Alfonso Cortina, Repsol YPF Chairman and CEO, assisted by the other Members of the Repsol YPF Executive Committee, today presented the company�s five-year strategic plan.

The Chairman started the presentation by outlining the company�s track record in value creation. Shareholder earnings, as the sum of share revaluation and dividends, rose 21.3% per annum over the past five years, giving a higher accumulated revaluation for the last five years than the average for the top six oil companies in the world.

Looking to the future, Alfonso Cortina declared, "we intend to be one of the major integrated world oil companies and a leading company in all our core areas".

In order to carry out the strategic plan, Repsol YPF will invest 23,100 million Euros during the period 2001-2005. The breakdown of investments by business areas is as follows: 41.5% to Exploration & Production, 28.7% to Gas & Power, 20.2% to Refining & Marketing, 4.6% to Chemicals and the remaining 5.1% to the Corporation and other areas. By geographical areas, approximately 11,000 million Euros will be invested in Latin America, approximately 8,400 in Spain and the remainder in other countries.

The Chairman and CEO finalized his presentation by pointing out the main strategic commitments of the Company for the year 2005, which are summarized in the following four fundamental aspects: to reduce debt levels to 30-35%; to achieve a minimum Return on Capital Employed (ROCE) of 15%; to obtain an annual gain of 7.8% in oil and gas production, reaching in 2005 a production of 1,350,000 barrels of oil equivalent per day; as well as obtaining at least a 10% annual increase in the dividend.

In the presentation, each of the Executive Vice Presidents analysed in detail the activities and strategies in place for each of the company�s business areas. These are some of the highlights:

The strategy for Exploration and Production targets increased production in coming years, whilst maintaining the current low operating costs and high reserves replacement rate. To this end, the company will concentrate operations in core areas and projects where it has a competitive edge.

The final objective is to increase this business area�s income and profitability in a diversified manner, not only on a short and medium term, but beyond the year 2005.

One of the main strategic goals is to take advantage of its competitive edge in the countries and geological areas where it operates. This leadership is evident in Argentina, North Africa and some Latin American countries, such as Bolivia, Venezuela and Ecuador. Thus, for example, Repsol YPF is the private company owning the most gas reserves in Latin America. Current total reserves (proved, possible and probable) amount to 991 billion cubic metres, equivalent to 50 times annual natural gas consumption in Spain.

In Gas & Power, the strategy addresses growth in all links of the gas chain, leadership in the LNG business in the Atlantic area, and maximum revenues in Spain. To this end, the Gas Natural SDG affiliate will be converted into a multi-utility, selling not only natural gas, but also power and other services.

Repsol YPF�s strength in this business lies in its solid position and long experience in the LNG area, which has permitted the Company to build up an excellent customer list and extensive marketing experience. At the same time, Repsol YPF has access to markets of greater future growth, is a leader in strategic projects generating high added-value and is the only short-term supplier in the Atlantic area, where it represents around a fourth of the traffic, controlling 40% of the world spot market.

The presence of Repsol YPF in Atlantic LNG in Trinidad & Tobago gives the Company a strategic position to supply and trade in the higher growth markets in the Atlantic area, the United States and the Caribbean.

Another strong point of the strategy lies in growth in Latin America, where Repsol YPF has a strong position in gas reserves and a high integration in the gas chain, from production to markets, being the leading company in the distribution of gas in the area, where it is present in the largest population centres.

In Europe the Company is a leader in gas, with an excellent customer list and extensive marketing experience. For example, in 2000, Gas Natural SDG increased its customer list by 695,000 only in Spain. These factors will permit Repsol YPF to take advantages of the opportunity presented by power market liberalization in the development of a "multi-utility" strategy.

With respect to power production, the Company has a strong head start in carrying out the Spanish program for power generation from natural gas. The first projects for combined cycle power plants, those of San Roque in C�diz and Sant Adri� de Bes�s in Barcelona, with a total capacity of 800 MW, are planned to start up at the beginning of 2002.

In Refining & Marketing, efforts will be channelled to maintain the efficiency of the past, keeping up cost excellence and know-how, and exporting this to other countries in which the company has R&M operations.

The company�s strong track record in refining and marketing position rests on the strategic location of its refineries in Spain and Latin America, allowing the company to supply markets efficiently. In marketing, we hold a majority presence in Spain and Argentina, with market shares of over 40% in both countries. This allows to take advantage of economies of scale.

In LPG, Repsol YPF is the largest operator in Spain and in the Latin American countries in which it conducts this business. In 2000, the Repsol YPF LPG business ranked third in the world in terms of sales.

The core objective in Chemicals is concentrating activity in core geographical and business areas where it has a competitive edge, and ongoing cost leadership as a result of integrating the chemical business with natural gas production and refining.

As one of the most relevant aspects of chemical assets, apart from the aforementioned integration, mention should be made of the company�s cutting edge technology in the joint production of propylene oxide and styrene (there are only two other companies possessing this technology), as well as special rubbers and plastics for agriculture all over the world.

In addition to the strategic analysis of each business area, the CFO gave a review of the company�s financial situation, and the Corporate Vice Chairman explained the purpose of the new Repsol YPF corporate structure, and the efforts and achievements being made in cost saving. The highlights of these presentations are as follows:

The company retains its ongoing conservative financial policy, in place for several years. The YPF acquisition was a necessary exception in this policy, but efforts are continuing to recover financial flexibility. Indeed, the debt leverage has fallen continuously from 73% in June 1999 to 49.9% at the close of the first quarter 2001. A basic item contributing to additional debt reduction is the partial divestment already announced of CLH and ENAGAS.

The new structure of Repsol YPF, approved at the end of 2000, is synonymous of a new management system. The creation of a Corporate Vice Chairmanship to coordinate all corporate responsibilities on a world-wide level and country managers in the countries where we operate is a relevant aspect of this.

This new management system, currently being introduced, is designed to make the company more agile and efficient, changing the organization and reinforcing management responsibility and control. Ongoing cost saving measures are instrumental in reaching this goal. Since the YPF integration, cost savings have already been made for 515 million euros per annum. In addition, the company has set a new target to achieve additional yearly savings of 600 million euros by 2005.