20120227 PTT AnalystMeeting4Q2011 en 03

(1)

Analyst Meeting

Q4 and FY 2011

(2)

2011 Highlights

Performance & Roadmap

Investment

20

12

12 Ou

Ou

tl

oo

k

PTT Group Stress Test

1 1

(3)

2011 Highlights

Performance & Roadmap

Investment

20

12

12 Ou

Ou

tl

oo

k

PTT Group Stress Test

1 1

(4)

2011 Highlights

Economy

•• European Financial turmoil leading to credit rating downgrade in Italy, Spain, and other 7European Financial turmoil leading to credit rating downgrade in Italy, Spain, and other 7 European countries

European countries

•• – –

shown shown

•• Lower Chinese demand from tight Lower Chinese demand from tight monetary policy, however, increasingly gloomy global outlookmonetary policy, however, increasingly gloomy global outlook and slower growth forced China to start easing monetary policy in December

and slower growth forced China to start easing monetary policy in December

•• NESDB estimated that NESDB estimated that devastating flood led to contracting Thai economy by 9.0% devastating flood led to contracting Thai economy by 9.0% in Q4/2011in Q4/2011 and FY 2011 growth only at 0.1%

and FY 2011 growth only at 0.1%

Operations

•• Flood caused NG sales volume to decrease by Flood caused NG sales volume to decrease by 7.7% QoQ, while only 1% effect 7.7% QoQ, while only 1% effect in oil businessin oil business

•• Yetagun Yetagun closed to install compressor platform lead to lower NGV supplyclosed to install compressor platform lead to lower NGV supply

•• Gradually increasing NGV retail price structure implemented since January 16, 2012Gradually increasing NGV retail price structure implemented since January 16, 2012

2 2

•• rreessuumme e ooppeerraa oon n rroom m wwaarrrraann y y ss uu oowwn n nn

(5)

201

201 1 –

1 –

Yea

r of

Rec

ord

Pro

fit

Unit : THB Billion

Record Year

•

• Increasing sales volumeIncreasing sales volume 1,214 1,214 1,5081,508 2,001 2,001 1,586 1,586 1,8981,898 2,428 2,428

Revenue

~ ~

from ESP, GSP6, Ethane from ESP, GSP6, Ethane cracker (PTTPE)

cracker (PTTPE) •

• Stock gain as crude oil Stock gain as crude oil priceprice 386 386 400400 490490 645645 ~USD 60 bn~USD 60 bn

Effective BCM

~USD 10 bn ~USD 10 bn e ecc vve e uuss nneesss s oonn nnuu yy Management lead to minimal Management lead to minimal impact from flood in Q4/2011 impact from flood in Q4/2011

Net Income

85.5 85.5 95.595.5 97.897.8 84.084.0 105.3 105.3 55% 55%

Group-wide Stress Test to Group-wide Stress Test to prepare for future

prepare for future uncertaintiesuncertainties

21.6 21.6 24.524.5 37.6 37.6 . . 51.7 51.7 .. 45% 45% 45%45% 50% 50% 37% 37% 58%58% 57% 57% 62% 62% 55% 55% 59% 59% 59% 59% 36% 36% PTTPTT Affiliates Affiliates 3 3 2 2000011 22000022 22000033 22000044 22000055 22000066 22000077 22000088 22000099 22001100 22001111 81% 81% 6644%% 5500%% 41%41% 42%42%

(6)

Strong Contributions from All Businesses

Unit : THB Billion Unit : THB Billion +25% +25% 17.8 17.8 PetrochemPetrochem

105.3

105.3 Net Income

Net Income

+75% +75%

•

Crude Crude oiloil 106106$/BBL$/BBL (+40%)(+40%)

•

Accounting AccountingGRMGRM6.086.08$/BBL$/BBL(+26%)(+26%)

•

• _‐

_‐

9.4 9.4 13.4 13.4 10.2 10.2

.

_Refinery_Refinery +43%

+43%

•

Spread SpreadPXPX 647647$/Ton$/Ton(+93%)(+93%)

Volume Drivers

28.7 28.7 30.6 30.6 +7%

+7%

•

_Ethane_Ethane_cracker_cracker₁₁_MT_MT_A_A_(Q4/10)_(Q4/10)

•

HDPE HDPE300300KTKTAA&&LDPELDPE300300KTKTAA(Q1/11)(Q1/11)

•

BisBis

_‐

PhenolPhenol

_‐

AA150150KTA(Q2/11)KTA(Q2/11)

36.1 36.1 47.8 47.8 PTTPTT +32% +32%

•

PP/PDH PP/PDH 300/310300/310KTKTAA(Q3/10,(Q3/10,Q1/11)Q1/11)

•

TDAE TDAE5050KTKTAA(Q1/11)(Q1/11)

•

OilOilSandsSands KKDKKD 15,00015,000 BOEDBOED(Q1/11)(Q1/11)

-0.4 -0.4 _-4.3_-4.3 _Others_Others

‐

,,

•

ESPESP0.760.76MTMTAA (Q3/10)(Q3/10)

•

GSPGSP661.81.8MTMTAA(Q1/11)(Q1/11)

•

LNGLNGTerminalTerminalcapacitycapacity55MTMTAA(Q3/11)(Q3/11)

4 4

D

i

v

i

d

e

n

d

1

0

0 .

.

2

5

1

3

3 .

.

0

(THB/Share) (THB/Share)

(7)

2010-2011 Accolades

PTT is widely recognized among business communities both international and local

Asia Talent Management 10th_{Asia Business}

Leaders Award 2011

7th_{Top Asia Energy}

Companies of 2010 35th_{Top Global Energy}

Companies of 2010

128t _{Fortune Global 500}

of 2011 - 155th_{in 2010}

- 118th_{in 2009}

171t _{The Biggest Listed}

Companies in the World 2011 -196th_{in 2010} -244th_{in 2009} Dow Jones Sustainability Index # 17

Best CEO 2010 Asian Corporate Director Thai BMA Best Bond Awards The winners of The Asset’s Best Managed Company 2010

Best Corporate Governance 2010

Best Investor Relations 2010 Best Cor orate Social

• Asia’s Best CEO • Asia’s Best CFO

• Best IR Website/Promotion • Best Environmental

Res onsibilit

• Deal of the Year • Most Creative Issue

• Best Investor Relations Issuer

Responsibility 2010

Best Commitment to Strong Dividend Policy 2010

• Best Investor Relations • Best Investor Relations

Professional

Board of the year Award 2010/11

SET Awards

• Top Corporate Governance _{Trusted Brand 2011} _{Best CEO for Ener Sector 2011} Outstanding State Enterprise Report Award 2010 & 2011

• Best Corporate Social Responsibility Awards 2011

• Thailand’s Top Brand in Platinum Award for Service Station

Award 2010

• Best State Enterprise of the Year, Best of the Best • Outstanding Leadership

(8)

2011 Highlights

Performance & Roadmap

Investment

2012 Outlook

PTT Group Stress Test

(9)

Exploration & Production Performance : PTTEP

(65.29%)

Product Prices

Net Income

(100%)

E

&

P

Gas

Oil

&

Trading

Refining

PetChem

101.7 102.7 73.8 102.2

Liquid (USD/BBL)

Unit: MMUSD

1,380

5.91 6.64 6.00 55.4 61.3 44.8 55.5

Weighted Avg.

(USD/BOE)

489

96% . Q3/11 Q4/11 2010 2011

as

Q3/11 Q4/11 2010

Unit: KBOED

0.2% 5%

QoQ

• Sales volume dropped from flood (i.e. Arthit

North Bon kot MTJDA B-17

(10)

Exploration & Production Roadmap : PTTEP

Target Sales Volume

Proved Reserves

E & P Gas Oil & Trading Refining PetChem Coal

Unit: KBOED

Total 969 MMBOE

Overseas

284

330 345 326 ₃₂₄

Middle East & Africa North America 7% 16% 44% 56% 265

South East Asia

Policy

Domestic

Thailand

Reserves Replacement Ratio 1.10 > 1 Reserve Life Index (year) 9

2011 2012 2013 2014 ₂₀₁₅2015 2016 2011 CF 2012 2013 2014 2016 8 BKT South, Montara Zawtika Algeria

(11)

Gas Business Performance : Natural Gas

NG Sales Volume

_{Gas BU EBITDA}

2011 3,802 4,055 4,152 4,148 4,145 4,330 4,249 3,919 Unit: MMSCFD _AVG. 4 040 4,161 Unit: MMTHB 62,195 32% 2009 3,280 3,606 3,677 3,686 3,562 47,212 9,880 16,832 41%

NG Customer Profile

Key Activities

Q1 Q2 Q3 Q4 Q3/11 Q4/11 2010 2011 237 246 NGV (6%) 3% Unit: MMSCFD 4,040 4,249 _4,161 3,919 8% QoQ

•

NG sales volume declined in all customers as a result of flood except sales volume to GSPs

866 430 486 860 867 559 IPP (21%) SPP (12%)

GSP (21%)

_•

increased due to the resumption of ESP & GSP 6_{Higher average gas cost from price adjustment}

1,070 1,146

Q3/11 Q4/11 2010 2011

EGAT (27%)

9

•

NG sales volume slightly increased due to gas leakage and flood

(12)

Gas Business Performance: GSPs & NGV

GSP - Reference Product Prices

NGV EBIT Loss

PP HDPE Unit : USD/Ton 1,399 _1,329 1,364 1,606 1,423 1,340 1,585 Unit : MMTHB Q3/11 Q4/11 2010 2011 Naphtha 333 333 ₃₃₃ ₃₃₃ 869 805 660 853 1,222 Domestic LPG -7,323 -3,259 - , 3%

GSP Sales Volume

Key Activities

Q3/11 Q4/11 2010 2011 - , 44% Unit : KTon 5,820 36% QoQ

•

GSPs sales volume increased mainly due to the resumption of GSP 6 and ESP

NGL (11%) Ethane (31%) 647 1,798 1 500 4,289 YoY

•

GSP volume increased by 36% from COD of ESP in July 2010, and GSP 6 in Jan 2011

9% LPG (49%) 712 2,833 167 467 154 Q3/11 Q4/11 2010 2011 , 10

•

NGV price increased by 0.50 Baht/Kg a month starting from Jan 16, 2012

(13)

Gas Business Roadmap

6,000 Unit :MMSCFD

4,000 GSP Industry NGV 13% 7% 6% 18% 16% 7% 2,000 Power_-_EGAT -IPP -SPP 60% 59%

New PTTLNG _(BongkotPTTEP PTTEP_(M9)

Chevron 2011 2012 2013 2014 2015 2016 Pipeline South) 4th_Onshore Offshore Com ressor (Plathong) (MMSCFD) 4,380 5,580 6,980 6,980 6,980 6,980 Capacity (MTA) 6.7 6.7 6.7 6.7 6.7 6.7 11

(14)

Oil Business Performance : PTT

Contribution Margin*

Oil BU - EBITDA

11,973 Unit : MMTHB 0.77 Unit : THB/Liter 9% 12,126 13,224 Oil 0.72 . . 11% 3,236 _2,874 291 1,251 2,583 Q3/11 Q4/11 2010 2011 Non-Oil Q3/11 Q4/11 2010 2011

* Exclude non–oil business

Sales

Volume

Key

Activities

Unit : MM Liter _5% QoQ

_•

_{Sales volume returned to normal in Q4 after more}

20,762 21,807 FO import in Q3 to compensate gas leakage YoY

•

Sales volume increased due to the increase in

2%

, ,

Q3/11 Q4/11 2010 2011 ₁₂

domestic demand and fuel oil demand during gas leakage

•

PTT stations 1,326 (+6 stations from Q3)

(15)

International Trading Business Performance : PTT

Contribution Margin

Trading BU - EBITDA*

2,188 2,209 Unit : MMTHB 0.04 0.04 0.04 Unit :THB/Liter 1% 612 0.03 54% Q3/11 Q4/11 2010 2011 Q3/11 Q4/11 2010 2011 * PTT Only

Sales

Volume

Key

Activities

Unit : MM Liter _QoQ

•

2%

60,256 59,145

15%

IRPC

•

Contribution margin slightly decreased due to the decrease in condensate margin

, ,

Q3/11 Q4/11 2010 2011 ₁₃

YoY

•

Lower sales volume, specially crude volume, due to schedule shutdown of affiliate refineries

(16)

Refining Business Performance

GRM/GIM

Net

Income

(100%)

23,414 32,455 Unit : MMTHB 39% BCP Unit : USD/BBL 6.87 5.90 7.37 9.40 6.08 A/C GRM A/C GIM 3,935 1,396 65% SPRC TOP 4.66 3.40 3.81 4.53 3.25 3.85 4.82 Mkt GRM Q3/11 Q4/11 2010 2011

Source : PTT, Refining Associates

Note: Weighted Avg. GRM of PTT’s associates’ complex refineries (TOP, SPRC, BCP, and IRPC) Weighted Avg. GIM of PTT’s associates’ integrated refineries (TOP and IRPC)

Account GRM/GIM = Market GRM/GIM + Hedging Gain/Loss + Stock Gain/Loss

Q3/11 Q4/11 2010 2011

93% _85% _90% _89% _100%

900 1000

Total Intake

Key Activities

Unit : KBD

Aggregated

QoQ

• Market GRM decreased following European debt

50% 400 500 600 700 800 652 686 684 704 BCP . crisis

• For Aromatics, PX spread margin dropped due to the resumption of PX plants IRPC

‐

50% 0 100 200 300 Q3/11 Q4/11 2010 2011 TOP 14 • Market GRM improved from higher demand due to

global economy recovered

(17)

Refining Business Roadmap

2012 2013 2014 2015 2016

. Refining Cap. 275 Kbpd PX 489 KTA MX 90 KTA • PX 100 KTA • BZ 100 KTA Ethanol UBE 400 KLiter/day Phase I & II PSA & HVU revamp Derivatives • LAB 100 KTA 110 MW 110 MW BZ 177 KTA Tol 144 KTA PTT 38.51% Refining Cap. 215 Kbpd Propylene Booster •Propylene ABS/SAN Expansion • PP Compound and Specialties 100 KTA Propylene 320 KTA Aromatic 367 KTA Olefin 728 KTA Polyolefin 615 KTA 61 KTA . Bangchak Refining Cap. 120 Kbpd Ph I 38 MW

Solar Power Plant Ph II Unit Ph III 48 MW Catalytic Reforming Unit (CCR) 12 KBD Cogeneration 32 MW Ethanol UBE 400 KLiter/day ower an 15 MW Palm Plantation 3,300 Rais Expansion project 15

(18)

Petrochemical Business Performance

Spread Margins

Net Income (100%)

638 647 Unit : MMTHB Unit : USD/Ton 37,086 71% HMC Polymers Others HDPE-Naphtha PX-Naphtha 13% 13% 93% 462 ₄₂₉ 511 ₄₄₃ 554 335 _PTTGC 47% , 8,325 4,449 3/11 4/11 2010 2011 3/11 4/11 2010 2011

Sales

Volume

Key

Activities

Q3/11 Q4/11 2010 2011

Note : PTTGC- Pro-forma income statement.

89% _{88% 90%} _86%

Unit : KTon

23%

QoQ

• Sales volume and average selling price dropped from lower demand following China’s tight monetary policy

Aggregated Util.

1,264 1,550 YoY _• _{Sales volume increased from the commercial} operations of

• PTTGC’s Ethane Cracker 1 MTA in Dec 2010 12%

Q3/11* Q4/11* 2010 2011

PTTGC

PTT Phenol 222 196

16 • PTTGC’s HDPE 300 KTA & LDPE 300 KTA in Q1/11 • PTT Phenol’s Bis-Phenol A 150 KTA in Q2/11 • HMC Polymers’s PP/PDH 300/310 KTA in Q3/10

and Q1/11, respectively

(19)

Petrochemical Business Roadmap

2012 2013 2014 2015 2016

PTT 48.92% Refining 280 KTA Olefins 2,888 KTA NatureWorks 50% PLA 70 KTA roma cs , Polymers 1,590 KTA Specialty 826 KTA Perstorp 51% TDI 125 KTA HDI 45 KTA PTT 40.00% Phenol 200 KTA Acetone 125 KTA BPA 150 KTA Phenol 250 KTA Acetone 154 KTA PTT 41.44% PP 750 KTA Propylene 310 KTA . AN 200 KTA MMA 70 KTA . PBS 20 KTA 17

(20)

Other Businesses : Coal - SAR

(45.6%)

Average SAR Selling Price

Net Income (100%)

Unit : MMUSD _116% Unit : USD/Ton 190 94 100 73 93 37 73 88 97% Q3/11 Q4/11 2010 2011

Sales

Volume

Ke Activities

Q3/11 Q4/11 2010 2011

Unit : KTon QoQ_• _{Started production at Northern Lease, Sebuku}

• Higher average selling price from higher quality coal 0.1% 3 077 , Jembayan Sebuku 10,712

23% YoY _• _{Sales volume maintained at same level as previous} year, despite a collapse of the Kutai Kartenegara

Q3/11 Q4/11 2010 2011 ,

18 bridge that obstructed the coal transportation

• Increased in average selling price following global coal price surged

(21)

Coal Mining Roadmap

Target Production Volume

Resources & Reserves

Unit : MMTon 2% Sebuku

Reserves 146 MMTon

12.0 . Sebuku 8.5 9.0 10.7 10.7 Jembayan Jembayan Jembayan

Resources 1,505 MMTon

2008 2009 2010 2011 2012 E 2013 E 40% 19 Sebuku 19

(22)

PTT Consolidated Performance : 2011

78 106 4% Others PTTEP Dubai (USD/BBL) Unit : MMTHB 28% 1,898,682 2,428,165 16% 6% PTT - Gas Revenue 2010 2011 74%

PTT - Oil & Trading Others

Revenue

170 330 210,748 24% 56% 8% 6% PTT - Oil & Trading

PTTEP EBITDA 2010 2011 - as Others

EBITDA

83,992 105,296 _45% 17% 13%‐4% PTT Refining Net Income 2010 2011 29.58 36.91 29% PTTEP 20 EPS (THB/Share)

(23)

PTT Group Performance : 2011

% share

Unit : MMTHB 2010 2011 YoY 2010 2011 YoY

PT T Company Only 54,457 73,434 35% 54,457 73,434 35%

Performance 100% Equity Method % PTT

Less: Dividend Received 18,316 24,275 33% 18,316 24,275 33%

Gain (Loss) on sales of investments in Associates

and other adjusting 1,913 n.m. 1,913 n.m.

PTT Net operating Income 36,141 47,246 31% 36,141 47,246 31%

- PTTEP , , . , , Petro. Business 21,731 37,086 71% 10,158 17,753 75% - PTTGC* 16,320 30,033 84% 48.92% 7,922 14,465 83% - HMC/PPCL/PTTPL/PTTPM/PTTAC -/ PTTME-/PTTTANK , , , , Refining 23,405 32,455 39% 9,377 13,445 43% - TOP 8,956 14,853 66% 49.10% 4,201 7,514 79% - IRPC 6,100 4,107 -33% 38.51% 2,250 1,443 -36% - SPRC 5,553 7,885 42% 36.00% 2,116 2,960 40% - BCP 2,796 5,610 101% 27.22% 810 1,528 89% Others Business 1,335 -2,114 n.m. -406 -4,276 n.m. - PTTI group - - - -(PTTAPM,EMG,PTTML,FLNG),PTTGE , , , , Gas & Utilities -TTM/PTTNGD/IPT/TP/DCAP/CHPP 3,008 2,927 -3% 20-100% 1,783 933 -48%

Oil & Oth. - PTTRB/PTTT/SBECL/THAPPLINE/_{/PTTCL/TLBC/ICT/EnCo} 1,250 1,881 50% 33-100% 733 1,713 134%

Shared of Net Income fr om Affiliates 90,245 112,175 24% 47,851 57,480 20%

21

Add Gain (Loss) on sales of inves tments in A ssociate s

0 570 n.m. 0 570 n.m.

PTT Conso. Net Income 126,386 159,991 27% 83,992 105,296 25%

(24)

Statement of Financial Position : Solid and Secured

Unit: MMTHB Increased assets : •

11.2 12.1

• PTTLNG

• WIP of 4th_pipeline

• Platform compression

• 40% KKD Oil Sands ICR

116,132 Other 1,229,109 1,402,412 14% Treasury policy 0.4 0.4 1.4 1.3 228,132 265,025 135,801 300,666 , Liabilities Other Current Assets L/TLiabilities Cash &

S/T Invest Net Debt/EBITDA < 2.0

Net Debt/Equity < 1.0 368,515 419,914 371,029 , Others Non-current Assets (incl. due within 1 yr) 496,661 557,414 601,341 643,949 PP&E Total Equity

− FC : Moody’s (Baa1), S&P (BBB+), JCR (A-), FITCH (BBB)

− LC : Moody’s (Baa1), S&P (BBB+), JCR (A), FITCH (A-)

31 Dec10 31 Dec 11

(25)

Dividend Policy & Historical Payments

PTT is firmly committed to pay dividend at no less than 25% of net income

EPS DPS % Dividend Payout

32.4% 32.6% 29.8% 30.1% 30.3% 30.8% 33.0% 43.6% 40.4% 35.0% 35.2% 30.57 34.14 34.82 29.26 36.91

PTT’s minimum payout ratio

22.40

18.33

21.06 UNIT : Baht / share

7.71 8.75 13.43 6.75 9.25 10.50 11.50 _{8.00 8.50} 10.25 13.00 2.50 2.85 . 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 23

(26)

2011 Highlights

Performance & Roadmap

Investment

2012 Outlook

PTT Group Stress Test

(27)

PTT: CAPEX (PTT and Wholly Owned Subsidiaries)

PTT plans to invest ~Bt 358 bn ($12bn) during 2012-2016

Unit: MMTHB

R&D

JV & Investment in Subsidiaries Oil & Tradin

rea own : ears By Business Unit Gas 33% Coal 2% Power 2% LNG 5% Gas 85 484 91,467 Others 41% 81,513 61,148 Investment in Subsidiaries 50% Oil & Trading 14% R&D 3% 55,492 41,279 , 26,880 38,384 27,163 31,831 35,812 16,653 7,611 23,134 2012 2013 2014 2015 2016 25

(28)

PTTEP: 2012-2016 CAPEX

Total Expenditures (2012-2016) = US$ 20 Billion**

5,168

OPEX = US$ 8 Billion

3,479 4,129 3,553 3,495* 1,571 , 1,174 1,397 1,473 1,522 1,747 3,597 2,732 1,822 1,957 1,806 2,321 2014 2011 2012 2013 2015 2016

* Exclude KKD Oil Sands Acquisition cost of US$ 2.28 Billion ** Exclude expenditure for M&A opportunities

(29)

PTT Group CAPEX 2012 – 2016 ~ THB 900 BN*

R & D

•Biochemical • Specialty

Upstream – E&P

Other

16%

2%

•Thailand 54% •SE Asia 22% •North America 15% • Australasia 5% • Coal • Palm Oil Oil&Trading

19%

•ME & Africa 4% • FLNG •Power 16% 6% LPG facilities •Onshore Pipeline •LNG Terminal •

* Excluded M&A of Affiliates, ** PTTGC excludes new initiatives •Offshore Spur Lines

(30)

2011 Highlights

Performance & Roadmap

Investment

2012 Outlook

PTT Group Stress Test

(31)

Economic Outlook : 2012

Positive

Negative

• Fed planned to keep interest

rate exceptional low until late

2014

• Iran’s threat to the Strait of

Hormuz will cause supply

disruption and crude oil price

Global

• US economic data indicates

upward momentum

• Greece debt may prolong and

tend to be more severe possibly

leading to contagion among EU

community

• Post- oo construction ea to

increasing in domestic

consumption and investment

• Concern on repeating great

flood

•

• More stability of the

government

amendment

(32)

Market Outlook

•

forecasted to grow 1.0 MMBPD, reaching 90.0 MMBPD, according to IEA’s report in January 2012.

• Dubai crude oil price in 2012 is expected to be around

US$ 100 -110 per barrel.

Supply disruption from Iran’s reaction to the sanction

US economic data indicates upward momentum

An increase in oil supply from the exporting countries

The fragile European economic situation Source: IEA

(33)

Market Outlook

• ngapore

n

s es ma e o

be at around US$ 6-7 per barrel

– A result of narrowed refining capacity surplus – Lower global petroleum products demand

caused by economic slowdown.

– Restocking after Chinese new year and annual schedule shutdown

USD/Ton USD/Ton

– versupp y an ower pe roc em ca pro uc s demand caused by economic slowdown

• Aromatics rice tends to be im roved

– PX demand remains strong from the delay of new PX supply

– The start u of new PTA lants

– Lower demand caused by economic slowdown

31

(34)

2011 Highlights

Performance & Roadmap

Investment

2012 Outlook

PTT Group Stress Test

(35)

PTT Group Financial Stress Test

Rationale

We are o eratin under VUCA* circumstances

• European debt crisis

• Double dip economy in the U.S

• . es

e res ence an manage e so vency o

e

company

Objectives

.

PTT’s health

Scope

* Volatility, Uncertainty, Complexity and Ambiguity

(36)

7-Step Approach

External

scenarios Transmission ecosystemIndustry risk modelCompany to industry Transmissionto company

Build stress testing engine & capability Build mitigation plan Run model and measure impact Iterate for mitigation plans Operate

▪ Monitor & Modify

–

e scenar o t roug ea ng n cators

–

Stress scenarios to reflect the new uncertainties and changes to levels of macro-economic indicators in existing scenarios

–

Transmission mechanisms to reflect new linkages to industry Maintain

an company

(37)

Stress Scenarios

▪Orderl defaults of ▪Euro zone

Extreme stress Stress Impending crisis Signs of weakness Business as usual

▪Recapitalization of bank balance sheets

PIIGS

▪Eurozone intact due to

Focus on fiscal transfers as adjustment

breakdown n progress

▪Manufacturing and service sectors in

contraction zone

▪ All countries cost of borrowing

increased

▪Deteriorating financial health of Italy

▪ mec an sm ▪Trade and FX imbalances: Deterioration of fiscal situation Today

US ▪Debt deleveragingincreases pace, reducing capital availability union

▪Decline in housing prices ▪Inflation falls to lowest

levels since march 2011

and increasing imbalances ▪Further downgrade of US Today ▪Unemployment remains at 8-9% ▪Consumer spending weakens

▪Real estate transaction

pace

▪Unemployment improves

to 9%

▪Credit crunch from –NPA’s in real estate

–Refinancing of past stimulus program

▪Export decline due to

develo ed world

▪Social unrest in

China due to rural and urban economic divide Today

volume declined in Oct

▪Trade surplus increased, but slowdown in exports in October ▪M1 and M2 rowth slowdown

▪The flood repeats in

this year and FDI

Thailand

remained on downward trend

▪Impact of flood affects

GDP growth Thailand

▪On top of flood,

Social and slows down as several

industries move to other ASEAN countries Today

in Q1-2 , 2012, no

industries relocate tensions andrise to civil unrest

(38)

Mitigation Plan to Ensure Resilience

Range of impact

of stress

Stress case Base case (from business plan 2012)

Actions to take before the stress scenario materializes

Business

as usual

Monitor scenario through lead indicators; incorporate into

investment approval decisions

A

Performance

decline

No regret operational

Operational mitigation:

Launch opex and capex excellence to achieve top quartile

b1

B

mitigation

. .

Create a pre-emptive and contingency operational plan

–

Crisis plan for capacity optimization

b3

Financial

Health issue

–

Optimal hedging strategy

Strate ic miti ation:

C

B

C

Prepare for divestments of non strategic assets

Review and prioritize capex

c1

c2

r s s

_{Review the trade off of early major additional debt or}

equity issuance

c3

(39)

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และลงทนอกมหาศาลกับพลั งงานใหม เพ ออนาคตของคนไทยทกคน

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PTT Public Company Limited – Investor Relations Department

Tel. +66 2 537-3518, Fax. +66 2 537-3948, E-mail: [email protected] http://www.pttplc.com, http://www.twitter.com/PTTIR

The information contained in our presentation is intended solely for your personal reference only. In addition, such

Disclaimer

information contains projections and forward-looking statements that reflect our current views with respect to future events and financial performance. These views are based on assumptions subject to various risks and uncertainties. No assurance is given that future events will occur, that projections will be achieved, or that our assumptions are correct. Actual results may differ materially from those projected.

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Oil Balance Thailand: Jan - Dec 2011

Adequate refining capacity maintains the stability of supply

Supply

Production

Sales

Imported Refined Petroleum Products 54 KBD

mport

Crude/

Refined

omes c

848 KBD

794 KBD Total Refining Capacity in Thailand:_{1,099 KBD} Products_{919 KBD*}

Indigenous (20%)

787 KBD

(**)

Crude/ Condensate

175 KBD _{PTT’s Associated Refineries : 905 KBD} _Refined

Export

207 KBD (TOP, PTTGC, SPRC, IRPC, BCP) Other Refineries : 194 KBD (ESSO, RPC) Products 189 KBD Source: PTIT

Crude Export 32 KBD

221 KBD

Remark : (*)Refined product from refineries= 822 KBD, including domestic supply of LPG from GSPs and Petrochemical Plants = 97 KBD (**) Not included Inventory

KBD = Thousand Barrels per day

(42)

Natural Gas Balance: Jan – Dec 2011

Main driver of the Thai economy

Supply

Production

Sales

Indigenous (78%) 3,253 MMSCFD

Petrochemical

Ethane/ Propane/ LPG/NGL Total 4,167 MMSCFD

Feedstock

(14%)

Industry

2,469 MMSCFD 867 MMSCFD (21%) Chevron 28% Others 40%

ouse o

Transportation

(7%) LPG/NGL Methane 6 GSPs Total Capacity 2,665 MMSCFD PTTEP 32%

Power

(59%)

Industr

14%

Pipeline 784 MMSCFD

1,602 MMSCFD Import (22%) 922 MMSCFD LNG 10% Myanmar

NGV

(6%)

922 MMSCFD

Remark: MMSCFD = Million Cubic Feet @ Heating Value 1,000 Btu/ft3

(43)

Our Major Businesses & Activities

E&P PTTEP 65.29% Exploration and Production

t r e a m

Business Areas Company PTT’s holding (%) Activities

U p

d i a

t e PTT PLC

• Gas Pipeline 100% Sole owner/operator of the Transmission pipeline

PTT PLC

I n t e r

m • S&M 100% Supply & Marketing of Natural Gas

• GSP 100% Extracting Hydrocarbon contents in NG for Petrochemical’s feedstock

ar e ng Int’l Trading a

m

•Oil Marketing 100% Retail service Stations and commercial Marketing •Int’l Trading 100% Import/Export/Out-Out trading of petroleum and

petrochemical products D o w n s t r Petrochemical PTTGC 48.92% Petrochemical Flagship

TOP 49.10% Integrated Refinery & Petrochemical IRPC 38.51% Integrated Refinery & Petrochemical SPRC 36.00% Stand alone Complex Refinery BCP 27.22% Complex Refinery & Retail Stations

N e w B u s i n e s

International PTT Inter 100% Overseas investment arm of PTT :

Coal, New energy and related businesses

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PTT’s Strategic Importance to the Thai Economy

PTT has the largest market cap on the SET

PTTEP 6.6%

PTTGC 3.6%

SET Market Cap = Baht 9.3 trillion

PTT 10.9% TOP 1.7% IRPC 1.0% Others 75.8% PTT Group 24.2% 100 BCP & Others 0.4% 139 Data as of 20 February 2012 Fortune Global 500 Ranking 118 128 Need new initiatives 59.9 59.9 Rev.of 100th_company in Fortune Global 500 (Billion USD) 64.9 65.0 68.1 Vayupak 46.2 _15% Public 34% Ministry of Finance 2008 2009 2010 2020

Revenue (Billion USD)

43 Data as of 9 September 2011

Remark: * DJSI = Dow Jones Sustainability Index

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PTT Aspiration

company role in high

returns

HPO

(Technologically Advanced Green NOC)

Sustainable Growth Economic

To perform SOE role in

public service

To perform energy company role

in caring society & environment

CG

CSR

Social Environmental

(47)

PTT Group Strategic Direction

Investment priorities by geography and value chain

Internationalization

Non- Asia Europe Non- Asia

Africa AmericasNon- Asia Non- AsiaMiddle_East

Australia, N. Asia and S. Asia

ASEAN a s Upstream Upstream Upstream Midstream Expand production to 900 kbd Build LNG business & expand mid-/ downstream gas value chain

Support group inv. Upstream P&R O i l & Retail

internationalize chemical business Expand oil station related

business and spin off lubricants

Top oil and gas player Upstream Coal d j a c e n t n d u s t r y ra ng r s i f i c a t i o n

Grow coal mining to large scale Upstream

Power Build Thailand Gas, follow int. gas value

E n e r g y / i a l s D i v e

Alt. energy Build Thai clean power,_{monitor opport. in ASEAN}

c a n expans on, oppor un s c coa

Plantations Develop palm oil, sugar_{and cassava} _Energy

conglomerate s G r e e n m a t e r Infrastructure

Build Green business (ASEAN biohub) Bio-business

Strengthen inte rated hub

Non-oil Retail Explore opportunities in non-fuel retail O t h e r _{(e.g. Gr. Marine)} conglomerate

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Statements of Cash Flows for Year 2011 & 2010 (PTT Only)

Investing -29,133 -15,270

CAPEX(PP&E, Intangible asset) -18,925 -24,842

Operating 65,701 72,632

Net Income 54,457 73,434

Changes in assets & liabilities 18,636 4,263

Investment (Sub. &Affiliates) -8,335 -32,910 Dividend/Interest Received 22,123 30,588

Others -23,998 11,894

Income Tax -14,153 -9,655

Non-Cash Adjustment 6,625 4,087

Interest-net 136 503

Free Cash flow

Financing -18,024 -67,380

Repayment Loans -26,250 -32,786 36,568 57,362 Interest paid -11,932 -12,628 Dividend paid -33,447 -31,722 Received from share issue 3,185 1,698

Adjust effect of FX

-1 47

Received from loans/Bonds 50,420 8,058

Ending Cash & Cash Beginning Cash and Cash

Cash In Out

46

61,311 51,341

42,768 61,311 18,543 -9,971

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Statements of Consolidated Cash Flows for Year 2011 & 2010

Investing 2010 -123,126 2011 -160,454

CAPEX (PP&E, Intangible

asset) -105,916 -112,525 Operating 2010 155,902 2011 177,550 Net Income 83,992 105,296 20,629 -289

Investment (Sub. &Affiliates) - , - , Dividend/Interest Received 10,623 15,644

Others -25,161 13,460

Income Tax -43,707 -42,074 Non-Cash Adjustment 94,890 113,386

Interest - net 99 1,231

Free Cash flow

Financing 4,901 -45,423

32,776 17,096

epaymen oans - , - ,

Interest paid -14,718 -18,536 Dividend paid -31,755 -41,103 Received from share issue 3,626 1,983 Received from loans/Bonds 99,200 48,517

Adjust effect of FX

Ending Cash & Cash Beginning Cash and Cash

-5,909 8,658 47 qu va en s 135,801 116,132 qu va en s 104,033 135,801 as n u 31,768 -19,669 47

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Debt Profile : Control Cost & Manage Risk

Managed debt according to financial risk and policy

Debt Portfolio

Unit : MMTHB

: Cost of debts ~ 4.34 % : % fixed-rate ~ 82 % : Avg. debt life ~ 6.1 years : Cost of debts ~ 5.04 %

: % fixed-rate ~ 90 % : Avg. debt life ~ 7.5 years

343 138 370,262 391,696 84,147 114,442 229,606 US D THB 266,185 257,443 _243,153 (25%) (31%) 63,979 68,308 72,337 (25%) (26%) (30%) 193,454 197,877 170,816 258,991 255,860 162,090 (75%) (74%) (69%) (75%) (70%) _(59%)

31 Dec 09 31 De c 10 31 Dec 11 31 Dec 09 31 De c 10 31 De c 11

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PTT Consolidated Performance : Q4/11

Dubai (USD/BBL) 107 107 4% Others PTTEP 648,365 595,366 8% 16% 7% PTT - Gas Revenue Q3/11 Q4/11

Revenue

PTT - Oil & Trading

PTT - Oil & TradingOthers

52,866 _50,9754%

64% 19%

9%

PTT - Gas EBITDA PTTEP

EBITDA

Q3/11 Q4/11 Others 21,599 16,645 23% 63% 15% 6% ‐29% PetChem PTTEP Refining Net Income EPS (THB/Share) Q3/117.57 5.83Q4/11 46% PTT 49

(52)

PTT Group Performance : Q4/11

% share

Unit : MMTHB Q3/11 Q4/11 QoQ 3Q/11 Q4/11 QoQ

-

-Performance 100% Equity Method % PTT

, , , ,

Less: Dividend Received 13,182 493 -96% 13,182 493 -96%

Gain (Loss) on sales of investments in Associates

and other adjusting 5 919 n.m. 5 919 n.m.

- - , , , , E&P - PTTEP 7,450 15,150 103% 65.29% 5,176 10,433 102% Petro Business 8,325 4,449 -47% 3,957 2,417 -39% - PTTGC* 6,095 3,998 -34% 48.92% 3,006 2,083 -31% - HMC/PPCL/PTTPL/PTTPM/PTTAC / PTTME/PTTTANK 2,230 451 -80% 40-48% 951 334 -65% Refining Business 3,936 1,395 -65% 1,456 1,052 -28% - TOP 2,518 1,862 -26% 49.10% 1,220 1,064 -13% - - - , n.m. . - -- SPRC 991 1,167 18% 36.00% 339 446 32% - BCP 604 561 -7% 27.22% 172 129 -25% Others Buiness -106 -4,484 4130% -697 -4,869 n.m.

Inter _,PTTGE- PTTI group PTTAPM,EMG,PTTML,FLNG -445 -5,861 n.m. 100% -445 -5,861 n.m.

Gas &

Utilities -TTM/PTTNGD/IPT/TP/DCA P/CHPP 853 169 -80% 20-100% 269 -125 -146%

Oil & Oth. - PTTRB/PTTT/SBECL/THAPPLINE/_{/PTTCL/TLBC/ICT/EnCo} -514 1,208 n.m. 33-100% -521 1,117 n.m.

Shared of Net Income from Affiliates 19,605 16,510 -16% 9,892 9,033 -9%

PTT Conso. Net Income 31,312 24,122 -23% 21,599 16,645 -23%

50

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Natural Gas : Strong and Increasing Demand over Long Term

Natural gas is a fuel of choice for power producers and transportation industry

Gas demand forecast (CAGR during 2011-2030)

: Total ~ 1% : Power ~ 1% 6,000 mmscfd : Industry ~ 3% : NGV ~ 2% 7%

5,422

4,000 5,000

Industry

17% 6% 3,000

GSP

21%

1,970

13% 18% 2,000 8% 15% 0 ,

Power

77% 60% 58% Source : PTT 51

(54)

Thailand’s Projected Energy Demand

160,000 180,000 KTOE 163,812 145,604 _Nuclear 2% 120,000 140,000 Hydro/Import 17% 15% Renewable 126,588 106,263 87 651 3% 6% 14% 4% 13% 1% 60 000 80,000 100,000 14% 13% Natural Gas Coal/Lignite 33% 2% _14% 13% 35% 38% 14% 20,000 40,000 38% 33% Oil 27% 32% 31% 29% 0

Source : EPPO/ PDP 2010/ PTT team analysis 2011

(55)

Natural Gas Price Structure

Gas prices are mostly agreed under long-term contracts and volatility pass-through to ensure stable returns.

Customers

Sales Price Structure

Gas Pool Price

₊

Supply Margins

₊

Pipeline Tariffs

Power Producers 60% : : IPP 21% : SPP 12% Average Purchased Gas Price . 1.75% 9.33% 21.8 Bt/MMBtu

GSP 21% Charged at the same price structure of power producers Petrochemicals Feedstocks

- , ,

NGL Reference to Naphtha market price

Local Cooking Gas Capped at 333 USD/ton

Reference to Saudi Aramco’s contract price Industry 13% Charged at prices comparable to fuel oil

NGV 6% Capped at 9.5 Baht/Kg*

Export Cooking Gas

53

* Government will increase NGV retail price Baht 0.50 /kg per month from January 16, 2012 until January 15, 2013

20120227 PTT AnalystMeeting4Q2011 en 03

Analyst Meeting

Analyst Meeting

Q4 and FY 2011

Contents

Contents

2011 Highlights

2011 Highlights

Performance & Roadmap

Performance & Roadmap

Investment

Investment

20

20

12

12

Ou

Ou

tl

tl

oo

oo

k

k

PTT Group Stress Test

PTT Group Stress Test

Contents

Contents

2011 Highlights

2011 Highlights

Performance & Roadmap

Performance & Roadmap

Investment

Investment

20

20

12

12

Ou

Ou

tl

tl

oo

oo

k

k

PTT Group Stress Test

PTT Group Stress Test

2011 Highlights

2011 Highlights

Economy

Economy

Operations

Operations

201

201

1 –

1 –

Yea

Yea

r of

r of

Rec

Rec

ord

ord

Pro

Pro

fit

fit

Record Year

Record Year

Revenue

Revenue

Effective BCM

Effective BCM

Net Income

Net Income

Strong Contributions from All Businesses

Strong Contributions from All Businesses

_‐

_‐

_‐

_‐

_‐

_‐