INTRODUCTION

Repsol YPF is an oil, chemical and gas company, carrying out activities in exploration and production, refining, distribution and marketing, chemicals and natural gas and electricity.

The company’s main objective is to create value for the shareholder, whilst providing high quality products and services at competitive and attractive prices for the consumer.

In the period from 1994 to 1998, Repsol showed an annual growth in net profit per share of 10.8%. Average return on capital for the period was 12.3%, and total profit for the shareholder (share revaluation plus dividends) was 18.6% per year.

In 1999, Repsol acquired 97.5% of YPF S.A., a leading company in Argentina and one of the largest in Latin America. YPF is engaged in exploration, production, refining and marketing, and petrochemical activities.

Following the acquisition of YPF, the new company has reserves of approximately 4.2 billion barrels of oil equivalent, and produces 1,004,000 boepd, with a refining capacity of 1.2 million boepd. Repsol YPF ranks between the seventh and eighth largest integrated oil companies in the world.

Repsol YPF strategy is constructed on four basic guidelines which have been fortified by the acquisition of YPF. These are: maintaining and strengthening the company’s leading position on the home markets in Spain and Argentina; growth in exploration and production by developing new discoveries and acquisitions, giving priority to natural gas reserves for the Spanish market; progress in its international expansion (focusing on Latin America), and the consolidation of an integrated gas-electricity chain.