11. Connected Transactions

11.1 Connected Persons

11.1.1 Between PTTEP and PTT Affiliates

+----------+------------+-------------------+---------+----------------+
| Item     | PTTEP      | PTT               | Energy  | The Aromatics  |
|          |            |                   | Complex | (Thailand)     |
|          |            |                   |         | Public Company |
|          |            |                   |         | Limited (ATC)  |
+==========+============+===================+=========+================+
| List of  | Position   | Position          | P       | Position       |
| D        |            |                   | osition |                |
| irectors |            |                   |         |                |
| Involved |            |                   |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr. Pala | Director   | Director          | -       |   Chairman of  |
| S        |            |                   |         |   the Board    |
| ookawesh |            | (Ending Date of   |         |                |
|          |            | Directorship      |         |                |
|          |            | September 22.,    |         |                |
|          |            | 2005)             |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr.      | Director   | President         | -       | Director       |
| Prasert  |            |                   |         |                |
| B        |            |                   |         |                |
| unsumpun |            |                   |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr.      | Director   | Senior Executive  |   -     |   Director     |
| Pichai   |            | Vice President,   |         |                |
| Chun     |            | Corporate Finance |         |                |
| havajira |            | and Accounting    |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr.C     | Chairman   | Chairman of the   |   -     |   -            |
| herdpong | of the     | Board             |         |                |
| Siriwit  | Board      |                   |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr. Manu | Director   | Director          |   -     |   -            |
| Le       |            |                   |         |                |
| opairote |            | (Ending Date of   |         |                |
|          |            | Directorship      |         |                |
|          |            | April 12, 2005)   |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr       | Director   | Director          |   -     |   -            |
| .Wisudhi |            |                   |         |                |
| S        |            | (Ending Date of   |         |                |
| risuphan |            | Directorship May  |         |                |
|          |            | 31, 2005)         |         |                |
+----------+------------+-------------------+---------+----------------+
| Mr.      | Director   | Senior Executive  |   C     |   -            |
| Chit     |            | Vice President,   | hairman |                |
| rapongse |            | Gas Business      |   of    |                |
| Kwang    |            | Group             |   the   |                |
| sukstith |            |                   |   Board |                |
+----------+------------+-------------------+---------+----------------+
| M        | Director & | Management        |   D     |   -            |
| r.Maroot | Secretary  |                   | irector |                |
| Mrigadat | to the     |                   |         |                |
|          | Board of   |                   |         |                |
|          | Directors  |                   |         |                |
+----------+------------+-------------------+---------+----------------+
| Aff      | - - PTT    | - PTT is a        |   - PTT |   PTT, the     |
| iliation | holds      | shareholder of    |   and   |   major        |
|          | 66.32 %    | PTTEP and PTTCH   |   PTTEP |   shareholder  |
|          | share in   |                   |   each  |   of PTTEP,    |
|          | PTTEP      |                   |   hold  |   hold a 46.45 |
|          |            |                   |   a 50% |   % share in   |
|          | - Some     |                   |   share |   ATC          |
|          | Directors  |                   |   in    |                |
|          | sit on     |                   |         |   Some         |
|          | both the   |                   |  Energy |   Directors    |
|          | PTT’s and  |                   |         |   sit on both  |
|          | PTTEP’s    |                   | Complex |   PTTEP’s and  |
|          | Board of   |                   |         |   ATC’s Board  |
|          | Directors  |                   |         |   of Directors |
+----------+------------+-------------------+---------+----------------+

2.  Connected Transactions

In 2005, some of the Company’s transactions qualified as items under the
Stock Exchange of Thailand (SET) announcement on disclosure of
information and operations of listed companies on connected transactions
B.E. 2546 (2003) and B.E. 2547 (2004) (Amendment No.2), enforced since
21 July 2004. In compliance with this announcement, the Board of
Directors or Company management, or both, considered the rationale,
suitability, and maximum benefit to the Company, including the
disclosure of these items, detailed below:

11.2.1 Regular commercial items endorsed by the Board of Directors or
the management

  (1) Petroleum product sales

According to the sales agreements, petroleum product sales between PTT
and PTTEP take place instantly upon production, and petroleum delivery
is covered for the life of each project. In 2005, about 87.2% of its
petroleum products were sold to PTT at the same prices as those sold by
its partners.

+-------------------------------------+---------------+---------------+
| Product                             | 2005          |               |
+-------------------------------------+---------------+---------------+
|                                     | Volume        | Value         |
|                                     |               |               |
|                                     |               | (million      |
|                                     |               | baht)         |
+-------------------------------------+---------------+---------------+
| Crude Oil (million barrels)         | 7.11          | 14,067        |
+-------------------------------------+---------------+---------------+
| Natural Gas (million cubic feet)    | 228,295.81    | 31,112        |
+-------------------------------------+---------------+---------------+
| LPG (metric tons)                   | 99,658.67     | 1,159         |
+-------------------------------------+---------------+---------------+
| Condensate (million barrels)        | 5.64          | 11,529        |
+-------------------------------------+---------------+---------------+

During 2005, PTTEP and its joint-venture partners signed the following
Gas Sales Agreements (GSAs) with PTT as details in 3.3.1 (1).

(2) Deferred income

Deferred income arose from PTTEPI’s receipt of advance payments
(prepayments) from PTT for natural gas that it could not yet take
delivery of during 1999-2001, in accordance with the volumes stipulated
in the GSAs of the Yadana Project and Yetagun Project. PTTEP will
recognize such income when PTT takes delivery of the gas in future
years.

(3) Up-front payment per Gas Sales Agreement – Bongkot Project

On July 13, 2005, the joint-venture partners of Bongkot Project signed
an amendment to the Bongkot GSA and a Side Agreement for additional gas
sales from the Project. The Development Area will be expanded to cover
the current total concession area of the Bongkot Project, and PTT will
purchase an additional 61 billion cubic feet from April 1, 2005, to
October 1, 2008. On the signing date of the Amendment, PTTEP made an
up-front payment to PTT of about Baht 444.45 million, to be amortized on
the basis of additional sales volume.

(4) Advance Discount Payment

On October 21, 2005, the Board agreed to support the government’s policy
of subsidizing the automatically-adjusted formula for the electricity
fee rate (Ft) by providing an advance discount of Baht 1,500 million to
PTT, the major gas supplier in Thailand. The amount was in accordance
with the gas price discount terms stipulated in the existing GSAs, due
to become effective from mid-2006. PTTEP will eventually recover the net
present value of the transaction with reference to GSAs in the future.
The transaction had no economic impact on the net present values of the
projects.

11.2.2 Short-term (up to three years) property lease: office space lease

PTTEP leased 2,800 square meters of office space and provided related
services to PTT under a three-year contract, effective from August 15,
2003, to August 14, 2006. In 2004, an additional 201-square-meter office
lease contract was signed with PTT, and a 333-square-meter contract with
The Aromatics (Thailand) Plc (ATC), replacing Thai Olefins Plc. (TOC),
which moved out in August 2004. The lease term was also three years,
starting from October 1, 2004, and ending on September 30, 2007. The
rent details appear below:

+--------------------------+-------------------+-----------------------+
| O                        | Item              | 2005 Lease and        |
| rganization/Company Name |                   | Service Fee           |
|                          |                   |                       |
|                          |                   | (Baht)                |
+--------------------------+-------------------+-----------------------+
| PTT                      | Office Space      | 18,660,384            |
|                          | Lease and Service |                       |
+--------------------------+-------------------+-----------------------+
| ATC                      | Office Space      | 2,721,276             |
|                          | Lease and Service |                       |
+--------------------------+-------------------+-----------------------+

  11.2.3 Capital Increase and loan for subsidiary company according to
  shareholding interests

PTTEP and PTT jointly established Energy Complex Company, evenly
splitting the shares, with a fully paid-up registered capital of Baht
1,000,000, to develop and manage the National Energy Complex Development
Project, to be located behind their current head offices. The complex
will provide rental office space for the Ministry of Energy, PTTEP, and
other PTT subsidiaries and affiliates, with construction due for
completion by the end of 2007.

At Meeting No. 1/2548/231 on January 28, 2005, the PTTEP Board decided
to raise its capital by 399.50 million Baht in Energy Complex
proportional to its 50% equity. Energy Complex’s total paid-up
registered capital would amount to Baht 800 million, that is, 80 million
common shares at Baht 10 each. In addition, the Board decided to jointly
provide a 800-million-Baht loan to the company, which was half the total
amount of Baht 1,600 million.

  11.2.4 The Divestment of Thaioil Power Company Limited

On October 21, 2005, the PTTEP Board passed a resolution for PTTEPI to
sell all its common shares in Thaioil Power Company, totaling 73,060,000
shares or 26% of the paid-up capital, to PTT for Baht 2,300 million or
Baht 31.48 per share. PricewaterhouseCoopers FAS Ltd. – the independent
financial advisor – considered the transaction fair to the shareholders
of PTTEP and reasonable to enter into. Extraordinary Shareholders’
Meeting No. 1/2005, held on December 15, 2005, approved the transaction.
The completion of cash payment and share transfer occurred on December
23, 2005.

11.3 The Procedure for Approving Connected Transactions

PTTEP’s Board considers all transactions involved with conflict of
interest, including related or connected transactions in compliance with
sound business ethics and meet the scrutiny of the Audit Committee, as
well as supervises to meet the criteria of SET and the Securities and
Exchange Commission. Information disclosure on potential conflicts must
be considered by the Board to ensure accurate and adequate disclosure.

PTTEP has clearly set up the policy on conflict of interest, covering
the procedures to report such conflicts, in order to ensure the Board
and employees strictly comply with the principles. In addition, for any
transactions in which directors, employees or related person could
derive personal benefit from entering into transaction with the company,
the Board and employees are not permitted to participate in the approval
of such transaction, and the price must be properly defined in a manner
consistent with that offered to general person.

11.4 Future Connected Transactions

The future connected transactions will be conducted as part of the
normal course of business, with no special favors and no transfers of
benefits between PTTEP and its subsidiaries or any connected person.
PTTEP will strictly comply with the regulations of the Stock Exchange of
Thailand and other regulatory authorities related to connected
transactions based on the reasonableness, appropriateness and fairness,
and for the utmost benefit of all shareholders and stakeholders in
consistent with PTTEP good corporate governance policy.