GAZ.L Regulatory News (GAZ)

Gazprom Neft Group

Condensed Interim Consolidated Financial Statements (unaudited)

As of and for the three and six months ended 30 June 2020

with Report on Review

Gazprom Neft Group

Condensed Interim Consolidated Financial Statements (unaudited)

As of and for the three and six months ended 30 June 2020

with Report on Review

Contents

Report on Review of Condensed Interim Consolidated Financial Statements.......................................... i

Condensed Interim Consolidated Financial Statements

Condensed Interim Consolidated Statement of Financial Position........................................................... 1

Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income.. …. 2

Condensed Interim Consolidated Statement of Changes in Equity......................................................... 3

Condensed Interim Consolidated Statement of Cash Flows.................................................................... 4

Notes to the Condensed Interim Consolidated Financial Statements

1. General.............................................................................................................................................. 5

2. Summary of significant accounting policies...................................................................................... 5

3. Cash and cash equivalents................................................................................................................ 8

4. Trade and other receivables.............................................................................................................. 8

5. Inventories.......................................................................................................................................... 8

6. Other taxes receivable....................................................................................................................... 8

7. Other current assets.......................................................................................................................... 9

8. Property, plant and equipment........................................................................................................... 9

9. Right-of-use assets.......................................................................................................................... 11

10. Investments in associates and joint ventures.................................................................................. 12

11. Long-term financial assets............................................................................................................... 14

12. Other non-current assets................................................................................................................. 14

13. Short-term debt and current portion of long-term debt.................................................................... 14

14. Trade and other payables................................................................................................................ 14

15. Other current liabilities..................................................................................................................... 15

16. Other taxes payable......................................................................................................................... 16

17. Long-term debt................................................................................................................................. 17

18. Lease liabilities................................................................................................................................. 19

19. Other non-current financial liabilities................................................................................................ 19

20. Other non-current liabilities.............................................................................................................. 19

21. Net foreign exchange gain / (loss)................................................................................................... 20

22. Finance expense.............................................................................................................................. 20

23. Fair value measurement.................................................................................................................. 21

24. Commitments and contingencies.................................................................................................... 21

25. Related party transactions............................................................................................................... 23

26. Segment information....................................................................................................................... 27

Report on Review

1. General

Description of business

PJSC Gazprom Neft (the "Company") and its subsidiaries (together referred to as the "Group") is a vertically integrated oil company operating in the Russian Federation, the CIS and internationally. The Group's principal activities include exploration, production and development of crude oil and gas, production of refined petroleum products and distribution and marketing operations through its retail outlets.

The Company was incorporated in 1995 and is domiciled in the Russian Federation. The Company is a public joint-stock company and was set up in accordance with Russian regulations. PJSC Gazprom, the Group's parent, owns 95.7% of the shares in the Company. The Russian Federation is the ultimate controlling party.

2. Summary of significant accounting policies

Basis of preparation

The Group maintains its books and records in accordance with accounting and taxation principles and practices mandated by legislation in the countries in which it operates (primarily the Russian Federation). The accompanying Condensed Interim Consolidated Financial Statements were primarily derived from the Group's statutory books and records with adjustments and reclassifications made to present them in accordance with International Financial Reporting Standards ("IFRS").

The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Accounting Standard IAS 34 Interim Financial Reporting.

The Group does not disclose information which would substantially duplicate the disclosures contained in its audited Consolidated Financial Statements as of and for the year ended 31 December 2019, such as significant accounting policies, estimates and judgements, financial risk disclosures or disclosures of financial line items, which have not changed significantly in amount or composition. These Condensed Interim Consolidated Financial Statements should be read in conjunction with the Group's Consolidated Financial Statements for 2019 prepared in accordance with IFRS.

However, the spread of the coronavirus pandemic (COVID-19) and the preventive measures which led to decrease in the economic activity of market participants in the first half of 2020, as well as significant volatility in the currency, stock and commodity markets since March 2020 (including weakening of the ruble (RUB) against the US dollar (USD) and EURO (EUR)), the decrease in oil prices and its subsequent partial recovery), and the obligations to reduce oil production in accordance with OPEC+ agreement since May 2020, have impacted the accounting estimates which are used by the Group in the Condensed Interim Consolidated Financial Statements preparation and bear the risk of significant adjustments to the carrying amounts of assets and liabilities. The information on the effect of these macroeconomic factors on the estimates with the greatest impact on the amounts reflected in these Condensed Interim Consolidated Financial Statements is provided below.

Impairment of non-current assets

Due to indications of possible impairment in the first quarter of 2020, the Group conducted impairment testing as of 31 March 2020 for oil and gas assets located outside the Russian Federation, the valuation of which is most affected by changes in macroeconomic parameters that are not offset by a decrease in the ruble exchange rate (note 8). There was no changes in these valuations for the three months ended 30 June 2020. The macroeconomic factors mentioned above were taken into account when preparing business plans (models), which are the main source of information for measuring the value in use of non-current assets, including when preparing forecasts of oil production volumes, oil price dynamics, as well as when determining the discount rate.

Estimation of oil and gas reserves

The estimation of proved reserves of oil and gas is used to calculate depreciation, depletion and amortization of oil and gas assets. In addition, the assessment of proved oil and gas reserves is used to calculate future cash flows, which are one of the main indicators of whether an asset is impaired. Oil and gas reserves are estimated based on certain assumptions of the Group, including the economic profitability of production, which is affected by the dynamics of oil prices and future capital and operating expenses. The macroeconomic factors mentioned above may lead to a downward revision of the reserves estimate.

These macroeconomic factors also affected the fair value of financial assets and financial liabilities that are carried at fair value or amortised cost (note 23).

Subsequent events occurring after 30 June 2020 were evaluated through 19 August 2020, the date these Condensed Interim Consolidated Financial Statements were authorised for issue.

The results for the three and six months ended 30 June 2020 are not necessarily indicative of the results expected for the full year.

The Group as a whole is not subject to significant seasonal fluctuations.

Changes in significant accounting policies

Significant accounting policies, judgements and estimates applied while preparing these Condensed Interim Consolidated Financial Statements are consistent with those applied during the preparation of the Consolidated Financial Statements as of and for the year ended 31 December 2019.

Application of new IFRS

The following amendments to the existing standards which became effective did not have any material impact on the Group:

· Amendments to the Conceptual Framework for Financial Reporting (issued in March 2018 and effective for annual periods beginning on or after 1 January 2020);

· Definition of a Business − Amendments to IFRS 3 (issued in October 2018 and effective for annual periods beginning on or after 1 January 2020);

· Definition of Material − Amendments to IAS 1 and IAS 8 (issued in October 2018 and effective for annual periods beginning on or after 1 January 2020);

· Interest Rate Benchmark Reform − Amendments to IFRS 9, IAS 39 and IFRS 7 (issued in September 2019 and effective for annual periods beginning on or after 1 January 2020).

New accounting standards

The following new standards and amendments to the existing standards are not expected to have any material impact on the Group when adopted:

· COVID-19-Related Rent Concessions − Amendments to IFRS 16 (issued in May 2020 and effective for annual periods beginning on or after 1 June 2020);

· IFRS 17 − Insurance Contracts (issued on 18 May 2017 and amended in June 2020, effective for annual periods beginning on or after 1 January 2023);

· Classification of Liabilities as Current or Non-Current − Amendments to IAS 1 (issued in January 2020 and amended in July 2020, effective for annual periods beginning on or after January 2023);

· Onerous Contracts − Cost of Fulfilling a Contract − Amendments to IAS 37 (issued in May 2020 and effective for annual periods beginning on or after 1 January 2022);

· Property, Plant and Equipment: Proceeds before Intended Use − Amendments to IAS 16 (issued in May 2020 and effective for annual periods beginning on or after 1 January 2022);

· Updating References to the Conceptual Framework − Amendments to IFRS 3 (issued in May 2020 and effective for annual periods beginning on or after 1 January 2022);

· Annual Improvements to IFRS Standards 2018-2020 Cycle (issued in May 2020 and effective for annual periods beginning on or after 1 January 2022):

· Fees in the '10 per cent' Test for Derecognition of Financial Liabilities − Amendments to IFRS 9;

· Lease Incentives (Amendment to Illustrative Example 13 accompanying IFRS 16);

· Subsidiary as a First-time Adopter − Amendment to IFRS 1;

· Taxation in Fair Value Measurements − Amendment to IAS 41.

3. Cash and cash equivalents

Cash and cash equivalents as of 30 June 2020 and 31 December 2019 comprise the following:

4. Trade and other receivables

Trade and other receivables as of 30 June 2020 and 31 December 2019 comprise the following:

5. Inventories

Inventories as of 30 June 2020 and 31 December 2019 comprise of the following:

Other inventories are primarily comprised of work in progress, some of which relates to a single production cycle with a period of more than 12 months.

6. Other taxes receivable

Other taxes receivable as of 30 June 2020 and 31 December 2019 comprise the following:

7. Other current assets

Other current assets as of 30 June 2020 and 31 December 2019 comprise the following:

8. Property, plant and equipment

Movements in property, plant and equipment for the six months ended 30 June 2020 and 2019 are as follows:

Capitalised borrowing costs for the six months ended 30 June 2020 include interest expense in the amount of RUB 14.9 billion and exchange losses arising from currency borrowing in the amount of RUB 1.4 billion (RUB 13.4 billion and 0.5 RUB billion for the six months ended 30 June 2019 accordingly).

As of 31 March 2020 the Group identified indicators of impairment in relation to upstream oil and gas assets in foreign regions and performed the impairment test for such assets (no impairment were recognised as of 31 December 2019). There was no changes in these valuations for the three months ended 30 June 2020. The impairment loss is included in Depreciation, depletion and amortisation line item in the Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income. In assessing the possible impairment, the carrying amount is compared with the estimated value in use.

The value in use is determined as the discounted net cash flows based on the forecasts of oil prices and production quantities based on reserve report and confirmed long-term strategic plans. The forecasting period for determining the value in use is in line with the management assumptions for long-term planning and does not exceed the useful life of assets different from goodwill and included in the CGUs.

Key assumptions applied to the calculation of value in use:

· The discount rate calculation is based on the Company's weighted average cost of capital adjusted for asset specific risks (9.36% per annum in real terms, no change compared to 2019);

· Oil prices are based on the available forecasts from globally recognized research institutions such as Wood Mackenzie, Platts/PIRA, Energy Group and Energy Aspects;

· Estimated production volumes were based on detailed data for the fields and the field development plans approved by management through the long-term planning process were taken into account.

9. Right-of-use assets

Movements in right-of-use assets for the six months ended 30 June 2020 and 2019 are as follows:

10. Investments in associates and joint ventures

The carrying values of the investments in associates and joint ventures as of 30 June 2020 and 31 December 2019 are summarised below:

The principal place of business of the most significant joint ventures and associates disclosed above is the Russian Federation.

Arcticgas

JSC Arctic Gas Company (Arcticgas) is developing oil and gas condensate fields located in the Yamalo-Nenets Autonomous Area of the Russian Federation. The control over Arcticgas is divided equally between the Group and PJSC NOVATEK.

Slavneft

PJSC NGK Slavneft and its subsidiaries (Slavneft) are engaged in exploration, production and development of crude oil and gas and production of refined petroleum products in the Russian Federation. The control over Slavneft is divided equally between the Group and PJSC NK Rosneft.

Northgas

CJSC Northgas (Northgas) is engaged in development of the Severo-Urengoyskoye natural gas field. The Group's investment in Northgas is held through Gazprom Resource Northgas LLC which is controlled by the Group and owns a 50% share in Northgas. The control over Northgas is divided equally between the Group and PJSC NOVATEK.

Messoyakha

JSC Messoyakhaneftegas (Messoyakha) is developing the Vostochno-Messoyakhskoye and Zapadno-Messoyakhskoye oil and gas condensate fields. The control over Messoyakha is divided equally between the Group and PJSC NK Rosneft.

The summarised financial information for the significant associates and joint ventures as of 30 June 2020 and 31 December 2019 and for the three and six months ended 30 June 2020 and 2019 is presented in the tables below.

Others

The aggregate carrying amount of all individually immaterial associates and joint ventures as well as the Group's share of those associates' and joint ventures' profit or loss and other comprehensive income are not significant for both reporting dates and periods.

11. Long-term financial assets

Long-term financial assets as of 30 June 2020 and 31 December 2019 comprise the following:

12. Other non-current assets

Other non-current assets are primarily comprised of advances provided on capital expenditures (RUB 45.2 billion and RUB 44.9 billion as of 30 June 2020 and 31 December 2019, respectively).

13. Short-term debt and current portion of long-term debt

As of 30 June 2020 and 31 December 2019 the Group has short-term debt and current portion of long-term debt outstanding as follows:

14. Trade and other payables

Trade and other payables as of 30 June 2020 and 31 December 2019 comprise the following:

Other accounts payable are partly represented by the short-term part of a liability to PJSC Gazprom for assets related to the Prirazlomnoye project.

15. Other current liabilities

Other current liabilities as of 30 June 2020 and 31 December 2019 comprise the following:

16. Other taxes payable

Other taxes payable as of 30 June 2020 and 31 December 2019 comprise the following:

Tax expenses other than income tax expense for the three and six months ended 30 June 2020 and 2019 comprise the following:

17. Long-term debt

As of 30 June 2020 and 31 December 2019 the Group has long-term outstanding debt as follows:

Bank loans

In September 2018 the Group borrowed RUB 10.0 billion under long-term facility agreement with Alfa-Bank due payable in September 2023. In February 2020 the Group performed pre-scheduled final principal repayment in the total amount of RUB 10.0 billion.

In February 2019 the Group performed pre-scheduled final principal repayment in the total amount of USD 249.1 million (RUB 16.4 billion) under the Club term loan facility with the syndicate of international banks (facility agent - Mizuho).

In July 2012 the Group signed an ECA-covered term loan facility with the group of international banks (facility agent HSBC) with a final maturity date in December 2022. In June 2019 and December 2019 the Group performed a partial principal repayment in the total amount of EUR 25.8 million (RUB 1.8 billion) according to the payment schedule. In June 2020 the Group performed a partial principal repayment in the total amount of EUR 12.9 million (RUB 1.0 billion) according to the payment schedule.

In the first half 2015 the Group signed several long-term facility agreements with one of the Russian banks with maturity date in August 2019. In February and April 2019 the Group performed pre-scheduled principal repayment in the total amount of USD 202.4 million (RUB 13.3 billion) and USD 496.0 million (RUB 31.9 billion) respectively. The loan is fully repaid as of 31 December 2019.

In December 2018 the Group borrowed RUB 30.0 billion and in January 2019 RUB 20.0 billion under a long-term facility agreement with one of the Russian banks. In December 2019 the Group performed a pre-scheduled final repayment in the total amount.

In February 2019 the Group borrowed EUR 400.0 million (RUB 29.9 billion) under a long-term facility agreement due payable in February 2024. In July 2019 the Group performed pre-scheduled final repayment in to total amount.

In July 2019 the Group borrowed EUR 200.0 million (RUB 14.4 billion) under a long-term facility agreement. In February 2020 the Group borrowed EUR 150.0 million (RUB 10.3 billion) under a long-term facility agreement. The long-term facility agreement is due payable in February 2025.

In September 2019 the Group borrowed RUB 5.0 billion under a long-term facility agreement due payable in September 2024.

In December 2019 the Group borrowed RUB 10.0 billion under a long-term facility agreement due payable in December 2022. In February 2020 the Group performed pre-scheduled final principal repayment in the total amount of RUB 10.0 billion.

In December 2019 the Group borrowed RUB 15.0 billion under long-term facility agreement due payable in December 2024.

In December 2019 the Group borrowed RUB 30.0 billion under a long-term facility agreement with one of the Russian banks due payable in December 2022.

In June-July 2018 the Group signed several long-term facility agreements. In September, November and December 2019 the Group performed pre-scheduled partial principal repayment in the total amount of RUB 70.0 billion. The long-term facility agreements are due payable in August - December 2026.

The loan agreements contain financial covenant that limits the Group's ratio of "Consolidated financial indebtedness to Consolidated EBITDA". The Group is in compliance with all covenants as of 30 June 2020 and 31 December 2019 and during the six months ended 30 June 2020.

Bonds

In June 2016 the Group placed Ruble bonds (BO-03 series) with the total par value of RUB 10.0 billion. In June 2019 the bond holders exercised the put option on Ruble bonds (BO-03 series) with the 100% par value in amount of RUB 8.8 billion.

In November 2019 the Group placed five-year Ruble bonds (003P-01R series) with the total par value of RUB 25.0 billion. The bonds bear interest of 6.85% per annum. The issue has a two-year call option, allowing the early redemption of the bonds at the Group's decision.

In December 2019 the Group placed ten-year Ruble bonds (003P-02R series) with the total par value of RUB 20.0 billion. The bonds bear interest of 7.15% per annum.

In February 2020 the Group placed five-year Ruble bonds (003P-03R series) with the total par value of RUB 10.0 billion. The bonds bear interest of 6.20% per annum.

18. Lease liabilities

Reconciliations between undiscounted lease liabilities and their present value as of 30 June 2020 and 31 December 2019 are presented in the tables below:

From lease liabilities the Group has excluded expenses related to variable lease payments and payments under short-term lease contracts in the amount of RUB 9.1 billion for the six months ended 30 June 2020 (RUB 7.9 billion for the six months ended 30 June 2019). The cash outflow from such contracts does not differ significantly from the amount of expenses.

Total cash outflow for leases equals RUB 8.4 billion for the six months ended 30 June 2020 and does not include variable lease payments, payments under short-term contracts and payments for non-lease component (RUB 7.0 billion for the six months ended 30 June 2019).

19. Other non-current financial liabilities

Other non-current financial liabilities as of 30 June 2020 and 31 December 2019 comprise the following:

Deferred consideration represents a liability to PJSC Gazprom for assets relating to the Prirazlomnoye project. Payments of the principal amount of the liability are presented as financing activities in the Repayment of long-term borrowings line in the Condensed Interim Consolidated Statement of Cash Flows.

20. Other non-current liabilities

Other non-current liabilities are primarily comprised of advances received (RUB 86.7 billion and RUB 48.0 billion as of 30 June 2020 and 31 December 2019, respectively).

21. Net foreign exchange gain / (loss)

The net foreign exchange gain / (loss) for the three and six months ended 30 June 2020 and 2019 comprises the following:

22. Finance expense

Finance expense for the three and six months ended 30 June 2020 and 2019 comprises the following:

Interest expense includes expenses on lease liabilities in the amount of RUB 2.1 billion and RUB 3.6 billion for the three and six months ended 30 June 2020, respectively (RUB 1.4 billion and RUB 2.8 billion for the three and six months ended 30 June 2019, respectively).

23. Fair value measurement

The following assets and liabilities are measured at fair value in the Condensed Interim Consolidated Financial Statements: derivative financial instruments, equity investments and the Stock Appreciation Rights plan (SAR). Derivative financial instruments and SARs refer to Level 2 of the fair value measurement hierarchy, i.e. their fair value is determined on the basis of inputs that are observable for the asset or liability either directly (as prices) or indirectly (derived from prices). Equity investments are represented by unlisted equity securities and refer to Level 3 of the fair value measurement hierarchy. The Group determines the fair value of unlisted equity securities considering different scenarios of future capital distributions for such investments. There were no significant changes in fair values for the reporting period. There were no transfers between the levels of the fair value hierarchy during the six months ended 30 June 2020 and 2019. There are no significant assets or liabilities measured at fair value categorised within Level 1 or Level 3 of the fair value hierarchy. The fair value of the foreign exchange contracts is determined by using forward exchange rates at the reporting date with the resulting value discounted back to present value.

As of 30 June 2020 the fair value of bonds and loan participation notes is RUB 410.1 billion (RUB 371.4 billion as of 31 December 2019). The fair value is derived from quotations in the active market from an external source of financial information and is related to Level 1 of the fair value hierarchy. The carrying value of other financial assets and liabilities measured at amortised cost approximates their fair value. The fair values were calculated based on cash flows discounted using the current lending rate. They are classified as Level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

24. Commitments and contingencies

Taxes

Russian tax and customs legislation is subject to frequent changes and varying interpretations. The management's treatment of such legislation as applied to the transactions and activities of the Group, including calculation of taxes payable to federal, regional and municipal budgets, may be challenged by the relevant authorities. The Russian tax authorities may take a more assertive position in their treatment of legislation and assessments, and there is a risk that transactions and activities that have not been challenged in the past may be challenged later. As a result, additional taxes, penalties and interest may be accrued. Generally, taxpayers are subject to tax audits for a period of three calendar years immediately preceding the year in which the decision to carry out a tax audit was taken. Under certain circumstances tax audits may cover longer periods. For the individual entities of the Group the field tax audit with regard to the years 2015-2018 is being performed now, the years 2018-2019 are currently open for tax audit. The management believes it has adequately provided for any probable additional tax accruals that might arise from these tax audits.

Russian transfer pricing legislation is generally aligned with the international transfer pricing principles developed by the Organisation for Economic Cooperation and Development (OECD), although it has specific features. This legislation provides for the possibility of additional tax assessments for controlled transactions (transactions between related parties and certain transactions between unrelated parties) if such transactions are not on an arm's-length basis.

Compliance of the prices of the Group's controllable transactions with related parties with the transfer pricing rules is subject to regular internal control. The management believes that the transfer pricing documentation that the Group has prepared to confirm its compliance with the transfer pricing rules provides sufficient evidence to support the Group's tax positions and related tax returns. In addition in order to mitigate potential risks, the Group regularly negotiates approaches to defining prices used for tax purposes for major controllable transactions with tax authorities in advance. Twenty-two pricing agreements between the Group and tax authorities regarding major intercompany transactions were concluded in 2012-2019.

As Russian tax legislation does not provide definitive guidance in certain areas, the Group adopts, from time to time, interpretations of such uncertain areas that reduce the overall tax rate of the Group. While the management currently estimates that the tax positions and interpretations that it has taken can probably be sustained, there is a possible risk that an outflow of resources will be required should such tax positions and interpretations be challenged by the tax authorities. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the Group.

Economic environment in the Russian Federation

The Group operates primarily in the Russian Federation and is therefore exposed to risks related to the state of the economy and financial markets of the Russian Federation. The Russian economy is significantly affected by world oil and gas prices; therefore, a significant prolonged decline in oil prices has a negative impact on the Russian economy. The Russian economy was growing in 2017-2019, after overcoming the economic recession of 2015 and 2016. The development of the coronavirus pandemic (COVID-19) in 2020 and the measures taken in this regard to prevent the spread of coronavirus infection led, among other factors, to a sharp decline in oil prices and the weakening of the Russian ruble. The situation in the financial markets remains unstable. This operating environment has a significant impact on the Group's operations and financial position.

The management is taking necessary measures to ensure sustainability of the Group's operations. However, the future effects of the current economic situation are difficult to predict and the management's current expectations and estimates could differ from actual results.

In 2014 the U.S., the EU and certain other countries imposed sanctions on the Russian energy sector that partially apply to the Group. The information on the main restrictions related to the sanctions was disclosed in the Consolidated Financial Statements as of and for the year ended 31 December 2014. In August 2018 the U.S. signed an act to impose further sanctions against the Russian Federation. The Group assessed that the new sanctions do not have a significant impact on its activity.

Environmental matters

The enforcement of environmental regulation in the Russian Federation is evolving and the enforcement posture of government authorities is continually being reconsidered. The Group periodically evaluates its potential obligations under environmental regulation. The management is of the opinion that the Group has met the government's requirements concerning environmental matters, and therefore the Group does not have any material environmental liabilities.

Capital commitments

As of 30 June 2020 the Group has entered into contracts to purchase property, plant and equipment for RUB 683.6 billion (RUB 523.4 billion as of 31 December 2019).

25. Related party transactions

For the purpose of these Condensed Interim Consolidated Financial Statements parties are considered to be related if one party has the ability to control or jointly control the other party or exercise significant influence over the other party in making financial and operational decisions as defined by IAS 24 Related Party Disclosures. Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties.

The Group enters into transactions with related parties based on market or regulated prices. Short-term and long-term loans provided as well as debt are based on market conditions available for not related entities.

The Group has applied the exemption as allowed by IAS 24 Related Party Disclosures not to disclose all government-related transactions, as the parent of the Company is effectively being a government controlled entity. In the course of its ordinary business the Group enters into transactions with natural monopolies, transportation companies and other government-related entities. Such purchases and sales are individually insignificant and are generally entered into on market or regulated prices. Transactions with the state also include taxes which are detailed in notes 6 and 16.

The tables below summarise transactions in the ordinary course of business with either the parent company or the parent's subsidiaries and associates or associates and joint ventures of the Group.

As of 30 June 2020 and 31 December 2019 the outstanding balances with related parties were as follows:

During the three and six months ended 30 June 2020 and 2019 the following transactions occurred with related parties: