Repsol activities in: Argentina Bolivia Brazil

LPG

Repsol YPF is the largest producer of LPG in Argentina. Repsol YPF Gas commercialises bottled LPG in the retail market and non-bottled for the domestic, commercial and industrial market, with a market share of 32.8%. 

The market was liberalised until May of 2005, although actors had been reaching Stabilised Price Agreements with the Administration for butane since 2002. From that date, the new LPG Law established that the Energy Department would set wholesale prices for butane and propane on a quarterly basis, and would recommend maximum price for sales to the public of bottled products for domestic use. The distribution of bottled LPG is undertaken via 100% distributors, which then resell the product to points of sale.

Natural Gas

Through Gas Natural SDG, Repsol YPF participates in the distribution of natural gas in Argentina, Colombia, Brazil and Mexico to a total of a 5.1 million customers at 31 December 2007. The group is also involved in the distribution of natural gas in six of Latin America's most important cities: Mexico DF, Monterrey, Santafe de Bogota, Buenos Aires, Rio de Janeiro and Sao Paulo. In general, the prices paid by end consumers are regulated. A market of "qualified" industrial clients also exists in Argentina and Mexico where they can select their supplier freely once they reach a certain minimum level of consumption.

In Argentina, Repsol YPF is involved in the distribution of gas in the north of Buenos Aires, where the company has approximately 1.4 million customers, through Gas Natural BAN. The involvement of YPF in Metrogas, which distributes in the south of the city, has, consolidated, comparatively speaking, since 2002.

Bolivia 2007

At 31 December 2007, Repsol YPF held mineral rights over 32 blocks in Bolivia: 7 exploration blocks, with a net area of 9,153 km and 25 exploitation blocks with a net area of 2,194 km2 located in the Beni, Pie de Monte, Subandino Sur and Subandino Norte Basins.

The year's net production was 6.5 Mbbl of petroleum, including condensed liquids and liquids separated from natural gas, and 127.2 bscf of natural gas, with an equivalent total net production of 29.2 Mbep (80,005 bepd), primarily from the fields operated by Andina and from the Mamore Block.

Proven hydrocarbon reserves corresponding to Repsol YPF were of 82.5 MBep at 31 December 2007.

In June 2006, Argentina and Bolivia (Enarsa and YPFB) signed a 20 year agreement under which Bolivia will increase its supplies to Argentina from the current maximum of 7.7 million m3/day to 27.7 million m3/day. This increased supply will be made possible thanks to the construction of the GNEA gas pipeline, which will transport 20 million m3/day.

The exploratory survey Huacaya x-1 was completed in 2007 and gave a positive result.

• The Operating Contracts signed on 28 October 2006 as a result of the new Hydrocarbons Law (3058) and the Supreme Nationalisation Decree (28,701), were approved by the National Congress in April 2007 and, on 2 May, the Protocolisation Acts were signed in the presence of the Government Notary, with which said law became effective. From this moment on, considerable changes have occurred in the management of the company, as:

The tables for utility distribution between YPFB and the Holder, a basic requirement for distributing part of the utility to YPFB, came into effect from 31 August 2007, when the "SURTAX" tax was repealed.

• In October 2007 the “estimated” Development Plans for each of the current Operating Contracts were presented in accordance with each of the contracts' stipulations. The Development Plans are the set of activities that the Holder must present to schedule the efficient exploitation of all existing reserves in the Contract Area. This creates a long term commitment that will be reflected in the delivery agreements. It is important to highlight the “estimated” nature of each of the plans, as certain basic conditions remain to be fulfilled before the contract Holder is fully able to take on the investment commitment; this situation has yet to come to fruition and, thus, the investments presented in the documents are not firm investment commitments but rather estimates of the potential development for each contract area.

• In December 2007 gas was discovered in the Huacaya X-1 exploratory well, located in the northern area of the Caipipendi Block in which the Margarita Field is also to be found. The production tests showed flow volumes around 800,000 square metres of gas per day. Repsol YPF is the consortium operator with a share of 37.5%. The other shareholders include British Gas with 37.5% and Panamerican Energy with 25%. Following 18 months of drilling and an investment of almost 60 million dollars, the Huacaya X-1 well reached a final depth of 4,800 metres.

• In December 2007 the Final Conciliation Acts on Operational Contract Appendices G were signed. Said Appendices assign the amounts for Accumulated Investment and Depreciation from the beginning of the Contract Area's operations to the Effective Date of the Operational Contracts, in order to incorporate the Recoverable Costs' net balances. When the OCs were signed, they included preliminary Investment and Depreciation figures, which were to be conciliated by the Parties, who committed to revise “the indicated amounts in good faith bearing in mind the results of the audit that is currently being undertaken” (in reference to the audits being carried out under the Nationalisation SD.

LPG