Part 1

Executive Summary

1. Summary of Business Nature

The nature of PTTEP’s core business lies within the Exploration and
Production (E&P) industry. As of 31 December 2008, the Company, its
subsidiaries, and its associated companies commands 42 petroleum
exploration and production projects and 4 investment projects, of which
15 are commercially-produced according to the core businesses practice,
as detailed in item 2.2.1 and 2.3 of Part 2.

PTTEP’s goals and policies are to source and supply natural gas,
condensate, crude oil or LPG, primarily to the Thai market. In 2008 the
Company and its subsidiaries sold a total of 219,314 BOED,
a 22% rise from the previous year. Natural gas and condensate produced
from Arthit Project first came on stream on 26 March 2008. Crude oil and
natural gas output from the Vietnam 9-2 Project initiated productions on
25 July 2008. In addition, PTTEPI, a subsidiary whom operates and holds
all the shares in the Myanmar M9 Block, located in the Gulf of Moattama,
Myanmar; had signed the Head of Agreement (HOA) contract. The contract
covers total gas sale volume of 300 MMSCFD, 240 MMSCFD of which will be
sold to Thailand and 60 MMSCFD to Myanmar. The gas price in both cases
will be referenced to the existing gas sales agreement (GSAs).

The competition level within the E&P industry in Thailand can be
regarded as non-threatening. This is due to the nature of the market
where demand usually exceeds supply. The types of contract utilized are
usually done so in long-term, where conditions stipulate take-or-pay
clauses, minimizing any losses which may occur.

Despite the current economic slowdown which may prolonged throughout
2009, consequently affecting the domestic energy demand. The previously
mentioned clauses ensured that the products will be sold in the volume
agreed, when the contract was signed. Leaving the current output and
sales close to those seen in 2008, and will likely little, if any,
affected by the economic slowdown.

Regarding the medium to long-term market, it is likely that the demand
for petroleum products will continue to grow. It is PTTEP’s commitment
to search and source new energy supply from both domestic and
international sources to meet the growing demand. The Company currently
has plans to develop the South Bongkot project in the Gulf of Thailand
and the Myanmar M9 Block in the Gulf of Moattama, where the output is
expected within the year 2012-2013. Furthermore, the Company has more
than 20 exploration projects in the hope of securing more petroleum
supply to meet future needs.

2. Summary of Major Risk

The major risks associated with the Company’s petroleum exploration and
production result from internal and external factors.

Internal factors consist of new project investment risks, exploration
risks, project development risks, production risks, commercial risks,
organization capability risks, and safety, security, health, and
environmental risks.

External factors consist of political risks in the investment countries,
litigation risks, petroleum price risks, exchange rate risks and
interest rate risks.

PTTEP has developed a systematic risk management system to effectively
manage these risks. The risk management processes include risk analysis
and identification, risk mitigation including preventive or corrective
measures to bring risk to an acceptable level, and consistent risk
monitoring as mentioned in item 1 of part 2.

3. Summary of PTTEP Group’s Structure

PTTEP sets up structuring policy for PTTEP group companies with the aim
of utmost effectiveness of resource management, a transparent
management, strong long-term business strategy and good corporate
governance. On 31 December 2008, PTTEP invested the total of 37
companies, comprising 31 subsidiaries and 6 associated companies as
presented in item 2.2.3 and 5.2 of part 2.

4. Summary of Connected Transaction

4.1 Regular commercial items

The petroleum products amounted Baht 115,774 million were sold to PTT
Public Company Limited.

4.2 Property lease

(1) The office space was leased to PTT Public Company Limited and PTT
Aromatics and Refining Public Company Limited amounted Baht 19.68
million and Baht 1.5 million respectively.

(2) The land of 2.72 Rai was leased from PTT Public Company limited
amounted of Baht 5.49 million.

4.3 Service Agreement

The payment to PTT ICT Solution Company Limited for providing all
information and communication technology services amounted Baht 120.93
million.

4.4 Prorated Financial Assistance to Subsidiaries

PTTEP lend to Energy Complex Co., Ltd., prorated to its 50% shareholding
amounted Baht 1,835 million.

5. Summary of Financial Position and Operation Result

1.  Financial position

As of 31 December 2008, PTTEP and its subsidiaries commanded total
assets of Baht 238,267 million, an increase of Baht 48,228 million, or
25% higher than at the total at the end of 2007. This increase was
mainly due to (1) higher cash and cash equivalents of Baht 19,982
million from operating activities and Bills of Exchange (B/Es) issuance
(2) the increase of Baht 24,321 million in oil and gas properties for
production, mainly from MTJDA-B17, Arthit, Pailin, Bongkot and B8/32&9A
projects, and (3) the increase of a long term loan to Energy Complex
Co., Ltd. amounting to Baht 1,235 million.

PTTEP launched the Short-term Financing Program (“PF”) in April 2008
which involved the company’s inaugural issuance of B/Es via Public
Offering to institutional and high net-worth investors. B/Es are to be
issued monthly on a revolving basis. As of 31 December 2008 the
outstanding face value of B/Es was 3,000 million Baht with interest rate
2.73 – 3.85.

PTTEP and its subsidiaries had total liabilities of Baht 104,163 million
or Baht 20,911 million higher than the total at the end of 2007, mainly
due to income tax payable and the B/Es issuance as mentioned above.

PTTEP and its subsidiaries had total shareholders’ equity of Baht
134,104 million, which was higher than at the end of 2007 by Baht 27,317
million or 26%.

2.  Results of Operations

The results of operations for the year 2008, PTTEP and its subsidiaries
totaled a net profit of Baht 41,675 million or Baht 12.60 per
share-diluted, an increase of Baht 13,220 million or 46% when compared
with 2007’s net profit of Baht 28,455 million or Baht 8.63 per
share-diluted. Return on shareholders’ equity for 2008 was 35%.

For 2008, total revenues of PTTEP and its subsidiaries amounted to Baht
140,007 million, an increase of Baht 43,234 million or 45% when compared
with last year (Baht 96,773 million). This increase was mainly due to
higher sales of petroleum of Baht 41,857 million or 46%, resulting from
(1) the higher average petroleum sales price for the year 2008, which
rose to USD 49.69 per BOE compared with last year at USD 39.78 per BOE;
however the average sales exchange rate for this year decreased to Baht
33.25 per USD from last year’s Baht 34.77 per USD as a result of the
strengthened Baht, and (2) the higher sales volume for the this year to
219,314 BOED compared with the last year of 179,767 BOED. This increased
volume mainly came from (1) petroleum sales volume from the Arthit,
G4/43 and Vietnam 9-2 projects, which started production this year (2)
increased petroleum sales volumes from the Oman 44 project, while (3)
the crude oil sales of the B8/32&9A project and natural gas sales of the
Yadana and Yetagun projects decreased.

PTTEP and its subsidiaries collected higher revenue from pipeline
transportation, which was proportionally recorded from Moattama Gas
Transportation Company (MGTC) and Taninthayi Pipeline Company LLC (TPC).
Also, there was increased other income from construction service on the
Arthit gas export pipeline to customers.

PTTEP and its subsidiaries incurred expenses for 2008 amounting to Baht
65,000 million, an increase of Baht 20,511 million or 46% when compared
with Baht 44,489 million for the last year.

For more detail of financial position and result of operation please see
item 12 of Part 2.

6. Any facts that are critical for the business operation and may
significantly affect the shareholders’ benefits.

None

7.  Summary of PTTEP Securities

PTTEP currently has a total registered share of Baht 3,322 million,
consisting of 3,322 million ordinary shares at the par value of Baht 1
per share. The Company’s registered paid-up capital was at Baht 3,307.08
million which was an increase of Baht 9.66 million from year 2007 (9.66
million shares at Baht 1 each), from the exercise of warrants to
purchase the Company’s common shares by the management and employees
according to the 2002-2006 Employee Stock Ownership Plan or ESOP.

In Referring to the 5-year Employees Stock Ownership Plan (2002-2006) or
ESOP, PTTEP’s General Shareholders’ Meeting consented to issue and offer
a total of 12,400,000 units of warrants to its directors (only ESOP for
the year 2002), management and employees. At the end of 2008, a total of
9,416,880 units of warrants had been exercised.

As reported on the SET website as of 12 January 2008, the Company’s
common shares of NVDRs issued and outstanding amounted to 41,858,440
shares or 1.27% of total registered paid-up shares, which amounted to
3,307,084,400 shares. The NVDR holders will not participate and vote in
shareholder’s meeting, except in the case where a listed company wishes
to delist its shares from the SET.

In April 2008, PTTEP launched the Short-Term Financing Program (“PF”)
which involved the inaugural issuance of the company’s Bills of Exchange
(B/Es) via Public Offering to institutional and high net-worth
investors. PTTEP’s Bills of Exchange are issued monthly on a revolving
basis whereby biddings were conducted on the third Wednesday of every
month to select the Arranger/Paying Agent bank. Bidding dates were
subsequently changed to the third Thursday of every month beginning
September 2008 onwards. As of 31 December 2008, the total amount of B/Es
outstanding stood at Baht 3,000 million.

(Investors shall study the Company’s information in part 2 prior to
investment.)