Today, June 18^th 1999, Repsol filed at the Comisi�n Nacional del Mercado de Valores (Madrid Stock Exchange) an Annex to the Prospectus already filed on June 10^th last.

The information included in this Annex reflects the conversations held lately between Repsol and the Argentine government regarding competition issues and a possible requirement by the latter to sell certain YPF assets if Repsol�s current tender offer for the control of YPF were successful.

This document states that the Argentine Minister of Economy and Public Works and Services has presented Repsol, S.A. a request which the latter has formally accepted.

The terms of this requirement are as follows:

• Natural Gas. A series of contracts supplying natural gas to third parties, representing approximately 15% of the gas sold jointly on the Argentine market by YPF and Repsol, should not be renewed.

• Fuel. A crude oil refining capacity equivalent to 4% of the overall refining market in Argentina at December 31^st, 1998, should be divested by transfer to a third party or parties. A number of service stations altogether accounting for total Eg3 sales of gasoline and gas-oil in 1998 (around 10% of the Argentine market) should be transferred to a third party or parties. In both cases, these divestments should be completed within eighteen months.

• Electricity. The participation in power generation, except in the case of projects already undertaken or in study, and auto-generation for the Group�s own consumption should not be increased until the aforementioned contracts for the supply of natural gas to third parties have expired or been transferred. This commitment will be binding for a period of eighteen months.

• LPG. The clause forbidding re-importation used by YPF in its LPG export contracts should be suppressed within a maximum time limit of eighteen months. LPG retail sales to the Argentine market should be reduced by 4% over a period of three years, whilst the company promises to pass on through selling prices the benefits of the economies of scale resulting from the market share set for this transition period, on the basis of reasonable profitability.

By accepting this request, Repsol understands that these divestment obligations are for the purpose of avoiding the higher market shares that would result from the acquisition of YPF, in view of the controlling stakes already held by Repsol in oil companies in Argentina.

The obligations subscribed do not refer to future market share situations which may result from internal growth through investment and competitive efficiency.

Repsol considers that the above listed commitments fall within their reasonable expectations. Repsol has, at all times, expressed to the Argentine Government and public opinion its willingness to avoid taking up dominant market positions viewed as undesirable. Indeed, the company had already stated its readiness to divest assets which might lead to such a situation.