text: At 31 December 2004 the Santos Group has open oil price swap contracts with settlement expiry dates up to nine months. If closed out at 
  balance date these contracts would have resulted in a loss of $11.2 million (2003: loss of $1.8 million). 
  
  **(d) Credit risk exposure**
  
  Credit risk represents the potential financial loss if counterparties fail to perform as contracted. 
  
  The credit risk on financial assets, excluding investments, of the Santos Group which have been recognised on the statements of financial 
  position is indicated by the carrying amount. 
  
  The credit risk on off-balance sheet derivatives is the cost of replacing the contract if the counterparty were to default and is measured by their 
  market value at balance date. As at 31 December 2004, counterparty default of foreign currency swaps, foreign currency option contracts, oil 
  price swap contracts and interest rate swap contracts would result in a loss of $37.2 million (2003: loss of $61.9 million). 
  
  The Santos Group controls credit risk on derivative financial instruments by setting exposure limits related to the credit worthiness of 
  counterparties, all of which are selected banks or institutions with a Standard and Poor’s rating of A or better. 
  
  85  Annual Report 2004 