Political risks and risks related to society

= High = Medium = Low

Description of risks	Risk managament	Exposure
The Group’s operations are affected by the tax rules in force in the countries in which PA Resources carries on business. Each country decides on and controls the taxes payable by the oil industry. The taxes are generally a combination of – among other things – income tax, royalties, sale of oil to local markets at a discount, investment subsidies, stamp duty and capital gains tax. Oil-producing developing countries have had a tendency to raise taxes in line with increases in oil prices.	The majority of PA Resources’ operations are in countries in which the pressure from taxes is not high. This is particularly the case following the sale of the Norwegian business.

Description of risks	Risk managament	Exposure
A certain amount of PA Resources’ operations are conducted in countries where the Group may be exposed to political, social and economic instability and which have a history of problems involving corruption. Bribery and other types of corruption cause major problems for companies that are faced with these.	PA Resources has chosen to concentrate its operations on countries with a calm, stable political climate. To reduce the risk of corruption in West Africa the Group has decided to support the Extractive Industry Transparency Initiative introduced in the Republic of Congo and in Equatorial Guinea. The Group also applies the OECD’s tool for corporate risk management in countries with weak governments. Read more under Environment, safety and society.	No more comprehensive disturbances occurred during the year. Political elections were held in Equatorial Guinea, with the president and his party remaining in power.