Management's Discussion and Analysis (MD&A) and Operating Results for the 3rd Quarter of 2009 and the Nine-Month Period Ended September 30, 2009 1. Financial and Operating Highlights 3Q 2009 3Q 2008 9M 2009 9M 2008 Crude intake (kbpd) 124.0 126.6 135.0 138.8 Paraxylene production (thousand tons) 87 69 286 244 Average forex rate (Baht/US$) 34.0 33.9 34.7 32.9 Gross refining margin (US$/BBL) -1.3 -11.7 6.8 6.7 Sales (million Baht) 42,291 62,263 118,081 184,050 Gross profit (million Baht) 370 -3,715 10,402 8,927 EBITDA (million Baht) -321 -4,434 8,412 6,834 Net profit (million Baht) -571 -3,554 4,813 3,391 (1) Earnings per share (Baht) -0.16 -1.03 1.39 1.10 (2) Adjusted Earnings per share (Baht) -0.16 -1.03 1.39 0.98 (1) Based on actual weighed average number of common shares during the period: - 9M 2008 3,077 million shares - 3Q 2008, 3Q 2009 and 9M 2009 3,461 million shares (2) Based on total current number of shares: 3,461 million shares 1 2. Benchmark Prices for Crude Oil and Refined Petroleum Products Average Platts Singapore quoted prices for crude oil and refined products Unit: US$/BBL 3Q 2009 3Q 2008 2Q 2009 9M 2009 9M 2008 Dubai 67.9 113.3 59.1 57.1 107.2 Tapis 71.6 125.2 61.7 60.6 119.1 Gasoline (95 Ron) 76.9 119.3 68.7 66.8 118.1 Jet fuel/ kerosene 75.2 142.1 66.5 65.7 136.9 Diesel (0.5%S) 74.9 139.0 66.2 64.8 136.0 Fuel oil (180 cs) 64.9 102.5 53.3 52.4 89.9 LPG 47.7 77.7 36.2 41.1 75.6 Paraxylene - US$/Ton 1,013 1,348 957 899 1,267 (1) Gasoline (95 Ron) - US$/Ton 653 1,014 584 568 1,004 Source: Mean of Platts Singapore and PCI (1) Converted to US$/Ton using 1 Ton = 8.5 barrels Crude prices for 3Q 2009 increased roughly 9 - 10 $/bbl from 2Q 2009 with Dubai and Tapis crude prices averaging 67.9 $/bbl and 71.6 $/bbl respectively. However, average crude prices were still much lower than average crude prices in the same quarter last year, which were 113.3 $/bbl for Dubai and 125.2 $/bbl for Tapis. 3Q 2009 overall product prices rose from 2Q 2009 in line with the change in crude prices,except LPG prices which remained under government price control at 11 Baht/kg (324 $/Ton or 28 $/bbl) until August 31, 11.4 Baht/kg (336 $/Ton or 29 $/bbl) towards the end of the quarter. Paraxylene Asian Contract price (ACP) in 3Q 2009 increased slightly from 2Q 2009 to 1,013 $/Ton. However, feedstock prices outpaced the increase in paraxylene resulting in weaker paraxylene margins in 3Q 2009. 2 3. Production and Gross Margin 3Q 2009 3Q 2008 + / (-) 9M 2009 9M 2008 + / (-) Refining capacity (kbpd) 177.0 177.0 - 177.0 177.0 - Crude intake (kbpd)124.0 126.6 -2.6 135.0 138.8 -3.8 Refinery production (1) - Light products (%) 35.6% 37.0% -1.4% 34.8% 35.5% -0.7% - Middle distillates (%) 50.4% 47.6% 2.8% 50.4% 51.1% -0.7% - Heavy products (%) 14.0% 15.4% -1.4% 14.8% 13.4% 1.4% Paraxylene production ('000 tons) 87 69 18 286 244 42 Gross Refining Margin (US$/BBL) -1.3 -11.7 10.4 6.8 6.7 0.1 (1) Excludes reformate for chemical feedstock 3Q 2009 Crude intake of 124.0 kbpd was slightly lower than 3Q 2008 by 2.6 kbpd. The lower crude run was mainly due to weaker crude economics and an increase in planned maintenance activities this quarter. Paraxylene production in 3Q 2009 was 87 KTon, 18 KTon higher than 3Q 2008 reflecting increased paraxylene margins over the period. The gross refining margin (GRM) was -1.3 $/bbl in 3Q 2009 compared to -11.7 $/bbl in 3Q 2008. The improvement in GRM was due to much lower stock losses, partly offset by weakerindustry margins. The middle distillates portion in 3Q 2009 of 50.4% was in line with the refining yield for the first half of the year The middle distillates production in 3Q 2008 was impacted by lower diesel demand. 3 4. Financial Performance in 3Q 2009 and 9M 2009 (Unit: million Baht) 3Q 2009 3Q 2008 + / (-) 9M 2009 9M 2008 + / (-) Sales 42,291 62,263 (19,972) 118,081 184,050 (65,969) (175,123) Cost of sales (41,921) (65,978) 24,057 (107,679) (175,123) 67,444 Gross profit 370 (3,715) 4,085 10,402 8,927 1,475 Selling expenses (1,072) (1,089) 17 (3,153) (3,227) 74 Administrative expenses (127) (131) 4 (334) (339) 5 Profit from sales (829) (4,935) 4,106 6,915 5,361 1,554 Memo: - Downstream (995) (5,024) 4,029 6,484 5,510 974 - Petrochemicals 166 89 77 431 (149) 580 Other income 23 56 (33) 57 81 (24) Operating profit (806) (4,879) 4,073 6,972 5,442 1,530 Share of profit from an associate 58 45 13 193 166 27 Profit before interest and income tax (748) (4,834) 4,086 7,165 5,608 1,557 Finance costs,net(111) (260) 149 (432) (834) 402 Profit before income tax (859) (5,094) 4,235 6,733 4,774 1,959 Income tax charge288 1,540 (1,252) (1,920) (1,383) (537) Net profit (571) (3,554) 2,983 4,813 3,391 1,422 Sales and cost of sales in 3Q 2009 were lower than 3Q 2008, reflecting reduced crude and refined petroleum product prices and lower sales volumes.Gross profit for 3Q 2009 improved by Baht 4,085 million from 3Q 2008 primarily due to much lower stock losses. This was partially offset by the lower industry margin in 3Q 2009. 3Q 2009 selling and administrative expenses were Baht 1,199 million, slightly lower than Baht 1,220 million in 3Q 2008. Profit from sales for 3Q 2009 were Baht -829 million compared to Baht -4,935 million in 3Q 2008. The improvement of Baht 4,106 million was from the lower loss in the Downstream segment and higher profits from the Petrochemicals segment. The improvement in the 4 Petrochemicals result in 3Q 2009 was due to stronger paraxylene margins and higher production volumes, partially offset by lower margins for other chemical products. Net finance costs decreased by 57% to Baht 111 million in 3Q 2009 from Baht 260 million in 3Q 2008, as a result of lower debt levels and reduced interest rates. As a result of the foregoing factors, 3Q 2009 results were a loss of Baht 571 million compared to a loss of Baht 3,554 million in 3Q 2008. 5 5. Balance Sheet (Unit: million Baht except for percentages) 30 Sep, 30 Jun, 2009 2009 + / (-) + / (-) % Assets - Current assets 25,540 28,667 (3,127) (11%) - Non-current assets 35,273 34,627 646 2% Total assets 60,813 63,294 (2,481) (4%) Liabilities -Current liabilities 28,427 29,545 (1,118) (4%) -Non-current liabilities 7,959 7,914 45 1% Total liabilities 36,386 37,459 (1,073) (3%) Shareholders' equity -Issued & paid-up share capital17,075 17,075 - - -Premium on share capital 4,032 4,032 - - -Retained earnings 3,144 4,580 (1,436) (31%) -Fair value reserve 169 141 28 20% Minority interest 7 7 - - Total shareholders' equity 24,427 25,835 (1,408) (5%) Total liabilities and shareholders' equity 60,813 63,294 (2,481) (4%) As of September 30, 2009, current assets decreased by Baht 3,127 million from June 30,2009 primarily due to lower inventories. Non-current assets increased by Baht 646 million due to a higher property, plant and equipment balance and higher deferred income tax assets. Current liabilities decreased by Baht 1,118 million to Baht 28,427 million in 3Q 2009. The decrease was due to lower crude payables which were partly offset by higher short-term borrowings. Non-current liabilities slightly increased by Baht 45 million to Baht 7,959 million at the end of September. Total shareholders' equity decreased by Baht 1,408 million reflecting the 3Q 2009 net loss of Baht 571 million and Baht 865 million of interim dividend paid out from accumulated retained earnings in the quarter. 6 6. Financial Ratios Comparison of financial ratios is as follows: Profitability ratios 3Q 2009 3Q 2008 2Q 2009 9M 2009 9M 2008 Gross profit margin (%) 0.9% -6.0% 14.8% 8.8% 4.9% Net profit margin (%) -1.4% -5.7% 8.4% 4.1% 1.8% Interest coverage ratio (times) -2.9 -16.7 46.3 19.3 7.7 Liquidity and debt to equity ratios 30 Sep, 2009 30 Jun, 2009 31 Dec, 2008 Current ratio (times) 0.9 1.0 0.5 Quick ratio (times) 0.2 0.2 0.1 Total debt to equity ratio (times) 1.0 0.9 1.4 Long term debt to equity ratio (times) 0.3 0.3 0.0 Net debt to equity ratio (times) 1.0 0.9 1.3 Financial ratios calculation: Gross profit margin = Gross profit / Sales Net profit margin = Net profit / Sales Interest coverage ratio = EBITDA / Interest expense Current ratio = Current assets / Current liabilities Quick ratio = (Cash and cash equivalents + Short term investments + Trade receivables) / Current liabilities Total debt = Current borrowings + Non-current borrowings Total debt to equity ratio = Total debt / Total shareholders' equity Long term debt to equity ratio = Non-current borrowings / Total shareholders' equity Net debt to equity ratio = (Total debt - Cash and cash equivalents) / Total shareholder's equity Name: Robert Michael Cooper Title: Managing Director Date: November 16, 2009 7