This excerpt taken from the STO 20-F filed Apr 9, 2008.
Interest and currency risk.
Interest and currency risks constitute significant financial risks for the StatoilHydro group. Total exposure is managed at a portfolio level in accordance with approved strategies and mandates on a regular basis. The fair value of financial instruments related to our interest rate swaps, currency swaps and fixed interest non-current liabilities are specified in the table below:
The estimated loss that would be recognised in the Statement of income associated with a 10% adverse change in NOK currency rates would be approximately NOK 10.4 billion and NOK 7.6 billion as of 31 December, 2007 and 2006, respectively. A hypothetical one percentage point adverse change in interest rates would result in a loss, that would be recognised in the income statement, of NOK 2.7 billion and NOK 2.4 billion related to interest-bearing liabilities, investments in debt securities and related financial instruments as of 31 December, 2007 and 2006, respectively. These estimated currency and interest rate sensitivities are based on an uncorrelated loss scenario and actual results could vary due to assumptions used and because offsetting account correlations are not reflected within this analysis. All financial instruments included in the interest and currency rate sensitivity calculation have a linear sensitivity towards changes. Therefore a positive change in the NOK currency rates and interest rates would give a gain that would be recognised in the Statement of income, with the opposite values as the losses calculated for the negative changes.
StatoilHydro's cash flows are largely in US dollars, European euro and Norwegian kroner, but significant amounts are also Swedish kroner, Danish kroner and UK pounds sterling. The currencies in the debt portfolio are managed in connection with our expected future net cash flows per currency. The Group's debt, after considering currency swaps, is mainly in US dollars.