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CHAPTER 3 Where are we heading?

The spectrum of risks to which the Cepsa is exposed can be broadly classified into

the following four key risk categories:

STRATEGIC RISKS Relating to general factors such as political, economic, socio-cultural, technological and environmental, as well as those related to the Group's strategic positioning and planning.

REGULATORY AND COMPLIANCE RISKS Relating to any lack of ethical conduct, violation or failure to comply with applicable laws or regulations and violation or failure to comply with the internal procedures and policies.

FINANCIAL AND MARKET RISKS Arising from volatility of prices for basic raw materials or commodities, from exchange rates, from interest rates, and from hedging and trading transactions, as well as those related to the management of liquidity and solvency, credit and counterparty risks.

OPERATIONS AND INFRASTRUCTURES RISKS Associated with the efficacy and efficiency of operations, amongst which the most noteworthy are the supply of products, goods and services, transmission management, extraction and manufacturing-related processes, sales and marketing, the safety of personnel and installations, the respect for the environment, the human resources and information technologies.