11. Connected Transactions

10.1 Connected Transactions in 2011

(1) Regular Commercial or Business-Supporting Items

+--------+----------+----------------------+---------+----------------+
| Con    | Shares   | Transaction          | 2011    | Necessity and  |
| nected | in PTTEP |                      | Value   | Reason         |
| C      |          |                      |         |                |
| ompany |          |                      |         |                |
+--------+----------+----------------------+---------+----------------+
| PTT    | 65.286 % | 1.1 Petroleum        | Baht    | Prices were    |
| Plc.   |          | product sales:       | 140,106 | market-based,  |
| (PTT)  |          |                      |         | reflecting     |
|        |          | -   Crude oil: 9.50  | million | those quoted   |
|        |          |     MMBBL            |         | by project     |
|        |          |                      |         | partners to    |
|        |          | -   Natural gas:     |         | PTT.           |
|        |          |     386,609.00 MMSCF |         |                |
|        |          |                      |         |                |
|        |          | -   LPG: 86,292.00   |         |                |
|        |          |     metric tons      |         |                |
|        |          |                      |         |                |
|        |          | -   Condensate:      |         |                |
|        |          |     11.87 MMBBL      |         |                |
+--------+----------+----------------------+---------+----------------+
|        |          | 1.2 Petroleum        | Baht    | The Board of   |
|        |          | product purchase:    | 2,177   | Directors      |
|        |          |                      | million | approved this  |
|        |          | -   Jet fuel: 1.79   |         | contract with  |
|        |          |     million liters   |         | PTT under      |
|        |          |                      |         | price formulas |
|        |          | -   High-speed       |         | and a          |
|        |          |     diesel: 74.37    |         | five-year      |
|        |          |     million liters   |         | agreement      |
|        |          |                      |         | (2009 – 2013), |
|        |          |                      |         | under which    |
|        |          |                      |         | prices were    |
|        |          |                      |         | based on       |
|        |          |                      |         | market         |
|        |          |                      |         | c              |
|        |          |                      |         | ompetitiveness |
|        |          |                      |         | and reasonable |
|        |          |                      |         | conditions.    |
+--------+----------+----------------------+---------+----------------+

(2) Property Leases

  ----------- -------------- ---------------------- ---------- -----------------
  Connected   Shareholding   Transaction            2011 Value Necessity and
  Company                                                      Reason

  Energy      PTTEP held 50% The Board of           Baht 444   The rates for
  Complex     in Energy      Directors, at Meeting  million    such space leases
  Co., Ltd.   Complex Co.,   No. 1/2553/307 on                 were assessed by
              Ltd.           January 28, 2010                  a third party
                             passed a resolution               based on the
                             for PTTEP to sign the             standard method
                             lease agreement with              and compatible
                             Energy Complex for                with market
                             47,000 square meters              rates.
                             for three years, from             
                             October 1, 2009, to               
                             September 30, 2012,               
                             for Baht 1,105 million            
                             for office space,                 
                             storage, and                      
                             multipurpose areas.               
  ----------- -------------- ---------------------- ---------- -----------------

(3) Service Agreement with PTT ICT Solutions Co., Ltd.

  ----------- -------------- ---------------------- ---------- -----------------
  Connected   Shareholding   Transaction            2011 Value Necessity and
  Company                                                      Reason

  PTT ICT     PTTEP holds    The Board of           Baht 214   This was in
  Solutions   20% of shares  Directors, at Meeting  million    compliance with
  Co., Ltd.   in PTTEP ICT.  No. 10/2549/254 on                the ICT policy
  (PTT ICT)   Other          September 29, 2006,               under the PTT
              shareholders   passed a resolution               Group management
              consist of PTT for PTTEP to sign a               concept for
              (20%), PTTEP   service agreement with            synergy.
              Global         PTT ICT, which will               
              Chemical       provide all                       
              (40%), and     information and                   
              Thaioil (20%)  communication                     
                             technology services               
                             (ICT services) for a              
                             five-year term                    
                             starting from July 1,             
                             2006. The total                   
                             service charge for                
                             PTTEP will be                     
                             approximately Baht 702            
                             million.                          
  ----------- -------------- ---------------------- ---------- -----------------

10.2 Procedure for approving connected transactions

PTTEP’s Board considers all transactions that may involve conflicts of
interest, including related or connected transactions, to ensure that
they comply with sound business ethics and meet the scrutiny of the
Audit Committee for defined items. As well, the Board supervises all
transactions to see that they meet the criteria of the Stock Exchange of
Thailand and the Securities and Exchange Commission. Information
disclosure on potential conflicts must be considered by the Board to
ensure accurate and adequate disclosure.

PTTEP has clearly set up a policy on conflicts of interest, covering the
procedures to report such conflicts to ensure that the Board and
employees strictly comply with the principles concerned. In addition,
for any transactions in which Directors, employees, or related persons
could derive personal benefits from entering into transactions with the
Company, such Directors or employees are not permitted to participate in
the approval of such transactions, and the prices must be properly
defined in a manner consistent with that offered to any external party.

10.3 Comments of the Audit Committee

PTTEP’s Audit Committee reviewed and determined that the decisions and
actions taken by the Board or the Management were based on the
appropriateness and fairness of all connected transactions that occurred
in 2011.

10.4 Future connected transactions

All future connected transactions will be conducted as part of the
normal course of business with neither special favors nor transfers of
benefits between PTTEP and its subsidiaries or any connected person.
PTTEP will strictly comply with the regulations of SET and other
regulatory authorities related to connected transactions based on
reasonableness, appropriateness, and fairness, and for the utmost
benefits of all shareholders and stakeholders, which is consistent with
PTTEP’s good corporate governance policy.