8.  Capital Structure

As of December 31, 2006, PTTEP’s capital structure consists of Baht
69,289 million liabilities and Baht 88,524 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

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 adjustment of the Company’s par value resulted in an
increase in its ordinary shares from 664,400,000 shares to 3,322,000,000
shares. Currently, PTTEP has its registered share of Baht 3,322 million
consists of 3,322 million ordinary shares at the par value of 1 Baht per
share.

In 2006, the Company’s registered paid-up capital was increased by Baht
11.34 million (11.34 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 2002-2005 Employee Stock Ownership Plan
or ESOP Therefore, at December 31, 2006, the Company’s registered
paid-up capital was at Baht 3,286 million (3,286 ordinary shares, at a
par value of Baht 1).

8.1.2 Bonds[1]

In October 2006, PTTEPI redeemed its unsubordinated bonds which were
guaranteed by the Company. The Bonds carried interest rate of 7.625% per
annum, payable every six months, with a maturity of 10 years. The
redemption included the principal of USD 200 million. Therefore, at
December 31, 2006 PTTEP and its subsidiaries’ total debts consisted of
bonds in the amount of USD 254.11 million, or total of approximately
Baht 9,206.41 million, with the long term debt (including current
portion of long-term loan) to equities ratio of 0.10 times.

Details of bonds as of December 31, 2006 are as follows:

  ---------------- -------------- --------------- ---------- --------------------
  Bond             Issue Size     Rate per annum  Maturity   Other Details

  An unsecured     Yen 23 billion 3.35%,          10 years,  PTTEP was the
  unsubordinated   (230 units at  semi-annually   due in     issuer. The Company
  Bond- Samurai    a face value                   2007       had entered into a
  Bond (1997)      of Yen 100                                SWAP agreement at
                   million)                                  the amount of
                                                             USD193.28 million at
                                                             an interest rate of
                                                             7.86% per annum.

  An unsecured     Baht 2,500     4.625%,         15 years,  PTTEP was the
  unsubordinated   million (2.5   semi-annually   due in     issuer. The Company
  Bond- Baht Bond  million units                  2018       had entered into a
  (2003)           at a face                                 SWAP agreement at
                   value of Baht                             the amount of USD
                   1,000)                                    60.83 million at an
                                                             interest rate of
                                                             3.85% 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
offer 10,000,000 units of warrants to purchase the Company’s common
shares. Details of the warrants to be allocated each year will be
proposed for approval from the Shareholders on yearly basis.

On April 28, 2004, PTTEP’s General Shareholders’ Meeting consented to
the reallocation of 2.4 million shares[2] 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 reserve 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 2006, a total of 5,200,400
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 22, 2007, the Company’s
common shares of NVDRs issued and outstanding amounted to 59,581,026
shares or 1.81% of total registered paid-up shares, which amounted to
3,286,002,000 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

    1.  Top 10 major shareholders

Top 10 major shareholders of the Company as of August 18, 2006. (the
date which the

Company closed shares registration book for the right to receive the
2006 interim dividend)

  --------------------------------------------------------------------------
  Ranking   Shareholders                   Amount          % of a total
                                                           shares
  --------- ------------------------------ --------------- -----------------
  1.        PTT Public Company Limited     2,171,750,000   66.10

  2.        Chase Nominees Limited 1       60,229,696      1.83

  3.        The Bank of New York           55,591,225      1.69
            (Nominees) Limited                             

  4.        Thai NVDR Company Limited      50,339,480      1.53

  5.        Littledown Nominees Limited    48,020,000      1.46

  6.        BNP Paribas Securities         46,584,000      1.42
            Services, Luxembourg Branch                    

  7.        HSBC(Singapore) Nominees PTE   42,186,280      1.28
            Ltd.                                           

  8.        State Street Bank and Trust    30,953,000      0.94
            Company                                        

  9.        Morgan Stanley & Co            30,598,368      0.93
            International Limited.                         

  10.       HSBC Bank Plc-client general   27,112,300      0.83
            A/C                                            
  --------------------------------------------------------------------------

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] Please see the details of Debenture Registrar and Debenture holders'
Representatives 13.3 และ 13.4

[2] 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.