8. Management

8.1 Organization Structure (as of 15 January 2010)

[]

8.2 Management Structure

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

8.2.1 The Board of Directors of PTTEP (“The Board”): The Board has the
authority and the responsibility of providing the Company with
directions on corporate governance and code of business conduct,
corporate policy, strategic plan, vision, and annual budget for its
operating plans; appointing or replacing the President and Chief
Executive Officer (CEO); 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 Capital Market Supervisory and the Securities
Exchange of Thailand which applies to a connected transaction or a
transaction concerning the acquisition or disposition of material assets
of a listed company.

As of year-end 2009, the Board consisted of 15 Directors with details of
current ones and Director whose term ended during the year shown in
Attachment 1.

Director’ changes in number of shares held and Board Meeting attendances
in 2009 are summarized below:

[TABLE]

8.2.2 Sub-committees: Appointed by the Board to screen specific,
critical matters, these
sub-committees consist of experts in suitable specialized fields who
present their views to the Board. PTTEP currently has five standing
sub-committees.

(1) The Corporate Governance Committee has the following
responsibilities:

(1.1) To establish the Company’s corporate governance policy including
the code of business conduct, which will be proposed to the Board for
approval and implemented at every level

(1.2) To ensure that the company’s operation and the functioning of the
Board, Sub-Committees, Management, and all personnel, comply with the
Company’s good corporate governance policy and code of business conduct.

(1.3) To review the Company’s corporate governance policy, the code of
business conduct, along with the guidelines and good corporate
governance practices, in compliance with the law, the practice of
international and leading companies, and the recommendation of leading
institutions, and propose them to the Board for approval.

(1.4) To oversee the Company’s assessment of compliance of the Company’s
good corporate governance policy and code of business conduct.

(1.5) To disclose information concerning the company’s good corporate
governance to stakeholders in the annual report, with prior approval of
the Board.

The Corporate Governance Committee members are all independent
directors, consisting of 4 persons as follows:

+---------------------+----------------+-------------------------------+
| - Mr. Vudhibhandhu  | Vichairatana   | Chairman and Member of Risk   |
|                     |                | Management Committee          |
+---------------------+----------------+-------------------------------+
| - Mr. Chokchai      | Aksaranan      | Member and Chairman of Audit  |
|                     |                | Committee                     |
+---------------------+----------------+-------------------------------+
| - Mr. Rathakit      | Manathat       | Member                        |
|                     |                |                               |
| - Mr. Bhusana       | Premanode      | Member                        |
+---------------------+----------------+-------------------------------+

Mr. Sommai Khowkachaporn was on the sub-committee until 26 June 2009.

In 2009, there were altogether two meetings of the Corporate Governance
Committee, with all members with perfect attendance.

(2) The Audit Committee has the following responsibilities:

1.  To review the Company’s financial reports so as to ensure that it is
    correct and sufficient, with the external auditor in attendance at
    each quarterly meeting.

2.  To review the Company’s compliance with the Securities and Exchange
    Acts, Regulations of SET, and relevant laws.

3.  To consider connected transactions or potential conflict-of-interest
    transactions to ensure that they were reasonably conducted in the
    best interests of the Company.

4.  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.

5.  To consider, select and propose the appointment of PTTEP’s external
    auditor, including its fees, and attend a non-management meeting
    with the external auditor at least once a year.

6.  Deliberated the independence of the Internal Audit Department and
    endorsed the appointment, transfer, and performance merit
    considerations for the chiefs of the Internal Audit Department.

7.  To approve the annual internal audit plan.

8.  To screen and consider the budget and manpower of the internal audit
    unit.

9.  The Chairman of the Audit Committee or a committee member must
    attend the shareholders’ meeting in order to answer relevant
    questions, including the appointment of the external auditor.

10. To review the Audit Committee Charter annually.

11. To undertake other assignments for the Board.

12. To report the Audit Committee’s performance in the annual report.

The Audit Committee is made up of Independent Directors, each member
being knowledgeable and experienced in reviewing financial statements.
The current audit committee has three members as follows:

+-------------+--------------+--------------------+--------------------+
| Name        |              | Position           | Experience of      |
|             |              |                    | reviewing          |
|             |              |                    | financial          |
|             |              |                    | statements         |
+-------------+--------------+--------------------+--------------------+
| - Mr.       | Aksaranan    | Chairman and       | 1. 2007 – Present: |
| Chokchai    |              | Member of          | PTT Aromatics and  |
|             |              | Corporate          | Refining PLC.      |
|             |              | Governance         |                    |
|             |              | Committee          | 2. 2005 – Present: |
|             |              |                    | Sahapatana         |
|             |              |                    | Interholding PLC.  |
+-------------+--------------+--------------------+--------------------+
| - Mr.       | Vasantasingh | Member and         | 2006 – 2007:       |
| Chulasingh  |              | Chairman of        | Electricity        |
|             |              | Nominating         | Generating         |
|             |              | Committee          | Authority of       |
|             |              |                    | Thailand           |
+-------------+--------------+--------------------+--------------------+
| - Mr. Sirin | Nim          | Member, Chairman   | 2002 – Present:    |
|             | manahaeminda | of Remuneration    | Trinity Wattana    |
|             |              | Committee, and     | Group of companies |
|             |              | Member of Risk     |                    |
|             |              | Management         |                    |
|             |              | Committee          |                    |
+-------------+--------------+--------------------+--------------------+

In 2009, there were altogether eight meetings of the Audit Committee,
with perfect attendance.

(3) The Remuneration Committee has the following responsibilities:

(3.1) To consider remuneration packages for the Board and sub-Committees
with fair and reasonable principles in accordance with work performance,
Company performance, the guidelines of the industry, as well as the
scope of duties and responsibilities, and proposed them to the
shareholders’ meeting for approval.

(3.2) To evaluate the annual performance of the President and CEO, and
propose the findings to a Board meeting for approval.

(3.3) To consider the remuneration package for the President and CEO and
the salary structure of executives with fair and reasonable principles
and propose them to a Board meeting for approval.

(3.4) To evaluate the performance of the Remuneration Committee, report
its performance to a Board meeting and disclose the findings to the
shareholders every year.

(3.5) To review its charter consistently to ensure appropriateness and
timeliness.

  (3.6) To undertake any other duties assigned by Board.

The Remuneration Committee consists of at least three members, the
majority of whom are independent directors, and the Chairman is an
independent director. The current Remuneration Committee has four
members:

  -------------------- ------------------- ------------------------------
  - Mr. Sirin          Nimmanahaeminda     Chairman,
                                           Independent Director, and
                                           Member of Audit Committee

  - Mr. Viraphol       Jirapraditkul       Member and Independent
                                           Director

  - Ms. Sirinuj        Bisonyabut          Member and Independent
                                           Director

  - Mr. Chitrapongse   Kwangsukstith       Member, Member of Nominating
                                           Committee, and Member of Risk
                                           Management Committee
  -------------------- ------------------- ------------------------------

In 2009, the Company had two sets of Remuneration Committee. The first
one, with their terms ending on 22 June 2009, consisted of Mr. Pala
Sookawesh, Mr. Sirin Nimmanahaeminda, Mr. Viraphol Jirapraditkul, and
Mr. Chitrapongse Kwangsukstith. The second one, also appointed by the
Board, is the current one, with their terms beginning on 23 June 2009
and ending on 22 June 2012. The current committee held one meeting, with
perfect attendance.

(4) The Nominating Committee has the following responsibilities:

(4.1) To shortlist candidates for election/appointment as new Directors
or President and CEO, and propose their names to the Board or
shareholders’ meetings to fill the vacancies or to replace Directors
completed their terms

(4.2) To prepare the names of shortlisted candidates for Directors or
President and CEO in advance and/or when there is a vacancy

(4.3) To develop annual performance agreements (PAs) for the Board and
the President and CEO, and propose them to the Board for approval, and
design the annual assessment forms for the Chairman, Directors,
sub-committees and the President and CEO.

(4.4) To nominate Directors to sub-committees for appointment by the
Board when there are vacancies, or propose their adjustment to the Board
as necessary

(4.5) To regularly review the appropriateness and timeliness of the
Nominating Committee Charter

(4.6) To disclose its own performance in the annual report

(4.7) To undertake any other assignment for the Board, relevant to the
selection of Directors or the President and CEO.

The Nominating Committee consists of three Directors, the majority of
whom must be independent directors, including the Chairman. The current
Nominating Committee, numbering three members, consists of:

  ----------------------- ----------------- ------------------------------
  - Mr. Chulasingh        Vasantasingh      Chairman, Independent
                                            Director, Member of Audit
                                            Committee

  - Mr. Sommai            Khowkachaporn     Member, Independent Director,
                                            and Member of Risk Committee

  - Mr. Chitrapongse      Kwangsukstith     Member, Member of Remuneration
                                            Committee, and Member of Risk
                                            Management Committee
  ----------------------- ----------------- ------------------------------

  In 2009, the Company had two sets of Nominating Committee. The first
  one, with their terms ending on 22 June 2009, consisted of Mr.
  Chulasingh Vasantasingh, Mr. Chitrapongse Kwangsukstith, and Mr. Sanit
  Rangnoi, who completed his directorship on 31 March 2009 and
  automatically his membership of the Nominating Committee. The second
  one, also appointed by the Board, is the current one, with their terms
  beginning on 23 June 2009 and ending on 22 June 2012. This committee
  held six meetings, with perfect attendance.

(5) The Risk Management Committee has the following responsibilities:

(5.1) To formulate PTTEP’s risk management policy and framework, and
advise the Board and the Management on issues relating to corporate risk
management

(5.2) To supervise and promote Enterprise-Wide Risk Management with a
focus on raising risk awareness for business management processes and
resources allocation

(5.3) To consider PTTEP’s key risks in line with the corporate direction
and the value chain of the petroleum E&P business. Those risks include
exploration, development, production (concerning safety, security,
health, and the environment), investment (including geopolitics),
financial and commercial, organizational capability, legal and
regulatory risks. The Committee also recommends preventive methods and
risk mitigating actions to reduce risks to an acceptable level. It
consistently monitors, assesses, and modifies mitigating actions in ways
compatible with PTTEP’s business management.

(5.4) To support risk managers in continuously assessing major factors
in risk management actions with respect to corporate plans and on par
with the standards of leading international companies.

(5.5) To regularly report to the Board the outcome of risk assessment
and mitigating actions. Critical issues with significant impacts on the
Company require an immediate report.

The Risk Management Committee consists of at least three Independent
Directors. The current one consists of six Directors, three of whom are
Independent Directors:

+---------------------+------------------+----------------------------+
| - Mr. Pichai        | Chunhavajira     | Chairman                   |
+---------------------+------------------+----------------------------+
| - Mr. Vudhibhandhu  | Vichairatana     | Member, Independent        |
|                     |                  | Director, and Chairman of  |
|                     |                  | Corporate Governance       |
|                     |                  | Committee                  |
+---------------------+------------------+----------------------------+
| - Mr. Sirin         | Nimmanahaeminda  | Member, Independent        |
|                     |                  | Director, Chairman of      |
|                     |                  | Remuneration Committee,    |
|                     |                  | and Member of Audit        |
|                     |                  | Committee                  |
+---------------------+------------------+----------------------------+
| - Mr. Chitrapongse  | Kwangsukstith    | Member, Member of          |
|                     |                  | Nominating Committee, and  |
|                     |                  | Member of Remuneration     |
|                     |                  | Committee                  |
+---------------------+------------------+----------------------------+
| - Mr. Sommai        | Khowkachaporn    | Member, Independent        |
|                     |                  | Director, and Member of    |
| - Mr. Anon          | Sirisaengtaksin  | Nominating Committee       |
|                     |                  |                            |
|                     |                  | Member                     |
+---------------------+------------------+----------------------------+

Mr. Sommai Khowkachaporn was appointed to this sub-committee on 26 June
2009.

Attendance of Sub-Committees in 2009

+----------+---+----------+--------+--------+--------+--------+--------+
| Sub-c    |   |          | CG     | Audit  | Remune | Nomi   | Risk   |
| ommittee |   |          | Com    | Com    | ration | nating | Mana   |
| Member   |   |          | mittee | mittee | Comm   | Comm   | gement |
|          |   |          |        |        | ittee* | ittee* | Com    |
|          |   |          |        |        |        |        | mittee |
+----------+---+----------+--------+--------+--------+--------+--------+
|          |   |          | (Total | (Total | (Total | (Total | (Total |
|          |   |          | 4      | 3      | 4      | 3      | 6      |
|          |   |          | me     | me     | me     | me     | me     |
|          |   |          | mbers) | mbers) | mbers) | mbers) | mbers) |
+----------+---+----------+--------+--------+--------+--------+--------+
|          |   |          | Total  | Total  | Total  | Total  | Total  |
|          |   |          | Mee    | Mee    | Mee    | Mee    | Mee    |
|          |   |          | tings: | tings: | tings: | tings: | tings: |
|          |   |          | 2      | 7      | 1 time | 6      | 14     |
|          |   |          | times  | times  |        | times  | times  |
+----------+---+----------+--------+--------+--------+--------+--------+
| 1. Mr.   |   | A        | 2/2    |   7/7  |   -    |   -    | -      |
| Chokchai |   | ksaranan |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 2. Mr.   |   | Vasa     | -      |   7/7  |   -    |   6/6  | -      |
| Ch       |   | ntasingh |        |        |        |        |        |
| ulasingh |   |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 3. Mr.   |   | Nimmana  | -      |   7/7  |   1/1  |   -    | 12/14  |
| Sirin    |   | haeminda |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 4. Mr.   |   | Jirap    | -      |   -    |   1/1  |   -    | -      |
| Viraphol |   | raditkul |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 5. Mr.   |   | Kwang    | -      |   -    |   1/1  |   6/6  | 11/14  |
| Chit     |   | sukstith |        |        |        |        |        |
| rapongse |   |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 6. Mr.   |   | Bisony   | -      |   -    |   1/1  |   -    | -      |
| Sirinuj  |   | abut^(@) |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 7. Mr.   |   | Vich     | 2/2    |   -    |   -    |   -    | 13/14  |
| Vudh     |   | airatana |        |        |        |        |        |
| ibhandhu |   |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 8. Mr.   |   | K        | 1/1    |   -    |   -    |   4/4  | 8/8    |
| Sommai   |   | howkacha |        |        |        |        |        |
|          |   | porn^(#) |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 9. Mr.   |   | Preman   | 1/1    |   -    |        |   -    | -      |
| Bhusana  |   | ode^(@@) |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 10. Mr.  |   | Manat    | 1//1   |   -    |        |   -    | -      |
| Rathakit |   | hat^(@@) |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 11. Mr.  |   | Chun     | -      |   -    |   -    |   -    | 14/14  |
| Pichai   |   | havajira |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 12. Mr.  |   |          | -      | -      | -      | -      | 14/14  |
| Anon     |   |          |        |        |        |        |        |
| Sirisae  |   |          |        |        |        |        |        |
| ngtaksin |   |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| Ex-Sub-c |   |          |        |        |        |        |        |
| ommittee |   |          |        |        |        |        |        |
| Members  |   |          |        |        |        |        |        |
| in 2009  |   |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 1.  Mr.  | R |          | -      | -      | -      | 2/2    |   -    |
|          | a |          |        |        |        |        |        |
|    Sanit | n |          |        |        |        |        |        |
|          | g |          |        |        |        |        |        |
|          | n |          |        |        |        |        |        |
|          | o |          |        |        |        |        |        |
|          | i |          |        |        |        |        |        |
|          | ^ |          |        |        |        |        |        |
|          | ( |          |        |        |        |        |        |
|          | # |          |        |        |        |        |        |
|          | # |          |        |        |        |        |        |
|          | ) |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+
| 2. Mr.   | S |          | -      | -      | 0/0    | -      |   -    |
| Pala     | o |          |        |        |        |        |        |
|          | o |          |        |        |        |        |        |
|          | k |          |        |        |        |        |        |
|          | a |          |        |        |        |        |        |
|          | w |          |        |        |        |        |        |
|          | e |          |        |        |        |        |        |
|          | s |          |        |        |        |        |        |
|          | h |          |        |        |        |        |        |
|          | ^ |          |        |        |        |        |        |
|          | ( |          |        |        |        |        |        |
|          | # |          |        |        |        |        |        |
|          | # |          |        |        |        |        |        |
|          | # |          |        |        |        |        |        |
|          | ) |          |        |        |        |        |        |
+----------+---+----------+--------+--------+--------+--------+--------+

^(@)Became a member of the Remuneration Committee on 23 June 2009

^(@@) Became a member of the Corporate Governance Committee on 26 June
2009

^(#) (1) Became a member of the Nominating Committee on 31 March 2009

(2) Being a member of the Corporate Governance Committee until 26 June
2009

(3) Became a member of the Risk Management Committee on 26 June 2009

^(##) Termed ended on a member of the Nominating Committee on 31 March
2009

^(###) Being the chairmanship of the Remuneration Committee until 22
June 2009

^(∗) The Nominating and the Remuneration Committees appointed their
third panels of members from 23 June 2009 to 22 June 2012

8.2.3 Qualifications of Independent Directors and Recruitment Process

PTTEP requires that the Board must always comprise at least one-third
(or at least five members) in Independent Directors. (From 2010 onward,
at least half of the Board must be Independent Directors.) The Company
has made the qualifications of each such Director, by the Good Corporate
Governance of PTTEP, even more stringent than those defined by the
Securities and Exchange Commission (SEC), as seen below:

(1) Holds no more than 0.5% of total voting stocks of PTTEP, its parent
company¹, its subsidiaries², and its associated companies³, a related
juristic entity⁴, including stocks held by connected persons, as well as
nominees⁵.

(2) Is not or has not ever been board member of its parent company or an
executive director, employee, staff, advisor who receives salary or a
controlling person⁶ of PTTEP, its parent company, its subsidiaries, its
associated companies, same-level subsidiaries⁷ or a juristic person who
may have conflicts of interest unless the foregoing status has ended for
more than 2 years.

(3) Is not a person related by blood or legal registration, such as
father, mother, spouse, sibling and child, including spouse of the
children, management, major shareholders⁸, controlling persons, or
persons to be nominated as management or controlling person of PTTEP or
its subsidiaries.

(4)  Has not or has not had a business relationship with PTTEP, its
parent company, its subsidiaries, its associated companies or a juristic
person who may have conflicts of interest, in the manner that may
interfere with his independent judgment, or is not or has not ever been
a major shareholder, non-independent director, management or controlling
persons of any person having business relationship with PTTEP, its
parent company, its subsidiaries, its associated companies or a juristic
person who may have conflicts of interest unless the foregoing
relationship has ended for more than 2 years.

The term ‘business relationship’ aforementioned under paragraph one
includes any normal business transaction, rental or lease of immovable
property, transaction relating to assets or services or grant or receipt
of financial assistance through receiving or extending loans, guarantee,
providing assets as collateral, including any other similar actions,
which result in the applicant or his counterparty being subject to
indebtedness payable to the other party in the amount of 3 percent or
more of the net tangible assets of the applicant or 20 million Baht or
more, whichever is lower. The amount of such indebtedness shall be
calculated according to the calculation method for value of connected
transactions under the Notification of Capital Market Supervisory Board
concerning Rules on Connected Transactions. The combination of such
indebtedness shall include indebtedness taking place during the course
of 2 years prior to the date on which the business relationship with the
person commences.

(5)  Is not or has not ever been an auditor of PTTEP, its parent
company, its subsidiaries, its associated companies or a juristic person
who may have conflicts of interest and is not a major shareholder,
non-independent director, management, controlling persons or partner of
an audit firm which employs auditors of PTTEP, its parent company, its
subsidiaries, its associated companies or a juristic person who may have
conflicts of interest unless the foregoing relationship has ended for
more than 2 years.

(6)  Is not or has not ever been any professional advisor including
legal or financial advisor who receives an annual service fee exceeding
2 million Baht from PTTEP, its parent company, its subsidiaries, its
associated companies or a juristic person who may have conflicts of
interest, and is not a major shareholder, non-independent director,
management, controlling persons or partner of the professional advisor
unless the foregoing relationship has ended for more than 2 years.

(7) Is not a director representing a PTTEP’s or its major shareholder’s
board member or a shareholder who is related to PTTEP’s major
shareholder.

(8) Has no any other characteristics which make him incapable of
expressing independent opinions with regard to PTTEP’s business.

(9) Does not own/run any business similar to or material competing with
PTTEP or its subsidiaries or not being the material partner in any
partnership, executive director, employee, staff, advisor who receives
salary or holds no more than 1% of total voting stocks of the company
similar to or material competing with PTTEP or its subsidiaries.

(10) Is authorized by the Board to make a collective decision to execute
business of PTTEP and its parent companies, its subsidiaries, its
associated companies, same-level subsidiaries or a juristic person who
may have conflicts of interest.

+-----------------------------------------------------------------------+
| ¹ The company with more than 50% of total voting stocks in PTTEP,     |
| directly or indirectly, which is PTT Plc (PTT’).                      |
|                                                                       |
| ² Companies in which PTTEP directly or indirectly holds more than 50% |
| of total voting stocks, or can influence financial and management     |
| policies, such as, PTTEP International Ltd., and PTTEP (Thailand)     |
| Ltd.                                                                  |
|                                                                       |
| ³ Companies in which PTTEP or its subsidiaries altogether hold from   |
| 20% to 50% of total voting stocks, or take part in decision-making on |
| financial and management policies, such as, Energy Complex, Co.,      |
| Ltd., and Carigali – PTTEPI Operating Company Sendirian Berhad (CPOC) |
|                                                                       |
| ⁴ Major shareholders or Controlling Person of PTTEP, which is PTT or  |
| a juristic entity in which PTT holds stocks, controls, or has a       |
| significant interest, either directly or indirectly.                  |
|                                                                       |
| ⁵ Shareholders for other people in a concealed manner.                |
|                                                                       |
| ⁶ Any person who, as a matter of fact, has substantial control over   |
| PTTEP in its policy setting, management and operations.               |
|                                                                       |
| ⁷ Any two or more subsidiaries having PTT as their Parent Company, no |
| matter in which levels such subsidiaries are, such as PTTEP, and PTT  |
| Natural Gas Distribution Co.,Ltd.                                     |
|                                                                       |
| ⁸ Shareholders with more than 10% of voting stocks, including stocks  |
| held by connected persons.                                            |
+-----------------------------------------------------------------------+

Independent Directors, at least once a year, will self-certify their
qualifications when submitting their biographies at the end of the year,
which will be disclosed in Form 56-1 and the annual report.

The procedure of Independent Director selection is similar to the
nominating procedure of PTTEP Directors and the President and CEO,
detailed under 8.3.1, that is, if an Independent Director is retired
from the office, to fill the vacancy PTTEP will give priority to a
qualified candidate who also has such qualifications of an Independent
Director, and will enable the Board composition to have the right number
of Independent Directors. However, if any other Director later qualifies
to be an Independent Director, he or she will automatically assume the
position of an Independent Director.

8.2.4 The President and CEO: The scope of the President and CEO’s
authority is as follows:

(1) Authority under Company Regulations granted by shareholders’
resolutions

The President and CEO is the authorized signatory in dealing with
external parties under clause 9, paragraph 6, of the Regulations
registered at the Ministry of Commerce.

(2) Authority under Company Regulations granted by the Board

The President and CEO takes charge of, and is authorized for conducting,
business operations under PTTEP Regulations – namely the Budget
Regulations of 1996, Finance and Accounting Regulations of 1996,
Procurement Regulations of 2007, and Human Resource Administration
Regulations of 2005. Administration of this power is comparable with
private companies in the E&P business and must be in the best interests
of PTTEP. Procurement approval and legal act commitment must be within
the following limits:

1.  Up to 300 million baht each time for corporate and PTTEP-owned
    projects

2.  Up to each annual budget total, joint-venture assets approved under
    joint-venture agreements, and international assets approved by the
    government of each respective country in which PTTEP invested

The President and CEO is authorized to amend contract outlays by up to
Baht 150 million and then to report such amendment to the Board.

(3) Authority vested by the Board

The Board vested its powers in the President and CEO to act on the
Company’s behalf in day-to-day business operation under the objectives
of the Memorandum of Association, dealing with E&P under petroleum
concessions or agreements and with other businesses in the interests of
the Company, as well as the delegation of his authority. However, such
exercise of authority by the President and CEO or his delegated persons
is forbidden if the President and CEO, delegated persons, or connected
persons are involved in a conflict of interest in any way with PTTEP or
its subsidiaries.

8.2.5 Details of current management team members and the controlling
person as of 15 January 2010 under the new organizational structure
appear in Attachment 1.

  8.2.6 Company Secretary

The Company Secretary plays a key role in efficient coordination inside
the Company, that is, between the Chairman of the Board and the
President and CEO or the Management, and outside the Company, that is,
between the Company, shareholders, and regulatory agencies. Good
corporate governance calls for PTTEP to designate a Company Secretary
(at present, Mr. Theerasak Tancharoenlarp) to be responsible for
overseeing and advising the Board and the Management about applicable
laws, rules, regulations and recent developments about good corporate
governance; and ensuring smooth and efficient performance by the Board
and standing sub-committees, in line with the law and relevant rules, as
well as the Company’s good corporate governance. He is responsible for
holding Board, standing sub-committee, and shareholders’ meetings. His
additional tasks include preparation and filing of PTTEP’s key
documents; notification to regulatory agencies of relevant information;
organization of orientation for new coming Directors; and promotion of
understanding and appreciation of good corporate governance among
Directors, executives, and employees.

8.3 Nomination of the Board and Management

8.3.1 Nomination of the Board and the President and CEO

Each year the Nominating Committee prepares a Director List, a pool of
qualified candidates selected from a list of directors of state-owned
enterprises, major listed companies and competent personalities in
business. When there is a Director or the President and CEO vacancy, the
Nominating Committee is to choose suitable candidates by considering the
Director List and recommended nominees from PTT, the major shareholder.
Priority will be given to those with skill mixes, 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 best
interests of the Company, including awareness of the possibilities of
conflicts of interest on the part of Directors and the President and
CEO, the Nominating Committee is to scrutinize these qualifications:

(1) Suitable qualifications stipulated by the Public Company Limited
Act, SEC Act, regulations issued by SEC, SET, and PTTEP Good Corporate
Governance.

(2) Knowledge and skills with diverse experiences in different fields of
benefit to the Company.

(3) Characteristics complementary to Good Corporate Governance so as to
benefit Company business, including ethics, independence, assertiveness,
creativity, accountability, care and loyalty, dedication, and a suitable
age.

Election of Directors to replace retiring ones must obtain the approval
of the annual shareholders’ meeting through a majority of eligible
shareholders in attendance under the following criteria and procedure:

(1) Nomination to a 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
people and the Company has added another channel for this purpose, that
is, nomination of a person or persons between October 1 and December 31
of each year. This has been made known to investors through SET’s
notification channel and the Company’s website. The website also
contains rules for Proposal of Director Nominees in advance, including
the proposed director nominee form (form B) and resume of director
nominee.

(2) Should the number of Director candidates be no greater than the
number to be elected, the shareholders’ meeting is to elect those
candidates as Directors. Balloting is to be conducted for individual
nominees, and those with the majority of the votes win.

(3) Should the number of Director candidates exceed the number to be
elected, a ballot is to be held among the shareholders. Each shareholder
may vote for as many individual candidates as the number of open
positions. 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.

  8.3.2 Executives’ Nominating

The President and CEO is authorized to select and appoint any person(s)
with knowledge, capabilities and experience in PTTEP business to
management level. This selection process is in compliance with PTTEP
Personnel Administration Regulations and reported to the Board’ meeting,
with the exception of Vice President Level that is required to be
approved by the Board. In case there is a need to select a person who is
not in PTTEP, an interview of the candidate has to be conducted by the
Interview Committee. Additionally, any appointment of internal audit
department management is required to seek prior approval from the Audit
Committee.

8.4 Remuneration of the Board and the Management

8.4.1 Remuneration of Directors and Sub-committee Members

Unit: Baht

[TABLE]

[TABLE]

8.4.2 Executive’s Remuneration

+--------------+------+--------------+--------+----------------------+
|              | 2008 |              | 2009   |                      |
+--------------+------+--------------+--------+----------------------+
|              | Nu   | Total Amount | Number | Total Amount (Baht)  |
|              | mber | (Baht)       |        |                      |
+--------------+------+--------------+--------+----------------------+
| Salary       | 13   | 6            | 17⁽⁴⁾  | 75,488,010.00        |
|              |      | 2,310,304.00 |        |                      |
+--------------+------+--------------+--------+----------------------+
| Bonus        |      | 3            |        | 36,392,800.50 ⁽³⁾    |
|              |      | 1,242,170.00 |        |                      |
|              |      | ⁽²⁾          |        |                      |
+--------------+------+--------------+--------+----------------------+
| Other        |      | 8,895,848.40 |        | 10,325,453.50        |
| com          |      |              |        |                      |
| pensation⁽¹⁾ |      |              |        |                      |
+--------------+------+--------------+--------+----------------------+
| Total        |      | 10           |        | 122,206,264.00       |
|              |      | 2,448,322.40 |        |                      |
+--------------+------+--------------+--------+----------------------+

⁽¹⁾ Provident Fund

⁽²⁾ Includes bonus for 2008, paid in 2009

⁽³⁾ Includes bonus for 2009, paid in 2010

⁽⁴⁾ Executives, numbering 17 persons, consist of the President and CEO,
Executive Vice President, Vice President, Acting Vice President (from
appointment date) and Ex-Executives (Mr. Maroot Mrigadat and Mr.
Suppamas Prachakvej) This excludes executives seconded to PTT ( Mr.
Nipit Isarankura Mr. Tevin Vongvanich)

Allocation of ESOP Warrants

  From 2002 to 2006, with the approval of the general shareholders’
  meetings, PTTEP allocated

ESOP warrants to buy common shares to all eligible management and
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:

+-----+--------------+------------+------------+---------------------+
| Y   | Number of    | Exercise   | Exercise   | Exercise Period     |
| ear | Warrants     | Ratio      | Price      |                     |
|     |              |            |            |                     |
|     | (Unit)       | (Unit of   | (Baht)***  |                     |
|     |              | Warrant :  |            |                     |
|     |              | Unit of    |            |                     |
|     |              | Share)     |            |                     |
+-----+--------------+------------+------------+---------------------+
| 2   | 2,800,000    | 1:5        | 36.60      | 31 July 2005 – 31   |
| 004 |              |            |            | July 2009           |
+-----+--------------+------------+------------+---------------------+
| 2   | 2,800,000    | 1:5        | 55.60      | 31 July 2006 – 31   |
| 005 |              |            |            | July 2010           |
+-----+--------------+------------+------------+---------------------+
| 20  | 2,800,000    | 1:5        | 91.20      | 31 July 2007 – 31   |
| 06* |              |            |            | July 2011           |
+-----+--------------+------------+------------+---------------------+

* In April 2006, PTTEP adjusted par value from 5 Baht to 1 Baht per
share, resulting in a change of Exercise Price and Exercise Ratio of the
warrants for the year 2002-2006.

** Exercise Price Calculation

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.

2006: Calculated by using the average closing prices of PTTEP shares
during the period of 90 days lapse prior to the date of the board of
directors’ resolution to propose this agenda (calculated from November
1, 2005 to January 29, 2006) minus the 2005 dividend per share.

  Number of PTTEP Shares and Warrants Held by the Management

+-------------+------------+--------+-------+------------+----------+
| Name        |            | Shares |       | Change in  | Warrants |
|             |            | as of  |       | Shares     |          |
|             |            | 31     |       |            |          |
|             |            | De     |       |            |          |
|             |            | cember |       |            |          |
+-------------+------------+--------+-------+------------+----------+
|             |            | 2008   | 2009  |            |          |
+-------------+------------+--------+-------+------------+----------+
| 1.  Mr.     | Siris      | 52,000 | 5     | -          | -        |
|     Anon    | aengtaksin |        | 2,000 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 2.  Mr.     | Janmaha    | 2      | 27    | 29,000     | 10,100   |
|     Somkiet |            | 46,600 | 5,600 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 3.  Mr.     | Limpiti    | 1      | 7     | (37,500)   | 4,200    |
|             |            | 10,500 | 3,000 |            |          |
|    Asdakorn |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| Spouse      |            | 63,000 | 6     | (3,000)    | N/A      |
|             |            |        | 0,000 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 4.  Mr.     | Eimsiri    | 20,000 | -     | (20,000)   | 21,000   |
|             |            |        |       |            |          |
|  Chatchawal |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 5.  Mr.     | Vongvut    | 1      | 10    | (50,000)   | 12,700   |
|     Somporn | hipornchai | 58,500 | 8,500 |            |          |
+-------------+------------+--------+-------+------------+----------+
| Spouse      |            | 3,000  | 3,000 | -          | N/A      |
+-------------+------------+--------+-------+------------+----------+
| 6.  Mr.     | Isarankura | 1      | 8     | (95,200)   | 14,100   |
|     Nipit   |            | 77,200 | 2,000 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 7.  Mr.     | Poj        | 2      | 30    | 42,500     | 4,200    |
|             | anapreecha | 65,500 | 8,000 |            |          |
|  Prisdapunt |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 8.  Mr.     | Won        | 51,300 | 6     | 17,000     | 19,300   |
|     Luechai | gsirasawad |        | 8,300 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 9.  Mr.     | Iamchula   | 36,900 | 8     | 47,500     | 6,200    |
|             |            |        | 4,400 |            |          |
|   Suraphong |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 10. Mr.     | Tongtaow   | 10,000 | 1     | -          | 12,600   |
|             |            |        | 0,000 |            |          |
| Chalermkiat |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 11. Mr.     | M          | 1      | 9     | (14,500)   | 6,600    |
|     Somchai | anopinives | 06,500 | 2,000 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 12. Mr.     | Ran        | 87,000 | 10    | 17,500     | 9,900    |
|     Pairoj  | gponsumrit |        | 4,500 |            |          |
+-------------+------------+--------+-------+------------+----------+
| Spouse      |            | 3,000  | 3,000 | -          | N/A      |
+-------------+------------+--------+-------+------------+----------+
| 13. Mr.     | Thavisin   | 1      | -     | (115,500)  | 3,300    |
|             |            | 15,500 |       |            |          |
| Phongsthorn |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 14. Mr.     | Anant      | N/A    | 3     | N/A        | 5,200    |
|     Nawee   | -raksakul¹ |        | 1,700 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 15. Mr.     | Sopon      | N/A    | 2     | N/A        | -        |
|     Prapat  | pongpipat¹ |        | 6,800 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 16. Mr.     | Sangw      | N/A    | 5     | N/A        | 9,300    |
|     Kanit   | ongwanich¹ |        | 7,300 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 17. Mr.     | Bunnag     | 33,100 | 3     | 4,100      | -        |
|     Anutra  |            |        | 7,200 |            |          |
+-------------+------------+--------+-------+------------+----------+
| 18. Mr.     | Satc       | 20,700 | 6,500 | (14,200)   | 1,800    |
|     Sermsak | hawannakul |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 19. Ms.     | W          | 77,800 | 6     | (11,000)   | 2,760    |
|             | ankertphon |        | 6,800 |            |          |
|   Jaroonsri |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
| 20. Mrs.    | Vangvasu²  | N/A    | 8     | N/A        | 900      |
|             |            |        | 3,700 |            |          |
|  Thanyaporn |            |        |       |            |          |
+-------------+------------+--------+-------+------------+----------+
|             |            | N/A    | 5,000 | N/A        | N/A      |
+-------------+------------+--------+-------+------------+----------+

+------------+-------------+--------+-------+------------+----------+
| Ex-        |             |        |       |            |          |
| management |             |        |       |            |          |
| in 2009    |             |        |       |            |          |
+------------+-------------+--------+-------+------------+----------+
| Name       |             | Shares |       | Change in  | Warrants |
|            |             | as of  |       | Shares     |          |
|            |             | 31     |       |            |          |
|            |             | De     |       |            |          |
|            |             | cember |       |            |          |
+------------+-------------+--------+-------+------------+----------+
|            |             | 2008   | 2009  |            |          |
+------------+-------------+--------+-------+------------+----------+
| 1.  Mr.    | Mrigadat³   | 1      | 25    | 99,300     | 7,500    |
|     Maroot |             | 54,450 | 3,750 |            |          |
+------------+-------------+--------+-------+------------+----------+
|   Spouse   |             | 1      | 19    | 9,000      | -        |
|            |             | 81,250 | 0,250 |            |          |
+------------+-------------+--------+-------+------------+----------+
| 2.  Mr.    | Pitrchart⁴  | 1      | 13    | (35,500)   | 6,940    |
|     Suwit  |             | 67,100 | 1,600 |            |          |
+------------+-------------+--------+-------+------------+----------+
| 3.  Mr.    | Vongvanich⁵ | 1      | 25    | 99,300     | 7,500    |
|     Tevin  |             | 54,450 | 3,750 |            |          |
+------------+-------------+--------+-------+------------+----------+
| 4.  Mr.    | Prachakvej⁶ | 1      | 19    | 9,000      | -        |
|            |             | 81,250 | 0,250 |            |          |
|   Suppamas |             |        |       |            |          |
+------------+-------------+--------+-------+------------+----------+

¹ Appointed Acting Vice President on 1 November 2009

² Appointed Manager, Tax Department on 1 April 2009

³ End of management position on 1 November 2009

⁴ End of management position on 1 January 2009

⁵ End of management position on 1 September 2009

⁶ End of management position on 1 October 2009

8.5 Good Corporate Governance

8.5.1 Rights of Shareholders

Recognizing the rights of all shareholders, PTTEP has taken steps to
demonstrate its respect for basic shareholders’ rights, namely to buy,
sell, or transfer shares; to obtain adequate information; to participate
and vote in the shareholders’ meeting on significant issues and issues
affecting PTTEP; and to share in the profits of the company, as follows:

(1) At least 14 days ahead of each meeting, the Company sends meeting
invitations in both Thai and English, containing agenda details and
related appendices in adequate details together with the opinions of the
Board, proxy forms designed by the Ministry of Commerce, a list of all
Independent Directors together with all possible connections by each
Independent Director. These invitations also contain details about the
credentials each shareholder needs to bring to the meeting and meeting
attendance procedure, together with Company regulations on the meeting
and voting procedures, and a map showing the meeting venue. In addition,
shareholders may view information about each meeting agenda item on the
Company’s website more than 30 days ahead of the meeting date once the
Board of Directors has decided on it, which will be passed on to the
shareholders.

(2) PTTEP always allows registration of shareholders at least an hour
before each meeting, for which a barcode system detailing each
shareholder is reproduced on the registration form or the proxy form and
is used for facilitation and registration time-saving, as well as the
accuracy of shareholder details.

(3) Before each meeting, the Chairman explains clearly how ballots are
cast and counted under Company regulations. The Company collects its
count of shareholders or proxies who have not yet voted on any agenda
item and shows ballot-counting summaries derived from barcode counting
to facilitate the process and make the ballot counting accurate.
Balloting proceeds in line with Company regulations and the law, with
the summary of each item clearly displayed in the meeting room. The
Company will ask shareholder volunteers together with an independent
legal advisor to witness ballot counts for greater transparency. To
protect the rights of shareholders, PTTEP conducts balloting for each
matter separately, and in the election of directors, provides for
individual director election.

(4) Allocating enough time for the meeting, the Chairman conducts each
meeting suitably and transparently by the order listed on the meeting
notice, allowing thorough expression of views and queries before each
ballot round, and summarizes meeting resolution(s) on each agenda item.
Shareholders are free to send their meeting-related questions to the
Board ahead of the meeting date.

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

(6) All Directors attend each shareholders’ meeting. Each member of the
standing sub-committees may address relevant questions and concerns
posed by shareholders (if any).

(7) PTTEP regularly disseminates information to shareholders via the
Stock Exchange of Thailand’s (SET) channel, media, and publications,
including its website. PTTEP also organized its operation site visit for
shareholders for better understanding of its business.

(8) The Company sets up information request channels for minor
shareholders through the E-mail addresses of Independent Directors on
matters of Directors’ activities, good corporate governance (GCG) and
audit matters. Apart from these channels, minor shareholders can
directly contact the Corporate Secretary or the Investor Relations unit.

(9) PTTEP explicitly discloses shareholding structures in affiliated and
subsidiary companies to ensure shareholders of transparent management
structures that are open to scrutiny.

(10) The Company conducts its business efficiently for its growth and
suitable returns to shareholders.

8.5.2 Equitable Treatment of Shareholders

PTTEP values and treats all shareholders fairly through the following
actions:

(1) Allowing each shareholder to propose agenda items for consideration
at the annual general meeting of shareholders (AGM) or nominate
qualified people for election as Directors ahead of the AGM date between
October 1 and December 30, 2009, and announcing such acceptance and
deliberation criteria via SET’s news channels up to five months ahead.
The announcement was also publicized on the Company’s website to
illustrate equitable treatment of shareholders. That is to say, each
matter or nominee was to be considered against PTTEP’s criteria, deemed
as the screening of genuinely useful agenda items and an addition of
qualified names through the Nominating Committee before submission to
the Board’s consideration. The Board would inform the meeting of its
findings, together with its reasons, at the AGM.

(2) Conducting the meeting in sequence of agenda items as specified in
the invitation and not adding agenda items without notifying
shareholders in advance, so that they may have enough time for
investigation before making their decisions.

(3) Providing shareholders with a list of all Independent Directors on
proxy forms as another option for them to decide their own voting,
clearly identifying which directors have vested interests in which
matter. An instance is that in each director election to replace
retiring ones due to completion of terms, an independent director that
complete his or her terms and is nominated for re-election is regarded
as having vested interests. PTTEP recommended that shareholders make use
of proxy forms which could direct voting patterns to encourage them to
do so.

(4) Encouraging shareholders to use ballots in every agenda item.
‘Voting tickets’, provided for each agenda item separately, are
collected at the meeting for dissenting and abstained votes. A special
case is when voting for Directors, in which all ballots will be
collected, whether the votes are for, against, or abstained. All votes
are then summed with the pre-cast votes as prescribed in the proxy forms
before announcing the resolution to the meeting. For transparency and
reference, PTTEP arranges for officers from its legal advisor and
volunteers from the shareholders serving as witnesses for ballot
counting and files all voting tickets bearing signatures of witnesses
volunteered by shareholders.

(5) Recording the minutes accurately and completely for delivery to all
shareholders after sending it to SET and the Securities and Exchange
Commission (SEC), 14 days after each meeting. The minutes are also
posted on the Company’s website.

(6) Ensuring strict supervision of the use of confidential (inside)
information by defining in writing the explicit approach of
confidential-information retention as well as the prevention of insider
trading as part of GCG practices and the Code of Business Conduct on the
exploitation of inside information in connection with securities laws;
regular revisions are undertaken for fairness to all stakeholders. The
following summarizes the major actions taken.

(6.1) Regularly warning Directors and all employees through various
communication channels about the abuse of confidential information to
prevent such exploitation for themselves and others. The Company clearly
stipulated punitive disciplinary measures. All supervisors, as CG
leaders, must stress or advise their own subordinates.

(6.2) Defining periods for transaction abstention for Company shares by
seeking cooperation from all Directors and Executive Management and the
manager or equivalent in Finance and Accounting Group to refrain from
engaging in Company share transactions through themselves, spouses,
children under legal age – whether directly or indirectly (e.g., through
nominees or private funds) before PTTEP disclosed significant
information, e.g., one month before disclosure of quarterly and annual
financial statements and 24 hours after such disclosure – to allow
public distribution of such information. PTTEP encouraged retention of
long-term Company shareholding, or at least three months from the last
purchase date; this excluded purchase of shares by virtue of warrants.

(6.3) Completely disclosing in the annual report the share portfolios of
the Directors, Executive Management, and the manager of equivalent in
Finance and Accounting Division in compliance with the regulations of
the Office of Securities and Exchange Commission. The Office of the
Corporate Secretary reports to the Board each time any of these people
experiences changes in their portfolios. PTTEP has no direct agency in
charge of monitoring compliance with the Code of Business Conduct.

(7) In its GCG principles as well as its Code of Business Conduct, PTTEP
devises practical guidelines for potential conflicts of interest for the
Directors, the Management, and all employees to observe. It also defines
criteria for the Directors and the Management to report their vested
interests, including such interests of related persons. Should such a
matter arise, the stakeholders must report it to PTTEP at once and
refrain from deliberating and voting on that matter.

8.5.3 Roles of Stakeholders

PTTEP values the rights of all internal and external stakeholders, which
includes shareholders, customers, employees, government, partners,
society, communities and environment, suppliers/contractors, lenders,
competitors, local culture and tradition, and human rights, of which the
practical guidelines are stated in its GCG booklet. In addition, an
ethical business framework for balanced consideration of stakeholders
appears in its Code of Business Conduct, also publicized on the
Company’s website. PTTEP takes into consideration stakeholders and their
rights wherever it works.

(1) Treatment of major stakeholders

(1.1) Employees

(a) PTTEP recruits, selects, and hires staff based on qualifications,
experience, and competence for suitable positions, encourages their
continuous development, promotes their career advancement, and provides
opportunities for them to take part in external activities under the
Company’s policy scope.

(b) A fair compensation process is in place for PTTEP to attract and
retain competent people in its service so that they may perform their
work efficiently. Key factors include up-to-date pay scales and pay
procedures of other domestic petroleum operators, job value
discrepancies in the required expertise, job complexities, assigned
responsibilities, and expressed competence through job performance.

(c) The Company provides and/or improves mutually fair welfare schemes.
Key factors include its own affordability, both short and long terms,
with a focus on fostering the security of life for employees and their
families; components not easily affordable by most employees, not
adequate provided for by the government; and components provided by most
other domestic petroleum operators to their employees.

(d) PTTEP values timely joint-resolution of problems among employees
themselves, or between subordinates and supervisors, to maintain good
relations among all. Should such a problem arise, employees can file
petitions under the Company’s procedure. Provided that they follow the
criteria and procedure in good faith, their employment status will not
be affected, and PTTEP will refrain from taking action that would harm
them or their witnesses.

(1.2) Customers

PTTEP’s mission is to produce and sell crude oil and natural gas at
competitive prices through agreements of both long and short terms, as
well as spot-market sales. For agreements governing new projects and
spot-market sales, the Company treats all customers equally and in the
best interests of all parties. For long-term product sales, including
natural gas, PTTEP strictly honors agreements and regularly coordinates
with its customers to deliver products of quality matching customers’
needs in a timely manner.

(1.3) Suppliers/contractors

PTTEP treats all its suppliers/contractors fairly. Its procurement is
based on fair and just competition for the maximum benefit of PTTEP. The
Company does not discriminate others in business competition. The three
channels of participation by suppliers and vendors are

(1) The Company’s website at http://www.pttep.com/ and then choose
VendorPortal, VendorRegistration, or
http://www.pttep.com/VendorRegistration/

(2) If the user at PTTEP already has suppliers’/vendors’ information and
want to do business with them, the user then submits such information to
the procurement group for further processing

(3) Suppliers/vendors can contact the procurement group at 66 (0)
2-537-5340.

Moreover, PTTEP has communication channel for supplier/contractors to
inquire information or update the address by sending email to
procurement@pttep.com.

(1.4) Lenders

PTTEP not only issues debentures and bills of exchange under relevant
terms of reference, laws, and announcements of SEC, but also strictly
follows policies, objectives, and resolutions made at shareholders’
meetings. The Company values compliance with all obligations under the
terms of reference on the rights and duties of a debenture issuer and
the conditions of loan contracts.

(1.5) Communities/society

Apart from conducting ethical business, a principle cultivated in its
employees, PTTEP is dedicated to showing social responsibility by
running public service projects continually in a tangible way while
focusing on employees’ substantial participation in assorted activities.
Such activities fall into two main groups: community quality of life and
environmental conservation, including the culture of ‘From Natural
Treasure to Intellectual Wisdom and Environmental Conservation’ to
cultivate awareness of being a good member of society.

In developing the quality of life, recognizing that a decent quality of
life of society’s members forms a key foundation of sustainable
development, PTTEP has launched diverse projects and activities focusing
on youth development, learning, health, and well-being, together with
occupational development of community members. Instances include the
scholarship presentation project, which in 2009 saw more than 2,123
scholarships handed over to elementary and second students in various
project areas of the Company; the project is in its second decade of
existence. The ‘Teach Me Computer’, ‘Youth Science Camp’, ‘English
Camp’, and ‘Education Trip’ projects enriched youths’ intellect,
strengthening Thailand’s drive toward sustainable development. Promoting
sound health were the ‘PTTEP I Love Sports’ and ‘Mini-Farm’ projects.
Finally, the ‘Thai Rice College Project’ raised the quality of life of
community members, as well as their occupations, which contributed to
community growth and independence.

PTTEP’s other main, continual mission has been the conservation of
natural resources, the environment, and culture. Changes in nature,
particularly global climate change, have resulted from the ignorance
about the value of ecological and natural resource conservation. With
that in mind, PTTEP launched the ‘Tree Planting in the Human Heart’ and
the ‘Thai Heritage, World Heritage’ projects to focus on society and its
employees to take the responsibility of environmental stewardship.
Meanwhile, ‘Earth Smile’ and ‘PTTEP Thai Sea Heritage Conservation’
projects focus on social awareness of potential impacts of our
negligence of natural resource and environmental duties.

These missions for society and the environment will always be at work.
Thanks to the determination of all executives and employees to observe
good corporate governance, PTTEP continues its friendship with society,
communities, the environment, and culture under the concept of ‘From
Natural Treasure to Intellectual Wisdom and Environmental Conservation’.

(1.6) Environment and Safety

PTTEP has committed its outlay and resources to ensure the upkeep of our
environment for Thais and their children, by taking steps in
environmental management, monitoring and assessing impacts, and
systematically defining preventive and mitigating measures. All projects
and undertakings by PTTEP have won environmental management system
certification, including Bongkot and Sirikit. The Company is preparing
documents and applying for ISO 14001 certification for Arthit Project.

An activity that the Company has managed throughout the country is
reforestation in various areas, thanks to the volunteering of society
members and communities. These can alleviate environmental impacts
caused by global climate change.

In its offshore petroleum production, PTTEP has installed a Flare Gas
Recovery Unit (FGRU) for reuse of such gas, derived from Bongkot gas and
condensate, which has worked well. By so doing since July 2007, the
Company contributed to the lowering of greenhouse gases vented into the
atmosphere by 250,000 tons a year of carbon dioxide equivalent. In
addition, the Company investigated the feasibility, as well as the
detailed design, of the so-called Carbon Capture and Storage for Bongkot
South Project.

As for its onshore petroleum production, the Company has investigated
the maximization of petroleum resource usage through using
otherwise-flared gas to fuel community production at Nong Tum in Amphoe
Kong Krai Lat, Sukhothai, while saving fuel costs for the communities.
PTTEP experimented with a project to capture the otherwise-flared gas
for use in producing LNG (Liquefied Natural Gas) at Nong Tum-A oil field
in Amphoe Kong Krai Lat. It joined hands with Ratchaburi Electricity
Generating Plc in fueling a small power plant at Pradu Tao A oil field,
which was equivalent to fuel saving of about 1.5 million liters a year,
to a capacity of abut 2 megawatts. In addition, PTTEP supported and
promoted a project designed to turn the flare gas, part of the Sirikit
Field development, into LNG for vehicle use; the project was under
construction. It is expected that greenhouse gas reduction of about
6,000 tons equivalent of carbon dioxide emission will result from this
effort.

In addition, PTTEP deliberated investment through the Clean Development
Mechanism (CDM) under the Kyoto Protocol, designed to facilitate
industrialized countries that are obliged to cut greenhouse gas
emissions to achieve their committed goals by investing in CDM projects
located in developing countries. By definition, such projects must
support sustainable national development. Today PTTEP is developing
projects under CDM to cut emission greenhouse gases from onshore
operations, particularly those in Sao Thian A oil field of Sirikit
Concession, where the Company is investigating its project on the use of
flare gas in fueling small power plants.

The details of such projects appear in the annual report of safety,
security, health, and environment (since 2001) and in the social
responsibility annual report (since 2007), both of which are accessible
at http://www.pttep.com/.

(1.7) Government

PTTEP conducts its exploration and production under the supervision of
relevant government agencies, whether those in Thailand or those of the
countries where it works. The Company regards these government agencies
as the key support to its smooth business and to proper business
operations in line with respective countries’ policies, rules, and
regulations. Its clear policy, therefore, is to regularly coordinate and
transparently share information with relevant government agencies, both
domestic and abroad. In addition, valuing the forging and maintaining of
long-term relationship with these agencies, the Company has continually
staged activities to promote cordial relationship.

(1.8) Partners

As an operator and a business partner in several projects, PTTEP has
sent delegates to project management committee meetings, which consist
of government and all other joint-venture partners, to jointly
deliberate management approaches, annual plans, and budgets. In each,
PTTEP exercises its vote in proportion to its interest, the conditions
under its joint operating agreements, and related laws.

(1.9) Competitors

PTTEP treats its competitors professionally and fairly.

(1.10) Local culture and tradition

When operating in different countries, PTTEP takes into account their
local culture and practices and organizes training by experts, including
representatives of the Ministry of Foreign Affairs or those from
embassies on relevant subjects – including recommendations and
information concerning local culture, what to do, and what to avoid for
PTTEP employees assigned there.

(1.11) Human rights

The Company ensures that in all its operating areas, no illegal labor is
used and that the human rights principles of the United Nations are
observed.

(2) It is PTTEP’s policy to promote stakeholders’ business participation
with the Company by giving shareholders and other stakeholders
opportunities to submit recommendations in assorted matters concerning
its business and matters dealing with their individual rights by the
e-mailing Independent Directors directly at
independentdirector@pttep.com. All such input will be screened for
submission to the Board to ensure that their rights are catered to and
that they are fairly treated.

(3) Measures concerning reporting and protection mechanism

It is PTTEP’s ultimate business goal to generate long-term value and
shareholders’ satisfaction, as seen in its motto: “growth, prosperity,
stability, sustainability and dignity”. Convinced that GCG will lead to
that goal, the Company instituted channels for employees and external
parties to report or provide information concerning wrongdoing or
violations of laws and rules, GCG, the Code of Business Conduct,
policies, procedures, terms of reference, or regulations of PTTEP
through the CG Hotline channels. And to foster confidence that such
whistle-blowers would not face persecution, PTTEP has instituted a
policy for the acceptance of such complaints and protection of
whistle-blowers. This includes mitigation of trouble for whistle-blowers
if their reporting were done in goodwill, without any malice to PTTEP or
any other party. PTTEP will treat such information with strict
confidentiality; the complaints will be involved by concerned and
assigned persons only, and the investigation policy is to be strictly
followed. The following CG Hotline channels are available:

(3.1) Telephone number: 0-2537-4499

(3.2) Facsimile number: 0-2537-4949

(3.3) E-mail address: cghotline@pttep.com

(3.4) CG Hotline Box located at Head Office

(3.5) Direct submission or by mail to the Corporate Secretary Office.

In 2009, complaints numbered eleven, of which ten has been completed.

8.4.4 Information Disclosure and Transparency

Disclosure of information represents a vital principle for GCG. PTTEP
values the information that needs to be forwarded to SET and
shareholders, particularly its accuracy, adequacy, timeliness, and equal
access by all recipients. Such information preparation follows the Code
of Business Conduct. The Investor Relations (IR), and the External
Relations Department address inquiries from institutional investors,
minor shareholders, analysts, and those interested in monitoring PTTEP
data. The Company has a clear procedure for information disclosure to
SET under ordinary and urgent circumstances.

PTTEP’s key disclosed information consists of both financial and
non-financial information. In 2009, the financial information,
particularly the reviewed/audited financial statements, according to the
external auditor, is essentially accurate under generally accepted
accounting principles. These financial statements have also been
reviewed by the Audit Committee and endorsed by the Board of Directors
before disclosure to shareholders. The Board also reports of its
responsibility to financial reports in the annual report. To speed up
financial information availability for investors, the Board also
discloses unreviewed quarterly and unaudited annual financial
statements, going beyond SET’s requirements. There has been no material
difference noted between those unreviewed/unaudited and reviewed/audited
reports. As regards non-financial information, PTTEP discloses connected
transactions, management discussions and analyses, risk management
information, and a CG report in the annual report and Form 56-1.

All disclosed information, as well as information made public to
shareholders and investors, is disseminated in Thai and English on
PTTEP’s website, which includes the annual report, Form 56-1,
shareholders’ meeting invitations and its resolutions, roadshow
presentations, quarterly presentations for analysts, press releases, and
the company’s safety, security, health and environment, which is now
included in its annual corporate social responsibility report. For
greater access and maximum benefit to users, the website is regularly
updated. In 2009, 53 matters were disclosed via SET’s system. The
Company organized meetings with securities analysts on various
occasions, including five analyst meetings and 10 roadshows.

Apart from these, the Company took shareholders and analysts to visit
operating areas, including Sirikit Field in Kamphaeng Phet, Petroleum
Development Support Base Project, and Arthit Project Production Platform
off Songkhla province to enable them to appreciate this business and
have more confidence in PTTEP’s business. In 2009, Investor Relations
launched an IR Corner at the 2009 AGM to add information channels for
the shareholders.

PTTEP also discloses the roles and responsibilities of the Board and all
standing sub-committees, including the attendance of each Director under
Topic 8, Management Structure; reports of each sub-committee (Topic 8.6,
Reports of Standing Sub-committees); and the policy of Directors and
Executive Management remuneration under Topic 8.5.5, Responsibility of
the Board, (6) Directors’ and Executive’s Remuneration.

PTTEP constantly values the accuracy, completeness, timeliness, and
transparency of information disclosure and is committed to keeping up
this practice.

Investor Relations (IR)

The Investor Relations is responsible for communicating information that
accurately shows PTTEP’s real value to stock analysts, shareholders, and
investors in general under the rules of SET, and for fostering
confidence on the part of analysts and investors as well as a positive
image and attitude in investors through coordination and consultation
with PTTEP’s management. Investors and interested parties can contact
this unit for information on PTTEP, including financial statements,
annual report, and notifications to SET, SEC, etc. To contact the IR
unit, three means are possible:

(1) Telephone number: 66 (0)-2537-4512 and 66 (0)-2537-4611

(2) E-mail address: ir@pttep.com

(3) Facsimile number: 66 (0)-2537-4467.

8.4.5 Responsibilities of the Board

(1) Structure

(1.1) Components

The PTTEP Board of Directors has assigned the Nominating Committee to
recruit Directors or the President and CEO to fill vacant positions; in
so doing, the Nominating Committee selects from those qualified,
competent, and experienced people to serve the interests of PTTEP.

The Board consists of 15 Directors, a size considered suitable for the
business. These include Connected Directors and Non-connected Directors
not related to the major shareholders and not serving as directors or
management of major shareholders, or Independent Directors, who must
always account for at least one-third of the Board or the number of at
least five. (The Board, during its December 2009 meeting, approved a
revision of the Company’s Corporate Governance practice concerning
Independent Directors that they must make up at least half of the
Board.) The Board also consists of at least three private-sector
Directors from outside the Company.

(1.2) Qualifications of PTTEP Directors

(1) Age not over 70 years

(2) Diverse skill mix, among them: industry knowledge, accounting &
finance, business judgment, management skills, international markets,
business strategy, crisis management, corporate governance, and legal
matters.

Only one major shareholder prevails at PTTEP, with minor shareholders so
widely distributed that they cannot form a statistically significant
group. Also, since the current non-Independent Directors and those who
do not represent the major shareholder are diverse in professional
qualifications or organizations, the current Board of Directors,
accordingly, can safeguard the interests of all shareholders as a whole.
As mentioned above, the Company has revised its Corporate Governance
practice to have Independent Directors on at least half of the Board.

(1.3) Terms of Directorship and Number of Companies Where Directors Can
Serve

PTTEP decided that a third of the Directors will leave the Board at each
AGM. The 15 Directors it has, therefore, results in each person holding
a three-year term. To enable PTTEP to leverage Directors’ qualifications
for maximum suitability and benefit, their services are limited to three
consecutive terms (effective from 2006) – except when the Company
considers them specialists that could benefit PTTEP’s operation. The
Board also approved the revision of its Corporate Governance practice by
limiting the number of other companies where each Director is serving as
a Board to five. This information of directors’ holding positions in
other organization is disclosed in Form 56-1, the annual report, and the
Company’s website.

(1.4) Definition of Independent Director Qualifications

This has been detailed under Topic 8.2.3.

(1.5) Policy and Procedures for Serving as Other Companies’ Directors
for the President and CEO and Management

PTTEP values the experience to be acquired by the President and CEO and
other Management members through their director service in other
organizations. However, to allow them to devote their time to its
business, the Company requires that the President and CEO and members of
the Executive Management may serve as directors of other business
entities (apart from self-owned or family businesses) only as necessary
and as long as such positions do not compromise the business interests
of PTTEP. In any case, prior approval is needed from an authorized
person, and the name PTTEP or their positions in PTTEP cannot be used in
any way to involve any other company’s business. Nevertheless, any PTTEP
management or employee assigned to serve as a director, a management
committee member, or a secretary in an organization or party involved in
the exploration and production business, or a business directly related
to it, must return to PTTEP any compensation given to him or her. In
other cases, he or she can keep the compensation.

(1.6) Segregation of the Chairman and the President and CEO and their
authority and duties

The Chairman of the Board and the President and CEO are two separate
persons, both elected from Directors. The Chairman stays away from
day-to-day management, as there is a clear separation between
policy-making, monitoring and assessment, and management execution. The
Chairman’s leadership plays a key role in ensuring the Board’s
efficiency and independence of the Management, (along with the President
and CEO) deciding agenda items under the Board’s responsibility, and
efficiently chairing Board and shareholders’ meetings. This is done by
encouraging all Directors to actively take part in such meetings,
including raising critical questions, consulting, guiding, supervising,
and regularly supporting the operation of the Management through the
President and CEO. At the same time, the Board refrains from
interference in routine tasks or business activities of the Management.
The Chairman also ensures that the Directors observe PTTEP GCG. Whereas
the President and CEO takes full responsibility for Company management
execution under the authority framework assigned by the Board in line
with PTTEP’s rules.

(1.7) Independence of Chairman

PTTEP has determined that, in future elections of the Chairman,
independence will be the foremost factor for deliberation. Unless there
is a greater necessity, other Directors are to be considered.
Nevertheless, PTTEP’s Chairmen have consistently performed their duties
independently. Moreover, PTTEP has instituted the Chairman’s performance
evaluation by the entire Board to gain feedback as guidelines for
improving and auditing his performance. The appraisal outcome has been
disclosed in Form 56-1 and the annual report.

(1.8) Corporate Secretary

This is detailed under Topic 8.2.6

(2) Sub-committees

The Board has appointed standing sub-committees (or simply
‘sub-committees’), consisting of qualified Directors, to handle specific
tasks for the Board as defined by the scope of each. Their
qualifications, terms, and scopes of responsibility have been defined in
their respective charters. A majority of their members are Independent
Directors, and so is the Chairman of each sub-committee, with the
exception of the Risk Management Committee. The Chairman of the Board
does not belong to any sub-committee. The sub-committees regularly
report their findings to the Board and each year report their
performance to the shareholders using Form 56-1 and the annual report.

PTTEP constitutes five sub-committees, namely the Audit Committee,
Remuneration Committee, Nominating Committee, Corporate Governance
Committee, and Risk Management Committee. Their names, responsibilities,
number of meetings, individual attendances, and reports appear under
Topics 8.2.2 and 8.6.

(3) Roles and Responsibilities of the Board

(3.1) Corporate Governance Policy

In 2001 the Board issued a written GCG policy, which has constantly been
reviewed. The latest version, to be announced as Revision 5, was
approved by the Board as proposed by the Corporate Governance Committee
in December 2009; the meaning of Corporate Governance has been made more
concise and understandable, leading more clearly to the significance of
the matter while making it more in line with international practices in
limiting the number of listed companies where Directors should serve (as
directors or the management) to five. Copies of the GCG manual and the
Code of Business Conduct were handed out to all PTTEP employees for
reference and compliance. All were requested to sign their names as a
pledge to abide by these, and to the Code of Directors’ Conduct, as
applicable, as guiding principles under the highest standard. Besides,
these were given to business partners, regulatory agencies, agencies
regularly contacted by PTTEP, as well as interested parties. They also
appear on the Company’s website under Good Corporate Governance to
facilitate viewing by shareholders, investors, and interested parties.

PTTEP continued to focus on promoting the understanding of GCG to
Directors and all employees through activities including orientation
sessions for new Directors and employees including newly appointed
management.

PTTEP has developed communication channels of GCG information according
to its nature for its employees as follows:

• CCS CG Information Center, for general information concerning GCG
practices

• CCS Compliance News Alert, for reminders about relevant rules and
laws, including insider trading, or for alerts on relevant, upcoming
rules and laws.

In 2009, the Company instituted an assessment of compliance with the
Code of Business Conduct at each departmental level upward to find out
more about employees’ practice and apply the findings in evolving and
promoting such compliance. Topics of the Code were scrutinized, with a
score of 1 being ‘needs urgent improvement’; 2, ‘needs improvement’; 3,
‘fair’; 4, ‘good’; and 5, ‘very good’.

(3.2) Code of Business Conduct

Valuing ethical business conduct, PTTEP regards the code as a precursor
to desirable behavior that defines the framework and guiding principles
for good business conduct for the Board, management, and all employees
to observe for the benefit of efficiency and ethics through respect for
rights and treatment of stakeholders equitably, with fairness, and
openness to scrutiny. This would not only foster confidence and
acceptance of PTTEP’s efficiency and transparency, but also foster
long-term value for the stakeholders and fairness to all.

The code consists of 13 subjects governing desirable behavior and
reflects the organization values in business operation that the
Directors, the Executive Management, and all employees must observe. The
subjects of the Code of Business Conduct are as follows:

-   Respecting the law and political neutrality

-   Internal control

-   Human resources

-   Confidentiality

-   Disclosure of information

-   Use of inside information

-   Conflict of interest

-   Procurement and contracts

-   Gifts, entertainment, and bribery

-   Accounting and finance

-   Use of information technology and communications

-   Safety, security, health, and environment

-   Corporate social responsibility.

At its December 2009 meeting, the Board approved a revision to the Code
under four key topics, namely ‘Human resources’, by expanding the
definition to other cases; ‘use of inside information’, by making it
more comprehensive, that is, no exploitation of inside information of
companies engaged in business with PTTEP through buying, selling, or
proposing to buy shares of such companies; ‘Gifts, entertainment, and
bribery’, by making guidelines more explicit; and ‘Use of information
technology and communications’, by expanding on the security measures
for systems and information to disclosure of passwords for PTTEP’s
information access.

In 2009 the Company focused on cultivating the awareness of all PTTEP
employees of performance in compliance with the Code of Business
Conduct. The major theme of its 2009 publicity campaign was ‘Proper Use
of Information’, which spans three topics of the Code, namely
Confidentiality, Disclosure of information, and Use of inside
information. Educational activities were staged to promote the Code,
including training for all executives and staff, a slogan contest, a
film about good corporate governance and the Code, and a survey of
compliance with the Code by each unit.

(3.3) Conflicts of interest

Published in the GCG Policy, PTTEP demands that all Directors and
employees avoid any conflict between personal and corporate interests.
Here are the essences.

• Decisions about Company business by all Directors and employees must
solely be for the best interests of PTTEP without the influence of
personal gains or those of related parties.

• All Directors, management, and employees must review and report all
conflicts of interest to the Company.

In addition, PTTEP has devised the following measures:

• All Directors, management, and employees strictly comply with laws,
rules, and regulations, particularly those of SET concerning connected
transactions.

• Avoidance of financial involvement and relationship with external
parties by all Directors, management, employees, or related parties that
could compromise PTTEP’s interests, bring about conflicts of interest,
or hamper efficient business conduct

• When they are involved in a conflict of interest, Directors,
management, and employees who are normally hiring, selecting, deciding,
or approving such transactions must report to supervisors or those with
joint approval authority by using PTTEP’s form for reporting conflicts
of interest. Also, they must withdraw from such processes or from
undertaking transaction with PTTEP.

• All Directors, management, and employees reviews and self assess on
conflicts of interest as specified in annual self-appraisal forms.

• All Directors, management, and employees must immediately notify their
potential conflicts of interest, when in doubt. This applies when they
or related parties take part or hold shares in any business concerns
engaged in transactions with PTTEP with potential conflicts of interest.

In deliberating connected transactions during 2009, PTTEP complied with
the above-mentioned policy, SET rules and regulations on connected
transaction of 2003 and the announcement of the Capital Market
Regulatory Commission No. Tor Jaw 21/2551, concerning criteria for
engaging in connected transactions. Board resolutions concerning these
transactions were strictly made among non-connected Directors. Details
about connected transactions of 2009 appear in Topic 10.

(3.4) Internal Control and Internal Audit

PTTEP implements an internal control policy that is sufficient and
acceptable for Company risks and prevailing business circumstances, or
the activities of individual departments. To ensure suitable control
measures with prevailing circumstances, environment, and risks, the
Internal Audit Department regularly monitors internal control practices.

The Board, management, and all employees collectively decide business
procedures to ensure achievement of the objectives with reasonable
confidence:

-   Efficient and effective operations, including prudent use of
    resources

-   Accurate, reliable, and timely financial reporting

-   Compliance with Company policies, laws, and regulations.

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

-   Control Environment: A proper control environment fosters control
    awareness in those conducting business with competence, integrity,
    and a code of conduct. 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. In short, PTTEP is determined to
    uphold the GCG principles.

-   Risk Assessment: Recognizing the value of risk management, the
    Company has set up a risk management department to take charge of
    risk analysis, assessing probabilities and potential impacts, and
    taking action to ensure acceptable risk management. PTTEP classifies
    risk management at the corporate level, linking to its strategic
    directions and strategies, and the operating level, to be managed by
    departments. With clear risk management procedures, all risks come
    under the supervision of the Risk Management Committee.

-   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 resource management, finance and accounting,
    budgeting, and procurement regulations, including the charters of
    the five sub-committees. These regulations frame PTTEP’s management
    and operation control.

The Company has also devised a Delegation of Authority and Signatures
(DAS) table for the President and CEO to clearly delegate authority to
the Company’s functional management, resulting in practical and
easily-tracked courses of action. The Company has instituted an
International Asset Policy, Standard, and Procedure for oversea projects
operated by itself, as well as for joint ventures, which should serve as
a practical guideline.

The Company has allocated responsibilities to dedicated units for the
verification, control, and oversight of its strict compliance with laws
and regulations, including Legal Department, Office of the Corporate
Secretary, Accounting Department, and Safety, Security, Health, and
Environmental Department. Besides these duties, they are required to
alert all parties when new rules and regulations come into effect.
Should doubts arise concerning any law or legal implications, these
units are to consult Legal Department to ensure accurate understanding
and compliance.

-   Information and Communication: The Company institutes efficient and
    effective communication procedures for information, both internally
    and externally, for complete, accurate, and timely decision-making.
    Information is either financial or non-financial. Internally,
    through the Intranet (via Internal Communication as the information
    center), PTTEP provides employees with adequate and timely
    information needed for doing their work, as well as communication
    between management and employees 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 relevant regulations, for good
    coordination and business appreciation.

PTTEP has an information control system for the transmission and
reception of information and clearly allocates tasks along with
responsible persons, authority, and units concerning information and
communication technology. In addition, the Company has classified levels
of access to confidential information in all its departments to give
access to authorized personnel only.

-   Monitoring and Evaluation: PTTEP has clear control and operating
    performance assessment, as well as that of risk management
    performance. Under the risk assessment monitoring procedure,
    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
    indicators to the Board. In addition, the Internal Audit department
    monitors and assesses internal control outcome, and then reports its
    findings to the Audit Committee.

-   Findings of internal control assessment for 2009 appear under Topic
    9.

(3.5) Risk Management

Defining a risk management policy for the Company, the Board appointed
the Risk Management Committee as a standing sub-committee under a
charter of 2005. This sub-committee ensures that PTTEP business
operation follows the risk management policy.

In charge of the adequacy of risk management systems and the
effectiveness of risk management for the Company, the Risk Management
Department not only investigates and indicates risks or anomalies
hampering business operation against strategic and operating goals;
alleviates or eliminates such risks in a systematic and efficient way;
periodically reporting to risk owners, the Management, the Risk
Management Committee, and the Board, and summarizes its activities for
reporting to the Board for consideration of process adequacy,
cultivation of a culture, and awareness for risk management in its
business for each company unit.

(4) The Board of Directors’ Meetings

As a rule, for a given year the Board plans its meeting dates with
regular agenda items scheduled for each month. In 2009, the Board met
every last Friday of the month for a total of 17 times, including an
offsite meeting to deliberate strategic plans, considered crucial and
therefore time-consuming in deliberation. The Board held one meeting
without the presence of management before the August meeting. The
Independent Directors held one meeting among themselves before the
November meeting; they also decided to hold quarterly meetings among
themselves in 2010. Directors consistently received an invitation to
each meeting along with draft minutes and supporting information ahead
of each meeting.

As a rule, agenda items are jointly decided by the Chairman and the
President and CEO, but Directors may also propose matters they consider
important. For instance, they proposed items for the meeting in the
absence of management and the meeting of the Independent Directors. In
2009 a total of 58 agenda items were deliberated, including major ones
such as the direction and policy approach for strategic implementation;
the annual budget; financial statements; petroleum purchase agreements
and negotiations; bidding for international exploration and production;
joint ventures; Arthit Project operation; Bongkot South Project
development; procurement under major projects; election of the Chairman;
resolving of the Montara Field problems; oil price risk management;
definition of criteria on vested interests of Directors and management;
and amendments of the company’s regulations. Matters for acknowledgment
consisted of 146 items, most of which were reports on operation and
updates on various projects; status of Company shares; entering into
joint ventures; changes in Directors during the year; appointment and
transfer of management; human resources administration updates; reports
on activities in support of social and environmental development;
reports on safety, security, health and environment; procurement and
change in financial contract limit within the approval authority of the
CEO; and reports of sub-committees. A typical Board meeting took two
hours, with the Corporate Secretary in attendance each time to look
after and guide the Board on pertinent regulations, as well as to take
the minutes and file complete information along with meeting documents.

The meeting minutes covered all essential issues and all the minutes
were unanimously approved, particularly for matters requiring
deliberation. Questions raised during Board meetings were addressed
along with additional explanations, and Directors’ views were clearly
recorded. All documents were systematically filed under tight security.
As a rule, all Directors attended each Board meeting except for
legitimate reasons of absence. Whenever possible, Directors sent an
apology letter to the Chairman when they could not attend a meeting. The
Board attendance record for 2009 appears under Topic 8.2.1.

(5) Self-assessment of the Board

PTTEP has stipulated under the continuous improvement element of its GCG
(item 4.3.2) – the assessment of the performance of the Board, the
Chairman, and the Sub-committees – that their performance must be
self-assessed against the performance assessment forms and the annual
Performance Agreements, and that the performances of the Chairman and
Standing Sub-committees must be assessed each year, as defined by the
Nominating Committee.

The Board assessment divided into three parts: individual
self-assessment, cross-assessment for individuals, and the entire Board
assessment. All sub-committees are evaluated by both the committee
member themselves and other directors as well. The Chairmen performance
is also assessed by all directors. PTTEP will propose these scores for
the consideration of the Remuneration Committee before securing a prior
approval from the Board and disclosing the scores in the annual report.
PTTEP then gathers the comments and suggestions made in the evaluation
forms as guidelines for improving the performance of the Board and the
Company.

For 2009, apart from devising performance assessment forms for the
Board, the Sub-committees, and the Chairman, the Nominating Committee
added a weighting factor for each topic. As regards the grading scale
for these assessments, a ‘1’ stands for ‘seriously needs improvement’, a
‘2’ for ‘fair’, a ‘3’ for ‘standard’, a ‘4’ for ‘good,’ and a ‘5’ for
‘very good’.

-   Self-assessment scores by individual Directors averaged 4.67 against
    4.53 in the previous year.

-   Cross-assessment scores, conducted for the first time this year,
    averaged 4.75, against 4.67 in the previous year.

  The Board as a group performed in two aspects:

(1) Against Performance Agreements, with a 20% weighting factor,
averaged 3.60 - no change from the previous year

(2) Against self-assessment forms of the entire Board, with an 80%
weighting factor, averaged 4.71, against 4.55 in the previous year.

  On the whole, the Board averaged 4.48 against 4.36 in the previous
  year.

-   The Audit Committee scored 4.74 or ‘good’ against 4.70 in the
    previous year

-   The Remuneration Committee scored 4.83 or ‘good’ against 4.71 in the
    previous year

-   The Nominating Committee scored 4.74 or ‘good’ against 4.58 in the
    previous year

-   The Corporate Governance Committee scored 4.84 or ‘good’ against
    4.82 in the previous year

-   The Risk Management Committee scored 4.75 or ‘good’ against 4.63 in
    the previous year

-   The Board Chairman earned 4.94 from the rest of the Board, or ‘good’
    against 4.70 in the previous year.

(6) Directors’ and Executives’ Remuneration

(6.1) Directors’ Remuneration

PTTEP’s policy for compensation paid to the Directors and members of the
Sub-committees is clear and transparent. The Remuneration Committee
decides and reviews such compensation based on not only suitability, but
also individual and Company performance, industry practices, practices
of leading SET-listed companies of the same size and industry, and the
scope of accountability. The 2009 AGM approved Directors’ and
Sub-committee members’ remuneration, effective from 2009 onward as
proposed by the Remuneration Committee, adjusting their compensation in
Directors’ bonuses in line with PTTEP’s financial performance, operating
performance, and additional responsibility from 2008, as detailed below:

-   Retainer fee at Baht 37,500/person/month, paid in full each month as
    was done in 2008.

-   Meeting fee at Baht 25,000/person/meeting, paid only to those in
    attendance (as in 2007).

-   Annual bonuses for all Directors will be paid out if dividends are
    paid to shareholders in a given year; payouts would amount to 0.1%
    of the net profit for the same year but no more than Baht 40
    million, paid according to the tenure of each Director. The original
    limit was Baht 30 million a year.

-   Members of all standing sub-committees – namely the Corporate
    Governance Committee, the Audit Committee, the Remuneration
    Committee, the Nominating Committee, and the Risk Management
    Committee – would continue to receive meeting fees of Baht
    25,000/person/meeting, as was done in 2007. This, however, excluded
    members who were concurrently PTTEP management and does not apply
    when meetings concerned circulating resolutions.

-   The Chairman of the Board and the Chairmen of sub-committees
    received an extra 25 percent of the fees allocated to regular
    Directors or members.

    Individual director’s compensation details concerning retainer fees,
    meeting fees, and bonuses, as well as meeting fees for
    sub-committees, appear under Topic 8.4.1.

    (6.2) Remuneration Policy for Associated Companies /Subsidiaries’
    Board Members

    This has to do with entities set up by PTTEP to serve as mechanisms
    for conducting businesses for PTTEP for its best interests under
    various business conditions. These are treated as Company assets in
    line with legal criteria or investment conditions. Some of these
    have operated as full-fledged companies. As a rule, the boards of
    these companies are kept to a bare minimum, for instance, Executive
    Vice President and/or Vice President, and/or Management (or all of
    these positions) directly responsible for the success of the
    projects under such subsidiaries and associated companies. PTTEP
    rules and procedures therefore apply, as these are assets managed in
    the best interests of the Company.

    Executives assigned to serve on behalf of PTTEP as directors of
    affiliates and subsidiaries engaged in petroleum exploration and
    production, or directly related ones, including PTTEP Services Co.,
    Ltd., are not entitled to extra compensation, as this is considered
    PTTEP’s direct business and part of routine work. For other cases,
    they may receive such compensation, as it is considered extra
    duties, including service for PTT ICT Solutions Co., Ltd., and
    Energy Complex Co., Ltd. This provision is clearly stated in the GCG
    principles.

    (6.3) The President and CEO’s Remuneration

    The President and CEO’s remuneration package is clearly and
    transparently decided by the Remuneration Committee with the
    endorsement of the Board. Consideration is given to Company
    performance and performance appraisal outcome, prevailing industry
    and business practices of companies with similar sizes, as well as
    his or her job responsibilities and the economic situation.

    Assessment of The President and CEO’s performance is made against
    his or her performance agreement for a given year, duly filled on
    the form decided by the Remuneration Committee, specifically the key
    performance indicators (KPIs) of 2009 and endorsed by the Board as
    check-and-balance to monitor the performance of The President and
    CEO against short-term and long-term goals. Besides allowing for GCG
    practices, this would make the deliberation of the President and
    CEO’s remuneration transparent and suitable while also enabling him
    or her to apply the findings to improve performance. In addition, a
    survey was conducted on Vice Presidents and upward about the
    performance of the President and CEO and, particularly in the
    quality aspect, for future use by the President and CEO in
    improvement. The findings of this survey are to be forwarded to the
    Remuneration Committee and the Board’s acknowledgment.

    (6.4) Executive’s Compensation

The Remuneration Committee reviews and recommends the salary structure
criteria or procedures for defining the salary structure for executive
that are fair and reasonable while conforming to prevailing practices in
this business for the Board’s endorsement. Executives’ compensation
packages and salary structures are determined by market comparison with
other leading oil and gas companies’ criteria, procedures, pay rates,
salary surveys, and with consideration to their individual scopes of
accountability.

The President and CEO decides individual executive management’s
compensation. Annual merit increases of executive management are tied to
individual performance, the Company’s performance, and key performance
indicators (KPIs) achievement of each division.

To maintain its competitiveness in the oil and gas market, PTTEP
participates in annual compensation surveys along with other leading oil
and gas companies to obtain sufficient information to report to the
Board for possible adjustment in competitive compensation strategy when
there is a significant compensation change in the marketplace.

In compliance with GCG and transparency, PTTEP discloses the
Management’s compensation, including their PTTEP shares and ESOP
warrants, in the annual report.

(7) The Board of Directors and Executives’ Training

(7.1) Directors’ Development

The Board has instituted self-development by encouraging Directors to
undergo training courses organized by the Thailand Institute of
Directors (IOD). Directors have passed such courses organized by IOD and
external agencies as detailed in Attachment 1. When there is a new
Director, PTTEP provides an orientation for him or her, complete with an
up-to-date directors’ manual and useful documents and information, to
introduce the nature of PTTEP’s business and its business approach;
documents concerning their legal responsibilities and good corporate
governance practices are also provided to the directors.

(7.2) Executive’s Development and Succession Planning

At PTTEP, the management potential is assessed through the 360-degree
survey method and enrolled in an Assessment Center, including
notification of assessment results and joint preparation of executive
potential planning to supplement their competency in management and
demonstrate organizational leadership. Succession planning is
systematically practiced to replace retiring personnel or fill new
positions resulting from company business expansion. As regards
succession planning for the President and CEO, the major shareholder’s
policy prevails.

(8) Awards of 2009

The Company garnered assorted awards from different institutions,
including Best Public Companies of the Year 2009 at the Money & Banking
Awards 2009, organized by Finance & Banking Magazine.

It achieved a score of 100 and a four-star bonus, an acclaim as a role
model, under the 2009 AGM Checklist Project of SEC, assessed by the Thai
Investors Association.

PTTEP won the Best Performance Award and the Top Corporate Governance
Award at the 2009 SET Awards event, hosted by SET and Finance & Banking
Magazine.

PTTEP achieved an ‘Excellent’ score from a survey of Corporate
Governance Report of Thai Listed Companies 2008, organized by IOD.

Finally, the Company won certification in three aspects, namely Board of
the Year for Exemplary Practices, Audit Committee of the Year, and Board
with Consistent Best Practices under the Board of the Year Awards
2008/09 Project, launched by IOD, SET, Board of Trade of Thailand,
Federation of Thai Industries, Thai Bankers’ Association, Thai Listed
Companies Association, and Federation of Thai Capital Market
Association.

8.6 Sub-committees Report

8.6.1 Corporate Governance Committee Report

Valuing compliance with the Good Corporate Governance (GCG) Policy and
the Code of Business Conduct in its operation, PTTEP has developed its
good corporate governance in line with the regulations of the Stock
Exchange of Thailand (SET), best practices of other leading companies,
and generally-accepted international best practices. To this committee,
the Board of Directors (“Board”) has assigned to supervise the Company’s
operation as well as to encourage the compliance with the GCG policy and
the Code of Business Conduct at all levels.

The Corporate Governance Committee held two meetings in 2009 to fulfill
its roles and responsibilities specified in its charter and reported the
outcomes to the Board as summarized below:

(1) Supervised the promotion of knowledge and understanding to ~~by~~
    Directors, Management, and employees to act in compliance with both
    the GCG Policy and the Code of Business Conduct, and occasionally
    participated in such activities.

(2) Reviewed the GCG Policy to ensure its compatibility with SET’s
    principles of GCG for listed companies (2006 edition), adapted from
    the Organization for Economic Co-operation and Development (OECD)
    Principles of Corporate Governance, to align PTTEP’s practices with
    those of international practices.

(3) Supervised PTTEP’s self-assessment of compliance with the GCG Policy
    and the Code of Business Conduct for future refinement.

(4) Formulated a CG reporting guideline in line with the SET criteria
    for dissemination to stakeholders in the annual report.

Mr. Vudhibhandhu Vichairatana

(Mr. Vudhibhandhu Vichairatana)

Chairman of the Corporate Governance Committee

8.6.2 The Audit Committee Report

Composed of three Independent Directors with knowledge, expertise, and
experience in finance and accounting, law, and related technical
practices, the Audit Committee is chaired by Mr. Chokchai Aksaranan,
with Mr. Chulasingh Vasantasingh and Mr. Sirin Nimmanahaeminda as
members. All are knowledgeable and experienced in reviewing financial
statements.

All Audit Committee members performed their duties and responsibilities
as assigned by the Board of Directors in accordance with PTTEP’s Audit
Committee Charter. During 2009, the Audit Committee held seven meetings,
with perfect attendance each time, completing the work items as
summarized below:

(1) Reviewed the quarterly and annual financial statements with the
    Management and the external auditor (The Office of the Auditor
    General) with comments and recommendations to ensure the accuracy
    and creditability of the accounting system and financial
    information, as well as accurate, sufficient, and timely disclosure
    of significant matters to meet the accounting standards and
    requirements of relevant laws and regulations.

(2) Reviewed PTTEP’s performance to ensure the Company’s compliance with
    the securities and stock exchange laws, the Stock Exchange of
    Thailand’s rules and regulations, and other laws related to PTTEP’s
    business.

(3) Considered and supported the disclosure of connected transactions to
    ensure accuracy and completeness together with the opinion that they
    were reasonably executed for the benefit of shareholders;
    deliberated PTTEP’s issuing of quarterly Management Discussion and
    Analysis Reports (MD&As), which were useful for all investors.

(4) Reviewed PTTEP’s internal control and internal audit system to
    ensure both sufficiency and appropriateness for business operations.

(5) Considered, selected, and proposed that the Office of the Auditor
    General continue to serve as the external auditor; considered and
    decided upon the relevant audit fees for 2009; attended meetings
    with the external auditor and the internal audit department in the
    absence of the Management.

(6) Deliberated the independence of the internal audit department and
    endorsed the appointment, transfer, and performance merit
    considerations for the chiefs of the internal audit department.

(7) Endorsed the audit plans of the internal audit department, reviewed
    audit findings and approach taken, and assessed audit findings.

(8) Screened the budget and manpower requirements of the internal audit
    department.

(9) Approved the amended Audit Charter for 2009

(10) Amended regulations of the Audit Committee for 2009

(11) Assessed the Audit Committee’s 2009 performance by completing a
     self–assessment, assessment by the Board of Directors, and
     assessment by related agencies. . The result of the assessment
     revealed that the performance of the Audit Committee remained
     effective.

  The Audit Committee continued to regularly submit all minutes of its
  meetings to the Board of Directors.

In conclusion, for the year, the Audit Committee’s opinions are as
follows:

(1) PTTEP’s accounting system and financial reports were accurate,
    creditable, and contained complete, sufficient, and timely essential
    information.

(2) The Company’s internal controls were adequate, suitable, and
    adaptable to evolving circumstances to suit its present and future
    business operations while complying with all relevant laws and
    regulations.

(3) The Office of the Auditor General, the external auditor, was
    independent and experienced in auditing the Company’s financial
    reports to ensure accuracy and reliability, as well as complete,
    sufficient, and timely disclosure of significant information.

(4) Based on its review of connected transactions or items with
    potential conflicts of interest, the Audit Committee regarded
    PTTEP’s disclosure of information as accurate and complete, and such
    items carried fair conditions and prices, which had won the prior
    approval of the Management or the Board of Directors.

Chokchai Aksaranan

(Mr. Chokchai Aksaranan)
Chairman of the Audit Committee

8.6.3 The Remuneration Committee Report

Appointed by the Board of Directors (“Board”), the Remuneration
Committee consists of four members. Chaired by Mr. Sirin
Nimmanahaeminda, they consisted of Mr. Viraphol Jirapraditkul, Mrs.
Sirinuj Bisonyabut, and Mr. Chitrapongse Kwangsukstith. The Chairman and
the majority of members are Independent Directors.

During the year, in performing its roles as assigned by the Board, this
committee exercised due care, prudence, independence, and thoroughness
in compliance with Remuneration Committee Charter, which dealt with the
remuneration of the Board, Standing Sub-committees, and Chief Executive
Officer, including the revision of the charter for suitability. Members
with vested interests abstained from voting on such matters. One
committee meeting was held in 2009, with perfect attendance, and the
outcomes reported to the Board.

As regards remuneration details for the Board, Standing Sub-committees,
and Chief Executive Officer, which appear under ‘Board and Executive
Remuneration’ in the annual report, the Board and the 2009 General
Meeting of Shareholders, depending on their authority, approved by
taking into account their respective duties and responsibilities,
together with job and Company performances. In the process, it
benchmarked the remuneration of comparable leading companies of the same
size in similar industries and considered factors potentially affecting
its business or the overall economy so that remuneration may be properly
and transparently made while bolstering the confidence of all
stakeholders.

  Sirin Nimmanahaeminda

  (Mr. Sirin Nimmanahaeminda)

Chairman of the Remuneration Committee

8.6.4 Nominating Committee Report

Under the Good Corporate Governance of PTTEP, the Nominating Committee
consists of three Directors, two of whom are Independent Directors,
including the Chairman.

In 2009, there are two committees served as the Nominating Committee.
Ending on 22 June 2009, the first, led by Mr. Chulasingh Vasantasingh
(Chairman/ Independent Director), consisted of Mr. Sanit Rangnoi
(Independent Director, retiring from the Board and this committee on the
completion of his term on 31 March 2009) and Mr. Chitrapongse
Kwangsukstith. The second was from 23 June 2009 to 22 June 2012, with
Mr. Chulasingh Vasantasingh (Chairman/ Independent Director), Mr. Sommai
Khowkachaporn (Independent Director), and Mr. Chitrapongse
Kwangsukstith. Performing its duties under the Nominating Committee
Charter B.E. 2546, the committee held six meetings, with perfect
attendance, with the following outcomes:

(1) Deliberating the qualifications of candidates for Directors and
    preparing a Director list with the Company’s maximum benefit in mind
    and with input from PTT, the major shareholder.

(2) Deliberating the list of those under 1 and proposing it to the Board
    and the 2009 annual general meeting (AGM) of shareholders for
    election in place of those whose terms expired.

(3) Deliberating the list of those under 1 and proposing Mr. Tevin
    Vongvanich to the Board for election to fill a vacancy, with effect
    from 30 November 2009 onward.

(4) Deliberating qualified Directors and proposing them to the Board for
    appointment to the Standing Sub-committees as follows:

(4.1) Mr. Sommai Khowkachaporn to the Nominating Committee and Mr. Anon
Sirisaengtaksin to the Risk Management Committee, replacing those
directors retiring on the completion of their terms during the year,
with effect from 31 March onward and serving for the same term as those
retiring.

(4.2) Mr. Chulasingh Vasantasingh, Mr. Sommai Khowkachaporn, and Mr.
Chitrapongse Kwangsukstith to the new Nominating Committee, with effect
from 23 June 2009 to 22 June 2012.

(4.3) Mr. Sirin Nimmanahaeminda, Mr. Viraphol Jirapraditkul, Mr.
Chitrapongse Kwangsukstith, and Mrs. Sirinuj Bisonyabut to the new
Remuneration Committee, with effect from 23 June 2009 to 22 June 2012.

(4.4) Mr. Sommai Khowkachaporn to the Risk Management Committee, with
effect from 26 June 2009 onward.

(4.5) Mr. Bhusana Premanode to the Corporate Governance Committee,
replacing Mr. Sommai Khowkachaporn, and Mr. Rathakit Manathat to the
same committee, with effect from 26 June 2009 onward.

(5) Deliberating a proposal made to the 2009 AGM for the ratification of
    the amendment to the Articles of Association number 9, as the
    Registrar had ruled against the principles behind the resolution in
    the aspects below, made by the 2008 AGM, held on 28 March 2008: (a)
    Categorizing Directors as connected director, director with no
    interests in PTTEP, and private-sector ones, (b) Retirement of the
    Chief Executive Officer from the Board once the latter decides to
    change the former (c) Directors who are authorized to sign and bind
    the Company (related to a) The Registrar had agreed to register the
    Company provided that the above-mentioned Articles of Association
    was amended.

(6) Deliberating the suitability of proposing the amendment to the
    Articles of Association to contain termination of directorship due
    to age disqualification. The committee recommended that more prudent
    investigation should be made before submission to future AGMs.

(7) Deliberating the Performance Agreement of the Board and evaluation
    forms for the Board, Directors, Standing Sub- committees, Chairman
    of the Board, and the President and CEO for the year. Also,
    deliberating management questionnaires about the performances of the
    President and CEO for future improvement.

(8) Deliberating the Performance Agreement of the President and CEO and
    their respective evaluation form for 2010.

(9) Deliberating an amendment to clause 5 (5) of the Nominating
    Committee Charter B.E. 2546 concerning its responsibility, covering
    deliberation leading to the modification of Standing Sub-committees.

(10) Deliberating the 2008 and 2009 reports of the Nominating Committee
     for disclosure in the respective Form 56-1 and annual reports.

The Nominating Committee routinely reported its meeting outcomes to the
Board, members with vested interests abstaining from voting on such
matters. Through the year, it duly performed all assignments with
caution, prudence, competence, and independence, providing candid views
for the maximum benefit of the Company, shareholders, and stakeholders.

Chulasingh Vasantasingh

  (Mr. Chulasingh Vasantasingh)

  Chairman of the Nominating Committee

8.6.5 Risk Management Committee Report

The PTTEP Risk Management Committee is chaired by Mr. Pichai
Chunhavajira with Mr. Sirin Nimmanahaeminda, Mr. Vudhibhandhu
Vichairatana, Mr. Chitrapongse Kwangsukstith, Mr.Sommai Khowkachaporn
and Mr. Anon Sirisaengtaksin performing their duties as members.

During 2009, this committee performed its roles as assigned by the Board
of Directors under the relevant charter and held fourteen meetings as
summarized below.

(1) Considered risk management processes and plans to ensure efficient
    risk management and internal control compatible with acceptable risk
    levels and evolving circumstances.

(1) Considered the corporate risk profile in support of the Company’s
    strategic directions.  Each risk – whether strategic or
    operational - was contemplated in both qualitative and quantitative
    terms, with constructive recommendations given to mitigate it. 
    Mitigating actions were also closely monitored. 

(2) Reviewed and approved actions to manage risks significant to PTTEP
    relating to new investments which align with their domestically and
    internationally expansion including geopolitical risk analysis, and
    the oil price risk management policy before submission for final
    approval from the Board.

(3) Considered the Corporate Strategic Plan, Key Performance Indicators,
    2010 Annual Corporate Budget, and relevant risks before submission
    for approval from the Board.

The committee continually reported its findings to the Board on a
regular basis.

                                In summary, it is our view that the
committee has performed its duties in 2009 prudently, competently, and
independently while providing candid views to all parties for the
benefit of PTTEP, all shareholders, and stakeholders.

Pichai Chunhavajira

(Mr. Pichai Chunhavajira)

Chairman of the Risk Management Committee

8.7 Use of Inside Information

Details appear under 8.5.2.

8.8 Personnel

8.8.1 As of year-end 2009, PTTEP and its subsidiaries (namely PTTEPS and
PTTEP Services) had a headcount of staff and seconded staff of 2,736,
classified by business line as follows:

+----------------------------------------------+-----------------------+
| Division                                     | Number (Person)       |
+----------------------------------------------+-----------------------+
| (1) Business Development and International   | 50                    |
|     Group                                    |                       |
+----------------------------------------------+-----------------------+
| (2) International Assets Division            | 74                    |
+----------------------------------------------+-----------------------+
| (3) Myanmar Assets Division                  | 83                    |
+----------------------------------------------+-----------------------+
| (4) Division under the Chief Executive       | 88                    |
|     Officer                                  |                       |
+----------------------------------------------+-----------------------+
| (5) Finance and Accounting Division          | 160                   |
+----------------------------------------------+-----------------------+
| (6) Geosciences Division                     | 164                   |
+----------------------------------------------+-----------------------+
| (7) Human Resources and Business Service     | 296                   |
|     Division                                 |                       |
+----------------------------------------------+-----------------------+
| (8) Joint Venture and Thai Onshore Assets    | 301                   |
|     Division                                 |                       |
+----------------------------------------------+-----------------------+
| (9) Operations Support Division              | 454                   |
+----------------------------------------------+-----------------------+
| (10) Production Development Division         | 355                   |
+----------------------------------------------+-----------------------+
| (11) Division under the President            | 31                    |
+----------------------------------------------+-----------------------+
| (12) Strategy and Capability Development     | 88                    |
|      Division                                |                       |
+----------------------------------------------+-----------------------+
| (13) Thai Offshore Assets Division           | 592                   |
+----------------------------------------------+-----------------------+
| Total                                        | 2,736                 |
+----------------------------------------------+-----------------------+

8.8.2 PTTEP’s headcount has featured no significant changes and the
Company has seen no significant labor disputes over the past three
years.

8.8.3 In 2009, the total compensation (salaries, bonuses, and provident
fund contributions) of PTTEP, PTTEPS, PTTEP Services staff, and seconded
staff under 8.8.1 amounted to 3,405,399,870.47 baht.

  8.8.4 Human Resources Development Policy

In order to improve staff competency and strengthen organizational
capability for the continuing expansion of Company business, both in
Thailand and overseas, PTTEP has made much of the effort in improving
its HR development systems and processes. In this endeavor, the Company
has reinforced implementation of its competency-based training and
development approach with an aim to accelerate the development of its
human resources. Based on this competency concept, the Company has
provided training throughout the past year via the following channels:

(1) In-house and External Training

The Company provided such training, both locally and overseas, to its
staff at all levels, including management. This training comprised a
large variety of courses, including courses in technical and
professional training, SSHE training, IT training, English-language
training and business administration and management training.

(2) Long-term Training and Development Programs

The objective of these programs was to prepare its staff for future
roles and assignments in various current and upcoming projects. The
programs were provided to selected technical staff and conducted from 1
to 3 years in duration. By this approach, the staff undertook on-the-job
training, both in Thailand and overseas, with business partners as well
as services companies, such as Total, Chevron, and Schlumberger.

(3) Master’s Degree Scholarship Programs

The Company provided scholarships to selected staff to help them pursue
studies culminating in master’s degrees in geosciences and petroleum
engineering at top universities in the USA, UK, Canada and Australia as
well as management at SASIN Graduate Institute of Business
Administration of Chulalongkorn University. In 2006, the scholarship
programs were extended to the master’s degree program in offshore
technology and management at the Asian Institute of Technology, located
in Thailand.