8. Management

[]

8.1 Management Structure

PTTEP is governed by the Board of Directors (“The Board”), which has
five standing
sub-committees, namely the Corporate Governance Committee, the Audit
Committee, the Nominating Committee, the Remuneration Committee, and the
Risk Management Committee.

8.1.1 Duties and Responsibilities of the Board

The Board is authorized to manage the Company in accordance with the
Company’s objectives, Articles of Association, and shareholder
resolutions. The major duties and responsibilities are as follows:

(1) Duties under Articles of Association

-   The Board is authorized to manage the Company in accordance with the
    Company’s objectives, Articles of Association, and shareholder
    resolutions.

-   The Board shall elect one Chairman, one more director to be Vice
    Chairman if it deems appropriate, together with one Chief Executive
    Officer (CEO) and Secretary to the Board.

(2) Duties under Good Corporate Governance

- To determine the Company’s good corporate governance and code of
business conduct and be a role model in adopting these principles for
the management and employees.

- To ensure that the Company’s operations comply with laws, the
Company’s objectives, affidavits, shareholders’ and Board resolutions,
related policies including the internal control system as well as PTTEP
good corporate governance principles and code of business conduct.

- To collaborate with the management in designating the vision, mission,
and values that the Company expects to happen.

- To consider and approve strategic plans, direction, and policy for the
Company as well as its budget, investment, loans, human resources, and
operating goals submitted by the management, and supervise and closely
monitor the Company’s operation so that its strategic plans and
objectives can be achieved.

- To consider cases related to conflicts of interest in a careful and
transparent manner and report to the Company any vested interests or
stakes of related persons, prevent misuse of the Company’s properties
for self-gains, as well as execution of transactions with people related
to the Company in an inappropriate way.

- To specify and ensure that these following matters are in place within
the Company: precise and appropriate regulations, standardized and
reliable financial reporting, an efficient internal control system, as
well as appropriate risk management.

- To ensure that the Company undergoes auditing both from the internal
and external auditors and that they perform effectively and efficiently.

- To assure stakeholders of correct, complete, appropriate, and timely
communication and information disclosure.

- To delegate authority to the President and CEO to execute business
under the approved budget, and conduct a monitoring and assessment so
that Company policies and plans can be accomplished.

- To conduct performance evaluation of the Board, Chairman of the Board
and Standing Sub-committees, the findings of which are disclosed in the
annual report, and conduct performance evaluation of the President and
CEO and determine his or her remuneration based on performance. They
shall also ensure that the Company has an effective evaluation process
of the executive management’s performance.

As of 1 January 2012, the Board consisted of 15 directors, with details
of current ones and directors whose terms ended during the year shown in
Attachment 1.

Changes in the number of shares held by Directors and Spouses, and Board
Meeting attendances in 2011 are summarized as follows:

  --------------------------------------------------------------------------------------------------
  Director                                 Shares as            Change      Number of  Number of
                                           of 31                            Warrants   Attendance/
                                           December                                    Total
                                                                                       Meetings
  -------------- ------------------------- ---------- --------- ----------- ---------- -------------
                                           2010       2011                             

  1. Mr. Norkun  Sitthiphong^($#,@)        N/A        -         N/A         -          13/13

  2. Mr. Pichai  Chunhavajira^($)          -          -         -           -          18/18

  3. Mr.         Jirapraditkul^($)         -          -         -           -          18/18
  Viraphol                                                                             

  4. Mr. Sommai  Khowkachaporn^($)         -          -         -           -          18/18

  5. Mr. Tevin   Vongvanich                180,500    75,500    (105,000)   -          17/18

  6. Mr.         Parapuntakul^($)          N/A        -         N/A         -          16/18
  Chakkrit                                                                             

  7. Mr.         Nitisiri^($)              N/A        -         N/A                    11/11
  Chaikasem                                                                            

  8. Mr. Ampon   Kittiampon^($,@@)         N/A        -         N/A         -          13/13

  9. General     Ratanavanich^($,@@@)      N/A        -         N/A         -          8/8
  Lertrat                                                                              

  10. Mr.        Euchukanonchai^($,@@@@)   N/A        -         N/A         -          1/1
  Krairit                                                                              

  Spouse                                   N/A        10,000    N/A                    

  11. Mr. Pailin Chuchottaworn^($,@@@@@)   N/A        -         N/A         -          1/1

  12. Mr. Manas  Jamveha^(1,๑)             N/A        -         N/A         -          -

  13. General    Kranlert^(1,๑)            N/A        -         N/A         -          -
  Pornchai                                                                             

  14. Mrs.       Hongsaprabhas^(1,๑)       N/A        -         N/A         -          -
  Varanuj                                                                              

  15. Mr. Anon   Sirisaengtaksin ^(##)     92,000     106,000   14,000      -          18/18

  Ex-Directors                                                                         
  in 2011                                                                              

  1. Mr. Prasert Bunsumpun^(@)             -          50,000    50,000      -          14/15

  2. Mr.         Vasantasingh^(@@)         -          -         -           -          4/5
  Chulasingh                                                                           

  3. Mr.         Vichairatana^(@@@)        -          -         -           -          5/5
  Vudhibhandhu                                                                         

  4. Mr.         Kwangsukstith^(@@@)       222,000    222,000   -           -          5/5
  Chitrapongse                                                                         

  Spouse                                   160,000    165,000   5,000                  

  5. M.R.        Svasti^(@@@@)             -          -         -           -          10/10
  Pongsvas                                                                             

  6. Mr. Bhusana Premanode^(*)             -          -         -           -          13/15

  7. Mr. Witoon  Simachokedee^(**)         N/A        -         N/A         -          11/13

  8. Mr. Wichai  Pornkeratiwat^(***)       N/A        -         N/A         -          13/13

  9. Mr. Naris   Chaiyasoot^(****)         N/A        -         N/A         -          11/12
  --------------------------------------------------------------------------------------------------

+------------------------------------+---------------------------------+
| Remarks:                           |   ^(#)Chairman and Chairman of  |
|                                    |   the Independent Director      |
| ^($#,@) Assumed directorship on 30 |                                 |
| March 2011 and elected Chairman on |                                 |
| 25 April 2011                      |                                 |
|                                    |                                 |
| ^($,@@)Assumed directorship on 30  |                                 |
| March 2011                         |                                 |
|                                    |                                 |
| ^($,@@@)Assumed directorship on 16 |                                 |
| June 2011                          |                                 |
|                                    |                                 |
| ^($)Independent Director           |                                 |
|                                    |                                 |
| ^($,@@@@)Assumed directorship on   |                                 |
| 25 November 2011                   |                                 |
|                                    |                                 |
| ^($,@@@@@)Assumed directorship on  |                                 |
| 1 December 2011                    |                                 |
|                                    |                                 |
| ^(1,๑)Assumed directorship on 1    |                                 |
| January 2012                       |                                 |
|                                    |                                 |
| ^(@)Resigned from directorship on  |                                 |
| 17 October 2011                    |                                 |
|                                    |                                 |
| ^(@@)Resigned from directorship on |                                 |
| 19 April 2011at 17.00 hrs.         |                                 |
|                                    |                                 |
| ^(@@@)Term ended on 30 March 2011  |                                 |
|                                    |                                 |
| ^(@@@@)Resigned from directorship  |                                 |
| on 16 June 2011                    |                                 |
|                                    |                                 |
| ^(*)Resigned from directorship on  |                                 |
| 26 October 2011                    |                                 |
|                                    |                                 |
| ^(**)Resigned from directorship on |                                 |
| 23 November 2011                   |                                 |
|                                    |                                 |
| ^(***)Resigned from directorship   |                                 |
| on 24 November 2011                |                                 |
|                                    |                                 |
| ^(****)Resigned from directorship  |                                 |
| on 1 December 2011                 |                                 |
+------------------------------------+---------------------------------+
|                                    |   ^(##)CEO & President          |
+------------------------------------+---------------------------------+
|                                    |   Audit Committee consisted of  |
|                                    |   7,8,9                         |
+------------------------------------+---------------------------------+
|                                    |   Remuneration Committee        |
|                                    |   consisted of 9,11             |
+------------------------------------+---------------------------------+
|                                    |   Nominating Committee          |
|                                    |   consisted of 4,7,11           |
+------------------------------------+---------------------------------+
|                                    |   Corporate Governance          |
|                                    |   Committee consisted of 3,6,10 |
+------------------------------------+---------------------------------+
|                                    |   Risk Management Committee     |
|                                    |   consisted of 2, 3,4, 15       |
+------------------------------------+---------------------------------+

8.1.2 Sub-committees: Appointed by the Board to screen specific
significant matters, these sub-committees consist of experts in suitable
specialized fields who present their views to the Board. PTTEP currently
has five such sub-committees.

(a) The Corporate Governance Committee has the duties and
responsibilities in accordance with its charter as follows:

(1) To establish the Company’s corporate governance policy including its
business ethics, which are proposed to the Board for approval and
implemented at every level.

(2) To ensure that the Company’s operation and the functioning of the
Board, Sub-committees, the management, and all personnel comply with the
Company’s good corporate governance policy and business ethics.

(3) To review the Company’s corporate governance policy, business
ethics, along with the guidelines and good corporate governance
practices, compare them with relevant laws, practices of international
and leading companies, recommendations of leading institutions, and
deliberate governance-related shareholders’ proposals to table to the
Board as well as to respond to the shareholders.

(4) To oversee the Company’s assessment of compliance of the Company’s
good corporate governance policy and business ethics.

(5) To disclose information about the Company’s good corporate
governance to stakeholders in the annual report, with prior approval of
the Board.

(6) To oversee and provide recommendations on corporate social
responsibility (CSR) activities.

(7) To review this charter regularly for its constant appropriateness
and timeliness.

(8) To disclose the Committee’s performance in the Company’s annual
report.

(9) To perform other duties relevant to good corporate governance of
PTTEP as may be assigned by the Board.

The Corporate Governance Committee consists of at least three
independent directors. The following are current members of the
committee with the term from 25 April 2011 to 24 April 2014:

+--------------------------------------+-------------------------------+
| -   Mr. Viraphol Jirapraditkul       | Chairman of the committee     |
+--------------------------------------+-------------------------------+
| -   Mr. Chakkrit Parapuntakul        | Member                        |
+--------------------------------------+-------------------------------+
| -   Mr. Krairit Euchukanonchai       | Member                        |
+--------------------------------------+-------------------------------+

In 2011, the Committee held four meetings with perfect attendance each
time, with Mr. Theerasak Tancharoenlarp, Senior Vice President of
Corporate Secretary Office and Corporate Secretary, acting as its
secretary. The sub-committee has disclosed its annual performance in the
Report of the Corporate Governance Committee.

(b) The Audit Committee has the duties and responsibilities in
accordance with its charter as follows:

(1) To review PTTEP’s financial reports with the external auditor at
every quarterly meeting to ensure accuracy and adequacy.

(2) To review PTTEP’s performance for compliance with the securities and
exchange law, SET’s regulations, and other laws related to PTTEP’s
business.

(3) To review connected transactions or transactions that may lead to
conflicts of interest so as to ensure that they comply with the law and
SET’s regulations, and are reasonable as well as in the best interests
of the Company.

(4) To ensure that PTTEP has an efficient and appropriate internal
control system and internal audit system, and to review audit findings,
approaches taken, and assess audit findings in various activities of
PTTEP according to the procedures and acceptable standards in
coordination with the external auditor.

(5) To consider, select, and propose the appointment of the external
auditor, consider and decide the audit fees, and attend a non-executive
meeting with the external auditor at least once a year.

(6) To scrutinize the independence of Internal Audit Department and
endorse the appointment, transfer, and merit or punishment
considerations for its head(s).

(7) To approve the audit plans of Internal Audit Department.

(8) To screen the budget and manpower requirements of Internal Audit
Department.

(9) The Chairman of the Audit Committee or its members must attend
shareholders’ meetings to answer questions about its work or the
appointment of the external auditor.

(10) To review and amend its charter annually.

(11) To perform other duties assigned by the Board.

(12) To disclose its performance in the Company’s annual report.

The Audit Committee consists of at least three independent directors
with knowledge, expertise, and experience in auditing financial
statements. The following are current members with the term from 31
March 2010 to 30 March 2013:

+------------------+-------+-----------------------+------------------+
| Director         | Pos   | Financial Statements  | Remarks          |
|                  | ition | Audit Experience      |                  |
+------------------+-------+-----------------------+------------------+
| Mr. Ampon        | Cha   | -   December 2005 -   | Assumed the      |
| Kittiampon       | irman |     April 2007 :      | position on 25   |
|                  |       |     Member of the     | April 2011       |
|                  |       |     Audit Committee,  |                  |
|                  |       |     Rayong Refinery   |                  |
|                  |       |     Public Company    |                  |
|                  |       |     Limited           |                  |
|                  |       |                       |                  |
|                  |       | -   May - December    |                  |
|                  |       |     2007 : Chairman   |                  |
|                  |       |     of the Audit      |                  |
|                  |       |     Committee, Rayong |                  |
|                  |       |     Refinery Public   |                  |
|                  |       |     Company Limited   |                  |
|                  |       |                       |                  |
|                  |       | -   April 2010 -      |                  |
|                  |       |     April 2011 :      |                  |
|                  |       |     Chairman of the   |                  |
|                  |       |     Audit Committee,  |                  |
|                  |       |     PTT Public        |                  |
|                  |       |     Company limited   |                  |
+------------------+-------+-----------------------+------------------+
| Mr. Chaikasem    | M     | -   2008 – Present :  | Assumed the      |
| Nitisiri         | ember |     Member of the     | position on 19   |
|                  |       |     Audit Committee,  | May 2011         |
|                  |       |     Thai Oil Public   |                  |
|                  |       |     Company Limited   |                  |
|                  |       |                       |                  |
|                  |       | -   April 2010 -      |                  |
|                  |       |     April 2011 Member |                  |
|                  |       |     of the Audit      |                  |
|                  |       |     Committee, PTT    |                  |
|                  |       |     Public Company    |                  |
|                  |       |     Limited           |                  |
|                  |       |                       |                  |
|                  |       | -   2007 - 2010 :     |                  |
|                  |       |     Chairman of the   |                  |
|                  |       |     Audit Committee,  |                  |
|                  |       |     Thai Airways      |                  |
|                  |       |     International     |                  |
|                  |       |     Public Company    |                  |
|                  |       |     Limited           |                  |
+------------------+-------+-----------------------+------------------+
| General Lertrat  | M     | -   2000 - 2004, 2006 | Assumed the      |
| Ratanavanich     | ember |     : Member of the   | position on 16   |
|                  |       |     Audit Committee,  | June 2011        |
|                  |       |     PTTEP             |                  |
|                  |       |                       |                  |
|                  |       | -   2007 - 2008 :     |                  |
|                  |       |     Chairman of the   |                  |
|                  |       |     Audit Committee,  |                  |
|                  |       |     PTTEP             |                  |
+------------------+-------+-----------------------+------------------+

In 2011, the Audit Committee held 10 meetings, where 52 agenda items
were considered with perfect attendance each time, with Mr. Verasak
Manchuwong, Vice President of Internal Audit Department, acting as its
secretary. The sub-committee has disclosed its annual performance in the
Report of the Audit Committee.

(c) The Nominating Committee has the duties and responsibilities in
accordance with its charter as follows:

(1) To shortlist candidates for Directors or President and CEO by taking
into account the Board’s composition, skill mix, experience, number of
company in which he or she served, as well as potential conflicts of
interest, and proposing their names to the Board or shareholders’
meetings for election to fill the vacancies or to replace Directors that
completed their terms.

(2) To prepare the names of shortlisted candidates for Directors or
President and CEO in advance and/or when there is a vacancy.

(3) To acquire comments or suggestions from the Board and/or President
and CEO of PTT (if any) to supplement the selection decision before
submitting it for consideration of the Board’s or shareholders’
meetings.

(4) To develop performance agreements (PAs) each year for the Board and
President and CEO and propose them to the Board for approval, and
setting the annual evaluation forms of Chairman, Directors,
sub-committees, and President and CEO.

(5) To nominate Directors to the sub-committees for appointment by the
Board when there are vacancies or proposing to the Board a change in the
sub-committees as deemed appropriate.

(6) To regularly review the appropriateness and timeliness of its own
charter.

(7) To disclose its own performance in the Company’s annual report.

(8) To perform any other assignment for the Board, relevant to the
selection of Directors or President and CEO.

The Nominating Committee consists of at least three Directors, most of
whom are independent directors, including the Chairman. The following
are current members of the committee with the term from 23 June 2009 to
22 June 2012:

+--------------------------------------+-------------------------------+
| -   Mr. Sommai Khowkachaporn         | Chairman and                  |
|                                      |                               |
|                                      | Independent Director          |
+--------------------------------------+-------------------------------+
| -   Mr. Chaikasem Nitisiri           | Member and                    |
|                                      |                               |
|                                      | Independent Director          |
+--------------------------------------+-------------------------------+
| -   Mr. Pailin Chuchottaworn         | Member                        |
+--------------------------------------+-------------------------------+

Mr. Chaikasem Nitisiri and Mr. Pailin Chuchottaworn were appointed as
members on 19 May 2011 and 1 December 2011 respectively in place of Mr.
Chulasingh Vasantasingh and Mr. Prasert Bunsumpun, who resigned from
their membership on 19 April 2011 at 17.00 hrs. and 17 October 2011
respectively. In 2011, the Committee held seven meetings with perfect
attendance each time, with
Mr. Theerasak Tancharoenlarp, Senior Vice President of Corporate
Secretary Office and Corporate Secretary, acting as its secretary. The
sub-committee has disclosed its annual performance in the Report of the
Nominating Committee.

(d) The Remuneration Committee has the duties and responsibilities in
accordance with its charter as follows:

(1) To consider remuneration packages for the Board and sub-committees
against fair and reasonable criteria or principles in accordance with
work performance, the Company’s performance, the guidelines of the
industry, as well as the scope of duties and responsibilities, and
proposed them to shareholders’ meetings for approval.

(2) To consider the remuneration package for the President and CEO and
the salary structure of the executives against fair and reasonable
criteria or principles, and propose them to the Board’s meetings for
approval. In case of the remuneration of the President and CEO, the
duties and responsibilities together with the annual performance shall
be taken into consideration as well.

(3) To evaluate its own performance, report it to the Board’s meetings
and disclose the findings to shareholders every year.

(4) To review its charter consistently to ensure appropriateness and
timeliness.

(5) To undertake any other duties assigned by the Board of Directors.

The Remuneration Committee consists of at least three directors, most of
whom are independent directors, including the Chairman. The following
are current members of the committee with the term from 23 June 2009 to
22 June 2012:

+----------------------------------------+-----------------------------+
| -   General Lertrat Ratanavanich       | Chairman and                |
|                                        | Independent Director        |
+----------------------------------------+-----------------------------+
| -   Mr. Pailin Chuchottaworn           | Member.                     |
+----------------------------------------+-----------------------------+

An additional member is being selected from independent directors to
fill the vacancy. During 2011, there were also other directors on the
Remuneration Committee as follows:

  -------------------------------- --------------------------------------
  Name                             Term

  Mr. Chitrapongse Kwangsukstith   23 June 2009 – 30 March 2011
  Member                           

  Mr. Viraphol Jirapraditkul       23 June 2009 – 24 April 2011
  Member                           
  Chairman from 1 January 2011     

  Mr. Chulasingh Vasantasingh      1 January 2011 – 19 April 2011 at
  Member                           17.00 hrs.

  M.R. Pongsvas Svasti             25 April 2011 – 15 June 2011
  Member                           

  Mr. Prasert Bunsumpun            25 April 2011 – 16 October 2011
  Member                           

  Mr. Witoon Simachokedee          25 April 2011 – 22 November 2011
  Member                           
  -------------------------------- --------------------------------------

In 2011, the Committee had one meeting in December with perfect
attendanceม with Mr. Theerasak Tancharoenlarp, Senior Vice President of
Corporate Secretary Office and Corporate Secretary, acting as its
secretary. The sub-committee has disclosed its annual performance in the
Report of the Remuneration Committee.

(e) The Risk Management Committee has the duties and responsibilities in
accordance with its charter as follows:

(1) To define a risk management policy and a risk management framework,
and provide advice to the Board and the management about enterprise-wide
risk management.

(2)     To oversee the implementation of the risk management system and
provide relevant support in order to achieve success for the
enterprise-wide risk management, with an emphasis on enhancing risk
awareness and significance of each risk to support the decision for the
development of appropriate procedures and commitment of resources.

(3)    To review an enterprise-wide view of risks related to the
corporate direction and the value chain in the exploration and
production business, including risks related to exploration and
development, production (covering issues on safety, security, health,
and the environment), investment (covering the geopolitical risks of
each country invested in), finance and commerce, corporate capability,
and laws and regulations, together with preventive measures and the
mitigation strategy to manage risks to acceptable levels. To monitor,
evaluate, and improve action plans regularly to mitigate risks and suit
operating conditions using Enterprise Risk Management Dashboard to
identify the risk owners responsible for monitoring and updating related
information, as well as defining mitigation strategies.

(4)    To support each risk manager in his or her operations and
assessment of major factors in continual risk management in line with
the corporate plans and on a par with other leading companies.

(5)    To regularly report to the Board risk management assessment
supervision and mitigation measures taken, except for matters of
significant impacts to the Company, for which the Board must be informed
immediately.

The Risk Management Committee consists of at least three directors, with
at least one being an Independent Director. The following are current
members of the committee (Acting), three of whom are Independent
Directors, with the term from 27 November 2008 to 26 November 2011:

+----------------------+-----------------+-----------------------------+
| -   Mr. Pichai       | Chunhavajira    |   Chairman and Independent  |
|                      |                 |   Director                  |
+----------------------+-----------------+-----------------------------+
| -   Mr. Viraphol     | Jirapraditkul   | Member and                  |
|                      |                 |                             |
|                      |                 | Independent Director        |
+----------------------+-----------------+-----------------------------+
| -   Mr. Sommai       | Khowkachaporn   | Member and                  |
|                      |                 |                             |
|                      |                 | Independent Director        |
+----------------------+-----------------+-----------------------------+
| -   Mr. Anon         | Sirisaengtaksin | Member.                     |
+----------------------+-----------------+-----------------------------+

New committee members are being selected by the Nominating Committee to
replace those who retired. During the year, Mr. Chitrapongse
Kwangsukstith and Mr. Vudhibhandhu Vichairatana retired at the AGM and
ceased their duties on 30 March 2011; Mr. Wichai Pornkeratiwat and Mr.
Viraphol Jirapraditkul were appointed members on 25 April 2011;
afterward, Mr. Wichai Pornkeratiwat resigned from the Board and the
committee, with effect from 24 November 2011.

In 2011, the Risk Management Committee held 12 meetings, with
Mr. Chatchawal Eimsiri, Executive Vice President of Finance and
Accounting Group, acting as its secretary for the January meeting, and
Ms. Penchun Jarikasem taking the Executive Vice President of Finance and
Accounting Group in February, acting as secretary and attended the
meeting afterward. The sub-committee has disclosed its annual
performance in the Report of the Risk Management Committee.

Attendance of Sub-Committees in 2011

+------------+------------+--------+--------+--------+--------+--------+
| Sub        |            | Cor    | Audit  | Remune | Nomi   | Risk   |
| -committee |            | porate | Com    | ration | nating | Mana   |
| Member     |            | Gove   | mittee | Comm   | Comm   | gement |
|            |            | rnance |        | ittee* | ittee* | Com    |
|            |            | Com    |        |        |        | mittee |
|            |            | mittee |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
|            |            | (Total | (Total | (Total | (Total | (Total |
|            |            | 6      | 6      | 3      | 6      | 7      |
|            |            | me     | me     | me     | me     | me     |
|            |            | mbers) | mbers) | mbers) | mbers) | mbers) |
+------------+------------+--------+--------+--------+--------+--------+
|            |            | Total  | Total  | Total  | Total  | Total  |
|            |            | Mee    | Mee    | Mee    | Mee    | Mee    |
|            |            | tings: | tings: | tings: | tings: | tings: |
|            |            | 4      | 10     | 1 time | 7      | 12     |
|            |            | times  | times  |        | times  | times  |
+------------+------------+--------+--------+--------+--------+--------+
| 1. Mr.     | Kitt       | -      |   8/8  |   -    |   -    |   -    |
| Ampon      | iampon^(@) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 2. Mr.     | Nit        | -      |   7/7  |   -    |   3/3  |   -    |
| Chaikasem  | isiri^(@@) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 3. General | Ratanava   | -      |   6/6  |   1/1  |   -    |   -    |
| Lertrat    | nich^(@@@) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 4. Mr.     | Jirapradit | 3/3    |   -    |   -    |   -    |   7/8  |
| Viraphol   | kul^(@@@@) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 5. Mr.     | Parapu     | 4/4    |   -    |   -    |   -    |   -    |
| Chakkrit   | ntakul^(*) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 6. Mr.     | Chuchott   | -      |   -    |   1/1  |   1/1  |   -    |
| Pailin     | aworn^(**) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 7. Mr.     | Khowkacha  | -      |   -    |   -    |   5/5  |        |
| Sommai     | porn^(***) |        |        |        |        |  12/12 |
+------------+------------+--------+--------+--------+--------+--------+
| 8. Mr.     | Ch         | -      |   -    |   -    |   -    | 12/12  |
| Pichai     | unhavajira |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 9. Mr.     | E          | 1/1    |   -    |   -    |   -    | -      |
| Krairit    | uchukanonc |        |        |        |        |        |
|            | hai^(****) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 10. Mr.    | Siris      | -      |   -    |   -    |   -    | 11/12  |
| Anon       | aengtaksin |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| Ex-Sub     |            |        |        |        |        |        |
| -committee |            |        |        |        |        |        |
| Members in |            |        |        |        |        |        |
| 2011       |            |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 1. Mr.     | Vasant     | -      |   2/2  |   -    |   4/4  |   -    |
| Chulasingh | asingh^(#) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 2. Mr.     | Vichair    | 1/1    |   1/1  |   -    |   -    | 3/3    |
| Vu         | atana^(##) |        |        |        |        |        |
| dhibhandhu |            |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 3. Mr.     | Kwa        | -      |   -    |   -    |   3/3  | 2/2    |
| Ch         | ngsukstith |        |        |        |        |        |
| itrapongse | ^(###)     |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 4. M.R.    | Sva        | 1/1    |   4/4  |   -    |   -    | -      |
| Pongsvas   | sti^(####) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 5. Mr.     | Bunsump    | -      |   -    |   -    |   1/1  | -      |
| Prasert    | un^(#####) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 6. Mr.     | Premanod   | 2/2    |   -    |   -    |   -    | -      |
| Bhusana    | e^(######) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 7. Mr.     | Sim        | -      |   -    |   0/0  |   -    | -      |
| Witoon     | achokedee^ |        |        |        |        |        |
|            | (########) |        |        |   (Re  |        |        |
|            |            |        |        | signed |        |        |
|            |            |        |        |        |        |        |
|            |            |        |        | before |        |        |
|            |            |        |        |   the  |        |        |
|            |            |        |        |   me   |        |        |
|            |            |        |        | eting) |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 8. Mr.     | Porn       | -      |   -    |   -    |   -    |   4/5  |
| Wichai     | keratiwat^ |        |        |        |        |        |
|            | (########) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+
| 9. Mr.     | Ch         | -      |   -    |   -    |   -    |   -    |
| Naris      | aiyasoot^( |        |        |        |        |        |
|            | #########) |        |        |        |        |        |
+------------+------------+--------+--------+--------+--------+--------+

Remark :

^(@)Became a member of Audit Committee and was appointed chairman of
Audit Committee on 25 April 2011

^(@@)Became a member of Audit Committee and Nominating Committee on 19
May 2011

^(@@@)Became a member of Audit Committee and was appointed chairman of
Remuneration Committee on 16 June 2011

^(@@@@)Was chairman of Corporate Governance Committee and Risk
Management Committee on 25 April 2011

^(*)Became a member of Corporate Governance Committee on 1 January 2011–
21 February 2011 and became a member of Corporate Governance Committee
again on 25 April 2011

^(**)Became a member of Remuneration Committee and Nominating Committee
on 1 December 2011

^(***)Was appointed chairman of Nominating Committee again on 24 March
2011

^(****)Became a member of Corporate Governance Committee on 25 November
2011

^(#)Resigned from directorship, chairman of Audit Committee,
Remuneration Committee, and Nominating Committee on 19 April 2011 at
17.00 hrs.

^(##)Terms on Corporate Governance Committee, Audit Committee, and Risk
Management Committee ended on 30 March 2011

^(###)Terms on Remuneration Committee, Nominating Committee, and Risk
Management Committee ended on 30 March 2011

^(####)Resigned from directorship, Corporate Governance Committee, Audit
Committee, and Remuneration Committee on 16 June 2011

^(#####)Resigned from directorship, Remuneration Committee and
Nominating Committee on 17 October 2011

^(######)Resigned from directorship and Corporate Governance Committee
on 26 October 2011

^(#######)Resigned from directorship on 23 November 2011

^(########)Resigned from directorship and Risk Management Committee on
24 November 2011

  ^(#########)Resigned from directorship on 1 December 2011

In addition, PTTEP has a panel of Independent Directors with the duties
and responsibilities in accordance with its charter as follows:

(1) To propose significant issues beneficial to the Company, the major
    shareholders, and minor shareholders for the Board and/or President
    and CEO’s consideration

(1) To provide views on the proper roles and duties of the Board and
    other appropriate views of Independent Directors for the best
    interests of the Company and the major and minor shareholders.

(2) To examine PTTEP’s compliance with the law relating to Independent
    Directors and review the definition of Independent Directors to be
    lawfully complete and appropriate.

(3) To perform other duties assigned by the Board provided that such
    duties do not affect their independence.

(4) To review the Independent Director Charter for its appropriateness
    and timeliness.

At present, Independent Director consists of 12 members:

+---------------------------------+------------------------------------+
| -   Mr. Norkun Sittiphong       |   Chairman                         |
+---------------------------------+------------------------------------+
| -   General Lertrat             |   Vice Chairman                    |
|     Ratanavanich                |                                    |
+---------------------------------+------------------------------------+
| -   Mr. Viraphol Jirapraditkul  | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Sommai Khowkachaporn    | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Pichai Chunhavajira     | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Chakkrit Parapantakul   | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Ampon Kittiampon        | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Chaikasem Nitisiri      | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Krairit Euchukanonchai  | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mrs. Varanuj Hongsaprabhas  | Independent Director               |
+---------------------------------+------------------------------------+
| -   General Pornchai Kranlert   | Independent Director               |
+---------------------------------+------------------------------------+
| -   Mr. Manas Jamveha.          | Independent Director               |
+---------------------------------+------------------------------------+

During 2011, the following independent directors ended their terms,
namely
Mr. Vudhibhandhu Vichairatana, on 30 March 2011, and Mr. Chulasingh
Vasantasingh, M.R. Pongsvas Svasti, Mr. Bhusana Premanode, Mr. Witoon
Simachokedee, and Mr. Naris Chaiyasoot on 19 April 2011 at 17.00 hrs.,
16 June 2011, 26 October 2011, 23 November 2011 and 1 December 2011,
respectively. Moreover, starting from 1 January 2012, Mrs. Varanuj
Hongsaprabhas, General Pornchai Kranlert, and Mr. Manas Jamveha were
elected as PTTEP directors in the place of Mr. Wichai Pornkeratiwat, Mr.
Witoon Simachokedee, and Mr. Naris Chaiyasoot, who resigned from their
directorship. These also qualified as PTTEP Independent Directors.

In 2011, the Independent Directors held four meetings, with most of them
in attendance, with Mr. Theerasak Tancharoenlarp, Senior Vice President
of Corporate Secretary Office, acting as its secretary. They performed
their duties under the committee’s charter carefully, prudently,
competently, and independently for equitable treatment of shareholders
and protection of minority shareholders. All meeting outcomes were
reported to the Board for acknowledgment.

8.1.3 Qualifications of Independent Directors and Their Nomination

The Board must always be made up of at least one half in Independent
Directors. The Company has made the qualifications of such Directors –
under the good corporate governance of PTTEP – even more stringent than
those defined by the Capital Market Supervisory Board, as seen below:

(1) Holds no more than 0.5% of the total voting stocks of PTTEP, its
parent company¹, its subsidiaries², and its associated companies³, a
related juristic entity⁴, including stocks held by connected persons, as
well as nominees⁵.

(2) Is not or has never been an executive director, employee, staff,
adviser who receives salary or a controlling person⁶ of PTTEP, its
parent company, its subsidiaries, its associated companies, its sister
companies⁷, major shareholders or controlling persons of PTTEP unless
the foregoing status has ended for more than two years. This shall not
include an independent director who was a government official or an
adviser of a government agency which is a major shareholders or
controlling person of PTTEP

(3) Is not a person related by blood or legal registration, such as
father, mother, spouse, sibling and child, including a spouse of the
children, management, major shareholders⁸, controlling persons, or
persons to be nominated as management or controlling person of PTTEP or
its subsidiaries.

(4)  Has not or has not had a business relationship with PTTEP, its
parent company, its subsidiaries, its associated companies, or a
juristic person who may have conflicts of interest, in a manner that may
interfere with his or her independent judgment, or is not or has never
been a major shareholder, connected director, management, or controlling
persons of any person with business relationship with PTTEP, its parent
company, its subsidiaries, its associated companies, or a juristic
person with potential conflicts of interest, unless such relationship
has ended for more than two years.

The term ‘business relationship’ in paragraph one includes any normal
business transaction, rental or lease of immovable property, transaction
relating to assets or services or grant or receipt of financial
assistance through receiving or extending loans, guarantee, providing
assets as collateral, including other similar actions which result in
the applicant or his counterparty being subjected to indebtedness
payable to the other party for 3 percent or more of the net tangible
assets of the applicant or 20 million Baht or more, whichever is lower.
The amount of such indebtedness shall be calculated according to the
calculation method for the value of connected transactions under the
Notification of Capital Market Supervisory Board concerning Rules on
Connected Transactions. The combination of such indebtedness shall
include indebtedness taking place during the two years before the date
on which the business relationship with the person begins.

(5)  Is not or has never been an auditor of PTTEP, its parent company,
its subsidiaries, its associated companies, or a juristic person with
potential conflicts of interest and is not a major shareholder,
connected director, management, controlling persons or partner of an
audit firm which employs auditors of PTTEP, its parent company, its
subsidiaries, its associated companies, or a juristic person with
potential conflicts of interest unless such relationship has ended for
more than two years.

(6)  Is not or has never been a professional adviser, including legal or
financial advisor who receives an annual service fee exceeding 2 million
Baht from PTTEP, its parent company, its subsidiaries, its associated
companies, or a juristic person with potential conflicts of interest,
and is not a major shareholder, connected director, management,
controlling persons or partner of the professional adviser unless such
relationship has ended for more than two years.

(7) Is not a director representing a PTTEP’s or its major shareholder’s
board member or a shareholder who is related to PTTEP’s major
shareholder.

(8) Has no other characteristics which make him or her incapable of
expressing independent opinions on PTTEP’s business.

(9) Does not own/run any business similar to or competing with PTTEP or
its subsidiaries and is not a material partner in any partnership,
executive director, employee, staff, adviser who receives salary, and
holds no more than 1% of total voting stocks of the company similar to
or competing with PTTEP or its subsidiaries.

(10) Is authorized by the Board to make a collective decision to execute
the business of PTTEP and its parent companies, its subsidiaries, its
associated companies, sister companies, or a juristic person with
potential conflicts of interest.

+-----------------------------------------------------------------------+
| ¹ Parent company means the company with more than 50% of total voting |
| shares in PTTEP, directly or indirectly, which means PTT Plc (‘PTT’). |
|                                                                       |
| ² Subsidiaries mean companies in which PTTEP directly or indirectly   |
| holds more than 50% of the total voting shares, or can influence      |
| financial and management policies, such as PTTEP International Ltd.   |
| and PTTEP Services Ltd.                                               |
|                                                                       |
| ³ Associated companies mean companies in which PTTEP or its           |
| subsidiaries altogether hold from 20% to 50% of the total voting      |
| shares, or take part in decision-making on financial and management   |
| policies, such as Energy Complex, Co., Ltd., and Carigali – PTTEPI    |
| Operating Company Sendirian Berhad (CPOC)                             |
|                                                                       |
| ⁴ Juristic person with potential conflicts of interest means major    |
| shareholders or those that can exert control over PTTEP, which means  |
| PTT or a juristic entity in which PTT holds shares, controls, or has  |
| a significant interest, either directly or indirectly.                |
|                                                                       |
| ⁵ Nominees mean shareholders for other people in a concealed manner.  |
|                                                                       |
| ⁶ Controlling persons means any person who, as a matter of fact, has  |
| substantial control over PTTEP in its policy-setting, management, and |
| operations.                                                           |
|                                                                       |
| ⁷ Sister companies mean any two or more subsidiaries of PTT,          |
| regardless of levels of subsidiaries, such as PTTEP and PTT Natural   |
| Gas Distribution Co., Ltd.                                            |
|                                                                       |
| ⁸ Major shareholders mean shareholders with more than 10% of the      |
| voting shares, including those held by their connected persons.       |
+-----------------------------------------------------------------------+

Independent Directors at least once a year verify and certify their
qualifications when submitting their biographies at the end of the year,
which are disclosed in Form 56-1 and the annual report. On 1 January
2011, 12 Independent Directors did so under PTTEP’s corporate
governance.

The nominating procedure of Independent Director selection is similar to
that of PTTEP Directors and the President and CEO, detailed under 8.2.1,
that is, if he or she retires from the office, to fill the vacancy,
PTTEP will give priority to qualified candidates with such
qualifications and will keep the Board’s composition with the right
number of Independent Directors. However, if any other Director, from
time to time, has qualified as an Independent Director, he or she will
assume the position at once.

8.1.4 Business relationship or professional services of the Independent
Directors for the Company during the past fiscal year

None

8.1.5 Authority of President and CEO

(1) Authority under the Articles of Association vested by shareholder
resolutions

The President and CEO is the authorized signatory in dealing with
external parties under clause 9, paragraph 6, of the Articles registered
at the Ministry of Commerce.

(2) Authority vested by Board resolutions

The Board authorizes the President and CEO to act and conduct, on behalf
of the Company, business operations under the stated objectives in its
Memorandum of Association, petroleum concessions and other agreements,
including other businesses in which the Company has interests; to take
charge and conduct business under PTTEP Regulations – namely the
Budgeting Charter B.E. 2539, Finance and Accounting Charter B.E. 2539,
Regulation on Human Resources Management 2005, and Procurement Charter
B.E. 2550, applying practices comparable with those of other private
companies in the E&P business and in the best interests of PTTEP.
Delegation of authority is permitted unless each attorney has a direct
or indirect conflict of interest with PTTEP or its subsidiaries in
exercising the authority.

8.1.6 Details of current management team members and the controlling
persons
as of 1 January 2012 appear in Attachment 1.

8.1.7 Corporate Secretary

The Corporate Secretary plays a role in effectively coordinating
internally between the Chairman and the President and CEO and externally
between the Company, the shareholders, and the regulators. PTTEP’s good
corporate governance prescribes the Board to designate the Corporate
Secretary, who also resumes the position of Secretary to the Board of
Directors (at present, Mr. Theerasak Tancharoenlarp), as responsible for
overseeing and advising the Board and the Management about applicable
laws, rules, regulations, including information about updates of good
corporate governance matters; ensuring that the businesses of the Board
and sub-committees are run correctly and smoothly, in compliance with
related laws, regulations, and PTTEP’s good corporate governance;
organizing the Board’s, sub-committees’, and shareholders’ meetings;
preparing and safeguarding vital company documents, namely the agenda
and minutes of the meetings of the Board, Standing Subcommittees and
shareholders, Form 56-1, Director Roster, etc.; notifying regulators
about related information; arranging orientation for new directors; and
promoting and enhancing the understanding of good corporate governance
among the Directors, the Management, and employees.

8.2 Nomination of the Board and Management

8.2.1 Nomination of the Board and the President and CEO

When there is a Director vacancy, the Nominating Committee is to choose
suitable candidates to become a Director by considering the current list
of state enterprise directors of State
Enterprise Policy Office (SEPO), a collection of qualified persons for
state enterprises, and recommended nominees from PTT, the major
shareholder. Priority will be given to those with skill mixes,
experience, and specific qualifications in areas still lacked by the
Board or critical to the Company’s business to fill the composition of
the Board and for the ultimate benefit of PTTEP, including awareness of
the possibilities of conflicts of interest of a given Director. The
Nominating Committee is to consider qualified candidates for PTTEP Group
as prescribed in No. 8.4.5 (1.2) Director Qualifications.

Election of Directors to replace retiring ones must obtain the approval
of the AGM through a majority of eligible shareholders in attendance
under the following criteria and procedures:

(1) Nomination to a shareholders’ meeting is to be made by the
Nominating Committee for each Director whose term has ended, with prior
screening by the Board. Shareholders may nominate other persons and the
Company has added another channel for this, that is, nominating a person
or persons between 1 October and 31 December of each year. This has been
made known to investors through SET’s notification channel and the
Company’s website, which also contains rules for nominating Directors,
together with a Director nomination form, for minority shareholders’
use.

(2) Should the number of Director candidates be less than the number to
be elected, the shareholders’ meeting is to elect those candidates as
Directors by voting for individual candidates, under which they must
receive majority votes.

(3) Should the number of Director candidates exceed the number to be
elected, a ballot is to be held. Each shareholder may vote for as many
candidates for Directors as the number of open positions, and voting is
carried out for individual candidates. Those with the highest ballots
are to be elected Directors, as many as the number of open positions
accommodates.

When Director positions become vacant for other reasons, the Board may
elect new Directors through at least a three-fourth majority vote and
these elected Directors are to remain in their positions for only as
long as the remaining terms of their predecessors.

With the approval of the Board, the President and CEO is nominated by
The Nominating Committee, which considers a person who is skilled,
experienced, and professional, and possesses specific expertise
necessary and maximum benefit for PTTEP. Potential conflicts of interest
of the President and CEO are also taken into account. Further
information appears in Management Development and Succession Plan.

8.2.2 The Nomination of Executives

The CEO is authorized to select and appoint any person(s) with the
knowledge, capabilities, and experience in PTTEP’s business environment
to the management rank. This authorization process complies with the
PTTEP Personnel Administration Regulation and is reported at the Board’s
meeting, except for the appointment of Executive Vice Presidents, which
requires the approval of the Board. If there is a need to select a
person who is not a PTTEP employee, an interview of the candidate must
be conducted by an interview committee. Additionally, any appointment of
the head of internal audit management requires a prior approval of the
Audit Committee.

8.3 Remuneration of the Board and the Management

8.3.1 Remuneration of Directors and Sub-committee Members

  ----------- ----------------- -------------- ---------- ----------- ------------ -------------- ------------ ------------ -------------- --------------
  Directors                     Remuneration                                                                                2011 Bonus     Total
                                                                                                                            paid in        
                                                                                                                            2012^($)       

                                Board                     Audit       Corporate    Remuneration   Nominating   Risk                        
                                                          Committee   Governance   Committee      Committee    Management                  
                                                                      Committee                                Committee                   

                                Meeting Fee    Retainer   Meeting Fee Meeting Fee  Meeting Fee    Meeting Fee  Meeting Fee                 
                                               Fee                                                                                         

  1. Mr.      Sitthiphong ^(#*) 400,000        450,000    0           0            0              0            0            2,432,517.40   3,282,517.40
  Norkun                                                                                                                                   

  2. Mr.      Chunhavajira      450,000        450,000    0           0            0              0            343,750      2,622,950.82   3,866,700.82
  Pichai                                                                                                                                   

  3. Mr.      Jirapraditkul     450,000        450,000    0           93,750       0              0            150,000      2,622,950.82   3,766,700.82
  Viraphol                                                                                                                                 

  4. Mr.      Khowkachaporn     450,000        450,000    0           0            0              156,250      275,000      2,622,950.82   3,954,200.82
  Sommai                                                                                                                                   

  5. Mr.      Vongvanich        425,000        450,000    0           0            0              0            0            2,622,950.82   3,497,950.82
  Tevin                                                                                                                                    

  6. Mr.      Parapuntakul      400,000        450,000    0           100,000      0              0            0            2,622,950.82   3,572,950.82
  Chakkrit                                                                                                                                 

  7. Mr.      Nitisiri          275,000        300,000    180,000     0            0              75,000       0            1,631,259.82   2,461,259.82
  Chaikasem                                                                                                                                

  8. Mr.      Kittiampon ^(#@)  325,000        375,000    262,500     0            0              0            0            1,990,568.16   2,953,068.16
  Ampon                                                                                                                                    

  9. General  Ratanavanich      200,000        262,500    150,000     0            46,875         0            0            1,430,047.16   2,089,422.16
  Lertrat     ^(##@)                                                                                                                       

  10. Mr.     Euchukanonchai    25,000         75,000     0           25,000       0              0            0            265,888.17     390,888.17
  Krairit     ^(*@)                                                                                                                        

  11. Mr.     Chuchottaworn     25,000         37,500     0           0            25,000         25,000       0            222,771.17     335,271.17
  Pailin      ^(**@)                                                                                                                       

  12. Mr.     Sirisaengtaksin   450,000        450,000    0           0            0              0            0            2,622,950.82   3,522,950.82
  Anon                                                                                                                                     
  ----------- ----------------- -------------- ---------- ----------- ------------ -------------- ------------ ------------ -------------- --------------

  -------------- --------------- -------------- ---------- ----------- ------------ -------------- ------------ ------------ -------------- --------------
  Directors                      Remuneration                                                                                2011 Bonus     Total
                                                                                                                             paid in        
                                                                                                                             2012^($)       

                                 Board                     Audit       Corporate    Remuneration   Nominating   Risk                        
                                                           Committee   Governance   Committee      Committee    Management                  
                                                                       Committee                                Committee                   

                                 Meeting Fee    Retainer   Meeting Fee Meeting Fee  Meeting Fee    Meeting Fee  Meeting Fee                 
                                                Fee                                                                                         

  Ex-Directors                                                                                                                              
  in 2011                                                                                                                                   

  1. M.R.        Svasti ^(#)     250,000        225,000    110,000     25,000       0              0            0            1,192,903.66   1,802,903.66
  Pongsvas                                                                                                                                  

  2. Mr. Prasert Bunsumpun ^(##) 381,250        403,125    0           0            0              25,000       0            2,236,694.36   3,046,069.36

  3. Mr.         Vasantasingh    100,000        112,500    62,500      0            0              100,000      0            783,292.16     1,158,292.16
  Chulasingh     ^(###)                                                                                                                     

  4. Mr.         Vichairatana    125,000        112,500    0           50,000       0              0            0            639,568.83     927,068.83
  Vudhibhandhu   ^(@)                                                                                                                       

  5. Mr.         Kwangsukstith   125,000        112,500    75,000      0            0              75,000       50,000       639,568.83     1,077,068.83
  Chitrapongse   ^(@)                                                                                                                       

  6. Mr. Bhusana Premanode ^(@@) 325,000        375,000    0           50,000       0              0            0            2,141,477.66   2,891,477.66

  7. Mr. Witoon  Simachokedee    275,000        337,500    0           0            0              0            0            2,191,780.82   2,804,280.82
                 ^(@@@)                                                                                                                     

  8. Mr. Wichai  Pornkeratiwat   325,000        337,500    100,000     0            0              0            0            2,198,966.99   2,961,466.99
                 ^(*)                                                                                                                       

  9. Mr. Naris   Chaiyasoot      275,000        337,500    0           0            0              0            0            1,983,381.99   2,595,881.99
                 ^(**)                                                                                                                      
  -------------- --------------- -------------- ---------- ----------- ------------ -------------- ------------ ------------ -------------- --------------

Remarks:

^(#*)Assumed directorship on 30 March 2011 and chairmanship on 25 April
2011

^(#@)Assumed directorship on 30 March 2011, became a member of Audit
Committee and the chairman of Audit Committee on 25 April 2011

^(##@)Assumed directorship and chairmanship of Remuneration Committee on
16 June 2011

^(*@)Assumed directorship and membership of Corporate Governance
Committee on 25 November 2011

^(**@)Assumed directorship and membership of Remuneration Committee and
Nominating Committee on 1 December 2011

^(#)Resigned from directorship on 16 June 2011

^(##)Resigned from directorship on 17 October 2011

^(###)Resigned from directorship on 19 April 2011 at 17.00 hrs.

^(@)Term ended on 30 March 2011

^(@@)Resigned from directorship on 26 October 2011

^(@@@)Resigned from directorship on 23 November 2011

^(*)Resigned from directorship on 24 November 2011

^(**) Resigned from directorship on 1 December 2011

^($)2011 bonuses to be paid in 2012 are in accordance with the AGM
resolution on dividend payment

Remuneration to Independent Director Serving as an Independent Director
in Parent Company

In year 2011, PTTEP Independent Directors had received remuneration from
PTT Public Company Limited as Independent Director in PTT, a parent
company of PTTEP as below

+-------------------+----------+----------+------------+-------------+
| List              | Board    |          | Meeting    | Total       |
|                   | Remu     |          | Fee of     |             |
|                   | neration |          | Sub-       |             |
|                   |          |          | committees |             |
+-------------------+----------+----------+------------+-------------+
|                   | Director | Meeting  |            |             |
|                   |          | Fee and  |            |             |
|                   | Bonus    | Retainer |            |             |
|                   |          | Fee      |            |             |
+-------------------+----------+----------+------------+-------------+
| 1.  Mr. Sommai    | 1,53     | 57       | 105,000    | 2           |
|     Khowkachaporn | 9,726.03 | 8,214.29 |            | ,222,940.32 |
+-------------------+----------+----------+------------+-------------+
| 2.  Mr. Ampon     | 48       | 26       | 86,250     | 829,974.03  |
|     Kittiampon    | 2,191.78 | 1,532.25 |            |             |
+-------------------+----------+----------+------------+-------------+
| 3.  Mr. Chaikasem | 60       | 293,750  | 45,000     | 941,489.73  |
|     Nitisiri      | 2,739.73 |          |            |             |
+-------------------+----------+----------+------------+-------------+
| 4.  Mr. Krairit   | 44       | 17       | 60,000     | 679,637.65  |
|                   | 9,315.07 | 0,322.58 |            |             |
|    Euchukanonchai |          |          |            |             |
+-------------------+----------+----------+------------+-------------+
| 5.  Mr.           | 1,40     | 621,000  | 206,250    | 2           |
|     Chulasingh    | 2,739.73 |          |            | ,229,989.73 |
|     Vasantasingh  |          |          |            |             |
+-------------------+----------+----------+------------+-------------+
| 6.  Mr. Bhusana   | 1,67     | 610,000  | 75,000     | 2           |
|     Premanode     | 1,232.88 |          |            | ,356,232.88 |
+-------------------+----------+----------+------------+-------------+

8.3.2 Executive’s Remuneration

The Remuneration Committee reviews and recommends for the Board’s
endorsement fair and reasonable criteria or procedures for defining the
salary structures for executives while conforming to prevailing business
practices. Executives’ compensation packages and salary structures are
determined by market comparison with other leading oil and gas
companies’ criteria, procedures, pay rates, salary surveys, and with
consideration of executives’ individual scopes of accountability.

The President and CEO decides individual executives’ compensations.
Annual merit increases of executives are tied to their individual
performance, the Company’s performance, and key performance indicator
(KPI) achievement of each division or group.

To maintain its competitiveness in the oil and gas market, PTTEP
participates in the annual compensation survey along with other leading
oil and gas companies to obtain adequate information to report to the
Board for possible adjustment in its competitive compensation strategy
when there is a significant compensation change in the marketplace.

To comply with good corporate governance and transparency, PTTEP
discloses the Management’s compensation, including their PTTEP shares
and ESOP warrants, in the annual report.

(1) Cash (compensation and provident fund)

+-----------------+------+-----------------+-------+-----------------+
|                 | 2010 |                 | 2011  |                 |
+-----------------+------+-----------------+-------+-----------------+
|                 | Nu   | Total Amount    | N     | Total Amount    |
|                 | mber | (Baht)          | umber | (Baht)          |
+-----------------+------+-----------------+-------+-----------------+
| Salary          | 8⁽⁴⁾ | 47,537,400      | 8⁽⁵⁾  | 53,898,318      |
+-----------------+------+-----------------+-------+-----------------+
| Bonus           |      | 23,957,719 ⁽²⁾  |       | 29,756,163 ⁽³⁾  |
+-----------------+------+-----------------+-------+-----------------+
| Other           |      | 6,031,176       |       | 6,520,065       |
| compensation⁽¹⁾ |      |                 |       |                 |
+-----------------+------+-----------------+-------+-----------------+
| Total           |      | 77,526,295      |       | 90,174,546      |
+-----------------+------+-----------------+-------+-----------------+

⁽¹⁾ Provident Fund

⁽²⁾ Includes bonuses for 2010, paid in 2011(paid in January and
February)

⁽³⁾ Includes bonuses for 2011, paid in 2012(paid in January and
February)

⁽⁴⁾ Executives, numbering 8, consist of the CEO and the Executive Vice
Presidents

⁽⁵⁾ Executives, numbering 8, consist of the CEO, the Executive Vice
Presidents and seconded executives from PTT

(2) Allocation of ESOP Warrants

From 2006, with the approval of shareholders’ meetings, PTTEP allocated
ESOP warrants for common shares to all eligible Management and employees
to give each a sense of belonging and reward those devoted to Company
service, as summarized below:

+-----+-------------+-------------+------------+----------------------+
| Y   | Number of   | Exercise    | Exercise   | Exercise Period      |
| ear | Warrants    | Ratio       | Price      |                      |
|     |             |             |            |                      |
|     | (Unit)      | (Unit of    | (Baht)***  |                      |
|     |             | Warrant :   |            |                      |
|     |             | Unit of     |            |                      |
|     |             | Share)      |            |                      |
+-----+-------------+-------------+------------+----------------------+
| 20  | 2,800,000   | 1:5         | 91.20      | 31 July 2007 – 31    |
| 06* |             |             |            | July 2011            |
+-----+-------------+-------------+------------+----------------------+

* In April 2006, PTTEP adjusted the par value from Baht 5 to Baht 1 per
share, resulting in a change of exercise price and exercise ratio of the
warrants for 2006.

** Exercise Price Calculation

2006: Calculated by using the average closing prices of PTTEP shares
during the 90 days lapse before the date of the Board’s resolution to
propose this agenda (calculated from November 1, 2005 to January 29,
2006) minus the 2005 dividend per share.

Number of PTTEP Shares and Warrants Held by the Management and Spouses

+----------------+---------------+----------+---------+---------------+
| Name           |               | Shares   |         | Change in     |
|                |               | as of 31 |         | Shares        |
|                |               | December |         |               |
+----------------+---------------+----------+---------+---------------+
|                |               | 2010     | 2011    |               |
+----------------+---------------+----------+---------+---------------+
| 1.  Mr. Anon   | Si            | 92,000   | 106,000 | 14,000        |
|                | risaengtaksin |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 2.  Mr.        | Janmaha       | 315,600  | 326,100 | 10,500        |
|     Somkiet    |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 3.  Mr.        | Limpiti       | 55,000   | 45,000  | (10,000)      |
|     Asdakorn   |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| Spouse         |               | 63,000   | 63,000  | -             |
+----------------+---------------+----------+---------+---------------+
| 4.  Mr.        | Eimsiri       | -        | -       | -             |
|     Chatchawal |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 5.  Ms.        | Jarikasem¹    | N/A      | -       | N/A           |
|     Penchun    |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 6.  Mr.        | Vong          | 142,000  | 142,000 | -             |
|     Somporn    | vuthipornchai |          |         |               |
+----------------+---------------+----------+---------+---------------+
| Spouse         |               | 3,000    | 3,000   | -             |
+----------------+---------------+----------+---------+---------------+
| 7.  Mr.        | Pojanapreecha | 319,000  | 319,000 | -             |
|     Prisdapunt |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 8.  Mr.        | Wongsirasawad | 80,800   | 109,800 | 29,000        |
|     Luechai    |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 9.  Mr.        | Iamchula      | 99,400   | 88,400  | (11,000)      |
|     Suraphong  |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 10. Mr.        | Krongphanich  | N/A      | 67,500  | N/A           |
|     Yongyos    | ²             |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 11. Ms.        | Wankertphon   | 66,200   | 75,600  | 9,400         |
|     Jaroonsri  |               |          |         |               |
+----------------+---------------+----------+---------+---------------+
| 12. Ms.        | Sasnanand¹    | 17,000   | 8,500   | (8,500)       |
|     Chanamas   |               |          |         |               |
+----------------+---------------+----------+---------+---------------+

¹ Appointed as Executive Vice President, Finance & Accounting Group, on
1 February 2011

² Appointed as Senior Vice President, Accounting Division, on 16
February 2011

8.4 Good Corporate Governance

The Board of Directors of PTTEP values good corporate governance and
code of business conduct and is convinced of steering business with
strict adherence to these concepts. It is believed that this is the
right path toward attaining the goal of ‘growth, prosperity, stability,
sustainability, and dignity’ and to bolster confidence among
shareholders and all stakeholders. The Board assigned the Corporate
Governance Committee to ensure that PTTEP business conforms to the
Company’s Corporate Governance Policy and Code of Business Conduct and
to always maintain the standards of Operational Excellence on a par with
international practices. This has resulted in its national and
international recognition through 2011 as shown in the topic
Recognition. PTTEP has constantly complied with the Principles of Good
Corporate Governance for Listed Companies 2006 of the Stock Exchange of
Thailand (SET as follows:

8.4.1 Rights of Shareholders

Recognizing the rights of all shareholders, PTTEP has taken steps to
demonstrate its respect for basic shareholders’ rights, namely to buy,
sell, or transfer shares; to obtain adequate information in a timely
manner; to participate and vote or grant proxy to vote in the
shareholders’ meeting on significant issues that require approval from
the shareholders’ meeting such as the appointment of new directors in
replacement of those who are due to retire by rotation, the
consideration of the Board’s remuneration, the appointment of the
auditor and the consideration of the auditor’s fee, etc., or other
issues affecting PTTEP. Shareholders’ rights concerning sharing in the
profits of the company and receiving sufficient and timely information
will be protected. PTTEP promotes the rights of shareholders as follows:

(1) 2011 Annual General Shareholders’ Meeting

(1.1) PTTEP revealed the scheduled dates for 2011 shareholders’ annual
general meeting (AGM) approximately 2 months in advance since 27 January
2011, following the Board’s resolution to hold the AGM on 31 March 2011.
The Board also fixed the dates on which shareholders have the right to
join the meeting and to receive their dividends (the so-called Record
Date) on 14 February 2011 and to close the share registration book on
15 February 2011.

(1.2) The Company sends meeting invitations in both Thai and English to
shareholders 21 days ahead of each meeting, containing agenda details,
either for consideration or for acknowledgement, and related appendices
in adequate details together with the opinions of the Board, proxy forms
designed by the Ministry of Commerce, a list of all Independent
Directors together with all possible conflicts of interest of each
Independent Director. These invitations also contain details about the
credentials each shareholder needs to bring to the meeting and meeting
attendance procedure, together with Company regulations on the meeting
and voting procedures, and a map showing the meeting venue. In addition,
shareholders may view information about the agenda items of each meeting
in both Thai and English on the Company’s website 36 days ahead of the
meeting date once the Board of Directors has decided on it, the same
information that will be passed on to the shareholders.

(1.3) PTTEP always allows registration of shareholders at least two
hours before each meeting, for which a barcode system detailing each
shareholder is reproduced on the registration form or the proxy form and
is used for facilitation and registration time-saving, as well as the
accuracy of shareholder details. Furthermore, PTTEP also provides duty
stamps for all proxy forms.

(1.4) The Company distributes the rules and regulations of the AGM to
all meeting participants so that they may have a clear understanding of
the meeting procedures, voting method by shareholders and proxies whose
votes cannot be divided except for proxy Form C, temporary closure of
AGM registration for vote counting for each agenda item, as well as
procedures for vote counting, making queries, and raising opinions at
the meeting, and
so on.

(1.5) Before each meeting, the Corporate Secretary is assigned by the
Chairman to explain clearly how ballots are cast and counted under
Company’s regulations. The Company collects ballots of all shareholders
or proxies, who have not yet voted on each agenda item, in cases they
would object or abstain and uses barcode ballots to facilitate the
process and make the ballot counting accurate. Balloting proceeds in
line with Company regulations and the law, of which the voting result of
each agenda item will be clearly displayed in the meeting room. The
Company will ask shareholder volunteers together with an independent
legal advisor to witness ballot counts for greater transparency. To
protect the rights of shareholders, PTTEP conducts balloting for each
matter separately, and in the election of directors, each nominated
candidate will be voted individually.

(1.6) Allocating enough time for the meeting, the Chairman conducts each
meeting suitably and transparently by the order of agenda items as
listed on the meeting notice, allowing thorough expression of views and
queries before each ballot round, and summarizes meeting resolution(s)
on each agenda item. Shareholders are invited to send their
meeting-related questions to the Board ahead of the meeting date.

(1.7) PTTEP gives shareholders who show up late a chance to vote on
agenda items still under deliberation.

(1.8) All Directors attend each shareholders’ meeting. Members of the
standing sub-committees may address relevant questions and concerns
posed by shareholders (if any).

(2) PTTEP regularly disseminates information to shareholders via the
Stock Exchange of Thailand’s (SET) channel, media, and publications,
including its website. For improved understanding of its business, PTTEP
also organized its operation site visit altogether 2 trips in 2011 for
shareholders to S1 Project, Phitsanulok Province, whereas 2 more trips
of the plan have been postponed to be in February 2012 resulting from
the flooding situation.

(3) The Company sets up information request channels for minor
shareholders through the E-mail addresses of Independent Directors on
matters of Directors’ activities, good corporate governance (GCG) and
audit matters. Apart from these channels, minor shareholders can
directly contact the Corporate Secretary or the Investor Relations unit.

(4) PTTEP explicitly discloses shareholding structures in affiliated and
subsidiary companies to ensure shareholders of transparent management
structures that are open to scrutiny.

(5) The Company conducts its business efficiently for its sustainable
growth and suitable returns to shareholders.

8.4.2 Equitable Treatment of Shareholders

PTTEP values and treats all shareholders fairly through the following
actions:

(1) 2011 Annual General Shareholders’ Meeting

(1.1) Allowing each shareholder to propose agenda items for
consideration at the annual general meeting of shareholders (AGM) or
nominate qualified person for election as Directors ahead of the AGM
date between 1 October and 30 December 2010, and announcing such
acceptance and deliberation criteria via SET’s news channels up to five
months ahead. The announcement was also publicized on the Company’s
website to illustrate equitable treatment of shareholders. That is to
say, each matter or nominee was to be considered against PTTEP’s
criteria, deemed as the screening of genuinely useful agenda items and
an addition of qualified names through the Nominating Committee before
submission to the Board’s consideration. The Board would inform the
meeting of its findings, together with its reasons, at the AGM. However,
there was no proposal submitted to PTTEP.

(1.2) Conducting the meeting in sequence of agenda items as specified in
the invitation and not adding agenda items without notifying
shareholders in advance, so that they may have enough time for
investigation before making their decisions.

(1.3) Providing shareholders with a list of all Independent Directors on
proxy forms as another option for them to decide their own voting,
clearly identifying which directors have vested interests in which
matter. An instance is that in each director election to replace
retiring ones due to completion of terms, an independent director that
complete his or her terms and is nominated for re-election is regarded
as having vested interests. PTTEP recommends that shareholders make use
of proxy forms which can be indicated their voting directions and
encourages them to do so.

(1.4) Encouraging shareholders to use ballots in every agenda item.
‘Voting tickets’, provided for each agenda item separately, are
collected at the meeting for objected and abstained votes. All votes are
then summed with the pre-cast votes as prescribed in the proxy forms
before announcing the resolution to the meeting. For transparency and
reference, PTTEP provides independent legal advisor and volunteers from
the shareholders to serve as witnesses for ballot counting and files all
voting tickets bearing signatures of volunteered witnesses for further
review.

(1.5) Taking accurate minutes of the meeting with complete contents,
namely the issues raised, queries, or opinions made in the meeting,
clarifications made by Directors or executives related to each agenda
item, meeting resolution with the numbers of votes for, votes against,
and abstention, and arranging for deliveries of the minutes to all
shareholders after submission to SET and SEC within 14 days after the
meeting. The minutes, together with its video recording, will be also
posted on the Company’s website.

(2) The Use of Inside Information

Ensuring strict supervision of the use of inside information by defining
in writing the explicit approach of inside information retention as well
as the prevention of insider trading as part of GCG and the Business
Ethics on the exploitation of inside information in accordance with
securities laws; regular revisions are undertaken for fairness to all
stakeholders. The following summarizes the major actions taken.

(2.1) Regularly warning Directors and all employees through various
communication channels about the abuse of inside information to prevent
such exploitation for themselves and others. The Company clearly
stipulated punitive disciplinary measures. All supervisors, as CG
leaders, must stress or advise their own subordinates.

(2.2) The Board of Directors’ Meeting on 24 November 2011 approved the
revision of the Company’s business ethics on Use of Inside Information
by elevating the level of cooperation request to prohibition of PTTEP
stock trading in a silent period starting from the disclosure of 2011
financial statements. The Corporate Secretary informs Directors,
executives from the senior vice president level upward, as well as Vice
President, Corporate Accounting and Vice President, Finance of such
restriction. These people, their spouses, and children under the legal
age, are prohibited from buying or selling PTTEP shares through either
direct or indirect methods (including through nominees or individual’s
mutual funds) one month before and 1 day after the release of the
Company’s material information that may affect PTTEP stock price, such
as the quarterly or annual financial statements. This will provide
enough time for the information to thoroughly reach the public. The
Company also encourages these people to hold long-term shares, that is,
for at least three months from each purchase. The restriction, however,
does not include selling and buying PTTEP shares through warrants
exercise.

(2.3) The company shall disclose the shareholding of directors,
executives from the Executive Vice President upward, the Senior Vice
President, Accounting Division, and Vice President, Corporate Accounting
and Vice President, Finance in the annual report accurately as
stipulated by the SET and SEC. Also, the Board has to follow up the
ethical business performance on inside information control. Those said
person shall submit the report every time when there is any change in
shareholding to the company’s secretary in order to inform the Board.
Compliance unit will follow up and surveillance the ethical business
performance on use of inside information according to the company’s
rule.

(3) Directors and executives from executive vice president upward are
required to report vested interests with the Company, held by themselves
and connected persons, without delay. The Corporate Secretary is
responsible for reporting such stakes to the Chairman and Chairman of
the Audit Committee for examination within seven days after receiving
the report. The practice is in line with Securities and Exchange Act
(No. 4) B.E. 2551 and the Capital Market Supervisory Board notification.

(4) In its GCG principles and its Code of Business Conduct, PTTEP
devises practical guidelines for potential conflicts of interest for the
Directors, the Management, and all employees to observe. It also defines
criteria for the Directors and the Executive Management from the
executive vice president level upward to report their vested interests,
including such interests of their related persons. Should such a matter
arise, they must report it to PTTEP and the Corporate Secretary at once
and refrain from deliberating and voting on that matter.

8.4.3 Roles of Stakeholders

The Board approved the PTTEP mission that values the rights of
stakeholders. The mission states that PTTEP is committed to producing
oil and natural gas with quality and safety and at competitive prices in
parallel with the responsibility for society and environmental
conservation. The Company observes GCG in its business administration
and financial management. In practice, PTTEP values the rights of all
internal and external stakeholders, which includes shareholders,
customers, employees, government, partners, society, communities and
environment, suppliers/contractors, lenders, competitors, local culture
and tradition, and human rights, of which the practical guidelines are
stated in its GCG booklet. In addition, an ethical business framework
for balanced consideration of stakeholders appears in its Code of
Business Conduct, also publicized on the Company’s website. PTTEP takes
into consideration stakeholders and their rights wherever it operates.
In addition, in 2011, PTTEP became a participant in the United Nations
(UN) Global Compact, an agency of the United Nations of which the
objective is to call for the collaboration among organizations worldwide
to advance their commitments to sustainability and corporate citizenship
relating to 4 core areas: human rights, labour, the environment and
anti-corruption.

(1) Treatment of major stakeholders

(1.1) Shareholders

PTTEP respects the rights of shareholders and treats all of them
equally. The Company, in its business administration, observes GCG and
the Code of Business Conduct to foster sustainable growth while creating
maximum value for shareholders.

(1.2) Employees

(1.2.1) PTTEP adheres with the principles of the UN Global Compact by
eliminating all forms of illegal labour in every location it has
investment and defines guidelines in its GCG and code of business
conduct as follows:

(i) PTTEP shall study for better understand of and strictly follow all
applicable laws in every location.

(ii) PTTEP shall study and respect the cultural and local traditional
differences and not act against culture or tradition of each locality.

(iii) PTTEP shall not discriminate against any individual by personal
relationship or by dissimilarity of race, gender, age, complexion,
religion, or any other condition that does not interfere with
performance.

(1.2.2) PTTEP recruits, selects, and hires staff based on
qualifications, experience, and competence for suitable positions,
encourages their continuous development, promotes their career
advancement, and provides opportunities for them to take part in
external activities under the Company’s policy.

(1.2.3) A fair compensation system is in place for PTTEP to attract and
retain competent people in its service so that they may perform their
work efficiently. Key factors taken into account include up-to-date pay
scales and pay procedures of other domestic petroleum operators, job
value discrepancies in the required expertise, job complexities,
assigned responsibilities, and expressed competence through job
performance.

(1.2.4) The Company provides and/or improves mutually fair welfare
schemes. Key factors that have been considered include its own
affordability, both short and long terms, with a focus on fostering the
security of life for employees and their families; components not easily
affordable by most employees, not adequate provided for by the
government; and components provided by most other domestic petroleum
operators to their employees.

In addition, PTTEP instituted a provident fund to ensure security for
employees and their families. This will also be a guarantee for
employees upon their resignation or retirement. The provident fund is
made up of monthly contributions from both the employees and the
Company. The Company contributes 15% of its employees’ basic salary
while employees contribute between 2% up to 15%. Conditions for
employees to receive the contribution and its returns are made under
Company’s regulations.

(1.2.5) PTTEP values timely joint-resolution of problems between
subordinates and supervisors, to maintain good relations among all.
Should such a problem arise, employees can file petitions under the
Company’s procedure. Provided that they follow the criteria and
procedure in good faith, their employment status will not be affected,
and PTTEP will refrain from taking action that would harm them or their
witnesses.

(1.2.6) PTTEP gives priority in human development in order to enhance
its capacity for business performance. We deem that human resources are
key factors for the Company so they are provide with training and
development both in short term and long term. Apart from academic and
technical capacity’s building, PTTEP also embeds the corporate values to
all staff members so that they can work with a same standard leading the
Company to attain its vision and mission as targeted.

(1.2.7) PTTEP has conducted the Employee Engagement Survey in 2011 as a
mechanism to drive the company towards achieving its strategic goal and
vision. Also, such survey assists in directing the company’s development
towards being a workplace of pride that employees can work effectively
and happily.

(1.3) Customers

PTTEP’s mission is to produce and sell crude oil and natural gas at
competitive prices through agreements of both long and short terms, as
well as spot-market sales. For agreements governing new projects and
spot-market sales, the Company treats all customers equally and in the
best interests of all parties. For long-term product sales, including
natural gas, PTTEP strictly honors agreements and regularly coordinates
with its customers to deliver products of quality matching customers’
needs in a timely manner.

(1.4) Suppliers/contractors

PTTEP regards its suppliers/contractors as significant support of its
business to grow and sustain. Therefore, the policy of fair treatment to
suppliers/contractors as business partners is clearly defined in PTTEP
Good Corporate Governance and Code of Business Conduct and announced to
directors, management and employees for adherence.

In 2011, PTTEP revised its code of business conduct concerning
suppliers/contractors to endorse its transaction with those who have
ethics and responsibility for society and environment including to
underline them to have a better standard in term of safe workplace and
respect the social fundamental rights of their staffs likewise.

PTTEP treats all its suppliers/contractors fairly. Its procurement is
based on fair and just competition while responsible for society and
environment for the maximum benefit of PTTEP. The Company does not
discriminate others in business competition. The four channels of
participation by suppliers and vendors are

(1.4.1) Through e-commerce in the PTTEP’s website at
http://www.pttep.com/VendorRegistration/ and the suppliers/contractors
are also able to check the payment transaction at http://www.pttep.com/
and choose VendorPortal

(1.4.2) If the user at PTTEP already has suppliers’/contractors’
information and wants to do business with them, the user then submits
such information to the Procurement Department for further processing of
new vendor prequalification before carrying on procurement. In term of
prequalification, the company has investigated the suppliers/contractors
if they have a policy and support ethical business practice and
corporate social responsibility. In this regard, this could drive them
to realize the corporate social responsibility and environment along
with their business profit.

(1.4.3) The Company holds an SSHE Contractor Forum with
suppliers/contractors every year to ensure the correct mutual
understanding and stress the importance of safety, security, health, and
the environment. Moreover, a PTTEP Golf Charity event is organized
annually to foster their relationship with the Company.

(1.4.4) Suppliers/contractors can contact the Procurement Department
directly throughout the working hour.

Furthermore, the Company provides additional channel for conveniences of
suppliers/contractors to request information or notify of their
addresses change by sending Email to vendor@pttep.com.

(1.5) Partners

The joint venture between PTTEP and its partners either in Thailand or
overseas will be carried on under the international mutual working
agreement. This agreement will rule the rights and duties of the
partners expressly. The partners have a mandate to become the joint
venture committee for directing and managing the product and services
supply including the annual work plan and budget with the clear scope
and formal resolution. The partners have the right to monitor the
financial information and annual financial statements. There are clear
and suitable measures such as the penalty for non-compliance with the
agreement of partners. It is noted that the company also underlines
transparency in information dissemination between the partners and
external parties.

(1.6) Competitors

PTTEP treats its competitors professionally and fairly under transparent
and fair rules and does not discredit competitors through false
accusations.

(1.7) Lenders

PTTEP not only issues debentures and bills of exchange under relevant
terms of reference, laws, and announcements of SEC, but also strictly
follows policies, objectives, and resolutions made at shareholders’
meetings. The Company values compliance with all obligations under the
terms of reference on the rights and duties of a debenture issuer and
the conditions of loan contracts. We also have a measurement to cope
with the remedy for stakeholders affected from the company due to its
non compliance with the rights and duties of the issuer and the
condition of the loan agreements.

(1.8) Government

PTTEP executes its business transaction under close supervision of
Government agencies concerned both in Thailand and abroad. The Company
regards these government agencies as the key support to its smooth
business and to proper business operations in line with respective
countries’ policies, rules, and regulations. Its clear policy,
therefore, is to regularly coordinate and transparently and honestly
share information with relevant government agencies, both domestic and
abroad.

In addition, valuing the forging and maintaining of long-term
relationship with these agencies, the Company has continually staged
activities to promote cordial relationship.

(1.9) Communities/society

In addition to running an ethical business with principles nurtured into
staff, PTTEP recognizes that its petroleum operations must be carried
out in parallel with responsibilities for society. In 2011, PTTEP
establishes the corporate social responsibility policy which is
compatible to international standard as the framework for the Company’s
social responsibility activities. The Company has consistently developed
social responsibility projects under the concept of “From Natural
Treasure to Intellectual Wisdom and Environmental Conservation”, with a
focus on three aspects: development of the quality of life; conservation
of natural resources, culture, and the environment; and participation
from staff. This is used to drive society and communities toward
sustainable development and to create an awareness of being a good
citizen. PTTEP projects and activities in this area are as follows.

(1.9.1) Life quality development

(i) Education

- Scholarship

- Mobile library

- Learning park

- Educational Trip

- 7 Pat Tutor Camp

- Genius student camp with PTTEP

- Computer Donation and Computer Center

- Youth fishing

(ii) Health Promotion

-   I Love Sports with PTTEP

-   Youth training to become an umpire

-   PTTEP Cares for Health

-   Campaign for reduction of accident from agricultural vehicles

-   Mini Farm

(iii) Skills Development

-   Thai rice academy

-   Life quality development at Doi Mae Salong

-   Natural gas for agricultural community and environment

-   Crab bank

    2.  Natural Resources, Cultural, and Environmental Conservation

(i) Thai Heritage, World Heritage

(ii) Tree Planting in the Human Heart

(iii) Marine Heritage Conservation

(iv) Learning source from the undersea royal vessel

(v) Artificial coral placement

(vi) Folk Song Conservation and Following the Footsteps of Art
     Philosophers

(1.9.3) Staff participation

(i) CSR Volunteer

(ii) Neighborly Love Club

(iii) Bongkot Asa Club

(iv) Arthit Asa Club

(v) PTTEP Ruam Jai Pattana

(1.10) Safety, Security, Health and Environment

The company’s policy and practice on safety and health in work place and
environment

PTTEP is committed to protecting the health and safety of everyone who
plays a part in our operations and lives in the communities in which we
operate, while maintaining the security of our people and assets.
Wherever we operate, we will conduct our business with respect to local
and global environment to achieve the objectives of sustainable
development. Generally, oil and gas industry is a high risk business
that may cause impact to health and safety of employees, community and
environment. PTTEP believes that a good safety management and effective
planning can prevent and alleviate the impact to health, safety and
environment. Furthermore, PTTEP keeps developing and improving its
safety management, which is deem worthwhile investment and easier
compared to solving problems that may arise.

The vision of safety, security, health and environment of PTTEP is not
only becoming the LTI free organization but also being a leader in
safety, security, health and environment. This is in consistent with the
company’s mission and policy as set systematically which is deemed as a
key factor to achieve its goal of sustainable development in the future.

PTTEP has reviewed its vision, mission and safety policy periodically in
order to ensure that they are up to date and in line with the company’s
expansion in the future.

To meet these commitments, PTTEP have in place, the SSHE Management
System (SSHE MS) that outlines our main principles and accountabilities
to drive for continuous improvements in our operations.

PTTEP’s SSHE Policy includes the following:

(i) Encourage a positive SSHE culture through visible leadership and
    commitment from management and employee involvement.

(ii) Ensure that all employees and contractors are accountable for their
     own safety and the safety of those around them.

(iii) Meet or exceed compliance with all applicable SSHE laws and
      regulations, and international standards in all of our operations
      worldwide.

(iv) Ensure all employees and contractors are trained and competent to
     meet SSHE MS requirements.

(v) Identify, eliminate or minimized, and manage SSHE risks to our
    employees, the environment and Assets.

(vi) Develop and maintain active plan for emergency and crisis
     management.

(vii) Prevent any incident recurrences through an efficient incident
      management system.

(viii) Seek to achieve and maintain SSHE excellence by setting
       measurable SSHE objectives and targets and assessing performances
       through regular audits and reviews.

(ix) Communicate SSHE issues in an open and transparent manner both
     internally, either from top-down or bottom-up and externally.

Conducting a Business with Environmental Standards

An effective environmental management system is developed and
implemented for PTTEP’s petroleum exploration and production operations
to minimize potential environmental impacts that could arise. The
implementation of the ISO14001:2004 Environmental Management System
(EMS) Standard by PTTEP’s domestic operational projects is in compliance
with the company’s policy and standards, national and local
legislations, and other international standards/requirements to prevent
environmental pollution and degradation, promote energy conservation,
and ensure the improvement of company performance. As a result, PTTEP is
the first petroleum exploration and production company in Thailand and
in the Southeast Asian region to achieve the ISO14001 Certification for
its domestic projects such as Bongkot Project, S1 Project, PTTEP1
Project, Petroleum Development Support Base and Arthit Project,. More
information on the environmental management system and environmental
performances, control and monitoring could be found in the answer to
question no. 4.5 of the 56-1 SET questionnaire and also in the PTTEP
annual Sustainability Report which has been published since 2007 on
PTTEP’s official website, (http://www.pttep.com)

Promoting the Efficient Use of Natural Resources

PTTEP gives great importance in energy and natural resources efficiency
in which many projects that uses the recovery of flare gas to generate
electricity and reprocess in the system are present. Flare gas recovery
and utilization at the Bongkot Project with a production rate of 600
MMSCFD of natural gas and 18,000 BBLD of condensate by installing a
Flash Gas Recovery Unit system (FGRU) into their offshore operations in
2006. This decreased the amount of gas to be flared into the atmosphere
by 6.5 MMSCF per day and also recovers condensate from operation by 400
BBL per day.

The recovery of flare gas at 10-20 MMSCF per day through the integration
of gas pipelines/flowlines from different production stations in S1
Project is another way to reduce the GHG emissions into the atmosphere.
This project is expected to be commenced by 2^(nd) quarter of 2013. By
connecting the pipelines from different production stations (from Nong
Toom-A to Pradu Tao-A) and converging them into LKU’s main production
site, this can serve as a means to recover flare gas from the smaller
production sites and converge it into one location for utilization and
access. The utilization of flare gas includes electricity generation,
cooking, etc. In 2010, the S1 Project also installed a “Cooling Pad”
with the purpose of increasing the efficiency of the Chiller Cooling Pad
by reducing the temperature of air before entering the system. The
efficiency of the “Chiller Cooling Pad” has increased to 24% after the
installation and is reduced the energy use by 21,600 KWh per month.

As for onshore petroleum production, PTTEP investigated the optimum use
of petroleum resources. Associated gas, which needs to be flared, has
found application as a fuel in the production of Nong Tum community
products in Kong Krai Lat district, Sukhothai province. This not only
exhibits a better use of natural gas but also reduces fuel costs for the
community. The Company also has a project to produce liquefied natural
gas (LNG) from associated gas at the Nong Tum–A oil deposit. Moreover,
the Company has joined Ratchaburi Electricity Generating Holding Plc. in
making use of associated gas to fuel a small power plant at Pratu Tao–A
site to cut oil consumption by around 1.5 million liters per year for
power generation of around 2 MW.

PTTEP, moreover, considers investment through the Clean Development
Mechanism (CDM), devised under the Kyoto Protocol to help industrialized
countries fulfill their obligations to reduce greenhouse gases through
their investments in greenhouse gas reduction projects in developing
countries. Also as a requirement, this kind of project must be designed
to support sustainable development in developing countries. At present,
PTTEP is carrying out a CDM project for less greenhouse gas emission at
onshore production sites, especially at the Sao Thian–A deposit in S1,
where a study is conducted to bring associated gas to fuel a small power
plant. The project has already won approval as a CDM project from
Thailand Greenhouse Gas Management Organization. The company is now
going through the verification and documentation process before
submission to the UN Clean Development Mechanism Executive Board for
consideration and it is estimated to be economically viable with an
initial approximation of carbon dioxide reduction emission of up to at
least 31,000 tonnes of carbon dioxide per year.

For more information on the environment efficiency and conservation
projects, please refer to the answers in question 4.5 of the 56-1 SET
questionnaire and also in the PTTEP Annual Sustainability Report which
has been published since 2007 on PTTEP’s official website,
(http://www.pttep.com)

Equipping Employees with Knowledge about the Environment

PTTEP provides SSHE and environment-related employees with trainings and
knowledge sharing on environmental issues and key messages via different
channels including in-house training, external training and seminars,
knowledge sharing sessions, and via company email messages. Most of the
environmental issues that are addressed are the Oil Spill Response IMO
Level 1 training, ISO 14001 standard awareness and requirements
training, environmental impact assessments and updates of local and
international environment laws and regulations. We also send off
environmental key messages and issues via SSHE Council meetings which is
held quarterly, SSHE Monthly Meetings in each department, Sustainable
Development Committee meetings, and tool box meetings for employees at
the operating sites.

In addition, PTTEP has made every possible attempt to ensure that our
operations do not result in harmful impacts on people and the
environment. The SSHE Management System or the SSHE MS that was adapted
from the OGP (International Association of Oil and Gas Producers) is the
foundation of our SSHE Management System (SSHE MS), which stipulates
that risk assessment of all activities must be carried out and adequate
control systems be implemented to reduce the risks to the As Low As
Reasonably Practicable (ALARP). This effort also complies with the
relevant legislation, regulations, and the international industry
guidelines for the development and application of our SSHE MS.

“Step Change in SSHE”

Even though many SSHE measures and efforts have been put in place, PTTEP
SSHE performance still needs to be significantly improved in order to
support company growth in the future. In Q2-2011, an initiative called
"Step Change in SSHE" was introduced in PTTEP.

The prime objective of the initiative is to move our SSHE performance
towards SSHE Excellence by the enforcement of the SSHE MS and
strengthening of our SSHE culture. The objective is to become an
LTI-Free organization by 2013 and an Incident-Free organization by 2015.

There are five acts in the “Step Change in SSHE"

Act1: SSHE moment in all meetings

All meetings must kick off with a dynamic thought-provoking message
about any element of SSHE. This is made by members in rotation to share
their story to increase SSHE awareness of all PTTEP personnel.

Act2: Safe and happy workplace

This act aims to improve the promotion of a safe and happy work
surroundings which result in awareness and realization of SSHE in every
move PTTEP personnel make.

Act 3: SSHE cares, SSHE shares

This act is intended to convey care to PTTEP personnel by improving SSHE
communication through various media, including websites, exhibitions,
supporting campaigns, and other relevant activities.

Act 4: SSHE is a license to operate

Since our organization is an oil and gas organization, we cannot
tolerate any mistakes because it may jeopardize the future prosperity of
the organization. Hence, strengthening the SSHE MS is necessary.

Act 5: SSHE in mindset

SSHE is actually a part of daily life. All PTTEP personnel should have
SSHE in their sub conscious mind and act habitually both at work and
home.

(1.11) Law

PTTEP respects the law, culture and custom at everywhere we operate our
business and defines it a business ethics for business operation legally
and effectively. Director, executives, and employees are required to
abide by strictly and not to abuse any copyrights especially in
information and communication technology. PTTEP also defines a business
ethics on anti-corruption that the Company’s personnel shall not corrupt
nor receive a bribe and that they make clear to the related persons of
the Company about the Company’s standing point. It is required that any
corruption encountered shall be raised to the Company. The Corporate
Secretary Office is appointed a compliance unit to oversee the company’s
overall compliance with applicable laws.

(1.12) Local culture and tradition

When operating in different countries, PTTEP takes into account their
local culture and practices and organizes training by experts, including
representatives of the Ministry of Foreign Affairs or those from
embassies on relevant subjects – including recommendations and
information concerning local culture, what to do, and what to avoid for
PTTEP employees assigned to work there.

(1.13) Human rights

The Company ensures that in all its operating areas, no illegal labor is
used and that the human rights principles of the United Nations’ Global
Compact are observed.

(2) It is PTTEP’s policy to promote stakeholders’ participation in the
Company’s business by giving shareholders and other stakeholders
opportunities to submit recommendations or useful information of
assorted matters concerning either the Company’s business or their
individual rights by e-mailing directly to Independent Directors at
independentdirector@pttep.com. All such input will be screened for
submission to the Board to ensure that their rights are catered to and
that they are fairly treated.

(3) Measures concerning raising concerns and protection mechanism

It is PTTEP’s ultimate business goal to generate long-term value and
shareholders’ satisfaction, as seen in its goals: “growth, prosperity,
stability, sustainability and dignity”. Convinced that GCG will lead to
that goal, the Company instituted channels for employees and external
parties to report or provide information concerning wrongdoing or
violations of laws and rules, GCG, the Code of Business Conduct,
policies, procedures, terms of reference, or regulations of PTTEP
through the CG Hotline channels. And to foster confidence that such
whistleblowers would not face persecution, PTTEP has instituted a policy
for the acceptance of such complaints and protection of whistleblowers.
This includes mitigation of trouble for whistleblowers if their
reporting were done in goodwill, without any malice to PTTEP or any
other party. PTTEP will treat such information with strict
confidentiality; the complaints will be involved by concerned and
assigned persons only, and the investigation policy is to be strictly
followed. The findings will be reported to the Corporate Governance and
the Board of Directors quarterly. The following CG Hotline channels are
available:

(3.1) Facsimile number: 0-2537-4949

(3.2) E-mail address: cghotline@pttep.com

(3.3) CG Hotline Box located at its Offices

(3.4) Direct submission or by mail to the Corporate Secretary Office

In 2011, the Company received through CG Hotline three queries, all of
which were replied, and one complaint, which was closed.

8.4.4 Information Disclosure and Transparency

Disclosure of information represents a vital principle for GCG. PTTEP
values the information that needs to be forwarded to SET and
shareholders, particularly its accuracy, adequacy, timeliness, and equal
access by all recipients. Such information preparation follows the
Business Ethics. The Investor Relations, and the Corporate Communication
and Reputation Management Department address inquiries from
institutional investors, minor shareholders, analysts, and those
interested in monitoring PTTEP data. The Company has a clear procedure
for information disclosure to SET under ordinary and urgent
circumstances.

PTTEP’s material information includes both financial and non-financial
information. In 2011, disclosure of financial information, especially
the financial statements, was reviewed and audited by auditors in its
essence according to generally accepted accounting principles (GAPP),
and was endorsed and approved by the Audit Committee and the Board
before its release to the shareholders. The Board of Directors also
reports their financial responsibilities in the annual report. Moreover,
PTTEP discloses unreviewed quarterly financial statements and unaudited
annual financial statements, which exceed SET regulations, so that
shareholders and investors can receive financial information more
rapidly. Such information and the reviewed and audited statements do not
contain any significant difference. PTTEP also follows SET and SEC
regulations in releasing non-financial information, which include
connected transactions, management discussion and analysis, and risk
management. The Good Corporate Governance report is also included in the
annual report and the 56-1 Form.

Information disclosed to the public, shareholders and investors, is
posted on the Company’s website in both Thai and English. Such
information involves all information disclosed through SET, which is
immediately posted on the Company’s website, annual reports, the 56-1
Form, invitations to shareholders’ meetings, minutes of shareholders’
meetings, information used for roadshows, quarterly results presented to
analysts, audio and video information presented through webcast, news
releases, and SSHE reports, which are incorporated into the annual
sustainability report. PTTEP regularly updates its website to keep
viewers informed and provide them with easy access to information for
their highest benefit. In 2011, PTTEP disclosed 47 pieces of information
through SET and organized activities to meet with analysts on various
occasions, consisting of three analyst meetings, twelve roadshow
sessions, two site visits and CSR activities by stock analysts, and
regular company visits.

PTTEP also arranges for shareholders’ visit to operating areas, such as
Sirikit Oil Field in Kamphaeng Phet province, to build confidence and
understanding of its operation and business. In the 2011 AGM, Investor
Relations officers were stationed as part of PTTEP team to provide
information and answer questions to shareholders, thus providing more
access to information.

Directors, executives from executive vice president upward, Senior Vice
President, Accounting Division, Vice President, Corporate Accounting and
Vice President, Finance are required to report vested interests with the
Company, held by themselves and connected persons, without delay. The
Corporate Secretary is responsible for reporting such stakes to the
Chairman and the Chairman of the Audit Committee for examination within
seven days after receiving the report. The practice is in line with
Securities and Exchange Act (No. 4) B.E. 2551 and a Capital Market
Supervisory Board notification.

PTTEP also discloses the roles and responsibilities of the Board and all
standing sub-committees, including the attendance of each Director under
Topic 8, Management; reports of the Chairman of each sub-committee (item
no. 8.5, Reports of Standing Sub-committees); and the policy of
Directors and Executive Management remuneration under item no. 8.4.5,
Responsibility of the Board, (3.8) Remuneration.

PTTEP constantly values the accuracy, completeness, timeliness, and
transparency of information disclosure and is committed to keeping up
this practice.

Investor Relations (IR)

Investor Relations is responsible for communicating information that
accurately shows PTTEP’s real value to stock analysts, shareholders, and
investors in general under the rules of SET, and for fostering
confidence on the part of analysts and investors as well as a positive
image and attitude in investors through coordination and consultation
with PTTEP’s management. Investors and interested parties can contact
this unit for information on PTTEP, including financial statements,
annual report, and notifications to SET, SEC, etc. To contact the IR
unit, three means are possible:

(1) Telephone number: 0-2537-4675, 0-2537-4611, and 0-2537-7555

(2) E-mail address: ir@pttep.com

(3) Facsimile number: 0-2537-4467

8.4.5 Responsibilities of the Board of Directors

Each year, the Board of Directors plays a key role in developing the
vision, mission, strategies, work plans, and budgets together with the
Management. Directors must perform their duties cautiously and honestly
in line with laws, Company regulations, Good Corporate Governance, and
the Business Ethics. Directors also monitors that the reporting of
operating results in all aspects, be it business results, financial
results, and compliance with regulations and policies, be included in
their monthly meetings to reinforce PTTEP’s efficiency and business
ethics.

(1) Structure

(1.1) Components

The Board comprises 15 members, considered suitable size compared with
this business. The Board members are categorized as non-executive
director and executive director, or as independent directors with the
number not less than half of the existing Board composition. There must
also be at least three Directors from the private sector. As of 1
January 2012, there are altogether 15 directors comprising

-   14 Non-executive directors (93.34 percent of the Board)

-   1 executive director who is the President and Chief Executive
    Director

-   12 independent directors (90 percent of the Board)

-   3 directors from private sector

Only one major shareholder prevails at PTTEP, with minor shareholders so
widely distributed that they cannot form a statistically significant
group. Also, since the current non-Independent Directors and those who
do not represent the major shareholder are diverse in professional
qualifications or organizations, the current Board of Directors,
accordingly, can safeguard the interests of all shareholders as a whole.

Name, bibliography, qualification, experience and shareholding of all
directors are disclosed in the attachment 1: The detail of the
executives and the controlling persons of the company and the company’s
website.

(1.2) Qualifications of PTTEP Directors

(1) Qualifications complied with the Public Company Act, Security and
Exchange Law, Rules of the Security and Exchange Commission, the Capital
Market Supervisory Board, the Stock Exchange of Thailand and relevant
Cabinet Resolution.

(2) Diverse skill mix, among them: industry knowledge, accounting &
finance, business judgment, management skills, international markets,
business strategy, crisis management, corporate governance, and legal.

(3) Directors can contribute fully for the company and shall not serve
as director or executive at more than 5 listed companies. Any director
who is absent from the Board of Directors’ meeting more than 3
consecutive times without due reason is regarded as disqualify for
directorship.

(4) Age not over 70 years

(1.3) Terms of Directorship and Number of Companies Where Directors Can
Serve

The Company has a set of criteria that one-third of the Directors, the
total number of which must not exceed 15, must relinquish their
directorship after the completion of the three-year term. Moreover,
starting from 2006, each Director is not allowed to serve for more than
three consecutive terms. This gives the Company opportunities to select
suitable persons for its maximum benefit. An exception is made only for
experts in particular areas, based on the Company’s consideration.
Another key criterion for considering the qualifications of candidates
is the number of listed companies where the person is serving as a
director or an executive, which should not exceed five. One PTTEP
Director is holding a directorship at more than five listed companies,
but this has not affected his performance. He has dedicated his time for
the Company and has always been present at meetings with valuable
suggestions and recommendations made for the Company. PTTEP keeps
shareholders informed of meeting attendance records so that shareholders
may consider replacements for those who complete their terms.
Information regarding directorship holding in other companies is
reported in the 56-1 Form and on the Company’s website. At present, no
director resumes position of director or management in more than 5
listed companies. The term of the Standing Subcommittees, namely the
Audit Committee, the Remuneration Committee, the Nominating Committee,
the Corporate Governance Committee and the Risk Management Committee is
three-year.

(1.4) Definition of Independent Director Qualifications

This has been detailed under Topic 8.1.3.

(1.5) Policy and Procedures for Serving as Other Companies’ Directors of
the President and Chief Executive Officer (CEO) and Management

PTTEP values the experience to be acquired by the CEO and other
Management members through their director service in other
organizations. However, to allow them to devote their time to its
business, the Company requires that the CEO and members of the
Management may serve as directors of other business entities (apart from
self-owned or family businesses) only as necessary and as long as such
positions do not compromise the business interests of PTTEP. In any
case, prior approval is needed from an authorized person, and the name
PTTEP or their positions in PTTEP cannot be used in any way to involve
any other company’s business. Nevertheless, any PTTEP management or
employee assigned to serve as a director, a management committee member,
or a secretary in an organization or party involved in the exploration
and production business, or a business directly related to it, must
return to PTTEP any compensation given to him or her from such capacity.
In other cases, he or she can keep the compensation. This information
will be disclosed in the attachment 1: The detail of the executives and
the controlling persons of the company. There is no one now working more
than 5 listed companies. At present, no management resumes position of
director or management in more than 5 listed companies.

(1.6) Segregation of the Chairman and the CEO and their authority and
duties

The Chairman of the Board and the CEO are two separate persons, both
elected from Directors. The Chairman stays away from day-to-day
management, as there is a clear separation between policy-making,
monitoring and assessment, and management execution. The Chairman’s
leadership plays a key role in ensuring the Board’s efficiency and
independence of the Management, deciding agenda items under the Board’s
responsibility along with the CEO, and efficiently chairing Board and
shareholders’ meetings. This is done by encouraging all Directors to
actively take part in such meetings, including raising critical
questions, consulting, guiding, supervising, and regularly supporting
the operation of the Management through the CEO. At the same time, the
Board refrains from interference in routine tasks or business activities
of the Management. The Chairman also ensures that the Directors observe
PTTEP GCG. Whereas the CEO takes full responsibility of Company
management execution under the authority framework assigned by the Board
in line with PTTEP’s rules. Moreover, to distinguish his roles and
responsibilities, the Chairman must not hold any position in any
committee.

(1.7) Independence of Chairman

PTTEP has determined that, in the election of the Chairman, independence
will be the foremost factor for deliberation. Unless there is a greater
necessity, other Directors are to be considered. Nevertheless, PTTEP’s
Chairmen have consistently performed their duties independently.
Moreover, PTTEP has instituted the Chairman’s performance evaluation by
the entire Board to gain feedback as guidelines for improving and
auditing his performance. The appraisal outcome has been disclosed in
Form 56-1 and the annual report.

Apart from the Chairman, all other Directors always express their free
views about the Company business in Board meetings and committee
meetings, as well as in their other work performances. This is to ensure
that the business administration is efficient, proper, transparent, and
beneficial to shareholders at large.

(1.8) Corporate Secretary

This is detailed under Topic 8.1.7.

(2) The Standing Sub-committees

The Board has appointed standing sub-committees (or simply
‘sub-committees’), consisting of qualified Directors, to handle specific
tasks for the Board as defined by the scope of each sub-committee. Their
qualifications, terms, and scopes of responsibility have been defined in
their respective charters. A majority of their members are Independent
Directors, and so is the Chairman of each sub-committee, with the
exception of the Risk Management Committee. The Chairman of the Board
does not belong to any sub-committee. The sub-committees regularly
report their findings to the Board and each year report their
performance to the shareholders in Form 56-1 and the annual report.

PTTEP constitutes five sub-committees, namely the Audit Committee,
Remuneration Committee, Nominating Committee, Corporate Governance
Committee (CGC), and Risk Management Committee. Their names,
responsibilities, number of meetings, individual attendances, and
reports appear under Topics 8.1.2 and 8.5.

(3) Roles and Responsibilities of the Board

(3.1) Corporate Governance Policy

Since 2001, the Board has defined a policy on good corporate governance
(GCG) and made it a written rule. The policy is revised every year, and
the current revision is the sixth one in line with GCG Principles for
Listed Companies in the Stock Exchange of Thailand of 2006 and those of
The Organisation for Economic Cooperation and Development (OECD).
Besides, the policy is comparable with that of leading international oil
companies and suggestions from various institutes. The essence of GCG
principles involves the rights of shareholders, the equitable treatment
of shareholders, role of stakeholders, disclosure and transparency and
responsibilities of the Board, which supports efficient management with
business ethics by observing the six following principles:

(i) Accountability

(ii) Responsibility

(iii) Fairness and Integrity

(iv) Transparency

(v) Creation of Long Term Value to All Stakeholders

(vi) Promotion of Best Practice

The Company distributed its Good Corporate Governance and Business
Ethics booklet to Directors, executives, and all employees for use as a
reference and as guidelines to follow. All must sign their names as a
commitment to performing to their highest standards based on GCG and
Code of Business Conduct. The GCG and Business Ethics booklet was also
distributed to joint-venture partners, government agencies overseeing
PTTEP, and organizations in frequent contact with PTTEP, and interested
persons. The information is also posted on the Company’s website under
the topic of Good Corporate Governance so that shareholders, investors,
and interested persons may easily access to the information.

PTTEP continued to focus on promoting the understanding of GCG and
Business Ethics to Directors and all employees through activities
including orientation sessions for new Directors and employees including
newly appointed management. Furthermore, it also organized CG Visit for
the Corporate Governance Committee to meet with management and employees
of each group in order to follow-up the GCG promotion and CG Leader
performance of the management.

PTTEP has launched a CG Clinic as a channel for staff to get information
about GCG and Business Ethics. The Corporate Secretary is responsible
for answering queries. PTTEP has developed communication channels of GCG
information according to its content for its employees as follows:

• CCS CG Information Center, for general information concerning GCG
practices

• CCS Compliance News Alert, for reminders about relevant rules and
laws, including insider trading, or for alerts on relevant, upcoming
rules and laws.

PTTEP commits to develop the good corporate governance and to have an
assessment by the external third party every 3 years in accordance with
its Good Corporate Governance and Code of Business Conduct. The
assessment had been conducted by TRIS Corporation Limited (TRIS) last
year. In 2011, we have improved our performance according to TRIS’
recommendations in various aspects such as an enhance understanding on
related transaction of the executives and staff via e-mail monthly or
shareholder’s rights protection by formulating security trading
restriction at some period of time, etc.

(3.2) Code of Business Conduct

Valuing ethical business conduct, PTTEP regards the business ethics as a
precursor to desirable behavior that defines the framework and guiding
principles for good business conduct for the Board, management, and all
employees to observe for the benefit of efficiency and ethics through
respect for rights and treatment of stakeholders equitably, with
fairness, and openness to scrutiny. This would not only foster
confidence and acceptance of PTTEP’s efficiency and transparency, but
also foster long-term value for the stakeholders and fairness to all.

PTTEP’s Code of Business Conduct was made in a written form and is
reviewed annually. In 2011, the business ethics on gifts, entertainment
and bribery has been amended to cover the anti-corruption which is the
significant issue of concern among the local and international society
and the subject has been changed to gifts, entertainment and
anti-corruption. The business ethics consists of 13 subjects governing
desirable behavior and reflects the organization values in business
operation that the Directors, the Management, and all employees must
observe. The subjects of the Code of Business Conduct are as follows:

1)  Respecting the law and political neutrality

2)  Internal control

3)  Human resources

4)  Confidentiality

5)  Disclosure of information

6)  Use of inside information

7)  Conflicts of interest

8)  Procurement and contracts

9)  Gifts, entertainment, and anti-corruption

10) Accounting and finance

11) Use of information technology and communications

12) Safety, security, health, and environment

13) Corporate social responsibility

PTTEP instituted an assessment of 2011 Code of Business Conduct Practice
Rating Program in work unit (at the department level upward) to
determine management and employees’ compliance with the Code of Business
Conduct. The results of the assessment will be used for further
development and promotion of the code among employees. The results this
year showed that the Company received an overall score of 4.15 out of 5,
against 4.30 in 2010 (1 = need urgent improvement, 2 = need improvement,
3 = average, 4 = good, and 5 = very good).

(3.3) Conflicts of interest

Published in the GCG Policy, PTTEP demands that all Directors and
employees avoid any conflicts between personal and corporate interests.
Here are the essences.

-   Decisions about Company business by all Directors and employees must
    solely be for the best interests of PTTEP without the influence of
    personal gains or those of related parties.

-   All Directors, management, and employees must review and report all
    conflicts of interest to the Company.

In addition, PTTEP has devised the following measures:

-   All Directors, management, and employees strictly comply with laws,
    rules, and regulations, particularly those of SET concerning
    connected transactions.

-   Avoidance of financial involvement and relationship with external
    parties by all Directors, management, employees, or their related
    persons that could compromise PTTEP’s interests, bring about
    conflicts of interest, or hamper efficient business conduct

-   When Directors, management, and employees involve in any hiring,
    selecting, deciding, or approving transactions that may cause them a
    conflict of interest, they must report to supervisors or those with
    joint approval authority by using PTTEP’s form for reporting
    conflicts of interest. Also, they must withdraw from such processes
    or from undertaking transaction with PTTEP.

-   All Directors, management, and employees reviews and self assess on
    conflicts of interest as specified in annual self-appraisal forms.

-   All Directors, management, and employees must immediately notify
    their potential conflicts of interest, when in doubt. This applies
    when they or their related persons take part or hold shares in any
    business entity that engaged in transactions with PTTEP that might
    cause potential conflicts of interest.

In deliberating connected transactions during 2011, PTTEP complied with
the above-mentioned policy, SET rules and regulations on connected
transaction of 2003 and the notification of the Capital Market
Supervisory Board No. Taw Chaw 21/2551, concerning rules on connected
transactions. Furthermore, PTTEP has improved the practice of this
matter by proposing all transactions to the Audit Committee’s meeting
though the approval authority belongs to the management for transparency
and fairness. Board resolutions concerning these transactions were
strictly made among non-connected Directors. Details about connected
transactions of 2011 appear in item 11.

(3.4) Internal Control and Internal Audit

PTTEP implements an internal control policy that is sufficient and
acceptable for Company risks and prevailing business circumstances, or
the activities of individual departments. To ensure suitable control
measures with prevailing circumstances, environment, and risks, the
Internal Audit Department regularly monitors internal control practices.

The Board, management, and all employees collectively decide business
procedures to ensure achievement of the objectives with reasonable
confidence:

-   Efficient and effective operations, including prudent use of
    resources

-   Accurate, reliable, and timely financial reporting

-   Compliance with Company policies, laws, and regulations.

The Company’s internal control process was based on the regulations of
The Committee of Sponsoring Organizations of the Treadway Commission
(COSO) and that of the Office of the Auditor General of Thailand, and
consists of five components:

(i) Control Environment: A proper control environment fosters control
    awareness in those conducting business with competence, integrity,
    and a Business Ethics. It covers the formulation of business
    directions and policies, business expansion, organization, and clear
    definition of responsibilities. It entails proper delegation of
    authorities and responsibilities. In short, PTTEP is determined to
    uphold the GCG principles.

(ii) Risk Assessment: Recognizing the value of risk management, the
Company has set up a risk management department to take charge of risk
analysis, assessing probabilities and potential impacts, and taking
action to ensure acceptable risk management. PTTEP classifies risk
management at the corporate level, linking to its strategic directions
and strategies, and the operating level, to be managed by departments.
With clear risk management procedures, all risks come under the
supervision of the Risk Management Committee. (Details as under Risk
Management)

(iii) Control Activities: PTTEP has designed its business to function
systematically and efficiently. Also, to prevent and minimize operation
risks, the Company operates under four essential regulations: human
resource management, finance and accounting, budgeting, and procurement
regulations, including the charters of the five sub-committees. These
regulations frame PTTEP’s management and operation control. The Company
has also devised a Delegation of Authority and Signatures (DAS) table
for the CEO to clearly delegate authority to the Company’s functional
management, resulting in practical and easily-tracked courses of action.

PTTEP has developed the Corporate Governance Framework (CGF) indicating
the principle and structure of management and supervision between the
corporate and other assets. This is applied to make clear about the
role, the duty and responsibility in working together between the
corporate and the assets. In addition, the company has applied it with
the PTTEP Australasia project for the first time. It is expected that
the company will apply to cover other projects under the company’s
operation in the future

In term of working process, PTTEP has worked in details in Project
Realization Process (PREP) to make clear and standardize for petroleum
exploration and production. The process will be indicated very clear
with several stages such as activity, deliverable, Value Assurance Check
and Approver. Each stage will be set systematically to minimize the risk
and being easier for examination. During the previous year, the company
has applied the PREP for the activity of Exploration and Appraisal and
Drilling.

In term of compliance, PTTEP has assigned the Corporate Secretary Office
to be in charge of monitoring, controlling and supervising the company’s
operation so that it strictly complies with relevant laws and
regulations. This compliance covers all areas where we operate in order
to minimize the risk from non compliance. In addition, new rules and
regulations shall be notified to all related parties. In case of doubt
about legal matters, a consultation shall be sought in order to have a
mutual general understanding before complying consistently.

(iv) Information and Communication: The Company institutes efficient and
effective communication procedures for information, both internally and
externally, for complete, accurate, and timely decision-making.
Information is either financial or non-financial. Internally, through
the Intranet (via Internal Communication as the information center),
PTTEP provides employees with adequate and timely information needed for
doing their work, as well as communication between management and
employees to improve job coordination and execution to fulfill goals.
Externally, the Company has an effective procedure in place to provide
sufficient information and deliver reports on its performance to various
institutions in a timely and efficient way as required by relevant
regulations, for good coordination and business appreciation.

PTTEP has an information control system for the transmission and
reception of information and clearly allocates tasks along with
responsible persons, authority, and units concerning information and
communication technology. In addition, the Company has classified levels
of access to confidential information in all its departments to give
access to authorized personnel only.

(v) Monitoring and Evaluation: PTTEP has clear control and operating
performance assessment, as well as that of risk management performance.
Under the risk assessment monitoring procedure, findings are regularly
reported to the Risk Management Committee. Corporate performance is
assessed every quarter of the year, with each department reporting its
results against plans and performance indicators to the Board. In
addition, the Internal Audit department monitors and assesses internal
control outcome, and then reports its findings to the Audit Committee.

Findings of internal control assessment for 2011 appear under Topic 10.

(3.5) Risk Management

Defining a risk management policy for the Company, the Board appointed
the Risk Management Committee as a standing sub-committee under a
charter of 2005. This sub-committee ensures that PTTEP business
operation follows the risk management policy.

In charge of the adequacy of risk management systems and the
effectiveness of risk management for the Company, the Risk Management
Department not only investigates and indicates risks or anomalies
hampering business operation against strategic and operating goals;
alleviates or eliminates such risks in a systematic and efficient way;
periodically reporting to risk owners, the Management, the Risk
Management Committee, and the Board, and summarizes its activities for
reporting to the Board for consideration of process adequacy,
cultivation of a culture, and awareness for risk management in its
business for each company unit.

(3.6) Board Meetings

As a rule, the Board schedules the meeting dates for each year in
advance and has a clear meeting agenda for each month. In 2011, it
scheduled each month’s meeting for the fourth Thursday and also set
aside an off-site meeting for devising strategies, which the Company
highly valued. Special meetings were also held as appropriate. There
were altogether 18 meetings. In addition, there was one meeting
exclusively held among Directors in the absence of the Management before
the regular meeting of July 2011. Independent Directors Committee also
held their quarterly meetings before the regular meetings of March,
June, September, and December. The Board always received invitations to
the meetings, draft minutes, and information related to the meeting
agenda ahead of meeting dates.

The Chairman and the President and CEO usually consider matters to be
included in the agenda of Board meetings. Directors can also propose
matters for consideration and they propose issues both in the Board
meetings without executives and those of Independent Directors
Committee. In 2011, there were altogether 91 matters raised for
consideration. High on the agenda included the business direction and
strategic policies, annual budget, financial statements, the
consideration of procurement on vessel service from the Thai company,
project investment, the election of a new director to fill the vacancy,
the appointment of standing subcommittees, improvement or issuance of
the Company’s regulations, such as, the Compliance Charter B.E. 2011.
There were 146 matters raised for acknowledgement, most of them
concerning reports of operating results, progress of various projects,
portfolio review, relinquishment of onshore concessions, progress of
project management, the process and tools for business expansion,
Project Look Back during 2000 – 2010, the relinquishment of concession
areas, investment in PTTEP share status, position changes of Directors
during the year, appointments of executives, activities to support
social and environment development, oil price risk management and
reports from standing subcommittees. The Board meeting normally lasts
about three hours with the presence of the Corporate Secretary, who is
responsible for providing directors with advice concerning related
regulations to ensure correct practice and for taking minutes of the
meeting as well as collecting and filing all documents.

The Board’s decision will be based on majority vote by applying one many
one vote rule. A director who has conflicts of interest on any
particular matter shall not attend the meeting and vote on that matter.
In case the vote cast is equal, the Chairman shall exercise a casting
vote.

In addition, in these following cases, it is required to obtain approval
from the shareholders’ meeting not less than three-fourths of the total
entitled votes present at the Meeting:

(1) Sale or transfer of the Company’s business wholly or partly to other
    persons

(2) Purchase or transfer of other companies of private company’s
business to PTTEP

(3) Conclusion, amendment or termination of the contract related to the
lease of PTTEP’s business for a whole or a substantial part,
authorization of other persons to manage the Company’s business or the
merging with other entities for the purpose of profit sharing.

(4) Amendment of the Company’s affidavits or Articles of Association.

(5) Capital increase or decrease, debenture issuance, business and
company dissolution.

(6) In case where PTTEP or its subsidiaries agree to enter into a
connected transaction or to acquire or dispose the Company’s or its
subsidiaries’ assets as defined in the SET’s Notification as the case
may apply.

The meeting minutes covered all essential issues and all the minutes
were unanimously approved, particularly for matters requiring
deliberation. Names of those meeting participants who gave opinions,
queries, and clarifications in each meeting were clearly recorded. All
documents were systematically filed under tight security. As a rule, all
Directors attended each Board meeting except for due reasons of absence.
Whenever possible, Directors sent an apology letter to the Chairman when
they could not attend a meeting.

(3.7) Self-assessment of the Board

PTTEP has stipulated in its GCG the assessment of the performance of the
Board, the Chairman, and the Sub-committees – that their performance
must be self-assessed against the performance assessment forms and the
annual Performance Agreements, and that the performances of the Chairman
and Standing Sub-committees must be assessed each year, using the
evaluation forms defined by the Nominating Committee.

The Board assessment divided into three parts: individual
self-assessment, cross-assessment for individuals, and the entire Board
assessment. All sub-committees are evaluated by both the committee
member themselves and other directors as well. The Chairmen performance
is also assessed by all directors. PTTEP will propose these scores to
the Board and disclose the scores in the annual report. PTTEP then
gathers the comments and suggestions made in the evaluation forms as
guidelines for improving the performance of the Board and the Company.

For 2011, a weighting factor for each topic has been fixed as same as in
2010. As regards the grading scale for these assessments, a ‘1’ stands
for ‘seriously needs improvement’, a ‘2’ for ‘fair’, a ‘3’ for
‘standard’, a ‘4’ for ‘good,’ and a ‘5’ for ‘very good’.

-   Self-assessment scores by individual Directors averaged 4.66
    against 4. 74 in the previous year, very close to the highest score
    of 5

-   Cross-assessment scores averaged 4.89, against 4.84 in the previous
    year, very close to the highest score of 5

The Board as a group performed in two aspects:

1)  Against Performance Agreements, with a 50% weighting factor,
    averaged 3.86, against 4.38 in the previous year

2)  Against self-assessment forms of the entire Board, with a 50%
    weighting factor, averaged 4.74, same score as last year, very close
    to the highest score of 5

On the whole, the Board averaged 4.30 against 4.56 in the previous year,
very close to the highest score of 5.

-   The Audit Committee scored 4.77 against 4.83 in the previous year,
    very close to the highest score of 5

-   The Remuneration Committee scored 4.83 against 4.90 in the previous
    year, very close to the highest score of 5

-   The Nominating Committee scored 4.57 against 4.74 in the previous
    year and very close to the highest score of 5

-   The Corporate Governance Committee scored 5.00 against 4.85 in the
    previous year, very close to the highest score of 5

-   The Risk Management Committee scored 4.87 against 4.79 in the
    previous year, very close to the highest score of 5

-   The Chairman of the Board earned 4.94 from the rest of the Board
    members, against 4.91 in the previous year, very close to the
    highest score of 5

    The Company will use the Board evaluation result of 2011 for further
    improvement in 2012 accordingly.

    (3.8) Directors’ and Executives’ Compensation

    (3.8.1) Directors and Standing Sub-committees’ Compensation

    PTTEP’s policy for compensation paid to the Directors and members of
    the Sub-committees is clear and transparent. The Remuneration
    Committee decides and reviews such compensation based on not only
    suitability, but also the Board’s and Company’s performance,
    practices of leading SET-listed companies of the same size and
    industry, and the scope of responsibility and the economic situation
    and proposes it for approval from shareholders’ meeting. The 2011
    AGM approved Directors’ and Sub-committee members’ remuneration
    effective from 2011 onward as proposed by the Remuneration
    Committee, as detailed below:

(i) Directors’ remuneration at the same rate as the remuneration in 2010
detailed as follows:

(i.i) Retainer fee at Baht 37,500/person/month, paid in full each month.

(i.ii) Meeting fee at Baht 25,000/person/meeting, paid only to those in
attendance.

(i.iii) Annual bonuses for all Directors will be paid out if dividends
are paid to shareholders in a given year; payouts would amount to 0.1%
of the net profit for the same year with the total limited to Baht 40
million, paid according to the tenure of each Director.

(i.iv) The Chairman of the Board shall receive an extra 25 percent of
the fees and bonus.

(ii) The Standing Sub-committees consisting 5 Sub-committees according
to the Company’s Article of Association, namely, the Corporate
Governance Committee, the Audit Committee, the Remuneration Committee,
the Nominating Committee and the Risk Management Committee shall receive
the remuneration as follows:

(ii.i) The Audit Committee will receive a meeting fee of 30,000
Baht/person/meeting. This has increased from years 2010 and 2009 for
which the payment rate was 25,000 Baht/person/meeting. Rationale for
this increase stems from the expanded number of committee
responsibilities and from the need for a comparable fee as compared to
listed companies of the same size within the same industry.

(ii.ii) The Remuneration Committee, the Nominating Committee, the
Corporate Governance Committee and the Risk Management Committee will
receive the meeting fee of 25,000 Baht/person/meeting at the same rate
of 2010 and 2009.

(ii.iii) The Chairman of Sub-committees shall receive an extra 25
percent of the meeting fee.

(ii.iv) The payment will not apply when the meeting resolutions
conducted by circulating.

(ii.v) The committee members who are the executive management top down
from the top management will not receive the remuneration.

Individual director’s compensation details concerning retainer fees,
meeting fees, and bonuses, as well as meeting fees for sub-committees,
appear under Topic 8.3.1

(3.8.2) Compensation Policy for Affiliates’/Subsidiaries’ Board Members

This has to do with entities set up by PTTEP to serve as mechanisms for
conducting businesses for PTTEP for its best interests under various
business conditions. These are treated as Company assets in line with
legal criteria or investment conditions. Some of these have operated as
full-fledged companies. As a rule, the boards of these companies are
kept to a bare minimum, for instance, Executive Vice President, Senior
Vice President, and/or Vice President directly responsible for the
success of the projects under such subsidiaries and associated
companies. PTTEP rules and procedures therefore apply, as these are
assets managed in the best interests of the Company.

Executives assigned to serve on behalf of PTTEP as directors of
subsidiaries and affiliates engaged in petroleum exploration and
production, or directly related ones, including PTTEP Services Co.,
Ltd., are not entitled to extra compensation, as this is considered
PTTEP’s direct business and part of routine work. For other cases, they
may receive such compensation, as it is considered extra duties,
including service for PTT ICT Solutions Co., Ltd., and Energy Complex
Co., Ltd. This provision is clearly stated in the GCG principles of
PTTEP.

(3.8.3) CEO’s Compensation

The CEO’s compensation package is clearly and transparently decided by
the Remuneration Committee with the endorsement of the Board.
Consideration is given to performance appraisal outcome, Company
performance, prevailing industry and business practices of companies
with similar sizes, as well as job responsibilities and the economic
situation.

Assessment of the CEO’s performance is made transparently and clearly
according to the result of the Company’s 2011 Key Performance Indicator
(KPI) by the Remuneration Committee and approved by the Board as
check-and-balance to monitor the performance of the CEO against
short-term and long-term goals. Besides allowing for GCG practices, this
would make the deliberation of the CEO’s compensation transparent and
suitable while also enabling him to apply the findings to improve
performance.

(3.8.4) Executive Management’s Compensation

The Remuneration Committee reviews and recommends the criteria or
procedures for defining the salary structure for executive management
that are fair and reasonable while reflecting the Company’s performance
for the Board’s approval. Executives’ salary structures are determined
by market comparison with other leading oil and gas companies’ criteria,
procedures, pay rates, salary surveys, and with consideration to their
individual scopes of accountability.

The CEO decides individual executive management’s compensation. Annual
merit increases of executive management are tied to individual
performance, the Company’s performance, and key performance indicators
(KPIs) achievement of each division.

To maintain its competitiveness in the oil and gas market, PTTEP
participates in annual compensation surveys along with other leading oil
and gas companies to obtain sufficient information to report to the
Board for possible adjustment in competitive compensation strategy when
there is a significant compensation change in the marketplace.

In compliance with GCG and transparency, PTTEP discloses the
Management’s compensation, including their PTTEP shares and ESOP
warrants, in the annual report.

(3.9) The Board of Directors’ and Executives’ Training

(3.9.1) Directors’ Development

(i) Orientation for new Directors

PTTEP organizes orientation for each new Director as follows:

(1) The CEO and executives will present information to introduce new
    director to the Company’s business and business direction, petroleum
    exploration and production knowledge and technique, related laws,
    PTTEP GCG and business ethics as well as necessary and useful
    information for effective director performance.

(2) New Director will receive the Director’s manual, which provides
    essential information, such as strategy, related laws and rules, and
    PTTEP GCG and Business Ethics. The Company will keep updating the
    Director’s manual and improving it for reference in performing
    directors’ duties.

New Director after attending the orientation shall evaluate the
orientation efficiency so that the Company can improve it. Moreover, a
director elected the Board Chairman will be presented how to be an
efficient Board Chairman and how to conduct the Board of Directors’ and
shareholders’ meetings.

(ii) Directors’ training

PTTEP has knowledgeable Directors who are always eager to learn about
their duties and the business, which it always supports. In 2011,
directors’ trainings are as follows:

+---------------------+------------------------------------------------+
| Name of Director    | Courses                                        |
+---------------------+------------------------------------------------+
| 1.  Mr. Viraphol    | 1. Role of the Nomination and Governance       |
|     Jirapraditkul   | Committee (RNG 1/2011) organized by IOD        |
+---------------------+------------------------------------------------+

+---------------------+------------------------------------------------+
|   Name of Director  | Courses                                        |
+---------------------+------------------------------------------------+
| 1.  Mr. Tevin       | 1.  Role of the Compensation Committee (RCC    |
|     Vongvanich      |     13/2011) organized by IOD                  |
|                     |                                                |
|                     | 2.  “The Senior Executive in Justice Class 15” |
|                     |     lectured by Court of Justice,              |
|                     |     Justice College, Judicial Training         |
|                     |     Institute                                  |
+---------------------+------------------------------------------------+
| 2.  General Lertrat | 1. Financial Statements for Directors (FSD     |
|     Ratanavanich    | 13/2011) organized by IOD                      |
|                     |                                                |
|                     | 2. Directors Forum 1/2011 organized by IOD     |
|                     |                                                |
|                     | 3. Role of the Compensation Committee (RCC     |
|                     | 13/2011) organized by IOD                      |
+---------------------+------------------------------------------------+

12 directors have so far attended Director Certification Program (DCP)
and 1 Director attended Accreditation Program (DAP) out of altogether 15
directors. PTTEP has applied membership of Thai Institute of Directors
Association for every director and will distribute the relevant training
program or the supplementary document for training to the director for
further study. Details of the attendance in training provided by IOD as
well as other institutions are shown in Attachment 1.

Moreover, PTTEP also invited an external speaker to lecture in order to
enhance certain knowledge for the directors and the executives. PTTEP
invited Khunying Chada Watanasirikul, the Chairman of IOD, to give the
lecture on ‘the role of the Board to anti-corruption’ in order to
express commitment of the Company to develop its business operation in
accordance with the good practice for anti-corruption, which is a part
of the good corporate governance. PTTEP also regularly informs and
reminds Directors of their responsibilities under the law and guidelines
on GCG to reinforce their understanding.

(3.9.2) Executive Development and Succession Planning

PTTEP has a management competency evaluation through an assessment
center and compared the evaluation result with PTTEP Management
Success Profile consisting of Competency, Personal Attribute,
Organization Knowledge and Experience. Each executive will be informed
of the result for identifying a development plan to enhance management
competency and leadership.

In additional, PTTEP has a systematic succession plan for key position
to replace retirement and/or to fill new positions as a result of
company expansion. The succession planning will be conducted and
selected by the Career Review Board based on qualification, knowledge,
capacity and experience in certain positions. Once the Career Review
Board can select the successor, the company will set the individual
development plan both in short term and long term time so that the
successor is ready to work at the scheduled period.

  8.5 Report of the Sub-committees

8.5.1 Report of the Corporate Governance Committee 2011

Valuing compliance with its corporate governance (CG) policy and code of
business conduct, PTTEP has continually improved its practices, for
which the Board of Directors has assigned the Corporate Governance
Committee this responsibility. This sub-committee, consisting of at
least three Independent Directors, supervises and promotes compliance
with the above-mentioned policy and code across the Company.

The year 2011 this sub-committee ran by 2 groups of committee. The
first—serving from January 1, 2011, to February 21, 2011, and acting
until April 24, 2011—was chaired by Mr. Vudhibhandhu Vichairatana, with
M.R. Pongsvas Svasti and Mr. Chakkrit Parapuntakul serving as members.
Serving from April 25, 2011, to April 24, 2014, the current
sub-committee is chaired by Mr. Viraphol Jirapraditkul, with Mr.
Chakkrit Parapuntakul and Mr. Krairit Euchukanonchai (serving from
November 25, 2011, replacing Mr. Bhusana Premanod, who resigned on
October 26, 2011) serving as members. All members attended the four
meetings held during the year, with the following essences.

(1) Assessed and revised the above-mentioned policy, code of business
    ethics, and guidelines in compliance with good corporate governance,
    international practices and leading companies’ practices, and
    recommendations of various institutions for the Board’s approval.

(2) Promoted compliance through PTTEP’s business and the performance of
    the Board, executives, and employees with the above-mentioned policy
    and code by monitoring and recommending promotional activities for
    each quarter of the year. This applied to PTTEP’s actions on
    complaints filed through the CG Hotline. The sub-committee also met
    management teams during CG Visit activities to monitor the promotion
    of CG and executives’ CG Leadership performance. In addition, the
    sub-committee participated in and stressed the significance of
    corporate governance at two CG training sessions for new executives
    and three for new hires in 2011.

(3) Ensured assessment of code of business conduct compliance, which was
    undertaken internally.

(4) Formulated a CG reporting guideline in line with the Stock Exchange
    of Thailand criteria for distribution to stakeholders in the annual
    report.

(5) Considered and submitted to the Board a charter for the Board itself
    to serve as proper, tangible framework and guidelines for compliance
    on a par with those of leading companies.

(6) Reviewed the charter for the sub-committee itself and its reports
    for 2011 to improve its roles and responsibility to include
    oversight of corporate social responsibility (CSR) work and conform
    to the charters for other sub-committees, and to disclose reports on
    its performance for the year.

(7) Considered and submitted to the Board a rule for compliance for
    PTTEP Group.

(8) Provided recommendations on and joined the monitoring of CSR
    activities, including CSR plans, to ensure proper, sustainable CSR
    action plans.

The Corporate Governance Committee regularly reported all meeting
outcomes to the Board. Throughout the year, it performed all assignments
under its charter of 2005 and amendments with prudence, competence, and
independence, and provided candid views for the maximum benefit of
PTTEP, the shareholders, and stakeholders.

Viraphol Jirapraditkul

(Mr. Viraphol Jirapraditkul)

Chairman of the Corporate Governance Committee

8.5.2 Report of the Audit Committee 2011

Consisting of three qualified Independent Directors with experience in
finance and accounting, law, and related technical practices, the Audit
Committee is chaired by
Mr. Ampon Kittiampon, with Mr. Chaikasem Nitisiri and Gen. Lertrat
Ratanavanich as members. All are knowledgeable and experienced in
reviewing financial statements.

In its performance, the sub-committee relied on the following approach:

-   Ensure the efficient execution of PTTEP’s audit system

-   Emphasis on compliance audit, particularly on the part of subsidiary
    companies, with a focus on strict and regular compliance

-   Promotion of a preventive system to ensure alerting systems for
    business processes in case of irregularities.

All members performed their duties and responsibilities as assigned by
the Board of Directors in accordance with the regulations of the Audit
Committee, which aligns with the Stock Exchange of Thailand regulations.
During 2011, it held 10 meetings with perfect attendance, completing the
tasks summarized below:

(1) Reviewed the quarterly and annual financial statements with the
    Management and the external auditor (The Office of the Auditor
    General) and asked questions and provided recommendations to ensure
    the accuracy and creditability of the accounting system and
    financial information, as well as accurate, sufficient, and timely
    disclosure of significant matters to meet the accounting standards
    and requirements of relevant laws and regulations.

(2) Each quarter of the year, deliberated the Management’s discussion
    and analysis (MD&A) in consultation with the Management and called
    to attention issues affecting PTTEP’s business, which the Management
    was to define measures to control, monitor, and report periodical
    progress on.

(3) Reviewed PTTEP’s performance to ensure the Company’s compliance with
    the securities and stock exchange laws, the Stock Exchange of
    Thailand’s rules and regulations, and other laws related to PTTEP’s
    business.

(4) Deliberated and supported the disclosure of connected transactions
    to ensure accuracy and completeness; the Committee viewed that these
    transactions were reasonably executed for the maximum benefit of
    PTTEP.

(5) Reviewed PTTEP’s internal controls and internal audit system to
    ensure their adequacy, suitability, and effectiveness. The
    sub-committee considered the following matters particularly
    essential:

-   Governance of overseas projects where PTTEP was the operator. The
    sub-committee advocated self-assessment of internal controls to
    ensure the sufficiency of internal control to accommodate Company
    expansion. In valuing the governance of joint-venture projects, the
    sub-committee consulted the management to undertake a review of
    management systems and the governance of joint-venture projects for
    greater efficiency.

-   Progress tracking of Enterprise Resource Planning project
    implementation, requiring departments responsible for the project to
    give periodical reports.

(6) Deliberated and proposed that the Office of the Auditor General
    continue to serve as the external auditor, decided the audit fees
    for 2011

(7) Attended meetings with the external auditor and the internal audit
    department in the absence of PTTEP management to acknowledge the
    approach and audit plans of the external auditor and problems faced
    during its audit to seek solutions. This year, two such meetings
    took place.

(8) Approved the amendment to the 2011 Audit Charter

(9) Reviewed and amended the 2011 regulations of the Audit Committee

(10) Considered the independence of the internal audit department and
     endorsed the appointment, transfer, and performance merit
     considerations or punitive measures for the chiefs of the internal
     audit department.

(11) Endorsed the plans of the internal audit department and reviewed
     audit result. The sub-committee stressed the planning of audits and
     alignment of audits with PTTEP’s key risks.

(12) Screened the budget and manpower requirements of the internal audit
     department.

(13) Assessed this year’s performance by completing a self–assessment,
     assessment by the Board of Directors, and assessment by related
     agencies, the result of the assessment revealed that the
     performance of the Audit Committee remained effective.

The Audit Committee continued to regularly submit all minutes of its
meetings to the Board.

In conclusion, for the year, the Audit Committee’s opinions are as
follows:

-   PTTEP’s accounting system and financial reports were accurate,
    creditable, and contained complete, adequate, and timely essential
    information.

-   PTTEP’s internal controls were adequate, suitable, and adaptable to
    evolving circumstances to suit its present and future business
    operations while complying with all relevant laws and regulations.

-   The Office of the Auditor General—PTTEP’s external auditor—was
    independent and experienced in auditing its financial reports to
    ensure accuracy and reliability, as well as complete, adequate, and
    timely disclosure of essential information.

-   Based on its review of connected transactions or items with
    potential conflicts of interest, the Audit Committee regarded
    PTTEP’s disclosure of information as accurate and complete, and such
    items carried fair conditions and prices, which had won the prior
    approval of the Management or the Board.

Ampon Kittiampon

(Mr. Ampon Kittiampon)
Chairman of the Audit Committee

8.5.3 Report of the Nominating Committee 2011

PTTEP’s good corporate governance requires the Nominating Committee to
be made up of at least three Directors, while the Chairman and the
majority of members must be Independent Directors. Bound by the
Nominating Committee Charter, they serve for three years at a time.

The current Nominating Committee (serving from 23 June 2009 to 22 June
2012) is chaired by Mr. Sommai Khowkachaporn (Independent Director),
with the rest made up of
Mr. Chaikasem Nitisiri (Independent Director), who replaced Mr.
Chulasingh Vasantasingh on
19 May 2011, and Mr. Pailin Chuchottaworn, who replaced Mr. Prasert
Bunsumpun on
1 December 2011.

During the year, the sub-committee performed Board-assigned duties under
its own charter prudently, competently, and independently in recruiting
Directors, replacing those that had completed their terms or resigned;
nominating sub-committee members and chairmen; examining performance
agreements for the Board and performance assessment forms for the Board,
the Chairman, sub-committees, and the President and CEO. Seven meetings
were held during the year with perfect attendance. Members with vested
interests duly abstained on relevant matters. All meeting outcomes were
reported to the Board.

PTTEP has publicized details about the criteria and processes for
recruitment of Directors and the President and CEO in the annual report.

Sommai Khowkachaporn

(Mr. Sommai Khowkachaporn)

Chairman of the Nominating Committee

8.5.4 Report of the Remuneration Committee 2011

The Board of Directors appointed the Remuneration Committee, which
consists mainly of independent directors and of which the Chairman is
also an independent director, to consider the compensation suitability
for the Board, the sub-committees, and the President and CEO, as well as
the salary structure for senior management. The underlying principles
taken into consideration are fair and reasonable criteria, procedures,
and structures.

One meeting was held during the past year to fulfill the sub-committee’s
roles and responsibilities (spelled out by the Board in the Remuneration
Committee Charter) prudently and independently. All members attended the
meeting, and a report of its outcomes was filed to the Board. Below is a
summary of its work for the year.

-   Deliberation of the compensation for the Board and the
    sub-committees was based on their respective performance. Taken into
    consideration were the assessment of the Board as a whole, together
    with its achievement against the performance indicators defined
    since the beginning of the year by the Nominating Committee in the
    performance agreement (with 50% weighting average each), the company
    performance, alignment with the compensation of listed industry
    peers and companies of similar sizes, duties and responsibilities of
    the Board and the sub-committees, together with the overall economic
    situation.

-   Deliberation of the compensation for the CEO & President,
    incorporating incentives for his commitment to corporate growth and
    based on his performance against the indicators defined in his
    annual performance agreement. It was the Nominating Committee’s
    decision that he should have the same KPIs as the corporate ones so
    as to illustrate his accountability for guiding the company toward
    its goals. Again, the Remuneration Committee also takes into account
    the compensation of listed industry peers and companies of similar
    sizes when considering the CEO & President’s remuneration.

-   Acknowledgment of executive management’s salary structure. The
    sub-committee regarded that PTTEP’s structure, in comparison with
    those of leading companies in the exploration & production and the
    oil & gas businesses, still suited present circumstances.

Having executed its duties in a fair, transparent, and reasonable manner
so as to bolster confidence among all stakeholders, the sub-committee
has also disclosed the compensation for the Board, sub-committees, and
executives in this annual report.

Lertrat Ratanavanich

(General Lertrat Ratanavanich)

Chairman of the Remuneration Committee

8.5.5 Risk Management Committee Report 2011

The PTTEP Risk Management Committee currently consists of four members;
chaired by Mr. Pichai Chunhavajira, with Mr. Sommai Khowkachaporn, Mr.
Viraphol Jirapraditkul and Mr. Anon Sirisaengtaksin serving as members.
During the year, Mr. Chitrapongse Kwangsukstith and Mr. Vudhibhandhu
Vichairatana ceased to be directors and members of the committee when
they completed their terms at the annual general meeting on 30 March
2011. On 25 April 2011 Mr. Wichai Pornkeratiwat and Mr. Viraphol
Jirapraditkul were appointed members. Mr. Wichai Pornkeratiwat resigned
from the Board and the committee, with effect from 24 November 2011.

The Risk Management Committee members performed their duties and
responsibilities as assigned by the Board of Director and in accordance
with the Risk Management Charter. During 2011, the Committee held 12
meetings which can be summarized as follows:

(1) Improved Enterprise Risk Management Framework to ensure the
    effectiveness of risk management process to mitigate risk into
    acceptable levels and evolving circumstances.

(2) Supported corporate strategy, PTTEP conducted extensive qualitative
    and quantitative evaluation of its Corporate Risk Profile. The Risk
    Management Committee was able to provide constructive insight and
    direction on how to mitigate risks and oversight over the progress
    of the measures taken to mitigate those risks, which ranged from
    strategic or operational risks. The Enterprise Risk Management
    Dashboard established an ownership and a “Risk Owner” responsible
    for following up and reporting on the current status of identified
    risks, formulation and execution of appropriate actions with which
    to mitigate such risks.

(3) Evaluated and authorized appropriate measures to manage and mitigate
    critical risks to PTTEP. Provided oversight over new investments and
    the oil price hedging program, prior to board approval.

(4) Considered the corporate strategic plan, key performance indicators,
    2011 annual budget, and relevant risks prior to board approval.

The committee reported its findings to the Board on a regular basis.

In summary, it is our view that the committee has performed its duties
in 2011 prudently and independently while providing candid views to all
parties for the benefit of PTTEP, all shareholders, and stakeholders.

Pichai Chunhavajira

(Mr. Pichai Chunhavajira)

Chairman of the Risk Management Committee

8.6 Use of Inside Information

Details appear under 8.4.2

8.7 Personnel

8.5.1 As of 31 December 2011, PTTEP and its subsidiaries (namely PTTEPS,
PTTEP Services and PTTEP AA) had a headcount of staff and seconded staff
of 3,602, classified by Functional Group as follows:

+---------------------------------------------------+------------------+
| Functional Group                                  | Number (person)  |
+---------------------------------------------------+------------------+
| (1) Domestic Asset                                | 1047             |
+---------------------------------------------------+------------------+
| (1) Engineering, Operations and Supply Chain      | 1005             |
+---------------------------------------------------+------------------+
| (1) Finance and Accounting                        | 237              |
+---------------------------------------------------+------------------+
| (2) Geosciences and Exploration                   | 194              |
+---------------------------------------------------+------------------+
| (3) Human Resources, Reputation and Business      | 372              |
|     Services                                      |                  |
+---------------------------------------------------+------------------+
| (4) International Asset                           | 531              |
+---------------------------------------------------+------------------+
| (5) Strategy and Business Development             | 72               |
+---------------------------------------------------+------------------+
| (6) Functions reporting to President and CEO      | 144              |
+---------------------------------------------------+------------------+
| Total                                             | 3,602            |
+---------------------------------------------------+------------------+

8.5.2 PTTEP’s headcount has featured no significant changes and the
Company has seen no significant labor disputes over the past three
years.

8.5.3 In 2011, the total compensation (salaries, bonuses, and provident
fund contributions) of PTTEP, PTTEPS, PTTEP Services staff, and seconded
staff amounted to Baht 4,616,935,721.71.

8.5.4 Human Resource Development Policy

In order to improve staff competency and strengthen organizational
capability for the continuing expansion of company’s business, both in
Thailand and overseas, PTTEP has improved its human resources
development systems and processes by implementing its competency-based
training and development approach to accelerate the development. Based
on this competency concept, the company has provided training throughout
the past year via the following channels:

(a) In-house and External Training

The company provided in-house training and external training, both
locally and overseas, to its staff at all levels, including management.
This training comprised a great variety of courses, including technical
and professional training, SSHE training, IT training, English language
training, organizational knowledge as well as business administration
and management training.

(a) Long-term Training and Development Programs

Long-term company training and development programs prepared employees
for future roles and assignments in various current and upcoming
projects. The programs were provided to selected staff and were
conducted from 1-3 years in duration. By this approach, the staff
undertook on-the-job training, both in Thailand and overseas, with
business partners as well as services companies, such as Total, Chevron,
and Schlumberger.

(b) Master’s Degree Scholarship Programs

The company provided scholarships to selected employees to help them
pursue master’s degree studies at world-class top universities in:

1)  Petroleum geosciences

2)  Petroleum engineering

3)  Other engineering that related to company business

Moreover, the company also provided master’s degree scholarships in
management at Thailand reputable institute such as:

1)  SASIN Graduate Institute of Business Administration of Chulalongkorn
    University.

2)  Offshore Technology and management at the Asian Institute of
    Technology in Thailand

3)  Petroleum geosciences (international program) at Chulalongkorn
    University.