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FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the quarter ended ~~March~~June 3130, 2003

Preem Holdings AB (publ)
(Translation of registrant's name into English)

Sandhamnsgatan 51, S-11590, Stockholm, Sweden
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ý Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2 (b) under the Securities Exchange Act of 1934.

Yes o No ý

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	PREEM HOLDINGS AB (PUBL)
Date: May 30, 2003	By:	/s/ PER HÖJGÅRD Name: Per Höjgård Title: Chief Financial Officer
Date: August 29, 2003	By:	/s/ PER HÖJGÅRD Name: Per Höjgård Title: Chief Financial Officer

Table of Contents

		Page
Cautionary Statement Concerning Forward-Looking Statements		i1
Presentation of Certain Information		ii2
INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF PREEM HOLDINGS AB AND CONSOLIDATED SUBSIDIARIES
INTERIM CONSOLIDATED FINANCIAL STATEMENTS OF PREEM HOLDINGS AB (PUBL)
Interim Consolidated Income Statements for the Three Months Ended March 31, 2002 and March 31, 2003		1
Consolidated Income Statements (Unaudited) for the Three Months Ended June 30, 2002 and June 30, 2003		3
Interim Consolidated Balance Sheets as of December 31, 2002 and March 31, 2003		2
Consolidated Income Statements (Unaudited) for the Six Months Ended June 30, 2002 and June 30, 2003		4
Interim Consolidated Statements of Cash Flow for the Three Months Ended March 31, 2002 and March 31, 2003		4
Consolidated Balance Sheets (Unaudited) as of December 31, 2002 and June 30, 2003		5
Notes to Interim Consolidated Financial Statements		5
Consolidated Statements of Cash Flow (Unaudited) for the Six Months Ended June 30, 2002 and June 30, 2003		7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		9
Notes to Consolidated Financial Statements for the Six-Month Period Ended June 30, 2003		8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		15

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 6-K contains forward-looking statements. The management of Preem Holdings AB (publ) (the "Company") has based these forward-looking statements on its current expectations and projections about future events. Although the Company's management believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. Important factors that could cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others:

•: volatility in refining margins, in market prices for crude oil and refined products and in the U.S. dollar-krona and Euro-krona exchange rates;
•: unplanned shut downs due to technical problems at the Company's refineries;
•: the Company's future capital needs;
•: the Company's ability to hedge against currency, commodity and interest rate risks;
•: the Company's ability to comply with existing or newly implemented environmental regimes in the countries in which it operates;
•: the Company's liability for violations, known and unknown, of environmental laws;
•: the Company's ability to remediate contaminated sites within budgeted amounts;
•: possible adverse effects of the Company's anticipated growth through joint venture, acquisition or restructuring, including diversion of management resources, incurrence of additional debt, the terms and conditions of any joint venture, failure to integrate acquired businesses and the Company's liability for known and unknown liabilities of acquired businesses;
•: agreements or disagreements among members of the Organization of Petroleum Exporting Countries ("OPEC"); and
•: limitations on the Company's operational flexibility arising under agreements governing the Company's debt.

All forward-looking statements attributable to the Company or persons acting on the Company's behalf are expressly qualified in their entirety by these cautionary statements. In addition, certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company's Annual Report on Form 20-F for the year ended December 31, 2002 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. Because of the uncertainties associated with forward-looking statements, you should not place undue reliance on them. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PRESENTATION OF CERTAIN INFORMATION

~~Solely~~We present our financial statements in Swedish kronor. In addition, solely for the convenience of the reader, ~~the~~certain ~~interim~~Swedish ~~financial~~kronor ~~statements~~amounts ~~for all periods~~ have been translated into U.S. ~~Dollars~~dollars ~~($)~~ using the ~~March~~June 3130, 2003 rate of $1.00 = ~~SEK8~~SEK 8.5000. On ~~May~~August 2321, 2003, the exchange rate for the ~~Krona~~Swedish krona against the U.S. ~~Dollar~~dollar was $1.00 =~~SEK7~~ SEK 8.8239, based on data provided by the Swedish Central Bank. Unless otherwise indicated, all references in this report to "SEK," "krona" or "kronor" are to the lawful currency of Sweden; all references to "$" or "U.S. dollars" are to the lawful currency of the United States of America; and all references to "€" or "Euro" are to the single currency adopted by twelve of the fifteen member states of the European Union.

We present our financial statements in Kronor. Unless otherwise indicated, all references in this report to "SEK," "Krona" or "Kronor" are to the lawful currency of Sweden; all references to "$" or "Dollar" are to the lawful currency of the United States; and all references to "€" or "Euro" are to the single currency adopted by twelve of the fifteen member states of the European Union. 2

Preem Holdings AB and Consolidated Subsidiaries

Consolidated Income Statements (unaudited)

	Three Months Ended March 31,
	Three Months Ended June 30,
	2002		2003
	SEK		SEK		$
			(in millions)
Revenues	10,~~330~~225		129,~~560~~151		1,~~477~~144
Excise duties	(21,~~868~~800	)	(21,~~214~~834	)	(~~260~~229	)
Sales revenue	78,~~462~~425		107,~~346~~317		~~1,217~~915
Cost of goods sold	(78,~~141~~031	)	(97,~~643~~533	)	(~~1,134~~942	)
Gross profit	321		703		83
Gross profit (loss)	394		(216	)	(27	)
Selling expenses	(~~233~~237	)	(~~197~~201	)	(2325	)
Administrative expenses	(~~106~~92	)	(~~119~~120	)	(1415	)
Other operating income	7353		7957		97
Operating income	55		466		55
Other operating expenses	—		(15	)	(2	)
Interest income	13		9		1
Operating income (loss)	118		(495	)	(62	)
Interest expense	(115	)	(122	)	(15	)
Interest income	11		11		1
Other financial expenses, net	166		33		4
Interest expense	(121	)	(114	)	(14	)
Income before taxes	119		386		45
Other financial expenses, net	61		141		18
Income taxes	(44	)	(108	)	(12	)
Income (loss) before taxes	69		(457	)	(57	)
Minority interests	(3	)	(1	)	0
Income taxes	(17	)	134		17
Net income	72		277		33
Minority interests	(1	)	0		0
Net income (loss)	51		(323	)	(40	)

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Preem Holdings AB and Consolidated Subsidiaries

Consolidated Income Statements (unaudited)

	Six Months Ended June 30,
	2002		2003
	SEK		SEK		$
			(in millions)
Revenues	20,555		21,711		2,714
Excise duties	(4,668	)	(4,048	)	(506	)

Sales revenue	15,887		17,663		2,208
Cost of goods sold	(15,172	)	(17,176	)	(2,147	)

Gross profit	715		487		61
Selling expenses	(470	)	(398	)	(50	)
Administrative expenses	(198	)	(239	)	(30	)
Other operating income	126		136		17
Other operating expenses	—		(15	)	(2	)

Operating income (loss)	173		(29	)	(4	)
Interest income	24		20		2
Interest expense	(236	)	(236	)	(29	)
Other financial expenses, net	227		174		22

Income (loss) before taxes	188		(71	)	(9	)
Income taxes	(61	)	26		3
Minority interests	(4	)	(1	)	0

Net income (loss)	123		(46	)	(6	)

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Preem Holdings AB and Consolidated Subsidiaries

Consolidated Balance Sheets (unaudited)

	As of December 31, 2002	As of ~~March~~June 3130, 2003
	SEK	SEK	$
	(in millions)
ASSETS
Fixed assets
Intangible fixed assets
Goodwill	1,072	~~1,014~~956	~~119~~120
Total intangible assets	1,072	~~1,014~~956	~~119~~120
Tangible assets
Land and building, net	762	~~758~~761	8995
Plant and machinery, net	3,786	3,~~686~~631	~~434~~454
Capitalized turnaround cost, net	207	~~185~~283	2236
Equipment, tools fixtures and fittings, net	681	~~674~~687	7986
Construction in progress	291	~~362~~443	4355
Total tangible fixed assets	5,727	5,~~665~~805	~~667~~726
Financial assets
Participation in associated companies	5	5	1
Other securities held as fixed assets	2	2	0
Other long-term receivables	116	~~113~~108	13
Total financial assets	123	~~120~~115	14
Total fixed assets	6,922	6,~~799~~876	~~800~~860
Current assets
Inventories	3,523	3,~~949~~040	~~465~~380
Accounts receivable	3,684	32,~~463~~442	~~407~~305
Receivables from associated companies	1	10	0
Other receivables	337	~~397~~225	4728
Prepaid expenses and accrued income	254	~~240~~271	2834
Cash and cash equivalent	461	~~262~~264	3133
Total current assets	8,260	86,~~312~~242	~~978~~780
TOTAL ASSETS	15,182	1513,~~111~~118	1,~~778~~640

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Preem Holdings AB and Consolidated Subsidiaries

Consolidated Balance Sheets (unaudited)

	As of December 31, 2002		As of ~~March~~June 3130, 2003
	SEK		SEK		$
	(in millions)
SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES
Shareholders' equity
Restricted equity
Share capital	1		1		0
Restricted reserves	0		0		0
	1		1		0
Non-restricted equity
Profit brought forward	3,074		3,~~379~~271		~~397~~409
(Loss)/Profit for the year	(148	)	277		33
Loss for the year	(148	)	(46	)	(6	)
Total shareholders' equity	2,927		3,~~657~~226		~~430~~403
Minority interests	8		97		1
Provisions
Pension provision	157		~~158~~153		19
Deferred tax liability	396		~~397~~371		4746
Other provisions	53		53—		6—
Total provisions	606		~~608~~524		7265
Liabilities
Long-term liabilities
Shareholder loans	242		242		2830
Bond loan	2,678		2,~~686~~666		~~316~~333
Liabilities to credit institutions	2,875		2,~~601~~347		~~306~~294
Bank overdraft facility	—		~~125~~139		1518
Other long-term liabilities	—		2		0
Total long-term liabilities	5,795		5,~~656~~396		~~665~~675
Current liabilities
Liabilities to credit institutions	771		~~1,066~~682		~~126~~85
Advanced payment from customers	159		~~159~~169		1921
Accounts payable	1,883		1,~~595~~099		~~188~~138
Liabilities to parent company	356		11		12
Liabilities to associated companies	1		3		0
Income tax payable	8		914		12
Other liabilities	1,556		1,~~310~~025		~~154~~128
Accrued expenses and prepaid income	1,112		~~1,028~~962		~~121~~120
Total current liabilities	5,846		53,~~181~~965		~~610~~496
TOTAL SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES	15,182		1513,~~111~~118		1,~~778~~640

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Preem Holdings AB and Consolidated Subsidiaries

Consolidated Statements of Cash Flow (unaudited)

	Three Months Ended March 31,
	Six Months Ended June 30,
	2002		2003
	SEK		SEK		$
			(in millions)
Income from operation
Income after financial items	~~119~~188		~~386~~(71	)	45(9	)
Adjustments for non-cash items
Deprecation and amortization	~~202~~404		~~217~~434		2654
Unrealized exchange gains	(~~138~~441	)	(41150	)	(519	)
Other adjustments for non-cash items	—7		4(49	)	0(6	)
Taxes paid	(2831	)	—(1	)	—0
Cash flow in working capital
Increase in inventories	(371	)	(426	)	(50	)
Decrease in inventories	160		483		61
Decrease in current receivables	74650		~~179~~1,345		21168
Decrease in liabilities	(456	)	(502	)	(59	)
Decrease in current liabilities	(408	)	(1,329	)	(166	)
Cash flow used in operating activities	(598	)	(183	)	(22	)
Cash flow from operating activities	529		662		83
Investment activities
Investment in tangible fixed assets	(163	)	(104	)	(12	)
Investment in intangible fixed assets	(1	)	0		0
Investment in tangible fixed assets	(457	)	(402	)	(50	)
Sale of tangible fixed assets	1		3		0
Increase in financial fixed assets	(45	)	0		0
Sale of subsidiary	(38	)	—		—
Cash flow used in investment activities	(207	)	(101	)	(12	)
Increase in financial fixed assets	(1	)	1		0
Cash flow used in investment activities	(496	)	(398	)	(50	)
Financing operation
New loans from credit institutions	~~736~~741		~~745~~759		8895
Payment of loans from credit institutions	(~~207~~364	)	(~~660~~1,218	)	(78153	)
Cash flow from financing activities	529		85		10
Dividends paid	(2	)	(2	)	0
Cash flow of the period	(276	)	(199	)	(23	)
Group contribution received	8		—		—
Liquid funds at the beginning of the period	959		461		54
Cash flow from (used in) financing activities	383		(461	)	(58	)
Exchange-rate difference in cash and cash equivalents	(6	)	—		—
Cash flow of the period	416		(197	)	(25	)
Cash and cash equivalents at the end of the period	677		262		31
Liquid funds at the beginning of the period	959		461		58
Exchange-rate difference in cash and cash equivalents	(2	)	—		—
Cash and cash equivalents at the end of the period	1,373		264		33
Supplementary disclosures
Cash flow interest
Interest received	1221		918		12
Interest paid	(~~212~~349	)	(~~218~~255	)	(2632	)
Items included in cash and cash equivalents
Cash and bank balance	~~451~~441		~~233~~230		2729
Short-term investments	~~226~~932		2934		4
Total cash and cash equivalents	~~677~~1,373		~~262~~264		3133

The accompanying notes form an integral part of these Interim Consolidated Financial Statements.

Preem Holdings AB and Consolidated Subsidiaries ~~Notes to Consolidated Financial Statements Three-Months Period Ended March 31, 2003~~

Note 1. Basis of presentation

Preem Holdings AB (publ) (the "Company") was originally established in 1980 as Swedoil AB and is registered with the Swedish Patent and Registration Office under the number 556206-9673. Swedoil AB was a subsidiary of Preem Petroleum AB that had been dormant since 1983. On March 1, 2001, its name was changed from Swedoil AB to Preem Holdings AB, through an amendment to its Articles of Association and its subsequent registration with the Swedish Patent and Registration Office. The purpose of this name change was to reflect accurately its status as a holding company and its position within the overall corporate structure with respect to Corral Petroleum Holdings AB, its parent company, and Preem Petroleum AB, its operating subsidiary. Also on March 1, 2001, the Company's status was changed from a private company to a public company, giving it the ability under Swedish law to raise capital through the issuance of securities. Corral Petroleum Holdings AB, a Swedish company, contributed all of the issued and outstanding shares of Preem Petroleum AB to Preem Holdings AB on March 19, 2001. Preem Holdings AB is wholly owned by Corral Petroleum Holdings AB, which is wholly owned by Moroncha Holdings Company Limited, which is wholly owned by Mr. Mohammed Hussein Ali Al-Amoudi.

Preem Holdings AB applies the Swedish Annual Account Act and complies with recommendations of the Swedish Accounting Standards Board and the Swedish Financial Accounting Standards Council.

The accompanying Consolidated Financial Statements present the financial position, results of operations and cash flows of Preem Holdings AB and its consolidated subsidiaries. Preem Holdings AB's principal assets as of ~~March~~June 3130, 2003 consist of all of the issued and outstanding shares of Preem Petroleum AB and an inter-company loan to Preem Petroleum AB. Preem Holdings AB's principal liability as of ~~March~~June 3130, 2003 consists of €291 million aggregate principal amount of 105/8% senior secured notes, due 2011, of which Preem Holdings AB issued €250 million on April 10, 2001 and €55 million on July 20, 2001. As of ~~March~~June 3130, 2003, the Company has repurchased €14 million worth of its own notes on the open market.

The accompanying consolidated financial statements present the financial position and results of operations of the Company and have been prepared in accordance with Swedish GAAP. These accounting principles differ in certain significant respects from U.S. GAAP. For further information, see note 26 of the Company's Consolidated Financial Statements included in its Annual Report on Form 20-F for the fiscal year ended December 31, 2002 (the "2002 Annual Report").

The interim financial information included in the interim consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. Interim results for the three months ~~ended~~and ~~March~~the six months ended June 3130, 2003 are not necessarily indicative of the results to be expected for the full year.

There has been no material change in the Company's related party transactions since December 31, 2002. For further information, see item 7.B in the Company's 2002 Annual Report. ~~There~~ has been no material change in the Company's contingent liabilities since December 31, 2002. For further information, see note 23 in the Company's Consolidated Financial Statements included in its 2002 Annual Report.

Note 2. Sales revenue

	Three months ended March 31,
	Six months ended June 30,
	2002		2003
Supply and Refining	613,~~258~~589		916,~~578~~157
Marketing	24,~~395~~778		35,~~256~~635
International	~~450~~987		—
Group eliminations	(13,~~641~~467	)	(24,~~488~~129	)
Total	715,~~462~~887		1017,~~346~~663

Note 3. Operating income

	Three months ended March 31,
	Six months ended June 30,
	2002		2003
Supply and Refining	~~188~~706		~~599~~307
Marketing	3223		341
International	0(7	)	—
Other Non-allocated Income (expense), net	(~~165~~549	)	(~~167~~337	)
Total	55173		~~466~~(29	)

Note 4. Inventories

The valuation of inventories has been carried out at the lower of the acquisition value and the actual value. The actual value for finished products is the net sales value, and for crude oil it is the replacement costs. At ~~March~~June 3130, 2003, the actual value of inventories was ~~SEK8~~SEK 227 million ~~lower~~higher than the acquisition value. ~~Consequently, we made a write-down of the inventory value of SEK8 million, affecting the cost of goods sold with the same amount.~~ There is a general practice within the Swedish oil industry to lend and borrow products to/from other oil companies. The lending portion of inventory volume is included in the inventory value in an amount of ~~SEK27~~SEK 36 million. Borrowed inventory volumes corresponds to an inventory value of ~~SEK74~~SEK 88 million, which is not included in the inventory value.

	As of December 31, 2002	As of ~~March~~June 3130, 2003
Raw materials and supplies	1,836	1,~~786~~470
Finished products	1,687	21,~~163~~570
Total	3,523	3,~~949~~040

Note 5. Shareholders' Equity

The changes in shareholders' equity in Preem Holdings AB and its consolidated subsidiaries for the period December 31, 2002 to ~~March~~June 3130, 2003 are as follows:

	Share capital	Restricted reserves	Unrestricted reserves	Total shareholders equity
	(SEK in million)
	(in millions of SEK)
Balance at December 31, 2002	1	—0	2,926	2,927
Shareholder's contribution	—	—	~~345~~—	345
Calculated tax effect of group contribution	—	—	108	108
Net income	—	—	—	(46	)
Net income	—	—	277	277
Balance at June 30, 2003	1	0	3,225	3,226
Balance at March 31, 2003	1	—	3,656	3,657

Note 6. Long-term Liabilities to Credit Institutions

	2003	2004	2005	2006	2007	2008+
Bond loan	—	—	—	—	—	2,~~686~~666
Loans	~~390~~202	555	~~399~~386	~~429~~404	503	~~727~~699
Total	~~390~~202	555	~~399~~386	~~429~~404	503	3,~~413~~365

The Company has as of ~~March~~June 3130, 2003 debt of ~~SEK41~~SEK 40 million secured by real estate mortgages and debt of ~~SEK425~~SEK 400 million that is guaranteed by a financial institution.

Note 7. ~~Interim~~Contingent ~~Segment Information~~liabilities

~~The~~There ~~Company operates mainly in the oil and gas industry and~~ has ~~two~~been ~~reportable~~no ~~segments:~~material achange Supply and Refining Segment and a Marketing Segment. The two segments were determined based upon the types of services and products that are provided to customers. The Supply and Refining Segment operates the majority-owned Scanraff refinery located on the west coast of Sweden, north of Gothenburg, and the wholly owned Preemraff refinery located near the harbor of Torshamnen in Gothenburg, as well as storage depots throughout Sweden. The Supply and Refining Segment sells a full range of refined products in Sweden and abroad. The Marketing Segment sells home-heating gasoil directly to end-users, and gasoil, diesel and fuel oil directly to Swedish companies using refined products purchased from the ~~Supply~~Company's ~~and~~contingent ~~Refining~~liabilities ~~Segment.~~since ~~The Marketing Segment also sells gasoline~~December 31, ~~diesel,~~2002 ~~lubricants, shop merchandise and~~ other ~~products~~than ~~through its Preem-branded service stations~~follows.

InOn ~~January~~June ~~2003~~29, 2000, the Swedish Competition Authority filed a summons application to the City Court of Stockholm against Preem Petroleum AB ~~sold~~and ~~its~~four ~~wholly~~other ~~owned~~oil ~~Polish~~companies ~~subsidiary,~~operating ~~through~~in Sweden ~~which~~demanding wethat ~~conducted~~the ~~all~~City ~~our~~Court ~~Polish~~impose ~~operations,~~total tofines ~~Statoil.~~on ~~The~~all ~~sale~~five ~~resulted~~oil incompanies of SEK 740 million as a ~~loss~~penalty infor ~~2002~~ alleged infringements of ~~approximately~~the ~~SEK3~~Swedish Competition Act. Of the SEK 740 million. ~~The~~in ~~sale~~total offines, ~~our~~the ~~Polish~~Swedish ~~operations~~Competition ~~follows~~Authority ~~our~~demanded ~~decision~~that tothe ~~concentrate~~City ~~further~~Court ~~investments~~impose fines on ~~refining~~Preem ~~and~~Petroleum toAB ~~strengthen~~of ~~our~~SEK ~~activities~~85 million. inThis ~~Sweden.~~claim ~~Prior~~was adjusted to ~~the~~SEK ~~sale~~81 million. ofThe ~~our~~Competition ~~Polish~~Authority ~~operations,~~claimed wethat ~~had~~Preem ~~three~~Petroleum ~~reportable~~AB ~~segments:~~participated ~~the~~in ~~Supply~~a ~~and~~cartel ~~Refining~~on ~~Segment and~~ the ~~Marketing~~Swedish ~~Segment~~market ~~discussed~~concerning ~~above,~~prices asand ~~well~~discounts ason angasoline ~~International~~during ~~Segment,~~the ~~which~~summer ~~sold~~and ~~refined~~fall of ~~products~~1999. ~~primarily~~Court toproceedings ~~wholesale~~took ~~customers~~place induring ~~Poland~~the ~~and,~~third toquarter aof ~~lesser~~2002 ~~extent,~~and inon ~~Norway.~~April 29, ~~After~~2003 the ~~sale~~District Court of ~~our~~Stockholm ~~Polish~~announced ~~operations~~its judgment, wefinding ~~consolidated~~that the ~~remaining~~five ~~operations~~companies ofhad ~~our~~violated the ~~International~~Competition ~~Segment, including~~Act. ~~our~~The ~~operations~~court inassessed ~~Norway,~~Preem Petroleum AB with ~~our~~a ~~Marketing~~fine ~~Segment,~~of ~~which,~~SEK ~~prior~~6 million. toThe ~~this~~court ~~consolidation,~~also ~~was~~ordered ~~referred~~the Competition Authority to aspay up to SEK 2.3 million of Preem Petroleum AB's legal fees. Both the ~~Swedish~~Competition ~~Market~~Authority ~~Segment~~and Preem Petroleum AB have appealed the court's judgment.

7 For further information, see note 23 in the Company's Consolidated Financial Statements included in its 2002 Annual Report.

Performance of the segments is evaluated based upon operating profit (loss) before income taxes and excluding interest income and expenses, and minority interest. Segment information has been prepared in accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information." Accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales were made at market rates. 10

	Three months ending March 31,
	2002		2003
	(in millions)
Sales revenue:
Supply and refining	6,258		9,578
Marketing	2,395		3,256
International	450		—
Segment sales revenue	9,103		12,834
Intersegment sales revenue	(1,641	)	(2,488	)
Sales revenues	7,462		10,346
Segment operating profit:
Supply and refining	188		599
Marketing	32		34
International	0		—
Segment operating profit	220		633
Other non-allocated income net(1)	(165	)	(167	)
Income from operations	55		466
Non-allocated items(2)	64		(80	)
Income before income taxes	119		386

Note 8. U.S. GAAP Information

8 The accompanying interim consolidated financial statements have been prepared in accordance with Swedish GAAP, which differs in certain significant respects from U.S. GAAP. The following is a summary of the adjustments to net income and Shareholders' equity that would have been required if U.S. GAAP had been applied instead of Swedish GAAP in the preparation of the interim consolidated financial statements.

		Six-month periods ended June 30,
		2002		2003
		(SEK in million)
Net income/(loss) under Swedish GAAP		123		(46	)
Adjustments to reconcile to U.S. GAAP:
	Pensions (A)	2		2
	Pension refund (B)	46		9
	Business combinations (C)	116		116
	Computer software for internal use (D)	6		1
	Financial instruments (E)	—		(30	)
	Changes in group structure (F)	2		7
	Income tax effect of U.S. GAAP adjustments	(16	)	3

	Net income under U.S. GAAP	279		62

Basic and diluted income per share in accordance with US GAAP (SEK) (E)		55,800		12,400

Weighted-average number of shares outstanding (thousands) (E)		5		5

		As of December 31, 2002		As of June 30, 2003
		(SEK in million)
Shareholders' equity under Swedish GAAP		2,927		3,226
Adjustments to reconcile to U.S. GAAP:
	Pensions (A)	56		58
	Pension refund (B)	(14	)	(5	)
	Business combinations (C)	232		348
	Computer software for internal use (D)	19		20
	Financial instruments (E)	(161	)	(191	)
	Changes in group structure (F)	(76	)	(69	)
	Accumulated income tax effect of U.S. GAAP adjustments	28		31

	Shareholders' equity U.S. GAAP	3,011		3,418

(A): Pensions—The Group companies have various pension schemes in accordance with local conditions and practices in the countries in which they operate. Most of these schemes are defined benefit pension schemes with retirement, disability, death and termination income benefits. The retirement income benefits are generally a function of years of employment and final salary with the Company and are generally coordinated with local national pension schemes. The Group companies' schemes are generally funded through payments to insurance companies or to trustee-administered funds as determined by periodic actuarial calculations. The Group policy for funding its defined benefit plans is to satisfy local statutory funding requirements for tax deductible contributions. The Company contributes at least an amount equal to the minimum funding requirements for the

countries in which it maintains pension schemes. The Company also participates in some multi-employer pension arrangements and defined contribution pension arrangements. Under U.S. GAAP, the determination of pension expense for defined benefit pension plans is made pursuant to Statement of Financial Accounting Standard No. 87, "Employers' Accounting for Pensions SFAS No. 87." SFAS 87 is more prescriptive than Swedish GAAP in that it requires the use of the specific actuarial method (the projected unit credit method). SFAS 87 requires, under certain circumstances, that a minimum liability may be recorded with a corresponding intangible asset and/or reduction of shareholders' equity for plans that are underfunded.

(B): Pension refund—The Swedish National Pension Fund decided during late 1999 to repay some of its excess funds to the contributors to the plan. The amount to be received is split into two parts i) 20% in cash during September 2000; and ii) 80% of future required payments. Swedish GAAP allows the Companies to account for this refund in income during 2000 using a present value calculation of future payments. Under U.S. GAAP the non-cash portion of the refund will be recognized as an offset to future contributions.
(C): Business combinations—Acquisitions of certain subsidiaries are reported differently in accordance with Preem's accounting principles and U.S. GAAP. The difference is attributable primarily to reporting and amortization of goodwill.

In 2002 Preem adopted SFAS 142 "Goodwill and Other Intangible Assets" in its determination of Net income and Shareholders' equity in accordance with U.S. GAAP. In accordance with SFAS 142, goodwill and other intangible assets with indefinite useful lives should not be amortized but rather evaluated for impairment annually. Accordingly, the amortization of goodwill reported under Swedish GAAP has been reversed in the determination of Net income and Shareholders' equity under U.S. GAAP. Furthermore, impairment tests have been performed for existing goodwill as of December 31, 2002. No impairment loss has been recognized as a result of these tests.

(D): Computer software for internal use—The cost of developing computer software for internal use is expensed as incurred under Swedish GAAP. Certain costs are capitalized under U.S. GAAP (SOP 98-1) and are amortized over the expected economic life of the asset.
(E): Financial instruments—Under Swedish GAAP, unrealized gains and losses on forward refining margin contracts which hedge future cash flows are deferred and recognized only when realized. Under U.S. GAAP, unrealized gains and losses on forward refining margin contracts that do not qualify for hedge accounting treatment would be recognized as income or loss when they occur. Effective January 1, 2001, the Company adopted SFAS No. 133 "Accounting for Derivative Instruments and Hedging Activities" and SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Transactions, an Amendment to FASB Statement No. 133". These statements establish accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet at fair value as either assets or liabilities, and requires the company to designate, document and assess the effectiveness of a hedge to qualify for hedge accounting treatment. The Company uses derivative instruments to hedge the value of the Groups' financial position. Management has determined that none of the Groups' hedges of financial exposure qualify for hedge accounting under U.S. GAAP during 2002. In accordance with U.S. GAAP, all outstanding derivative instruments are therefore valued at fair value. The gains and losses that thereby arise are included when calculating income. The six month-end adjustment to record derivative instruments at fair value in accordance with U.S. GAAP resulted in a net loss adjustment of SEK 30 million recognized in current earnings.

(F): Changes in group structure—Preem changed its shareholding in the refineries during 2002 through a transaction structure agreement in which the parties agreed to combine the operations, assets and liabilities of Scanraff and Scancracker into a joint refining company with unified ownership shares and processing rights being held 75% by Preem and 25% by Norsk Hydro. The transaction has been recorded as a change in group structure with an effect only on shareholders' equity under Swedish GAAP. The transaction under U.S. GAAP is recorded as a non-monetary transaction exchanging assets without any gain reported on the transaction. The excess value is instead used to write down the assets received in the transaction and will be reversed over the life of the corresponding assets.

Comprehensive income

The Company has adopted Statement of Financial Accounting ("SFAS") No. 130, "Reporting Comprehensive Income", which establishes standards for the reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income generally encompasses all changes in stockholders' equity (except those arising from transactions with the owners) and includes net income, net unrealized gains or losses on available for sale securities and foreign currency translation adjustments. Comprehensive income in accordance with U.S. GAAP for the six-month periods ended June 30, 2002 and 2003 was SEK 285 million and SEK 62 million, respectively.

Note 9. Interim Segment Information

The Company operates mainly in the oil and gas industry and has two reportable segments: a Supply and Refining Segment and a Marketing Segment. The two segments were determined based upon the types of services and products that are provided to customers. The Supply and Refining Segment operates the majority-owned Scanraff refinery located on the west coast of Sweden, north of Gothenburg, and the wholly owned Preemraff refinery located near the harbor of Torshamnen in Gothenburg, as well as storage depots throughout Sweden. The Supply and Refining Segment sells a full range of refined products in Sweden and abroad. The Marketing Segment sells home-heating gasoil directly to end users, and gasoil, diesel and fuel oil directly to Swedish companies using refined products purchased from the Supply and Refining Segment. The Marketing Segment also sells gasoline, diesel, lubricants, shop merchandise and other products through its Preem-branded service stations.

In January 2003, Preem Petroleum AB sold its wholly owned Polish subsidiary, through which we conducted all our Polish operations, to Statoil. The sale of our Polish operations follows our decision to concentrate further investments on refining and to strengthen our activities in Sweden. Prior to the sale of our Polish operations, we had three reportable segments: the Supply and Refining Segment and the Marketing Segment discussed above, as well as an International Segment, which sold refined products primarily to wholesale customers in Poland and, to a lesser extent, in Norway. After the sale of our Polish operations, we consolidated the remaining operations of our International Segment, including our operations in Norway, with our Marketing Segment. Prior to this consolidation, the Marketing Segment was referred to as the Swedish Market Segment.

Financial information by segment is as follows:

	Three months ended June 30,				Six months ended June 30,
	2002		2003		2002		2003
	(in millions)
Sales revenue:
Supply and refining	7,331		6,579		13,589		16,157
Swedish market	2,383		2,379		4,778		5,635
International	537		—		987		—
Segment sales revenue	10,251		8,958		19,354		21,792
Group eliminations	(1,826	)	(1,641	)	(3,467	)	(4,129	)

Sales revenues	8,425		7,317		15,887		17,663
Segment operating profit:
Supply and refining	518		(292	)	706		307
Swedish market	(9	)	(33	)	23		1
International	(7	)	—		(7	)	—

Segment operating profit	502		(325	)	722		308
Other non-allocated income net(1)	(384	)	(170	)	(549	)	(337	)
Income from operations	118		(495	)	173		(29	)
Non-allocated items(2)	(49	)	38		15		(42	)

Income before income taxes	69		(457	)	188		(71	)

(1): Other non-allocated income (expense) includes the corporate cost center, non-recurring items and exchange rate differences.
(2): Non-allocated items consist of interest income and expenses, other financial income and expense.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We refine crude oil in Sweden and then market and sell refined products primarily in Sweden and other northern European markets. We conduct our business through Preem Petroleum AB, our wholly owned operating company, ~~Preem Petroleum AB,~~ which has two reportable segments: the Supply and Refining Segment and the Marketing Segment. Our Supply and Refining Segment, which operates our majority-owned Scanraff refinery and our wholly owned Preemraff refinery,. It purchases and refines crude oil, and then sells refined products wholesale to our Marketing Segment and to third ~~parties,~~ ~~which~~parties. ~~are~~Other ~~primarily other~~ refined product marketing companies comprise the majority of our third party customers. Our Marketing Segment consists of a home-heating and business-to-business division and a station and consumer division. Our home-heating and business-to-business division sells refined products to wholesale and retail customers, including sales of home-heating gasoil to retail customers. Our station and consumer division consists of a network of Preem-branded service stations throughout Sweden.

In January 2003, Preem Petroleum AB sold its wholly owned Polish subsidiary, through which we conducted all of our Polish operations, to Statoil. The sale ~~resulted in a loss in 2002~~ of ~~approximately SEK3 million. The sale of~~ our Polish operations follows our decision to concentrate further investments on refining and to strengthen our activities in Sweden. Prior to the sale of our Polish operations, we had three reportable segments: the Supply and Refining Segment, ~~and the~~ Marketing Segment ~~discussed above~~, asand ~~well as an~~ International Segment, which sold refined products primarily to wholesale customers in Poland and, to a lesser extent, in Norway. After the sale of our Polish operations, we consolidated the remaining operations of our International Segment~~, including~~ ~~our operations in Norway,~~ with our Marketing Segment,. ~~which,~~Prior ~~prior~~ to this consolidation, our Marketing Segment was referred to as the Swedish Market Segment.

Prices for crude oil and refined products are subject to frequent and significant fluctuations. As a result, a refinery's sales revenue and cost of goods sold can vary significantly from period to period, even when the volume of crude oil purchased and refined products sold remain relatively constant. A refinery's sales revenue depends on refined product prices, currency fluctuations and throughput,. ~~which~~Throughput is a function of refining capacity and utilization. The ~~cyclicality~~cyclical nature of refined product prices ~~results~~leads into ~~high~~volatile ~~volatility of~~ sales revenue. Consequently, sales revenue, viewed alone, is not indicative of an oil refining company's results. Earnings and cash flow from refining are largely driven by gross and net refining margins,. ~~and~~A a successful refinery strives to maintain its profit margins from year to year, notwithstanding fluctuations in the currencies and prices of crude oil and refined products.

Refining margins

Oil refineries measure the financial performance of their operations by their margins. "Gross refining margin" is the difference between the sales revenue received from the sale of refined products ~~produced by a refinery~~ and the cost of crude oil and, (where relevant), other intermediate ~~feedstocks~~feedstock ~~processed~~that by it processes. While crude oil costs in general are a function of supply and demand, there are many grades of crude oil ~~and~~with ~~their~~varied relative prices ~~vary~~. ~~Like crude oil~~Similarly, different refined products vary in price. A refinery's gross refining margin is a measure of both the sophistication of the plant's design and its crude oil purchasing strategy (i.e., its ability to produce the most valuable refined product mix from the least costly crude oil). Thus, a refinery with a cracking facility, such as Scanraff, ~~that~~which can produce a higher percentage of the lighter, higher- value, fractions, will generally have a ~~higher~~larger gross refining margin than a less complex facility, such as Preemraff. "Refining margin" measures the ability of a refinery to cover the costs of its refining process. "Net cash margin" is the refining margin less the refinery's fixed operating costs, excluding depreciation and other non-cash costs. Net cash margin indicates the cash generating capability of the refinery. "Net refining margin" is the net cash margin less depreciation and reflects the overall profitability of the refinery.

~~Highlights~~ "Refining margin" measures the ability of a refinery to cover the ~~First~~costs ~~Quarter~~of its refining process. "Net cash margin" is the refining margin less the refinery's fixed operating costs, excluding depreciation and other non-cash costs. Net cash margin indicates the cash generating capability of ~~2003~~ the refinery. "Net refining margin" is the net cash margin less depreciation and reflects the overall profitability of the refinery.

Highlights of the First Six Months of 2003

Supply and Refining Segment

~~From~~During the ~~beginning~~six months ofended June 30, 2003, ~~until~~ the ~~middle~~Brent ofprice ~~March~~fluctuated, ~~crude~~ranging ~~oil prices varied~~ from a low of $3022.90 per barrel toon ~~$35~~April 29, ~~per~~2003 ~~barrel,~~to a ~~range~~high ~~that is significantly higher~~of ~~than the~~ $1834.70 ~~to $26~~ per barrel ~~range~~on ~~for~~March 10, ~~crude~~2003. ~~oil~~Generally, ~~prices during~~ the ~~first~~Brent ~~quarter~~price ~~of 2002. The higher prices during this period were a consequence of lower production~~ in ~~Venezuela due to~~ the ~~national strike,~~first ~~low~~six months ~~industry-wide~~of ~~inventory~~2003 ~~storage~~was ~~levels~~significantly ~~and~~higher ~~the~~than ~~geopolitical~~in ~~uncertainty surrounding~~ the ~~impending~~same ~~war~~period in ~~Iraq.~~2002, ~~Crude~~when ~~oil prices began to decrease toward~~ the ~~end~~Brent ofprice ~~March, falling~~ranged by from approximately $1020.00 per barrel ~~from~~to $3425.7300 per barrel. onSince ~~March 10~~the tolow of $2422.9690 per barrel on ~~March~~April ~~21.~~29, ~~The~~2003, the Brent price ofincreased ~~crude~~steadily ~~oil~~to $28.30 per barrel on ~~March~~June 3130, 2003 ~~was $28~~.08 Since ~~per~~June 30, ~~barrel~~2003, ~~and~~ asthe ofBrent ~~May~~price has continued to increase; on August 2321, 2003, the Brent price was approximately $2630.9200 per barrel. ~~This~~The ~~fall~~higher prices in ~~crude~~the ~~oil~~first ~~prices~~six months of ~~resulted~~2003 ~~primarily~~compared ~~from~~to the ~~realization~~same ~~that~~period ~~decreased~~in ~~Iraqi~~2002 ~~oil~~are ~~exports~~due ~~would~~to below ~~offset~~industry-wide byinventory ~~increased exports from other OPEC countries~~levels, ~~the~~production ~~relatively~~constraints ~~short~~imposed ~~duration~~by ofOPEC ~~the~~on ~~war~~its inmember ~~Iraq~~countries, and ~~increased~~uncertainties ~~oil~~about ~~production~~the timing inof ~~and~~resumption ~~exports from Venezuela, both~~ of ~~which~~crude ~~almost~~oil ~~returned~~exports tofrom ~~pre-strike levels~~Iraq.

~~Prices~~To ~~for~~accommodate ~~refined products were also high in~~ the ~~first~~resumption ~~quarter~~ of ~~2003.~~crude ~~Refining~~oil ~~margins~~exports ~~were~~from ~~relatively high~~Iraq, ~~particularly~~OPEC ~~toward~~is ~~the~~expected ~~end~~to ofreduce ~~the~~production ~~quarter~~quotas ~~when~~of ~~crude~~other ~~oil~~member ~~prices~~states. ~~fell~~As at a ~~faster~~ ~~rate~~result, ~~than~~industry ~~refined~~crude ~~product~~oil prices. ~~The~~are ~~higher~~expected ~~prices for refined products were primarily attributable~~ to ~~reduced supply by virtue of the fact that Venezuelan refineries, normally large suppliers~~ toremain ~~the U~~high.S. ~~market,~~Brent ~~were~~prices ~~shut~~are ~~down~~currently ~~because~~in of the ~~national~~upper ~~strike;~~end anof ~~exceptionally~~OPEC's ~~cold~~target ~~winter~~range ~~that increased demand~~ for ~~heating~~crude oil inprices ~~the~~of ~~Atlantic~~between ~~Basin;~~$22.00 and a$28.00 ~~lack~~per ~~of shipping capacity, which resulted in significant amounts of oil having to be shipped over long distances~~barrel. ~~Operations~~As ata ~~our~~result, ~~wholly owned Preemraff refinery were smooth and stable in~~ the ~~first~~resumption ~~quarter~~ of ~~2003~~crude ~~and~~oil ~~benefited from~~exports ~~high refining margins. However, while our majority-owned Scanraff refinery also benefited~~ from ~~high refining margins during the first quarter of 2003~~ Iraq, ~~the~~despite ~~catalytic~~additional ~~cracker~~production ~~had~~constraints toimposed beby ~~shut~~OPEC ~~down~~ on ~~December 30,~~ ~~2002 due to freezing problems and~~ its ~~start-up~~member ~~in January 2003 was delayed because of a continued low ambient temperature. In addition~~countries, ~~Scanraff~~may ~~also~~decrease ~~experienced problems with its propylene manufacturing plant~~slightly.

WeRefined ~~are~~product ~~considering~~prices anin ~~additional~~the ~~investment~~first six months of 2003 were also higher than prices in athe ~~mild-hydrocracker~~same ~~unit~~period atin ~~Scanraff~~2002. Higher refined product prices, ~~our~~coupled ~~share~~with offalling ~~which~~crude ~~would~~oil prices befrom ~~approximately~~the ~~SEK2,535~~end of March through April ~~million~~2003, toresulted ~~further~~in ~~upgrade~~higher ~~the refinery~~refining tomargins. ~~enhance~~However, ~~its~~ refining margins at our refineries decreased in May as a result of increasing crude oil prices and lagging refined product prices.

10 Our high refining margins in the first half of 2003 were attributable to increased demand for fuel oil, which, in turn, resulted from higher electricity prices. The higher electricity prices resulted from a number of factors, including unusually low inventory levels of natural gas in the United States, the suspension of energy-generating nuclear power plants in Japan beginning in April 2003 for safety inspections, and unusually warm weather and low water levels in Europe. The effect of these factors was partially offset by the U.S.-led military action in Iraq and the SARS epidemic, which led to slower economic growth and lower oil demand during this period.

~~The~~From ~~following~~the ~~tables~~beginning ~~show~~of May 2003 until the ~~calculation~~middle of ~~margins~~June 2003, ~~for~~Preemraff ~~Scanraff~~was ~~and~~shut ~~Preemraff~~down for ~~the~~a ~~first~~regularly ~~quarters~~scheduled ofmajor ~~2003~~maintenance ~~and~~turnaround, ~~2002.~~which Inincludes ~~accordance~~inspections ~~with~~of all ~~industry~~processing ~~practice,~~units. ~~the~~This ~~margins~~major ~~are~~maintenance ~~expressed in~~turnaround ~~Dollars~~occurs ~~per~~every ~~barrel~~four years. The ~~information~~last ~~for~~such ~~Scanraff~~major ~~shows~~maintenance ~~our~~turnaround ~~share~~was ofconducted ~~the~~at ~~refinery's~~Preemraff ~~production~~in ~~for~~1999 ~~the~~and ~~periods~~at ~~indicated~~Scanraff in 2002.

	Three months ended March 31,
	2002			2003
	(in Dollars/barrel)
Scanraff
Gross refining margin	$	1.06		$	4.84
Variable refining costs		(0.22	)		(0.45	)
Refining margin		0.84			4.39
Fixed operating costs		(0.48	)		(0.69	)
Net cash margin		0.36			3.70
Depreciation		(0.30	)		(0.46	)
Net refining margin	$	0.06		$	3.24
Total production (000 barrels)		14,216			13,870
Preemraff
Gross refining margin	$	0.25		$	3.31
Variable refining costs		(0.06	)		(0.25	)
Natural gas, refining fuel		(0.12	)		(0.06	)
Refining margin		0.07			3.00
Fixed operating costs		(0.37	)		(0.39	)
Net cash margin		(0.30	)		2.61
Depreciation		(0.50	)		(0.60	)
Net refining margin	$	(0.80	)	$	2.01
Total production (000 barrels)		9,572			9,974

In the second quarter of 2003, we upgraded Preemraff by installing a mild-hydrocracker unit. This unit processes heavy gasoil to produce naphtha, light gasoil and ultra-low sulfur heavy gasoil.

~~For the first quarter 2003, 11.4 million barrels of production was secured through derivative instruments at a refining margin level of $2 per barrel.~~ 16

~~Preem's~~The ~~Supply~~following ~~and~~tables ~~Refining~~show ~~Segment~~the ~~generated~~calculation ~~EBITDA~~ of ~~SEK743 million~~margins infor Scanraff and Preemraff for the ~~first~~three ~~quarter~~months ofand six months ended June 30, 2002 and 2003. ~~compared~~In toaccordance ~~SEK311 million~~with industry inpractice, the ~~first~~margins ~~quarter~~are expressed in U.S. dollars per barrel. The information for Scanraff shows our share of ~~2002~~the refinery's production for the periods indicated.

	Three months ended June 30,						Six months ended June 30,
	2002			2003			2002			2003
	(in U.S. dollars per barrel)
Scanraff
Gross refining margin	$	1.87		$	3.89		$	1.45		$	4.37
Variable refining costs		(0.22	)		(0.35	)		(0.22	)		(0.40	)

Refining margin		1.65			3.54			1.23			3.97
Fixed operating costs		(0.45	)		(0.82	)		(0.50	)		(0.75	)

Net cash margin		1.20			2.72			0.73			3.22
Depreciation		(0.35	)		(0.50	)		(0.32	)		(0.48	)

Net refining margin	$	0.85		$	2.22		$	0.41			2.74

Total production (thousands of barrels)		13,435			13,825			27,651			27,695
Preemraff
Gross refining margin	$	1.17		$	1.86		$	0.69		$	2.82
Variable refining costs		(0.16	)		(0.35	)		(0.17	)		(0.29	)
Natural gas, refining fuel		(0.11	)		(0.13	)		(0.11	)		(0.08	)

Refining margin		0.90			1.38			0.41			2.45
Fixed operating costs		(0.57	)		(1.99	)		(0.42	)		(0.97	)

Net cash margin		0.33			(0.61	)		(0.01	)		1.48
Depreciation		(0.35	)		(1.13	)		(0.34	)		(0.79	)

Net refining margin	$	(0.02	)	$	(1.74	)	$	(0.35	)		0.69

Total production (thousands of barrels)		7,862			5,752			17,429			15,726

During the first six months of 2003, 22.8 million barrels of production were secured through derivative instruments. We entered into the margin hedge to secure a refining margin level of $2.00 per barrel, meaning that any actual refining margin higher or lower than $2.00 per barrel would be offset by an opposite hedge result. The actual average refining margin for the first six months of 2003 was $3.41 per barrel.

A perfect hedge would have reduced our actual average refining margin for the first six months of 2003 to $2.00 per barrel on the hedged volume. However, it is not possible to make a perfect hedge on the derivative market and any deviation from a perfect hedge is defined as the basis risk. The result of the basis risk was $(0.63) per barrel, meaning that the effective hedge on the hedged volume was $1.37 per barrel.

Marketing Segment

~~Cold~~We ~~weather~~generated high sales volumes in our Marketing Segment during the first quarter of 2003, ~~combined~~as ~~with~~compared ~~high~~to ~~electricity~~the ~~prices~~first quarter of 2002, ~~led~~due primarily to ~~high~~unusually cold ~~sales~~weather ~~volumes~~and inhigh ~~our~~electricity ~~Marketing Segment~~prices. InWith respect to our home-heating division, the effects of the cold weather and high ~~electricity~~ prices partially offset ~~the~~a recent trend of ~~structural~~consumers increasingly ~~conversion~~relying ofon heating sources ~~from oil to~~ other ~~heating~~than ~~facilities,~~oil. ~~resulting~~During inthe ansecond ~~8% increase~~quarter inof ~~sales~~2003, ~~volumes~~electricity ~~compared~~prices todecreased ~~the~~from first quarter oflevels ~~2002.~~and ~~The~~ demand for oil heating installations, ~~however,~~remained ~~remains~~ low. This ~~The~~resulted ~~volatile~~in ~~market~~a ~~prices~~sales ~~have~~volume ~~however~~in ~~put~~our ~~pressure~~Marketing onSegment ~~the~~for ~~margins. In~~ the ~~business-to-business~~second ~~division~~quarter of ~~our~~2003 ~~Marketing~~that ~~Segment,~~was ~~customer~~only ~~contracts~~slightly ~~are~~higher ~~now~~than ~~being~~the ~~renegotiated~~sales tovolume ~~allow~~ for ~~better~~the ~~flexibility~~same period in ~~periods~~2002. ofIn ~~rapidly~~addition, ~~changing~~volatile product prices have put pressure on our margins, primarily in our business-to-business division.

~~The~~Within our station and consumer division, ~~has~~our ~~focused~~diesel onsale ~~marketing~~volumes ~~and~~in ~~publicizing~~ the ~~Preem~~first ~~brand,~~six months ~~including~~of ~~hosting~~2003 aincreased ~~conference~~by ~~for~~10% ~~station~~compared ~~managers~~to ~~and~~the ~~retailers~~same period in 2002. We ~~also~~carried ~~intend~~out marketing activities to ~~launch further~~increase sales along with activities to reduce our costs. The effects of our increased marketing activities and efforts to reduce costs were offset by increased competition, which resulted in ~~2003~~lower margins for both gasoline and diesel throughout the period.

Our Marketing Segment generated EBITDA of SEK73 million in the first quarter of 2003 compared to SEK70 million in the first quarter of 2002.

Corporate Cost Center

We book losses or gains in foreign exchange in operating activities separately as "corporate costs" soin ~~that~~order weto ~~can~~ fairly and accurately present the results of ~~the~~ the operating activities of each of our reportable segments. ~~The "corporate cost center" generated negative EBITDA of SEK133 million in the first quarter of 2003 compared to negative EBITDA of SEK131 million in the first quarter 2002.~~

Results of operations

Our revenues include excise duties, which are taxes on petroleum products that we collect at the point of sale and remit monthly primarily to the government of Sweden. The continuous collection of excise duties at the time of sale and the holding of such excise duties until we are obligated to remit them to the government enables us to use this cash to fund a significant portion of our working capital needs. Sales revenue represents our revenues less the excise duties. In this discussion, we have ~~broken~~provided ~~out the~~ sales revenue offigures for our Supply and Refining Segment and our Marketing Segment. The sales revenue of our Supply and Refining Segment includes ~~intercompany~~inter-company sales to the Marketing Segment (and, in the first ~~quarter~~six months of 2002, to our ~~International~~ International Segment). The sales revenue of our Marketing Segment (and, for the first ~~quarter~~six months of 2002, our International Segment) includes sales revenue received on the resale of such refined products. We have included ~~intercompany~~inter-company sales revenue in total sales revenue for our Supply and Refining Segment. Our ~~intercompany~~inter-company sales are made at market rates. Since refined products are commodities, these sales could have been made to third parties at similar prices. We believe that the inclusion of these amounts in the sales revenue for our Supply and Refining Segment properly reflects the results of these segments for purposes of comparison. To avoid overstating total sales revenue, these ~~intercompany~~inter-company sales have been eliminated in our ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~ statements included above.

Cost of goods sold consists of the cost of our crude oil purchases (including transportation costs) and direct production costs (including depreciation of equipment used in the refining process). We have no long-term supply contracts ~~of more than 13 months in duration~~ and rely primarily on spot market purchases. We regularly monitor market conditions for various types of crude oil as well as demand for refined products.

Gross profit is our sales revenue less the cost of goods sold. Occasionally, due to market forces, the crude oil and/or refined product price curve is in "contango," meaning that forward prices of crude oil or refined products exceed current spot market prices. While we do not speculate with inventory, as a result of our large storage capacity we are able to take advantage of the price curve being in contango by simultaneously entering into current spot market purchase and future sale agreements. When we take advantage of the price curve being in contango, our primary expense is that associated with storing the crude oil or refined products until their time of delivery under the future sale agreement. So long as our storage costs are less than the profit margin resulting from the price curve being in contango we are able to lock in a profit margin. By locking in our margin, we can realize significant profits by utilizing our substantial storage facilities to store crude oil and refined products at our existing facilities until the delivery date called for by the sale agreements. Selling expenses consist primarily of the costs of sales personnel, advertising and promotions. Administrative expenses consist primarily of the costs of administrative personnel. 18

12 Gross profit is our sales revenue less the cost of goods sold. Occasionally, contango conditions exist, meaning that the forward price for crude oil and/or refined products exceeds the current spot market price, which is the price of crude oil and/or refined products for immediate delivery. While we do not speculate with inventory, as a result of our large storage capacity, we are able to take advantage of contango conditions by simultaneously entering into current spot market purchases and future sale agreements. We store the crude oil and/or refined products obtained at spot market prices at our existing facilities until the delivery date under the future sale agreements. So long as our costs are less than the profit margin resulting from contango conditions, we are able to realize significant profits. Our primary costs are the costs of storing the crude oil and/or refined products until the time of delivery. In addition, we incur selling costs, which consist primarily of the cost of sales personnel, advertising and promotions, and administrative costs, which consist primarily of the costs of administrative personnel.

Other operating income consists of our sales of surplus heat, harbor fees, commission income, sales of storage certificates to other oil companies for their ~~EU-imposed~~ compulsory storage obligations imposed by the European Union, income from the rental of dealer-operated service stations and several other items, none of which is individually material. Our other operating income is generated largely ~~attributable~~ tofrom our non-refining business and, as such, is insulated to a degree from the volatility of our refining margins and provides us with relatively stable earnings.

Operating income is gross profit, net of the foregoing items and net of non-recurring items, if any. ~~We have itemized the contributions to operating income of our Supply and Refining Segment, Marketing Segment and International Segment.~~

~~Financial~~Our ~~income~~net ~~and~~financial income (expenses,) ~~net,~~ consist of our share of the ~~non-cash~~ income (loss) of associated companies, dividends received, interest income and expense, foreign exchange losses and certain other items.

We are subject to Swedish income tax on our taxable income. We attempt to minimize the amount of taxes ~~payable~~that bywe ~~Preem~~pay ~~Holdings AB~~ by transferring, to the extent possible, our taxable income to ~~its~~ our parent company, Corral Petroleum Holdings AB. As a result, the amount included on our ~~statement~~consolidated ofincome ~~operations~~statements as income taxes generally reflects book-entry transfers rather ~~than~~ than cash paid or payable. In particular, ~~we effect~~ a transfer to our parent company, ~~Corral~~is ~~Petroleum~~recorded ~~Holdings AB, which we record~~ as a group contribution in the form of a book-entry dividend. The amount we ~~can~~may transfer onto aour ~~year-to-year~~parent company ~~basis~~in any given year is limited by the Swedish Companies Act to the lesser of the amount of our consolidated and unconsolidated unrestricted shareholders' equity, which includes net income earned during the year~~, shown on a consolidated and stand-alone basis~~. The group contribution to our parent company is simultaneously offset by a shareholder contribution from our parent company. The excess of the group contribution, if any, over the shareholder contribution represents a true dividend payable in cash.

Minority interests as of ~~March~~June 3130, 2003 principally reflect the interest of Vattenfall AB in Preem Gas AB. Minority interests as of ~~March~~June 3130, 2002 ~~also~~ reflected the interest of Vattenfall AB in Preem Gas AB, as well as the interests of Hydro R&M Holding AS, an affiliate of Norsk Hydro AS, in Scanraff and Greenergy International Limited in Greenergy Fuels Limited. In 2002, we sold our interest in Greenergy Fuels Limited to Greenergy International Limited. In addition, in 2002, with the restructuring of Scanraff and Scancracker, we began accounting for our ownership in Scanraff using the proportional method instead of the consolidation method.

13 The following table shows the sales revenues and operating income for our reportable segments discussed above for the three months and six months ended June 30, 2002 and 2003.

~~The following table shows the sales revenues and operating income for our reportable segments discussed above:~~ 19

	Three months ended March 31,
	Three months ended June 30,				Six months ended June 30,
	2002		2003		2002		2003
	(in millions)
	(in millions of SEK)
Sales Revenue:
Supply & Refining	67,~~258~~331		96,~~578~~579		13,589		16,157
Marketing	2,~~395~~383		32,~~256~~379		4,778		5,635
International	~~450~~537		—		987		—
Total Sales Revenue	7,462		10,346
Inter-segment sales revenue	(1,826	)	(1,641	)	(3,467	)	(4,129	)
Operating Income (loss):
Total Sales Revenue	8,425		7,317		15,887		17,663
Supply & Refining	188		599
Operating Income (loss):
Marketing	32		34
Supply & Refining	518		(292	)	706		307
International	0		—
Marketing	(9	)	(33	)	23		1
Other non-allocated expense	(165	)	(167	)
International	(7	)	—		(7	)	—
Total Operating Income	55		466
Other non-allocated income (expense)	(384	)	(170	)	(549	)	(337	)
Total Operating Income	118		(495	)	173		(29	)

Consolidated Statement of Operations

	Three months ended March 31,
	2002		2003
	(in millions)
Revenues	10,330		12,560
Excise duties	(2,868	)	(2,214	)
Sales revenue	7,462		10,346
Costs of goods sold	(7,141	)	(9,643	)
Gross profit	321		703
Selling and administrative expenses	(339	)	(316	)
Other operating income	73		79
Operating income	55		466
Financial income/(expense), net	64		(80	)
Income before taxes	119		386
Income taxes	(44	)	(108	)
Minority interests	(3	)	(1	)
Net income	72		277

The following table shows certain items from our consolidated income statements for the three months and six months ended June 30, 2002 and 2003.

	Three months ended June 30,				Six months ended June 30,
	2002		2003		2002		2003
	(in millions of SEK)
Revenues	10,225		9,151		20,555		21,711
Excise duties	(1,800	)	(1,834	)	(4,668	)	(4,048	)

Sales revenue	8,425		7,317		15,887		17,663
Costs of goods sold	(8,031	)	(7,533	)	(15,172	)	(17,176	)
Gross profit	394		(216	)	715		487
Selling and administrative expenses	(329	)	(321	)	(668	)	(637	)
Other operating income	53		57		126		136
Other operating expenses	—		(15	)	—		(15	)

Operating income	118		(495	)	173		(29	)
Financial expense, net	(49	)	38		15		(42	)

Income before taxes	69		(457	)	188		(71	)
Income taxes	(17	)	134		(61	)	26
Minority interests	(1	)	0		(4	)	(1	)

Net income	51		(323	)	123		(46	)

~~Three months ended March 31, 2003 compared to three months ended March 31, 2002~~ 20

~~Revenues. Our~~ ~~revenues~~Three ~~for the three~~ months ended ~~March~~June 3130, 2003 ~~were~~compared ~~SEK12,560~~to ~~million, an increase of SEK2,230 million, or approximately 22%, from SEK10,330 million for the~~ three months ended ~~March~~June 3130, 2002. The increase in revenues was primarily attributable to the increase in market prices for crude oil and products and to higher sales volumes. The market price for crude oil in the first quarter of 2003 was approximately 49% higher than the market price for the same period last year. The increase was to a certain extent offset by the weakening of the Dollar versus the Krona. In the first quarter of 2003, the Dollar decreased by approximately 18% against the Krona compared to the same period last year. Because our sales are made principally in Dollars, a weaker Dollar, when translated into Kronor, will result in a decrease in revenues if all other factors remain constant over time.

~~Sales revenue~~Revenues. ~~Sales~~Our ~~revenue~~revenues for the three months ended ~~March~~June 3130, 2003 ~~was SEK10,346~~were SEK 9,151 million, a andecrease ~~increase~~ of ~~SEK2~~SEK 1,~~884~~074 million, or ~~approximately 39~~11%, from ~~SEK7~~SEK 10,~~462~~225 million for the three months ended ~~March~~June 3130, 2002,. The decrease in revenues was primarily asattributable ato ~~result~~the weakening of the U.S. dollar versus the krona. In the second quarter of 2003, ~~and~~the in U.S. dollar decreased by approximately 19% against the krona compared to the same ~~proportions~~period aslast year. Because our sales are made principally in U.S. dollars, ~~the~~a weaker U.S. dollar, when translated into kronor, will result in a decrease in revenues if all other factors ~~discussed~~remain ~~above~~constant over time. The decrease was to some extent offset by an increase in market prices for crude oil and products and an increase in sales volumes.

~~Cost~~Sales ~~of goods sold~~revenue. ~~Cost~~Sales ofrevenue ~~goods sold~~ for the three months ended ~~March~~June 3130, 2003 was ~~SEK9~~SEK 7,~~643~~317 million, ana ~~increase~~decrease of ~~SEK2~~SEK 1,~~502~~108 million, or ~~approximately 35~~13%, from ~~SEK7~~SEK 8,~~141~~425 million for the three months ended ~~March~~June 3130, 2002, primarily as a result of, and in the same proportions as, the factors discussed above.

~~Gross~~Cost ~~profit~~of goods sold. ~~Gross~~Cost ~~profit~~of goods sold for the three months ended ~~March~~June 3130, 2003 was ~~SEK703~~SEK 7,533 million, ana ~~increase~~decrease of ~~SEK382~~SEK 498 million, or ~~approximately 119~~6%, from ~~SEK321~~SEK 8,031 million for the three months ended ~~March~~June 3130, 2002. ~~This~~The ~~increase~~decrease in cost of goods sold was ~~primarily~~to asome ~~result~~extent of offset by higher ~~sales~~purchase ~~margins~~prices ~~due~~of tofinished ~~much~~products ~~higher~~during ~~refining~~the ~~margins~~regularly ~~and~~scheduled tomajor ~~higher~~maintenance ~~sales~~turnaround ~~volumes~~of Preemraff.

~~Selling~~Gross ~~and administrative expenses~~profit. ~~Selling~~Gross ~~expenses~~profit for the three months ended ~~March~~June 3130, 2003 ~~were SEK197~~was SEK (216) million, a decrease of ~~SEK36~~SEK 610 million, or ~~approximately 15~~155%, from ~~SEK233~~SEK 394 million for the three months ended ~~March~~June 3130, 2002. ~~The~~This decrease inwas ~~selling expenses is~~ primarily a result of ~~the~~lower ~~sale~~sales ofmargins ~~our operations in Poland~~ and inhigher ~~the~~price ~~United~~losses ~~Kingdom.~~on ~~Administrative~~our ~~expenses~~inventories ~~for~~due ~~the~~to ~~three~~a ~~months~~larger ~~ended~~decrease ~~March 31,~~in ~~2003~~market ~~were~~prices ~~SEK119 million,~~in ~~an increase of SEK13 million~~kronor, oras ~~approximately~~compared ~~12%,~~to ~~from SEK119 million for~~ the ~~three~~same ~~months~~period ~~ended~~last ~~March 31, 2002~~year. ~~The increase is largely the result of higher costs for corporate projects and pension expenses.~~

~~Other~~Selling ~~operating~~and ~~income~~administrative expenses. ~~Other~~Selling ~~operating~~expenses ~~income~~ for the three months ended ~~March~~June 3130, 2003 were ~~was~~SEK 201 million, a decrease of SEK 36 million, or 2%, from SEK 237 million for the three months ended June 30, 2002. The decrease in selling ~~SEK79~~expenses is primarily a result of the sale of our operations in Poland and to lower costs for personnel in our Marketing Segment. Administrative expenses for the three months ended June 30, 2003 were SEK 120 million, an increase of ~~SEK6million~~SEK 28 million, or approximately 830.4%, from ~~SEK73~~SEK 92 million for the three months ended ~~March~~June 3130, 2002. The increase is ~~primarily~~largely ~~attributable~~a toresult of higher ~~sales~~ ofcosts ~~waste~~for ~~heat~~corporate ~~sold~~projects byand ~~our~~higher ~~Preemraff~~costs ~~refinery~~for pensions attributable to ~~the~~extra ~~City~~payments ofdue ~~Gothenburg~~to weak returns from the pension funds.

~~Operating~~Other ~~income~~operating ~~(loss)~~income. ~~Operating~~Other operating income for the three months ended ~~March~~June 3130, 2003 was ~~SEK466~~SEK ~~million, an increase of SEK411~~57 million, from SEK55 million for the three months ended March 31, 2002. This increase was primarily a result of higher sales margins and higher sales volumes. The operating income of our Supply and Refining Segment was SEK599 million for the three months ended March 31, 2003, an increase of ~~SEK411~~SEK ~~million from SEK188~~4 million ~~for the three months ended March 31~~, 2002. This increase in operating income was in particular attributable to much higher refining margins and to an increase in sales volumes. Our Marketing Segment generated an operating income of SEK34 million for the three months ended March 31, 2003, an increase of SEK2 million, or approximately 68%, from ~~an operating income of SEK32~~SEK 53 million for the three months ended ~~March~~June 3130, 2002. The increase ~~in the Marketing Segment's operating income was~~ is primarily aattributable ~~result~~to of higher ~~sales~~harbor ~~volumes compared~~fees tocharged ~~the~~by ~~same~~Scanraff ~~period~~in ~~last year~~Lysekil.

Other operating expenses. Other operating expenses for the three months ended June 30, 2003 were SEK 15 million, as compared to zero other operating expenses for the three months ended June 30, 2002. The increase is attributable to losses in accounts receivable related to the sale of our operations in Poland.

Financial expense, net. Financial expense, net, for the three months ended March 31, 2003 was SEK(80) million, a decrease of SEK144 million from SEK64 million for the three months ended March 31, 2002. The principal component of this decrease was a decrease in foreign exchange gains on the notes of SEK126 million. 21

Operating income (loss). Operating loss for the three months ended June 30, 2003 was SEK 495 million, compared to operating income of SEK 118 million for the three months ended June 30, 2002. The operating loss of our Supply and Refining Segment was SEK 292 million for the three months ended June 30, 2003, compared to operating income of SEK 518 million for the three months ended June 30, 2002. This change was primarily attributable to lower sales margins and to higher price losses on our inventories due to a larger decrease in market prices in kronor, as compared to the same period last year. Our Marketing Segment generated an operating loss of SEK 33 million for the three months ended June 30, 2003, an increase of SEK 24 million, or approximately 267%, from an operating loss of SEK 9 million for the three months ended June 30, 2002. The increase in the Marketing Segment's operating loss was primarily a result of lower sales margins compared to the same period last year.

Financial income (expense), net. Net financial income for the three months ended June 30, 2003 was SEK 38 million, compared to net financial expense of SEK (49) million for the three months ended June 30, 2002. The principal components of this change was an increase in foreign exchange gains of SEK 35 million on our outstanding 10⁵/8% senior secured notes, due 2011, and foreign exchange gains on our net U.S. dollar-denominated assets of SEK 33 million.

Income taxes. Income taxes for the three months ended June 30, 2003 were SEK 134 million, a decrease of SEK 151 million from SEK (17) million for the three months ended June 30, 2002. The decrease is attributable to lower calculated taxable income in 2003. Income taxes do not generally reflect cash paid or payable because we transfer, to the extent possible, our taxable income to our parent company Corral Petroleum Holdings AB, as a group contribution, which is in the form of a book-entry dividend.

Six months ended June 30, 2003 compared to six months ended June 30, 2002

Revenues. Our revenues for the six months ended June 30, 2003 were SEK 21,711 million, an increase of SEK 1,156 million, or approximately 6%, from SEK 20,555 million for the six months ended June 30, 2002. This increase is primarily attributable to the increase in market prices for crude oil and products and to higher sales volumes. Crude oil prices in the first six months of 2003 were approximately $5.70 per barrel, or 25%, higher than in the same period in 2002. Sales volumes in the first six months of 2003 were 1,284,000 cubic meters, or 17%, higher than in the same period in 2002. The increase in crude oil prices and sales volumes was offset to a large extent by a weaker U.S. dollar versus the krona. In the first half year of 2003, the U.S. dollar decreased by approximately 19% against the krona compared to the same period in 2002.

Sales revenue. Sales revenue for the six months ended June 30, 2003 was SEK 17,663 million, an increase of SEK 1,776 million, or 11%, from SEK 15,887 million for the six months ended June 30, 2002, primarily as a result of, and in the same proportions as, the factors discussed above.

Cost of goods sold. Cost of goods sold for the six months ended June 30, 2003 was SEK 17,176 million, an increase of SEK 2,004 million, or 13%, from SEK 15,172 million for the six months ended June 30, 2002, primarily as a result of, and in the same proportions as, the factors discussed above.

Gross profit. Gross profit for the six months ended June 30, 2003 was SEK 487 million, a decrease of SEK 228 million, or 32%, from SEK 715 million for the six months ended June 30, 2002. This decrease was primarily a result of lower sales margins and to higher price losses on our inventories due to a larger decrease in market prices in kronor, compared to the same period last year.

Selling and administrative expenses. Selling expenses for the six months ended June 30, 2003 were SEK 398 million, a decrease of SEK 72 million, or 15%, from SEK 470 million for the six months ended June 30, 2002. The decrease in selling expenses is primarily a result of the sale of our operations in Poland and to lower costs for personnel in our Marketing Segment. Administrative expenses for the six months ended June 30, 2003 were SEK 239 million, an increase of SEK 41 million, or 21%, from SEK 198 million for the six months ended June 30, 2002. The increase is largely a result of higher costs for corporate projects and higher costs for pensions attributable to extra payments due to weak returns from the pension funds.

Other operating income. Other operating income for the six months ended June 30, 2003 was SEK 136 million, an increase of SEK 10 million, or 8%, from SEK 126 million for the six months ended June 30, 2002. The increase in other operating income is primarily a result of increased sales of storage certificates and increased sales of waste heat from Preemraff to the City of Gothenburg.

Other operating expenses. Other operating expenses for the six months ended June 30, 2003 were SEK 15 million, compared to zero other operating expenses for the six months ended June 30, 2002. The increase is attributable to losses in accounts receivable related to the sale of our operations in Poland.

Operating income (loss). Operating loss for the six months ended June 30, 2003 was SEK (29) million, compared to operating income of SEK 173 million for the six months ended June 30, 2002. The operating income of our Supply and Refining Segment was SEK 307 million for the six months ended June 30, 2003, a decrease of SEK 399 million, or 57%, from SEK 706 million for the six months ended June 30, 2002. This decrease in operating income was primarily attributable to lower sales margins and to higher price losses on our inventories due to significantly higher decrease in market prices in kronor, compared to the same period last year. Our Marketing Segment generated an operating income of SEK 1 million for the six months ended June 30, 2003, a decrease of SEK 22 million, or 96%, from SEK 23 million for the six months ended June 30, 2002. The decrease in the Marketing Segment's operating income was primarily a result of lower sales margins compared to the same period last year.

Financial income (expense), net. Net financial expense for the six months ended June 30, 2003 was SEK 42 million, compared to net financial income of SEK 15 million for the six months ended June 30, 2002. The principal components of this change were the decrease in foreign exchange gains of SEK 89 million on our outstanding 10⁵/8% senior secured notes, due 2011, and an increase in foreign exchange gains on our net U.S. dollar-denominated assets of SEK 26 million.

Income taxes. Income taxes for the six month ended June 30, 2003 were SEK 26 million, a decrease of SEK 87 million from SEK (61) million for the six months ended June 30, 2002. The decrease is attributable to lower calculated taxable income in 2003. Income taxes do not generally reflect cash paid or payable because we transfer, to the extent possible, our taxable income to our parent company, Corral Petroleum Holdings AB, as a group contribution, which is in the form of a book-entry dividend.

Introduction of the Euro

On January 1, 1999, a new single European currency, the "Euro," replaced the local currencies in eleven of the fifteen member states of the European Union. The participating members of the European Union established fixed conversion rates between their sovereign currencies and the Euro. As of January 1, 2001, a twelfth member state has joined the European Monetary Union. Beginning January 1, 2002, the participating members began issuing new Euro-denominated bills and coins for use in cash transactions. As of July 1, 2002, all participating members had withdrawn all bills and coins denominated in the respective local currencies, so that the local currencies are no longer legal tender for any transaction, completing the conversion to the Euro.

The Swedish Parliament elected not to participate in the European Monetary Union at its commencement on January 1, 1999, although it has stated that it will let voters decide whether to participate later through a referendum. The referendum will be held in September 2003. If and when Sweden decides to participate in the single currency, the ~~Krona~~krona would be replaced by the Euro. We cannot assure you that the introduction of the Euro will not increase the volatility of ~~the~~krona ~~Krona~~ exchange rates or result in the future appreciation of the ~~Krona~~krona.

The introduction of the Euro has not had a material effect on our operations. Our Swedish operations have been able to conduct business in Euro since January 1, 1999. This has not involved any material amendments to our systems software, staff training or other steps. We believe that all necessary procedures have been taken and tested, and staff trained in the changes to working practices.

Recently issued accounting standards

On April 30, 2003, the Financial Accounting Standards Board, or FASB, issued FASB Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities, which amends FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, to address (1) decisions reached by the Derivatives Implementation Group, (2) developments in other Board projects that address financial instruments, and (3) implementation issues related to the definition of a derivative. Statement 149 has multiple effective date provisions depending on the nature of the amendment to Statement 133. ~~The~~We ~~Company~~are is currently evaluating the impact of adopting Statement 149 on ~~its~~our financial statements.

On May 15, 2003, the FASB issued FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. This ~~Statement~~statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). Many of those instruments were previously classified as equity. This statement is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. It is to be implemented by reporting the cumulative effect of a change in an accounting principle for financial instruments created before the issuance date of the ~~Statement~~statement and still existing at the beginning of the interim period of adoption. Restatement is not permitted. For nonpublic entities, mandatorily redeemable financial instruments are subject to the provisions of this statement for the first fiscal period beginning after December 15, 2003. ~~The~~We ~~Company~~are is currently evaluating the impact of adopting Statement 150 on ~~its financial~~our financial statements.

1624

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in Sweden (Swedish GAAP), which differ in certain significant respects from generally accepted accounting principles in the United States (USU.S. GAAP). The principle differences between Swedish GAAP and USU.S. GAAP are further discussed in note 26 to ~~the~~ our ~~Consolidated~~consolidated ~~Financial~~financial ~~Statements~~statements included in our Annual Report on Form 20-F for the fiscal year ended December 31, 2002.

The preparation of our consolidated financial statements requires the use of estimates, judgments and assumptions that affect the reported amounts of assets, liabilities and provisions at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. The following accounting principles applied by us that are deemed to be critical are discussed below.

Impairment of long-lived assets

We review long-lived assets used in our business on an annual basis for impairment, or whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. An impaired asset or a group of assets may not be recoverable. An impaired asset is written down to its estimated fair value. We estimate fair value based on independent appraisals and projected cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value using these methods is subject to numerous uncertainties, which require our significant judgment when making assumptions of revenues, operating costs, selling and administrative expenses, interest rates and general economic business conditions, among other factors.

Capitalized Turnaround Costs

We record the cost of ~~major~~regularly scheduled ~~refinery~~major maintenance ("turnarounds") of our refineries, catalysts used in refinery process units, as deferred charges. We amortize these deferred charges over the expected periods of benefit, generally ranging from two to four years. The American Institute of Certified Public Accountants has issued an Exposure Draft for a Proposed Statement of Position, "Accounting for Certain Costs and Activities Related to Property, Plant and Equipment," which would require major maintenance activities to be expensed as costs are incurred. If this proposed Statement of Position is adopted in its current form, we will be required to write off the balance of our deferred maintenance costs, which totaled ~~SEK185~~ SEK 283 million at ~~March~~ June 3130, 2003, and expense future costs as incurred.

Inventory

Our inventories are stated at the lower of cost or market. We use the FIFO ("first in, first out") method to determine the cost of our crude oil and refined product inventories. The carrying value of these inventories is sensitive to volatile market prices. If the market value of these inventories had been $1 per barrel lower as of ~~March~~June 3130, 2003, we would have been required to write down the value of our inventories by ~~SEK114~~approximately SEK 100 million. If refined product prices decline from the value at the end of a period, then we may be required to write down the value of our inventories in future periods.

1725

Contingencies

We record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates that it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as environmental, legal and income tax matters requires us to use our judgment. While we believe that our accruals for these matters are adequate, if the actual loss from a loss contingency is significantly different than the estimated loss, our results of operations may be over or understated.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are internal cash generation, long-term debt, short-term working capital financing and short-term use of excise duties collected. We operate in an environment in which liquidity and capital resources are impacted by changes in the prices for crude oil and refined products, and a variety of additional risks, including currency and regulatory risks. In particular, because we purchase crude oil on the spot market and prices can be volatile, the availability of cash or short-term credit is crucial to our business. Historically, our cash and short-term credit have been sufficient to finance such purchases. For the ~~three~~ six months ended ~~March~~June 3130, 2003, ~~EBITDA~~OIBDA was ~~SEK683~~SEK 405 million, compared to ~~SEK257~~SEK 577 million for the ~~three~~ six months ended ~~March~~June 3130, 2002.

~~EBITDA~~OIBDA, which we previously referred to as EBITDA, represents operating income (loss), before depreciation and amortization. ~~EBITDA~~OIBDA is a non-GAAP financial measure of liquidity and should not be considered as a substitute for operating ~~earnings~~income, net income, cash flow from operating activities or other statements of operations or cash flow data computed in accordance with Swedish GAAP. Funds depicted by this measure may not be available for management's discretionary use or for payment of interest or principle on our high-yield notes. Because all companies do not calculate ~~EBITDA~~OIBDA identically, the presentation of ~~EBITDA~~OIBDA may not be comparable to similarly entitled measures of other companies. The following table presents a reconciliation of ~~EBITDA~~OIBDA to cash flow from operating activities, the most directly comparable financial measure calculated and presented in accordance with Swedish GAAP.

	Three months ended March 31,
	Six months ended June 30,
	2002		2003
	(in millions)
	(in millions of SEK)
Cash flow from operating activities	~~(598~~529	)	~~(183~~662	)
Changes in working capital	~~753~~(402	)	~~749~~(499	)
Taxes paid	2831		—1
Unrealized exchange gains	~~138~~441		41150
Other adjustments for non-cash items	—(7	)	(449	)
Financial income/expense, net	(6415	)	8042
EBITDA	257		683
OIBDA	577		405

Commencing with this report on our financial results for the second quarter of 2003, we are no longer providing non-GAAP financial measures on a segment basis in response to recent U.S. Securities and Exchange Commission rules and guidance.

We believe that cash flow from operating activities, bank borrowings and other available sources of funds will be adequate to enable us to make required payments on our debt and to fund anticipated expenditures and working capital requirements for the foreseeable future.

In January 2003, we received an unconditional shareholder contribution from our parent company, Corral Petroleum Holdings AB, of SEK345 million, which was offset against the liability for a group contribution in 2002 of SEK345 million. Neither of these payments are restricted by the indenture governing our senior secured notes. 26

18 In January 2003, we received an unconditional shareholder contribution from our parent company, Corral Petroleum Holdings AB, of SEK 345 million, which was offset against the liability for a group contribution in 2002 of SEK 345 million. Neither of these payments are restricted by the indenture governing our senior secured notes.

Cash Flow

Cash flow ~~used~~from in operating activities was SEK~~(183)~~ 662 million for the ~~three~~six-month period ended ~~March~~June 3130, 2003, an increase of ~~SEK415~~SEK 133 million , or 25%, from SEK~~(598)~~ 529 for the ~~three~~six-month period ended ~~March~~June 3130, 2002. The increase was primarily a result of an increase in ~~income~~cash ~~after~~flow ~~financial items~~ from ~~SEK119 million~~working ~~for~~capital ~~the~~from ~~three~~SEK ~~months ended March~~402 ~~31, 2002 to SEK386~~ million for the ~~three~~six months ended ~~March~~June 3130, ~~2003 and a decrease in unrealized exchange gains from SEK138 million for the three months ended March 31,~~ 2002 to ~~SEK41~~SEK 499 million for the ~~three~~six months ended ~~March~~June 3130, 2003.

In Sweden, we collect government excise duties imposed on petroleum products at the time of retail sale and subsequently remit them on a monthly basis to the Swedish government. Excise duties were ~~SEK2~~SEK 4,~~214~~048 million for the ~~three~~six-month period ended ~~March~~June 3130, 2003 compared to ~~SEK2~~SEK 4,~~868~~668 million for the ~~three~~six-month period ended ~~March~~June 3130, 2002. The delay between the time we collect these funds and the time we are required to remit them to the government enables us to use the cash to finance a significant portion of our working capital needs.

Cash flow used in investing activities was ~~SEK101~~SEK 398 million for the ~~three~~six-month period ended ~~March~~June 3130, 2003 compared to ~~SEK207~~SEK 496 million ~~recorded~~ for the ~~three~~ six-month period ended ~~March~~June 3130, 2002. The decrease was primarily a result of lower investments in tangible fixed assets at our refineries. Cash flow ~~from~~used in financing activities was SEK ~~SEK85~~461 million for the ~~three~~six-month period ended ~~March~~June 3130, 2003 compared to ~~SEK529~~SEK 383 million ~~recorded~~ for the ~~three~~six-month period ended ~~March~~June 3130, 2002. ~~The~~This ~~decrease in cash flow from financing activities~~change was a result of an increase in ~~amortizations~~payments of loans from ~~SEK207million~~SEK 364 million for the ~~three~~six-month ~~months~~period ended ~~March~~June 3130, 2002 to ~~SEK660~~SEK 1,218 million for the ~~three~~six-month period ~~months~~ ended ~~March~~June 3130, 2003.

Restrictions on transfers of funds

Preem Holdings AB is a holding company. As a holding company, to meet our debt service and other obligations, we are dependent upon contributions, dividends, permitted repayment of debt and other transfers of funds from Preem Petroleum AB. Substantially all of our ~~present~~ assets consist of 100% of the share capital of Preem Petroleum AB and loans to Preem Petroleum AB made in connection with our offering of our senior secured notes in 2001. The ability of our subsidiaries to pay group contributions, dividends and make other payments to us may be restricted by, among other things, applicable corporate and other laws and regulations and by the terms of agreements to which such subsidiaries may be or may become subject. For example, a subsidiary company is prohibited from lending cash to a parent company under applicable corporate and other laws and regulations.

~~Preem~~A ~~Petroleum AB effects a~~ transfer to us ~~and~~from ~~records~~Preem itPetroleum AB is recorded as a group contribution in the form of a book-entry dividend. The amount Preem Petroleum AB can transfer to us in this manner oneach a year~~-to-year~~ ~~basis~~ is limited by the Swedish Companies Act to the lesser of the amount of its consolidated and unconsolidated unrestricted shareholders' equity, which includes net income earned ~~during~~ during the year~~, shown on a consolidated and stand-alone basis~~.

Credit Arrangements, Shareholder Investment and ~~Intercreditor~~Inter-creditor Arrangements

As of ~~March~~June 3130, 2003, we had total debt of ~~SEK6~~SEK 6,~~720~~076 million and an additional ~~SEK1~~SEK 1,~~056~~509 million of available unused commitments. Our long-term debt (excluding long-term bank overdraft facilities and shareholder loans) amounted to ~~SEK5~~SEK 5,~~287~~013 million as of ~~March~~June 3130, 2003, the current portion of which was ~~SEK403~~SEK 404 million. We also had drawings under short-term debt of ~~SEK663~~SEK 682 million. These loans and facilities are provided by various international banks. As of ~~March~~June 3130, 2003, our indebtedness bore interest at a weighted average annual rate of 7.16%.

~~In addition, as of March 31, 2003, we owed SEK242 million to Corral Petroleum Holdings AB in the form of an interest-free subordinated loan with no maturity date.~~ 28

19 In addition, as of June 30, 2003, we owed SEK 242 million to Corral Petroleum Holdings AB in the form of an interest-free subordinated loan with no maturity date.

Subsequent events

OnAt ~~June 29, 2000, the Swedish Competition Authority filed~~ a ~~summons~~meeting ~~application~~held ~~to the City Court of Stockholm against Preem Petroleum AB and four other oil companies operating in Sweden demanding that the City Court impose total fines~~ on ~~all~~August 15, ~~five~~2003, ~~oil~~our ~~companies~~board of ~~SEK740 million~~directors asapproved aan ~~penalty~~investment ~~for alleged infringements~~ of ~~the~~estimated ~~Swedish~~SEK ~~Competition Act. Of the SEK740~~3,300 million ~~in total fines~~, ~~the Swedish Competition Authority demanded that the City Court impose fines on Preem Petroleum AB~~ of ~~SEK85 million.~~which ~~This~~our ~~claim~~share ~~was~~would ~~adjusted~~be toSEK ~~SEK81~~2,475 million., ~~The Competition Authority claimed that Preem Petroleum AB participated~~ in ~~a cartel on~~ the ~~Swedish~~construction ~~market~~of ~~concerning~~an ~~prices~~ISO-Cracker ~~and~~unit ~~discounts~~at ~~on gasoline during the summer and fall of 1999~~Scanraff. ~~Court~~We ~~proceedings~~expect ~~took~~construction ~~place~~to ~~during~~commence in the ~~third~~coming ~~quarter~~months ~~of 2002~~ and ~~on April 29, 2003~~ the ~~District~~project ~~Court~~to ofbe ~~Stockholm~~completed ~~announced~~during ~~its judgment, finding that~~ the ~~five companies had violated~~second ~~the~~quarter ~~Competition Act. The court assessed Preem Petroleum AB with a fine~~ of ~~SEK6 million~~2006. ~~The court also ordered the Competition Authority to pay up to SEK2.3 million of our legal fees. Both the Competition Authority and Preem Petroleum AB have appealed the court's judgment.~~

Our Preemraff refinery was shut down in the beginning of May for regularly scheduled maintenance (referred to as a "turnaround"), which occurs every four years. The shut down is expected to last for approximately four weeks.

Quantitative and Qualitative Disclosures About Market Risk

Our primary market risk exposures are commodity price risk, foreign currency risk and interest rate risk.

Commodity Price Risk

Changes in the price of commodities, such as crude oil, can affect our cost of goods sold and the price of our refined products. Commodity price changes can trigger a price effect on inventory, which can affect our revenues, gross profit and operating income. Our inventory management strategies include the purchase and sale of exchange-traded, oil-related futures and options with a duration of twelve months or less. To a lesser extent, we also use oil swap agreements similar to those traded on international exchanges such as the International Petroleum Exchange, including crack spreads and crude oil options that, because they contain certain terms, such as point of delivery, customized to the market in which we sell, are better suited to hedge against the specific price movements in our markets. The number of barrels of crude oil and refined products covered by such contracts varies from time to time. We hedge amounts of crude oil and refined products above and below optimal inventory levels, which represent the volumes in stock and in transit within our system. These strategies are designed to minimize, on a short-term basis, our exposure to the risk of fluctuations in crude oil prices and refined product margins. This hedging activity is closely managed and subject to internally established risk standards. The results of these hedging activities are recognized in our financial statements as adjustments to the refining costs of sales and inventory costs.

Fluctuations in the crude oil price have been significant over the last three years. The three-year low of the monthly average dated Brent crude oil price (free on board, ~~Rotterdam~~Sullom Voe) was $18.68 per barrel in December 2001, while the three-year high was $32.77/ per barrel in September 2000. Monthly average prices decreased by as much as $7.48 ~~from~~ from November to December 2000, by $5.08 per barrel from September to October 2001 and $45.6668 per barrel from ~~November~~March to ~~December~~April ~~2002~~2003.

Our revenues and cash flows, as well as estimates of future cash flows are sensitive to changes in energy prices. Major shifts in the cost of crude oil and the price of refined products can result in significant changes in the operating margin from refining operations. Energy prices also determine the carrying value of our inventory.

We enter into commodity derivative contracts from time to time, to manage our price exposure to our inventory positions and our purchases of foreign crude oil in the refining process, and to fix margins on certain future production. The commodity derivative contracts may take the form of futures contracts, collars or price swaps and are entered into with reputable counter-parties. Gains and losses on futures contracts, realized and unrealized, are recognized in cost of goods sold at the time the contract is bought or sold (marked to market).

•: Hedging Activities/Hedge of Inventory: As of June 30, 2003, we had a short position in derivative contracts of Brent crude oil and oil products of 50,000 cubic meters. The unrealized profit as of June 30, 2003, was SEK 23.2 million ($2.9 million).

•: Trading Activities: As of June 30, 2003, the following commodity derivative contract was not treated as a hedge: a net flat (zero) position on trading. The unrealized loss as of June 30, 2003, was SEK 1.6 million ($0.2 million).
•: Hedging Activities/Hedge of refining margin: As of June 2003, 45.6 million barrels of the remainder of year 2003 and 2004 refinery production was secured at a hedge margin of $2.715 per barrel corresponding to a refining margin of $2.00 per barrel (excluding basis risks). The unrealized loss as of June 30, 2003, was SEK 224.4 million ($28.0 million). The currency components in the hedge activities of refining margin have been hedged. The unrealized profit as of June 30, 2003, was SEK 33 million.

Foreign Currency Risk

We publish our financial statements in ~~Kronor~~kronor. However, our crude oil purchases are primarily denominated in ~~Dollars~~U.S. dollars, our revenues are denominated in both ~~Dollars~~ U.S. dollars and ~~Kronor~~kronor, a portion of our indebtedness is denominated in ~~Dollars~~U.S. dollars, a portion of our indebtedness is denominated in ~~Kronor~~kronor and a portion of our indebtedness comprising the senior secured notes is denominated in Euros. Consequently, fluctuations in the ~~Dollar~~U.S. dollar-~~Krona~~krona and Euro-~~Krona~~krona exchange rates can affect our financial results. We incur substantial amounts of our borrowings in ~~Dollars~~ U.S. dollars to hedge our expenses to inventories, which are also priced in ~~Dollars~~U.S. dollars. We primarily use forward exchange contracts and, to a lesser extent, currency options and currency swaps to manage our foreign currency risk.

In the ~~three~~six-month period ended ~~March~~June 3130, 2003, we estimate that we received 7065% of our revenues in ~~Dollars~~U.S. dollars and 3035% in ~~Kronor~~kronor and that we incurred 80% of our costs and expenses in ~~Dollars~~ U.S. dollars and 20% in ~~Kronor~~kronor. In the ~~three~~six-month period ended ~~March~~June 3130, 2002, we estimate that we received 6062% of our revenues in ~~Dollars~~U.S. dollars and 3038% in ~~Kronor~~kronor and that we incurred 7078% of our costs and expenses in ~~Dollars~~U.S. dollars and 3022% in ~~Kronor~~kronor. As of ~~March~~June 3130, 2003, our ~~Krona~~krona-denominated, fixed-rate indebtedness totaled ~~SEK535~~SEK 535 million and our ~~Krona~~krona-denominated , variable-rate indebtedness totaled ~~SEK1~~SEK 1,~~192~~174 million. As of ~~March 31~~June 30, 2003, our ~~Dollar~~U.S. dollar-denominated, fixed-rate indebtedness totaled $105 million and our ~~Dollar~~ U.S. dollar-denominated, variable-rate indebtedness totaled $4525 million. As of ~~March~~June 3130, 2003, our Euro-denominated fixed-rate indebtedness totaled €291 million.

2130

The table below presents, as of ~~March~~June 3130, 2003 and December 31, 2002, a summary of our financial instruments by functional currency and expected maturity dates, which are derived from ~~the~~our ~~Preem Holdings AB~~ consolidated financial statements.

		~~2003~~	2003	~~2004~~	2004	~~2005~~	2005	~~2006~~	2006	~~2007~~	2007	~~2008+~~	2008+	~~Total Value~~	Total Value	~~Percentage of Total Long-Term Debt(1)~~	Percentage of Total Long-Term Debt(1)	~~Estimated Fair Value~~	Estimated Fair Value
		~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK		%	~~SEK~~	SEK
		~~(in millions, except percentages)~~	(in millions, except percentages)
Krona-denominated indebtedness as of March 31, 2003:
Krona-denominated indebtedness as of June 30, 2003:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	—	—	~~300~~	300	~~235~~	235	~~535~~	535	9	10%	~~572~~	574
~~Variable rate debt—amount due~~	Variable rate debt—amount due	~~220~~	202	~~555~~	555	~~186~~	186	4	4	~~203~~	203	24	24	~~1,192~~	1,174	21	22%	~~1,192~~	1,174
Dollar-denominated indebtedness as of March 31, 2003:
Dollar-denominated indebtedness as of June 30, 2003:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	~~425~~	400	—	—	~~468~~	440	~~893~~	840	16	15%	~~967~~	917
~~Variable rate debt—amount due~~	Variable rate debt—amount due	~~170~~	—	—	—	~~213~~	200	—	—	—	—	—	—	~~383~~	200	7	4%	~~383~~	200
Euro-denominated indebtedness as of March 31, 2003:
Euro-denominated indebtedness as of June 30, 2003:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	—	—	—	—	~~2,686~~	2,666	~~2,686~~	2,666	47	49%	~~2,458~~	2,506
Krona-denominated indebtedness as of December 31, 2002:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	—	—	~~300~~	300	~~235~~	235	~~535~~	535	9	9%	~~574~~	574
~~Variable rate debt—amount due~~	Variable rate debt—amount due	~~550~~	550	~~701~~	701	~~259~~	259	4	4	~~203~~	203	25	25	~~1,742~~	1,742	28	28%	~~1,742~~	1,742
Dollar-denominated indebtedness as of December 31, 2002:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	~~441~~	441	—	—	~~486~~	486	~~927~~	927	15	15%	~~1,006~~	1,006
~~Variable rate debt—amount due~~	Variable rate debt—amount due	—	—	—	—	~~221~~	221	—	—	—	—	—	—	~~221~~	221	4	4%	~~221~~	221
Euro-denominated indebtedness as of December 31, 2002:
~~Fixed rate debt—amount due~~	Fixed rate debt—amount due	—	—	—	—	—	—	—	—	—	—	~~2,678~~	2,678	~~2,678~~	2,678	44	44%	~~2,316~~	2,316

(1): Includes current portion.

~~Preem~~We ~~Holdings AB and its consolidated subsidiaries~~ had, as of ~~March~~June 3130, 2003, cash and cash equivalents in foreign currencies amounting to ~~SEK59~~ SEK 94 million, of which the equivalent of SEK ~~SEK29~~68 million was denominated in ~~Dollars~~U.S. dollars, the equivalent of ~~SEK16~~SEK 11 million was denominated in Euro and the equivalent of ~~SEK14~~ SEK 15 million was denominated in other European currencies.

Interest Rate Risk

In the normal course of our business, we hold various financial instruments that expose us to the risk of loss arising from changes in the market interest rates. We use interest rate swaps to manage our interest rate risk, but did not have any open position at either ~~March~~June 3130, 2003 or December 31, 2002. As of ~~March~~June 3130, 2003, SEK ~~SEK4~~4,~~114~~041 million of our indebtedness required payment at fixed rates and ~~SEK1~~SEK 1,~~575~~374 million required payment at variable rates. As of December 31, 2002, ~~SEK4~~SEK 4,140 million of our indebtedness required payment at fixed rates and ~~SEK1~~SEK 1,963 million required payment at variable rates.

2231

The table below presents, as of ~~March~~June 3130, 2003 and December 31, 2002, principal cash flows and related weighted average interest rates by expected maturity dates.

		~~2003~~	2003	~~2004~~	2004	~~2005~~	2005	~~2006~~	2006	~~2007~~	2007	~~Thereafter~~	Thereafter	~~Total Value~~	Total Value	~~Percentage of Total Long-Term Debt(1)~~	Percentage of Total Long-Term Debt(1)	~~Estimated Fair Value~~	Estimated Fair Value
		~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK	~~SEK~~	SEK		%	~~SEK~~	SEK
		(in millions, except percentages)
As of June 30, 2003:
As of March 31, 2003:
	Fixed rate debt—amount due		—		—		—		400		300		3,341		4,041		75%		3,997
Fixed rate debt—amount due		—		—		—		425		300		3,389		4,114		72	%	3,997
	Weighted average interest rate		—		—		—		5.6	%	6.4	%	9.7	%	9.0	%	—		—
Weighted average interest rate		—		—		—		5.6	%	6.4	%	9.7	%	9.0	%	—		—
	Variable rate debt—amount due		202		555		386		4		203		24		1,374		25%		1,374
Variable rate debt—amount due		390		555		399		4		203		24		1,575		28	%	1,575
	Weighted average interest rate		3.9	%	3.7	%	2.9	%	4.1	%	3.5	%	4.1	%	3.5	%	—		—
Weighted average interest rate		3.0	%	4.2	%	3.0	%	4.6	%	4.0	%	4.6	%	3.4	%	—		—
As of December 31, 2002:
As of December 31, 2002:
	Fixed rate debt—amount due		—		—		—		441		300		3,399		4,140		68%		3.896
Fixed rate debt—amount due		—		—		—		441		300		3,399		4,140		68	%	3.896
	Weighted average interest rate		—		—		—		5.6	%	6.4	%	9.7	%	8.9	%	—		—
Weighted average interest rate		—		—		—		5.6	%	6.4	%	9.7	%	8.9	%	—		—
	Variable rate debt—amount due		550		701		480		4		203		25		1,963		32%		1,963
Variable rate debt—amount due		550		701		480		4		203		25		1,963		32	%	1,963
	Weighted average interest rate		4.6	%	4.5	%	3.6	%	4.4	%	4.3	%	4.4	%	4.3	%	—		—
Weighted average interest rate		4.6	%	4.5	%	3.6	%	4.4	%	4.3	%	4.4	%	4.3	%	—		—

(1): Includes current portion.

2332

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Table of Contents
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
PRESENTATION OF CERTAIN INFORMATION
Preem Holdings AB and Consolidated Subsidiaries Consolidated Income Statements (unaudited)
Preem Holdings AB and Consolidated Subsidiaries Consolidated Income Statements (unaudited)
Preem Holdings AB and Consolidated Subsidiaries Consolidated Balance Sheets (unaudited)
Preem Holdings AB and Consolidated Subsidiaries Consolidated Balance Sheets (unaudited)
Preem Holdings AB and Consolidated Subsidiaries Consolidated Statements of Cash Flow (unaudited)
Preem Holdings AB and Consolidated Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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