8. Capital Structure

As of December 31, 2007, PTTEP’ s capital structure consisted of Baht
83,252 million liabilities and Baht 106,787 million shareholders’
equities. The liabilities to shareholders’ equities ratio was 0.78
times. Details of the capital structure are as follows:

8.1 Securities

8.1.1 Common Shares

PTTEP currently has a registered share of Baht 3,322 million consisting
of 3,322 million ordinary shares at the par value of 1 Baht per share.

In 2007, the Company’s registered paid-up capital was increased by Baht
11.42 million (11.42 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 (please refer to details of warrants in section 10.2).
Therefore, at December 31, 2007, the Company’s registered paid-up
capital was at Baht 3,297.42 million (3,297.42 million ordinary shares,
at a par value of Baht 1).

8.1.2 Bonds

In February 2007 the Company issued Baht 3,500 million unsecured,
unsubordinated bonds with a tenor of 3 years (due in 2010), and in June
2007 the Company issued Baht 12.5 billion unsecured, unsubordinated
bonds which consisted of the following trances:

(1) Baht 6,000 million bonds with a tenor of 3 years (due in 2010)

(2) Baht 3,500 million bonds with a tenor of 5 years (due in 2012)

(3) Baht 3,000 million bonds with a tenor of 15 years (due in 2012)

PTTEP’s Baht 12,500 million bonds issuance won the Best Thailand Deal
2007 by Finance Asia because it was the largest Thai corporate bond
offering to date and incorporated the markets fist call feature (15
non-call-five).

On September 19, 2007, PTTEP redeemed its 10-Year Samurai unsubordinated
bonds which included a principal of 23 billion yen and carried an
interest rate of 3.35% per annum. This 23 billion Yen Samurai Bond was
swapped into USD 193,277,310.92 at 1 USD = 119 Yen and carrying USD
interest rate of 7.86% per annum. As of December 31, 2007 PTTEP and its
subsidiaries’ total debts consisted of baht bonds in the amount of Baht
18,500 million. The long term debt (including current portion of
long-term loan) to equity ratio was 0.17 times.

Details of bonds as of December 31, 2007 are as follows:

+------------+-------------+-----------+---------+--------------------+
| Bond       | Issue Size  | Rate per  | M       | Other Details      |
|            |             | annum     | aturity |                    |
+------------+-------------+-----------+---------+--------------------+
| An         | Baht 2,500  | 4.625%    | 15      | PTTEP was the      |
| unsecured  | million     | per       | years,  | issuer. Swapped    |
| unsu       |             | annum,    | due in  | into USD 60.83     |
| bordinated | (2.5        | semi      | March   | million at an      |
| Baht Bond  | million     | -annually | 27,     | interest rate of   |
| issued in  | units at a  |           | 2018    | 3.85% per annum in |
| 2003*      | face value  |           |         | 2005, then         |
|            | of Baht     |           |         | unwinded swap to   |
|            | 1,000 per   |           |         | Baht 2,500 MM at   |
|            | unit.)      |           |         | 3.30% per annum in |
|            |             |           |         | 2007               |
+------------+-------------+-----------+---------+--------------------+
| Unsecured, | Baht 3,500  | 4.88% per | 3       | PTTEP was the      |
| unsu       | million     | annum,    | years,  | issuer.            |
| bordinated |             | semi      | due     |                    |
| Baht Bond  | (3.5        | -annually | 2010    |                    |
| issued     | million     |           |         |                    |
| February   | units at a  |           |         |                    |
| 2007       | face value  |           |         |                    |
|            | of Baht     |           |         |                    |
|            | 1,000 per   |           |         |                    |
|            | unit.)      |           |         |                    |
+------------+-------------+-----------+---------+--------------------+
| Unsecured, | Baht 6,000  | 3.60% per | 3       | PTTEP was the      |
| unsu       | million     | annum,    | years,  | issuer.            |
| bordinated |             | semi      | due in  |                    |
| Baht Bond  | (6 million  | -annually | 2010    | Swapped into       |
| issued     | units at a  |           |         | interest from      |
| June 2007  | face value  |           |         | fixed 3.60% to     |
| -Baht      | of Baht     |           |         | floating 6MFDR* +  |
| 12,500     | 1,000 per   |           |         | 0.99% in September |
| million    | unit.)      |           |         | 2007               |
| issued in  |             |           |         |                    |
| total      |             |           |         |                    |
+------------+-------------+-----------+---------+--------------------+
|            | Baht 3,500  | 3.91% per | 5       | PTTEP was the      |
|            | million     | annum,    | years,  | issuer.            |
|            |             | semi      | due in  |                    |
|            | (3.5        | -annually | 2012    |                    |
|            | million     |           |         |                    |
|            | units at a  |           |         |                    |
|            | face value  |           |         |                    |
|            | of Baht     |           |         |                    |
|            | 1,000 per   |           |         |                    |
|            | unit.)      |           |         |                    |
+------------+-------------+-----------+---------+--------------------+
|            | Baht 3,000  | 5.13% per | 15      | PTTEP was the      |
|            | million     | annum,    | years,  | issuer.            |
|            |             | semi      | due in  |                    |
|            | (3 million  | -annually | 2022.   |                    |
|            | units at a  |           | Issuer  |                    |
|            | face value  |           | has an  |                    |
|            | of Baht     |           | option  |                    |
|            | 1,000 per   |           | for     |                    |
|            | unit.)      |           | early   |                    |
|            |             |           | red     |                    |
|            |             |           | emption |                    |
|            |             |           | in 2012 |                    |
+------------+-------------+-----------+---------+--------------------+

* 6MFDR – The average of the average 6 months fixed deposit of 4 banks
(Bangkok Bank Limited, Kasikorn Bank, Krung Thai Bank, and Siam
Commercial Bank) which appears on the Bank of Thailand website. (1^(st)
Interest period fixed at 3.14625% per annum.)

8.1.3 Warrants

On April 30, 2002, the PTTEP’s General Shareholders’ Meeting consented
to the 5-year (2002-2006) Employee Stock Ownership Plan to issue and to
offer 10,000,000 units of warrants to purchase the Company’s common
shares. Details of the warrants to be allocated each year were to be
approved by the Shareholders on a yearly basis.

On April 28, 2004, PTTEP’s General Shareholders’ Meeting consented to
the reallocation of 2.4 million shares[1] which was previously
registered and reserved for the exercise of right under the warrant
issued to management and employee in 1998, but had expired (none of the
warrants were exercised), to be reserved for the exercise of right under
the newly issued warrants in 2004, 2005, and 2006.

On April 12, 2006 PTTEP amended its par value from 5 Baht to 1 Baht per
share in accordance with the 2006 General Shareholders Meeting’s
resolution. The change of its par value affected the exercise ratio of
the warrants from 1:1 to be 1:5 including the exercise price from Baht
111, Baht 117, Baht 183, Baht 278 and Baht 456 to be Baht 22.20, Baht
23.40, Baht 36.60, Baht 55.60, and Baht 91.20 respectively. The details
of the allocation of each warrant which were approved by the General
Shareholders’ Meeting are as follows:

+------+--------------+-------------+--------------+-----------------+
| Year | No. of       | Year to     | Exercise     | No. of warrant  |
|      | warrants     | Maturity    | Price        | to              |
|      |              |             |              |                 |
|      |              |             | (Baht)       | No. of common   |
|      |              |             |              | stock           |
+------+--------------+-------------+--------------+-----------------+
| 2002 | 2,000,000    | 5           | 22.20        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2003 | 2,000,000    | 5           | 23.40        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2004 | 2,800,000    | 5           | 36.60        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2005 | 2,800,000    | 5           | 55.60        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| 2006 | 2,800,000    | 5           | 91.20        | 1 : 5           |
+------+--------------+-------------+--------------+-----------------+
| T    | 12,400,000   |             |              |                 |
| otal |              |             |              |                 |
+------+--------------+-------------+--------------+-----------------+

Note: In 2002, the PTTEP’s General Shareholders’ Meeting resolved to
issue and offer the warrants to its directors, management and employee.
In 2003 – 2006 the General Shareholders’ Meeting resolved to issue and
offer the warrants to its management and employee.

Starting from the year 2003 to the end of 2007, a total of 7,484,060
units of warrants had been exercised.

8.1.4 Number of shares and shareholders voting rights will be affected
by NVDR issuance

An NVDR or Non-Voting Depository Receipt is a trading instrument issued
by the Thai NVDR Company Limited, a subsidiary wholly owned by the Stock
Exchange of Thailand (SET). NVDRs are automatically regarded as listed
securities in the SET. The objective of issuing NVDRs is not only to
stimulate trading activities in the Thai stock market, but also to help
eliminate foreign investment barriers, such as the foreign investment
limits and the impediments faced by institutional investors who
previously could not trade in the existing Thai Trust Fund. Investors
will receive all financial benefits; i.e., dividends, right issues or
warrants, just as if they had invested in the Company’s common shares.
The only difference between investing in an NVDR and the Company’s
shares is the voting right. Additionally, although the NVDR is designed
mainly to ease foreign investment barriers, the SET does not prohibit
Thai investors from investing this instrument.

As reported on the SET website as of January 29, 2008, the Company’s
common shares of NVDRs issued and outstanding amounted to 40,376,732
shares or 1.22% of total registered paid-up shares, which amounted to
3,297,420,300 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.

8.1.5 The agreement between the group of major shareholders which
affects securities issuance/offering or the operation of business

- None –

2.  Shareholders

8.2.1 Top 10 major shareholders

Top 10 major shareholders of the Company as of August 17, 2007. (The
date which the Company closed shares registration book for the right to
receive the 2007 interim dividend.)

  --------------------------------------------------------------------------
  Ranking   Shareholders                   Amount          % of a total
                                                           shares
  --------- ------------------------------ --------------- -----------------
  1.        PTT Public Company Limited     2,190,434,100   66.46

  2.        Nortrust Nominees Limited      62,576,099      1.90

  3.        Little Down Nominee Limited    62,186,300      1.89

  4.        The Bank of New York           59,999,964      1.73
            (Nominees) Limited                             

  5.        BNP Paribas Securities         52,369,145      1.59
            Services Luxembourg                            

  6.        HSBC(Singapore) Nominees PTE   52,228,889      1.58
            Ltd.                                           

  7.        Somers (U.K.) Limited          33,614,400      1.02

  8.        Thai NVDR Company Limited      30,479,126      0.92

  9.        Investors Bank and Trust       27,475,970      0.83
            Company                                        

  10.       Chase Nominees Limited 42      26,662,300      0.81
  --------------------------------------------------------------------------

8.2.2 Major shareholder who has significant influence on determining
company policy or the operation of business

PTT, as the major shareholder, has nominated any persons and the
management who possess the qualification in accordance with the company
criteria to become a new director or president. The nominating committee
will consider and propose the list of qualified persons to the board of
directors and the shareholder’s meeting for approval as appropriate.
Please see additional details in 9.2.1

8.3 Dividend Policy

Normally, it is the policy of the Company’s Board of Directors to
recommend to the shareholders an annual dividend of not less than 30% of
net income. Interim dividend may also be considered from time to time.
The Company has no dividend policies for its subsidiaries.

[1] ¹ On June 16, 1998, PTTEP’s General Shareholders’ Meeting approved
the issuance and offering of 1.2 million units of warrants to purchase
PTTEP’s common shares to management and employees of the Company. The
warrants had a 5 year life, and the exercise price of Baht 300. On
August 30, 2000, PTTEP’s Extraordinary General Shareholders’ Meeting
resolved to change the par value of the Company’s common shares from
Baht 10 to Baht 5, and as a result, the exercise price of the warrants
became Baht 150 each. On June 15, 2003, the warrants issued in 1998 were
expired.