Management's Discussion and Analysis (MD&A) and Operating Results for the 2nd Quarter of 2008 and the Six-Month Period Ended June 30, 2008 1. Financial and Operating Highlights 2Q 2008 2Q 2007 1H 2008 1H 2007 Crude intake (kbpd) 148.6 133.6 144.9 140.8 Paraxylene production (thousand tons) 91 107 175 210 Average forex rate (Baht/US$) 32.3 34.7 32.4 35.2 Gross refining margin (US$/BBL) 23.3 9.0 15.3 8.4 Sales (million Baht) 68,247 50,228 121,787 95,564 Gross profit (million Baht) 9,674 4,529 12,693 8,977 EBITDA (million Baht) 8,947 4,000 11,268 7,936 Net profit (million Baht) 5,814 1,894 6,944 3,929 (1) Earnings per share (Baht) 1.84 3.71 2.41 7.70 (2) Adjusted Earnings per share (Baht) 1.68 0.55 2.01 1.14 (1) Based on actual weighed average number of common shares during the period: - 2Q 2007 and 1H 2007 510 milion. shares - 2Q 2008 3,158 million. shares - 1H 2008 2,886 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$/BBL 2Q 2008 2Q 2007 1Q 2008 1H 2008 1H 2007 Dubai 116.9 64.8 91.4 104.2 60.1 Tapis 129.5 75.0 102.5 116.0 69.3 Gasoline (95 Ron) 129.8 85.7 105.1 117.5 77.0 Jet fuel / kerosene 154.4 82.3 114.2 134.3 77.2 Diesel (0.5%S) 154.5 81.3 114.4 134.4 75.7 Fuel oil (180 cs) 92.6 54.0 74.6 83.6 49.5 LPG 75.8 50.4 73.4 74.6 48.4 Paraxylene - US$/Ton 1,330 1,170 1,123 1,227 1,108 (1) Gasoline (95 Ron) - US$/Ton 1,104 728 894 999 655 Source: Mean of Platts Singapore and PCI (1) Converted to US$/Ton using 1 Ton = 8.5 barrels Crude prices rose rapidly in 2Q 2008. Dubai and Tapis crude prices were up around 25$/bbl in 2Q 2008 compared to 1Q 2008. While increases in gasoline and fuel oil prices were somewhat less than crude oil prices, distillate price increases significantly outpaced crude due to strong demand. LPG prices remained under government control in Thailand. The ex-refinery price was flat at 11 Baht/kg (US$340/Ton or about US$30/barrel) The gap between paraxylene and gasoline prices narrowed slightly during the quarter. 2 3. Production and Gross Margin 2Q 2008 2Q 2007 + / (-) 1H 2008 1H 2007 + / (-) Refining capacity (kbpd) 177.0 177.0 - 177.0 177.0 - Crude intake (kbpd) 148.6 133.6 + 15.0 144.9 140.8 + 4.1 Refinery production (1) - Light products (%) 34.7% 36.7% -2.0% 34.8% 35.4% -0.6% - Middle distillates (%) 54.2% 48.9% +5.3% 52.7% 49.2% +3.5% - Heavy products (%) 11.1% 14.4% -3.3% 12.6% 15.5% -2.9% Paraxylene production ('000 tons) 91 107 -16 175 210 -35 Gross Refining Margin (US$/BBL) 23.3 9.0 +14.3 15.3 8.4 +6.9 (1) Excludes reformate for chemical feedstock Crude intake in 2Q 2007 was impacted by the temporary shut down of one pipe still for decoking. Higher crude intake in 2Q 2008 was also due to attractive refining margins. Paraxylene production in 2Q 2008 was lower than 2Q 2007 as the declining paraxylene industry margins made additional production uneconomical. Gross refining margin (GRM) increased by 14.3$/bbl to 23.3$/bbl in 2Q 2008 from 9.0$/bbl in 2Q 2007. 3 4. Financial Performance of 2Q 2008 and first half of 2008 (Unit: million Baht) 2Q 2008 2Q 2007 +/(-) 1H 2008 1H 2007 +/(-) Sales 68,247 50,228 18,019 121,787 95,564 26,223 Cost of sales (58,573) (45,699) (12,874) (109,094) (86,587) (22,507) Gross profit 9,674 4,529 5,145 12,693 8,977 3,716 Selling and administrative expenses (1,217) (1,026) (191) (2,397) (2,033) (364) Profit from sales 8,457 3,503 4,954 10,296 6,944 3,352 Memo: - Downstream 8,586 3,021 5,565 10,534 5,790 4,744 - Petrochemicals (129) 482 (611) (238) 1,154 (1,392) Other income 18 26 (8) 25 42 (17) Operating profit 8,475 3,529 4,946 10,321 6,986 3,335 Other non-operating income - 162 (162) - 323 (323) Share of profit from an associate 58 50 8 120 101 19 Profit before interest and income tax 8,533 3,741 4,792 10,441 7,409 3,032 Interest income 29 29 - 42 111 (69) Interest expense (281) (1,238) 957 (616) (2,523) 1,907 Profit before income tax 8,281 2,532 5,749 9,867 4,997 4,870 Income tax charge (2,467) (638) (1,829) (2,923) (1,068) (1,855) Net profit 5,814 1,894 3,920 6,944 3,929 3,015 Both sales and cost of sales in 2Q 2008 were higher than 2Q 2007, reflecting higher sales volumes and rising crude and refined petroleum product prices. Gross profit for 2Q 2008 was more than double of 2Q 2007 due mainly to the improved refining gross margin. Taking into account the lower gross profit of 1Q 2008 comparing to 1Q 2007, 1H 2008 gross profit was 41% higher than 1H 2007. Selling and administrative expenses were higher comparing 2Q 2008 to 2Q 2007 and also 1H 2008 to 1H 2007 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, and higher transportation costs incurred for commercial and retail sales. There was no other non-operating income in 2Q 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 957 million (77%) in 2Q 2008 comparing to 2Q 2007 and Baht 1,907 million (76%) in 1H 2008 compared to 1H 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 2Q 2008 and 1H 2008 comparing to 25% for 2Q 2007 and 21% for 1H 2007. The lower effective tax rate in 2007 was primarily impacted by the 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 2Q 2008 increased by Baht 3,920 million (207%) from 2Q 2007,and 1H 2008 increased by Baht 3,015 million (77%) from 1H 2007. 5 5. Balance Sheet (Unit: million Baht except for percentages) 30 Jun,2008 31 Mar,2008 +/(-) +/(-) % Assets - Current assets 47,040 40,856 6,184 15% - Non-current assets 30,915 33,570 (2,655) -8% Total assets 77,955 74,426 3,529 5% Liabilities - Current liabilities 29,871 36,908 (7,037) -19% - Non-current liabilities 12,017 12,013 4 - Total liabilities 41,888 48,921 (7,033) -14% Shareholders' equity - Issued & paid-up share capital 17,075 12,877 4,198 33% - Premium on share capital 4,032 - 4,032 - - Retained earnings 14,736 12,384 2,352 19% - Fair value reserve 217 237 - - Minority interest 7 7 - 0% Total shareholders' equity 36,067 25,505 10,562 41% Total liabilities and shareholders' equity 77,955 74,426 3,529 5% As of 30 June 2008, current assets increased Baht 6,184 million from 31 March 2008 primarily due to higher inventory.Non-current asset decreased Baht 2,655 million due to lower deferred income tax assets as a result of lower tax loss carry forward balance from positive 1H 2008 taxable income. Current liabilities decreased Baht 7,037 million due to lower debt balance offsetting with higher payables. The Company paid down about Baht 14.7 billion of short term debts in 2Q 2008, using net IPO proceeds and cash generated during the period. Total shareholders' equity increased Baht 10,562 million from (1) Issued and paid-up capital increased Baht 4,198 million (par value of IPO's new shares issuance) in 2Q 2008, (2) Baht 4,032 million of premium on share capital recognized in 2Q 2008 and (3) retained earnings increased by Baht 2,352 million from the net of 2Q 2008 net profit of Baht 5,814 million minus the amount of dividend paid, Baht 3,461 million. 6 6. Financial Ratios Comparison of financial ratios are as follows: Profitability ratios 2Q 2008 1Q 2008 2Q 2007 1H 2008 1H 2007 Gross profit margin (%) 14.2% 5.6% 9.0% 10.4% 9.4% Net profit margin (%) 8.5% 2.1% 3.8% 5.7% 4.1% Interest coverage ratio (times) 31.8 6.9 3.2 18.3 3.1 Liquidity and debt to equity ratios 30 Jun, 2008 31 Mar, 2008 31 Dec, 2007 Current ratio (times) 1.6 1.1 1.1 Quick ratio (times) 0.4 0.2 0.3 Total debt to equity ratio (times) 0.6 1.4 1.4 Long term debt to equity ratio (times) 0.3 0.4 0.5 Net debt to equity ratio (times) 0.5 1.3 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: 14 August 2008 7