3. Business Operation

1.  Products Features

3.1.1 Petroleum

Petroleum means crude oil, natural gas, condensate, related products and
other hydrocarbon products which are free in nature.

Crude oil means crude mineral oil and bitumen of all kinds which is
liquid in nature and is obtained from an oil well and may be obtained
through gas separation equipment but has not yet been refined or
purified

Natural gas means hydrocarbon which is gas or vapor at the normal
temperature and pressure, and which normally has methane as it major
constituent

Condensate means hydrocarbon which condenses in natural gas, and which,
when separated from natural gas, is transparent and has low specific
gravity (high API)

LPG means petroleum product which is obtained from crude oil refinery or
natural gas separation processes and which primarily consists of butane
and propane.

The characteristic of the crude oil and condensate is liquid in nature
and has a measurement in barrel while the natural gas is measured by
cubic foot. All petroleum products could be given into the heat
measurement in Barrel of Oil Equivalent (BOE). 1 cubic foot of natural
gas has approximately 1,000 BTU while 1 barrel of crude oil has
6,000,000 BTU

2.  Gas Transportation Pipeline:

PTTEPO has other major investment in other companies as well such as a
25% of the investment in Moattama Gas Transportation Company (MGTC) and
19.31784% in Taninthayi Pipeline Company (TPC) to conduct the business
of pipeline laying from Yadana and Yetagun projects from Myanmar to Thai
borders.

3.1.3 Jetty, Bulk Tank and Warehouse

Both Jetty and warehouse provides supporting to PTTEP’s own offshore
asssets operating in the Gulf of Thailand and external operators in the
oil and gas activities. The facilities on the jetty include silos for
H2S Scavenger, Barite, Base Oil and Cement. Warehouse and Yard area has
a safely storage for all petroleum equipment such as tubing, casing and
drill bits. Currently, Jetty has a total length of 380 metres and is
divided into six berths, each approximately 65 metres. The deck of the
jetty is 2.3 metre above Mean Sea Level. The approaches and the water
depth of the jetty are about 8 metres below Chart Datum.

3.2 Factors affecting the opportunity or restriction in business

PTTEP does its petroleum exploration and production in the Kingdom and
abroad. The investment in foreign countries shall comply with conditions
and concession laws of those countries i.e. Production Sharing
Agreement/Contract or Services Agreement. Inside the Kingdom, PTTEP
shall comply with the Petroleum Act B.E. 2514 which sets out the details
and procedures for applying for and awarding petroleum concessions, the
period of production and also provides for various forms of benefits to
the government as owner of its petroleum resources. These forms of
benefits include royalty, petroleum income tax and other benefits. The
important points in the Petroleum Business Operation are as follows:

3.2.1 Issue of Concession Areas

The Department of Mineral Fuels, Ministry of Energy, which is the
responsible agency, delineates exploration blocks, and then invites oil
companies to submit applications for concessions. The Petroleum
Committee considers applications for concessions. In this connection,
the sub-committee will initially screen the information stated in the
applications, and the Minister of Energy is empowered to award and sign
the concessions. The government considers the qualifications of each
applicant and will take into account the proposed work program, adequacy
of the investment funds to be brought in and used in the exploration,
the transfer of technology, employment of Thai nationals, and also the
utmost benefits offered to the Kingdom.

3.2.2 Role of the Operator

A petroleum concession may be awarded to one concessionaire or to a
joint venture of two or more co-concessionaires. Since the petroleum
exploration and production business is associated with relatively high
risk, it is common for companies to join together in joint ventures in
order to spread the risks. In a joint venture, one company will be
designated “operator” to conduct the exploration and production
operations on behalf of the other co-venturers under the supervision of
a management committee composed of representatives of each company.
Other companies who participate in the joint venture are called
“non-operators”. The operators manage operations and make cash calls on
all co-venturers to finance the work program. Non-operators through
their representation on the management committee participate in
technical and financial decisions. Generally, an oil company as it grows
in experience, seeks to become an operator in order to assume a greater
role in management and operations.

3.2.3 Nature of Operations and Investment Decisions

Before oil company decides to invest in petroleum exploration in the
Kingdom and abroad, it has to consider its chances of exploration
success as well as other investment risk factors.
A study of information available is made to determine whether the area
has high petroleum potential. In addition, there must be a chance of
finding a source of petroleum that has commercial viability. The success
ratio of drilling of exploration wells in neighboring areas is taken
into account. If the company decides to invest, it will apply for a
petroleum concession or will “farm in” to an existing petroleum
concession.

After the oil company is awarded a concession area for exploration of
petroleum, an exploration program will be conducted, and may take 2-3
years. If the petroleum reserves are found, the amount of investment
funds required for the development stage and the value of sale of the
petroleum in the quantity of reserves expected to be recovered will be
evaluated. If such study indicates that the reserves are worth investing
in, that petroleum field will be considered to have sufficient
commercial viability to justify further investment in development. The
operator shall apply for an approval of petroleum production and shall
start its production at the same time. The operation is still able to
explore the rest of the existing areas if it is within the time frame of
exploration mentioned in the concession. At this stage, the operator
must have a certain degree of confidence about the investment because
the investment required for such development is very high. The operator
will normally identify buyers of petroleum in advance, and a long-term
sales agreement for petroleum to be produced will be signed. At present
the PTT is the biggest petroleum buyer in Thailand. The principal
elements of the sales agreement for petroleum are the method of
determination of the sales price and quantity of petroleum to be
delivered. In this regard, when the commencement period in the
contracted is reached, the buyer must be responsible the petroleum
produced immediately after the production commences. The sale of natural
gas from any domestic areas is presently made at the well-head while the
sale of natural gas from any foreign areas is made at the Thai borders,
in which case PTT must install gas pipe-lines sufficient for the
production amount specified in the gas sale agreement. The sale of the
crude oil is made at the buyer’s refinery while the sale of the
condensate is made at the Floating Storage Unit (FSU) near the
well-head.

3.2.4 Description of law relating to the business

At present, the operation of petroleum business in Thailand is governed
by two major enactments, namely, the Petroleum Act, B.E. 2514, and the
Petroleum Income Tax Act B.E. 2514, as amended. Several major features
of these laws are:

(1) an applicant for a concession must be limited company or a juristic
    person which has the same status as a limited company established
    under the law of Thailand or foreign law;

(2) the concessionaire, the co-concessionaire(s) and the co-venturer(s)
    must pay royalty which is normally paid by cash. However, the
    Minister may authorize a payment in kind of petroleum by a notice of
    at least not less than 6 months. The royalty may be used as credit
    against income tax (Thailand I) or be deducted as expenses (Thailand
    III terms);

(3) the rate of petroleum income tax may be prescribed not less than 50%
    but not over than 60% of the net interest from the petroleum
    business;

(4) interest paid cannot be deducted as expenses for income tax
    purposes;

(5) a concessionaire has right to obtain concessions for exploration
    blocks without limitation of number of exploration blocks.

  Thailand I for the petroleum concessions issued by the Ministry of
  Industry^(**) from B.E. 2514 to B.E. 2532 and the onshore petroleum
  concession issued before B.E. 2525

  Thailand II^(*) for all onshore petroleum concessions issued by the
  Ministry of Industry^(**) from B.E. 2525 to B.E. 2532

  Thailand III for the petroleum concessions issued by the Ministry of
  Industry^(**) from B.E. 2533

  Thailand IV for the petroleum concessions issued by the Ministry of
  Energy^(***) from B.E. 2550

  _________________________

  ^(*) According to the Article 36 of the Petroleum Act (Issue 4) B.E.
  2532, all the holders of the petroleum in Thailand II have already
  moved to Thailand III.

  ^(**) Now is the Ministry of Energy

  ^(***) The Petroleum Act (Issue 6) B.E. 2550 has came into force 18
  October B.E. 2550

Details of Thailand I, II, III and IV Terms

  ------------- --------------- --------------- --------------- ---------------
  Term          Thailand I      Thailand II     Thailand III    Thailand IV

  Royalty Rates 12.5% of income 12.5% of income progressive     progressive
                from sale or    from sale or    rate at sliding rate at sliding
                disposal of     disposal of     scale 5-15%,    scale 5-15%,
                petroleum which petroleum which deemed to be    deemed to be
                may be treated  may be treated  expenses which  expenses which
                as tax credit   as tax credit   could be        could be
                                                deducted in tax deducted in tax
                                                calculation     calculation

  Petroleum     50% of net      50% of net      50% of net      50% of net
  Income Tax    profit from     profit from     profit from     profit from
                petroleum       petroleum       petroleum       petroleum
                business        business        business        business
                operation       operation       operation       operation

  Special       -               annual          special         special
  Benefits                      benefits, and   remunerator     remunerator
                                annual          benefit which   benefit which
                                production      may be taken as may be taken as
                                bonus           deduction       deduction

  Exploration   8 years with 4  8 years with 4  6 years with 3  6 years with 3
  Period        year extension  year extension  year extension  year extension

  Production    not exceeding   not exceeding   not exceeding   not exceeding
  Period        30 years from   30 years from   20 years from   20 years from
                expiry date of  expiry date of  expiry date of  expiry date of
                exploration,    exploration,    exploration,    exploration,
                with extension  with extension  with extension  with extension
                not exceeding   not exceeding   not exceeding   not exceeding
                10 years        10 years        10 years        10 years

  Concession    not exceeding   not exceeding   not exceeding   not exceeding
  areas         10,000 sq. km   10,000 sq. km   4,000 sq. km    4,000 sq. km
                per exploration per exploration per exploration per exploration
                block, up to 5  block, up to 5  block, up to 5  block without
                exploration     exploration     exploration     limitation of
                blocks          blocks          blocks          number of
                                                                exploration
                                                                blocks
  ------------- --------------- --------------- --------------- ---------------

3.3 Marketing

In 2007, PTTEP and its subsidiaries produced crude oil, natural gas, LPG
and condensate in aggregate of 179,767 BOED, 6% higher than last year.
Sales revenue were 90,764 million Baht, an increased of 5 % from 2006.

  ----------------------- ----------------------- -----------------------
  Product                 Volume                  Value (Million Baht)

  Crude Oil (MMBBL)       13                      29,738

  Natural Gas (MMSCF)     277,004                 43,099

  LPG (Metric Tons)       96,388                  985

  Condensate (MMBBL)      7.15                    16,942
  ----------------------- ----------------------- -----------------------

3.3.1 Marketing Policy and Characteristics

PTTEP’s goals and policies are to source and supply petroleum to the
Thai market. PTT Plc is currently the major buyer of all products which,
after processing, find utilization in power plants, the petrochemical
industry, the transportation sector, industries, and households.

(1) Natural Gas

The constant increase in domestic demand for energy means that it is
PTTEP’s duty to source the supply. PTTEP therefore sells all of its gas
produced regionally to Thai consumers. As a rule, gas sales agreements
(GSAs) are long-term, ranging from 20 to 30 years. Three pipelines
located in the Gulf of Thailand convey the gas discovered in the Gulf of
Thailand to shore while the MGTC and TPC pipelines do the same should
the gas be discovered in Myanmar. PTTEPO holds 25.5% and 19.3% equity
interests in both pipelines. Moreover, onshore projects contribute to
the production of gas. The Nam Phong power plant sources its supply from
the E5 and Phuhorm projects. Additionally, associated gas from S1
Project is being supplied to the Lan Krabue power plant.

To secure revenues from gas field developments, PTTEP stipulates
take-or-pay conditions in its GSAs, which provide a minimum sales volume
for each year (referred to as the Annual Contract Quantity: ACQ)
together with formulated prices. Such formulae incorporate economic
indexes and fuel oil prices to ensure that the gas price reflects
production costs and remains competitive with alternative fuels over the
life of a given contract.

Transportation constraints can often pose challenges, especially for
overseas investments, in which cases PTTEP may choose to sell to the
market or regional markets closest to the point of production of
commercially viable gas reserves if it is found that such constraints
prohibit delivery to Thai customers. Market characteristics vary greatly
with the location of each investment, which in turn dictates sales terms
and conditions. PTTEP OM, for example, under a 2005 GSA, sells gas from
Oman 44 Project to the Omani government, while condensate and crude from
the same project is still sold to PTT to cater to Thai consumers.

  In 2007, PTTEP reached the following GSAs.

-   On December 17, Chevron Thailand Exploration and Production, Mitsui
    Oil Exploration, and PTTEP signed a GSA with PTT to sell the gas
    from Unocal 1, 2, 3, and 5 areas, effective from the expiration
    dates of existing GSAs. The gas production plateau under this new
    GSA is 1,240 MMSCFD. PTTEP holds 5% interest in Unocal 3, which
    accounts for approximately 50% of the GSA volume.

-   On December 27, PTTEP signed a GSA with PTT in which PTTEP will
    supply an additional volume of gas from the northern area of Arthit
    Project at 120 MMSCFD for approximately 3 years. The production will
    tentatively start in August 2008.

  Moreover, during the year, PTTEP began sales of gas from two projects:

-   Oman 44. Gas production and delivery started in March under a GSA
    with the Omani government, in which gas sales amount to
    approximately 50 MMSCFD. The condensate by-product is sold to PTT as
    Oman Blend crude oil. Incidentally, this is the first time PTTEP has
    produced and sold crude oil from overseas to PTT.

-   Pratu Tao-A (in S1 Project). Supply of associated gas commenced in
    June for power generation under a GSA with Ratchaburi Energy Co.,
    Ltd., in which gas sales are approximately 0.4 MMSCFD. This is a
    major achievement for PTTEP in using the gas by-product instead of
    burning it off.

(2) Crude Oil and Condensate

Crude oil and condensate are primarily targeted for Thai customers, with
sales prices based on market prices to reflect their market values.
While the majority of the sales are under long-term contracts, others
may fall under short-term ones or may be spot sales to capture available
market channels and expand opportunities of creating value for these
products.

3.3.2 Competition

Competitiveness in the Thai E&P industry is considered non-threatening
because of the nature of the market and its typical sales terms and
conditions where the market is secured through long-term sales
agreement. This is especially true for GSAs. Crude oil sales terms vary
from long-term to short-term, and often are spot sales. Threats from
overseas supply are made minimal by the lower transportation costs plus
the beneficial tax privileges of domestic supply. Domestic demand
generally exceeds domestic supply due to the continuous growth and the
expansion of the economy. Therefore, competition among domestic
producers is also minimal.

Due to the unprecedented growth in demand, as much as 2 million tons per
year of liquefied natural gas appears set to be imported from 2013
onward. The imported gas appears likely to have little effect on the
competition among the existing producers since the demand growth is
projected to overwhelm the committed supply.

PTTEP is committed to fostering continuous growth by venturing into
international opportunities. To minimize risk, as a rule, thorough
market studies are analyzed well in advance of any investments. For
example, Oman 44 Project’s gas generates sale at the committed volume,
while the crude oil is sold on a term-contract basis. Incidentally,
because of the continually high demand by Thai refineries, Thailand is a
critical market for the Oman Blend crude oil.

3.4 Production

3.4.1 Exploration and Production Stages and Technology

Exploration and production stages may generally be divided into 4 major
stages as follows:

(1) Exploration Stage

-   Primary geology and geophysics survey

-   Seismic survey

-   Interpretation of information from seismic survey

-   Drilling

(2) Appraisal/Delineation Stage

-   Studied petroleum geology in detail and additional seismic survey

-   Well log interpretation

(3) Development Stage

-   Set the plan for the appropriate development

-   Construct the platforms, provide production facilities and drill the
    development wells.

-   The development of the production facilities in the sea includes
    Well head Platform, Processing Platform, and Living Quarter

(4) Production Stage

-   The production of crude oil or natural gas must be made through the
    Christmas tree and other production equipment including gauge so
    that the rate of production of each well may be ascertained

-   The follow up of the production proportion of the water and
    petroleum, proportion of crude oil and natural gas, the decline of
    pressure in the petroleum levels and the forecast of the production
    in the future

-   Workover must be performed regularly to improve the rate, the
    duration and effectiveness of the production

-   In the Gulf of Thailand, the natural gas which is produced will be
    sent to the natural gas refinery and electricity power plant while
    condensate will be sent to Floating Storage Unit before the
    refinery.

PTTEP is ready with its personnel, technology and equipment to do its
business effectively to achieve its company mission very well.

3.4.2 Petroleum Reserves

Reserves are those quantities of petroleum which are anticipated to be
commercially recovered from known accumulations from a given date
forward. All reserve estimates involve some degree of uncertainty. The
uncertainty depends chiefly on the amount of reliable geologic and
engineering data available at the time of the estimate and the
interpretation of these data. The relative degree of uncertainty may be
conveyed by placing reserves into one of two principal classifications,
either proved or unproved. Unproved reserves are less certain to be
recovered than proved reserves and may be further sub-classified as
probable and possible reserves to denote progressively increasing
uncertainty in their recoverability.

(1) Proved reserves are those quantities of petroleum which, by analysis
of geological and engineering data, can be estimated with reasonable
certainty to be commercially recoverable, from a given date forward,
from known reservoirs and under current economic conditions, operating
methods, and government regulations. Proved reserves can be categorized
as developed or undeveloped.

If deterministic methods are used, the term reasonable certainty is
intended to express a high degree of confidence that the quantities will
be recovered. If probabilistic methods are used, there should be at
least a 90% probability that the quantities actually recovered will
equal or exceed the estimate.

(2) Unproved reserves

-   Probable reserves are those unproved reserves which analysis of
    geological and engineering data suggests are more likely than not to
    be recoverable. In this context, when probabilistic methods are
    used, there should be at least a 50% probability that the quantities
    actually recovered will equal or exceed the sum of estimated proved
    plus probable reserves.

-   Possible reserves are those unproved reserves which analysis of
    geological and engineering data suggests are less likely to be
    recoverable than probable reserves. In this context, when
    probabilistic methods are used, there should be at least a 10%
    probability that the quantities actually recovered will equal or
    exceed the sum of estimated proved plus probable plus possible
    reserves.

The Proved Reserves are reviewed annually by company’s earth scientists
and reservoir engineers to ensure rigorous professional standards. The
Proved Reserves are reported on a gross basis, which includes the
company’s net working interest and related host country’s interest. As
of December 31, 2007, the total Proved Reserves of all PTTEP and
subsidiaries projects are 190 Million Stock Tank Barrels (MMSTB) for
crude oil and condensate, and 4,850 Billion Standard Cubic Feet (BSCF)
for gas. The total Proved Reserves (Consolidated Companies) in term of
oil equivalent is 946 Million Barrels (MMBOE). No reserves quantities
have been recorded for the company on Blocks B, 48/95, 52/97, 16-1
Projects in offshore Vietnam and Myanmar M7 & M9 in Gulf of Mataban
because no commercial arrangement has been established for the
discoveries.

3.4.3 PTTEP Petroleum Production

In 2007, the total production of PTTEP and Subsidiaries projects is 76
MMBOE or equivalent to the production rate of approximately 209,000
Barrels of Oil Equivalent per Day (BOED), approximately 15,000 BOED or
8% increase from last year. The production increase was mainly
attributed to the increase of petroleum production from Unocal III, Phu
Horm and Oman 44 projects.

3.4.4 Environmental Impact

For a petroleum exploration and production operation, an effective
environmental management system is developed to minimize the following
potential environmental impacts: -

(1) Land use and marine organism impact from sound vibration, which is
    the main environmental impact during seismic surveys.

(2) Water and soil contamination from discharges of drilling fluid and
    produced water, release of sludge and contaminated solid wastes, and
    accidental spills of oil and condensate during drilling and
    production activities.

(3) Air pollution from hydrocarbon releases and atmospheric emissions
    from gas flaring, gas venting and fuel combustion during drilling
    and production activities.

Currently, the above environmental impacts are regulated by the
Department of Mineral Fuels, which is under Ministry of Energy and is
the direct permitting agency, and the Office of Natural Resources and
Environmental Policy and Planning (ONEP), regulated by the Ministry of
Natural Resources and Environment, which issues the directive that an
environmental impact assessment must be conducted and approved prior to
any commencement of exploration and production projects

PTTEP has initiated efforts to reduce environmental impacts, and has
maintained a constant and continuous follow-up of this initiative,
including the following:

(1) Implementation of the ISO14001 Environmental Management System (EMS)
Standard for all operational sites and the PTTEP office building. In
accordance with ISO14001 requirements, an environmental management
system is followed in compliance with company policy, legislation and
other requirements in order to prevent pollution to environment, and to
ensure improvement in effective company performance. As a result, PTTEP
became the first petroleum exploration and Production Company in
Thailand and the Southeast Asian region to achieve ISO 14001
Certification.

(2) Study of environmental impact assessment prior to commencement of
new exploration and production projects, which is legally required in
order to ensure on-going monitoring and measurement programs to mitigate
any environmental impacts for operations in Thailand and overseas.

(3) Re-injection of produced water (wastewater separated from offshore
production processes) into subsurface reservoirs to ensure no overboard
discharging which might affect the environment.

(4) Monitoring of discharged wastewater quality from the production
process and the quality of seawater, sediment, benthic fauna and fish
around platform vicinity to ensure there is no exposure to health and
environmental hazards.

(5) Recovery of flare gas for electricity generator and sales.

(6) Oil Spill Equipment and response are provided to ensure
environmentally sound operations from any oil spill incident Tier 1 (<
20 tonnes), joining the Oil Industrial Environmental Safety Group (IESG)
for Tier 2 oil spill response incident (20-1000 tonnes) and EARL/OSRL
(East Asia Response Limited/ Oil Spill Response Limited) for Tier 3 Oil
Spill Response (>1000 tonnes).

(7) Provision of appropriate technology for waste disposal and treatment
(e.g. Mercury contaminated waste, oil contaminated waste) for
environmental impact abatement.

(8) Promotion of Safety, Security, Health and Environmental awareness
through a number of means, e.g., training, and monthly SSHE bulletins,
etc.

(9) Coordination and provision of support to other exploration and
production companies, the Petroleum Institute of Thailand, government
agencies and related associations in order to expand experience and
solve environmental problems for further improvement.

During the past 3 years, PTTEP has strictly complied with both Thai and
International legislation and other requirements concerning Safety,
Security, Health and Environment. In addition, PTTEP has been
continuously improving its positive environmental practices in
maintaining, developing and reducing environmental impacts by achieving
the ISO 14001 certification for Environmental Management System Standard
from AJA Registrars LTD. under UKAS (United Kingdom Accreditation
Service) accreditation, for all its operational sites as detailed below:

(1) Bongkot Project in the scope of “Exploration and production of
    natural gas and condensate”

(1) S1 Project in the scope of “Exploration and production of petroleum”

(1) PTTEP1 Project in the scope of “Exploration and production”

(2) Songkhla Logistics Base in the scope of “Provision of logistics
    services to offshore oil and gas operations”

(3) PTTEP Building in the scope of “Building management and maintenance
    services”

(4) Core research centre and logistics support for storage of core lab
    samples.

In 2006, PTTEP developed its Environmental management System to comply
with requirement of ISO 14001 version 2004, and all PTTEP operating
units were certified for that standard.

PTTEP is committed to its SSHE policy to conduct its activities without
negative impact on personnel, properties of the company and its
contractors. In addition, PTTEP’s Lost Time Injury Frequency Rate (The
number of Lost Time Injuries per 1,000,000 hours worked) for the years
2005, 2006 and 2007 were 0.41, 0.32 and 0.32 respectively. This
indicator is in the same rate as the year 2006 and has been reflected in
sustainability of Safety, Security, Health and Environment (SSHE)
standards and measures implementation in the company management system.

With regard to spill incidents; spills in 2005, 2006 and 2007 were 4.44,
0.64 and 0.07 tonnes/million tonnes of production respectively. From
these figures, it can be seen that spills during that 3 year period have
decreased as a result of the company’s continuous improvement in Safety,
Security, Health and its Environment management system. PTTEP plans to
continuously mitigate the consequence of any accident through regular
drills and exercises and provide specific training courses for all staff
to ensure better understanding and awareness of prevention of accidents
and incidents, and to ensure prompt response.

In response to the rapid growth of investment, and operations of PTTEP
during recent years, PTTEP is updating their SSHE documents and
documentation system to standardize references and guidelines relating
to SSHE management. Once these documents are updated, new and existing
assets will be able to develop or update their own documents,
referencing the new standards.

To aid continual improvement in SSHE Management during 2007, PTTEP
promoted a more proactive SSHE culture within the company by introducing
more SSHE activities. The Safety Observation Card system has been
implemented to promote safety awareness in operations and to indicate
the potential unsafe environment in workplaces. A Web Based Incident
Reporting System (WIRS) was also implemented to enhance the efficiency
on data based management for all accidents and incidents relating to
company activities. With full implementation of this system, the
corrective actions and mitigation measures of accident/incident
reporting will be effectively processed by proactive and systematic
approaches.

However, to ensure that all mitigation measures are compliant and cover
all new and existing operations and activities, PTTEP also promoted
“Safety Awareness” in management and operational levels through Behavior
Based Safety (BBS) Training courses, a SSHE Contractor Forum, SSHE
Publications and SSHE Exhibition & Promotion Events.

During 10^(th)-12^(th) September 2007, at InterContinental Bangkok
Hotel, the 2007 Asia Pacific Health, Safety, Security and Environment
Conference and Exhibition (APHSSEC) was successfully organized and
hosted by PTTEP. The 2007 APHSSEC provided the opportunity for
producers, contractor and service company professionals, from around the
world, to meet and discuss optimum ways of working together for the
benefit of the oil and gas industry, and promote regional progress in
HSSE management. The evnt was very well attended with 706 delegates
representing 40 countries

At the Bongkot offshore production facilities, a Hydrocarbon Release
Reduction Initiative or HRRI was established to reduce unplanned
hydrocarbon releases in the Bongkot Field also in order to prevent a
major hydrocarbon release incident.

Additionally, as part of its commitment to protect the environment,
PTTEP has increased its spending on environmental improvement programs
by 67.2, 78.7 and 98.0 million Baht in the years 2005, 2006 and 2007
respectively.

With regard to sustainable development, PTTEP is one of the companies
under consideration for the potential project of Green House Gas
reduction. Although it is not mandatory for Thailand to reduce green
house gases, according to Kyoto Protocol, under United Nations Framework
Convention on Climate Change (UNFCCC), PTTEP is voluntarily encouraging
green house gas emission reduction in its operations through both a
Clean Development Mechanism (CDM) and the search for opportunities in
other economical projects.

PTTEP’s “Gas Recovery Unit” project was installed to reduce green house
gas emission from Bongkot production facilities. It is expected that the
green house gas reduction will be approximately 250,000 tonnes of carbon
dioxide equivalent/year by this project.

An engineering design study of Greater Bongkot South’s Carbon Capture
and Storage by Clean Development Mechanism (CDM) approach, for
operations in the Bongkot concession area, was also conducted to
identify other potential green house gas reduction projects in the
future.