Sustainable Development

Materiality Assessment Process

In 2021, PTTEP reviewed material topics on sustainability covering ESG or Environmental, Social, and Governance 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, including the comparison with global sustainability trends and direction, peers, and related institutions, 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, website and considered to define the Company's direction and strategy. 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 2021

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 2021 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 2021, 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	2021 Progress	SDGs
GRC role model of Thai Listed Companies. Increase GRC Maturity Level to the highest level (level 5) (Continuous Improvement with Automation).	Established 2021 GRC Roadmap according to GRC Strategies – Smart Assurance and GRC in Common Sense – categorized in 3 areas i.e. Process &Technology, People, and Society which aims to effectively integrate assurance processes, cultivate GRC in employee mindset to be aware, accept and implement GRC, as well as prepare for becoming a GRC role model among Thai Listed Companies. Conducted an Internal Maturity Assessment for Malaysia to support the planning of concrete GRC implementation and prepare for a Company-wide GRC Maturity Level assessment program. Enhanced Risk Management System to support more comprehensive risk identification. Continued studying on possibility to align and integrate assurance activities to reduce process redundancy and manage technology information on single platform for more efficiency. Continued building GRC culture through communication campaign such as promotional materials in the format of VDO Clips, sharing ideas related to GRC, and organizing online training and e-learning. Conducted Stakeholders Engagement Survey and take the results to develop improvement plan for becoming a GRC role model among Thai Listed Companies.

Materiality: 2. Increasing Petroleum Reserves

Report Topic: Energy Transition Towards Lower Carbon Future

Target	2021 Progress	SDGs
5% CAGR Production Growth by 2030. Maintain Proven Reserves to Production Ratio (R/P Ratio or 1P/Production) at no less than 5 years. Unit cost in the top quartile among peers. (≤25 USD/BOE) 20% of the Net Income from beyond E&P business by 2030.	Production growth rate at 17% Proportion of natural gas production accounted for 73% of all production in 2021. R/P Ratio or Reserves Life is at 7.5 years Unit cost was at 28.5 USD/BOE. Delivered first gas production of Sabah H in Malaysia, contributing to PTTEP's production volume in 2021. Acquired a 20% participating interest in Sultanate of Oman's Block 61, one of the largest gas developments in the Middle East, which immediately add to the company's petroleum reserves and sales volumes, foster its long-term growth, and open up further investment opportunities in the Middle East. Successfully completed Lang Lebah-2 appraisal wells in the SK410B Project located offshore Sarawak, Malaysia to confirm the discovery resources to support company long-term growth. Increased resource added from multiple successful oil and gas discoveries in Malaysia which are SK417 (Dokong and Nangka-1), SK405B (Sirung) and SK438 (Kulintang-1). Acquired 25% participating interest from Eni Sharjah B.V. in the exploration block (high gas-condensate possibility) naming Concession Area C onshore the Emirate of Sharjah situated in United Arab Emirate (UAE). The investment aligns with PTTEP's strategic focus on petroleum prolific area in the Middle East, low operating cost region. PTT Global LNG (PTTGL), a 50% joint venture company between PTT and PTTEP, obtained LNG shipper license from the Energy Regulatory Commission. Established 2 subsidiaries to support investment in renewable power business namely FutureTech Energy Ventures Company Limited, FutureTech Solar (Thailand) Company Limited. Expanded AI Robotic Venture Ltd. according to expansion strategy in new business by Establishment of four subsidiaries and one joint venture company to support its business growth plans namely Rovula (Thailand) Company Limited ("ROVULA") focuses on using advanced artificial intelligence and robotics to provide end-to-end subsea and marine inspection, repair, and maintenance in the oil and gas industry and beyond. Skyller Solutions Company Limited ("SKYLLER") provides integrated asset inspection and management services via its proprietary platform to industry asset owners. Varuna (Thailand) Company Limited ("VARUNA") leverages AI, satellite technology, and unmanned aerial vehicles to offer state-of-the-art smart-farming and smart-forestry solutions to farmers and agricultural businesses. Cariva (Thailand) Company Limited ("CARIVA") is a health data network which leverages AI, IoT, and robotics to empower and generate health insights. AeroSky (Thailand) Company Limited" (AeroSky) with Aerodyne Group (Aerodyne) from Malaysia and Digital Creation Co., Ltd. (DC), which will provide state-of-the-art drone-based enterprise solutions across the Thai market, including clients in the telecoms, electricity, oil & gas, and other infrastructure-led industries.

Materiality: 3. Lower Carbon Future

Report Topic: Environmental Management

Target	2021 Progress	SDGs
Reduce greenhouse gas emissions intensity by at least 25% by 2030 compared to the 2012 base year. Reduce greenhouse gas emissions by 306,630 tonnes of CO2 equivalent in 2021.	Reduced greenhouse gas emissions intensity by 24.1% compared to the 2012 base year. Reduced greenhouse gas emissions by 358,187 tonnes of CO2 equivalent.

Materiality: 4. Human Resource Preparation

Report Topic: Human Resource Management

Target	2021 Progress	SDGs
Improve the competency of employees at all levels by an average of 5.45% in preparation for organizational change. Conducts Employee Engagement Survey every 2 years, Percentage of actively engaged employees was 77% in 2020. The Employee Engagement Survey has been planned to be conducted in 2022.	Average employee competency level increased by 5.45 % in 2021. Improve digital competency and work processes of employees and executives through the ENTERPRISE* project, such as Digital Citizen Bootcamp project, iLearn project, and Digital Academy project. Percentage of actively engaged employees was 77% in 2020, which achieved the target. In 2021, during on-going spread of COVID-19 which has a potential of a rapid mass breakout, PTTEP has additionally organized activities to increase employee engagement through the company's activities.

Materiality: 5. Contribution to Community and Society

Report Topic: Sustainable Development

Target	2021 Progress	SDGs
Macro Level: Increase 50% of community income for focused communities and achieve 16,000 conservation networks by 2030, compared to the baseline data before PTTEP project implementation Help restoring the Gulf of Thailand's marine ecosystem by mangrove forestration, setting up Crab and Aquatic Animal Hatchery Learning Center Project, building community networks, raising awareness of sustainable fisheries, and promoting 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 and to create job opportunity for better employment through social development projects.	Macro Level: Increased community income of focused communities participating in Aquatic Animal Hatchery Learning Center and Seafood Product Value Enhancement Project: 20.5% Promote and expand projects of aquatic animal hatchery center and seafood value enhancement through 17 provinces around Gulf of Thailand, while creating jobs and improving community income income of fishers through Coastal Conservation Area and Fish Home Project and Aquatic Animal Hatchery Learning Center that is the improved version of the Crab Hatchery Learning Center. The conservation areas have encompassed 7.3 square km, 14 fish home has been built and 11 learning centers have been established in Songkhla, Pattani, Nakhon Si Thammarat, Prachuab Khiri Khan, Surat Thani, Chumphon, Phetchaburi, Samut Songkhram and Rayong provinces. Micro Level: Support hospital development projects to promote higher capacity and efficiency in servicing local people. The first project involved Lan Krabue Hospital, which received the funding for the construction of "the 36th Anniversary of PTTEP S1Building" with 60 beds and 10 special rooms, along with medical equipment and supplies for the in-patient building, the auditorium improvement and a refrigerated COVID-19 vaccine cabinet to serve local people and the Company's employees. Songkhla Hospital was the second project. It received funding for the construction of 7 fully-equipped operating rooms with 6 recovery beds. Under this support, Songkhla residents and people from nearby provinces can seek emergency help and witness a shorter waiting period for operations. With the operating rooms, the hospital can save patients with burn injury, reducing risks of escalating infection or loss of life. Under this project, the hospital has catered services to 1,671 patients. Support the Stunting Prevention Program in East Nusa Tenggara, the Republic of Indonesia, was initiated in collaboration with National Team for the Acceleration of Poverty Reduction (TNP2K) in support of the Government of Indonesia's vision for 2045 when the country celebrates 100 years of independence.

Materiality: 6. Environmental Management

Report Topic: Environmental Management

Target	2021 Progress	SDGs
For Thailand operations, 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 in Thailand operations. 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 Category I-IV protected areas as defined by the International Union for Conservation of Nature (IUCN) by 2044 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. 0.001% of industrial waste to landfill, and 0.06% of waste to landfill. Reinjected 99.95% of produced water for Thailand operation assets. Oil and chemical spill rate at 0.02 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 and apply technology to increase efficiency and reduce costs in petroleum production, and study new energy technology to be ready for the energy transition. Develop technologies to support organizational sustainability in three areas: Greenhouse Gas Reduction Circular Economy for E&P Oceans for Life Has an efficient intellectual property management system in place and has registered intellectual property from the outcome of research and technology development every year. Publish research papers in international conferences and journals and win the prize for national and international innovation award competitions every year. Complete the construction of PTTEP Technology and Innovation Centre (PTIC) by 2021.	Successful technology development projects in 2021: 5 projects in the prototype phase, 2 projects in the pilot testing phase, and 4 projects in the deployment phase. 5.7 million USD increase in return as a result of the deployment of the successfully developed technologies in E&P business. Develop 12 technology projects to support organizational sustainability in three areas: 6 greenhouse gas reduction projects, 4 circular economy for E&P projects, and 3 oceans for life projects. Submitted additional 19 patent applications, and 2 previous applications were granted in 2021, which made up to a total of 8 patents obtained. Published 8 technical papers in international academic conferences and received 2 awards for technology development projects. Completed the construction of PTIC by 2021 as per committed target and hold the grand opening ceremony in December 2021.

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 2021. Total Recordable Injury Rate (TRIR) of employees and contractors is ≤ 0.69 cases per million hours worked in 2021.	Lost Time Injury Frequency (LTIF) of employees and contractors was at 0.16 cases per million hours worked in 2021. Total Recordable Injury Rate (TRIR) of employees and contractors was at 0.74 cases per million hours worked in 2021.

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.

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