- Third quarter Consolidated Net Income NIS 178 Million, Compared to NIS 24 Million Last Year; Third Quarter 2006 Results Adversely Affected by Northern Hostilities

- Company Publishing Today Hebrew Draft Prospectus for the Issue of Debentures Primarily for the Financing of the Strategic Plan; Debentures Were Rated AA Stable by Maalot, a Standard and Poor''s Affiliation

Oil Refineries Ltd. (TASE: ORL) ("Oil Refineries" or the "Company") announced today its financial results for three and nine-month periods ending September 30, 2007.

The reported results for the third quarter and nine months 2007 exclude the results of Ashdod Refineries, which was sold at the end of the third quarter 2006, and which generated a substantial capital gain in the said third quarter. The results for the comparable period, the third quarter and nine months of 2006, are pro-forma figures and refer to the consolidated pro-forma statements.

Third Quarter Highlights

- Refining margin USD/bbl 5.7, compared to USD/bbl 7.3 in the third quarter 2006

- Company refining margin 52% higher than Mediterranean Ural Cracking Margin average of USD/bbl 3.75

- Consolidated EBITDA totaled NIS 326, compared to NIS 144 million in third quarter 2006

- Consolidated net income totaled NIS 178 million, compared to 24 million in third quarter 2006

- Quarterly results positively affected by the changes in the USD against the Israeli Shekel; Last year''s third quarter results were negatively affected by the northern hostilities

Third Quarter Results

Refining margin for the third quarter totaled USD/bbl 5.7 (USD/MT 41.6), compared to the third quarter Mediterranean Ural Cracking Margin(i) average of USD/bbl 3.75(i) (USD/MT 27.4). Refining margin for the third quarter 2006 totaled USD/bbl 7.3 (USD/MT 52.9).

Consolidated EBITDA for the third quarter 2007 reached NIS 326 million, compared to NIS 144 million pro-forma consolidated EBITDA in the third quarter of 2006.

Consolidated Operating Profit for the third quarter totaled NIS 238 million, compared to a pro-forma consolidated operating profit NIS 57 million in the third quarter of 2006.

Operating profit from the Refining segment totaled NIS 180 million, compared to NIS 87 million last year. The lower refining margins contributed to a NIS 61 million decline in operating profit over the second quarter last year, this was completely offset by a NIS 163 million contribution resulting from an increase in quantities sold, changes in the US dollar exchange rate and a decline in operating expenses. The Company''s consolidated results in the third quarter last year were negatively affected by the regional hostilities.

Operating profit from the Aromatics segment (conducted through Gadiv Petrochemical Industries Ltd.) totaled NIS 21 million, compared to an operating loss of NIS 11 million in the third quarter last year.

Operating profit from the Polymers segment (conducted through Carmel Olefins) totaled NIS 37 million, compared to an operating loss of NIS 19 million in the third quarter last year.

Consolidated net income for the third quarter of 2007 totaled NIS 178 million, compared to a pro-forma consolidated net income of NIS 24 million in the third quarter last year.

Nine-Month Results

Refining margin for the nine months totaled USD/bbl 8.4 (USD/MT 61.0), compared to the nine months Mediterraneani Ural Cracking Margin average of USD/bbl 5.6 (USD/MT 40.6). Refining margin for the nine months was also substantially higher than the USD/bbl 7.7 (USD/MT 55.9) refining margin in the nine months 2006.

Consolidated EBITDA for the nine months totaled NIS 1,194 million, compared to NIS 973 million pro-forma consolidated EBITDA in the same period last year. Consolidated Operating Profit for the nine months totaled NIS 937 million, compared to a pro-forma consolidated operating profit NIS 720 million in the same period last year.

Consolidated net income for the nine months, excluding a one-time charge totaling NIS 106 million in the first quarter 2007, totaled NIS 662 million, compared to a pro-forma consolidated net income of NIS 469 million in the nine months last year. The one-time charge, net after tax, resulted from the accounting treatment of a privatization grant paid in the first quarter 2007, by the government to the employees of Oil Refineries and its subsidiaries, following the successful privatization in February 2007. Net income for the nine months, including this one-time privatization expense, totaled NIS 556 million.

"We are very pleased that once again the Company has presented higher refining margins than the average refining margin for the Mediterranean "Ural" for the quarter, and this, despite the decline in refining margins this quarter compared to last year," commented Mr. Yashar Ben-Mordechai, Oil Refineries'' CEO. "The global energy market is going through a volatile period, evident in both the fluctuations in fuel prices and currencies. This volatility continues to impact the Company''s performance."

Mr. Ben-Mordechai added: "Carmel Olefins continues with its expansion strategy and, during the third quarter, fully operated its new Polypropylene unit. This unit is expected to more than double COL''s Polypropylene production once it reaches full production capacity during the coming year. In addition, two weeks ago COL announced that it has signed an Intent Agreement to purchase a 49% stake in a European petrochemical company."