Founded in 1992, SPRC is one of the leading petroleum product producers and oil refiner in Thailand and the Asia Pacific region.

SPRC owns and operates a complex refinery with a capacity of 165,000 barrels per day of crude oil, which represents 13.4% of the refining capacity in Thailand.

SPRC strategically located in Map Ta Phut, Thailand's premier petrochemicals hub and our key products consist of LPG, premium and regular grade of gasoline, jet fuel, diesel and fuel oil.

Our unique configuration and flexibility in production enables us to produce more gasoline compared to other Thai refineries.

The Chevron connection brings many benefits to SPRC including:

• Access to their Operational Excellence Management System (OEMS) which is comprehensive and systematic management of process safety, personal safety & health, the environment, reliability and efficiency
• Global Crude trading organization with bargaining power for crude purchases
• A well-established network of crude oil sources
• Product off-take contracts
• Sourcing other refinery materials under Chevron master supply agreements
• Access to proprietary technology and research
• Refinery optimization expertise
• Best practice systems and process management concerning decision analysis, project development and execution, governance and safety

The shareholding structure had been changed following the completion of our IPO on December 8, 2015. The updated shareholding structure is as shown below.

Chevron, our major shareholder, remains 60.6% of shareholder in SPRC and continue to provide benefit to SPRC through access to Chevron's global procurement services for crude oil and feedstocks, a global refined petroleum products sales network, advanced technological, operational, engineering and other technical support services, and Chevron's master supply agreements for materials and services.

The dividend payment policy of SPRC is to pay twice per year of at least 50 percent of net profits after legal reserve requirements. The payment is subject to actual and future cash flows, market conditions, capital requirements and other considerations as our board of directors may deem relevant

The dividend declaration shall be made in US Dollar and converted to Thai Baht by using the average selling exchange rate of The Bank of Thailand for 7 Banking days before the notification date of the Board of Directors for consideration on the dividend payment.

Our board of directors may recommend an annual dividend payment, subject to the approval of our shareholders at the shareholders' meeting. Our board of directors may also, by its resolution, decide to pay an interim dividend to our shareholders if the directors determine that it is justified by our profits. It is the policy of our board of directors to consider an interim dividend payment to shareholders every year.

The main feedstock used in our refinery production process is crude oil. Crude oil is classified based on the density, from Light to Heavy and the Sulfur content, from Sweet to Sour. The Lighter crude oil with low sulfur content is more expensive than Heavy crude oil with high sulfur because it requires less processing at a refinery to produce a more valuable mix of finished products such as gasoline, diesel, and jet fuel.

SPRC can process a wide range of crude oil, including crude oil from the Middle East, Far East, Domestic and other regions. As SPRC refinery has Upgrading and Conversion Units, we are able to use a higher proportion of heavy sour crude from the Middle East, which has a higher sulfur content and is less costly than light sweet crude, to produce a product slate that matches customer demand.

SPRC uses Chevron’s global crude and feedstock procurement network, crude characterizations and proprietary Linear Program to optimize the quantity and type of crude oil and other feedstocks that serve as inputs in refinery. This allows us to more precisely source, select and blend crude oil that enhances the gross refining margins while meeting customer demand. The crude oil slate is determined after we decide on our product slate with input from the offtakers, based on our assessment of customer demand and projected prices for the various products that we can produce, typically around 3 months in advance of product sales. We input pricing and product demand information into Chevron’s proprietary Linear software, which takes into account our production processes and constraints, to determine the optimal blend of crude oil to purchase.

We source and purchase crude oil primarily through Chevron and PTT and their affiliates on credit terms that are in line with market practice.

Our primary petroleum products from the distillation and conversion of crude oil are hydrocarbon fuels, which include LPG, premium and regular grades of gasoline, jet fuel, diesel, fuel oil and asphalt, as well as petrochemical feedstocks used in the petrochemical industry, which include PGP, LPG, chemical grade naphtha, mixed C4, reformate and sulfur.

The following diagram illustrates our refinery’s configuration and primary petroleum products:

Most of the products sold through the offtake Agreement are benchmarked off the Mean of Platts Singapore, or MOPS. Thai domestic prices are adjusted from MOPS pricing with certain transportation, production, product quality, and market adjustments as appropriate.

Domestic sale prices of petroleum products sold outside of the Offtake Agreement are also market driven and are generally based on the monthly average of regional benchmark prices with certain adjustment for the applicable product in the month that they are sold. Our exports for petroleum products are also generally based on benchmark pricing, such as the price for the relevant product quoted on MOPS, plus or minus a premium or discount based on market conditions and negotiations with potential purchasers as well as differences in product quality and location.

Gross refining margin is calculated as the difference between (i) the value at which our petroleum products are sold or transferred, and (ii) the landed cost of crude oil and other feedstocks used in the refining process, less (iii) the cost of energy (whether internally produced or purchased) used in operations. “Landed cost” is the total cost of crude and shipment costs including purchase price, freight, insurance and other costs incurred up to the shipment’s delivery at our refinery.

• Market gross refining margin is a metric based on current replacement cost and represents our gross refining margin, primarily excluding inventory gains and losses.
• Accounting gross refining margin is a metric based on accounting treatment, primarily including inventory gains and losses.

Formula for Success is simple in concept, but requires commitment, discipline and attention to every detail in implementation. It starts with a strong foundation in personal safety, which is leveraged into exceptional process safety and reliability, which allows us to maximize utilization of our facilities. Exceptional reliability and utilization provides the opportunity for our SPRC Family to focus on driving optimization and cost efficiency and thereby maximizing capture of Gross Refining Margin.

SPRC's ability to successfully implement the "formula" is the "secret" behind our continued exceptional operational and financial performance.

Volatility in crude oil price has directly impacted on refinery business but it will only be in short term impact. In downward trend, crude oil intake today is inventory that the Company purchased in advance with higher cost. Therefore, it provides stock loss on refinery operation. In contrast to upward trend, crude oil intake today is inventory that the Company purchased in advance with lower cost. Therefore, the Company presumably receives stock gain.

SPRC plans to have the scheduled shut down for maintenance of all its production units for 45 days (+/- 5 days), starting from 1 November 2019. The shutdown duration is in line with the last shut down in February 2014. During the scheduled maintenance activities, the Company will upgrade its facilities to improve efficiency, reliability and environmental, health and safety compliance. This will enable the Company to continue safe and reliable operation, process more crude types, extend the scheduled shut down period and maintain its 1st quartile in OA (Operation Availability) and UEDC (Utilization of Equivalence Distillation Capacity) among refineries in Asia Pacific and Indian Ocean region. The Company has the plans and actions in place to ensure no supply disruption to its customers and oil demand in Thailand.

In addition to the planned maintenance, the Company will implement Capacity Increase Project. The project will increase the capacity of its Crude Distillation Unit (CDU) and related downstream units from 165,000 barrels per day to 175,000 barrels per day. The Company expects to generate additional benefit immediately after this project is finished in December 2019. The combined costs for the Capacity Increase Project, planned maintenance, and upgrades in 2019 are approximately US$ 256 million. The Company does not expect any capital increase from the major spending as mentioned above.

The Company is committed to doing business in Thailand and will continue to look for opportunity to expand its business platform.