Oil Refineries to Acquire Control of Haifa Basic Oils

HAIFA, Israel, January 4 - Oil Refineries Ltd. (TASE: ORL.TA) (hereinafter: the
"Company", "ORL"), Israel's largest oil refiner, announced that it has
acquired 24.5% of Haifa Basic Oils (hereinafter: "HBO") from Paz Oil Company
Ltd. (hereinafter: "Paz"), held in trust, in consideration for NIS 59
million, and that the acquisition has been approved by the Company's Board of
Directors. The consideration is subject to adjustments if during a period of
5 years the Company will enter into an agreement to acquire an additional
shareholder's holding in HBO for a consideration indicating to a value of
over NIS 240 million for HBO.

Subsequent to the acquisition, the Company holds 74.5% of
HBO's issued share capital.

For additional information on HBO's activities, please refer
to the Company's Hebrew shelf prospectus from May 29, 2008.

As part of the transaction, the Company was notified of the
withdrawal of Paz from the request for the approval of a derivative claim
filed in 2006 by other shareholders in HBO against the Company, which was
approved by the Israeli court, as announced on October 25, 2009, a decision
that is currently being reviewed by the Israeli High Court (hereinafter: the
"Derivative Claim"). The Company was also notified on the waiver of Paz on
all rights to claim, demand or complaint of all forms and types with regards
to the Derivative Claim.

As a result of the transaction, the Company expects to record
a capital gain, yet to be determined.

Additional information in English on HBO can be found on its
website - www.hbo-wax.co.il/profile.htm.

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 9.8
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 (through Carmel Olefins Ltd.)
and Aromatics (through wholly-owned Gadiv Petrochemical Industries 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

    Company Contact:

    Rony Solonicof
    Chief Economist and Head of Investor Relations
    Oil Refineries
    Tel. +972-4-878-8320
    ContactIREn@orl.co.il

    Investor Relation Contacts:

    Ehud Helft \ Fiona Darmon
    GK Investor Relations
    Tel. +1-646-797-2868 \ +972-52-695-4400
    info@gkir.com

Company Contact: Rony Solonicof, Chief Economist and Head of Investor Relations, Oil Refineries, Tel. +972-4-878-8320, ContactIREn at orl.co.il; Investor Relation Contacts: Ehud Helft \ Fiona Darmon, GK Investor Relations, Tel. +1-646-797-2868 \ +972-52-695-4400, info at gkir.com