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Press Release: Rating Action

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10-1-109March 29, 2011

JCR Revises Rating Outlook of PTT to Stable

Issuer: PTT Public Company Limited (PTT)FC (Foreign Currency Long-Term Senior Debts): A- (to Stable from Negative)LC (Local Currency Long-Term Senior Debts): A (to Stable from Negative)

Issues

PTT Public Company LimitedJapanese Yen Bonds - First Series (2007)

Amount(bn) Issue Date Due Date Coupon Rating

JPY36.0 Jun. 29, 2007 Jun. 29, 2017 2.71% A-

JCR has revised the rating outlook of the foreign currency and local currency long-term senior debts of PTTPublic Company Limited (PTT) to stable from negative. This reflects the revision of the rating outlook of theGovernment of Thailand (GOT).

PTT's ratings are supported by its strategic importance for the Government of Thailand (GOT) in the nationalenergy policy of the country as well as their close links evident in PTT's legal status, capital sources andboard members. PTT plays an indispensable role in securing Thailand's stable power supply as, in 2010, 72%of the power generated in the country used natural gas that was supplied solely by PTT. PTT's such strategicimportance would remain unchanged in the medium to long term. The ratings also reflect PTT's resilience toshort-term shocks backed by its strong cash flow and sound financial position.

Meanwhile, the ratings are constrained by PTT's operation risks and large capital investment plans associatedwith its exploration and production (E&P) business, as well as market risks inherent in the oil refinery,petrochemical and E&P businesses. In the latter half of 2009, an oil and gas leakage accompanied by a firebroke out in an exploration project in the Timor Sea. This once again shed light on such high operation risks,although much of the resultant loss would eventually be covered by insurance. A sharp drop in oil priceswould also substantially affect PTT's earnings performance as illustrated by a net loss it posted in the fourthquarter of 2008. However, these constraints are mitigated by PTT's good track records and a relatively lowproduction cost in the E&P business, government regulations on natural gas pricing, and PTT's strong cashflow and sound financial condition.

(1) Thailand's sole oil/gas state enterprise with close ties with government

PTT is an integrated oil, gas and petrochemical company, undertaking a wide range of businesses primarilyin Thailand, such as E&P, transmission, refinery and distribution - both on its own and through itssubsidiaries and associated companies. Its consolidated sales and assets totaled THE 1.9 trillion and 1.2trillion (approximately JPY5.3 trillion and 3.4 trillion), respectively, in 2010.

PTT plays a highly public policy-oriented role and is a vital entity for GOT. The Thai Ministry of Finance(MOF) directly holds 51.4% of its shares (N.B. GOT made a cabinet decision to keep its stake at 51% orhigher). Another 15.3% stake is held by Vayupak Fund 1 (VF1), which was established by GOT in 2003 as

1JCR distributes rating information through the international on-line nenvork, Bloomberg (JCRA for Japanese, JCR for English), JIJI PRESS, Kyodo News-JLS,Quick (QRfor Japanese, QQfor English), Reuters page JRSI120 and Telekurs, Internet address: http://www.jcr.co.jp. Information herein has been obtained byJCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as otherfactors, JCR makes no representation or warranty, express or implied as to the accuracy, results, adequacy, timeliness, completeness, merchantability, fitness forany particular purpose with respect to any such information, and is not responsible for any errors or omissions, or for results obtained from use of suchinformation. Under no circumstances will JCR be liable for any special, indirect, incidental or consequential damages of any kind, including but not limited to,lost time, lost money, lost profits or goodwill, whether in contract, tort, strict liability or othenvise, and whether or not such damages are foreseen or unforeseenwith respect to any use of such information. JCR's ratings are statements of opinion and not statements of fact as to credit worthiness or recommendationsregarding credit decisions or decisions to purchase, hold or sell any securities. The ratings may be changed, suspended or withdrawn as a result of changes in orunavailability of information as well as other factors. As a general rule, JCR provides the rating sen-ices for a rating fee paid by the issuer, based on JCR feeschedules. Copyright ©20/7 Japan Credit Rating Agency, Ltd. All rights reserved. __^_

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a 10-year, closed-end fund. GOT is obliged to keep its 30% stake in VF1 and retains a first refusal right topurchase in case VF1 decided to divest its PTT shares. Of the 15 PTT board members, 10 are eitherincumbent or former government officials. PTT assumes the status of a "State Enterprise" under the BudgetProcedure Act BE2502 and the Public Debt Management Act BE2548. Its debt, therefore, constitutes a partof the country's public debt and its financial conditions are overseen by MOF. At the end of 2010, 5% of itsconsolidated debt was guaranteed by GOT.

(2) Solid position in exploration/production and natural gas businessesPTT's core operations are E&P business and natural gas business, which earned 59% and 28%, respectively,of the group's EBITDA in 2010. PTT Exploration and Production Public Company Limited (PTTEP), asubsidiary of PTT in the field of E&P of oil and gas, possessed 1,043 MMBOE (barrel of oil equivalent) ofproved reserves with a reserves life index of 9.4 years as of the end of 2010. PTTEP's reserve replacementratio was 1.33 (three-year average) and its drilling success ratio was 79% in 2010. The ratio of oil(including condensate) and gas was 29%/71% in sales volume and 21%/79% in proved reserves.Although the natural gas industry in Thailand was liberalized in formality in 2007 when the EnergyIndustry Act BE2550 was enacted, PTT retains its naturally monopolistic position as the owner andoperator of the country's backbone natural gas transmission pipelines. Following the SupremeAdministrative Court order in December 2007, PTT transferred to GOT a small portion of its pipelineassets expropriated and constructed by the former Petroleum Authority of Thailand, and entered into along-term lease agreement with GOT. This, however, neither changed PTT's legal status nor wouldsubstantially affect its financial performance.In 2010, 68% of the natural gas, which was supplied solely by PTT, was consumed for power generation.Demand for natural gas constantly grew in Thailand even when real GDP contracted in 1998 and 2009. In2010, power generated with natural gas accounted for 72% of the total power supply, which makes PTTindispensable in securing the country's stable power supply. In the "Power Development Plan 2010"announced in March 2010, GOT set forth a policy to lower the dependence on natural gas for powergeneration to around 39% in the long term. Even if this materialized, however, the importance of naturalgas would remain little changed.

(3) Strong cash flow and sound financial positionPTT maintains stable and strong cash flows from its E&P and gas businesses. In 2010, its consolidatedoperating cash flows, EBITDA and EBITDA margin were THE 152.8 billion (up 59.7% from 2009),THE 167.4 billion (up 17.3%), and 8.8%, respectively, while its annual interest expense totaled THB16.0billion. EBITDA margin of E&P and gas businesses were 70% and 13%, respectively. PTT hasaccumulated much of its profit as reserves, pulling up its capital/asset ratio from 24% at the end of 2001 to46% at the end of 2010. PTT's consolidated interest-bearing debt, which increased substantially in 2009 tofinance capital investment including M&As, stood at THB387.5 billion (including THB45.1 billion ofshort-term debt) at the end of 2010. Nevertheless, given its cash and cash equivalents totaling THB135.6billion, PTT's ratios of net debt to capital and EBITDA, at 0.4 and 1.4, respectively, were still below its 1.0and 2.0 targets. Thus, PTT has ample liquidity that provides strong resilience to short-term shocks.Given the nature of its business, PTT has a large capital investment plan, which will total THB327.0 billionfor PTT alone and THB333.2 billion for its subsidiary PTTEP over the next five years between 2011 and2015. On top of that, PTTEP acquired a 40% interest in an oil sands project in Canada for USD2.28 billionin January 2011. As a result, PTT's gearing ratio will go up temporarily though it would still stay below itstargets over the medium-term, given its current capital investment plan, sound financial position andsufficient operational cash flows.

(4) Operation and market risks PTT faces

JCR distributes rating information through the international on-line nehvork, Bloomberg (JCRA for Japanese, JCR for English), JIJI PRESS, Kyodo News-JLS,Quick (QRfor Japanese, QQfor English), Reuters page JRSII20 and Telekurs, Internet address: http://www.jcr.co.jp. Information herein has been obtained byJCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as otherfactors, JCR makes no representation or warranty, express or implied as to the accuracy, results, adequacy, timeliness, completeness, merchantability, fitness forany particular purpose with respect to any such information, and is not responsible for any errors or omissions, or for results obtained from use of suchinformation. Under no circumstances will JCR be liable for any special, indirect, incidental or consequential damages of any kind, including but not limited to,lost time, lost money, lost profits or goodwill, whether in contract, tort, strict liability or otherwise, and whether or not such damages are foreseen or unforeseenwith respect to any use of such information. JCR's ratings are statements of opinion and not statements of fact as to credit worthiness or recommendationsregarding credit decisions or decisions to purchase, hold or sell any securities. The ratings may be changed, suspended or withdrawn as a result of changes in orunavailability of information as well as other factors. As a general rule, JCR provides the rating sen-ices for a rating fee paid by the issuer, based on JCR feeschedules. Copyright ©2011 Japan Credit Rating Agency, Ltd. All rights reserved. _____^_

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In the latter half of 2009, one of PTT's group companies was hit by an outbreak of oil and gas leakageaccompanied by a fire in its exploration project in the Timor Sea, which resulted in incurring additionalexpenses of THB10.4 billion in 2009 and THB0.46 billion in 2010, respectively. Such loss will be coveredby insurance up to USD270 million (approximately THB9 billion), of which it has so far received THB2.71billion by insurers. The actual loss will be rather limited thanks also to tax relief measures. But the incidenthighlighted high risks inherent in the exploration business.

In September 2009, flaws in the Thai environment legislation led to an injunction by the CentralAdministrative Court to suspend 76 projects in the Map Ta Phut industrial area in the eastern part of thecountry for not complying with the environment provisions under 2007 (BE2550) Constitution. PTTgroup's 18 projects were included in this injunction. Following GOT's implementation of the rectificationmeasures, suspension was lifted in September 2010 for those projects except for one that needs to gothrough the newly introduced environment protection process.

PTT also faces possible risks from market fluctuations. In the fourth quarter of 2008 when the oil price(Dubai) plummeted to USD53/barrel from USD113/barrel in the previous quarter, PTT incurred a THB22.2billion net loss mainly from inventory losses and a fall in gross margin. Nevertheless, PTTEP's break-evencost was USD32/BOE, including USD3.75/BOE of lifting cost and USD13.58/BOE of finding anddevelopment (F&D) cost (three-year average), which was lower than its average selling price ofUSD44.8/BOE in 2010, indicating it still has some resilience to further oil price falls. In the natural gasbusiness where long-term sales contracts are usually made in advance, although PTT's gas purchase pricepartially reflects the fluctuation of oil prices, its impact is basically passed on to its consumers as the gassales prices are determined by the sum of average gas purchase price, pipeline tariffs and supply margins.PTT should also be able to accommodate a possible demand fall to a certain extent by reducing newinvestments, putting off production timing in new projects and exercising carry-forward clauses inlong-term gas sales contracts.

Yoshihiko Tamura, Chief AnalystSatoshi Nakagawa, Senior Analyst

The primary rating methods applied to the ratings are posted on JCR's website (http://www.jcr.co.jp) "Sovereign, PublicSector Entities and Multilateral Development Bank Rating Methodology." The rating methods are subject to change oraddition. However, the changes and additions including those that have been made in the past are posted in chronologicalorder. Please refer to the rating methods above after checking by comparing the date of press release about the ratings withthe release date of the rating methods (effective date of each of such rating methods).

JCR distributes rating information through the international on-line nehtork, Bloomberg (JCRA for Japanese, JCRfor English), JIJI PRESS, Kyodo New's-JLS,Quick (QRfor Japanese, QQfor English), Reuters page JRS1120 and Telekiirs, Internet address: http://www.jcr.co.jp. Information herein has been obtained byJCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as otherfactors, JCR makes no representation or warranty, express or implied as to the accuracy, results, adequacy, timeliness, completeness, merchantability, fitness forany particular purpose with respect to any such information, and is not responsible for any errors or omissions, or for results obtained from use of suchinformation. Under no circumstances will JCR be liable for any special, indirect, incidental or consequential damages of any kind, including but not limited to,lost time, lost money, lost profits or goodwill, whether in contract, tort, strict liability or othenfise, and whether or not such damages are foreseen or unforeseenwith respect to any use of such information. JCR's ratings are statements of opinion and not statements of fact as to credit worthiness or recommendationsregarding credit decisions or decisions to purchase, hold or sell any securities. The ratings may be changed, suspended or withdrawn as a result of changes in orunavailability of information as well as other factors. As a general rule, JCR provides the rating sen-ices for a rating fee paid by the issuer, based on JCR feeschedules. Copyright ©2011 Japan Credit Rating Agency, Ltd. All rights resetted.

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<Bloomberg>

Ticker: PTT@TB

Headline: OIL GAS NRG THAI ASIA SEASIA

JCR distributes rating information through the international on-line netu'ork, Bloomberg (JCRA for Japanese, JCR for English), JUI PRESS, Kyodo News-JLS,Quick (QRfor Japanese, QQfor English), Reuters page JRS1120 and Telekurs, Internet address: http://www.jcr.co.jp. Information herein has been obtained byJCR from the issuers and other sources believed to be accurate and reliable. However, because of the possibility of human or mechanical error as well as otherfactors, JCR makes no representation or warranty, express or implied as to the accuracy, results, adequacy, timeliness, completeness, merchantability, fitness forany particular purpose with respect to any such information, and is not responsible for any errors or omissions, or for results obtained from use of suchinformation. Under no circumstances will JCR be liable for any special, indirect, incidental or consequential damages of any kind, including but not limited to,lost time, lost money, lost profits or goodwill, whether in contract, tort, strict liability or othenvise, and whether or not such damages are foreseen or unforeseenwith respect to any use of such information. JCR's ratings are statements of opinion and not statements of fact as to credit worthiness or recommendationsregarding credit decisions or decisions to purchase, hold or sell any securities. The ratings may be changed, suspended or withdraw'n as a result of changes in orunavailability of information as well as other factors. As a general rule, JCR provides the rating ser\'ices for a rating fee paid by the issuer, based on JCR feeschedules. Copyright ©2011 Japan Credit Rating Agency, Ltd. All rights reserved.