Oil Refineries’ Enters Hydrocracking Era: Activates First Stage of Mild Hydrocracker

HAIFA, Israel -

- First Stage Expected to Add Roughly 120,000 Tons of Diesel and Kerosene per Annum

Oil Refineries Ltd. (TASE: ORL.TA) (the “Company”), Israel’s largest oil refiner, announced today that it has activated the first stage of its Mild Hydrocracking unit. The first stage is expected to increase Diesel and Kerosene (Jet Fuel) production by over 1.5%, contributing an additional 120 thousand tons of produced middle distillates per annum. The second stage of the Mild Hydrocracker is expected to become operational in the third quarter of 2010 and to increase the Company’s Diesel and Kerosene production capacity by a further 1.5%. The total expected investment cost in both these stages is approximately US$62 million.

The activation of the first stage of the Mild Hydrocracker will contribute to increasing the Company’s overall refining margins. The contribution of the first stage is additional US$20 million per annum, based on the average product prices of the past 12 months. This unit will utilize high pressure levels Hydrogen as well as a sophisticated Catalyst in order to convert heavier compounds such as VGO to Diesel and Kerosene. These are viewed as higher quality and more environmentally friendly fuels. The unit also produces the raw materials requited to operate the existing catalytic cracker, while improving both qualities and conversion

Mr. Yashar Ben-Mordechai, Oil Refineries’ Chief Executive Officer added: “The establishment of this Mild Hydrocracker serves as another important phase in strengthening our business foundations by increasing the flexibility of our refining units, enabling us to maximize refining margins while improving both product qualities and production quantities. The Company’s expanding refining margin base will further strengthen our financial standing and profitability in volatile markets. The first stage of the unit was completed on schedule, with the expected total cost (US$62 million) to be substantially lower than the initial budget of US$79 million.”

About Oil Refineries Ltd.

Oil Refineries Ltd. (ORL), located in the bay area of the city of Haifa, is 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: www.orl.co.il

The above includes forward looking statements based on Company data as well as on the Company’s plans and estimates based on this said data. The activity, results and other data may in reality be materially different given lack of clarity and various risks, including those outlined under risk factors in the Company’s published financial statements and management reports.

Contacts Company Contact: Rony Solonicof, Chief Economist and Head of Investor Relations Oil Refineries Tel. +972-4-878-8320 ContactIREn@orl.co.il Investor Relations Contact: Ehud Helft \ Fiona Darmon GK Investor Relations Tel. +1-646-797-2868 \ +972-54-566-3221 info@gkir.com

Source: Oil Refineries Ltd

Contacts: Company Contact: Rony Solonicof, Chief Economist and Head of Investor Relations, Oil Refineries, Tel. +972-4-878-8320, ContactIREn at orl.co.il; Investor Relations Contact: Ehud Helft \ Fiona Darmon, GK Investor Relations, Tel. +1-646-797-2868 \ +972-54-566-3221, info at gkir.com