Analyst Presentation Q3/07 and 9M/07 Results Thai Oil Public - - PowerPoint PPT Presentation

Analyst Presentation Q3/07 and 9M/07 Results

Thai Oil Public Company Limited

9 November 2007

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Disclaimer Disclaimer

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Corporate Vision, Mission and Value Corporate Vision, Mission and Value

TOP seeks to be one of the leading fully integrated refining and petrochemical companies in the region recognized for our sustainable growth, optimum stakeholder value, and commitment to environmental and social well-being.

Vision

• To be PTT’s flagship refinery through optimized

management of the group’s refining portfolio

• To expand facilities to better meet domestic demand

growth

• To enhance the competitive advantage of our power

generation operations to further solidify the core refining business

• To create a high-performance organization that

promotes teamwork, innovation and trust

Mission

P = Professionalism O = Ownership & Commitment S = Social Responsibility I = Integrity T = Teamwork and Collaboration I = Initiative V = Vision Focus E = Excellent Striving

Value

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Presentation Outline Presentation Outline

Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook

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Q3/07 Highlights Q3/07 Highlights

• Q3/07 remained quite favorable, in view of seasonality. Oil prices continued to rise as

geopolitical tension persisted and hurricane season’s approaching.

• GRM stood at 6 US$/bbl (vs. $2.84/bbl in Q3/06) supported by rising crude and middle

distillate prices (Jet & Gas Oil), although gasoline price was pressured by high inventory & the ending of driving season in the US

• Soften aromatic price & squeezed base oil margin pressured TOP’s integrated margin to

$ 7.7 US$/bbl, 37% lower QoQ but 18% higher YoY.

• Refinery was operated at 100%, amidst planned shutdown of CDU-2 for 14 days to allow

for the tie-in with TPX’s TATORAY. The 800,000 barrels of LR was produced in Q3/07 & kept as stock for further processing in Q4/07.

Overall Business Finance

• IPP bid was submitted on 19 October 2007 for 735 MW, gas fired project. At the same

time, another SPP proposal was submitted to EGAT for 79 MW electricity sales.

• Equity of 86 Baht million was injected into Maesod Clean Energy Co., Ltd to fund the

construction work for 200,000 L/D of Ethanol plant in Tak province.

• Thaioil Marine is expanding its fleet by acquiring additional 5 oil products, bitumen &

chemical vessels.

• Capitalizing on Baht strengthening, TOP took opportunity to unwind the $150 million CCS

and realized cash gain of Baht 596 million.

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Net Profit Breakdown*

Q3/06

Financial Performance YTD Well in Line Financial Performance YTD Well in Line

9M/07

• Bt. 3,528 mn.

PX 48%

Refinery 19%

LB 17% Power& Others 16%

*Percentage was based on total amount before deducting inter-company transaction.

Refinery 50%

PX 27% LB 7% Power & Others 15%

Bt.2,509 mn. Q3/07 Refinery 65%

PX 22% LB 7% Power & Others 6%

• Bt. 14,555 mn.

9M/06 Refinery 52%

PX 28% Power & Others 9%

• Bt. 14,561 mn.

LB 11%

5,652 21,317 4,992 23,009

Q3/06 Q3/07 9M/06 9M/07

3,528 14,561 2,509 14,555

Q3/06 Q3/07 9M/06 9M/07 Consolidated EBITDA

Mn Bt

Consolidated Net Profit

+8%

• 12%
• 29%
• 29%
• 0.04%

Mn Bt

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• High crude prices were supported by

– prolong geopolitical tension between Iran/UN and unrest in Nigeria – higher demand following the start- up of several refineries – Concern on hurricane season in Mexico Gulf

• Product oil price, except for Gasoline

continued to rise in Q3/07.

• Gasoline price was pressured by high

inventory & the ending of driving season in the US

• Product spreads were high except

Gasoline due to end of US driving season

Continuing High Oil Prices and Spreads Continuing High Oil Prices and Spreads

Oil Product & Crude Prices Product - Dubai Spreads

20 30 40 50 60 70 80 90 100

Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4

Diesel Gasoline Dubai Fuel Oil Jet

• 25
• 15
• 5

5 15 25 35

GO-DB FO-DB Jet-DB ULG95-DB

Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q4

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765 739 689 695 738 724 695 751 731 101 66 157 143 110 120 104 83 150 89% 91% 91% 87% 91% 91% 89% 88% 86% 200 400 600 800 1,000 1,200 1,400 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Jul- Aug 1H/06 1H/07 0% 20% 40% 60% 80% 100% Domestic Demand/Sales Net Export Petrochem & Others Utilization Rate

Slightly Weaken Domestic Demand Slightly Weaken Domestic Demand

(Intake) 903 921 906

Domestic Oil Demand / Refinery Intake

940 928 897

Kbd

Domestic Oil Demand by Product

Utilization

944

Unit: kbd

Source: DOEB, Ministry of Energy. 948

3% 4% 14% 12% 12%

5%

Export = 9% Domestic Jobbers TPX Shell / Caltex BCP PTT

TOP’s Sales Breakdown in Q3/07

2H/06 1H/07 Q3/07

78% 87% 91% 22% 13% 9%

Export Domestic

TOP’s Domestic / Export Sales

106 121 74 291 97 127 83 326 75 113 121 127 82 303 62

LPG Gasoline Jet/Kero Diesel FO

Q3/06 Q2/07 Jul-Aug/07

946

50%

9 80% 81% 16% 9% 11% 14% 40% 38% 43%

20% 19% 11%

24% 26% 17% 7% 6% 14% 20%

3%

0%

Strong Gross Refinery Margin Strong Gross Refinery Margin

TOP’s Crude Mix and Oil Product Yield

Middle Heavy Light

LPG Gasoline Jet/Kero Diesel Fuel Oil

9M/07 FY/06

F/E Local M/E

Thailand’s Oil Demand

TOP’s Accounting GRM (US$/bbl)

Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3* 9M/06 9M//07 * include LR stock kept for further processing in Q4/07

10.56 2.84 0.73 8.34 4.81 8.28 10.56

Market GRM Stock Gain / (Loss)

3.77 8.00 4.35 3.62 6.29 7.93 6.06 5.98 5.39

Accounting GRM

6.00 4.00

• 16.8

17.0 20.0 11.7 9.4 65.9 75.3 Q3/06

• 11.0

16.3 17.1 11.5 9.3 70.1 79.4 Q3/07 +0.6 +0.2

• 9.0
• 0.5

+4.9 +4.4 ∆QoQ +4.2 65.2 DB (M/E)

• 0.1

9.8 TP-DB +4.1 75.0 TP (F/E)

• 11.6

16.1 17.1 20.5 Q2/07 +5.8

• 0.7
• 2.9
• 0.2

∆ YoY Diesel - DB Fuel Oil

• DB

Jet - DB ULG 95

• DB

Oil Prices / Spreads – MOPS (US$/bbl)

10

400 600 800 1,000 1,200 1,400 1,600

Soften PX and LB Margins Soften PX and LB Margins

PX, MX and ULG 95 Spot Prices / Margins 500 SN & HSFO Spot Prices / Margins

200 400 600 800 1,000 1,200

• 6

• 6

• 6

• 6

• 6

• 7

• 7

• 7

• 7

PX MX ULG95 500SN HSFO

• PX prices softened during Q3/07

from lower demand as a result of lower PTA plants operations and shutdown of MEG plants in Saudi Arabia.

• PX margin in Q3/07 was pressured

by higher ULG price / feedstock cost.

• 500 SN – HSFO spread in Q3/07

was further reduced as a result of: – soften regional demand – higher feedstock costs

500SN-HSFO PX-ULG 95

402 398 732 575 540 473 395 480 525 623 687 637 538 466 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3

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4.81 10.56 2.84 0.73 8.28 10.56 5.98 8.34 6.00 402 398 732 575 540 473 395 511 469 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07

Healthy Integrated Margin Healthy Integrated Margin

Integrated Margin1) (US$/bbl)

PX – ULG 95

Plat

(US$/T)

LB - HSFO

480 525 623 687 637 466 543 547 537

Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/069M/07 (US$/T)

L/R

Crude

GRM Oil Products

(US$/bbl)

1) calculated from integrated intake Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07

Despite softening PX / LB margins in Q3/07, Group’s integrated margin remained high at 9.98 US$/bbl for 9M/07, (+15% yoy).

1.75 1.48 2.69 2.04 1.78 1.40 0.59 1.97 1.51 0.67 1.15 1.12 1.10 0.87 0.71 0.97 0.57 1.22 9.98 7.69 7.03 3.95 10.40 12.64 6.51 12.32 8.65 Q1/06 Q2 Q3 Q4 Q1/07 Q2 Q3 9M/06 9M/07

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Performance Breakdown by Company Performance Breakdown by Company

97 94 98 97 90 100 96 90 97 88 95 108

Q3/06 Q3/07 (%)

TOP TPX TLB IPT TP TM TOP TPX TLB IPT TP TM

Refinery Utilization PX Production Lube Production Availability Utilization Utilization

Utilizations and productions for all plants in Q3/07

Unit: Baht mn Q3/07 EBITDA 3,116 916 382 405 157 19 +/- Q3/06 1,714 (1,194) (462) (358) (46) (1) Q3/07 Net Profit 1,429 748 203 232 61 7 +/- Q3/06 902 (1,217) (495) (331) (23)

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Presentation Outline Presentation Outline

Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook

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Consolidated Financial Performance Consolidated Financial Performance

21% 34.39 7.13 4,733 9,822 14,555 (3,826) 1,811 (1,386) 23,009 199,810 9.98 8.34 9M/07

• 4%
• 1%
• 60%
• 24%
• 71%
• 60%
• 131%
• 36%

+2%

• 48%
• 12%
• 38%
• 43%

% QoQ

15% 37.79 7.14 6,855 7,706 14,561 (2,631) 2,639 (1,420) 23,317 217,386 8.65 6.07

9M/06

+12%

• 9%
• 28%
• 62%

+160%

• 29%

+155%

• 45%
• 4%
• 12%
• 19%

+18% +122

% YoY 18% 34.39 1.23 1,140 1,369 2,509 (551) 281 (460) 4,992 63,312 7.69 6.00 Q3/07 (Bt. Mn.)

+37% 10.56 2.70

TOP’s GRM

+16% 12.32 6.51

Integrated Margin

+27% 4,790 527

TOP

+6%

• 9%

0%

• 31%
• 0%

+45%

• 31%
• 1%

+8%

• 8%

%YoY

6% 37.64 1.73 3,001 3,528 (216) 511 (481) 5,652 77,807

Q3/06

1,497

Subsidiaries

34.67

Bt/US$ - ending

(452)

Financial Charges & Int exp.

22%

Effective Tax Rate (%)

3.08

EPS (Bt/sh.)

6,287

Net Profit

(1,782)

Tax Expense

440

FX Gain/(Loss) & CCS

9,637

EBITDA

72,070

Sales Revenue Q2/07 (US$/bbl)

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Robust Financial Position Robust Financial Position

Balance Sheet

66,852 73,197 79,291 21,448 21,551 28,015 35,869 30,452 29,741

Current Assets Non-current Assets Equities Total Assets

137,047 124,169

Other Liabilities LT Debt

• Bt. mn.

FY/05 FY/06 9M/07 125,200

Consolidated LT Debt

As of end Sep’07 (34.39Bt/US$)

• Bt. 29,741 mn.

(US$ 865 mn.) TOP 75% IPT 13% TP 2% TPX 10%

Treasury Policy Net Debt / Equity <= 1.0x Net Debt / EBITDA <= 2.0x

0.8 0.4 0.5 1.0

0.4

0.2 0.4 0.2 0.2

0.3

2005 2006 Q1/07 Q2/07 Q3/07

Net Debt / EBITDA Net Debt / Equity

Financial Ratios

US$ THB THB Fixed rate

Interest Rate Currencies

US$ Bond 40% US$ Term 15% THB Bond 18% THB Term 26% US$ 55% THB 45% Fixed 64% Float 36%

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Presentation Outline Presentation Outline

Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook

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TOP Group TOP Group’ ’s Major CAPEX Programs s Major CAPEX Programs

Q1/09 Thaioil Marine’s new fleet

Ethanol 0.2ML/Day1

2012 79 MW SPP Pending

Ethanol 0.5ML/Day

2012 735 MW IPP

Total

Total Euro IV2) Specialties TPX Expansion SBM Expansion New Gas Turbine CDU-3 Revamp

Projects (US$ mn.)

2011 2009 Q1/08 Q1/08 Q2/07 Q4/07

2011 2010 2009 2008 2007 2006 2005 COD 34 59 9 22 78 6 66 92 58 18 125 56 57 49 225 264 169 357 175 1,715

On-going Under Development

218 43 150 282 150 18 113 50 50 100 45 16 61

1)Investment for 30% equity stake 2)Based on 50 ppm sulphur in gasoline & diesel Not yet confirmed on project’s holding stake

476 125 500 250 125 12 72 210 39 32 80 9

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Details & Progress of Investment Projects Details & Progress of Investment Projects

Details Work Progress as of end Oct’07 CDU-3 Revamp Projects Size : + 50 kbd (CDU Capacity) Cost : US$ 218 mn. (US$ 4,360/bpd) IRR : ~ 28% based on US$ 4.5/bbl GRM EPCM : Foster Wheeler Exp.C.O.D. : Q4/07 Prior to commissioning of the expanded facilities, CDU-3 will be shutdown for 2 months in Q4/07 for major turnaround & tie-in with the new facilities. Overall Progress : 94%

• All new major equipment installed.
• Piping installation and tie-ins are in

progress.

• Cooling Tower is in commission.
• New crude furnace was completed.
• New crude tanks were completed and ready

to be commissioned in mid Nov’07.

New crude furnace completed New tank completed Cooling tower in commission

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Details & Progress of Investment Projects Details & Progress of Investment Projects

Details Work Progress as of end Sept’07 New Gas Turbine Projects Size : 38 MW Cost : US$ 43 mn. EPC : CTCI PMC : Foster Wheeler Status : Construction completed Overall Progress: 100%

• In operation

Overall Picture Balance of plant interconnecting pipes Substation

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Details & Progress of Investment Projects Details & Progress of Investment Projects

Details Work Progress as of end Oct’07 SBM Expansion Projects Size : 52” diameter * 14.5 km subsea pipeline (to receive full VLCC @ 2 mn. bbl crude) Cost : US$ 150 mn. EPC : SAIPEM PMC : Bechtel

• Exp. C.O.D. : Q4/07

Overall Progress: 98%

• Pipe laying was completed and tie-in to

existing onshore crude receiving line.

• Preparation for buoy delivery

On Shore Landscape Buoy body after painting Main bearing installation

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New pipe bridge Piping work Equipment & Structure in MX unit

Details & Progress of Investment Projects Details & Progress of Investment Projects

Details Work Progress as of end Oct’07 TPX Expansion Projects Size : +480 KTA Aromatics (add.)

+PX 141 KTA +MX 18 KTA +BZ 177 KTA +Tol 144 KTA

Cost : US$ 282 mn. EPC : Bechtel PMC : Foster Wheeler

• Exp. C.O.D.: Q1/08

Overall Progress : 81.5%

• New storage tanks construction were

completed.

• MX Unit was shutdown for equipment

installation/ modification and tie-ins (scheduled to be completed in Dec’07) Prior to commissioning of the expanded facilities, TPX will be shutdown for 2 months in Q1/08 for major turnaround & tie-in with the new facilities.

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PTT Group Marine Demand

200 400 600 800 1,000 1,200 2005 2006 2007 2008 2009 2010 2011 TM Expansion (7000 DWT) Thai Vessel PTT Group Demand

BTX Product Bitumen

2005 2006 2007 2008 2009 2010 2011 TM Expansion Thai Vessel (1,500-6,000 DWT) PTT Group Marine Demand

International Maritime Organization (IMO) starts enforcing the double hull vessel in chemical and oil products transportation in 2007 and 2010, respectively. Most of the existing Thai fleets are the single hull type with more than 20 years age. Following the business expansion of PTT Group, Thailand’s export of oil, aromatics products and bitumen will increase significantly which support Thaioil Marine’s plan tp expand its vessel fleet.

TPX & ATC

2 4 6 8 10 12 Oil Product Feedstock Chemical Bitumen

Mn TPA KTPA KTPA 25% 25%

18 Million tons p.a.

Export Export Export

SA + Kamee

Details & Progress of Investment Projects Details & Progress of Investment Projects Thaioil Thaioil Marine Marine

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Sugar Cane Based

Ethanol Projects Ethanol Projects

> 15% Project IRR Q2/07 : Board approval Q3/07 : Equity injection Current Status Sugar Cane (~0.8 mn. T/Y) Feedstock

• Padaeng Industry (35%)
• Mitr Phol Sugar Group (35%)

Partners with TOP Maesod, Tak, Thailand Location US$ 60 mn.

• Est. Investment

0.2 mn. L/D Capacity Ethanol Plant

• Domestic Ethanol is traded at 15.29 Baht per

Litre (~US$ 70/bbl).

• Domestic demand is ~0.5 Mn L/D vs. production

capacity of ~1.0 Mn L/D.

• To promote Gasohol usage, gap between

ULG95/91 and Gasohol 95/91 has been widened to 3.50 Baht per Litre.

• Production of Gasohol E20 is under discussion.
• Government policy is essential for success of

the Project.

Current Situation

Q1/09 Expected COD

Cassava Based

> 15% Review Feasibility Study and Demand / Supply situation Tapioca chips (~0.5 mn. T/Y) Under discussion Central, Thailand US$ 150 mn. 0.5 mn. L/D Pending

0.0 1.0 2.0 3.0 2006 2007 2008 2009 2010 2011 2012

M ol a sse s Ca ne J uic e +M ol a sse s Ca ssa v a +M ola sse s Ca ssa v a Mn L/D

Domestic Demand / Supply of Ethanol

* Assume 90% gasohol consumed in stead of ULG from 2009 onward

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TDAE

Strategy: to develop the Specialties products which are friendly to the environment and enhance the higher profit in long term Strategy: to develop the Specialties products which are friendly to the environment and enhance the higher profit in long term

Projects under Development Projects under Development – –TLB TLB’ ’s s Specialties Specialties

Treated Distillate Aromatics Extract

To upgrade Extract (one of by-products) to higher value product Completed feasibility study & trial production in Q2/07 commercial production will be started in 2008. 1st Phrase production is aimed at 15,000 TPA 2nd phrase to install a new unit with a capacity of 50,000 TPA at US$ 25 mn CAPEX has been approved. COD is expected in 2010.

Source: Prelim Global Lubricant Basestocks Study, Kline - Apr, 07

Japan China Indo Others

Regional TDAE Demand / Supply

KT

• As EU will enforce to use low toxic extract

for tyre and rubber industry in Jan’10 and some Asian countries have already started, regional TDAE demand is expected to grow at 45% CAGR.

100 200 50 150 Demand Supply 2006 2011

Demand +45% CAGR

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Opportunity for new IPP & SPP

IPP

• Thaioil Energy submitted a bid for IPP at 735 MW
• Total bid submission was about 17,000 MW from 20 bids
• Preferred bidders of IPP will be announced on 16 Nov’ 07

Preferred bidders named COD 700- 800 MW

Timetable for New IPP Bidding

Source: Solicitation IPP-2007-01, Jun 07

RFP issued Jun’07 19 Oct Nov Jun’08 2012 2013 2014 Bid submission PPA signed

Year on Year Demand/Supply Growth

Source: Power Development Plan B2 - Apr'07 and Solicitation IPP-2007

Projects under development Projects under development – – New IPP & SPP New IPP & SPP

1,000 2,000 3,000 4,000 5,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 M W

2 n d IP P G a s

• E

G A T G a s C

• a

l N u clea r S P P Im port

• Avg. Growth 1,407 MW/Year

G = 5.93%

• Avg. Growth 1,857 MW/Year

G = 5.90%

• Avg. Growth 2,335 MW/Year

G = 5.60% Minimum spare capacity maintained at 15% Year on Year Demand Growth

COD 700- 800 MW COD 1,400- 1,600 MW

SPP

• Thaioil Energy submitted a bid for SPP at 79 MW
• Total bid submission was about 2,000 MW
• The first announcement is expected in early 2008

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Presentation Outline Presentation Outline

Q3/07 and 9M/07 Highlights Q3/07 and 9M/07 Highlights Consolidated Financial Performance Consolidated Financial Performance Progress of Investment Projects Progress of Investment Projects Business Outlook Business Outlook

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600 1,200 1,800 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 KBD Others Japan India China

Total China 7,526 100 852 630 350 410 400 2,742 Japan 4,473 56

• 32

19

• 107

India 2,991 64 690 366 60 624 300 2,104 Taiwan 1,293

• Thailand

1,042 50 69

• 119

Vietnam 5

• 121
• 121

Others 7,223 41

• 90
• 250

381 Total 24,553 311 1,611 1,239 429 1,034 950 5,574 Kbd Jul '07 Existing 2007F 2008F 2009F 2011F 2012F 2010F

1)The Company

Regional Oil Demand1) Asia Pacific Refining Capacity Additions

China 6,896 6.5% 7,214 8,603 9,419 5.3% Japan 4,959

• 1.8%

4,758 4,492 4,274

• 2.4%

India 2,384 2.9% 2,495 2,829 3,054 4.2% South Korea 2,235 2.4% 2,299 2,407 2,467 1.7% Thailand 976 3.5% 962 1,074 1,147 2.7% Singapore 869 5.8% 953 1,153 1,313 7.1% Others 5,080 3.4% 5,315 5,838 6,162 3.3% Total Demand 23,399 2.6% 23,996 26,396 27,836 2.9% Total Supply 21,787 2.7% 22,378 25,329 27,114 3.7% ME Sur/(Def) 2,611

• 1.8%

2,458 2,449 3,272 3.8% Kbd 2006A % Growth % Annual Growth (2006-12F) 2007F 2010F 2012F

Source: FACTS, Fall 2007 issued in October 2007

Asia-Pacific Demand/Supply Balance

Regional Oil Demand/Supply Outlook Regional Oil Demand/Supply Outlook

YoY Demand Growth YoY Capacity Addition

1)

• Regional demand will remain outstrip supply

even with several additional refining capacity projects during 2008-9, mainly in China and India.

• Chinese additional capacity is geared toward

domestic demand. Indian capacity addition is geared for export to US & EU.

• Several new grassroot refinery projects in M/E

(about 840 kbd - mainly in 2010) have been delayed or canceled due to longer delivery time

• f major equipment and high escalating costs.

1) Include Naphtha demand * Total supply is based on 90% utilization rate

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Domestic PX Demand & Supply Global Total PX Supply / Demand & Operating Rate

PX Business Outlook PX Business Outlook

Source: CMAI, March 2007 & Company KTA

Global PX Supply & Demand Growth

• Operating rate is expected to remain high

during 2008-09 due to strong demand growth and delay of PX Projects in China and Middle East.

• Thailand remains net importer of PX until end

2008 when new ATC II project will be completed in Q3/08.

• Strong PX margin is expected to continue till

2009.

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 99 00 01 02 03 04 05 06 07 08 09

• Mn. T.

10 11 World Demand Growth Americas Europe Africa/Mideast Asia/Pacific

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2005 2006 2007 2008 2009 2010 2011

ATC Esso TPX Demand 10 20 30 40 50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Million Tons 0% 20% 40% 60% 80% 100%

America Europe Asia ME/Others Operating Rate

CAGR = 7% Supply by region Global PX demand

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LB Business Outlook LB Business Outlook

Source: Prelim Global Lubricant Basestocks Study, Kline - Apr, 07

• Regional Base Oil demand / supply

growth will be more prominent than the global.

• Shortage of Group I/II supply in the

region will support strong margin on high viscosity grade.

• Group III surplus would put pressure
• n low viscosity base oil.

100 200 300 Demand Supply Group I Group II Group III

2006 2010 2015

Demand +3.8% CAGR

Regional Base Oil Demand / Supply

Source: Prelim Global Lubricant Basestocks Study, Kline - Apr, 07

900 800 700 600 500 400 300 200 100 Demand Supply Group I Group II Group III

Global Base Oil Demand / Supply

• Global Base Oil demand is expected

to grow by 2.1% CAGR through 2015.

• Global supply for Group I is expected

to gradually drop and be replaced by Group II and III.

2006 2010 2015

Demand +2.1% CAGR

30

11

Conclusions Conclusions

Increase in oil prices has supported high refinery margin although at the same time suppressing PX and LB margins. This has resulted in moderate increase in Group integrated margin . High oil prices and volatility are likely to continue till additional crude production and / or refining capacity become materialized. TOP should benefit from widening oil product spreads as well as upgrading margin of LR stock in Q4/07. CDU-3 revamp and TPX expansion projects shall be completed in mid of Dec’07 and mid of Mar’08. Long term strategic plan has been developed to support the business growth, even during the potential downturn of the industry. The implementation of such growth strategies has shown rapid progress.

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Thank you

Should you have any queries, please contact: Investor Relations at email: ir@thaioil.co.th Tel: 662-617-8300 Fax: 662-299-0025