Repsol activities in: Argentina Bolivia Brazil

Peru 2007

At 31 December 2007, Repsol YPF held mineral rights over 8 blocks in Peru: 6 exploration blocks, with a net area of 30,610 km2 and 2 development blocks with a net area of 202 km2. Net hydrocarbon production in Peru was 2.5 Mbep (an average of 6,864 bepd), from block 88 in the Camisea oil field. Net production of crude was 1.2 Mbbl, including condensed liquids and liquids and 7.1 bscf of natural gas. Proven net reserves of crude and gas were estimated at 107.1 Mbep at 31 December 2007.

• An important exploratory discovery was made in January 2008 in Peru's block 57 with the Kinteroni X1 exploratory well. Repsol is the consortium operator and will operate the Kinteroni X1 field; it holds a stake of 53.84%, following the proportional acquisition of the share held by Burlington. Petrobras also holds a 46.16% stake. Block 57 is located in the Ucayali-Madre de Dios Basin in Peru's central jungle, 50 km from the Camisea gas and condensed liquid field (10% Repsol YPF). Initial production tests have registered volumes of flow of 1 million cubic metres of gas per day (0.365 bcm/year) and 198 cubic metres per day of associated liquid hydrocarbons (72,270 cubic metres/year).  

In order to establish an operation and development plan for the Kinteroni X1 discovery, a 3D seismic campaign will be undertaken on Kinteroni's structure and several delineation and exploratory wells will be drilled in the block. All of these steps will allow more precise assessment of the resources discovered to be carried out. They have been preliminarily estimated at around 2 TCF (56 bcm).

• In block 39, with a total area of 8,868 km2 and where Repsol YPF is the operator with a 55% stake, work continued in 2007 in the development programme's conceptual phase for the resources discovered in the block, analysing the different technical alternatives available for the production and assessment of heavy crude. This study will be complemented by the results from the “appraisal” wells that are scheduled to be drilled in 2008, once the corresponding environmental permits have been granted. A 2D seismic campaign of around 1,000 km was also prepared in 2007 and will begin in the first half of 2008.

An important exploratory discovery was made in block 39 with the Raya survey in August 2006. A discovery was also made in this block with the Buenavista survey in 2005. At December 2007, the results obtained in the Delfin survey were being assessed.

Refining

LPG

The Chilean and Peruvian markets are entirely liberalised. The distribution of bottled LPG is undertaken via distributors (both exclusive and otherwise), who them resell the product to points of sale.

LNG

The integrated liquified natural gas project, one of the largest projects in the 2008-2012 Strategic Plan, is being developed in Peru. This is a key aspect of the company's growth and it advanced positively in 2007.

The production of blocks 56 and 88 will provide the natural gas supply to the plant. The development of the Cashiriari field in block 88, where the San Martin oil field is already in production, also began and work in block 56 continued as planned. Repsol YPF holds a 10% stake in these blocks (Camisea oil field).

This agreement also included the acquisition by Repsol YPF of a 10% stake in Transportadora de Gas del Perú S.A. (TGP), the company that transports natural gas from Camisea through the gas pipeline to Lima.

On 22 December 2006 the Final Investment Decision (FID) was taken on the integrated LNG Peru LNG project, and on 22 January 2007 Perú LNG issued the corresponding “Notice to Proceed”, with which the awarding of this construction was formalised. The EPC contract (Engineering, Procurement and Construction) was awarded to CB&I, and the permits for the plant's construction were received. Said construction has progressed as per schedule in 2007. Entry into operation is estimated for 2010. The construction permits for the pipeline were received in mid-2007, the contract to purchase pipes was awarded in March and the construction permit in October. The work progressed in line with the initial plan.

In August 2007, Marubeni entered the Perú LNG project with its purchase of a 10% stake in the Korean company SK. The different shareholdings in the project are thus as follows: 50% Hunt Oil, 20% SK, 20% Repsol YPF and 10% Marubeni.

Also, in December 2007 the project's finance agreements were finalised.

The project also includes the exclusive marketing by Repsol YPF of all of the liquefaction plant's production (forecast at more than 4.5 million tonnes per year). The gas purchase agreement signed with Perú LNG will last for 18 years from the entry into commercial operation and, in terms of volume, is the largest LNG acquisition made by Repsol YPF in its history.

It is expected that the plant will be operative in 2010, and that it will begin to supply different markets on the American Pacific coast, Asian countries and Mexico.

In September 2007, Repsol YPF won the international public tendering organised by the Federal Electricity Commission for the supply of LNG to the natural gas terminal in the port of Manzanillo on the Mexican Pacific coast.

The contract, with an estimated value of 15,000 million dollars, covers the supply of LNG to the Mexican plant for a period of 15 years and for a volume in excess of 67 bcm, a figure equivalent to more than double the annual consumption in Spain. The Manzanillo plant, which will supply gas to the FEC's electricity plans in Mexico's central western area, will be supplied with the gas from Perú LNG.