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  13. Connected Transaction

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13.1 Connected Person

13.1.1 Between PTTEP and PTT Affiliated Companies

+----------+---------+--------------+---------+-----------+----------+
| Item     | PTTEP   | PTT Plc.     | Energy  | The       | Thai     |
|          |         |              | Complex | Aromatics | Olefins  |
|          |         |              |         | (         | Plc.     |
|          |         |              |         | Thailand) | (TOC)    |
|          |         |              |         | Public    |          |
|          |         |              |         | Company   |          |
|          |         |              |         | Limited   |          |
|          |         |              |         | (ATC)     |          |
+==========+=========+==============+=========+===========+==========+
| List of  | P       | Position     | P       | Position  | Position |
| D        | osition |              | osition |           |          |
| irectors |         |              |         |           |          |
| Involved |         |              |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr. Pala | D       | Director     | -       |           | Director |
| S        | irector |              |         |  Chairman |          |
| ookawesh |         |              |         |   of the  |          |
|          |         |              |         |   Board   |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr.      | D       | President    | -       | Director  | Director |
| Prasert  | irector |              |         |           |          |
| B        |         |              |         |           |          |
| unsumpun |         |              |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr.      | D       | Senior       |   -     |           |          |
| Pichai   | irector | Executive    |         |  Director | Director |
| Chun     |         | Vice         |         |           |          |
| havajira |         | President,   |         |           |          |
|          |         | Corporate    |         |           |          |
|          |         | Finance and  |         |           |          |
|          |         | Accounting   |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr. Manu | C       | Director     |   -     |   -       |          |
| Le       | hairman |              |         |           | Chairman |
| opairote | of the  |              |         |           |   of the |
|          | Board   |              |         |           |   Board  |
+----------+---------+--------------+---------+-----------+----------+
| Mr.C     | D       | Chairman of  |   -     |   -       |   -      |
| herdpong | irector | the Board    |         |           |          |
| Siriwit  |         |              |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr       | D       | Director     |   -     |   -       |   -      |
| .Wisudhi | irector |              |         |           |          |
| S        |         |              |         |           |          |
| risuphan |         |              |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Mr.      | D       | Senior       |   C     |   -       |   -      |
| Chit     | irector | Executive    | hairman |           |          |
| rapongse |         | Vice         |   of    |           |          |
| Kwang    |         | President,   |   the   |           |          |
| sukstith |         | Gas Business |   Board |           |          |
|          |         | Group        |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| M        | D       | Management   |   D     |   -       |   -      |
| r.Maroot | irector |              | irector |           |          |
| Mrigadat | &       |              |         |           |          |
|          | Se      |              |         |           |          |
|          | cretary |              |         |           |          |
|          | to the  |              |         |           |          |
|          | Board   |              |         |           |          |
|          | of      |              |         |           |          |
|          | Di      |              |         |           |          |
|          | rectors |              |         |           |          |
+----------+---------+--------------+---------+-----------+----------+
| Aff      | - - PTT | - PTT is the |   - PTT |   PTT,    |   - PTT, |
| iliation | holds   | shareholder  |   and   |   the     |   the    |
|          | 65.98 % | of PTTEP and |   PTTEP |   major   |   major  |
|          | share   | TOC          |   each  |   sh      |   sha    |
|          | in      |              |   hold  | areholder | reholder |
|          | PTTEP   |              |   50%   |   of      |   of     |
|          |         |              |   share |   PTTEP,  |   PTTEP, |
|          | - Some  |              |   in    |   holds   |   holds  |
|          | Di      |              |   PTTEP |   46.16 % |   44.92  |
|          | rectors |              |         |   share   |   %      |
|          | sit on  |              |  Energy |   in ATC  |   share  |
|          | both    |              |         |           |   in TOC |
|          | the     |              | Complex |   Some    |          |
|          | PTT’s   |              |         |           |   - Some |
|          | and     |              |         | Directors |   D      |
|          | PTTEP’s |              |         |   sit on  | irectors |
|          | Board   |              |         |   both    |   sit on |
|          | of      |              |         |   PTTEP’s |   both   |
|          | Di      |              |         |   and     |          |
|          | rectors |              |         |   ATC’s   |  PTTEP’s |
|          |         |              |         |   Board   |   and    |
|          |         |              |         |   of      |   TOC’s  |
|          |         |              |         |           |   Board  |
|          |         |              |         | Directors |   of     |
|          |         |              |         |           |   D      |
|          |         |              |         |           | irectors |
+----------+---------+--------------+---------+-----------+----------+

13.2 Connected Transactions

PTTEP’s transactions in 2004 qualified as items under the Stock Exchange
of Thailand announcement on the disclosure of information and operations
of listed companies on connected transactions B.E. 2546 (2003) and B.E.
2547 (2005) (Amendment No.2) which was effective on 21 July 2004. The
Company followed the practice accordingly, namely that the Board of
Directors or the management, or both, considered the appropriateness and
maximum benefit of the Company, including the disclosure of these items.
Details appear below:

13.2.1 Regular commercial items endorsed by the Board of Directors or
the management.

  1. Petroleum product sales

According to the sale agreements, petroleum product sales between PTT
and PTTEP instantly happens upon production, and petroleum delivery is
covered for the entire life of the project. In 2004, approximately
95.63% of PTTEP’s petroleum products were sold to PTT at the same price
as its partners. Details are shown below:

Unit of Value: million baht

+--------------------------------------+---------------+---------------+
| Product                              | 2004          |               |
+--------------------------------------+---------------+---------------+
|                                      | Volume        | Value         |
+--------------------------------------+---------------+---------------+
| Crude Oil (million barrels)          | 6.69          | 8,929         |
+--------------------------------------+---------------+---------------+
| Natural Gas (million cubic feet)     | 208,962       | 26,214        |
+--------------------------------------+---------------+---------------+
| LPG (metric tons)                    | 100,038       | 1,123         |
+--------------------------------------+---------------+---------------+
| Condensate (million barrels)         | 5.37          | 7,916         |
+--------------------------------------+---------------+---------------+

In addition, PTTEP and the consortium of the Arthit Project signed the
Gas Sales Agreement (GSA) with PTT Plc. The first gas production is
expected in the first half of 2007.

 2. Pailin Project gas price discounts

On October 10, 2003, the Pailin Project consortium signed with PTT an
amendment to the Gas Sales Agreement covering the deal to reduce the
Pailin gas price by 3%, effective from October 1 of the same year to the
date when PTT’s Third Pipeline in the Gulf of Thailand is completed
(around early 2006). In return, PTT agreed to raise the Pailin Daily
Contract Quantity (DCQ) from 330 to 353 million standard cubic feet per
day (MMSCFD). On this signing date, the consortium paid PTT a cash
amount of Baht 410 million as part of the discount. The Pailin gas price
discount will grow to 5% from the date of completion of the Third
Pipeline to the expiry date of the Agreement, for which PTT agreed in
return to raise the DCQ from 353 to 368 MMSCFD. In 2004, PTTEP recorded
the amount net discount of 157 million baht from the net sales of which
details stated in item 9 of Notes to Consolidated and Company Financial
Statements.

3. Deferred income

Deferred income arises from PTTEPI receipt of advance payments from PTT
for natural gas that PTT was not yet able to take receipt of in
1999-2001, in accordance with the volumes stimulated in the gas sales
contract of the Yadana and Yetagun Project. PTTEP will recognize the
deferred income when PTT takes receipt of the gas in the future years.
Please see details in item 15 of Notes to Consolidated and Company
Financial Statements.

13.2.2 Short-term property lease not more than 3 years: Office space
lease

Office Space Lease: PTTEP leased office space and provided related
service to PTT of 2,800 square meters by signing 3-year contract from
August 15, 2003 till August 14, 2006. In 2004, an addition of 201-
square meter office lease contract were signed with PTT; and 333-square
meter office lease contract signed with the Aromatic (Thailand) Public
Company (ATC) to substitute Thai Olefins Plc. (TOC) who moved out in
August 2004. The lease term is also three-year starting from October 1,
2004 till September 30, 2007. The total received payment of the
transaction is shown below:

Unit of Value : Baht

+------------------------------+------------------+-------------------+
| Organization/Company Name    | Item             | 2004 Lease and    |
|                              |                  | Service Fee       |
+------------------------------+------------------+-------------------+
| PTT Public Company Limited   | Office Space     | 17,517,000        |
|                              | Lease and        |                   |
|                              | Service          |                   |
+------------------------------+------------------+-------------------+
| The Aromatics (Thailand)     | Office Space     | 3,067,200         |
| Public Company Limited (ATC) | Lease and        |                   |
| *                            | Service          |                   |
+------------------------------+------------------+-------------------+
| Thai Olefins Plc. (TOC) **   | Office Space     | 680,319           |
|                              | Lease and        |                   |
|                              | Service          |                   |
+------------------------------+------------------+-------------------+

  * Lease from October – December 2004

  ** Lease from January – August 2004

The management based its consideration on market lease and on the fact
that the lease renewals in question contained clear statements on
compensation and renewals.

13.3 Comments of the Audit Committee

PTTEP’s Audit Committee acknowledged and agreed with the decisions and
action taken by the Board of Directors or the management, or both, based
on the appropriateness and suitability of all connected transactions
occurring in 2004.

13.4 Future Connected Transactions

PTTEP will strictly comply with the regulations of the Stock Exchange of
Thailand or any other regulatory authorities with regard to connected
transactions concerning persons/parties with conflict of interest in the
future for the maximum benefit of all shareholders.