Outperform Current / 2007-end Target Price: YTL5.60/7.2. PETROL OFISI (PTOFS.IS) Company Update

Company Update US$ 6.0 5.0 4.0 3.0 2.0 1.0 0.0 01/06 02/06 04/06 PTOFS STOCK MARKET DATA (31 July 2007) US cent per liter Relative Performance 05/06 1 mth 3 mths 12 mths -8.4% -12.9% -19.7% 52 Week Range (US$): 2.4 4.8 Current/Target Market Cap (US$mn)/: 2,162/2,650 Average Daily Vol (US$mn) 3 mths: 8.83 YTD US$ Return (%): 58.9 Shares Outstanding (mn): 417 Free Float: 13.27% Distribution mark-up trend 25.0 23.0 21.0 19.0 17.0 15.0 13.0 11.0 9.0 Dec-04 Feb-05 Gasoline Apr-05 June-05 Aug-05 FIGURES & FORECASTS PTOFS (2006-2007) 07/06 Oct-05 08/06 Diesel Dec-05 Feb-06 10/06 Apr-06 12/06 01/07 03/07 04/07 06/07 Relative to ISE (rhs) June-06 Aug-06 Oct-06 Dec-06 Feb-07 07/07 Apr-07 1.5 1.4 1.2 1.1 0.9 0.8 0.6 Outperform Current / 2007-end Target Price: YTL5.60/7.2 Enough underperformance... We believe Petrol Ofisi is severely punished following the fright of the retroactive tax issue and the fines related to the supply of unlicensed petrol stations. We calculate a fair equity value of US$2.65bn for PO, offering 22% upside by 2007- end. Back on track. Petrol Ofisi s share price has sagged under the weight of legal issues, with scant attention paid to the company s operational performance. We believe the agenda has now shifted back to the business, and we expect the company to start catching up with the competition, clawing back its lost market share as the tougher competition forces out weaker operators. An attractive entry point. Petrol Ofisi shares have underperformed the ISE by 20% over the last 12 months and by 8.4% in the last month. Now a line has been drawn under the tax issue and the EMRA fine fiasco, the current weakness provides an attractive entry point. The company currently trades at an EV/ EBITDA multiple of 5.5x and P/E of 13.3x based on 2008 forecasts at a discount to its peers. Strong mark-up environment set to continue. We believe the oil retail business will continue to benefit from high distribution mark-ups due to the recent climb in oil prices, which are likely to remain at around $65-70/bbl for the remainder of 2007. We estimate total revenues of U$9.4bn and an EBITDA of US$416mn in 2007. Sound core business with strong network. While the demand is set to remain strong with a CAGR of 5% in the upcoming period, we expect Petrol Ofisi to benefit from this growth at a maximum thanks to its strong national network coverage. The current level of throughput per station, though looks disadvantageous is a major opportunity for improvement. Focus on refinery business. The company remains committed to building a new 10mn tonne capacity refinery in the Ceyhan region in cooperation with OMV. The refinery will activate Petrol Ofisi s supply side in the energy value chain. Yet, we have not yet incorporated the added value in our valuation estimations. Net Sales (US$mn) EBITDA (US$mn) Net Income (US$mn) EBITDA Margin (%) P/E EV/Sales EV/EBITDA 2005 8,830 375 161 4.2% 13.4 0.3 6.5 2006 9,571 420 161 4.4% 13.4 0.3 5.8 2007E 9,428 416 69 4.4% 31.2 0.26 5.9 2008E 9,892 446 162 4.5% 13.3 0.25 5.5 Research: +90 (212) 318 2730 Sales: +90 (212) 318 2741

VALUATION DCF Valuation Based on our DCF valuation, we conservatively calculate a target value of US$2.65bn for Petrol Ofisi, indicating a 23% upside potential over its current Mcap of US$2.16bn. Petrol Ofisi - Free Cash Flow Projections (US$mn) 2007F 2008F 2009F 2010F 2011F 2012F 2013F 2014F 2015F Sales 9,428 9,892 10,257 10,750 11,143 11,568 11,928 12,286 12,546 Growth -31% 5% 4% 5% 4% 4% 3% 3% 3% Gross Profit 652 692 720 742 758 787 793 817 834 Operating Profit 321 346 385 392 401 422 435 448 458 Depreciation 87 89 84 86 89 93 78 80 82 EBITDA 411 439 473 483 495 520 518 534 545 Capex -150-100 -90-90 -90-90 -90-90 -90 Free Cash Flow 86 136 194 192 222 230 225 246 245 Source :Garanti Securities Summary of DCF Valuation (US$mn) PV of FCF 1068 Terminal growth rate 2% PV of Terminal Value 1939 Implied Firm Value 3007 Net Cash / (Debt) (357) Equity Value 2650 Current Mcap of Petrol Ofisi 2259 Upside Potential 23% In our DCF model, we used a 2% terminal growth rate. For the calculation of the discount rate, we used an equity risk premium of 6%, and a cost of debt of 7.8%. We used a 6.55% risk-free rate for the year 2007, which gradually decreases to 5.90% by 2015. With the price liberalization, distribution mark-ups per volume increased significantly. We are estimating a mere 5% growth in revenues in 2007, presuming that distribution mark-ups will continue to be strong. Due to this strong environment, we are also expecting a 4% increase in the EBITDA in 2007 (US$433mn). However, in the long-run, we are expecting operating margins to remain under pressure due to the intensifying competition. We are also estimating a decrease in the working capital requirements, thanks to better purchasing terms and the elimination of the 40% limit on imports. Instead of Tupras fixed tariffs with short payment terms, Petrol Ofisi is able to purchase at better payment conditions, decreasing its working capital requirements. We are also estimating that Petrol Ofisi will continue to spend at around US$150mn until 2008-end. Following 2009, our capex estimations remain at around US$100-90mn, yearly,disregarding refinery investment 2

Peer Group Comparison We also carried out a peer group comparison to obtain a fair value for Petrol Ofisi. We compared the Company with other global and local players in the oil industry. We take both P/E and EV/EBITDA multiples into account in our comparative valuation. As a result, we obtain a fair value of US$2.37bn. It is however important to note that most of the companies in the peer group are vertically integrated, whereas Petrol Ofisi operates only in distribution. This renders a one-to one comparison somewhat difficult. 2007E 2008E Companies Country Mcap US$mn P/E EV/ SALES EV/ EBITDA P/E EV/ SALES EV/ EBITDA Rubis France 883 18.75 0.70 6.68 17.01 0.64 6.03 World Fuel Services USA 1184 16.55 0.09 11.75 13.52 0.09 9.89 Esso STE Anonyme France 4082 17.45 0.20 6.30 19.65 0.21 7.60 Motor Oil Hellas Greece 2974 13.37 0.56 9.33 13.12 0.59 9.47 ERG SPA Italy 4091 15.27 0.39 6.48 13.56 0.41 5.48 Fuchs Petrolub AG Germany 2275 15.64 0.95 6.88 14.28 0.92 6.54 Hellenic Petroleum Greece 4783 14.06 0.47 8.32 14.21 0.47 8.17 Petronas Malaysia 2300 11.348 1.26 5.08 10.83 1.17 4.80 Caltex Australia Australia 6,402 15.24 0.68 6.62 15.59 0.69 7.28 Sıngapore Petroleum Singapore 1,897 8.86 0.56 4.532 7.58 0.43 4.48 Average 1 13.90 0.63 6.69 13.3 0.56 6.73 Petrol Ofisi Turkey 2101 31.0 0.3 5.9 13.0 0.3 5.5 Turcas Turkey 880 14.2 0.5 8.7 13.3 0.4 8.3 Average 2 19.7 0.5 7.1 13.3 0.4 6.8 Source: Blomberg, Garanti Estimates Date 31/07/2007 Average 2008E EV/EBITDA 6.80 Average 2008E P/E 13.30 2008E EBITDA of PTOFS 446 2008E Earnings of PTOFS 162.40 Net Cash / (Debt) -357 Est M. Cap of PTOFS 2372 Current M. Cap 2162 Premium / (Discount) (%) -8.9% Upside / (Downside) Potential (%) 9.8% 3

WHAT HAS CHANGED? The retroactive Tax Issue is resolved. On December 25, 2006, the daily Sabah claimed that Petrol Ofisi was liable to pay YTL1.2bn related to tax evasion prior to the merger of Is-Dogan Petroleum Investments (Is- Dogan) with Petrol Ofisi in 2002. The stock was dogged by the ensuing uncertainty. In March, the Tax Office reported a principal tax liability of YTL1.25bn for the 2002-2006 period, of which YTL265mn was declared as a provisional tax liability which was deductible. The amount of withholding tax and the associated penalty were declared to be YTL 985mn (US$697mn). Following the notification, Petrol Ofisi went to the Tax Authority to seek a negotiated settlement. On May 11, the two parties agreed on a total amount of YTL275mn (US$205mn) including all charges. Petrol Ofisi declared that it would pay the total amount in cash within 30 days. Petrol Ofisi has US$321mn in cash and cash equivalents according to its 1Q07 financials, which is sufficient to meet the required payment. This amount was paid in June. EMRA s fines cut to a maximum of YTL59mn (US$44mn). At the end of August 2006, EMRA fined 28 oil distribution companies a total of YTL1.667mn for illegally supplying oil products to their distributors. Although the companies applied to Council of State for an injunction decision, the Council of State issued a partial injunction decision against EMRA s fine on a negligible portion of the total fine amount. Petrol Ofisi and other oil distribution companies subsequently applied to the Administrative Case Departments to object to the Council of State s verdict. Meanwhile, Petrol Ofisi reached an agreement with the Tax Office to pay the fine in 18 monthly instalments starting from December 2006. The Administrative Courts issued an injunction on EMRA s YTL1.667mn fine imposed on the 28 oil distribution companies on January 25. With the Council of State s ruling, the fines imposed on distribution companies will be substantially reduced. The Council of State cited the petroleum law as the basis of its decision. We are still awaiting the review on the merits of the case by the 13 th court of the council of state. Both parties will then have the right to appeal to the Upper Court. Previously, the Energy Market Regulatory Authority (EMRA) had based its decision to fine the distributors on the second clause of the 7th article of the petroleum law, but the Administrative Court has now declared that the fines will be reviewed and issued according to the 3rd clause of the 19th article of the law. The upshot of this is that the fine, originally YTL714,460 per unlicensed petrol station, will be reduced to YTL71,446 per petrol station, a tenth of the original amount. The Council of State also retroactively changed the deadline by which petrol stations should have obtained licences, from EMRA s deadline of 20 March 2005 to 12 April 2005. This also reduces the number of petrol stations subject to fines. In this context, Petrol Ofisi s massive YTL598mn fine (including Erk Petrol) will be reduced to a maximum of YTL59mn. Conservatively, we have not estimated a probable decrease in the number of unlicensed petrol stations. 4

Petrol Ofisi obtains LPG distribution license. Petrol Ofisi received authorization from EMRA in March to distribute auto-lpg on a nationwide basis. The company already held a license for regional distribution. In the mean time, Petrol Ofisi has operated through contracted stations and Petrogaz (Petrol Ofisi brand) stations. Petrogaz recorded a 29% increase in volume in 2006, the highest growth in the market. Auto-gas distribution is the most rapidly growing segment in the LPG business. Aygaz, currently leads in the segment with a 27% market share. After obtaining nationwide LPG distribution rights, we expect Petrol Ofisi to be a more competitive force in the auto-lpg market, targeting a market share of 24%. The auto LPG business is highly competitive and we expect margins to remain under pressure in the long run. Market will continue its growth on the back of higher distribution mark-ups. Since the introduction of the New Petroleum Law, the distribution mark-ups remained strong. The total oil market is mainly controlled by six players yet, we observed a continuous upward push in the mark-ups. Distribution margins have climbed by an impressive 60% over the last 1 ½ years, averaging around 24 cents per litre for gasoline and 21 cents per litre for diesel. While we assume a further consolidation in the market in the short term, we do not expect margins to drop significantly, but a slight drop in the operating margins should be taken into account in the longer term. However, the impact from the slight dip in distribution mark-ups will be compensated by lower operating expenses and a better working capital management. Distribution mark-ups continue their increasing trend 25.0 23.0 21.0 Gasoline Diesel US cent per liter 19.0 17.0 15.0 13.0 11.0 9.0 Dec-04 Feb-05 Apr-05 June-05 Aug-05 Oct-05 Dec-05 Feb-06 Apr-06 June-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Source:Petder 5

Nature of competition changes With the new players and/or mergers in the sector, the general outlook for the market has changed significantly since 2006. Petrol Ofisi s merger with OMV and Turcas merger with Shell ushered in a new era for the sector. Later on, at the end of 2006 Tupras acquired 40% of OPET. In the short-term, as the market experiences consolidation, we should also be able to observe an increase in the number of petrol stations, albeit at a slower pace. Market Share by Products April 2007 Black Products DIESEL LUBRICANTS* GASOLINE POAŞ 30.3% POAŞ 26.8% POAŞ 23.6% POAŞ 53.2% SHELL&TURCAS 20.3% SHELL&TURCAS 21.0% SHELL&TURCAS 31.4% SHELL&TURCAS 3.9% BP 8.0% OPET 14.9% BP 14.3% OPET 15.3% BP 9.1% OPET 6.1% TOTAL 9.7% BP 18.3% TOTAL 2.9% Other 17.2% TOTAL 6.7% Other 13.2% Other 27.3% OPET 14.6% TOTAL 6.5% Other 5.5% Declining Phase CAGR of -11% Growth Phase CAGR of 4.7% Initial Growth Phase CAGR of 2-3% Stagnant Phase CAGR of 1% * as of June 2006 Source: Petroleum Association (PETDER) Gasoline consumption has shrunk in recent years as a result of dwindling sales of premium gasoline. Conversely, diesel consumption has continued to grow steadily. We anticipate 4.7% growth in the coming years. As Turkey switches to natural gas, mainly for heating purposes, consumption of black products will continue to decline. With the surge in air travel on the back of the spawning of new airlines, jet fuel consumption is expected to follow a rising trend in the near term. We expect competition to become fiercer going forward, mainly in the gasoline and diesel segments. The recent merger of Shell-Turcas catapulted the company to the number one position in the gasoline segment, while we believe OPET will push strongly for more market share in the diesel segment. In addition to Shell s competitive position in the distribution business, the company is also active in the downstream segment with Tupras. Shell is likely to become more aggressive in the market. 6

We expect Petrol Ofisi to lose some market share, something we have taken account of in our estimations. The market share loss will be compensated by the increase in the share of more profitable products. Volume shift towards a high yield portfolio will be have a more significant effect on the financials. Meanwhile, Tupras acquired Opet and added a distribution arm to its operations. The vertical integration of the Company is expected to mitigate risks in operations and margins, which tends to shift under changing market dynamics. Opet, on the other hand, has already established itself in the second position with around 1,200 petrol stations and a market share of 14%. The company has already launched an aggressive growth strategy, reinforcing its market position in the oil retail market and seems to stick to this strategy. Comparative Market Share (as of April-2007) GASOLINE DIESEL-7000ppm LOW SULPHUR DIESEL-50ppm 24% 18% 25% 21% 33% 36% POAŞ 16% 25% SHELL&TURCAS 31% 31% 19% 18% 24% 16% BP 13% 13% 18% 8% 19% 6% 6% 13% 7% TOTAL 7% 30% 34% 26% 20% 24% 18% Other 4M07 4M06 4M07 4M06 4M07 4M06 Source : Petroleum Association (PETDER) Increased significance of throughput per station Despite the unbeatable superiority of Petrol Ofisi in terms of number of stations (3,317 stations with Erk Petrol), with nationwide coverage, the Company is well behind its competitors, Shell and BP, in terms of throughput. However, efforts to increase its presence in the three big cities have been paying off. Annual Throughput Per Station (000 m3) The company opened 79 new stations in the last five years, in the 5.0 three big cities with an average annual throughput of over 3,000-4.0 3,500m 3. 3.0 Average:2.6 2.0 1.0 0.0 Opet Source : Petder PTOFS BP Shell & Turcas Total The company will continue to invest in new stations in critical locations, where circulation is higher (roundabouts, crossroads, heavy traffic areas etc). We believe that some Turkpetrol stations, which have not been branded under Shell, could be evaluated as potential acquisition targets during this process. However, we think this will come cheap. 7

Petrol Ofisi sees the refining business as the major source of future growth. In line with its strategy of becoming a vertically integrated regional energy player, Petrol Ofisi-OMV applied to the Energy Market Regulatory (EMRA) for a refinery license. Petrol Ofisi and OMV are very enthusiastic to build a refinery at Ceyhan, and they may include other parties interested in the project. Baku-Tblisi-Ceyhan (BTC) Pipeline Source: EIA Baku-Tblisi-Ceyhan 1mnb/d Erzurum Iran Syria Iraq Tehran Source: BOTAS On June 14, Petrol Ofisi announced that it had founded an affiliate, Petrol Ofisi Akdeniz Rafinerisi Sanayi ve Ticaret Anonim Sirketi, with a paid-in capital of YTL50mn, 99.99% owned by Petrol Ofisi, and applied to the Energy Market Regulatory Authority (EMRA) for a refinery licence. EMRA, meanwhile, already accepted the application submitted by the Calik-Indian Oil Company and Socar-Turcas consortium to build a refinery in the Ceyhan region. Note that Turkey is short in diesel and long in black products. Tupras can only meet 60% of the domestic demand for diesel and has to export its overcapacity in black products. We welcome the intention to build a refinery in the Ceyhan region focusing on diesel and jet fuel products. In our valuation calculations, we have not yet incorporated the potential value that would come from the refinery investment, as details of the project have not yet been revealed. Petrol Ofisi is planning a 10mn tonne capacity refinery in the Ceyhan region in a US$4.5bn investment, which will reduce Turkey s deficit in diesel and jet fuel products. The refinery will mainly produce gas oil and jet fuel for the domestic market, as well as serving export markets. The project is expected to enter operation by 2012. The refinery will eliminate the supply quality risk, while improving the margins. We take a positive view on Petrol Ofisi-OMV s intention to build a refinery, but would welcome a clearer view on the financing plans and profitability expectations. 8

Oil consumption is on the rise. Global oil consumption climbed by 9% per annum between 2000 and 2005, reaching 83.8mn bbl/day. Currently, total global oil consumption stands at 84mn bbl/day, with supply of 84.4mn bbl/day. Global demand for oil is expected to grow by 1.7mn bbl/day over each of the next three years. Turkey s oil demand is expected to grow up to 40.8mn ton in 2020 thanks to the increase in the number of cars on the road. In terms of retail sales, Turkey is the third largest market in Europe. Oil Products Demand Projection Population (mnn) 62 67 72 76 80 84 40 35 29.53 31.2 40.83 30 Milloin Tons 25 20 15 10 5 0 2019 2017 2015 2013 2011 2009 2007 2005 2003 2001 1999 1997 1995 1993 Source:Tupras estimates LPG Naphtha Total Gasoline Jet Fuel Gas Oil Fuel Oil Others While the consumption increases, demand for gasoil and jet fuel was impressive. Share of diesel products in total sales soared to 57% with 14pp, while jet fuel consumption is also on the rise. We expect the aviation industry to grow at a CAGR of 10-12% within the 2007-2010 period. Turkey is an attractive fast growing market with a buoyant aviation sector. Change in Demand 2 0 0 0 Black Products 24% Diesel 43% 2 0 0 6 Jet Fuel 9% Black Products 12% Jet Fuel 6% Gasoline + Auto LPG 27% Gasoline + Auto LPG 22% Diesel 57% Source:PETDER 9

Sales We predict total demand for oil products to increase at a CAGR of 5%, and we have assumed that Petrol Ofisi s sales volumes will grow in-line with the market. As implied before, growth will come from diesel and jet fuel products. We believe We have assumed a slight loss in market share for Petrol Ofisi amid fiercer competition. The establishment of Shell-Turcas and a very aggressive OPET have chipped away at the market share, but we believe a recovery is most likely in the medium term. Our assumptions foresee an attainable 23% market share while in the diesel market we believe the company s 30% market share can be maintained. The steep increase in oil prices is unlikely to continue in the medium term, and we therefore assume that oil prices will recede towards US$60/bbl. Apart from its distribution business, Petrol Ofisi also plans to increase its profitability in the aviation, lubricants and marine operations, which are consolidated under the other item. TURKEY CONSUMPTION 2004 2005 2006 2007 E 2008 E 2009 E 2010 E 2011 E 2012 E 2013 E 2014 E 2015 E Gasoline (000m3) 3,752 3,496 3,377 3,299 3,217 3,168 3,089 3,120 3,152 3,120 3,151 3,183 Diesel m3 (000m3) 12,663 13,075 14,172 15,194 16,488 17,919 19,314 20,377 21,396 22,358 23,141 23,835 Aviation (000m3) 2,010 2,280 2,500 2,550 2,614 2,692 2,773 2,856 2,942 3,030 3,121 3,215 Total 18,425 18,851 20,049 21,043 22,318 23,779 25,177 26,353 27,489 28,508 29,413 30,232 Black Products (000 ton) 4,473 4,012 2,944 2,943 2,941 2,794 2,654 2,550 2,550 2,525 2,525 2,525 LPG (000 tons) 3,759 3,692 3,517 3,577 3,638 3,699 3,765 3,784 3,803 3,822 3,841 3,860 Petrol Ofisi Sales (Volumes) 2004 2005 2006 2007 E 2008 E 2009 E 2010 E 2011 E 2012 E 2013 E 2014 E 2015 E Gasoline (000 m3) 962 900 871 782 756 748 729 733 741 733 741 748 Market Share 25.6% 25.7% 25.8% 23.7% 23.5% 23.6% 23.6% 23.5% 23.5% 23.5% 23.5% 23.5% Diesel (000 m3) 4,527 4,560 4,766 4,634 5,012 5,304 5,698 5,970 6,269 6,551 6,780 6,912 Market Share 35.7% 34.9% 33.6% 30.5% 30.4% 29.6% 29.5% 29.3% 29.3% 29.3% 29.3% 29.0% Jet fuel (000 m3) 1,440 1,715 1,880 1,920 1,966 2,022 2,082 2,145 2,206 2,273 2,341 2,411 Market Share 71.6% 75.2% 75.2% 75.3% 75.2% 75.1% 75.1% 75.1% 75.0% 75.0% 75.0% 75.0% Black Products (000 tons) 1,765 1,916 1,466 1,465 1,471 1,383 1,327 1,275 1,275 1,263 1,263 1,263 Market Share 39.5% 47.8% 49.8% 49.8% 50.0% 49.5% 50.0% 50.0% 50.0% 50.0% 50.0% 50.0% Oil Prices (Brent /$/bbl) 38 54 65 65 64 63 60 60 60 60 62 62 Revenue Projections (US$mn) 2004 2005 2006 2007 E 2008 E 2009 E 2010 E 2011 E 2012 E 2013 E 2014 E 2015 E Gas Stations 4,431 5,645 5,925 5,687 6,057 6,324 6,716 7,005 7,325 7,576 7,822 7,967 Commercial 1,752 2,058 2,014 2,060 2,104 2,150 2,197 2,246 2,295 2,345 2,397 2,450 Other 1,105 1,125 1,632 1,681 1,731 1,783 1,837 1,892 1,949 2,007 2,067 2,129 Total 7,288 8,828 9,571 9,428 9,892 10,257 10,750 11,143 11,568 11,928 12,286 12,546 10

Pricing Mechanism The tax rate on oil products is extremely high, the result being that Turkey is one of the most expensive countries worldwide. The state levies YTL 1.3625 of Special Consumption Tax (SCT) on each litre of 98-octane petrol, the ex-refinery price of which is currently YTL 0.75. VAT of 18% is then added to the end price. Thus, taxation accounts for around 61% of the total pump price. The distribution share and transport mark-up only comprise 13% of the total pump price, which is evenly shared between the distributor and retailer. It should be noted that the 50-50 share is an average. While the ex-refinery price of one litre of gasoline is YTL 0.753/ litre, the pump price amounts to YTL2.93/lt, quadrupling the refinery price. Unleaded Premium Gasoline Price Composition SCT 46.5% VAT 15% Income Share(National Stock) 0.05% Dist. Share+Transport 12.7% Price Composition for Gasoline July-07 YTL/lt Ex-Refinery Price 0.753 SCT 1.3625 Income Share 0.0014 Dist. Share+Transport 0.3731 Ex-Refinery Price 25.7% VAT 0.44 Pump Price 2.93 Source: Petder A potential reduction in the taxes could increase consumption going forward which could be another source of future growth. We might expect such a decrease in the long-term. Taxes on one liter of unleaded gasoline (US$/lt) 1.41 1.12 0.56 0.65 0.68 0.68 0.84 0.91 0.94 0.10 Turkey Netherlands Italy France Hungary Czech Republic Switzerland Spain Japan USA Source: EIA 11

First Quarter results Tax provisions led to a net loss of US$160mn in the first quarter... Petrol Ofisi recorded a net loss of US$160mn in its consolidated financial results, due to the provisions related to the retroactive tax amount. Recall that on May 11, Petrol Ofisi reached an agreement with the Tax Authority to pay a total YTL 275mn in retroactive tax. We estimate that the bottom line will just about turn into the black by the end of the year, to a diminutive US$16mn. The company recorded net sales of US$1890mn, indicating a 5% drop YoY. This was lower than the consensus estimate US$2.1bn. The total number of petrol stations in this period fell from 3,584 to 3400, justifying to some extent the drop in the revenues. On a segmental basis, station revenues were down by a mere 2% on an annual comparison, at US$1.19bn. The share of retail revenues in total revenues climbed to 63%, while the gross profit margin in the retail segment remained at 6%. The revenue contribution from the commercial and industrial business segments slumped by 22% to US$401mn. Revenues were affected by seasonality on a QoQ basis as the weight of lower margin black product consumption increased significantly in the first quarter of the year. We believe the upcoming spring results will be more satisfactory. Overall, the operating results were disappointing with US$69mn of EBITDA, falling below the consensus estimate of US$90mn. Despite the ongoing rise in distribution mark-ups, Petrol Ofisi s EBITDA margin contracted on a QoQ basis. The company recorded US$16mn of FX gains in 1Q07 thanks to the appreciation in the YTL. Petrol Ofisi had a short FX position of US$1,357mn at the end of March, of which US$453mn is covered through inventories. The company did not write any provision for the EMRA fines at its 1Q07 results. The legal process is still continuing, yet for the time being we are assuming a maximum fine of only US$44mn (YTL 59mn) for the licensing problems. PTOFS Summary Financials % Change US$mn 1Q06 2Q06 3Q06 4Q06 1Q07 2005 2006 1Q07/1Q06 1Q07/4Q06 2005/2006 Revenues 1993 2463 2772 2305 1890 8828 9571-5% -18% 8% Gross Profit 121 168 191 140 111 529 624-9% -21% 18% Operating Expenses -68-75 -65-66 -61-226 -275-10% -7% 22% Operating Profit 53 93 125 74 49 303 349-7% -33% 15% EBITDA 71 115 152 102 69 374 420-3% -33% 12% Financial Expenses -22-135 -127-124 -31-115 -124 44% -75% 8% Net Profit 35-126 149 100-160 161 161-560% -259% 0% Net Cash -585-441 -407-225 -288-610 -225-51% 28% -63% Ratios Gross Margin 6.1% 6.8% 6.9% 6.1% 5.9% 6.0% 6.5% -0.2 pp -0.2 pp 0.5 pp Operating Margin 2.7% 3.8% 4.5% 3.2% 2.6% 3.4% 3.6% -0.1 pp -0.6 pp 0.2 pp EBITDA Margin 3.6% 4.7% 5.5% 4.4% 3.6% 4.2% 4.4% 0.1 pp -0.8 pp 0.1 pp Net Profit Margin 1.7% -5.1% 5.4% 4.3% -8.4% 1.8% 1.7% -10.2 pp -12.8 pp -0.1 pp 12

Petrol Ofisi s Stock Performance Petrol Ofisi s share performance has sagged under the weight of the EMRA fines and retroactive tax issues. Petrol Ofisi Stock Performance (2006-2007) USD 7.00 6.50 6.00 Settlement of tax issue 5.50 5.00 4.50 4.00 3.50 3.00 2.50 2.00 EMRA fine Tax issue 07/07 06/07 05/07 04/07 03/07 02/07 01/07 12/06 11/06 10/06 09/06 08/06 07/06 06/06 05/06 04/06 03/06 02/06 01/06 Source: ISE 13

Balance Sheet 2006/03 2007/03 Change 2005 2006 2007E 2008E Current Assets 1,193.57 1,594.80 33.6% 1,216.84 2,022.31 1,759.61 1,881.91 Cash and Cash Equivalents 61.86 321.18 419.2% 102.72 460.41 259.75 309.75 Short-Term Trade Receivables 692.26 751.80 8.6% 628.38 913.60 898.51 922.68 Other Short-Term Receivables 29.78 32.09 7.8% 38.91 53.89 27.40 32.46 Inventories 376.16 453.21 20.5% 418.47 563.42 571.35 606.48 Other Current Assets 33.51 36.51 9.0% 28.35 31.00 30.00 43.00 Long Term Assets 2,295.99 2,350.80 2.4% 2,291.80 2,266.83 2,244.80 2,279.63 Long-Term Trade Receivables 6.40 5.73-10.6% 6.02 5.50 5.75 6.00 Tangible Fixed Assets 620.47 711.45 14.7% 616.63 663.85 774.45 786.45 Intangible Fixed Assets 1,665.19 1,619.56-2.7% 1,665.39 1,590.33 1,457.60 1,472.18 Other Long-Term Assets 3.83 13.97 264.4% 3.66 7.04 7.00 15.00 Total Assets 3,489.56 3,945.60 13.1% 3,508.64 4,289.14 4,004.41 4,161.54 Short Term Liabilities 1,197.50 1,404.54 17.3% 1,167.08 1,590.42 1,004.28 1,041.15 Short-Term Financial Loans 283.17 120.96-57.3% 305.12 186.23 110.00 150.00 Short-Term Trade Payables 573.69 760.88 32.6% 551.41 1,026.06 894.28 891.15 Other Short-Term Payables 4.40 1.29-70.7% 1.76 6.79 2.00 2.00 Other Short-Term Liabilities 336.24 521.41 55.1% 308.72 371.33 324.98 341.23 Long Term Liabilities 630.64 1,003.92 59.2% 714.75 1,029.30 1,028.00 1,090.00 Long-Term Financial Loans 363.98 488.38 34.2% 407.19 499.08 500.00 547.00 Long-Term Trade Payables 200.30 470.43 134.9% 241.97 479.52 473.00 478.00 Other Long-Term Liabilities 66.28 44.99-32.1% 65.50 50.66 55.00 65.00 Shareholders' Equity 1,658.72 1,534.21-7.5% 1,624.20 1,666.52 1,971.94 2,030.67 Total L. & S.holders' Equity 3,489.56 3,945.60 13.1% 3,508.64 4,289.14 4,004.22 4,161.82 Income Statement 2006/03 2007/03 Change 2005 2006 2007E 2008E Net Sales 1,992.66 1,889.56-5.2% 8,827.68 9,571.20 9,428.12 9,891.62 Cost Of Sales -1,876.87-1,792.57-4.5% -8,335.69-8,979.67-8,862.43-9,288.23 GROSS PROFITS/LOSSES 121.46 110.79-8.8% 528.86 623.98 582.69 625.39 Operating Expenses -68.29-61.33-10.2% -225.55-274.88-245.13-257.18 NET OPERATING PROFITS 53.17 49.46-7.0% 303.31 349.10 337.56 368.21 Income & Exp. From Other Op. 10.94-170.54 n.m. 11.93-40.64-217.85-49.46 Financial Expenses -21.66-31.18 43.9% -85.66-124.05-34.14-113.75 MINORITY INTERESTS -0.09 0.03 n.m -0.92-0.75-1.00-2.00 INCOME BEFORE TAXES 42.35-152.23 n.m. 228.66 183.66 84.57 202.99 Taxation on Income -7.66-7.41-3.2% -67.54-22.90-15.22-40.60 NET PROFIT AFTER TAXES 34.69-159.64 n.m 161.12 160.77 69.34 162.40 14

Definition of Stock Ratings Stock Ratings Previous Rating OUTPERFORM The stock's total return is expected to exceed the return of the ISE-100 by more than 10% by the end of 2007. BUY MARKET PERFORM The stock's total return is expected to be within 10% of the ISE-100 by the end of 2007. HOLD UNDERPERFORM The stock's total return is expected to fall below the return of the ISE-100 by more than 10% by the end of 2007. SELL Garanti Securities Garanti Building Nispetiye Mah. Aytar Cad. No.2/8 34340 Levent Istanbul Turkey ICM Contact Information: Tunc Obuter: +90 212 318 27 35 Alev Bosut +90 212 318 27 41 Facsimile: +90 212 217 84 70 E-mail: research@garanti.com.tr The information in this report has been obtained by Garanti Securities Research Department from sources believed to be reliable. However, Garanti Securities cannot guarantee the accuracy, adequacy, or completeness of such information, and cannot be responsible for the results of investment decisions made on account of this report. This document is not a solicitation to buy or sell any of the securities mentioned. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change 15 without notice. This report is to be distributed to professional emerging markets investors only.