32. Additional Financial Instruments Disclosure (continued) (b) Interest rate risk exposure (c) Commodity price risk exposure (d) Credit risk exposure To manage interest rate risk the Santos Group has entered into interest r ate swap contracts with maturities ranging from one to eighteen years. At 31 December 2004 the Santos Group has open interest rate swap contr acts which if closed out would have resulted in a gain of $44.2 million (2003: gain of $63.3 million). The Santos Group’s exposure to interest rate risk and the effective weigh ted average interest rates for classes of interest-bearing financial assets and financial liabilities is set out below: * After incorporating the effect of interest rate swaps ** Notional principal amounts The Santos Group is exposed to commodity price fluctuations through th e sale of petroleum products denominated in US dollars. The Santos Group enters into commodity crude oil price swap and option contracts and natur al gas swap and option contracts to manage its commodity price risk. 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 milli on (2003: loss of $1.8 million). 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 th e contract if the counterparty were to default and is measured by their market value at balance date. As at 31 December 2004, counterparty def ault 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 instrumen ts by setting exposure limits related to the credit worthiness of counterparties, all of which are selected banks or institutions with a Stan dard and Poor’s rating of A or better. Annual Report 2004 85 Fixed interest repriced Weighted or maturing in average Floating Non interest interest 1 year  Over 1 More than  interest- rate* r ate or less to 5 years 5 years bearing Total Note $million $million $million $million $million $million 31 December 2004 Financial assets Cash 4.55% 128.0 – – – – 128.0 Receivables 7 N/A – – – – 409.1 409.1 Other financial assets 12 N/A – – – – 1.2 1.2 128.0 – – – 410.3 538.3 Financial liabilities Payables 14 N/A – – – – 371.6 371.6 Deferred income N/A – – – – 22.1 22.1 Interest-bearing liabilities 15 5.50% 1.0 480.6 193.4 584.4 – 1,259.4 Interest rate swaps** – 522.8 (98.3) (424.5) – – 1.0 1,003.4 95.1 159.9 393.7 1,653.1 31 December 2003 Financial assets Cash 4.36% 111.1 – – – – 111.1 Receivables 7 N/A – – – – 171.7 171.7 Other financial assets 12 N/A – – – – 11.7 11.7 111.1 – – – 183.4 294.5 Financial liabilities Payables 14 N/A – – – – 291.3 291.3 Deferred income N/A – – – – 27.7 27.7 Interest-bearing liabilities 15 4.72% – 155.4 202.9 650.4 – 1,008.7 Interest rate swaps** – 525.6 (84.2) (441.4) – – – 681.0 118.7 209.0 319.0 1,327.7