LATIN AMERICA

Repsol YPF�s activities in Brazil are carried out in 7 offshore exploration areas and in 1 offshore development area. In the Repsol YPF-operated exploration area BES-3, and having completed the study and seismic data gathering stages, the first wildcat is scheduled for the second semester of 2000.

A production test is scheduled for the fourth quarter of 2000 in Carauna, the development area.

With over 160 million inhabitants, Brazil is an important market, since it has a lower per capita power consumption than Argentina or Chile. In addition, it lacks hydrocarbons, becoming a very important potential consumer.

These features and the existing gas reserves in Argentina and Bolivia create favorable conditions for the development of the natural gas market, with sales to Brazil and Chile, from Bolivia and Argentina. There are gas pipelines already in operation, as well as in the design and construction stages which are indicative of a market entering an important growth stage.