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CHAPTER 3 Our Environment Risks and opportunities management

Our activities are carried out in envi- ronments where there are a number of external factors (political, economic, social and regulatory) whose evolution can significantly affect operations and results.

Since 2013 we have been working to implement an integrated risk management system that allows us to manage risk on an aligned and consistent basis across the Com- pany, based on the main international standards in this area: ISO 31000 and COSO ERM.

We have taken actions to this regard, such as the formation of the Corporate Risks Unit within Audit, Internal Con- trol and Risks, and the formalization of the Risk Committee. Our Risk Map is also kept up to date on a constant basis, as concerns both the evaluation of risks on the basis of changes in the environments in which we operate, and the development of tools to address them.

On the basis of these criteria, we have identified the following risks to which we are exposed:

RISKS AND OPPORTUNITIES MANAGEMENT

High risk

Medium-high risk

Medium risk

Medium-low risk

Low risk

IM PA

CT

PROBABILITY

SHAREHOLDERS RETURNS

FINANCIAL ROBUSTNESS

LONG-TERM GROWTH

1. Market competition 2. Demand evolution 3. Country risk 4. Sustainability of E&P assets in

current context 5. Production and replacement

of reserves 6. Credit and counterparty risk 7. Price risk 8. Foreign exchange risk 9. Refining margin 10. Operating safety 11. Attracting and retaining talent 12. Physical safety 13. Information security 14. Innovation / Access to technology 15. Regulatory uncertainty