HAIFA, Israel, August 18 /PRNewswire/ --

- Substantial Sequential Improvement Over the First Quarter 2008

Oil Refineries Ltd. (TASE: ORL.TA) ("Oil Refineries" or the "Company") announced today its financial results for three and six month periods ending June 30, 2008.

Second Quarter Highlights (Compared to first quarter 2008) - Substantial increase in consolidated operating profit to $95 million and in consolidated EBITDA to $114 million - Refining margin USD/bbl 9.2, compared to USD/bbl 3.7 in first quarter 2008 - Average Reuter's quoted Mediterranean Ural Cracking Margin for the quarter totaled USD/bbl 6.3 - On August 13, 2008 General Meeting approved acquisition of 50% balance of Carmel Olefins

Second Quarter 2008

Refining margin for the second quarter 2008 totaled USD/bbl 9.2 compared with USD/bbl 3.7 in the first quarter 2008. Refining margin for the second quarter 2008, net of both the IFRS recording method for derivative transactions and inventory gains, totaled USD/bbl 6.7, compared to USD/bbl 2.4 in the first quarter 2008. The Mediterranean Ural Cracking Margin average quoted by Reuters for the second quarter 2008 totaled USD/bbl 6.3.

Consolidated EBITDA for the second quarter 2008 totaled $114 million, compared to $35 million in the first quarter 2008.

Consolidated Operating Profit for the second quarter 2008 totaled $95 million, compared to $16 million in the first quarter 2008. Operating profit from the Refining and Trade Segment totaled $78 million in the second quarter 2008, compared to $7 million in the first quarter 2008. Operating profit from the Petrochemicals Segment totaled $18 million in the second quarter 2008, compared to $10 million in the first quarter 2008. The Petrochemicals Segment includes the results of the Polymers Section (through 50%-held Carmel Olefins Ltd.) and the Aromatics Section (through wholly owned Gadiv Petrochemical Industries Ltd.). The Polymers Section generated an operating profit of $8 million in the second quarter 2008, compared to break even in the first quarter 2008. Operating profit of the Aromatics Section in the second quarter 2008 totaled $10 million, similar as the $10 million generated in the first quarter 2008.

Consolidated net income for the second quarter totaled $71 million, compared to $2 million in the first quarter 2008.

First Six Months 2008

Refining margin for the first six months 2008 totaled USD/bbl 6.5. Refining margin for the first six months, net of both the IFRS recording method for derivative transactions and inventory gains, totaled USD/bbl 4.6, compared to USD/bbl 8.4 in the first six months last year. The Mediterranean Ural Cracking Margin average, quoted by Reuters, for the first six months 2008 totaled USD/bbl 5.0.

Consolidated EBITDA for the first six months 2008 totaled $149 million, compared to $223 million in the same period last year.

Consolidated Operating Profit for the first six months 2008 totaled $111 million, compared to $161 million in the first six months 2007. Operating profit from the Refining and Trade Segment totaled $85 million in the first six months 2008, compared to $135 million last year. Operating profit from the Petrochemicals Segment totaled $28 million in the first six months 2008, compared to $30 million in the comparable period last year. The Petrochemicals Segment includes the results of the Polymers Section and the Aromatics Section. The Polymers Section generated an operating profit of $8 million in the first six months 2008, compared to $14 million in the same period last year. Operating profit of the Aromatics Section in the first six months 2008 totaled $20 million, compared to $16 million in the first six months 2008.

Consolidated net income for the first six months totaled $73 million, compared to $103 million in the same period last year.

On August 13, 2008, the Company's general meeting approved the acquisition of the 50% balance of shares in Carmel Olefins held by Israel Petrochemical Enterprises ("IPE"). In consideration for the shares, the Company will allocate IPE 20.53% of its share capital (following the allocation). The acquisition is part of the Company's business strategy and will enable it to leverage the full synergetic potential between the refining, polymer and aromatic segments. Completion of the transaction is subject to receiving the merger approval from the Israeli anti-trust authority and IPE receiving Control Permit from the Israeli Government.

Mr. Yashar Ben-Mordechai, Oil Refineries' CEO said "During first six months of 2008 we operated in both a volatile and unpredictable business environment. This quarter we operated with maximum flexibility in order to meet market demands. During this period we identified, and adapted ourselves, to take advantage of the rising global diesel prices. During the first six months we refined close to 4 million tons, of which 1,149 thousand tons were diesel, 17% higher than last year. Under the strategic plan, the erection of the new Hydro-Cracker will increase our utilization rate and the refined produce (especially middle distillates) turned out of each barrel of oil."

Mr. Yossi Rosen, Oil Refineries' Chairman of the Board noted, "We are gaining speed in the implementation of our strategic plan, which will both enable us to better meet the changing market demands as well as enable additional growth opportunities. Last week the Company's general meeting approved the acquisition of the 50% balance of shares in Carmel Olefins. This acquisition will enable us to fully maximize the synergies while enabling Oil Refineries to mitigate the fluctuations in its various markets. We continue to increase the volumes of activity in the trade segment. Furthermore, during 2008 we started to supply both fuel and transportation diesel under the new Euro 5 standard. This step is expected to draw an increase in demand for more environmentally friendly fuels."

Conference Call

The Company will also be hosting a conference call later today at 09:00am ET. On the call, management will present a presentation reviewing the second quarter 2008 highlights and industry trends. The presentation can be downloaded from the Company's website http://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: 1-866-3455-855 Israel Dial-in Number: 03-918-0610 UK Dial-in Number: 0800-404-8418 International Dial-in Number: +972-3-918-0610 at: 9:00am Eastern Time, 2:00pm UK, 4:00pm Israel

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 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 Polymers and Aromatics through its holdings in Carmel Olefins Ltd and Gadiv Petrochemical Industries Ltd. The Company also provides power and heat services to industrial customers in the Haifa Bay, as well as infrastructure services. 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 June 30, June 30, December 2008 2007 31, 2007 (Unaudited) (Audited) Assets Cash and cash equivalents 9,092 11,431 259,325 Derivatives at fair value through 391 8,204 6,513 profit and loss Investment in other financial assets 223,688 101,775 113,035 at fair value through profit and loss Trade receivables 675,608 436,604 394,470 Receivables and debit balances 84,082 96,298 84,029 Income tax 5,894 3,036 10,153 Inventory 1,346,296 821,418 1,042,545 Total current assets 2,345,051 1,478,766 1,910,070 Investments and long-term loans Investments in investees accounted 42,043 60,352 53,958 by the equity method Loan to Haifa Early Pensions Ltd. 99,248 70,509 80,038 Long term loans and debit balances 4,990 1,709 3,631 Derivatives at fair value through 120,891 2,208 2,571 profit and loss Employee benefit plan assets 7,446 8,560 7,519 274,618 143,338 147,717 Fixed assets, net 1,052,605 974,779 978,412 Intangible assets and deferred 25,700 13,174 22,924 expenses, net Total non-current assets 1,352,923 1,131,291 1,149,053 Total assets 3,697,974 2,610,057 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 June 30, June 30, December 2008 2007 31, 2007 (Unaudited) (Audited) Current liabilities Credit from banking institutions and other credit providers 572,222 283,828 216,021 Trade payables 697,525 429,563 561,232 Other payables 130,341 81,754 92,253 Derivatives at fair value through profit and loss 28,309 - - Income tax - 20,562 - Provisions 31,856 18,922 19,950 Total current liabilities 1,460,253 834,629 889,456 Non-current liabilities Debentures 827,898 229,434 717,302 Bank loans 407,999 499,134 452,154 Deferred taxes 117,614 137,316 125,287 Liabilities for financing lease 9,447 6,876 7,763 Other long-term liabilities 10,372 - - Employee benefits 71,571 74,299 67,358 Total non-current liabilities 1,444,901 947,059 1,369,864 Total liabilities 2,905,154 1,781,688 2,259,320 Shareholders' equity Share capital - 2,000,000,010 ordinary shares of NIS 1 par value 472,478 472,478 472,478 Capital reserves 20,340 28,569 29,036 Retained earnings 300,002 327,322 298,289 Total equity attributed to equity holders of the Company 792,820 828,369 799,803 Total liabilities and capital 3,697,974 2,610,057 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 six months For the three For the ended June 30, months ended June 30, year ended December 31, 2008 2007 2008 2007 2007 (Unaudited) (Unaudited) (Audited) Revenues 4,356,759 2,379,284 2,471,063 1,298,283 5,236,945 Cost of sales, refinery and services 4,163,743 2,154,040 2,340,206 1,184,110 4,805,066 Revaluation of open positions in derivatives on prices of goods and margins, net 33,543 (12,422) 13,056 (45,550) 20,156 Total cost of sales 4,197,286 2,141,618 2,353,262 1,138,560 4,825,222 Gross profit 159,473 237,666 117,801 159,723 411,723 Selling expenses 21,186 15,052 10,718 7,402 33,518 General and administrative expenses 40,651 33,510 25,918 14,346 68,027 Reduction of negative goodwill created upon acquisition (13,843) - (13,843) - - Privatization grant - 28,360 - - 28,360 Operating profit 111,479 160,744 95,008 137,975 281,818 Financing income 52,375 13,515 13,005 2,174 34,625 Financing expenses (89,953) (35,118) (33,911) (17,042) (136,750) Company's share in earnings of investees (net of tax) 3,726 7,125 8,796 5,154 6,913 Earnings before taxes on income 77,627 146,266 82,898 128,261 186,606 Taxes on income 4,150 39,866 11,514 33,199 44,937 Net earnings for the period 73,477 106,400 71,384 95,062 141,669 Earnings per ordinary share Net basic and diluted earnings per ordinary share (in USD) 0.037 0.053 0.036 0.048 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

For the six months For the three ended months ended June 30, June 30, June 30, June 30, 2008 2007 2008 2007 in USD millions Revenues Refining 3,901 2,272 2,153 1,245 Trade 311 - 232 - Polymers 241 150 134 75 Aromatics 310 246 161 131 Cancellation of inter-company transactions (407) (289) (209) (153) Total 4,356 2,379 2,471 1,298 Cost of sales, refinery and services Refining 3,785 2,084 2,056 1,114 Trade 307 - 230 - Polymers 233 128 131 65 Aromatics 275 216 142 112 Cancellation of inter-company transactions (403) (287) (206) (153) Total 4,197 2,141 2,353 1,138 Gross profit Refining 116 188 97 131 Trade 4 - 2 - Polymers 8 22 3 10 Aromatics 35 30 19 19 Cancellation of inter-company transactions (4) (2) (3) Total 159 238 118 160 Selling, general and administrative expenses Refining 35 30 21 13 Polymers 14 8 9 4 Aromatics 15 12 9 6 Cancellation of inter-company transactions (2) (1) (2) (1) Total 62 49 37 22 Other (income) expenses Refining - 23 - - Polymers (14) - (14) - Aromatics - 2 - - Cancellation of inter-company transactions - 3 - - (14) 28 (14) - Operating income Refining 81 135 76 118 Trade 4 - 2 - Polymers 8 14 8 6 Aromatics 20 16 10 13 Cancellation of inter-company transactions (2) (4) (1) 1 Total 111 161 95 138 Financing expenses, net (38) (22) (21) (15) Profit before taxes on income 73 139 74 123 Income tax (4) (40) (12) (33) 69 99 62 90 Company's share in earnings of 4 7 9 5 investees Net income for the period 73 106 71 95

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

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