The Russian party demanded further powers, inaddition to those arising under the original arrangements made back in1993 when EuRoPol Gaz SA was established. It also challenged the levelof the tariff for transmission of gas through the Polish territory,which was approved in December 2006 by the President of the EnergyRegulation Authority. This was opposed by the Polish representatives inthe Supervisory Board of EuRoPol Gaz SA who were present at the meetingand was found utterly groundless.

On request of Mr A. Medvedev, a representative ofGazprom, the Supervisory Board has changed its modus operandi.Accordingly, technical issues will be discussed by correspondence.Moreover, decisions in this regard will be taken in the same manner. Atthe same time, in accordance with the declaration of the Russian party,it will be ready to resume normal work of the Supervisory Board onlyonce the other shareholders have accepted increased influence ofGazprom on the decision-making in the Company. In effect, the attitudeof the Russian representatives in the Supervisory Board of EuRoPol GazSA leads to a deadlock in the mutual relations between the shareholdersand paralysing the work of the Supervisory Board.