9. Management

9.1 Management Structure

PTTEP is governed by the Board of Directors and has additional five
subcommittees, namely the Audit Committee, the Remuneration Committee,
the Nominating Committee, the Corporate Governance Committee, and the
Risk Management Committee.

9.1.1 The Board of Directors (“The Board”): The Board has the authority
and the responsibility of providing the Company with directions on
corporate governance, corporate policy, strategic plan, vision, and
annual budget for its operating plans; appointing or replacing PTTEP
Management; and monitoring and following up on Company performance. The
following matters, however, require approval by a shareholders’ meeting
with a total number of votes no less than three-quarters of the total
number of votes cast by the eligible shareholders present:

(1) Sale or transfer of the whole of essential parts of any PTTEP
business to other entities

(2) Purchase or acquisition of the business of other companies or
private companies by PTTEP

(3) Creation, amendment, or termination of contracts dealing with the
granting of a lease of the whole or essential parts of any PTTEP
business, the assignment to any other person(s) to manage the Company or
the merger of the Company with any other entity to share profits and
losses

(4) Amendment of the Memorandum or Articles of Association

(5) Increase or reduction of registered capital, debentures issuance,
company amalgamation, and company dissolution

(6) A case in which PTTEP or its subsidiaries decide to enter into a
connected transaction or a transaction concerning the acquisition or
disposition of material assets of PTTEP or its subsidiaries, as defined
in the Notification of the Securities Exchange of Thailand (SET) which
applies to a connected transaction of a listed company.

The Board consists of 15 Directors with details of current ones and one
Director who retired during the year shown in Attachment 1.

Director’ changes in number of shares held and Board Meeting attendances
in 2005 are summarized below:

+----------------------+------+------+------+------+----------+-------+
| Director             | As   |      | Ch   | Nu   | Total    | Atten |
|                      | of   |      | ange | mber | Compensa | dance |
|                      | Dece |      |      | of   | tion^($) |       |
|                      | mber |      |      | Warr |          |       |
|                      |      |      |      | ants | (Baht)   |       |
+----------------------+------+------+------+------+----------+-------+
|                      | 2003 | 2004 |      |      |          |       |
+----------------------+------+------+------+------+----------+-------+
| 1. Mr. Cherdpong     | -    | -    | -    | -    | 2,83     | 14/14 |
| Siriwit^(#)          |      |      |      |      | 6,680.33 |       |
+----------------------+------+------+------+------+----------+-------+
| 2. Mr. Pala          | 3    | 1    | (1,  | 1    | 2,21     | 11/14 |
| Sookawesh            | ,400 | ,700 | 700) | ,900 | 4,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 3. Mr. Wisudhi       | -    | -    | -    | -    | 2,23     | 13/14 |
| Srisuphan            |      |      |      |      | 9,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 4. Mr. Krairit       | -    | -    | -    | -    | 42       | 2/2   |
| Nilkuha*^(@)         |      |      |      |      | 3,377.50 |       |
+----------------------+------+------+------+------+----------+-------+
| 5. Mr. Anucha        | 3    | 5    | 1    | 1    | 2,43     | 14/14 |
| Sihanatkathakul^(@)  | ,500 | ,200 | ,700 | ,800 | 9,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 6. Mr. Charnchai     | -    | -    | -    | -    | 2,75     | 14/14 |
| Musignisakorn^(@)    |      |      |      |      | 1,844.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 7. Mr. Manu          | -    | -    | -    | -    | 2,31     | 14/14 |
| Leopairote^(##)      |      |      |      |      | 4,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 8. General Lertrat   | -    | -    | -    | -    | 2,41     | 14/14 |
| Ratanavanich^(@)     |      |      |      |      | 4,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 9. Mr. Pichai        | 1    | 3    | 1    | 1    | 2,06     | 9/14  |
| Chunhavajira         | ,700 | ,400 | ,700 | ,900 | 5,573.77 |       |
+----------------------+------+------+------+------+----------+-------+
| 10. Mr. Chulasingh   | -    | -    | -    | -    | 2,38     | 14/14 |
| Vasantasingh^(@)     |      |      |      |      | 3,094.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 11. Mr. Prasit       | 1    | 3    | 1    | 1    | 2,75     | 14/14 |
| Kovilaikool^(@)      | ,800 | ,500 | ,700 | ,800 | 4,098.30 |       |
+----------------------+------+------+------+------+----------+-------+
| 12. Mr. Vidhibhandhu | -    | -    | -    | -    | 2,36     | 12/14 |
| Vichairatana^(@)     |      |      |      |      | 4,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 13. Mr. Chitrapongse | 29   | 45   | 16   | 24   | 2,26     | 13/14 |
| Kwangsukstith        | ,000 | ,800 | ,800 | ,400 | 4,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 14. Mr. Prasert      | 3    | 15   | 11   | 1    | 2,38     | 13/14 |
| Bunsumpun            | ,500 | ,100 | ,600 | ,900 | 9,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| 15. Mr. Maroot       | 14   | 28   | 14   | 75   | 2,28     | 14/14 |
| Mrigadat             | ,200 | ,600 | ,400 | ,000 | 9,344.26 |       |
+----------------------+------+------+------+------+----------+-------+
| Ex-director in 2005  |      |      |      |      |          |       |
+----------------------+------+------+------+------+----------+-------+
| 1. Mr. Nopadon       | -    | -    | -    | -    | 2,06     | 11/11 |
| Mantajit**^(@)       |      |      |      |      | 2,855.10 |       |
+----------------------+------+------+------+------+----------+-------+

$ Retainer allowance, meeting allowance, and Director bonus for 2005
(paid in 2006)

# Appointed chairman on May 1

## Resigned from chairmanship on May 1

* Assumed directorship on October 21

** Resigned on October 4 after formal retirement from government service

@ Independent Director

9.1.2 Subcommittees: The Board appointed subcommittees consisting of
suitable knowledgeable persons to screen particular issues on their
behalf. In 2005 there were five of them, all reporting to the Board.

  (1) The Audit Committee: This subcommittee has the following
  responsibilities:

(a) To review and audit the Company’s financial report, so as to ensure
    that it is correct and sufficient, with the Company’s auditor also
    to attend the quarterly meeting

(b) To review and audit the Company’s operations to ensure that they are
    in compliance with the Securities and Exchange Acts, Regulations of
    the Stock Exchange of Thailand, and any other relevant laws

(c) To consider PTTEP’s information disclosure on matters related to
    connected transactions or conflict-of-interest transactions to
    ensure that they are correct and sufficient

(d) To review the internal control and internal audit systems to ensure
    that they are appropriate and effective, and, by coordinating with
    the external auditors, ensure that the audit report, the audit
    method and the audit report evaluation are of the required standard

(e) To consider, select and propose the appointment of PTTEP’s external
    auditors, including their fees

(f) To approve the appointment, rotation, performance appraisal and
    reward/ punishment for the head of the department responsible for
    auditing

  (g) To consider the audit plan

(h) To consider the budget and manpower of the audit unit

(i) To ensure that the Chairman of the Audit Committee, or a Director to
the Audit Committee, attends the Shareholders’ meetings to clarify any
matters pertaining to the Audit Committee or the appointment of the
external auditors

  (j) To review the Audit Committee Charter for revision (if necessary)
  annually

(k) To assume any other responsibilities as assigned by the Board of
Directors as well as to appoint the Chief of the Internal Audit or
Senior Manager, Corporate Secretary Office to be Secretary of the Audit
Committee

The Audit Committee consists of three Board Directors:

  - Mr. Charnchai Musiknisakorn Chairman - Mr. Prasit Kovilaikool
  Member - Mr. Anucha Sihanatkathakul Member.

  (2) The Remuneration Committee: This subcommittee has the following
  responsibilities:

(a) Assessing the performance of the Board, the subcommittees, and the
President against each year’s respective performance agreements

(b) Recommending fair and reasonable compensation packages for the
Board, the subcommittees, including retainer and meeting allowances,
bonuses, and other fringe benefits (cash and non-cash), which are to be
presented to shareholders’ meetings for approval

(c) Recommending compensation for the President, which consists of
salary, bonus, and other benefits (cash and non-cash), and recommend the
compensation structure of senior executives under a fair and reasonable
procedure and structure, for the Board’s approval

(d) Reviewing the compensation package of Directors, subcommittees,
President, and the compensation structure of senior executives, taking
into account individual and Company performance, together with
established guidelines of the industry and leading listed companies on
SET and respective scopes of duties and responsibilities

(e) Performing any other assignment for the Board.

The Remuneration Committee consists of three Board Directors:

  - Mr. Prasit Kovilaikool Chairman

  - Mr. Prasert Bunsumpun Member

  - Mr. Anucha Sihanatkathakul Member.

  (3) The Nominating Committee: This subcommittee has the following
  responsibilities:

  (a) Formulating a transparent and standard process of Director or
  President selection

(b) Shortlisting candidates for appointment as new Directors or
President, and proposing their names to shareholders’ meetings or Board
meetings as needed

(c) Preparing the names of shortlisted persons for Directors or
President in advance or when there is a Director or President vacancy,
or both

(d) Developing performance agreements (PA) each year for the Board,
subcommittees, and the President, and developing their annual
performance assessment forms for consideration by the Board

(e) Nominating Directors who qualify to be members of the subcommittees
for consideration by the Board to fill vacancies

(f) Performing any other assignment for the Board, relevant to the
selection of Directors or President.

  The Nominating Committee consists of three Board directors:

  - Mr. Chulasingh Vasantasingh Chairman

  - Mr. Prasert Bunsumpun Member

  - General Lertrat Ratanavanich Member (replacing Mr. Anucha
  Sihanatkathakul, effective October 21, 2005).

(4) The Corporate Governance Committee: Appointed by the Board on
February 22, 2005, this subcommittee is charged with:

(a) Establishing policies and directions for good corporate governance
(CG) practice, along with business ethics, and proposing the Board’s
approval for implementation at all levels

(b) Ensuring that the Company’s operation and actions of the Board,
subcommittees, the Management, and employees align with (a)

(c) Assessing and revising policies, directions, business ethics,
together with Company guidelines on CG, in an effort to comply with
international guidelines and recommendations by other institutes, and
proposing to the Board for approval

(d) Monitoring the movement and trends, and benchmark Company practice
with leading companies

(e) Supervising and promoting actions under (a) for ongoing
effectiveness and alignment with Company business

(f) Making recommendations for the Company, the Board, the Management,
and the task force on CG

(g) Regularly reporting CG matters to the Board and immediately
reporting critical matters, that may affect the company’s reputation and
image, as well as providing its views on practical aspects and
recommendations for modification as needed

(h) Disclosing information about CG at PTTEP for stakeholders and in the
annual report with prior approval by the Board.

The Corporate Governance Committee consists of three Board directors:

- Mr. Vudhibhandhu Vichairatana Chairman

- Mr. Charnchai Musignisakorn Member

- General Lertrat Ratanavanich Member

(5) The Risk Management Committee: On October 21, 2005, the Board
expanded the responsibilities of the Cash Management Committee to
include risk management matters, and in the process changed its name to
the Risk Management Committee, with the following responsibilities:

(a) Define the policy framework and process for risk management

(b) Promote and implement the risk strategy and policy by enhancing the
level of risk awareness within PTTEP, and through the development of
appropriate procedures and commitment of resources

(c) Maintain an enterprise-wide view of risk that related to corporate
direction and E&P value chain and then recommend mitigation strategy to
manage risks to be within the acceptable level

(d) Ensure adequate level of support is being provided to Risk manager

  (e) Support the monitoring of risks across PTTEP and report to the
  Board

The Risk Management Committee consists of three Board directors:

- Mr. Pichai Chunhavajira Chairman

- Mr. Anucha Sihanatkathakul Member

- Mr. Maroot Mrigadat Member.

9.1.3 Corporate Secretary is Mr. Theerasak Tancharoenlarp, whose
responsibilities consist of:

(1) Providing recommendations and support to the work of the Board on
legal and regulatory matters

(2) Ensuring good CG practices together with following up actions to
ensure that Board policy directions and recommendations find
implementation

(3) Supervising actions by the Board and the Management to ensure their
compliance with related laws and regulations

(4) Ensuring suitable and prudent actions taken by the Board

(5) Communicating with shareholders and ensuring that they are properly
taken care of

(6) Communicating with related regulatory agencies.

9.1.4 Details about Current Company Management appear in Attachment 1.

9.2 Nomination of the Board of Directors and Management

9.2.1 Nomination of the Board and President

When there is a Director or President vacancy, the Nominating Committee
is to choose suitable candidates to become a Director or President by
collecting a list of recommended nominees from PTT, the major
shareholder, for consideration. Priority will be given to those with
technical skills, experience, specific qualifications in areas still
lacked by the Board or critical to Company business. To arrive at the
ideal composition of the Board and for the maximum benefit to the
Company, the Nominating Committee is to scrutinize these qualifications:

(1) Suitable qualifications stipulated by the Public Company Limited Act

(2) Knowledge and skills with diverse experience in different fields
that would add value to the Company

(3) Characteristics complementary to CG so as to add value to Company
business, for example, business ethics, independence, courage,
creativity, duty of care and duty of loyalty, dedication, a suitable
age, good health, a sound mind, pre-meeting preparation habits, and
social acceptability.

Election of Directors to replace retiring ones must win the approval of
the annual shareholders’ meeting through a majority of eligible
shareholders in attendance. The criteria and procedure for election of
Directors are as follows:

(1) Nomination to the shareholders’ meeting is to be made by the
Nominating Committee for each Director whose term has ended, with prior
screening by the Board. Shareholders have the right to nominate other
persons and the Company has added another channel for shareholders as
well as providing information about Independent Director candidates on
the Company’s website. The authority to choose Directors rests with the
shareholders.

(2) Should the number of Director candidates not exceed the number to be
elected, the shareholders’ meeting is to elect those candidates as
Directors.

(3) Should the number of Director candidates exceed the number to be
elected, a ballot is to be held. Each shareholder may elect as many
candidates for Directors as the number of open positions. Voting is done
for individual candidates, and each shareholder or proxy has one vote
per share held. Those with the highest ballots and others with fewer
ballots are to be elected Directors, as the number of open positions may
accommodate.

For other reasons when Director positions become vacant, the Board is to
elect new Directors through at least a three-fourth majority vote. Such
elected Directors are to remain in their positions for only as long as
the remaining terms of the ones they replace.

9.2.2 Nomination of Executives

The President is authorized to appoint any person(s) with knowledge,
capability, and experience in Company business to the management rank in
compliance with PTTEP personnel administration regulations, and is to
report to the Board for acknowledgement. An exception is for the Senior
Vice President positions, which need the Board’s prior approval. For
appointments of those from outside the Company, they must pass an
interview by the interview committee. In addition, any appointment of
internal audit department manager requires prior approval from the Audit
Committee.

9.3 Compensation of the Board and Management

9.3.1 Directors’ Compensation

+--------------+---------+---------------+---------+-----------------+
| Comp         | 2004    |               | 2005    |                 |
| ensation^(@) |         |               | ⁽³⁾     |                 |
+--------------+---------+---------------+---------+-----------------+
|              | Number  | Total Amount  | Number  | Total Amount    |
|              |         | (Baht)        |         | (Baht)          |
+--------------+---------+---------------+---------+-----------------+
| Meeting      | 16^(#)  | 9,818,750     | 16^(#)  | 11,275,000      |
| Allowance    |         |               |         |                 |
+--------------+---------+---------------+---------+-----------------+
| Bonus        |         | 16,           |         | 2               |
|              |         | 442,622.95⁽¹⁾ |         | 4,518,302.27⁽²⁾ |
+--------------+---------+---------------+---------+-----------------+
| Other        |         | -             |         | -               |
| compensation |         |               |         |                 |
+--------------+---------+---------------+---------+-----------------+
| Total        |         | 26,261,372.95 |         | 35,793,302.27   |
+--------------+---------+---------------+---------+-----------------+

@Criteria for payment of Directors’ compensation appear in (11.4.10)

(1) Includes bonus for 2004, paid in 2005

(2) Includes bonus for 2005, paid in 2006

(3) See details of each Director on page 44

# The President also receives compensation for Senior Management, shown
in (11.3.2)

2.  Senior Management’s Compensation

+--------------+------+--------------+--------+----------------------+
|              | 2004 |              | 2005   |                      |
+--------------+------+--------------+--------+----------------------+
|              | Nu   | Total Amount | Number | Total Amount (Baht)  |
|              | mber | (Baht)       |        |                      |
+--------------+------+--------------+--------+----------------------+
| Salary       | 12   | 4            | 12     | 46,878,192.00        |
|              |      | 2,286,190.00 |        |                      |
+--------------+------+--------------+--------+----------------------+
| Bonus        |      | 1            |        | 22,129,817.00        |
|              |      | 4,292,730.00 |        |                      |
+--------------+------+--------------+--------+----------------------+
| Other        |      | 6,037,736.00 |        | 6,680,653.20         |
| c            |      |              |        |                      |
| ompensation* |      |              |        |                      |
+--------------+------+--------------+--------+----------------------+
| Total        |      | 6            |        | 75,688,662.20        |
|              |      | 2,616,656.00 |        |                      |
+--------------+------+--------------+--------+----------------------+

* Provident Fund

Please refer to warrants of the ESOP program on page 53

Allocation of ESOP Warrants

From 2002 to 2005, with the approval of the general shareholders’
meetings, PTTEP allocated ESOP warrants to buy common shares to
Directors serving in 2002, and all eligible employees in an effort to
give each a sense of belonging and reward those that are devoted to
Company service. The allocation is summarized below:

+----+-------------------+-----------------------+--------------------+
| Ye | Number of         | Exercise Ratio        | Exercise Price     |
| ar | Warrants          |                       |                    |
|    |                   | (Unit of Warrant :    | (Baht)**           |
|    | (Unit)            | Unit of Share)        |                    |
+----+-------------------+-----------------------+--------------------+
| 2  | 2,000,000         | 1:1                   | 111                |
| 00 |                   |                       |                    |
| 2* |                   |                       |                    |
+----+-------------------+-----------------------+--------------------+
| 20 | 2,000,000         | 1:1                   | 117                |
| 03 |                   |                       |                    |
+----+-------------------+-----------------------+--------------------+
| 20 | 2,800,000         | 1:1                   | 183                |
| 04 |                   |                       |                    |
+----+-------------------+-----------------------+--------------------+
| 20 | 2,800,000         | 1:1                   | 278                |
| 05 |                   |                       |                    |
+----+-------------------+-----------------------+--------------------+

* PTTEP transferred the warrants to buy common shares, allocated in 2002
to six Directors who were government officials, to the Ministry of
Finance. For 2003-2005, the Company offered no warrants to Directors.
Only the Management and employees received such offers.

** Exercise Price Calculation

2002: Market price calculated by using the average closing price of
Company shares 20 working days before the date on which the warrant’s
issuance and offering date was determined.

2003: Calculated by using the average closing price of Company shares on
the first working day following the period which was used for
calculating the exercise prices of the 2002 ESOP Program, up to the
working day before the date from which the Company determined that the
new shareholders had no right to receive the 2002 dividend payment, or
the Ex-dividend (XD) date, minus the 2002 dividend per share.

2004: Calculated by using the average closing price of Company shares on
the date which the Company determined that the new shareholders have no
right to receive the 2002 dividend payment, up to the working day before
the date from which the Company determined that the new shareholders had
no right to receive the 2003 dividend payment, or the Ex-dividend (XD)
date, minus the 2003 dividend per share.

2005: Calculated by using the average closing price of Company shares on
the date which the Company determined that the new shareholders have no
right to receive the 2003 dividend payment, up to the working day before
the date from which the Company determined that the new shareholders had
no right to receive the 2004 dividend payment, or the Ex-dividend (XD)
date, minus the 2004 dividend per share.

Number of PTTEP Shares and Warrants Held by the Management

+----------------------------+--------+-------+------------+----------+
| Name                       | Number |       | Change in  | Number   |
|                            | of     |       |            | of       |
|                            | Shares |       | Number of  |          |
|                            | as of  |       | Shares     | PTTEP    |
|                            | 31     |       |            | Warrants |
|                            | De     |       |            |          |
|                            | cember |       |            |          |
+----------------------------+--------+-------+------------+----------+
|                            | 2004   | 2005  |            |          |
+----------------------------+--------+-------+------------+----------+
| 1. Mr. Maroot Mrigadat     | 14,000 | 2     | 14,600     | 75,000   |
|                            |        | 8,600 |            |          |
+----------------------------+--------+-------+------------+----------+
| 2. Mr. Tevin Vongvanich    | 12,400 | 2     | 8,000      | 57,000   |
|                            |        | 0,400 |            |          |
+----------------------------+--------+-------+------------+----------+
| 3. Mr. Suwit Pitrchart     | -      | 1     | 17,800     | 55,800   |
|                            |        | 7,800 |            |          |
+----------------------------+--------+-------+------------+----------+
| 4. Mr. Somkiet Janmaha     | -      | 3     | 31,500     | 46,400   |
|                            |        | 1,500 |            |          |
+----------------------------+--------+-------+------------+----------+
| 5. Mr. Asdakorn Limpiti    | 25,300 | 3     | 6,200      | 46,400   |
|                            |        | 1,500 |            |          |
+----------------------------+--------+-------+------------+----------+
| 6. Mr. Poawpadet Vorabutr  | 500    | -     | (500)      | 46,400   |
+----------------------------+--------+-------+------------+----------+
| 7. Mr. Chatchawal Eimsiri  | -      | -     | -          | 46,400   |
+----------------------------+--------+-------+------------+----------+
| 8. Mr. Somporn             | -      | 2     | 23,700     | 46,500   |
| Vongvuthipornchai          |        | 3,700 |            |          |
+----------------------------+--------+-------+------------+----------+
| 9. Mr. Nipit Isarankura    | -      | 1     | 11,500     | 61,000   |
|                            |        | 1,500 |            |          |
+----------------------------+--------+-------+------------+----------+
| 10. Mr. Prisdapunt         | 47,300 | 5     | 6,700      | 68,800   |
| Pojanapreecha              |        | 4,000 |            |          |
+----------------------------+--------+-------+------------+----------+
| 11. Mr. Suppamas           | -      | 5     | 51,000     | 25,800   |
| Prachakvej                 |        | 1,000 |            |          |
+----------------------------+--------+-------+------------+----------+
| 12. Mr. Luechai            | -      | 4,100 | 4,100      | 32,600   |
| Wongsirasawad              |        |       |            |          |
+----------------------------+--------+-------+------------+----------+
| 13. Mr. Suraphong Iamchula | -      | -     | -          | 33,800   |
+----------------------------+--------+-------+------------+----------+
| 14. Mr. Chalermkiat        | -      | -     | -          | 33,800   |
| Tongtaow                   |        |       |            |          |
+----------------------------+--------+-------+------------+----------+
| 15. Mr. Anutra Bunnag      | -      | 3,000 | 3,000      | 21,100   |
+----------------------------+--------+-------+------------+----------+
| 16. Mrs. Sirirat           | -      | 8,500 | 8,500      | 10,700   |
| Sararattanakul             |        |       |            |          |
+----------------------------+--------+-------+------------+----------+
| 17. Mr. Chaiyaphon         | 3,400  | 4,100 | 700        | 16,300   |
| Chirakorn                  |        |       |            |          |
+----------------------------+--------+-------+------------+----------+

9.4 Corporate Governance

9.4.1 Corporate Governance (CG) Policy

The Board issued a written Corporate Governance (CG) policy in 2001,
which is constantly reviewed and is disclosed on the Company’s website.
Business ethics at the Company are based on six principles:
Accountability, Responsibility, Fairness and Integrity, Transparency,
Creation of Long-term Value to All Stakeholders, and Promotion of Best
Practices. The four yardsticks consist of righteousness, suitability,
transparency, and fairness.

Recognizing the indispensable role of Directors in supporting and
promoting the CG policy, the Board established the Corporate Governance
Committee on February 22, 2005, consisting of Independent Directors to
supervise CG policy and direction formulation and ensure compliance at
all levels, ranging from Directors, the Management, to employees.

The first half of 2005 consisted of the ongoing campaign among employees
to instill CG awareness and understanding, launched in June 2003.
Various activities were undertaken to educate Directors and employees,
for example, orientation sessions for new Directors and employees and a
special talk on CG Policy for Directors and the Management. In 2005 the
CG Committee appointed CG Working Committee to improve processes,
promote and enhance CG knowledge in management and employees to achieve
international standards. To this end, Management team members serve as
CG champions who will formulate action plans and report the progress
made every quarter. To arrive at clear results, internal assessments
will be made on CG work by means of the complete criteria and approach
defined by Thai Rating and Information Service Company (TRIS) and SET,
which were based on those of the Organization for Economic Cooperation
and Development (OECD). Using the 20% weighting for shareholders’
rights, 40% for the composition and role of the Board and the
Management, 25% for information disclosure, and 15% for CG culture,
PTTEP scored 8.21 overall against 8.14 in 2004, out of 10. The score has
been approved by the Board to disclose to the public as proposed by the
CG Committee.

9.4.2 Shareholders: Rights and Equitability

Valuing the rights and equitability of all shareholders, PTTEP has taken
these actions to demonstrate its respect for shareholders’ rights:

(1) Notifying Directors and all employees, their spouses, children under
legal age, and nominees, not to use inside information that is essential
to changes in Company share prices and not yet publicized in buying
Company shares, as well as encouraging holding of PTTEP shares for at
least three months

(2) Regularly disseminating information to shareholders via SET’s
channel, printed and other media, including via the Company’s website

(3) Setting up information request channels for minor shareholders, for
instance, E-mail addresses of Independent Directors engaged in matters
of Directors’ activities, CG, audit work, nomination of persons as
Independent Directors, and other matters including proposal of
additional shareholders’ meeting agenda items. The Company has clearly
defined the procedure and qualifications for Independent Director
candidates. Apart from these channels, minor shareholders can directly
contact the Company Secretary or the Investor Relations unit

(4) Sending to shareholders meeting invitations along with complete
related documents well in advance and facilitating
shareholders’attendance at the meetings, apart from adding the
information channel for shareholders through the Company’s website ahead
of sending the invitations. After each meeting, the minutes are sent and
disseminated in due time

(5) Giving shareholders who show up late a chance to vote on agenda
items still under deliberation

(6) Explicitly disclosing shareholding structures in affiliated and
subsidiary companies so that shareholders may be confident of
transparent management structures that are open to scrutiny

(7) Conducting business with efficiency to create growth for the Company
and suitable returns to shareholders.

9.4.3 Stakeholders’ Rights

PTTEP recognizes the importance of internal and external stakeholders,
shareholders, customers, suppliers, traders, creditors, partner
companies, government, society, the environment, and employees, as
stated in its policy on equitable treatment of stakeholders in its CG
statement. The Company also deals with stakeholders’ rights in its
regulations of human resources management, which provide for a welfare
committee to look after employees’ benefits. Moreover, to provide
further fair treatment between the Company and its suppliers by way of a
transparent procurement system, technical subcommittees and commercial
subcommittees were set up as checks and balances before the process of
the procurement committee taking care of high-value bidding under major
projects. Other assigned departments, for instance, External Relations
and Safety, Security, Health and Environment, assume responsibility for
social and environmental activities.

As the national petroleum exploration and production entity, the Company
is committed to conducting business with due care for nature and the
environment. It therefore joined the public sector in promoting
conservation areas and national parks as much as it can. One traditional
activity is its collaboration with the wildlife and lake conservation
development and promotion station in launching PTTEP Pithak Ruk Talay
Saab Songkhla. In conjunction with the Royal Forest Department, Ministry
of Agriculture and Cooperatives, it launched a book entitled “Thai
Heritage Forests,” dealing with the last conserved forest areas in five
regions of the country. Also, in conjunction with the Department of
National Parks, Wildlife, and Plants, the Company launched a book
entitled “Heritage of the Thai Seas,” dealing with Thailand’s rich
marine natural resources in physical, geographical, and geological
aspects, as well as a treatise on the background, status, and future of
the Thai seas. In collaboration with the Department of Mineral Fuels,
PTTEP engaged in reforestation covering 7,500 rai in the third phase
(2003-2007) of the Project in Honor of His Majesty The King in Amphoe
Wichian Buri of Phetchabun.

The Company supported sustainable quality of life activities by adding
skills in youths and developing community occupations for stronger
communities under the sufficiency economy. Specifically, PTTEP focused
on long-term projects with people development. Activities undertaken in
2005 included scholarships at all levels – primary and secondary levels
in Suphan Buri, Songkhla, Sukhothai, Kamphaeng Phet, and Chumphon;
undergraduate level in various disciplines to universities around the
country; and six scholarships granted to university students from
Vietnam, Myanmar, and Bangladesh for further study in Thailand. The
PTTEP I Love Sports Project aimed to promote children’s good health,
interest in sports, and a drug-free use of their spare time. The Thai
Rice College Project aimed to improve and develop brown jasmine rice for
greater productivity. Finally, the Company donated computers for use in
starting an educational network in an effort to promote learning and
develop skills for teachers and students alike.

Besides, PTTEP promptly and extensively provided help to victims of
natural disasters, for instance, to residents of flood-stricken
Songkhla. Apart from providing survival kits to victims, our helicopter
delivered dry food items to those in areas inaccessible by other means.

9.4.4 Shareholders’ Meetings

Within four months of the closing of its previous accounting year, the
Company organizes the annual general shareholders’ meeting to facilitate
the equitable rights of all shareholders. The Company sends meeting
invitations containing agenda details and related appendices together
with the opinions of the Board, proxy forms designed by the Ministry of
Commerce, a list of all Independent Directors, and a map showing the
meeting venue. Containing details about the credentials that each
shareholder needs to bring, these invitations are mailed at least 14
days ahead of the meeting date. In addition, shareholders may view
information about each meeting agenda item on the Company’s website
ahead of the invitation mailing date.

In 2005 the Company held two shareholders’ meetings, namely an ordinary
meeting on April 5 at 3.30 p.m., at the PTT Auditorium, PTT Head Office;
and an extraordinary meeting on December 15, at 10.30 p.m. at the 9^(th)
floor auditorium, Shinawatra III Towers. Attended by the Chairman and
the chairmen of all subcommittees to address questions and concerns,
both meetings illustrated its commitment to shareholders.

Before each meeting, the Chairman explains clearly how ballots are cast
and counted under Company regulations. The Company keeps count of
shareholders who have not yet voted on any agenda item and illustrates
ballot-counting procedures along with voting summaries throughout the
process. At the extraordinary shareholders’ meeting, the Company asked
shareholder volunteers to witness ballot counts for greater
transparency. During the meeting, it allowed thorough expression of
views and queries before each ballot round and summarized meeting
resolution(s) on each agenda item. As a rule, PTTEP allowed registration
of shareholders at least one hour before each meeting.

The ordinary shareholders’ meeting of 2005 deliberated nine regular
agenda items, namely the acknowledgement of the previous meeting
minutes; operating performance and annual financial statements; dividend
payment; election of Directors to replace those whose terms ended;
adjustment of Directors’ compensation; appointment of the external
auditor and its compensation; and safeguarding Directors’ performance.
Other items included the approval of the issuance of warrants for buying
common shares, to be awarded to the Management and employees, as well as
allocation of the related shares. All agenda items were duly approved by
the shareholders, which enabled preparation of the meeting minutes and
the addressing of questions to be completed within 14 days from the
meeting date; these reproduced documents were delivered to the
shareholders at once without having to wait until the next meeting.

The extraordinary shareholders’ meeting (No. 1/2548) was held to
deliberate, first, the divestment of Thaioil Power Company shares to
PTT, which represented a connected transaction under SET; and second,
revocation of Director appointments by virtue of their official
positions. The Company prepared the recommendations of an independent
financial advisor about connected transactions; this advisor was in
attendance at the meeting to clarify and answer questions. All agenda
items were duly approved by the shareholders. In particular, the
connected transaction was approved with at least three-fourths of the
attending eligible shareholders – excluding the connected parties,
namely PTT and the Directors with interests in the matter.

9.4.5 Leadership and Vision

In conjunction with the Management, the Board plays a key role in
defining the vision, mission, and strategic plan of the Company, as well
as its annual plans and budget, and both play leadership roles in CG.
The Board is to perform its duties with due care and integrity in
compliance with the law, Company regulations, and the CG policy.

In 2005 the Board continued to value their participation in training
courses to apply to their job performance while adding to their
knowledge and experience. To date, those attending the Director
Certification Program (DCP) and Director Accreditation Program (DAP)
held by the Thai Institute of Directors Association (IOD) number 13 out
of 15, with attendance details shown in Attachment 1.

Recognizing their responsibilities, the Board and its subcommittees
supervised the work of the Management throughout the year. They have
presented summaries of their own performance in the assessment reports
for 2005 (under 9.4.16), and Report of the Audit Committee (under
attachment 5) – both of which appear in the annual report.

9.4.6 Conflicts of Interest

PTTEP’s CG policy covers conflicts of interest with a procedure to
record such conflict(s) involving personnel at all levels, ranging from
Directors to regular employees. At year-end, all are to conduct
self-assessment and disclose items of possible conflicts of interest
through the year. For valid cases, PTTEP abides by the announcement of
SET concerning this matter as specified in Company regulations. In
deliberating connected transactions, the Board is to take all necessary
actions specified by the Board of SET concerning information disclosure
and actions by listed companies on connected transactions (issued in
2003). Voting is to exclude Directors with interests in each matter by
excluding them from its deliberation. The Audit Committee is to endorse
information disclosure (Form 56-1) and the annual report, as shown in
the connected transactions part (under 11).

9.4.7 Business Ethics

Since 2002, the CG policy has been formulated by the Board for use as a
business guideline by the Board and all employees. This is the supreme
policy for all to abide by so that the Company may grow and prosper with
security, sustainability, and dignity in years to come. When they join
PTTEP, each Director and each employee receive a copy of the policy,
which they must acknowledge with a signature and strictly abide by. The
policy undergoes revision each year and is disseminated in both Thai and
English on the Company’s website.

9.4.8 Balance of Power

The composition of the Board is simplified as Connected Directors,
Directors with no interest (at least have Independent Directors one out
of every three Directors or three Directors), and qualified
private-sector Directors (at least have three Directors). The Board
consists of 15 Directors – five Connected Directors plus the President,
nine Directors with no interest (seven Independent Directors and five
private-sector), and three formerly Connected Directors (former
Directors of PTT, the major shareholder) who are not classified as
Independent Directors.

The Board consists of those knowledgeable in diverse fields useful for
Company business – petroleum, law, finance, and other technical areas –
who can independently express their views on Company performance against
the given policy. In 2005, all Directors protected Company interests to
the best of their ability with due regard for all stakeholders.

The Board has defined an “Independent Director” above the definition
given by the Securities and Exchange Commission (SEC) and SET, as well
as the CG policy. Below is such definition:

(a) Holds no more than one percent of the paid-up capital of the Company
and its affiliated, associated, or related companies, including the
shares held by his or her spouse, children under legal age, or
nominee(s)

(b) Is not a Director or an executive of PTT; a PTTEP executive, an
employee, an advisor, an attorney, an auditor with a regular salary paid
by PTT or PTTEP, their affiliated, associated, or other related
companies

(c) Has resigned from such position in (b) for more than two years

(d) Is a Director with no benefits or interests whatsoever in finance
and management of PTTEP, affiliated, associated, or related companies of
PTT, including such benefits or interests during the period of two years
before his or her appointment to the Board, except where the Board has
ruled that such previous benefits or interests have no bearing on the
performance and the expression of independent views

(e) Is not related to or a close relative of any management member of
PTTEP or PTT

(f) Discloses all other relationships that may undermine his or her
independence under the policies on conflicts of interest, contained in
the CG principles of PTTEP.

9.4.9 Aggregation or Segregation of Positions

The Chairman of the Board and the President are two separate
individuals. The Chairman takes the lead in defining Company policy
under the strategies jointly considered and established by the Board and
the Management, and ensures that Board meetings are successfully
conducted. During each meeting all Directors are urged to actively
participate as well as raising essential questions. Directors also
occasionally meet to advise and support the Management through the
President. At the same time, the Board is to stay away from routine
tasks or business activities under the responsibility of the Management.
Only the President or the Acting President is authorized by the Board to
do so, and to commit the Company through his or her signature.
Presidential authority and power are therefore efficiently channeled
through the Management. Therefore, the authority of the Board and that
of the Management are clearly defined and segregated.

9.4.10 Directors’ and Executives’ Compensation

The 2005 General Shareholders’ Meeting deliberated compensation for the
Board by benchmarking it with the market norm while taking Company
performance into consideration. The meeting approved the same Directors’
retainer and meeting allowances as before (at 25,000 Baht each month and
for each meeting); the bonus ceiling was raised from 17 to 17-25 million
Baht/year. That is, for a net profit of 10,000 million Baht, the total
sum is to be exactly 17 million Baht, and for a net profit exceeding
10,000 million Baht, an increment of 0.08 percent of the margin beyond
10,000 million Baht will be paid, up to 25 million Baht a year.
Allocation is to be prorated with the duration of each person’s
directorship, with absences also taken into consideration. A 25% special
payment is made to the Chairman. Each subcommittee member is to get
25,000 Baht per person each time they meet, again with a 25% special
payment made to each subcommittee chairman. Compensation details appear
under 9.1.1 and 9.3.1.

9.4.11 The Board of Directors’ Meeting

As a rule, for a given year the Board fixes its meeting dates in
advance, with regular agenda items scheduled for each month. For 2005
the Board met every third Friday of the month for a total of 14 times,
including an offsite meeting to deliberate strategic plans and another
to deliberate human resource administration. The Board held one meeting
without the presence of the Management before the July meeting. Each
Director consistently received an invitation to the meeting, draft
minutes, and complementary information ahead of each meeting.

In 2005 a total of 122 agenda items were deliberated. These essential
items included the annual strategy formulation, work plans, and budget;
CG policy; financial statements; petroleum purchase agreements and
negotiations; bidding for exploration and production in other countries;
joint venturing; deliberation of assets obtained or disposed of;
procurement under major projects; and amendments to regulations.
Acknowledged items consisted of 121 items, which mainly consisted of
reports on operation and updates on various projects; status of Company
shares; changes in PTTEP directorship during the year; appointment of
executives; reports on activities in support of social and environmental
development; and reports from subcommittees. A typical Board meeting
took two hours, with the Company Secretary in attendance each time to
take the minutes and file complete information along with meeting
documents; he also advised the Board on pertinent regulations.

The meeting minutes covered all essential issues and all the minutes
were unanimously approved. Questions raised during Board meetings were
addressed and responded to along with additional explanations;
Directors’ views were explicitly recorded. All documents were
systematically filed under tight security. As a rule, all Directors
attended each Board meeting except for legitimate and necessary reasons.
Whenever possible, Directors sent an apology letter to the Chairman if
they could not attend a meeting. Board attendance records for the year
appear under 9.1.1 (page 44).

9.4.12 Subcommittees

Holding 15 meetings in 2005, the Audit Committee deliberated a total of
41 items and endorsed the suitability of connected transactions
involving PTTEP for presentation to shareholders at Extraordinary
Shareholders’ Meeting No. 1/2548. On October 4, Mr. Nopadon Mantajit
resigned as a member of the Board of Directors, Chairman of the Audit
Committee, and an Independent Director. To replace him, the Board of
Directors appointed Mr. Anucha Sihanatkathakul as an Audit Committee
member and appointed Mr. Charnchai Musignisakorn as Chairman of the
Audit Committee, effective from October 21.

The Remuneration Committee, with two meetings this year, mainly
deliberated the scoring of 2004 performance; deciding compensation for
the Board and its subcommittees in 2005; scoring all chairmen in 2005;
deciding compensation for the Board and its subcommittees in 2006;
scoring 2005 performance; deciding the President’s compensation for
2006; and deciding performance agreements for the Committee itself for
2006.

The Nominating Committee, with three meetings during the year,
deliberated the shortlisting of Director nominees for shareholders’
consideration; appointment of Audit Committee and Remuneration Committee
members to fill vacancies; performance agreements for the Board, the
subcommittees, and the President; consideration of performance
assessment forms for 2005 for the Chairman, the Board, and the
subcommittees; and deliberation of the Board’s composition.

The Corporate Governance Committee held its four quarterly meetings to
deliberate the formulation of a regulation dealing with the Committee
itself (dated 2005); formulation of performance agreements for 2005 and
2006; practical approaches for the year for the Committee itself;
acknowledging updates on a special CG talk for the Board and senior
executives; an amendment to the CG policy; work plans for the CG task
force for 2006; revision of the 2005 CG Committee regulation; and
assessment of internal CG findings.

During the year, no issue was tabled for the consideration of the Cash
Management Committee, whose name was modified by the Board to the Risk
Management Committee and whose scope of responsibility was
correspondingly modified, with details shown on page 48.

At each Board meeting, the subcommittees reported their meeting outcome.
Incidentally, all subcommittee members attended all meetings.

9.4.13 Internal Control and Internal Audit

PTTEP employs an internal control policy that corresponds to acceptable
Company risks and the diverse activities of individual departments. The
Internal Audit Department regularly monitors internal control to ensure
improved control measures related to changes in environment and risks.

Directors, Management, and employees have collectively decided business
procedures to achieve the following objectives:

(1) Efficient and effective operations, including prudent use of
resources

(2) Accurate, reliable, and timely financial reporting

(3) Compliance with Company policies, laws, and regulations.

The Company’s internal control procedure was based on the regulations of
The Committee of Sponsoring Organizations of the Treadway Commission
(COSO) and that of the Committee of the Auditor General of Thailand, and
consists of five components:

(1) Control Environment: A proper control environment fosters control
awareness in personnel conducting business with competence, integrity,
and a code of ethics. It covers the formulation of business directions
and policies, business expansion, organization, and clear definition of
responsibilities. It entails proper delegation of authorities and
responsibilities. (See details under Personnel Development). Determined
to uphold the principles of Good Corporate Governance, the Company has
included the CG policy in its statement.

(2) Risk Assessment: The Company has not only assessed major types of
risk facing it, together with their probability and impact, but has also
taken steps to manage them to acceptable levels. PTTEP classifies risk
management at the corporate level, to be managed by the risk management
committee, and the department level, to be managed by management and the
respective heads of departments or those serving in such departments,
under clear risk management procedures. PTTEP has developed its risk
management system into 5 steps: setting objectives; identification;
assessment; mitigation and monitoring.

PTTEP’s Risk Management policy has been set up for the proper and
efficient identifying, mitigating and monitoring of risks. For any risk
that confronts Company business, PTTEP has prepared standard practices
to respond in an appropriate, systematic and efficient manner. It should
also be noted that the Company remains committed to enhancing risk
awareness culture, improving work procedures and resources utilization
to proactively manage the risks. PTTEP will not only be able to reduce
possible loss, but also gain value-adding new business opportunities for
the Company.

(3) Control Activities: PTTEP has designed its business to function
systematically and efficiently. Also, to prevent and minimize operation
risks, the Company operates under four essential regulations: human
resources management regulations, finance and accounting regulations,
budgeting regulations, and procurement regulations. These regulations
serve as framework for management and operation control.

The Company has also devised the Delegation of Authority and Signatures
(DAS) table, which the President can use to clearly delegate authority
to the Company’s functional management, resulting in practical and
easily-tracked courses of action.

Concerning compliance, the Company has allocated responsibilities to
various departments to verify, control, and self-supervise in an effort
to strictly abide by laws and regulations. Departments are required to
notify one another when new rules and regulations come into effect.

(4) Information and Communication: The Company executes this aspect by
instituting efficient and effective communication procedures for
information both internally and externally for complete, accurate, and
timely decision-making. The systems contain both financial and
non-financial information. Internally, through the Intranet PTTEP
provides employees with adequate and timely information needed for doing
their work, as well as communication between the Management and
employees in an effort to improve job coordination and execution to
fulfill goals. Externally, the Company has an effective procedure in
place to provide sufficient information and deliver reports on its
performance to various institutions in a timely and efficient way as
required by pertinent regulations, to create positive relations and
business understanding.

Thanks to a dependable information control system moderating the sending
and receiving of data, PTTEP has attained clear distinction of authority
and easily-understood responsibilities for all its staff and functional
units. It has laid out levels for access to confidential information and
applications in all its departments to give access to authorized
personnel only.

(5) Monitoring and Evaluation: PTTEP features control systems, together
with performance monitoring and evaluation systems whereby operating
employees are evaluated on their performance. A risk assessment program
has been monitoring actions and its findings are regularly reported to
the Risk Management Committee. Corporate performance is assessed every
quarter of the year with each department reporting its results against
plans and performance indices. In addition, the Office of the Internal
Audit monitors and assesses internal control outcome, and then reports
its findings to the Audit Committee. Results of internal control
assessment for 2005 appear under item 10

9.4.14 Board Responsibility to Financial Statements

The Board is responsible for the financial statements for PTTEP and its
subsidiaries. The Audit Committee ensures that such statements are
prepared with due quality and accuracy under generally accepted
accounting principles, and that performance results and critical
information are transparently and adequately disclosed. The Board and
the Audit Committee have publicized these in this annual report.

9.4.15 Investor Relations

Information disclosure represents a vital principle for good corporate
governance. PTTEP pays close attention to the information that needs to
be forwarded to SET and shareholders, particularly for its accuracy,
adequacy, timeliness, and equitability. The Investor Relations unit
(attached to the Finance Department) and the Office of the Company
Secretary serve institutional investors, minor shareholders, analysts,
and those interested in monitoring PTTEP data. The Company has a clear
procedure for information disclosure under ordinary and urgent
circumstances alike; formats of data presentation; and timeframes for
notification of SET. In an effort to make available more financial
information more rapidly, the Company disclosed unaudited financial
statements for 2004 in early 2005 and disclosed unaudited quarterly
financial statements in 2005 for the first time. No significant
differences were seen between the unaudited and the audited versions,
especially for all quarterly and year-end financial statements.
According to the external auditor, the statements were essentially
accurate under generally accepted accounting principles; the accuracy,
completeness, and adequacy of the information have also been endorsed by
the Audit Committee before disclosure to shareholders. The Board has
made a statement of responsibility for such financial statements in this
annual report.

Concerning non-financial information, PTTEP has disclosed connected
transactions, management discussion and analysis, risk management, and a
report of corporate governance in the annual report as well as in Form
56-1. All disclosed information, as well as that made public to
shareholders and investors, is disseminated on PTTEP’s website, together
with the annual report, Form 56-1, roadshow information, quarterly
information presentations, press releases, and the annual report on
health, safety, security. Note that, effective from the second quarter
of 2005, the Company has added webcast (image and sound) of quarterly
information. For greater access and maximum benefit to users, the
website has been upgraded and made bilingual. A total of 66 information
items were disclosed via SET’s system.

In addition, on April 22, 2005, the Company organized a shareholders’
visit to its operations at Sirikit Field in Kamphaeng Phet, which also
featured a special talk to add to the visitors’ business knowledge and
understanding.

9.4.16 Assessment of Board and Subcommittee Performance in 2005

The Board and its subcommittees prepare performance agreements (PA)
annually for use in assessing each year’s respective performance. All
Directors conducted self-assessments together with assessments for the
entire Board of Directors and for all subcommittees, including the
chairmen. On their grading scale, a 3 stands for ‘essential and good,’ a
4 for ‘highly essential and very good,’ and a 5 for ‘most essential and
best.’ The Remuneration Committee was assigned to compute and compile
the findings for the Board’s approval. The essences of the findings
appear below:

(1) Self-assessments by Directors averaged 4.65

(2) The Board as a whole averaged 4.5 against its PA, and 4.48 (very
good) based on assessment results – compared with 4.42 the year before.
The score of importance reduced from 4.64 to 4.45. The weighting of each
ingredient for both years appears below:

+-------------------------+----------+-----------+----------+----------+
| Assessed Item           | 2005:    | 2005:     | 2004:    | 2004:    |
|                         | Im       |           | Im       | Per      |
|                         | portance | Pe        | portance | formance |
|                         |          | rformance | ¹        | ¹        |
+-------------------------+----------+-----------+----------+----------+
| 1. Policy Formulation   | 4.67     | 4.54      | 4.63     | 4.35     |
+-------------------------+----------+-----------+----------+----------+
| 2. Overseeing the       | 4.62     | 4.49      | 4.63     | 4.30     |
| Management              |          |           |          |          |
+-------------------------+----------+-----------+----------+----------+
| 3. Formulation and      | 4.56     | 4.56      | 4.66     | 4.26     |
| Monitoring of Strategic |          |           |          |          |
| Plan                    |          |           |          |          |
+-------------------------+----------+-----------+----------+----------+
| 4. Meetings             | 4.56     | 4.39      | 4.57     | 4.45     |
+-------------------------+----------+-----------+----------+----------+
| 5. Accountability       | 4.55     | 4.32      | 4.65     | 4.46     |
+-------------------------+----------+-----------+----------+----------+
| 6. Training and         | 4.48     | 4.46      | 4.54     | 4.46     |
| Development             |          |           |          |          |
+-------------------------+----------+-----------+----------+----------+
| 7. Board Structure      | 4.39     | 4.58      | 4.47     | 4.47     |
+-------------------------+----------+-----------+----------+----------+
| 8. Teamwork             | 3.77     | 4.53      | 4.50     | 4.45     |
+-------------------------+----------+-----------+----------+----------+
| Average                 | 4.45     | 4.48      | 4.64     | 4.42     |
+-------------------------+----------+-----------+----------+----------+

¹ excluding the item of board remuneration, which has been combined with
the remuneration committee’s assessment.

(3) The Audit Committee scored 4.2 against its PA, and 4.53 (very good)
based on assessment results

(4) The Risk Management Committee (formerly called the Cash Management
Committee) scored 5 against the PA, and 4.44 (very good) based on
assessment results

(5) The Remuneration Committee scored 4 against a PA, and 4.38 (very
good) based on assessment results

(6) The Nominating Committee scored 5 against a PA, and 4.35 (very good)
based on assessment results

(7) The Corporate Governance Committee scored 4.55 against a PA, and
4.55 (very good) based on assessment results

(8) The Chairman earned 4.57 (very good) based on assessment results.

9.4.17 Awards of 2005

According to the SET Award announcement of July 18, 2005, PTTEP was
recognized for its consistently good preparation of the Corporate
Governance Principles Report. It was among the Resources Group finalists
in the Best Performance category.

IOD, in conjunction with SET and SEC, announced the contest results of
listed companies’ CG practices for 2005, which were based on their
public disclosure of 2004. PTTEP scored 89%, which ranked the Company
among the top ten listed companies from a field of 371.

On November 28, 2005 the PTTEP Board of Directors was named the Board of
the Year for Distinctive Practices under the 2004/2005 Board of the Year
Project, which had been launched to recognize and promote efficient and
effective performance of the Boards of Directors of listed companies.

9.5 Use of Inside Information

In an effort to create equitability for shareholders, the PTTEP
Corporate Governance Policy clearly stipulates policies on confidential
information and on securities exchange. Measures are in place to
dissuade particular individuals from conducting any transaction of PTTEP
shares before PTTEP discloses such information to SET. Directors and the
Management, including secondees of high positions and staff involved in
the preparation of these reports and other inside information, are
instructed to refrain from conducting any transaction of Company shares
for or through themselves or others. The use of inside information is
treated as speculative trading and unfair practice – except for buying
Company shares via individual rights in warrants – and calls for
disciplinary punishment clearly defined by the Company. Each superior,
as CG Leader, is to remind or instruct his or her subordinates
accordingly.

All PTTEP employees are encouraged to hold on to their shares for at
least three months from the latest buying or sale dates of Company
shares – with the exception of the sale of Company shares obtained
through warrants. For orderly implementation of this policy, the Company
has taken the following actions:

(1) Limiting access to confidential information to those related on a
need-to-know basis

(2) Instituting an office security system to protect information
confidential files

(3) Ensuring that confidential information owners remind related people
to strictly observe security procedures

(4) Ensuring that all observe the code of ethics on maintaining
confidential information or commercial secrets for two years after
vacating their positions.

9.6 Personnel

9.6.1 As of year-end 2005, PTTEP and its subsidiaries (namely PTTEPS and
PTTEP Services) had a total employee count of 1,557, classified as
follows:

(1) Office of the President 80

(2) Strategy and Capability Development 34

(3) Thai Offshore Areas 350

(4) Regional Assets 224

(5) Business Development and Overseas Investment 92

(6) Geoscience and Reservoir Engineering 76

(7) Project Operations Support 206

(8) Finance and Accounting 121

(9) Human Resources and Business Services 211

(10) Production Development 163

Total 1,557

9.6.2 PTTEP payroll in 2005 featured no significant changes. No
significant labor disputes have arisen over the past three years.

9.6.3 The total compensation (salaries, bonuses, and provident fund
contributions) of employees under the payrolls of PTTEP and its
subsidiaries in 2005 under 9.6.1 amounted to 1,509,120,923.04 Baht.

9.6.4 Personnel Development Policy

To enhance the capability of the Company and its personnel and prepare
the Company for additional investment, both domestically and
internationally, the Company has amended its procedure for personnel
training by applying competency-based training and development. The aim
was to accelerate personnel development and training will now take the
following approaches:

(1) Internal and External Training

Providing internal training to all employees and the Management, the
Company also sends them to external training courses, conferences, and
seminars (domestic and international) in disciplines such as technical
and professional; security, safety, health, and environment; information
technology; English; administration; and management.

(2) Long-term Development Programs

To prepare personnel for work under various projects, PTTEP has launched
1-3 year training programs for technical professionals seconded to serve
in partner companies and contractor companies (domestic and
international), for instance, Total, Unocal, Smedvig, and TransOcean.

(3) Supporting Master’s Degree Education

Company scholarships are available for technical professionals in fields
such as petroleum geology and petroleum engineering at leading
universities and colleges in the US and the UK. PTTEP has also sponsored
Master of Management scholarships at Sasin Graduate Institute of
Business Administration.