Two circumstances had a most unfavourable effect for the company during this period: a fall in chemical margins, with a 3.6 times lower income than for the period in 1995, and the strength of the peseta, which negatively affected refining and marketing, exploration and chemical activities.

However, performance was, in turn, specially favoured by two factors. Brent crude oil prices rose considerably, reaching an average of $18.62 per barrel as opposed to $16.91 per barrel for the first quarter of 1995, and international refining margins were higher than last year.

First quarter highlights for Repsol by areas of activity may be resumed as follows:-

In Exploration and Production, operating income fell by 16.4% to 4,338 million pesetas, mostly as a result of lower production (-6.1%) and the end of gas production from the Gaviota field.

A contract was signed with Total and Sonatrach to develop and exploit a giant gas and condensate field, Tin Fouy� Tabankort, in Algeria. This transaction will raise Repsol's net recoverable reserves by 124 million barrels of oil equivalent. Total investment for the development of this field from 1996 to 2000 is estimated at 880 million dollars, and will be shared between the field's three partners in proportion to their stake (Repsol 30%, Sonatrach 35%, Total 35%). On the other hand, production started up at Harding field in the North Sea, in which Repsol holds a 25% stake, and where total production is expected to reach 60,000 bpd by the end of 1996.

Operating income from Refining and Marketing rose by 23.3% to 20,249 million pesetas in comparison to 16,421 million pesetas for the first quarter a year earlier. This increase was due to the better refining margins already mentioned, higher productivity and greater logistics activity, and this was achieved despite a negative influence on sales margins from the strength of the peseta against the DM and the effect of the price war being waged in the United Kingdom on fixing price ceilings for Spain.

Chemicals registered an operating income of 5,564 million pesetas in contrast to the 20,122 million pesetas for the first three months of 1995, mainly because of lower margins on plastics for the period, in which they dropped to an all-time low. However, gross margins on main plastics showed a gradual improvement over the quarter. Here, too, the higher peseta/DM exchange rate had a negative effect on revenues.

Operating income for the gas activity rose by 16.2% with respect to the same period of last year, reaching 23,229 million pesetas. There was improvement in income for LPG (4.9%) and natural gas (26.9%). Low temperatures in February and March favoured the consumption of fuels for heating and this had a beneficial effect on all markets. Demand for LPG rose by 5.2% against the quarterly figures for last year. In natural gas, the residential-commercial sector registered a 20.9% growth.

Overall investments for the three-month period were 48,765 million pesetas in comparison to 34,220 million pesetas in 1995. This expenditure mostly focused on refining and marketing and gas. In the former, investment was basically to strengthen the service station network and develop current projects for gasoil desulphurisation units at La Coru�a and Puertollano. In the latter, outlay was mainly for transmission infrastructure, the improvement of the distribution grid and the development of new markets.

The Annual General Shareholders' Meeting will take place on June 7th, 1996, at the Palacio Municipal de Congresos and will be officially announced shortly. At this Meeting, information will be given on the 1995 financial year and a total gross dividend of 171 pesetas per share will be proposed for approval. This represents a 22% increase on the previous year's dividend.

REPSOL SUMMARISED INCOME STATEMENTS

REPSOL COMPARATIVE BALANCE SHEET

REPSOL SUMMARISED INCOME STATEMENTS

  (Million pesetas)

- NON AUDITED FIGURES -

* Includes financial results, Goodwill amortization and Equity on earnings of unconsolidated affiliates

______________________________
$ = 124,110 pesetas in 1996
$ = 126,300 pesetas in 1995

REPSOL COMPARATIVE BALANCE SHEET

(Million pesetas)

- NON AUDITED FIGURES-