3221 info@gkir.com

Contacts: Company Contact: Rami Sasson, EVP Business Development and Capital Markets, Oil Refineries, Tel. +972-4-878-8114, ContactIREn@orl.co.il; Investor Relations Contact: Ehud Helft \ Fiona Darmon, GK Investor Relations, Tel. (US) +1-646-797-2868 \ (Int.) +972-54-566-3221, info@gkir.com