Sustainable Development

Materiality Assessment Process

In 2020, PTTEP reviewed material topics on sustainability through interviews and questionnaires on all stakeholders as well as the analysis of likelihood of opportunities and risks of factors that may affect the Company. The results were classified into 2 groups: material issues of the Company's operations and stakeholders' concerns and expectations. Being added up were global sustainability trends and direction in line with UN SDGs and DJSI as well as the energy industry's material issues. The assessment process was completed in line with GRI Standards as follows.

1. Identification

   Considered the company's business strategy, enterprise risks, and challenges, as well as social, business, and environmental activities, in conjunction with the stakeholders' suggestions, expectations, and interests.

2. Prioritization

   Once the key material issues were identified, PTTEP assessed these issues in two dimensions: the significance to PTTEP and the significance to stakeholders. The prioritized issues are presented in the form "Materiality Matrix" by

   - X (horizontal axis) is "significance of each materiality to PTTEP"
   - Y (vertical axis) is "significance of each materiality to stakeholders"

   PTTEP consider the issues in the upper-right quadrant to be the most significant,

3. Validation

   The Board of Director and The Management Committee reviewed and approved the material issues for disclosure in the sustainability report and web content. An external audit was carried out to verify the transparency, accuracy, and completeness of the disclosed information.

4. Review and Report Development

   Improved the participation procedure, as well as gathered feedback and recommendations from stakeholders to further improve the report to better reflect the stakeholders' issues.

Materiality Matrix 2020

1. Governance, Risk Management, and Compliance
2. Increasing Petroleum Reserves
3. Lower Carbon Future
4. Human Resource Preparation
5. Contribution to Community and Society
6. Environmental Management
7. Technology and Innovation
8. Occupational Health and Safety

More information about Material Issues and Boundaries can be access here.

Performance Summary of 2020 Material Issues

PTTEP has set short- and long-term sustainable development targets for business, social, and environmental dimensions and discloses the sustainability performance of our materiality issues. In 2020, the main achievements and progress on PTTEP's targets and work plan were as follows:

Materiality: 1. Governance, Risk Management, and Compliance (GRC)

Report Topic: Governance, Risk Management, and Compliance

Target	2020 Progress	SDGs
GRC role model of Thai Listed Companies. Increase GRC Maturity Level to the highest level (level 5) (Continuous Improvement with Automation).	Established a governance system in accordance with GRC principles in new investment projects to ensure that operations are in line with PTTEP standards and to monitor effectively. Additionally, the company has also expanded communication on GRC principles to foreign investment projects. Prepared 2020-2030 GRC Roadmap and presented to the Corporate Governance and Sustainable Development Committee to review and was approved by the Board of Directors to implement as proposed. The Company has also assigned the President as the GRC Champion to drive the Roadmap implementation efficiently. Develop GRC processes by integrating digital technology and expanding the coverage to company-wide, such as the whistleblowing system and risk management tools.

Materiality: 2. Increasing Petroleum Reserves

Report Topic: Business Sustainability

Target	2020 Progress	SDGs
5% CAGR Production Growth by 2030. Maintain Proven Reserves to Production Ratio (R/P Ratio or 1P/Production) at no less than seven years until 2030. Unit cost in the top quartile among peers. 20% of the net profit comes from new business by 2030.	Production growth rate at 2% as a consequence of the COVID-19 outbreak and low oil price. The proportion of natural gas production accounted for 70% of all production in 2020. Proved R/P Ratio or 1/P Production is at 7 years Unit cost was at 30.50 USD per barrel of oil equivalent, maintaining PTTEP's competitive advantage in the Petroleum E&P industry in Asia. Won the bid for Block Offshore 3 field, in partnership with Eni, for an offshore exploration block in the United Arab Emirates, a region known for low operating costs Signed the Exploration and Production Sharing Agreement (EPSA) with the Ministry of Energy and Minerals in the Sultanate of Oman for the 12th onshore exploration block. The block accounted for approximately 10,000 square kilometers and is located in central Oman, where the Oman government mainly conducts exploration, development, and production of natural gas. The operation is implemented in partnership with TOTAL E&P, which is equipped with several years of experience in Oman. Made two successful deep-water oil discoveries in Mexico's offshore Block 29 with good quality reservoirs. Discussions with co-operators on resources evaluation and development are underway, before seeking an approval from Mexico's regulatory body. Expanded AI Robotic Venture Ltd., according to expansion strategy in new business and establish two joint venture companies, namely ATI technology CO LTD, a platform provider by using smart farming technology to assess agricultural in-debt data to strengthen the Thai agriculture sector. The company is also operating in collaboration with Thaikhom PCL LTD to develop drone-related products and services for agriculture. Seaquest Explorer CO.,LTD, in partnership with Mermaid Maritime CO LTD, provides a subsea (IRM) service that focuses on robotic technology and Artificial Intelligence (AI), such as an examination and maintenance robot and sub-sea petroleum pipeline. Signed a Project Finance loan agreement to cover the developmental cost of the Mozambique Area 1 project for the two lines of liquefied natural gas production after the final investment decision was announced in 2019 to support future liquefied natural gas production. Signed Asset Sale and Purchase Agreement to acquire an additional 24.5% stake in the Algeria Hassi Burracez project from China National Offshore Oil Corporation (CNOOC), one of the co-investors, with a value equal to the CNOOC's investment spent from the project development period to the official date of approval. The project is currently pending approval from the Algerian government. This acquisition led PTTEP to have a total investment of 49% in this project (Algeria's national oil company, SONATRACH is the main co-investor with 51% stake). The project is expected to begin early stages of production at 10,000-13,000 barrels per day in late 2021 and will increase production to 50,000-60,000 barrels per day in 2025.

Materiality: 3. Lower Carbon Future

Report Topic: Environmental Management

Target	2020 Progress	SDGs
Reduce greenhouse gas emission intensity by at least 25% by 2030 compared to the 2012 baseline year. Reduce greenhouse gas emissions by 390,000 tonnes of CO2 equivalent in 2020.	Reduce greenhouse gas emission intensity by 13% compared to the 2012 baseline year. Reduced greenhouse gas emissions by 315,215 tonnes of CO2 equivalent.

Materiality: 4. Human Resource Preparation

Report Topic: Human Resource Management

Target	2020 Progress	SDGs
Improve the competency of employees at all levels by an average of 3.5% in preparation for organizational change. Develop a performance evaluation system and adopt a 360° employee behavioural evaluation method.	Average employee competency level increased by 3.5% in 2020. Improve digital competency and work processes of employees and executives through the ENTERPRISE* project, such as the Talent Game project, iLearn project, and Digital Academy project. Launched the Weconnect system, which is an application for a performance evaluation, and began using the 360° behavioural evaluation method. *ENTERPRISE project is the transformation of the organization, work process, and organization culture.

Materiality: 5. Contribution to Community and Society

Report Topic: Sustainable Development

Target	2020 Progress	SDGs
Macro Level: Help restoring the gulf of Thailand's marine ecosystem by setting up Crab and Aquatic Animal Hatchery Learning Center Project, build community networks, raise awareness of sustainable fisheries, and promote seafood value enhancement to social enterprise. Micro Level: Implement social development projects with the objective of building and maintaining a good relationship with stakeholders in the operating areas, to serve their needs through social development projects.	Macro Level: Increase the number of aquatic animals with economic value and income of fishers. Conversion and sustainable fishery networks were formed through Aquatic Animal Hatchery Learning Center Project which is transformed from Crab Hatchery Learning Center. Currently, five of the Crab Hatchery Learning Centers are established, of which three are located in Songkla, one in Pattani, and another one in Nakhon Sritammarat. Micro Level: Promote social enterprise through the Sobis Pammase project by supporting livestock farming to generate income and improve the quality of life of the community as well as to allocate profit from the project to support Stimulation, Intervention, Optimization of Services for Children (SIOLA), which is the program that focuses on the development of pre-school children in Indonesia. Support oral surgery for people with cleft lip and palate in the Republic of the Union of Myanmar to restore a good quality of life and build confidence for a sustainable life through the 100 Smiles Project.

Materiality: 6. Environmental Management

Report Topic: Environmental Management

Target	2020 Progress	SDGs
Achieve zero hazardous waste to landfill by 2020, zero industrial waste to landfill by 2025, and zero total waste to landfill by 2030, Achieve 100% reinjection of produced water. Achieve zero oil and chemical spills. Avoid operating in areas at risk from water scarcity and ensure that there is no impact on the community and their water usage. Avoid operating in World Heritage sites as defined by UNESCO and achieve No-Net Loss of biodiversity in protected areas as defined by the International Union for Conservation of Nature (IUCN) by 2024 and. Achieve Net Positive Impact of Ocean Biodiversity and Ecosystem Services (Ocean BES) value in domestic offshore operations by 2025 and all offshore operations by 2030, compared to the 2019 base year.	Zero hazardous waste to landfill. 0.09% of industrial waste to landfill, and 0.09% of waste to landfill. Reinjected 99.4% of produced water for Thailand operation assets. Oil and chemical spill rate at 0.08 tonnes per million tonnes of petroleum production. No PTTEP operations located in areas at risk of water scarcity. No PTTEP operations in areas of high biodiversity risk or World Heritage sites. Developed Biodiversity Offset Strategy for the Zawtika Onshore Gas Transportation project in the Republic of the Union of Myanmar, located in an IUCN protected area, to define effective ways forward to achieve no-net loss.

Materiality: 7. Technology and Innovation

Report Topic: Innovation and Knowledge Management

Target	2020 Progress	SDGs
Develop 10 technology projects that can be deployed or commercialized with an increase in overall returns from technology implementation by at least 350 million USD by 2024. Develop technologies to support organizational sustainability in three areas: Greenhouse Gas Reduction Circular Economy for E&P Oceans for Life Obtain 15 patents by 2025. Publish technical papers on technology development and receive a national and international academic award every year. Complete the construction of PTTEP Technology and Innovation Centre (PTIC) by 2021.	Successful technology development projects in 2020: 8 projects at the prototype stage, 4 projects at the pilot testing stage, and 3 projects at the deployment stage. 35 million USD increase in return as a result of E&P technology application. Develop technology to support organizational sustainability in three areas; 7 greenhouse gas reduction projects, 3 circular economy for E&P projects, and 3 oceans for life projects. Submitted 9 patents, and the previous submission was granted in 2020, which made up to a total of 6 patents approved. Published 6 technical papers at an international academic conference and received 3 awards for technology development. Made good progress on the construction of PTIC; including completion of the design and the first phase of construction in 2020.

Materiality: 8. Occupational Health and Safety

Report Topic: Safety, Security, Health and Environment

Target	2020 Progress	SDGs
Lost Time Injury Frequency (LTIF) of employees and contractors is ≤ 0.13 cases per million hours worked in 2020. Total Recordable Injury Rate (TRIR) of employees and contractors is ≤ 0.73 cases per million hours worked in 2020.	Lost Time Injury Frequency (LTIF) of employees and contractors was at 0.13 cases per million hours worked in 2020. Total Recordable Injury Rate (TRIR) of employees and contractors was at 0.32 cases per million hours worked in 2020.

CONTENT INDEX

PTTEP has created a Content Index that facilitates readers and all stakeholders to understand how PTTEP conducts the sustainability report and sustainability context on the website in alignment with GRI Standards.

Your opinions on PTTEP's materiality issues can be expressed at Survey of Readers' Opinions