8 10 12 Highlights Message from Chairman General Information and CEO 24 28 32 Nature of Business Strategic Directions Petroleum Overview and Thailandûs Exploration and Production Situation 36 40 43 Marketing and Competition Revenues Structure Risk Factors 50 59 60 Connected Transactions Awards and Recognition Management Discussion and Analysis of Operating Results 74 101 103 Good Corporate Governance Report of the Audit Report of the Nominating Committee Committee 104 106 107 Report of the Corporate Report of the Remuneration Report of the Risk Management Governance Committee Committee Committee 108 124 127 Shareholding and Management Internal Control Organization Structure Structure 128 141 144 Board of Directors Management Directors of Subsidiary and Associated Companies 148 149 255 Auditor Fee Financial Statements Supplemental Information on Petroleum Exploration and Production Activities 1 2 3 4 5 6 7 Financial Highlights Total Assets Total Liabilities Total Shareholderûs Equity 19,637 Total Revenues 14,131 Net Income 10,694 10,711 (Million USD) 8,926 7,820 7,021 6,311 5,685 5,286 * The proposed dividen of 2012 in 5,408 5.80 baht per share is subject to 4,532 the approval of the 2013 Annual 1,846 1,468 General Shareholdersû Meeting 1,380 on 27 March 2013. 2010 2011 2012 Basic Earnings per Share 0.42 0.44 0.55 (USD) Dividend per Share 5.03 5.40 5.80* (Baht) Financial Ratio Net Profit Book Value Margin (%) 30.46 25.83 26.29 per Share 1.63 1.90 2.70 (USD) Return on Shareholdersû 28.17 25.06 21.68 Equity (%) Return on Share Issued Total Assets (%) 14.05 11.83 10.93 and Fully 3,317 3,320 3,970 Paid-up (Million Shares) 2010 2011 2012 2010 2011 2012 8 Petroleum Proved Reserves (MMBOE) 20101,043 2011 969 2012 901 Petroleum Sales Volumes (BOED) 2010264,575 2011 265,047 2012 275,923 Petroleum Sales Volume Products 2010 2011 2012 Crude Oil (MMBBL) 14.45 14.16 19.18 Natural Gas (MMSCF) 421,922.40 417,090.97 412,042.44 LPG (Metric Tons) 72,689.38 86,292.37 92,732.81 Condensate (MMBBL) 13.36 12.92 12.32 Diluted Bitumen (MMBBL) - 2.07 3.77 Value (Million USD) 3,021.24 2,429.23 2,255.50 2,085.28 1,480.07 1,354.20 1,299.12 1,072.42 979.31 255.51 149.89 28.40 26.33 22.40 2010 2011 2012 9 Mr. Norkun Sitthiphong Mr. Tevin Vongvanich Chairman President and Chief Executive Officer PTTEP sustains a strong determination to explore and produce oil and gas that will provide energy security for all of us, and, yet, at the same time, provide sustainable value to the communities and the environment wherever we operate. 10 PTTEP maintains its passion to explore with responsibility. We always wish to take part in driving our economy, society and environment to grow and flourish together sustainably. This is why we consistently underline the importance of a thriving society and environment everywhere we operate. Last year, we followed our strategic direction and succeeded in expanding our business into new petroleum resources as well as maximizing benefit from our current operating projects. In August 2012, PTTEP successfully completed the acquisition of Cove Energy, a highly prospective East Africa hydrocarbon region that will develop into a vital LNG production base in the future. PTTEP experienced a 314,000 BPD increase of production in 2012. The Greater Bongkot South, Bongkot Project reached a stable gas production rate of 320 MMSCFD as required by the Gas Sales Agreement with PTT, and a condensate production rate of 9,000 BPD. Our S1 Project reached its highest production level of crude oil ever at 35,176 BPD. On top of this, Oman 44 Project added 4,600 BPD to its production whereas the Vietnam 16-1 Project also increased its production of crude oil to 55,000 BPD since production from its Te Giac Trang field came online. On funding activities, this past year, PTTEP completed the preferential public offering of new ordinary shares, which received overwhelming response from shareholders. This offering enabled PTTEP to raise 92,300 million baht, the largest amount ever raised in a public offering in Thailand. This capital raising will help strengthen the companyûs financial position and boost future business expansion. In 2012, PTTEP and its subsidiariesû total net profit for the year was USD 1,846 million (57,316 million baht), a 26 per cent increase from 2011. Earnings per share were USD 0.55 (17.08 baht) and return on shareholderûs equity was 21.68 per cent. Total revenue increased by 24 per cent as compared with 2011. Importantly as well during 2012, PTTEP also reconsidered all internal factors within the company by taking a look at the overall context, including a current and upcoming circumstances assessment, in order to determine and ensure the companyûs capability to achieve all its set targets. As a result of this thorough reconsideration, we redefined our mission, vision and corporate values, so that we now own a new and clearer, more focused company compass, and so that employees have supportive behavior for both present ongoing activities and future long-term projects. Adding to this point, PTTEP constantly looks for opportunities to upgrade the skill sets of our staff, and we have been working hard to set up our competency management system for each individual member of staff. In another undertaking, our Enterprise Resources Planning (ERP) Project is well on its way to completion. Through managing information resources, this project will improve our work processes and, at the same time, reduce duplication of work. On the safety side, as PTTEP aims to become a Loss Time Injury free organization, in 2012, we had a 45 per cent reduction in our Loss Time Injury Frequency rate. All of these elements are currently being implemented to help wheel PTTEP into becoming a leading Asian E&P company driven by technology and green practices. On the other hand, to briefly bring up a noteworthy society and environment point, PTTEP aspires to be listed on the Dow Jones World Sustainable Index (DJSI World). DJSI World is globally accepted by international leading companies as an indicator of sustainable development (SD). Last year, PTTEP developed SD strategy, policy and guidelines to follow and to yield tangible results under the supervision of the PTTEP Sustainable Development Committee too. PTTEP sustains a strong determination to explore and produce oil and gas that will provide energy security for all of us, and, yet, at the same time, provide sustainable value to the communities and the environment wherever we operate. Acceptance, trust and confidence from all of our stakeholders must always remain foremost in our minds › they are essential for us, both at present and in the future. The PTTEP Board of Directors, Management and Employees would like to express our sincere gratitude to every single one of you who have always supported us, most notably in our recent successful capital raising effort, courtesy of the strong support from our shareholders. We hope for your continued support and trust again in the future. 11 PTTEPûs Information Company Name PTT Exploration and Production Public Company Limited or PTTEP Head Office 555/1 Energy Complex Building A, 6th & 19th › 36th Floor, Vibhavadi Rangsit Road, Chatuchak, Bangkok 10900, Thailand Type of Business Petroleum exploration and production, and investment in related business Registration Number 0107535000206 Telephone +66-2537-4000 Facsimile +66-2537-4444 Website www.pttep.com E-mail To contact Independent Director: [email protected] To contact Investor Relations: [email protected] To contact Corporate Secretary: [email protected] Registered Capital 3,969,985,400 baht, divided into 3,969,985,400 ordinary shares, 1 baht each Paid-up Capital 3,969,985,400 baht, divided into 3,969,985,400 ordinary shares, 1 baht each (as of 31 December 2012) 12 Subsidiaryûs Information As of 31 December 2012, there are 59 subsidiaries. All of them have the same office, telephone and facsimile as PTTEP. Details of the directors of each subsidiary appear on pages 144-146. No. Company Name Abbreviation Number of Share Price Share Type Shareholders Shares Sold E&P Business 1 PTTEP International Limited PTTEPI 2,000,000,000 THB 10 Ordinary share PTTEP 100% 2 PTTEP Siam Limited PTTEPS 1,000,000 THB 100 Ordinary share PTTEP 51% PTTEPO 49% 3 PTTEP Andaman Company Limited PTTEPA 100,000 THB 10 Ordinary share PTTEPS 100% 4 PTTEP MEA Limited PTTEP MEA 50,000 USD 1 Ordinary share PTTEP 100% 5 PTTEP Offshore Investment Company Limited PTTEPO 6,667 USD 1 Ordinary share PTTEP 75% PTTEPI 25% 6 PTTEP Southwest Vietnam Company Limited PTTEP SV 50,000 USD 1 Ordinaryshare PTTEPO 100% 7 PTTEP Kim Long Vietnam Company Limited PTTEP KV 50,000 USD 1 Ordinary share PTTEPO 100% 8 PTTEP Hoang-Long Company Limited PTTEP HL 50,000 USD 1 Ordinary share PTTEPO 100% 9 PTTEP Hoan-Vu Company Limited PTTEP HV 50,000 USD 1 Ordinaryshare PTTEPO 100% 10 PTTEP Oman Company Limited PTTEP OM 50,000 USD 1 Ordinary share PTTEPO 100% 11 PTTEP Algeria Company Limited PTTEP AG 50,000 USD 1 Ordinary share PTTEPO 100% 12 PTTEP Iran Company Limited PTTEP IR 50,000 USD 1 Ordinary share PTTEP OM 100% 13 PTTEP Bahrain Company Limited PTTEP BH 50,000 USD 1 Ordinary share PTTEP OM 100% 14 PTTEP Holding Company Limited PTTEPH 50,000 USD 1 Ordinary share PTTEPO 100% 15 PTTEP Indonesia Company Limited PTTEP ID 50,000 USD 1 Ordinary share PTTEPH 100% 16 PTTEP Bengara I Company Limited PTTEPB 50,000 USD 1 Ordinary share PTTEP ID 100% 17 PTTEP Semai II Limited PTTEP SM 50,000 USD 1 Ordinary share PTTEP ID 100% 18 PTTEP Africa Investment Limited1 PTTEP AI 50,000 USD 1 Ordinary share PTTEPH 100% 19 PTTEP Rommana Company Limited PTTEPR 50,000 USD 1 Ordinary share PTTEP AI 100% 20 PTTEP Sidi Abd El Rahman Company Limited PTTEP SAER 50,000 USD 1 Ordinary share PTTEP AI 100% 21 PTTEP Bangladesh Limited PTTEP BD 50,000 USD 1 Ordinary share PTTEPH 100% 22 PTTEP South Asia Limited PTTEP SA 50,000 USD 1 Ordinary share PTTEPH 100% 23 PTTEP New Zealand Limited PTTEP NZ 50,000 USD 1 Ordinary share PTTEPH 100% 24 PTTEP International Holding Company Limited PTTEP IH 50,000 USD 1 Ordinary share PTTEPH 100% 25 Orange Energy Limited Orange 1,000,000 THB 100 Ordinary share PTTEPO 53.9496% MOECO International B.V.