SET Announcements

1000 / 246 / 2004 October 26, 2006 The Stock Exchange of Thailand 62, Ratchadapisek Road, Klongtoey Bangkok 10110 Subject : Resolutions of the Board of Directors' Meeting approving the transaction to have agreement on cogeneration project with PTT Public Company Limited ("PTT") Attention : President of The Stock Exchange of Thailand According to the resolution of the Board of Directors' Meeting of The Bangchak Petroleum Public Company Limited ("the Company' or "BCP") No. 12/2549 on October 26, 2006 which approve the transaction to have agreement on cogeneration project with PTT Public Company Limited ("PTT"), the Company would like to inform the transaction disclosure as follows: Transaction Date Since the detail of the agreement is under negotiation, the Company will sign the Head of Agreement within December 2006 and will enter into the Agreement to Sell and Purchase of Electricity and Steam around the early of 2007, it is expected that the Power Plant will be completed and starts commercial operation by the end of 2008. Involved Counterparties Seller of Electricity and Steam PTT Public Company Limted Purchase of Power and Steam Bangchak Petroleum Public Company Limited Relationship - PTT is the major shareholder of the Company holding 25.08 per cent of the common shares of the Company and 4.67 per cent of the BCP depository receipt (BCP-DR1) which has right to vote via Siam DR, equivalent to total shareholding of 29.75 per cent - The Ministry of Finance is the major shareholder of the Company and PTT, holding BCP-DR1 which has right to vote via Siam DR equivalent to shareholding of 11.17 per cent.The Ministry of Finance holds 52.33 per cent of PTT common shares Description of the Transaction Since the electricity demand of the Company will increase from 13.4 MW to 29 MW at 100,000 barrel per day production after the completion of the Product Quality Improvement (PQI) Project, of which project's plan including the installation of 5.6 MW generator and spare steam boiler to support the electricity and steam requirement that the Company will have own electricity generation of 21 MW and will purchase electricity of 8 MW from the Metropolitan Electricity Authority ("MEA"); however there are risk involved regarding the stability of electricity system required in the production due to the Company has to run the generator at full capacity and has to rely large electricity demand on MEA, hence the Company is procuring an investor to build a cogeneration power plant to generate 19.7 MW electricity and 90 tons per hour steam for selling to the Company. The invitation of potential investors to submit bidding proposal has been pursued and the Company has selected PTT as the investor in the project having proposed terms and conditions met with the Company's requirement together with the lowest price. By having PTT, the natural gas supplier, investing in the project will mitigate risk in procuring natural gas of which is the fuel in the power plant. Summary of the Agreement to Sell and Purchase of Electricity and Steam 1. The Company and PTT will enter into the Agreement to Sell and Purchase of Electricity and Steam for a period of 25 years which the Company will be responsible to provide land for power plant construction in the Bangchak Refinery while PTT will be the investor and responsible for design and construction, operation and maintenance of the power plant during the Agreement period. PTT will be the owner of the power plant and transfer the power plant to the Company at the end of the agreement period. Other clauses are standard terms and conditions generally used in the such agreement. PTT may assign its subsidiaries or affiliates to enter into the Agreement with the Company. 2. Electricity and steam price will be determined under a formula that electricity price will be a discount price from the price quoted by MEA under the Time of Use system while the steam price will be adjusted along with the change in natural gas price and the consumer price index. The Company is under negotiation on the detail of the agreement. The Company expects the purchase value of electricity and steam would be around Baht 950 million per annum. 3. The parties agree to have minimum amount to purchase and guarantee the supply of electricity and steam. In case PTT cannot supply electricity and steam as agreed, PTT will be responsible to procure from other sources or pay for penalty. Benefit to the Company 1. Increase stability and reliability of the electricity supply for BCP refinery by reduce electricity dependency form MEA 2. Increase efficiency on power utilization 3. Saving from investment in the spare steam boiler Opinion of the Company's Board of Director and Audit Committee The Board of Director Meeting of the Bangchak Public Company Limited including the members of the audit committee but excluding the connected person directors from PTT and the Ministry of Finance (Mr. Pichai Chunhavajra, Mr.Apisit Rujikeatkamjorn, Mr. Nares Sattayarak, Miss Chularat Suteethorn) who are not in the meeting, considers and approves such connected transaction contains general trade terms & conditions on fair basis and does not create benefit transfer. The transactions to construct the cogeneration power plant and to enter into the Agreement to Sell and Purchase of Electricity and Steam are classified as connected transactions under normal business transaction with general trade terms & conditions and return can be calculated from the assets or reference price. Please be informed accordingly. Yours sincerely, -signed- (Anusorn Sangnimnuan) President Office of the Secretary to Board of Directors Tel: 0-2335-4584