Investor Update March 2016

Transcription

1 Investor Update March

2 1 Contents Overview Performance 2016 Outlook

3 Oil Balance Thailand: Jan Dec 2015 Adequate refining capacity maintains the stability of supply Supply Production Sales Import (79%) 933 KBD Imported Refined Petroleum Products 58 KBD Crude/ Condensate 875 KBD Total Refining Capacity in Thailand: 1,097 KBD Refined Products 1059 KBD* Domestic Indigenous (21%) 247 KBD Crude/ Condensate 247 KBD PTT s Associated Refineries : 800 KBD (TOP, PTTGC, SPRC, IRPC) Refined Products 227 KBD 903 KBD (**) Export Other Refineries : 297 KBD (ESSO, BCP) Crude Export 0 KBD 227 KBD Source: PTIT Remark : (*)Refined product from refineries = 954 KBD, including domestic supply of LPG from GSPs and Petrochemical Plants = 105 KBD (**) Not included Inventory KBD = Thousand Barrels per day 2

4 Natural Gas Balance: Jan Dec 2015 Main driver of the Thai economy Gulf of Thailand (70%) Others, 43% Supply Production Sales Chevron, 28% PTTEP, 29% Onshore (3%) 3,388 MMSCFD Bypass Gas 843 MMSCFD 6 GSPs Total Capacity 2,740 Actual Heat 144 MMSCFD Ethane/ Propane/ LPG/NGL 961 MMSCFD (20%) LPG/NGL Methane 1,584 MMSCFD Petrochemical Feedstock (14%) Industry Household Transportation (6%) Import (27%) Power (60%) Industry (14%) Myanmar 71% LNG 29% 1,292 MMSCFD NGV (6%) Remark: MMSCFD = Million Cubic Heating Value 1,000 Btu/ft 3 3

5 PTT is Thailand s Largest Energy Company PTT Public Limited Company ( PTT ) Largest company on Thai Stock exchange Market cap ~US$44bn 1 or ~ THB 1.6 trillion 1 Group companies: 12.8% 1 of Thai Stock Exchange market capitalization Majority owned by Thai government (66%) 51% by Ministry of Finance 15% by Vayupak Fund Fully integrated and highly diversified over the entire O&G value chain International exploration and production business with 738 mmboe 2 of proved reserves in 2015 Sole operator and owner of gas transmission pipelines and GSPs in Thailand Largest refinery group in Thailand with stakes in 4 of 6 refineries in the country Largest petrochemical producer group in Thailand with stakes in 6 of 8 major petrochemical plants Leading oil marketing business with 1,450 retail stations and 40% 2 of market share by volume International oil trading business having traded 81.3 bn liters 3 in 2015 Coal business assets in Indonesia, Madagascar, and Brunei New Power Flagship (GPSC) to capture opportunity in neighboring ASEAN countries 1 As of 26 February 2016 : Avg. BOT selling rate USD/THB of As of 31 December For the year 2015 Robust revenue and Net Income growth since IPO (MMUSD) Revenue Net Income 12, % 19% 81% 142% -42% IPO International and local recognition 180 th in th in th in th in 2011 Thailand best borrower award 2014 Best CEO Best CFO Best Managed Company Best Corporate Governance Best Investor Relations Best Corporate Social Responsibility Best Commitment to Strong Dividend Policy SET Awards CAGR -1% Platts Top 250 Global Energy Company 24th Overall Global Performance in Asia of 2014 Top Corporate Governance Report Award 2010 & 2011 Best Corporate Social Responsibility Awards 2011 & ,922 PTT Affiliate 93 rd Fortune Global 500 in th in st in th in 2012 Dow Jones Sustainability Index (DJSI) DJSI Member (Listed in 2011) 4

6 PTT s Strategic Importance to Thailand Ministry of Finance holds majority stake in PTT PTT ratings at Thai sovereign level Public 34% Foreign 15% Thai 19% Thai Ministry of Finance 51% Kingdom of Thailand FC Baa1 BBB+ BBB+ A- PTT FC Baa1 BBB+ BBB+ A- Vayupak Fund 1 15% PTT LC Baa1 BBB+ A- A Note: As of March 2016 Largest market cap on the Thai Stock Exchange PTT PTTEP PTTGC TOP IRPC SPRC GPSC Total Others Market cap (BNUSD) % of SET 5.9% 2.1% 1.9% 1.0% 0.7% 0.3% 0.3% 12.8% 87.2% Moody s rating Baa1 Baa1 Baa2 Baa1 Ba1 N.A N.A. - - S&P rating BBB+ BBB+ BBB BBB BB+ N.A N.A The Vayupak Fund is a registered investment management fund in Thailand in which the Government is a major unit holder. The Government has rights of first refusal with respect to any of our shares to be sold by the fund. Although the fund s shareholding may be considered to be beneficially owned by the Government under international standards, such shares are not considered to be owned by the Government for the purposes of Thai law or our compliance with certain of our debt covenants 5 2 As of 26 February 2016 : Avg. BOT selling rate USD/THB of

7 Downstream Upstream Intermediate Infrastructure 6 Our Major Businesses & Activities Business Areas Company PTT s holding (%) Activities E&P Coal Gas PTTEP 65.29% Exploration and Production PTT Energy Resources 100% Coal Business PTT PLC Gas Pipeline 100% Sole owner/operator of the Transmission pipeline S&M 100% Supply & Marketing of Natural Gas GSP 100% Extracting Hydrocarbon contents in NG for Petrochemical s feedstock Oil Marketing Oil Marketing 100% Retail service Stations and commercial Marketing Int l Trading Int l Trading 100% Import/Export/Out-Out trading of petroleum and petrochemical products Petrochemical & Refining PTTGC 48.91% Petrochemical Flagship TOP 49.10% Integrated Refinery & Petrochemical IRPC 38.51% Integrated Refinery & Petrochemical SPRC 5.41% Stand alone Complex Refinery Power GPSC 22.58% Power Flagship 6

8 7 PTT Aspiration Strategic direction and target to achieve Big-Long-Strong aspiration Thai Premier Multinational Energy Company Strong TOP Quartile ROIC Big Long Ranked Fortune 93 rd Listed in DJSI since 2011 Technologically Advanced and Green National Oil Company

9 Pride & Treasure of Thailand 8

10 Y2015 Performance: PTT Group: Fully integrated alleviate performance despite impairment MMTHB Others P&R PTTEP 58,678 3,855 5,080 34,744 8,407 14,460 17,603 36,070 Margin 8,292 11,998 5,172 Int. & Share FX gain CIT exp. Other OPEX* of Impairment Income income 19,936 10,650 66% 176% Others Better performance mainly from PTT LNG Gain from divestment of BCP Petrochem Avg. A/C GRM increased 369% Aromatics P2F improved Olefins business declined from Polymer price dropped Refinery Avg. A/C GIM increased 174% Aggregate intake increased 10% PTT 45,127 Y2014 = 88,806 Operating performance 15% Y2015 = 75,881 22,336 11,957 30, % 66% 31% Gas GSP and Industrial margin squeezed better NGV performance NG Sale Volume increase 3% mainly from new IPPs & SPPs2 Oil Vol. increased 2% mainly from increased demand from lower retail prices Performance increased from better contribution margins for gasoline and lubes Impairment Other extra items (26,083) (4,045) (54,698) 110% Trading Vol. increased 3% from PTTT out-out expansions Margin dropped 36% mainly from squeezed margins on domestic condensate Y2014 (1,247) Y % PTTEP Impairment loss on assets Avg. selling price decreased 29% significantly decreased from a slump on oil price Sales volume increased 3% *including petroleum exploration expenses and royalties 9

11 10 Contents Overview Performance 2016 Outlook

12 E&P : Net loss due to impairment charges E & P Gas Oil & Trading Refining PetChem Others Product Prices Sales Volume KBOED 5% QoQ 3% YoY Liquid ($/BBL) % eighted Avg. 13% ($/BOE) Gas ($/MMBTU) % % 29% 11% Liquid Gas MMUSD Q3/15 Q4/ * Gas price, if excludes Vietnam 16-1 retroactive sale recording, is 8.08$ for 9M14 ** Average selling price, if excludes Vietnam 16-1 retroactive sale recording is 66.24$ for 9M (1,548) (1,284) Q3/15 Net Income (100%) % QoQ Q4/ ,538 (861) (854) % YoY Recurring NI (1,572) Non-recurring*** Q3/15* Q4/ * 2015 *Restated of PSC royalty Key Highlights Solid operational performance o Sale volume above target o Successful start-up of Algeria Bir Seba o Improved cost performance SAVE to be SAFE o Continue to show good recurring NI Ample cash & strong balance sheet position PTTEP to capitalize on potential M&A s Strong dividend commitment *** Includes Impairment loss, Deferred tax from Functional currency, Current Tax from FX Revaluation, Gain/loss from Financial instruments, Gain/(loss)on FX, H1 incident Insurance Claim, and etc. 11

13 12 E&P Strategy: RESET and REFOCUS 1. Maintain Sales Volume 2. Lower Expenditure Bring Down Unit Cost RESET 3. Preserve liquidity and financial flexibility in near-term REFOCUS 3. 12

14 PTT EBITDA Breakdown by BU s: (Unit:MMTHB) Business Unit Q3/15 Q4/15 QoQ YoY Gas- EBITDA 9,033 12,979 44% 55,283 45,622 (17%) S&M 1,260 2,065 64% 20,435 8,946 (56%) TM 4,541 6,479 43% 26,071 24,579 (6%) GSP 4,137 4,521 9% 20,030 13,954 (30%) NGV (2,831) (1,941) 31% (19,962) (10,279) 49% Others 1,926 1,856 (4%) 8,709 8,423 (3%) Oil-EBITDA Trading*-EBITDA 2,375 3,826 61% 11,578 14,583 26% 859 1,170 36% 5,070 3,719 (27%) Total** 12,267 17,975 47% 71,931 63,924 (11%) *MIS ** Included Gas & Oil subsidiaries 13

15 Gas BU: Overall NG volume increased, while NGV volume decreased $/MMBTU Fuel Oil* RHS 9.2 Avg. Pooled gas price NG Price VS FO LHS 437 $/Ton %YoY 700 Pooled Price % * MOPS HSFO 180 CST Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 NGV Sales Volume E & P Gas Oil & Trading Refining PetChem Others Fuel Oil % MMSCFD 4,822 NG Customer Breakdown 3% QoQ 4,696 4, , , ,105 1,075 1,206 1,151 Q3/15 Q4/ Key Highlights 4,807 3% YoY NGV (6%) Industry (14%) GSP (20%) SPP (15%) IPP (21%) EGAT (24%) K.Ton/Day 4% QoQ % YoY Pooled gas cost decrease lags selling price to industry, which is linked to fuel oil Overall NG sales volume increased from power 8.04 sector (new IPPs and SPPs) Vol. MMCFD Q3/15 Q4/ NGV volume decreased due to price hike, compared to lower other petroleum prices 14

16 Gas BU: Lower margin and one-time compensation pressured performance E & P Gas Oil & Trading Refining PetChem Others GSP Feed Cost vs Petroleum price USD/Ton 1,375 1,234 1, , ,188 1,375 1, %YoY HDPE 1,545 1,238-20% LPG Ex-GSP % Naphtha % Feed Cost % 1, LPG Ex-GSP* Naphtha Feed Cost** Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 * Effective on February 2, 2015 ** Revised feed cost calculation from per sale volume to per GSP production volume HDPE kton 7% QoQ 1,591 1,710 GSP Sales Volume 6, % YoY 6, Pentane (1%) Propane (12%) 2,106 2,199 Ethane (34%) NGL (10%) LPG (43%) ,739 2, Q3/15 Q4/ MMTHB 9,033 Gas - EBITDA 44% QoQ 12,979 55,283 8,709 20,030 26,071 1,926 1,855 4,137 4,521 20,435 4,541 6,479 1,260 2,065 (2,831) (1,941) (19,962) 17% YoY 45,622 8,422 13,954 24,579 8,946 (10,279) Q3/15 Q4/ * 2015 *Restated Others GSP TM S&M NGV Key Highlights GSP margin continues under squeezed, due to slower feed gas cost decline LPG price floatation since Feb 15 helped remove PTT s long-running heavy subsidy NGV price lifts in Jan and Sep 15 also helped cut PTT s subsidy by half One-time compensation for 4 th onshore pipeline delay in Q3/15 further weakened GAS BU s performance 15

17 Gas Business Roadmap E & P Gas Oil & Trading Refining PetChem Others Demand & Supply Gas transmission pipelines Project Dec th Pipeline (Rayong Kaengkhoi) Sent gas 17 Sep th Onshore Midline Compressor 28.36% NakornRatchasima Pipeline 74.64% Nakhonsawan Pipeline Sent Gas 20 Nov

18 Oil BU: Impact from Price Reform and Lower Petroleum Prices NGV Higher price Lower volume Avg. Sales Vol. (K.Ton/day) Price (THB/Kg) Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 E & P Gas Oil & Trading Refining PetChem Others YoY Change Avg. Price +16% Avg. Vol. -4% M.Ton LPG Import and Vol. dipped after restructuring 2014 Industry Auto Household THB/Kg 0.0 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 YoY Change Total Domestic Demand -15% Industry +3% Auto -12% Household -4% Import -33% M.Litre 1, Gasoline Demand surged from lower price 2014 Sales Vol. Export Price (RHS) 2015 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 THB/Litre YoY Change 50 Avg. Price -26% 0-50 Avg. Vol +13% Export +11% -200 M.Litre 3,000 2,000 1, Diesel Vol. improved while price decline 2014 Sales vol. Export Price (RHS) Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 THB/Litre YoY Change 40 Avg. 30 Price 20-18% 10 Avg. 0 Vol % Export +43%

19 Oil BU : Better contribution margins despite stock loss E & P Gas Oil & Trading Refining PetChem Others Petroleum Prices Sales volume 1/ Contribution margin 2/ THB/Liter 53% QoQ (Average Prices) (Average Prices) 0.92 USD/BBL USD/ton LPG (Pool) RHS Mogas LHS 300 MM Liter 6% QoQ 200 Gasoil LHS Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 1 / Only PTT and PTTRM 2 / Excluded Non-oil 8% YoY % YoY 24,657 25,268 6,157 6,511 Q3/15 Q4/ MMTHB 2,375 1,600 Oil - EBITDA Oil = 84% Non-oil = 14% 3,826 2, ,578 8,828 Oil = 28% Non-oil = 18% 14,583 11,340 2,750 3,243 Stock Q3/15 Q4/ Gain/Loss (MMTHB) (1,765) (1,657) (4,518) (4,770) * EBITDA from Operating Oil Non-Oil* Key Highlights Better contribution margins from lower oil price Market share increased 0.5% to 39.9% Improved non-oil performance from continuous branch expansions (Amazon café +20%) One time LPG stock gain from LPG price lifting 18

20 Oil BU : Overseas and non-oil expansions continue E & P Gas Oil & Trading Refining PetChem Others Domestic Market Expansion PTT station expansion Non-oil expansion Lubes expansion 3 years contract with Toyota ( M litres/year) International Market Expansion in AEC PTT station expansion Life station in Laos; PTT station in Myanmar Thailand Myanmar Laos Cambodia Philippines Lubes expansion First shipment (1M litres) to Myanmar for its domestic train business; 19

21 Trading BU: Margin continued to squeeze from low oil price E & P Gas Oil & Trading Refining PetChem Others Contribution Margin* Sales Volume % QoQ MM Liter 45% YoY 5% QoQ 3% YoY 78,595 81, NWS ($/BBL) Contribution Margin (THB/Liter) 19,532 20,438 50% QoQ 30% YoY Q3/15 Q4/ * PTT only : FX Adjusted Trading - EBITDA* Q3/15 Q4/ Key Highlights MMTHB 36% QoQ 5,070 27% YoY Performance declined mainly from squeezed condensate margin from lower 3,719 oil price ,170 Q3/15 Q4/ * PTT only : FX Adjusted Higher domestic and import crude to refineries due to favorable GRM and Out-Out trading volume. 20

22 Geographical coverage expansion 21 E & P Gas Oil & Trading Refining PetChem Others 1. Trading arm for PTTEP s new production in Algeria by securing selling term with Repsol, 1.2 MMBBL for Indian suppliers (BZ & PX 330,000MT for 2016) 3. Term contract with Vietnam Airline 550,000 tons/year during Pertamina (Gasoline MMBBL for Q1-Q2 2016) 5. To set up London Office

23 Refining BU: Low oil price A blessing in disguise Dubai USD/BBL Mkt GRM1.78 A/C GIM A/C GRM Stock Gain/Loss 5.30 GRM/GIM* Q3/15 Q4/ E & P Gas Oil & Trading Refining PetChem Others A/C GIM QoQ: 42% YoY: 174% Aromatics Production 91% 85% 82% USD/Ton 74 BZ-ULG PX-ULG95 BZ: 36% 101 Aromatics QoQ PX: 24% BZ: 64% 97 81% Q3/15 Q4/ YoY PX: 8% Refinery Utilization* Net Income (100%) 2% QoQ Aggregated Intake (KBD) U-Rate (%) Q3/15 Q4/ Aggregated U-Rate TOP (23 days ) IRPC T/A *Adjusted to exclude BCP (46 days) T/A 10% YoY Operating NI Total NI Operating NI YoY YoY % 312% Operating Income Stock gain/loss net NRV 7,997 QoQ 68% 13,474 (10,013) (7,304) Total NI QoQ 406% 6,170 28,792 (43,822) 45,428 (13,556) 31,872 (2,016) (15,030) Q3/15 Q4/ IRPC BCP SPRC TOP ** Performance BCP 4 mths 22

24 Refineries : 2015 Key Achievement and strategic roadmap E & P Gas Oil & Trading Refining PetChem Others A Leading Fully Integrated Refining & Petrochemical Company in Asia Pacific 2015 Key Achievement High Refinery run at 108% Effective cost management program Proactive risk management 2016 Strategic roadmap LAB & TOP SPP projects COD 2Q/16 Progressing on CFP study as plan ROIC 14% 1st Quartile ROIC in Petroleum & Petrochemical Industry in Key Achievement Further enhancement in Everest Project IRPC JV with Nippon A&L Inc. and Sumi-Thai International Limited 2016 Strategic roadmap UHV Completion COD 1Q/16 PPE + PPC COD (increase PP 300 KTA, total PP capacity 775 KTA) COD 3Q17 New investments through JV 2015 Key Achievement Cash received from BCP divestment amounting to 13,491 MB Cash received from SPRC IPO amounting to 11,183 MB (Dec 8,2015) 23

25 Petrochemical BU: Squeezed petrochemical margin weighed down stellar refineries performance CDU U-Rate USD/BBL 4.16 Mkt GRM Stock Gain/Loss Net NRV Olefins 92% U-Rate USD/Ton 101% 99% 102% 100% 0.91 A/C GRM A/C GRM 765% QoQ A/C GRM 369% YoY Q3/15 Q4/ ,2341,135 1,153 HDPE Price Refineries PP Price 96% HDPE: 7% Olefins QoQ PP: 12% % 1,544 1,553 1,238 1,155 Q3/15 Q4/ E & P Gas Oil & Trading Refining PetChem Others 94% YoY HDPE: 20% PP: 26% Aromatics 58% 66% 81% 74% YoY QoQ USD/Ton PX-Cond: 4% PX:-Cond 3% BZ-Cond: 2% BZ-Cond: 37% BZ-Cond PX-Cond BTX U-Rate Q3/15 Q4/ Mkt P2F Aromatics QoQ 37% Mkt P2F Stock Gain/loss net NRV- PTTGC Operating Income Unit : MMTHB 1,421 Net Income (100%) 7,664 4,485 1,207-3,064-2,060 Operating NI QoQ 71% Total NI QoQ 280% 5,406 36,835-15,928 15,372 27,170 20,503 Mkt P2F YoY: 137% Operating NI YoY Total NI 26% YoY 12% 23,449 20,907 HMC 4,691 PTTGC Q3/15 Q4/ ,721 Others

26 Petrochemical : PTTGC s strategic expansion plan E & P Gas Oil & Trading Refining PetChem Others 11,000 10,677 KTA 10,500 10,000 9,500 9,000 8,500 8,000 8,948 KTA Existing Non Captive Upstream and Downstream 8,948 KTA HDI Monomer 70 KTA Phenol II 405 KTA Aromatics 170 KTA HDI Deriv. 12 KTA mlldpe 400 KTA PO/Polyol 250 KTA MTP Retrofit 761 KTA 2015A 2016F 2017F 2018F 2019F 2020F ARO2 Phenol2 HDI Thailand HDI France MLLDPE PO/Polyol MTP Retrofit CAPEX MUSD 345 MUSD 43 MUSD 18 MUSD MUSD TBC TBC Additional PetChem* (per year) PX 115 KTA BZ 35 KTA OX 20 KTA PH 250 KTA AC 155 KTA HDI Derivative 12 KTA HDI Monomer 70 KTA MLLDPE 400 KTA Hexene-1 34 KTA PO 200 KTA Polyol 130 KTA Ethylene 500 KTA Propylene 261 KTA Period Q1 16 Q2 16 Q2 16 Q EBITDA Uplift/Year** 24 MUSD 63 MUSD 9 MUSD 24 MUSD 59 MUSD 100% stake of additional capacity ** Estimate EBITDA uplift with 100% stake at mid cycle price 25

27 Other Businesses : Coal - SAR Net loss in 2015 as a result of impairment E & P Gas Oil & Trading Refining PetChem Others Avg. Selling Price & Cash cost Sales Volume New Castle Avg. Selling Price Cash Costs USD/Ton QoQ YoY 10% 17% 2% 16% 3% 7% kton 13% QoQ 1,625 1, , % YoY 9,766 3,130 7,265 1,848 Sebuku 6,636 5,417 Jembayan Q3/15 Q4/ Q3/15 Q4/ MMUSD 9 Operating EBIT (5) (149) (154) Impairment EBIT (100%) QoQ EBIT 18x EBIT 49 EBIT Operating EBIT 24 Impairment Q3/15 Q4/ YoY 3.6x EBIT (149) (125) Key Highlights Net loss due to impairment charge of 149 MM.USD in Q4 15 from sustained low coal price Sales volume decreased as coal price dropped from oversupply. Successful negotiations with contractors to lower production cost. 26

28 Other Businesses : Power - GPSC Better performance supported by dividend income from subsidiary E & P Gas Oil & Trading Refining PetChem Others GWh QoQ 000 Ton Power 4% Steam 15% Power Steam 1,038 1,117 1,288 1,076 Sales Volume YoY Power 3% 5,422 5,582 Steam 2% 4,981 4,893 MMBaht 566 Dividend 288 Operating 278 Net Income (100%) 21% YoY 1,906 1,581 41% QoQ 335 Q3/15 Q4/ Committed Electricity Capacity Q3/15 Q4/ Key Highlights IPO on 18 May 2015 Renewable 2.4% Combined heat: VSPP 0.4% Renewable 4% Dividend Income from RPCL : 288 MB Cogen : SPP 29.5% 1,338 MW Combine Cycle : IPP 67.7% Cogen: SPP 36% 579 MW Hydro 60% COD of IRPC-CP Phase 1 (SPP: 45 MW) on Nov 15 NNEG (SPP: 38 MW) SCOD by June 2016 with 93% construction progress Operating 2015 Construction Rayong Plant s (CUP-4) s EIA has approved on Nov 15 (Plan Start construction in Q1 16) 27

29 Other Businesses : Power GPSC Project Highlight : NNEG & ICHINOSEKI E & P Gas Oil & Trading Refining PetChem Others Nava Nakorn Elecricity Generating Company Limited (NNEG) Pathumthani Province Equity Investment 1,590 THB MN Others GPSC Type SPP Cogeneration Capacity Electricity: 125 MW Steam: 30 T/H Customer Electricity: EGAT 90 MW (25 years), IUs 35 MW Steam: IUs SCOD Total Investment D/E 3:1 June, 2016 (93% completed) 6,360 THB MN Ichinoseki Solar Power (ISP1) Iwate Prefecture, Japan Equity Investment Shareholding Type Capacity Solar Electricity: 20.8 MW GA, 1% Customer Tohoku Electric Power (20 years) SCOD October, % Total Investment D/E 4:1 10,000 YEN million Plan Start construction on Q

30 PTT Consolidated Performance: Y2015 Avg. Dubai (USD/BBL) 18% 47% Y2014 Y2015 Unit : MMTHB Revenue EBITDA Net Income Operating Performance Net Income 9,055 7% 505, ,585 23, ,605,062 88,806 58,678 2,026,912 Q3/15 Q4/ % 59,729 65, , ,828 Q3/15 Q4/ Operating Performance 164% NI 101% 22% 3% (26,582) Q3/15 Q4/ % 26% 20% 14% Operating Performance 15% 0% NI 66% -10% 75,881 17% Net 19,936 Income 24% 1% Revenue 12% 2% 3% EBITDA 53% 63% 68% P&R Others 28% 6% PTTEP 18% PTT - Gas P&R PTT - Oil & Trading 29% 6% 1% PTT - Oil & Trading Others 2% 16% PTT - Gas 47% 47% PTTEP PTTEP -103% PTT 142% Net Income Others -57% 55% 64% PetChem Refining Revenue EBITDA 29

31 Statement of Financial Position MMTHB 2,250,351 3% 2,173,996 1,805,041 1,818,746 Assets slightly declined : Drop in trade A/R and A/P relating to lower crude oil price Impairment charge on Mining properties and E&P assets Cash & S/T Invest Other Current Assets Others Noncurrent Assets 316, , , , , , , , , ,617 Other Liabilities L/T Liabilities (incl. due 0.5 within 1 yr) Net Debt/EBITDA Net Debt/Equity (0.1) PP&E 1,105,147 1,054,694 1,118,677 1,087,687 Total Equity PTT Ratings at Sovereign Level FC : Moody s (Baa1), S&P (BBB+), JCR (A-), FITCH (BBB+) 1 31 Dec Dec Sep LC : Moody s (Baa1), S&P (BBB+), JCR (A), FITCH (A-) 30

32 Dividend Policy & Historical Payments PTT is firmly committed to pay dividend at no less than 25% of net income 148.6% 32.4% 32.6% 29.8% 30.1% 30.3% 30.8% 33.0% 43.6% 40.4% 34.7% 34.9% 35.5% 40.0% 54.1% 25% PTT s minimum payout ratio 25% Baht / share Dividend payout EPS DPS

33 PTT: CAPEX (PTT and Wholly Owned Subsidiaries) PTT plans to invest ~Bt 297bn* ($8bn) during Unit: MMTHB Growth 30% 89,085 By Strategy Green 1% 2, ,595 CAPEX Breakdown : 5 Years Energy Infrastructure 69% JV & Investment in Subsidiaries 23% M&A and Oversea investment 8% Oil & Trading 8% Gas 13% By Business Unit LNG 15% R&D, Others 1% Infrastructure 55% Infrastructure Investment in JV and its subs Head Office and Others Oil and International Trading Natural Gas 50,839 19,619 * budget approved by BOD at YE ,514 68,517 58,306 32,983 34,649 46,042 10,967 17,607 1,817 7, ,106 13,245 13,586 5, ,121 10,850 4, ,191 6,619 3,272 5,698 5, ,473 29,008 5 th pipeline & extension LNG, M&A and Investment Oversea 32

34 33 Contents Overview Performance 2016 Outlook

35 Henry Hub / JKM Price Outlook: Gas price tends to move lower from weak demand in North Asia while flooded supply Japan-Korea Marker (JKM) Price Forecast LNG Global Demand/Supply Future JKM Actual JKM Excess Supply expected in L-T Oversupply ~ 48 MTPA Average JKM price = 7.45 $/MMBtu Average JKM price 2016 = 5-6 $/MMBtu Current 4.70 $/MMBTU Henry Hub Natural Gas Price Forecast Source : EIA Annual Outlook, January 2016 Factors to watch US (Henry Hub) Low NG prices and declining rig activity begin to affect production (supply) Industrial demand grows and LNG exports increase and Coal-to-NG power plant switching. Asia (JKM) India: Strong economic growth and power subsidy scheme for gas fired power plant. High NG demand from emerging counties (Pakistan, Egypt, Jordan) to replace diesel power plants. Ample LNG from new LNG project from US and Australia. Japanese s nuclear restart and power market liberalization. Poor power demand from South Korea 34

36 USD/bbl Million barrels/day Crude Oil Outlook: Oil surplus condition still remains but declining World Oil Demand/Supply Balance surplus World oil Demand(LHS) World Oil Supply(LHS) Stockbuild*(RHS) Source: BOAML, IEA 2015 Dubai $50.9/bbl surplus Dubai Forecast Y2016 Range $35-45/bbl Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 WTI Brent Dubai Dubai Forecast (PTT Group PRISM) Source: (PTT Group) Estimated ( ) surplus Crude Oil Price Forecast in Y2016 range bound $/bbl World Oil Supply surplus trend to lower in 2016 mainly from lower non-opec production Factors to watch Expected slowdown in U.S. shale oil production Oil rig counts tend to keep dropping Geopolitical Conflict between Saudi Arabia and Iran Arrivals of Iranian Barrels U.S. Oil Export Ban Lifted Vulnerable Chinese Economy OPEC to maintain high production Strong USD pressure crude price Refinery turnaround in Europe & Asia 35

37 USD/bbl Refinery Margin Outlook : GRM slightly higher from low oil price and refinery turnarounds CDU Additional Vs Additional Demand AP&ME Demand Growth Outpacing Supply due to Refinery Closures Source: FACTs Semi Annual Reports, Fall 2015, Reuters, Bloomberg, TOP s estimate Singapore GRM Forecast in Y2016 to be around 8-9$/bbl Forecast Mogas GO FO Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Source: FACTS, DB, KBC, Reuters, IEA, Reuters, Thaioil and PRISM Estimated ( Feb 2016) Factors to watch Refinery turnaround season in Asia and Europe begins in Apr 16. Low oil price continues to support Mogas demand growth especially in China and India. Heavy Gasoil exports from China and India amid weak domestic demand. Weak fuel oil cracks on Higher arbitrage inflows from the West in late Jan and Feb 36

38 Olefins Outlook : Ethylene/PE: Pressured by slow-growing economy and capacity additions Factors to watch High cost producers (CTO* and MTO*) may have negative effect due to shift in advantage back to Gas/Naphtha base ethylene Permanent shutdown of naphtha cracker in Japan and turnaround of major plants in Asia may cause tight supply in the region during Q1-2/2016. Slow-growing economy is a major concern for PE consumption. Deep-sea cargoes still continue to target Asian market *CTO/MTO: Coal-to-olefins/Methanol-to-olefins 37

39 Olefins Outlook : Propylene: New capacity expands faster than demand growth 38 Factors to watch Global operating rate will decline as massive capacity from Asia exceeds demand growth last year. The arrival of large additional volumes from ME. Propylene margin will be pressured from additional capacity but integrated spread still remain good.

40 Aromatics Outlook : PX : Current pricing pressured from weak demand PX Capacity also Outstripped Demand Unit : KTA Operating rate : % 6,000 5,000 4, % 76.3% 76.2% 78.0% 77.0% 76.0% PX spreads remain at high levels compared to crude oil price USD/MT 1,800 1,600 1,400 3,000 2,000 1, ,000 Source : IHS Africa Europe Indian Sub. Middle East N. America NEA S. America SEA Other Demand Operating Rate Factors to watch 75.0% 74.0% 73.0% 72.0% 71.0% 1,200 1, PX Price PX MOPJ Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/ Source : PRISM, Feb 2016 Crude Price have brought about a reduction in production costs of PX Global operating rate will slightly decline resulting from capacity addition still outpace demand growth. Weakness in Polyester market and producer surplus are main factors that lowering on PX price. 39

41 40 Aromatics Outlook : BZ: Price expect to fall from lower demand but spread to maintain Lower Demand from Derivative discourage BZ Market Unit : KTA Operating rate : % 3, % 2, % 70.9% 71.8% 71.0% BZ spreads are expected to soft due to oversupply USD/MT 1,800 1,600 1,400 1, ,000 Source : IHS 2015 Africa 2016 Europe 2017 Indian Sub. Middle East N. America NEA S. America SEA Other Demand Operating Rate Factors to watch 70.0% 69.0% 1,200 1,000 Cracker feed-slate will become lighter from new start-up projects, thus reducing Benzene supply output. US and China still dominate global Benzene trade by net import. Lower crude price helps maintain BZ spread BZ MOPJ Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/ Source : PRISM, Feb BZ Price Global demands will be reduced due to slowdown in global economy.

42 Summary: Y2015 vs Y2016 Business Y2015 Y2016 (Forecast) Gas Price Henry Hub JKM 2.63 $/MMBTU 7.46 $/MMBTU Lower Oil Price Dubai Price 51 $/BBL Range $/BBL Reason Higher supply and weak demand in North Asia Oversupply condition still exist in 2016 Refinery Margin Singapore GRM 7.7 $/BBL 7-8 $/BBL Pressured by more export from China Petrochemical - Olefin (HDPE, PP) - Aromatics (PX, BZ) HDPE-Naphtha =746 $/TON PP Naphtha = 645 $/Ton PX-Naphtha = 353 $/Ton BZ-Naphtha = 195 $/Ton HDPE-Naphtha = lower PP Naphtha = lower PX-Naphtha = better BZ-Naphtha = better Pressured by slowgrowing economy and capacity additions Spread maintained from lower feed cost amid low demand and oversupply 41

43 Thank you PTT Public Company Limited Investor Relations Department Tel , Fax , ir@pttplc.com Website: Disclaimer The information contained in our presentation is intended solely for your personal reference only. In addition, such 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. Petroleum Reserves and Resources Information In this presentation, the Company discloses petroleum reserves and resources that are not included in the Securities Exchange and Commission of Thailand (SEC) Annual Registration Statement Form 56-1 under Supplemental Information on Petroleum Exploration and Production Activities. The reserves and resources data contained in this presentation reflects the Company s best estimates of its reserves and resources. While the Company periodically obtains an independent audit of a portion of its proved reserves, no independent qualified reserves evaluator or auditor was involved in the preparation of reserves and resources data disclosed in this presentation. Unless stated otherwise, reserves and resources are stated at the Company s gross basis. This presentation may contain the terms proved reserves, probable reserves, and/or contingent resources. Unless stated otherwise, the Company adopts similar description as defined by the Society of Petroleum Engineers. Proved Reserves - Proved reserves are defined as those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. Probable Reserves - Probable reserves are defined as those unproved reserves which analysis of geological and engineering data suggests are more likely than not to be recoverable. Contingent Resources Contingent resources are defined as those quantities of petroleum which are estimated, on a given date, 42 to be potentially recoverable from known accumulations, but which are not currently considered to be commercially recoverable. The reasons for non commerciality could be economic including market availability, political, environmental, or technological. 42

44 Debt Profile : Control Cost & Manage Risk Managed debt according to financial risk and policy Debt Portfolio Unit : MMTHB PTT Only Consolidated : Cost of debts ~ 4.53% : % fixed-rate ~ 73% : Avg. debt life ~ 8.41 years : Cost of debts ~ 4.42% : % fixed-rate ~ 70% : Avg. debt life ~ 7.45 years USD&Other THB 689, , , ,127 (44%) 256,588 (41%) 307, , ,972 83,985 (35%) 265,245 81, , , , , ,298 (65%) (29%) (71%) (31%) (49%) (69%) (51%) 384, ,733 (56%) (59%) 31 Dec Dec Dec Dec Dec Dec Note : Data as of 31 Dec 15 (THB/USD = THB/JPY = ) Excluding liabilities from finance leases; Cost of debts includes withholding tax. Cost of debts, % fixed rate, and avg. debt life took into account the derivative transactions. Debt outstanding is reconciled with accounting. 43

45 Statements of Consolidated Cash Flows : Y2015 Operating , ,284 Net Income 58,678 19,936 Changes in assets & liabilities 41,998 27,003 Income Tax (54,208) (42,137) Non-Cash Adjustment 262, ,482 Investing 2014 (213,223) 2015 (133,043) CAPEX (PP&E, Intangible asset) (186,142) (162,487) Investment (Sub. &Affiliates) (28,960) 30,893 Current investment (25,399) (24,202) Dividend/Interest Received 15,136 17,498 Others 12,142 5,255 Free Cash flow 96, ,241 Adjustment Financing (59,382) (163,813) Repayment Loans (126,830) (140,983)) Interest paid (33,097) (35,303) Dividend paid (68,674) (43,811) Received from share issue - 8,104 Received from loans/bonds 169,578 48,179 Others (358) ,338 Beginning Cash and Cash Equivalents Cash In/(Out) Ending Cash & Cash Equivalents 196, ,212 37,358 5, , ,978 44

46 45 Statements of Cash Flows (PTT Only) : Y2015 Operating , ,812 Net Income 45,056 9,555 Changes in assets & liabilities 17,966 27,819 Income Tax (2,553) (5,036) Non-Cash Adjustment 23,667 48,474 Investing 2014 (19,430) ,971 CAPEX (PP&E, Intangible asset) (31,639) (35,398) Investment (Sub. &Affiliates) (1,220) 25,064 Current investment (18,215) (15,058) Dividend/Interest Received 32,969 27,940 Others (1,325) 2,423 Free Cash flow 64,706 86,783 Financing (70,615) (77,272) Repayment Loans (27,963) (36,299) Interest paid (13,433) (13,765) Dividend paid (39,985) (31,401) Received from share issue - - Received from loans/bonds 10,766 4,193 Adjustment - (4) Beginning Cash and Cash Equivalents Cash In/(Out) Ending Cash & Cash Equivalents 63,927 58,018 (5,909) 9, ,018 67,525

47 PTT Group Performance : Y2015 (YoY) Unit : MMTHB Performance 100% % PTT holding Equity Method % PTT Y2014 Y2015 YoY Y2014 Y2015 YoY PTT Net operating Income 40,147 28,285-30% 40,147 28,285-30% E&P - PTTEP 21,490-31, % 65.3% 14,317-20, % - PTTGC 15,372 20,503 33% 49.3% 7,642 9,710 27% - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA 5,535 2,946-47% 2,558 1,169-54% Petrochemical 20,907 23,449 12% 10,200 10,879 7% - TOP -4,140 12, % 49.1% -1,961 6, % - IRPC -5,235 9, % 38.5% -1,949 3, % - SPRC -6,367 8, % 5.41%* -2,051 2, % - BCP 712 1, % 0%** % Refining -15,030 31, % -5,774 12, % Inter - PTTER, PTTGE -5,837-22, % 100% -5,858-22, % Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 4,893 6,073 24% 3,596 5,146 43% Utilities -GPSC/ TP/ DCAP 2,622 2,881 10% 1, % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 1,262 3, % 1,566 3, % Others Business 2,940-9, % , % PTT Conso. Net Income 69,740 44,391-36% 58,678 19,936-66% *SPRC before disposed = 36%, **BCP divested in April

48 PTT Group Performance : Q4/2015 (QoQ) Unit : MMTHB Performance 100% % share Equity Method % PTT Q3/15 Q4/15 QoQ Q3/15 Q4/15 QoQ PTT Net operating Income 3,584 9, % 3,584 9, % E&P - PTTEP -46,212 4, % 65.29% -30,170 3, % - PTTGC 1,207 4, % 49.34% 797 2, % - HMC/PTTPL/PTTPM/PTTAC/PTTMCC/PMMA % 40-50% % Petrochemical 1,421 5, % 796 2, % - TOP -2,295 3, % 49.10% -1,095 2, % - IRPC % 38.51% % - SPRC , % 5.41%* % - BCP - - 0%** - - Refining -2,017 6, % -1,176 2, % Inter - PTTER, PTTGE -1,863-18, % 100% -2,018-18, % Gas - PTTLNG/PTTNGD/ TTM(T)/ TTM (M) 1,473 1,911 30% % 1,262 1,487 18% Utilities -GPSC/ TP/ DCAP % 20-30% % Oil & Oth. - PTTT/SBECL/THAPPLINE/PTTRB/PTTANK/Others 1, % % % Others Business 1,549-15, % , % Shared of Net Income from Affiliates -45, % -30,146-8,441 72% Gain on selling investments - Net tax % % PTT Conso. Net Income -41,696 9, % -26, % *SPRC before disposed = 36%, **BCP divested in April

49 Data as of 31 December 2015 E&P and Gas Business Group Oil Business Group Petrochemicals & Refining Business Group Subsidiaries Consolidate PTT Exploration & Production Plc. PTTEP 65.29% PTT Natural Gas Distribution Co., Ltd. PTTNGD 58.00% PTT LNG Co., Ltd. PTTLNG % Thai Oil Power Co., Ltd.* TP 26.00% Global Power Synergy Co., Ltd* GPSC 22.58% Joint Ventures Equity Trans Thai-Malaysia (Thailand) Co., Ltd. TTM (T) 50.00% Trans Thai-Malaysia (Malaysia) Sdn. Bhd. TTM (M) 50.00% District Cooling System and Power Plant DCAP 35.00% Subsidiaries Consolidate PTT (Cambodia) Co., Ltd. PTTCL % Subic Bay Energy Co., Ltd. SBECL % PTT Retail Business Co., Ltd. PTTRB % Thai Lube Blending Co., Ltd. TLBC** 48.95% PTT Tank Terminal Co., Ltd. PTTTANK % PTT Oil Myanmar Co., Ltd. PTTOM % Associates Equity Keloil-PTT LPG Sdn. Bhd. KPL 40.00% Thai Petroleum Pipeline Co., Ltd.THAPPLINE 40.40% PetroAsia (Thailand) Co., Ltd. PA(Thailand) 35.00% Others Cost PetroAsia (Maoming) Co., Ltd. PA(Maoming) 20.00% PetroAsia (Sanshui) Co., Ltd. PA(Sanshui) 25.00% Intoplane Services Co., Ltd. IPS 16.67% Fuel Pipeline Transportation Co., Ltd.FPT % Others Fair Value Bangkok Aviation Fuel Services Plc. BAFS 7.06% Petrochemical Subsidiaries Consolidate PTT Polymer Marketing Co., Ltd. PTTPM 50.00% PTT Polymer Logistics Co., Ltd. PTTPL**50.00% PTT PMMA Co., Ltd. PTTPMMA % PTT Global Chemical Plc.* PTTGC 49.34% PTT Maintenance and Engineering* PTTME 40.00% PTT Energy Solutions Co., Ltd.* PTTES 40.00% Joint Ventures Equity HMC Polymers Co., Ltd. HMC 41.44% PTT Asahi Chemical Co., Ltd. PTTAC 48.50% PTT MCC Biochem Co., Ltd. PTTMCC 50.00% Refining Subsidiaries Consolidate Thai Oil Plc.* TOP 49.10% IRPC Plc.* IRPC 38.51% Refining Associates Equity Star Petroleum Refining Co., Ltd. SPRC 5.41% International Trading Business Group International Investment Subsidiaries Consolidate PTT International Trading Pte. PTTT % Others Subsidiaries Consolidate PTT Energy Resources Co., Ltd. PTTER % PTT Green Energy Pte. Ltd PTTGE % Subsidiaries Consolidate Others Fair Value Energy Complex Co., Ltd. EnCo 50.00% Dhipaya Insurance Plc. TIP 13.33% Business Service Alliance Co., Ltd. BSA * 25.00% PTT Regional Treasury Center Pte. Ltd. PTTRTC % PTT ICT Solutions Co., Ltd.* PTTICT 20.00% 48 Remark : *The companies have changed their status to subsidiaries due to impact from PACK5 ** Subsidiaries that PTT holds less than 50% but being consolidated because PTT has the power to control the financial and operating policies. 48

50 49 Natural Gas Price Structure : Jan-Dec 2015 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% : EGAT 24% : IPP 21% : SPP 15% GSP 20% Average Purchased Gas Price 1.75% * 1.75% * 9.33% * Charged at the same price structure of power producers 21.9 Bt/MMBtu * EGAT IPP and SPP Supply Margins not more than and respectively Petrochemicals Feedstocks Ethane, Propane, LPG NGL Local Cooking Gas Export Cooking Gas Industry 14% Profit-sharing mechanism based on market prices of petrochemicals Reference to Naphtha market price At GSPs cost (adjusted every 3 months) Reference to Saudi Aramco s contract price Charged at prices comparable to fuel oil NGV 6% Capped at Baht/Kg from Sep 2015 Contract periods are ~ years or until depletion of gas fields or the expiration of concessions 49

51 Natural Gas : A steadily growth of natural gas upon Government fuel diversification policy for power generation Gas demand forecast (CAGR during ) : Total ~ 0.3% : Power ~ 1% : GSP ~ -3% : Industry ~ 2% : NGV ~ -1% Source : PTT 50

52 Thailand s Projected Energy Demand Primary Energy Consumption KBD 3, Hydro/Import 2% ,494 2% 20% 12% 37% 2,639 2% 21% 13% 35% 5.2% 3.6% 3.1% 1.7% Renewable Coal/Lignite Natural Gas 26% 15% 32% % 29% 1.5% Oil 25% Source : EPPO/ DEDE/ PDP 2015/ PTT analysis as of Dec

53 52 Gas Business Generates Stable Returns Overview Gas transmission pipeline capacity Sole owner and operator of entire gas transmission pipelines in Thailand (> 3,000 km), a regulated business IRROE ranges between 12.5% - 18% for transmission pipeline investment Supply & marketing of natural gas provides fixed margin with long-term contracts of years 6 Gas Separation Plants; Total production 6.7 MTA; are on petrochemical market price-linked profit sharing basis

54 Key Business Drivers: Dubai Dubai vs FO ($/BBL) FO Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 HDPE and PX spreads($/ton) 1100 HDPE-Naphtha Spread PX-Naphtha Spread HDPE PX 100 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Note: Figures are average * Naphtha (MOPJ) LNG (JLC) ($/MMBTU) JKM Spot Avg. Pooled Gas ($/MMBTU) 5 Avg Pooled * JLC = Japan LNG Cocktail : Landed LNG price in Japan Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct JKM JLC* NG Prices ($/MMBTU) Avg = THB/USD FX (USD/THB) Appreciate 0.2 THB/USD (0.61%) 32.5 Depreciate 0.60 THB/USD (1.85%) Depreciated THB/USD (5.0%) 11.4 Depreciate 2.60 THB/USD (7.9%) Jan-14 Jul-14 Jan-15 Jul Avg = THB/USD 53

55 Energy Price Reform: LPG Prices Lifted GSP Capped Price from 333 USD/TON to reflect GSP Cost Imported 2.0 Mil. Ton (27%) GSP 3.6 Mil. Ton (48%) Refinery 1.9 Mil. Ton (25%) *CP Dec 15= 466 $/ton CP+85 $/ton or 551 $/ton 439 $/ton CP-20 $/ton or 446 $/ton 456 $/TON or /kg Oil Fund AS CLEARING HOUSE Tax 2.39 /kg Tax 2.39 /kg Margin 3.26 /kg Margin 3.26 /kg Oil Fund /kg No oil Fund VAT 1.46 /kg VAT 1.19 /kg Need subsidy 5.22 /kg /kg Cooking Transport Industrial /kg Low income LPG prices for Petchem : not controlled, but linked to market price and/or contract price Source : EPPO as of Dec

56 55 PTT strategies to cope with low oil price Corporates Survival Strategy: ROIC strategy to drive strong performance 1. Rationalization 2. Optimization Focus On : - Core Assets/Area - Strategic Direction - Future Potential - Low Cost Rationalization Optimization Operational Excellence Supply Chain Management Optimization Synergy New Technology Development Divest from: - Non Core/Strategic - Small Investment - Non Potential - High Cost Cost Reduction 3. Integration Integration Vertical Integration Increase Stability of fluctuation on business cycle Increase Resilience Consolidation 4. Consolidation Increase Size/Scale Complement Strategic Focus Minimize Unit Cost Increase Competitiveness

57 61 PTT Group Impairment Y2015 Y2014 = 26,083 MMTHB Y2015 = 54,698 MMTHB PTTGE, 2,928 Vencorex & other assets due to cease some operation line PTTGC, 745 PTTEP, 21,411 Others, 999 SAR due to lower coal price KPI&FBP to exit from lack of expertise business PTTER, 19,428 PTTGE, 1,457 Myriant due to cannot utilize its full capacity PTTGC, 1,240 PTTEP, 32,573 PT.FBP, PT MAR, Az Zhara & others in order to exit from lack of expertise business Montara and KKD projects due to continuously oil price drop E&P assets due to continuously oil price drop 56

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