Management's Discussion and Analysis (MD&A) and Operating Results for the 3rd Quarter of 2008 and the Nine-Month Period Ended September 30, 2008 1. Financial and Operating Highlights 3Q 2008 3Q 2007 9M 2008 9M 2007 Crude intake (kbpd) 126.6 148.3 138.8 143.3 Paraxylene production (thousand tons) 69 102 244 312 Average forex rate (Baht/US$) 33.9 34.1 32.9 34.8 Gross refining margin (US$/BBL) -11.7 3.5 6.7 6.7 Sales (million Baht) 62,263 49,541 184,050 145,105 Gross profit (million Baht) -3,705 1,840 8,988 10,817 EBITDA (million Baht) -4,434 1,296 6,834 9,232 Net profit (million Baht) -3,554 -380 3,391 3,550 (1) Earnings per share (Baht) -1.03 -0.59 1.10 6.37 (2) Adjusted Earnings per share (Baht) -1.03 -0.11 0.98 1.03 (1) Based on actual weighed average number of common shares during the period: - 3Q 2007 647 milion. shares - 9M 2007 556 milion. shares - 3Q 2008 3,461 million. shares - 9M 2008 3,077 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$/BBL 3Q 2008 2Q 2008 3Q 2007 9M 2008 9M 2007 Dubai 113.3 116.9 70.1 107.2 63.4 Tapis 125.2 129.5 79.4 119.1 72.7 Gasoline (95 Ron) 119.3 129.8 81.7 118.1 78.6 Jet fuel / kerosene 142.1 154.4 87.3 136.9 80.6 Diesel (0.5%S) 139.0 154.5 86.5 136.0 79.3 Fuel oil (180 cs) 102.5 92.6 59.6 89.9 52.9 LPG 77.7 75.8 51.7 75.6 49.5 Paraxylene - US$/Ton N/A 1,330 1,108 N/A 1,108 (1) Gasoline (95 Ron)-US$/Ton 1,014 1,104 694 1,004 668 Source: Mean of Platts Singapore and PCI (1) Converted to US$/Ton using 1 Ton = 8.5 barrels Crude prices continued to rise from 2Q 2008 reaching a peak in mid-Jul at 141$/bbl (dubai) before sharply declining to end 3Q 2008 at 90$/bbl. Average Dubai and Tapis crude prices in 3Q 2008 were 3-4$/bbl lower than 2Q 2008. With the exception of fuel oil prices, which were stronger in comparison to crude in 3Q 2008, decreases in gasoline, jet fuel, and diesel prices outpaced crude price declines. LPG prices remained under government control at 11 Baht/kg (US$320/Ton or US$28/barrel). Paraxylene's Asian contract price for September has not been settled as there is still a wide buy-sell price gap resulting from tumbling feedstock costs and weaker paraxylene demand. 2 3. Production and Gross Margin 3Q2008 3Q2007 +/(-) 9M2008 9M2007 +/(-) Refining capacity (kbpd) 177.0 177.0 - 177.0 177.0 - Crude intake (kbpd) 126.6 148.3 -21.7 138.8 143.3 -4.5 Refinery production (1) -Light Products (%) 37.0% 34.8% +2.2% 35.5% 35.2% +0.3% -Middle distillates (%) 47.6% 52.7% -5.1% 51.1% 50.4% +0.7% - Heavy products (%) 15.4% 12.5% +2.9% 13.4% 14.4% -1.0% Paraxylene production ('000 tons) 69 102 -33 244 312 -68 Gross Refining Margin (US$/BBL) -11.7 3.5 -15.2 6.7 6.7 - (1) Excludes reformate for chemical feedstock Crude intake in 3Q 2008 was lower than 3Q 2007 due to weaker gross refining margin and a planned shutdown for catalyst change-out and minor maintenance of some units to improve efficiency. Paraxylene production dropped in 3Q 2008 from 3Q 2007 due to weaker paraxylene margin. The gross refining margin (GRM) was weaker from 3.5 $/bbl in 3Q 2007 to -11.7$/bbl in 3Q 2008. The GRM for 3Q 2008 was negatively impacted by the dramatic drop in crude prices during the quarter. The decrease in middle distillates portion to 47.6% from 52.7% in 3Q 2007 was associated with a slowdown in diesel demand in 3Q 2008. 3 4. Financial Performance of 3Q 2008 and 9M 2008 (Unit: million Baht) 3Q2008 3Q2007 +/(-) 9M2008 9M2007 +/(-) Sales 62,263 49,541 12,722 184,050 145,105 38,945 Cost of sales (65,968) (47,701) (18,267) (175,062) (134,288) (40,774) Gross profit (3,705) 1,840 (5,545) 8,988 10,817 (1,829) Selling and administrative expenses (1,230) (1,067) (163) (3,627) (3,100) (527) Profit from sales (4,935) 773 (5,708) 5,361 7,717 (2,356) Memo: - Downstream (5,024) 492 (5,516) 5,510 6,282 (772) - Petrochemicals 89 281 (192) (149) 1,435 (1,584) Other income 56 51 5 81 93 (12) Other income Operating profit (4,879) 825 (5,704) 5,442 7,810 (2,368) Other non-operating income - 107 (107) - 430 (430) Share of profit from an associate 45 47 (2) 166 148 18 Profit before interest and income tax (4,834) 979 (5,813) 5,608 8,388 (2,780) Profit before interest and income tax Interest income 6 22 (16) 48 133 (85) Interest expense (266) (701) 435 (882) (3,224) 2,342 Profit before income tax (5,094) 300 (5,394) 4,774 5,297 (523) Income tax charge 1,540 (680) 2,220 (1,383) (1,747) 364 Net profit (3,554) (380) (3,174) 3,391 3,550 (159) Both sales and cost of sales in 3Q 2008 were higher than 3Q 2007, reflecting higher crude and refined petroleum product prices partially offset by lower sales volume.Lower refining margins were the principal contributor to lower gross profit in 3Q 2008 of Baht -3,705 million compared to Baht 1,840 million in 3Q 2007. 9M 2008 gross profit of Baht 8,988 million was Baht 1,829 million lower than the same period in 2007. Selling and administrative expenses were Baht 163 million higher comparing 3Q 2008 to 3Q 2007 and Baht 527 million higher comparing 9M 2008 to 9M 2007. The increases were mainly due to the inclusion of expenses incurred by the chemical marketing business, resulting from the entire business transfer of ExxonMobil Chemical(Thailand) Limited or EMCTL to the Company in September 2007, higher transportation costs, sales promotion expenses for retail sales. There was no other non-operating income in 3Q 2008. Other non-operating income consisted of the amortization of the deferred gain on the sale and leaseback transaction which the Company entered into in 2000 to lease certain assets that were sold to EMCTL.The absence of other non-operating income was due to the 4 termination of the sale and leaseback transaction following the transfer of the entire business of EMCTL to the Company in September 2007. Interest expense was down significantly by Baht 435 million in 3Q 2008 compared to 3Q 2007 and Baht 2,342 million in 9M 2008 compared to 9M 2007. This was the result of lower debt (due to the debt repayment associated with the capital injection in September 2007, the IPO proceeds in May 2008, and operating cash flow) as well as lower interest rates (due to the debt refinancing completed in December 2007). The effective tax rate was 30% for 3Q 2008 and 29% for 9M 2008. Effective tax rate for 3Q 2007 and 9M 2007 was above 30% mainly due to the reversal of deferred tax assets following the completion of the transfer of the entire business of EMCTL in 3Q 2007, which was partly offset by income tax holiday granted by the Board of Investment for income generated by the Company's aromatics plant, expiring on 10 September 2007. As a result of the foregoing factors, our net profit for 3Q 2008 decreased by Baht 3,174 million from 3Q 2007, and 9M 2008 net profit decreased by Baht 159 million from 9M 2007. 5 5. Balance Sheet (Unit: million Baht except for percentages) 30 Sep, 2008 30 Jun, 2008 +/(-) +/(-) % Assets - Current assets 43,635 47,040 (3,405) -7% - Non-current assets 32,174 30,915 1,259 4% Total assets 75,809 77,955 (2,146) -3% Liabilities - Current liabilities 34,438 29,871 4,567 15% - Non-current liabilities 10,639 12,017 (1378) -11% Total liabilities 45,077 41,888 3,189 8% Shareholders' equity - Issued & paid-up share Capital 17,075 17,075 - - - Premium on share capital 4,032 4,032 - - - Retained earnings 9,452 14,736 (5,284) -36% - Fair value reserve 166 217 (51) - Minority interest 7 7 - 0% Total shareholders'equity 30,732 36,067 (5,335) -15% Total liabilities and shareholders' equity 75,809 77,955 (2,146) -3% As of 30 September 2008, current assets decreased Baht 3,405 million from 30 June 2008 primarily due to lower accounts receivable from lower product prices and a lower cash balance. Non-current asset increased Baht 1,259 million from higher deferred income tax assets from a net loss in 3Q 2008. Current liabilities increased Baht 4,567 million from higher debt balance offsetting with lower payables.Non-current liabilities decreased as the Baht 1,375 million portion of long term debt due within one year was reflected in current liability. Total shareholders' equity decreased Baht 5,335 million from (1) 3Q 2008 net loss of Baht 3,554 million,(2) Baht 1,730 million of interim dividend paid out from accumulated retained earnings and (3) Baht 51 million fair value reserve. 6 6. Financial Ratios Comparison of financial ratios are as follows: Profitability ratios 3Q2008 2Q2008 3Q2007 9M2008 9M2007 Gross profit margin (%) -6.0% 14.2% 3.7% 4.9% 7.5% Net profit margin (%) -5.7% 8.5% -0.8% 1.8% 2.4% Interest coverage ratio (times) -16.7 31.8 1.8 7.7 2.9 Liquidity and debt to equity ratios 30 Sep, 2008 30 Jun, 2008 31 Dec, 2007 Current ratio (times) 1.3 1.6 1.1 Quick ratio (times) 0.2 0.4 0.3 Total debt to equity ratio (times) 1.0 0.6 1.4 Long term debt to equity ratio (times) 0.3 0.3 0.5 Net debt to equity ratio (times) 1.0 0.5 1.4 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: Daniel E. Lyons Title: Managing Director Date: Nov 13, 2008 7