The Easy Oil is Over: How NOCs are Reshaping to Stay Fit

in the New Normal

Tevin Vongvanich

President and CEO

PTT Exploration and Production PCL

26 March 2014

2

The information, statements, forecasts and projections contained herein reflect the

Company’s current views with respect to future events and financial performance. These

views are based on assumptions subject to various risks. No assurance is given that these

future events will occur, or that the Company’s assumptions are correct. Actual results may

differ materially from those projected.

3

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Consumption

Production

Ne

t im

po

rts

Barrels per day

Year

Source: Energy Policy and Planning Office, Ministry of Energy, Thailand

4

-

1,000

2,000

3,000

4,000

5,000

6,000

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Consumption

Production

Ne

t im

po

rts

Import LNG (2011) Import Myanmar’s Gas (2000)

‘000 scf per day

Year

Source: Energy Policy and Planning Office, Ministry of Energy, Thailand

5

PTTEP operates globally to provide reliable energy

supply and sustainable value to all stakeholders.

Leading Asian E&P company driven by technology and

green practices

MISSION

VISION

Passion to Explore For A Sustainable Future

VALUES

DNA

Source: PTTEP

-125

-25

75

175

275

375

475

-500

0

500

1000

1500

2000

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

13

International

Domestic

Net Income

International

Bongkot

IPO

Indonesia Iran

Cambodia

Oman

Algeria

Myanmar

Egypt

MTJDA

NZ Bahrain

Vietnam

Australia

Production (KBD)

Net Income (MMUSD)

Yadana Yetagun

Operating Investing

S1

Canada

Mozambique

Kenya

Natuna

Sea A

Production Production

6 Source: PTTEP

East Africa Deepwater,

LNG

Thailand Mature Field, EOR, Marginal Field

North America Oil Sand,

Shale Gas

Middle East EOR

Australia Exploration,

FLNG

South East Asia Deepwater, Exploration

7 Source: PTTEP

8

‘BIG’

Production 600 KBD in 2020

‘LONG’

10+ years Reserves Life

40+ years Resource Life

Green Practices

‘STRONG’

ROCE above Industry Average

Maintain the current credit rating

Business Sustainability Organizational Sustainability

HPO

Corporate

Governance

Care-Share-

Respect

Source: PTTEP

• CSV/CSR

• Good Corporate Citizen

• GRC

• Code of Conduct • Business Ethic

• Operational

Excellence • Technology • Organization

Capability

Clear visibility on growth strategy through international growth and opportunistic M&A Production Volume (KBOED)

~250

~400

600

Maintain Production Plateau in Domestic Projects

Growth from International Projects Start-ups and Ramp-ups

Expand Portfolio in new exploration areas and new businesses

Thailand :

- S1

- Bongkot

- Pailin

- Arthit

- MTJDA

Long-term Contributors :

- Myanmar M3

- Mozambique Offshore

Area 1

- Canada Oil Sands

M&A targets :

- Southeast Asia producing assets

- North America shale assets

with high liquid content

- Other prospects

Discovered Prospects :

- Cash / Maple

- Algeria HBR

New Frontiers:

- Mozambique and Kenya

2013 2020

Near-term Growth :

- Montara

- Vietnam 16-1

- Zawtika

- Algeria 433a & 416b

329

9 Source: PTTEP

10

‘BIG’

Production 600 KBD in 2020

‘LONG’

10+ years Reserves Life

40+ years Resource Life

Green Practices

‘STRONG’

ROCE above Industry Average

Maintain the current credit rating

Business Sustainability Organizational Sustainability

HPO

Corporate

Governance

Care-Share-

Respect

Source: PTTEP

• CSV/CSR

• Good Corporate Citizen

• GRC

• Code of Conduct • Business Ethic

• Operational

Excellence • Technology • Organization

Capability

0

200

400

600

800

1,000

1,200

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

11

Phase 2

350

Phase 1

150

Phase 3

550

Sales gas volume (MMscfd)

Source: EPPO, PTTEP

Challenges • Steep fast decline in production

• Ageing facilities

• Higher investment cost

Solutions • More cost-effective

• Recovering hydrocarbons

efficiently and environmental-friendly manner

Cumulative Production > 3.66 Tcf of Natural Gas and > 106 million BBL of condensate

Wells & Facilities 73 Exp & App wells and 416 Dev wells 33 WHP + 2 Processing Complex and 1 FSO

Investment > USD 6.6 billion

Phase 4

870

Benefits

Reduce duplicated works throughout Oil &

Gas value chain ranging from development

planning, engineering, procurement,

construction, operation and maintenance

Increase bargaining power and economy of

scale of EPCI contract through big lot

bidding leading to lower investment

Optimize project resources and better

surplus material management

Improve cross asset operation and

material interchangeability

Reduce spare parts and standardize of

maintenance with single design

The awarded winner from SPE Thailand E&P Awards in 2010

12

Background

Different assets and partners

Different specifications

Different design and operating philosophy

Leading to

Separate project execution

Duplicated works & lack of synergy

Standardization

Single design (in-house)

handling all subsurface

fluid properties and

conditions

Single specification (103

PTTEP specification have

been developed)

Single project

management

Source: PTTEP

13 Source: PTTEP

PTTEP own

100%

and become

operator

Challenges

• Mature field

• Waxy Crude

• Stakeholders management

Solutions

• Improve Oil Recovery & Unlock Potential

• Integrated Development & Exploration Strategy

• Value Assurance

• SSHE Excellence

• CSR/CSV

Double production

to highest record

(37,890 BBLD

on 25 Feb’13)

Cumulative Production > 218 million barrels of crude oil Wells & Facilities • 504 wells • 63 well locations

Design Principal

Lower gaslift injection point below production packer

Decrease hydrostatic pressure of liquid in both

tubing and wellbore

Improve lifting efficiency compared to conventional

gaslift method

Improve well outflow performance to increase oil

production

Benefits

Increase oil production from the lower zones

Simple completion design, utilization of available

equipment in the market

Serviceable and interventionable with standard

equipment

A

B

A – Conventional

Oil Gain

Pre

ss

ure

(p

sig

)

B – DeepLift

Production Rate (STB/day)

Inflow Performance VS Outflow Performance Curves

The awarded winner from SPE Thailand E&P Awards in 2012

14 Source: PTTEP

15

Sao Thian- A: The First CDM Project of oil & gas business in Thailand

Field Location: Sao Thian Oil Field, S1 Concession

Recovery of associated gas : 0.85 MMscfd

GHG Emission Reduction: 26,000 tCO2e/year

Flare stack (normal operation)

Flare stack (in case of emergency)

Gas metering Generator (Ratchburi Energy)

Transmission Line (PEA)

Storage tank

Crude Evacuation Crude Terminal

Separator

Producing well

Electricity Generating from excess gas At Sao Thian Oil Field, S1 Concession

Source: PTTEP

Thank You

PASSION TO EXPLORE FOR A SUSTAINABLE FUTURE