8.  Capital Structure

As of December 31, 2005, PTTEP’s capital structure consists of Baht
71,620 million liabilities and Baht 71,697 million shareholders’
equities. The liabilities to shareholders’ equities ratio was 1 times.
Details of the capital structure are as follows:

8.1 Securities

8.1.1 Common Shares

The Company’s registered capital consists of 664.40 million common
shares at a par value of Baht 5, or a total of Baht 3,322 million. In
2005, the Company’s registered paid-up capital was increased by Baht
14.66 million(2,932,100 shares at Baht 5 each), from the exercise of
warrants to purchase the Company’s common shares by the management and
employees according to the 2002-2004 Employee Stock Ownership Plan or
ESOP (details in 10.3, Warrants). Therefore, at December 31, 2005, the
Company’s registered paid-up capital was at Baht 3,274.66 million
(654,932,100 common shares, at a par value of Baht 5).

8.1.2 Bonds

In September 2005, PTTEP has entered into a cross currency swap
agreement with the Kasikornbank Public Company Limited. The agreement is
to swap the Baht 2,500 MM 15-year bond issued in March 27,2003 at a THB
fixed interest rate of 4.626% p.a. to USD 60.83 million at a USD fixed
interest rate of 3.85% p.a.

As of December 31, 2005, PTTEP and its subsidiaries’ total debts
consisted of bonds in the amount of USD 454.11 million, or total of
approximately Baht 18,697 million, with the long term debt (including
current portion of long-term loan) to equities ratio of 0.26 times.

Details of bonds as of December 31, 2005 are as follows:

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

  A secured,       USD 200        7.625%,         10 years,  PTTEPI was the
  unsubordinated   million        semi-annually   due in     issuer, with PTTEP
  Bond – Yankee    (200,000 units                 2006       as guarantor.
  Bond (1996)      at a face                                 
                   value of USD                              
                   1,000)                                    

  Bond             Issue Size     Rate per annum  Maturity   Other Details

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

  An unsecured     Baht 2,500     4.625%,         15 years,  PTTEP was the
  unsubordinated   million (2.5   semi-annually   due in     issuer. The Company
  Bond- Baht Bond  million units                  2018       had entered into a
  (2003)*          at a face                                 SWAP agreement at
                   value of Baht                             the amount of USD
                   1,000)                                    60.83 million at an
                                                             interest rate of
                                                             3.85% per annum.
  ---------------- -------------- --------------- ---------- --------------------

8.1.3 Warrants

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

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

Details of the allocation of each warrants which have been approved by
the shareholders’ meeting are described as follows:

+------+--------------+-------------+--------------+-----------------+
| Year | No. of       | Year to     | Exercise     | No. of warrant  |
|      | warrants     | Maturity    | Price        | to              |
|      |              |             |              |                 |
|      |              |             | (Baht)       | No. of common   |
|      |              |             |              | stock           |
+------+--------------+-------------+--------------+-----------------+
| 2002 | 2,000,000    | 5           | 111          | 1 : 1           |
+------+--------------+-------------+--------------+-----------------+
| 2003 | 2,000,000    | 5           | 117          | 1 : 1           |
+------+--------------+-------------+--------------+-----------------+
| 2004 | 2,800,000    | 5           | 183          | 1 : 1           |
+------+--------------+-------------+--------------+-----------------+
| 2005 | 2,800,000    | 5           | 278          | 1 : 1           |
+------+--------------+-------------+--------------+-----------------+
| T    | 9,600,000    |             |              |                 |
| otal |              |             |              |                 |
+------+--------------+-------------+--------------+-----------------+

Note: In 2002, the PTTEP’s General Shareholders’ Meeting resolved to
issue and offer the warrants to its directors, management and employee.
In 2003 – 2005 the General Shareholders’ meeting resolved to issue and
offer the warrants to its management and employee.

Starting from the year 2003 to the end of 2005, a total of 2,932,100
units of warrants had been exercised.

8.1.4 Non-Voting Depository Receipt (NVDR)

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

As reported on the SET website as of January 30, 2006, the Company’s
common shares of NVDRs issued and outstanding amounted to 10,388,895
shares or 1.59% of total registered paid-up shares, which amounted to
654,932,100 shares. The NVDR holders will not participate and vote in
shareholder’s meeting, except in the case where a listed company wishes
to delist its shares from the SET.

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

- None –

2.  Shareholders

    1.  Top 10 major shareholders

Top 10 major shareholders of the Company as of November 25, 2005. (the
date which the Company closed shares registration book for the right to
attend the Extraordinary Shareholders’ meeting on December 15,2005)

  ----------------------------------------------------------------------------
  Ranking   Shareholders                       Amount        % of a total
                                                             shares
  --------- ---------------------------------- ------------- -----------------
  1.        PTT Public Company Limited *       434,350,000   66.32

  2.        State Street Bank and Trust        17,153,870    2.62
            Company                                          

  3.        The Bank of New York (Nominees)    12,850,167    1.96
            Limited                                          

  4.        Thai NVDR Company Limited          10,318,730    1.58

  5.        Barclays Bank Plc-Re Equities      7,860,000     1.20

  6.        State Street Bank and Trust        6,767,941     1.03
            Company for London                               

  7.        Chase Nominees Limited 1           6,748,200     1.03

  8.        BNP Paribas Securities Services,   6,501,400     0.99
            Luxembourg Branch                                

  9.        HSBC(Singapore) Nominees PTE Ltd.  6,453,649     0.99

  10.       Morgan Stanley & Co International  5,720,470     0.87
            Limited                                          
  ----------------------------------------------------------------------------

* At December 31, 2005, PTT held 434,350,000 shares in PTTEP, or 66.32%.

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

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

8.3 Dividend Policy

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

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