Alejandro Plaza Mayor - Director of IR Miguel Martínez San Martín - COO and Member of Business Committee

Mark Hume - Credit Suisse First Boston Irene Himona - Exane BNP Paribas Dave Thomas - Citigroup Smith Barney Paul Spedding - HSBC Alastair Syme - Merrill Lynch Barry MacCarthy - ABN AMRO Theepan Jothilingam - Morgan Stanley Michele Della Vigna - Goldman Sachs Iain Reid - UBS Sergio Torres - Bear, Stearns Neil Morton - MF Global

Hello and welcome to today's Repsol YPF Third Quarter 2007 Preliminary Results Call. Today I am very pleased to present Mr. Alejandro Plaza. For the first part of this call, all participants will be in listen-only mode, and afterwards there'll be a question-and-answer session. Alejandro Plaza, please begin. Alejandro Plaza Mayor - Director of Investor Relations: Thank you. Good day ladies and gentlemen. This is Alejandro Plaza, Director of Investor Relations in Repsol YPF. On behalf of our company, I would like to thank you for taking the time to attend this conference of Repsol YPF's third quarter 2007 results, which as you are aware, were published today at the opening of the Madrid Stock Market, and may be accessed through our website, repsolypf.com. The conference will be conducted by Mr. Miguel Martinez, COO of Repsol YPF. I also wish to inform you that both the speech and the following Q&A session are being recorded for the replay service, which will be available on our website for the next six months. We have scheduled this conference to last approximately one hour. Miguel will focus on explaining our earnings performance in the quarter on listen-only mode. This will be followed by a question-and-answer session in which we will try to respond to any questions you may wish to put. Before we start, I invite you to read our disclaimer note shown in the presentation we have prepared. We may make forward-looking statements, which are identified by the use of words such as will, expect, and similar phrases. Actual results may differ materially depending on a number of factors as indicated on the slide. I am now handing over to Mr. Martinez. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thank you, Alejandro and good day to all of you. This quarter our earnings have been the product of the following variables. We have been exposed just like all the rest of our European competitors through the strengthening of the euro versus the US dollar to weaker refining margins, particularly in July, higher inflationary cost rates in the industry and lower gas realization prices, partially compensated by higher oil prices. Before commenting on third quarter results, allow me to refer to certain major events that have been taking place during this quarter. First, during the quarter, we've taken the final investment decision for the Bilbao refinery where we are building a new coker unit. As you know, our strategy is addressed towards the optimization of value and high return investments. Under this criteria, we're maximizing the return from our assets in downstream, particularly in the Iberian Peninsula. As we announced back in November 2005, we're investing heavily on expanding and increasing combustion of our refineries in Spain. Thanks to the upgrades of our Spanish refineries Cartagena and Bilbao, plus the Sines Petrochemical plant in Portugal, the future growth in this business is assured. We'll gain flexibility in connection with treatment of heavy oil, and we expect to improve our margins once the new compressor is in place by the end of this decade. Second, moving into upstream, three major issues. The Carioca discovery in Brazil, the commercialization of the I/R field in Libya and the start up of production in Genghis Khan. All this allows us to advance towards our goal of organic growth focusing our core areas. The company's intensive exploration efforts are starting to show results. Beginning with Brazil, we've just made a discovery with Petrobras in the Carioca field in deepwaters. It's still a bit early to give you the size of the field’s potential, but all seems to indicate that it could be of the same magnitude as Albacora Leste. The difference here is that our stake is 25% instead of the 10% in the later. Additionally, we also have an interest in attending the main round that will take place in the next few weeks. In North Africa, Libya and Algeria the exploration success of recent years is turning into sustainable organic growth. In this quarter, we obtained commercialization approval for the I/R fields in Libya. In the Gulf of Mexico, Genghis Khan has already started production, and we expect to reach 50,000 barrels of oil equivalent per day by the end of the decade just with current developments. We are pacing ahead with exploration activities in the areas where we are present already and we continue bidding on the new rounds. As you all know, in the latest round, early October, we got the high bids in 18 blocks, some of which are very promising such as the Angostura with Chevron or the Black Pearl with Marathon. Turning now to Ecuador and the recent developments that are taking place in this country where there has been a change in the windfall tax from 50% through 99%, Repsol is following its goal of efficient management of its portfolio. I would like to emphasize that results from Ecuador are not that material for our company. Both our production and profits in this country amount to less than 1%. Therefore, under this new scenario, we'll maintain our investments only if our returns are adequate and the value of our assets is warranted. In this regard, if we cannot readdress the situation through bilateral agreements with the Ecuadorian government, then we will be obligated to defend our shareholders’ interest by taking an appropriate stance. Third, and moving into LNG, two main issues; the supply contract signed with Mexico and Gassi Touil. In our strategy, this business is a relevant growth area. Our aim is to have an integrated position in the LNG chain maximizing our competitive advantage in marketing through our JV with Gas Nat Coldstream with the least possible exposure to the capital-intensive liquefaction business. In relation to this point and before I comment on the latest news, I'd like to mention that Gas Natural presented two days ago its strategy for the next five years based on higher investments addressed to improve its returns by organic and sustainable growth. In this sense, Repsol YPF can enhance the value of its stake through the maximization of Gas Natural growth and giving possibilities that the company faces for the next years. Let me continue by commenting on Peru LNG. We are making good progress in this project. As you all know, in December, we took the FID for the construction of the plant and in September we announced the signature of an agreement with Mexico to supply 4.5 BCMs per annum for a period of 15 years through the regasification plant in Montevideo. This gas will come from our Peru project that will start operations in 2010. By signing this contract, we have secured the sale of 75% of the uptake of gas from Comision, which warranties returns and leaves 25% of the gas to be used in the spot markets, Chile, Far East. On Gassi Touil, as you all know, last August, Sonatrach unilaterally decided to break the contract. During the last three years, we have made our best efforts by presenting solutions that could make the project profitable and viable. And the new scenario of higher cost impacts us. These solutions have worked for others aiming to develop there projects, but not for us. Consequently, we will claim before all international courts and tribunals compensation for the recession of the contract as well as financial compensation for damages arising from our exclusion from the project without receiving any settlement. Fourth, with regard to the divestment of a stake of YPF, the delay in closing the deal was due to the crisis, the disheartening conditions and access to capital markets. Having said this, we expect that during the next two quarters, we will be able to reduce our stake in YPF to 55%, since the detail of the sale to the potential new shareholder are all closed and we are already working in preparing all the recommendation for the IPO. Fifth, in line with the point mentioned above of optimizing our assets, during the third quarter, we are taking a step forward through the divestments of the corporate head office in Madrid and the service station network in Chile. Both divestments have positive effects on our results. Starting with the sale of the building in Madrid for €815 million, we have included in our accounts €211 million in capital gains, realizing on the sale of the land in which the tower is based. The gain... I'm saying… it’s the building, will be booked once transfer of property risk is completed at the beginning of 2009. The other optimization of assets that has been the divestment of the services station network in Chile for $210 million to a Colombian company, Terpel. The rationale behind the operation is the lack of integration with our refining business in Argentina, since domestic demand in the latter absorbs all of the supply. We believe that these assets can provide more asset value to others instead of us and we will book profits in the fourth quarter. Finally, and before commenting this third quarter results, Repsol YPF announced last week, a gross interim dividend of €0.50 per share to be paid next January. This interim dividend represents a 40% increase over last year's dividend and is in line with our strategy of increasing remuneration to our shareholders aiming to get a payout ratio in the range of 40% to 50%. €0.5 per share represents approximately 40% payout of our first half year results and get us closer to the levels of returns within our industry. Consequently, I believe this is in alignment with the strategy we believe the company must follow focusing on maximizing returns through organic growth in our core business based on the projects we have in our portfolio, optimizing the value of our stake in YPF, enhancing the value of our JV with Gas Nat for the integrated LNG project, and improving shareholder returns while maintaining financial discipline. Let me now review the third quarter results. Operating income for the quarter reached €1.4 billion, while net income at €742 million was down 14.6% year-on-year. These results on adjusted terms are the consequence of an 11% rise in refining and marketing and a 21% rise in G&P, which could not offset the drop in the other businesses. Our physical magnitudes, we have seen an improvement in our downstream business while the upstream and the chemicals were down year-on-year. In upstream, if we exclude the extraordinary effects of Dubai, 20,000 barrel per day, and Bolivia, 28,000 barrels per day, production in this quarter was 3% lower year-on-year. In Argentina, production was down 7%, though part of this fall was due to the problems with the Magallanes pipeline. If we exclude this extraordinary item, then Argentine production would have decreased by 6%. On the other hand, the rest of the world production was 7% higher because of increases in Brazil, Libya, and Trinidad and Tobago. In downstream, crude oil processing increased by 13% outside of Spain, and overall, the quantity processed was 4.2% higher due to the turnarounds of July and August in Spain. Oil products and LPG sales were also 9% higher, while petrochemical sales were affected by lower production of the plants in Argentina as a result of the restriction on natural gas in the Austral winter. Now turning to the economic figures, and I'm starting with E&P results. The following adjusted operating income in the business is explained by five components; basically, U.S. dollar depreciation, rising cost, exit from Dubai and lower volumes and weaker gas prices only compensated by higher liquid realizations. Looking at the graph, we see that variations in prices and volumes and contractual changes diminish adjusted income in the third quarter by €61 million in comparison with third quarter 2006. In addition, the cancellation of activities in Dubai reduced income from operation by €55 million. Also, as you all know, this does not affect net income. The exchange rate as a result of the almost 8% depreciation of the dollar against the Euro in this quarter had an adverse impact of €58 million. The rise in cost throughout the industry and other minor effects were €90 million. In addition, technical amortizations were up €20 million quarter-on-quarter because of the better investments. Turning to downstream, this quarter, our results have been hit by the narrowing of gasoline spreads. The following factors explain the year-on-year adjusted earning variations. Going from reduction to improvements, $0.5 per barrel drop in the refining margin partially compensated by the increased distillation level diminished income from operation by approximately €60 million. Again, the depreciation of dollar against the Euro reduced results by €20 million. On the positive hand, inventory gain amounted €66 million. The positive margin volume mix in marketing activities boosted income by €21 million. And finally, other operating income variations explain the €32 million of other differences. Regarding Chemicals, operating income in this third quarter was below a year ago. This all is explained mainly because of the natural gas restrictions in Argentina that negatively affected our urea and methanol production. These plants have seen their gas availability limited during a good part of the quarter avoiding chemicals production in Argentina to run as usual. Summing up, the various analysis for adjusted operating income in this quarter, the most important factors are, on the positive side, inventory effects that have added €72 million. This could not compensate for the rest of the impacts, commented previously, and which diminished results by €151 million due to the mix of volumes and worse margins, the exchange rate differences for a €78 million, €20 million from high year DD&A charges, €23 million on the back of costs, Dubai that cost €55 million effect, and other minor which represent €85 million year-on-year. With regards to financial results, these have improved year-on-year mainly as a consequence of lower financial charges as average debt has diminished, improved returns on financial investments, a positive impact of mark-to-market of the relative, and exchange rate gains. Following this brief rundown on our performance, I'd like to conclude by looking at our financial structure through the company's financial ratios, which have continue to improve. The net debt-to-total capital employed ratio is now at 14.7% and EBITDA-to-net debt is set at 2.16 times. To conclude this analysis, I would like to mention that the effective tax corporate rate for third quarter 2007 was 43%, above the level a year ago and in line with our projection of 40% for the year. To conclude my speech, I would say that this quarter has shown the improvement in oil price and marketing margins that could not offset the deterioration of refining margins, lower gas realization prices and rising cost that is affecting the industry. Going forward, we're aiming to enhance our returns based on organic growth and reduction of our long-term exposure. Thank you very much for your attention, and we'll now be pleased to answer any question you may wish to ask. Question and Answer

Thank you. We'll now begin our question-and-answer session. [Operator Instructions]. And our first question comes from Mr. Mark Hume of Credit Suisse. Please go ahead. Mark Hume - Credit Suisse First Boston: Hi, good afternoon, Miguel. I was hoping that you might be able to elaborate a little bit on what your planning and thinking is relative to any cash proceeds, which you hopefully can raise through the restructuring process next year? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks, Mark. Well, I'll tell you that our first goal on the topic in which we're really focused is what we call the first step is really to obtain that cash. And for that the first step is the sellout of the 25% of YPF and then the IPO. Regarding the proceeds as a second derivative, I'll have to say that in all our planning we're working specifically and only with organic growth. And I think it's important because there is an enormous difference between what we had in front of us and what we had in 2005 when we presented the strategic plan. Right now, we have in front of us at least 13 projects, all includes with names, and by that I mean the project in Bilbao, the project in Cartagena, the project in Sines, Shenzi, Block 39 in Peru, Regan, Carioca, all these are... can we say kind of… are realities that we didn't have two years ago. So, we basically are working on organic growth, and once we make that first step which we are aiming for, which is the rebalance of our portfolio, reducing the exposure in Latin would be the moment to analyze what we will do. But right now we're totally focused on the selling out of the Argentinean shares and the organic growth in our company. After that, well, Antonio Brufau have always mentioned that one thing for sure is that we will not do any operation that will destroy value for our shareholders. So, it's the only thing I can tell you. We are not going to do stupid things inorganically talking, and once we really obtain the proceeds will be the moment to analyze whether there are options in the market or whether we should return the money to our shareholders. I don't know if I answered you, Mark. Mark Hume - Credit Suisse First Boston: No, no, no, it’s excellent. And just one other thing, have you got any increased visibility on when you hope to undertake the sale process? I mean, I think previously you'd been hoping for some time early in 2008, has anything changed there? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: One factor is clear. I mean all the factors that depend on us, I mean... to agree with our future partner, the shareholders agreement and the SBA, this is already set and we're simply waiting for the banks to finance the transaction. So, it's quite difficult to compromise when the solution is on fair hands, but I'll say that next two quarters are going to be critical. In the other hand, we're working in all the papers regarding the IPO, but as you all know, for us it would be much better to first get the partner in the company and then proceed through the IPO, not the other way around, which would be much more difficult. Mark Hume - Credit Suisse First Boston: Okay. That's great. Thank you.

Our next question comes from Irene Himona of BNP Paribas. Please go ahead. Irene Himona - Exane BNP Paribas: Good afternoon. I was wondering, first of all, if you can give us some guidance on CapEx now that the Gas Natural is excluded. And secondly, could you explain what happened in Q3 with regards to the Resolution 459 in Argentina, the total energy program. What was the impact on the Q3 results and is there any guidance for Q4? Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, first regarding Gas Nat, I mean, your first question was regarding? Irene Himona - Exane BNP Paribas: What was capital expenditure guidance? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay. Irene Himona - Exane BNP Paribas: For the group. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, basically for the group I mean within the year, we’re slightly below last year, and we will end up probably in the area around the €2 billion, okay, and for the next year something below €5 billion. And for the next year, I would say that the focus moves around €5.5 billion. But we will be presenting this in the presentation and we will provide you all the capital expenditure for the next five years, I mean for 2008, 2012. And on that... based on organic growth, we expect to be between €5 billion and €6 billion per year without taking into account Gas Nat, which as you know has increased their investment for the next five years. Okay. And then, regarding the Programa de Energia Total resolution in Argentina, we have to say that it has worked perfectly well and right now the Argentinean authorities are processing all the extra expenditures we have had and we expect to recapture the money they owed us shortly. They are simply analyzing the correction of our billings. Irene Himona - Exane BNP Paribas: Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: You're welcome.

Our next question comes from Mr. Dave Thomas of Citigroup. Please go ahead. Dave Thomas - Citigroup Smith Barney: Yes, good afternoon, Miguel. I've got a couple of questions, please. Firstly, I'm trying to understand the strength of your… or relative strength of your Q3 E&P result. And the question really is around unit cash costs in the quarter, which if I look sequentially seem to have come down substantially from 2Q. I wonder if you could provide some guidance on why that is and what we may expect for the future. And secondly, really the question is around the post Argentine presidential elections, what do you expect to see going forward with regards to upstream gas prices back at the wellhead and also evolutional pump prices in the downstream? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks, Dave. Well, regarding the first question, the evolution of the E&P in comparison with the second quarter, I will have to say that really the figure that shows an important improvement was the Argentine variation, okay. The reason for that and the basic reason for that is that we have increased our realization price in Argentina from $41.9 per barrel to $49 [ph] per barrel. You have to think that our reference… the reference of the groups there is West Texas and West Texas has increased its price quarter-on-quarter by almost $10. We have been able to take without there retention 69% of these increased, so this is about $6.9 per barrel. And in the other hand also, there is a slight improvement in the reduction of the spreads, light and heavy crudes, which also help us a little. So, basically, if you multiply 26 million barrels of liquid we generate in Argentina, for this variance you obtain the improvement in Argentina. Also, we've been helping the EMP area on the fact that the... I mean there has not been in this quarter much increase on the EMP figures. This is due to the fact that also in Argentina, which gives the effect, Argentina, Brazil, and the fact there is that in the second quarter we have the Verna crude process in which the well was dry and we have to charge on the P&L for $25 million, more or less. So, both factors, I would say a slowdown in the exploration cost plus the increase in the Argentinean price has been the reasons for that improvement in the EMP area. Other than also outside Argentina, most of our references are based on West Texas, I think that Venezuela, the liquids we obtained in Trinidad are all… and the rest of Latin all refers to West Texas, which is only liquid that have improved most within this quarter. But I think that the important thing is that whether in other quarters, all the gain we made in upstream and we lost it in the pump, this quarter we've seen improvements at the pump in Argentina. So, if you look, we’re… I mean I think that the good news is that despite being especially in September in the high ‘90s in the price of the barrel, we've been able to [inaudible] (29:25), which refining and marketing in Argentina has been able to sustain a positive result, tiny but positive. And I will say this is… that those are the main factors. Regarding the second question, I think it's way too early to make any judgment. I think that we've to give time to the new government and see how they develop. I also think that we've a transition period, which is going to be important, which is a period between the 28 of October, which was election time, and the 10 of December, which is the date in which the new President will take the position. So, I would like to be prudent on that and wait, but we're basically optimistic about both, the first period and the second, but let's give the new Argentinean Government time to see how they'll operate and develop on the energy sector. Dave Thomas - Citigroup Smith Barney: Okay. Thanks, Miguel. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks Dave.

Our next question come from Mr. Paul Spedding of HSBC. Please go ahead. Paul Spedding - HSBC: Good afternoon, gentlemen. A question on YPF, I mean over the years, YPF has been a pretty serious cash flow for the… cash cow for the group with major contribution to paying Repsol's main dividend and also its capital expenditure. If you're going to sell or do sell 45% of that, then by definition it reduces the cash flow coming to the group after drafting minority dividends and it also by definition will reduce net income unless you can replace it with a similar asset. From what you said, it looks as though the proceeds are going to go into growth assets, i.e., ones that'll need investment rather than generating cash flow. Do you think that may mean that you need to revisit your dividend policy, and could we potentially even see the dividend cut as a result of the disposal? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: At least, our projection doesn't show that. What our projection shows is that keeping our debt level below 27%… 25%, 27% we would be able to pay the dividends we announced and to grow organically. So, cash is basically not our main concern regarding Argentina. In the other hand, you have to think that a lot of this cash, especially in Argentina, is being made through depreciation and this is something that we cannot take out of the country as dividend. So, liquidity, talking for the mother company, does not depend that much on Argentina. Paul Spedding - HSBC: Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay.

Our next question comes from Mr. Alastair Syme of Merrill Lynch. Please go ahead. Alastair Syme - Merrill Lynch: Hello. Hi, Miguel. Just coming back to the point on E&P profits, can you just remind us how the transfer pricing works between E&P and R&M in Argentina, how you've reflected the higher pump prices in the accounts? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay. The Argentina internal price, it's basically the international price multiplied by $0.69. I mean you have a retention to the exports of a 31% of the price, which is the one that determines the internal price in Argentina, okay. And this is the pricing, which E&P transfer to refining and marketing. Within these period and when I was commenting to... I think it was to Dave was that as the West Texas and the crudes increased their prices in $10 per barrel, we only captured a $0.69 from those, because the prices in Argentina are being reduced comparison with international prices by this amount, which is the retention the government applies, 31%. Once we have the product at this price, the refining works is traded into the market, and the problem we face there is that we have been since August 2005 till this quarter with a fixed price of the pump. So, somehow all the gains we made in the upstream… or the losses we made at the upstream level were cancelled by the pump price. So, to say, we have simply costs between the well, the exploration, the production, the refining, the distribution, and the commercialization. We have simply costs, which fights against the price of the pump. This quarter the difference is that the increase in prices have… give us some room and in that sense the gain we have obtained in upstream was not returned to the market. We were able to capture a part of it in the downstream area. I don’t know if--. Alastair Syme - Merrill Lynch: Can I ask if you think in the fourth quarter that oil prices might average, let's say, $90, do you think you can make a profit in the Argentine downstream? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: I would say that if prices keep the level of this quarter, we would be able to keep the figures. Alastair Syme - Merrill Lynch: Okay. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: It's only a perception, but… I mean I think the move in this quarter for us has been really important. And let's see if we are lucky enough to keep that stuck. Alastair Syme - Merrill Lynch: Thank you very much, Miguel. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks, Alastair.

Our next question comes from Mr. Barry MacCarthy of ABN AMRO. Please go ahead. Barry MacCarthy - ABN AMRO: Thank you. Good afternoon. It is also on refining and marketing, just… you've given a breakdown of the changes overall for OR&M from 3Q '06 to 3Q '07, but the move in ABB is particularly substantial from minus 112 in the third quarter last year to plus 6. And I understood your earlier comment that the increase in the light, heavy, and the realizations would have meant higher costs going into the refining system, but… that’s a very substantial improvement in profit. Can you add more detail on how that move actually occurred in terms of the moving parts? Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay. Well, basically the difference is what I have mentioned. I mean this quarter in comparison with the same quarter last year, I think the prices were more or less level. I mean we have had a little increase in prices, but they were more or less level. What is happening is that... I mean, we are not affected… if you look at the price... the price that the refining and marketing takes the product from upstream, then we have all type of costs and then we end up in the pump. We have been able to increase prices for almost a 20% in the comparison quarter-on-quarter. And this is the reason why we have improved enormously in downstream. So, if the prices kept rocketing and we are not able to transfer more prices, what we will have is what we have seen in the last eight quarters, which is transfers from upstream to downstream have not gained at all based on the increase of the crude. In this quarter, for the first time in the last two years, we have been able to gain part of this increase in prices in the upstream. I don't know if it was clear the explanation to you, Barry. Barry MacCarthy - ABN AMRO: It seemed quite clear, but just to clarify, so the retail price at the pump of diesel and gasoline has gone up by 20% quarter-on-quarter? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Yes. Barry MacCarthy - ABN AMRO: Okay. So, is there anything stopping those prices increasing further with the global increases in prices that we are seeing? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, it is difficult to say, but at least the first move has been done and we are there. We will see and now we will have a new government and have the reaction of the different factors in the future, but one thing is for sure, I mean we're importing diesel in Argentina and we are not… almost not exporting gasoline, so… and the country keeps growing. So, I think that the part of international price is difficult to say, which if we will be able to reach that in 2012, 2010, or 2016, but one thing is for sure, there is only one way out and this passes through the increasing prices. Barry MacCarthy - ABN AMRO: I agree, but what was the initial reaction to that 20% jump from the politicians and the consumers? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, I think that the consumers... I mean everyone is perceiving that barrel is at $100 and I think that for sure there has been, especially in the press, comments saying that we are increasing price, but it is difficult to fight against the fact that a barrel was at $50 or $58 at the beginning of the year and right now it’s $100. So, Argentina is now… and especially in this quarter, because this was the crisis, remember that there was a shortage of gas, shortage of electricity, they know that if they want energy at the end of the day, you have to pay it. So, it’s--. Barry MacCarthy - ABN AMRO: Okay. Thank you very much. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: You are welcome.

Our next question comes from Mr. Theepan Jothilingam of Morgan Stanley. Please go ahead. Theepan Jothilingam - Morgan Stanley: Hi, Miguel, just a couple of questions actually, please. Firstly, could you just give us a little bit more color on the progress you're making in the Gulf of Mexico? I was wondering sort of... what sort of contribution you expect from Genghis Khan for Q4, and then perhaps the progress in terms of the development on Shenzi, whether you have an estimate or an update on costs there? And my second question is just on Gas Natural, could you just give us a little bit more color in terms of the what specifically you think can be done to enhance the value of the JV and also if you could just give us an update in terms of your own position on Gas Natural as a sort of investment and a core part of the Repsol Group, please? Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, regarding the first one, I would say... I would have to say that those are our first steps in the Gulf of Mexico, and they're quite modest at the present time. So, right now Genghis Khan is producing something at one point something, 2,000 barrels per day. So, it's not a big issue for anyone, but for us it's quite important because it is a first step. Regarding... you know that we have unitized Genghis Khan with Shenzi. And the development in Shenzi is on track, but there are no any extra or special news regarding that. What we know is that at the end of the day, Shenzi will have to give us above 40,000 barrels per day by 2009. If you add up that to Neptune, which will have to give us something around 10,000 barrels a day is the figure I gave you in the speech, which would be about 50,000 barrels per day in the U.S. Gulf of Mexico by 2009. But I mean there is no... there hasn't been any news regarding Shenzi I believe that I know in the last quarter, although that their work is in progress regarding the development. And regarding Gas Nat, I mean two factors there. First is that operationally talking, Gas Nat for us is critical, critical in the sense that Gas Nat has the ability to gain or demand 2 extra BCMs per year. And 2 extra BCMs that goes straight to the final consumer. This allows us to have a position in the LNG business, which is quite unique because we have to grow 2 BCMs per year and we do not have the same risk as other companies because we end up in the final consumer. All these on top of the advantages that it will be sent to work together, meaning by that cost savings, fleet saving, more arbitrage capabilities with working together, and this is the important factors regarding Gas Nat and the reason why we need operationally Gas Nat. But apart from that, Gas Nat is also a financial investment. And as a financial investment, we mentioned I think it was a year ago or year-and-a-half ago that we saw a lot of potential in Gas Nat. And the truth is that that Gas Nat stake has doubled its value in just 18 months. We keep thinking that Gas Nat stake will go up. The reason for that, well, if you look at the utility sector in Europe, you'll see basically 60 groups and three of them lack of gas. Well, I don't know what the future will be, but Gas Nat is a company that fits perfectly well in all these groups. So, we keep thinking that operationally looking, with Gas Nat... in the other hand that is a financial investment, we see an upside and furthermore in the actual situation to play organically, we don't need the extra cash that the sale of the Gas Nat stake will give us. And it also help us rating… regarding rating because our exposure in Latin is quite big and somehow Gas Nat is a counterbalance to that exposure. I don't know if I have answered your question, Theepan. Theepan Jothilingam - Morgan Stanley: No. That's great, Miguel. Thank you for that. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: You're welcome.

Our next question comes from Mr. Michele Della Vigna of Goldman Sachs. Please go ahead. Michele Della Vigna - Goldman Sachs: Hi, Miguel. I actually wanted to ask two questions. The first one is, on your Bilbao coker and the Cartagena expansion, if you could give us guidance of how much these two projects together will cost and how much it would improve your refining margin per barrel in Spain. Secondly, given how the oil production especially in Argentina has declined this quarter, I wondered if you could guide us on what decline rates you expect in oil and in gas from Argentina in the coming years? Thanks. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Regarding the first question I have to say that the investment in Bilbao represents €752 million is our… the figure we use for our final investment decision. Also, I have to say that we seven month delayed from our original idea based on the difficulties we have faced obtaining the ambience permits, but the project is going to be on tack. I don't have the increment in margins that the Cocker unit will represent, but I can provide you with the combined of the Cocker and the Cartagena... and the Cartagena project, and both factors combined represent an increase or at least our expectation of increase in margins would be something around [inaudible] per barrel. You have to think that the impact in Cartagena is tremendous because Cartagena is a hydroskimming refining system and we are there increasing distillation capabilities and also increasing the conversion for the 220,000 barrels of a refinery that we will have at the end of the picture. So, I'll say it'd be between $2 and $3 per barrels increase in margins, but closer to the $3 per barrel. Regarding the second question and the declined rate, I will have to say two things. First is that we’ve tried to split our figures within Argentina and the rest of the upstream because our fight is not against the declining of Argentina. I mean, we are growing at a good rate outside Argentina, and to fight against the decline it would be… it will fell into a huge value destruction because the country is quite mature and the areas in which we are, are mature. But if you ask me for an expectation outside, this quarter was partially penalized because of the problems we have in the [inaudible] (48:20). And our expectation is that on something between a 3% or a 4% would be the natural decline of Argentina, but this also depends on prices. I mean if prices goes higher, we would be able to book and to put into production more areas that right are not accessible at today’s prices. In this quarter, I think that the... on average because we have been selling basically to the distributors, the decline or the price we had was pretty low in Argentina. So, if we are able to increase the prices we would be able to obtain more results. Regarding liquids, which is the main problem here, the decline this quarter is 6%. I would say that probably a 5%... 4%, 5% would be the natural figure there. Okay? Michele Della Vigna - Goldman Sachs: Thank you very much. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: You are welcome.

Our next question comes from Mr. Iain Reid of UBS. Please go ahead. Iain Reid - UBS: Hi, Miguel. Could I just follow-up on what you just has been talking about in terms of Argentina on the gas side. What price do you think would be required as a kind of incentive for you to offset the decline that you're seeing in terms of gas prices? You’ve obviously had somewhat of a crisis in the winter… in this winter in Argentina due to very low temperatures, and I presume the government, if they also are allowing you to increase pump prices must also have their mind on the availability of gas as well because I believe the import pipeline from Bolivia is also delayed. So, do you see that kind of process freeing up a little bit? And as l say, if you give us indication of the price, the incentive price would cause you to start some investing more seriously that will be interesting. And secondly, on Carioca, you said that you thought that the size of the fuel is about same as Albacora-Leste, and the composite basis, which is about 600 million barrels or so. Could you give us an indication of what's the timing and volumes in terms of production you are thinking of when the thing is on the stream in five or six years’ time or whatever? Thanks very much. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks, Iain. Well, starting with the first question, I mean there is no magic figure, there is a progression there in the figures. I mean we know that the areas in which with an extra dollar we can do more things, with two extra dollars we can do more things, so it's somehow something that correlates. You have to think that, for example, when we wrote-off reserves in 2005, a part of it is gas that is there, it's only that [inaudible] (51:31). The cost for that gas would be around $3 MBtu, $4 MBtu. So, outside of a critical point would be reach the $4 MBtu. At that given momentum, I think that we'll have more opportunities regarding growth in production in Argentina. And regarding Carioca, I mean we still have to delineate the field, but prospectives are pretty good. On there, if everything goes on track, we think that by 2010 we would be able to startup production. Next year, we'll be drilling again in Carioca and the spinout of one of the platforms we have would be there. So, probably next year, we would be able to give you more data regarding the field, but the only data we would have right now are quite positive. So, next year we would be drilling and 2010 would be probably the year in which production will start up. Iain Reid - UBS: And I presume you'll filling on the open acreage there on the license around this coming out? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Yes. And let's see, let's cross the fingers and see what happens, because basically this discovery probably would put more pressure on the area, but yes we'll be there. Iain Reid - UBS: Okay. Thanks very much.

Our next question comes from Mr. Sergio Torres from Bear, Stearns. Please go ahead. Sergio Torres - Bear, Stearns: Gentlemen, good afternoon. I would like to go back in discussing pricing of oil in Argentina. There used to be some agreement between producers and refiners through which the party shared equally the pain when export parity was above $55 per barrel, which equals to about $83 per barrel in the benchmark. I wonder whether such an agreement remains in place and whether the $55 cap still works, or would you be pushing for a higher level? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, basically, I mean it's true that there was somehow a curve that declined from $55 to $65 and then up from $65 to the rest, which... so basically… I mean the curve of retention has slowed down once you reach $55 million and slowed down a little more once we... the market reach the $65 per barrel mark. But in our case this doesn't work. I mean our few years are straight and clean in the sense that we apply between downstream and… between upstream and downstream simply a 31% retention in the market price. So, we take the market price, we apply a 31% discount, and this is a price in, which downstream will start to work with. It is true what you mentioned, but it refers to the that… to the market. Basically, I mean all our protection goes into our system, so it doesn't affect the figures you've in front of you. Sergio Torres - Bear, Stearns: Okay. Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: You're welcome.

Our next question comes from Mr. Janeev Shah [ph] of JPMorgan. Please go ahead. Unidentified Analyst - JPMorgan: Good afternoon, gentlemen. I've got two questions. First is, back in July you talked about full-year exploration expense around about $800 million for this year. Just looking at the three quarters so far, you considerably below. Does that mean we're going to see a large exploration expense in the fourth quarter? And my second question is, if you could give us split of the Argentinean gas price by types of consume, that'd be very helpful. Thanks. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thanks. Regarding the first question, you're right. I mean exploration cost in the fourth quarter will be higher and would be close to the figure we gave you last quarter. The reason for that is that we have at least three exploration works of course in the Gulf of Mexico, which are Stormy Monday, Coruna Al Mar, and Atlas, and this will increase the fourth quarter charges through the P&L account in this line. So, it would be more or less in line, normally part of the costs get concentrated in the fourth quarter. So, yes, regarding the first question. And the second one, the split of the gas between the different parts in this quarter was $0.49 [ph] Mcf for the distributors, industry 326, TNC 101, electricity 125, and downstream 253 with exports at 217. But the problem and the reason why the prices has dropped so significantly is that due to the hard winter, also winter Argentina had suffered, this blip in quantities have… I mean the mix have changed in favor of the distributors, which is the lower price sector. Unidentified Analyst - JPMorgan: Great. And just... sorry, one follow-up question, which is on your the 67 wells that you're planning to drill this year. How many have you drilled so far and how many have been successful? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: 37, and we are somehow slightly behind schedule, but at least what the people in the E&P tells me is that they will end up pretty close Unidentified Analyst - JPMorgan: Great. Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay. Thank you.

Our next question comes from Mr. Neil Morton of MF Global. Please go ahead. Neil Morton - MF Global: Good afternoon. I apologize upfront for laboring the point of high realizations, but if I look at your unit revenue in the upstream from the second quarter to the third quarter, there has actually been a decline in your unit revenue, both in ABB and the investor world despite the higher utilizations, profits going up. So, as Dave Thomas was implying, there has been a very sharp drop in cash costs, both within the ABB and in the rest of the world. Could you perhaps try and explain? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: I don’t have the exact distributed figures. I would also point out that… at least I know three qualitative factors that affect that First one is Bolivia. In the second quarter, Bolivia, we were working till May the way we used to. In this third quarter, we have been a service company, so this is one factor. Second factor is that normally in... I mean in any normal quarter, we used to buy a lot of gas from other Argentinean producers and sell it to the market. In this quarter, the Argentinean authorities kept all the gas from all the producers. So, we were not able to buy and sell gas in which basically we didn’t have any margin, but it affects the figure. And finally, another issue, which I know is there is that the exports for… I mean the sales from Bolivia to Argentine also affects, but through our INR people we'll give you the chart detail. But it's true, the figure also shook me when I saw it. Neil Morton - MF Global: And on ABB, do you have any comment on rest of the world, which also saw a sharp decline in costs? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: No, actually, I don't have any feeling that we have any decline in cost regarding the rest of the world. I mean we have a decline in revenues in ABB, but regarding cost I haven't seen much of a decline. The only thing that could affect there could be Dubai, which is not only out as revenues, but also as costs. But it's the only thing that I can figure it out right now. But we'll double check also this figure and we'll turn back to you if you want, Neil. Neil Morton - MF Global: Okay. Thank you. And just folding on, on Bolivia you mentioned the switchover to service contracts from May. I think you mentioned at the Q2 stage that your Bolivian production was 84,000 barrels a day. Could you just tell us what it was in Q3? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Yes. The exact figures for Bolivia were... I have this quarter production at 59,800 barrels of oil equivalent. And what I don't have in front of me is the second quarter figure. I can give you last year… I mean last year third quarter was 138,000 barrels a day. But I don't have the second quarter figures with me, sorry about that. Neil Morton - MF Global: That's quite all right. Just to confirm that 59,000 is before Andina being deconsolidated... [inaudible] (01:01:50) Andina. Alejandro Plaza - Director of Investor Relations: No. Andina is not yet deconsolidated, accounting-wise. Neil Morton - MF Global: Absolutely, that's what I thought. Could you give us an update on that? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Well, we don't have any news regarding Bolivia, although that they're asking us for development plans for all the fields there. And we are waiting for them to close all the points there right now open, which markets will be the ones that that will be assigned to our production, which would be the proposal to buyout part of Andina, which will be also be the LPG processing which they want to take our position there. So, there hasn't been any movement from the Bolivian authorities or proposal to buy us... the percentage of our shares they want. Furthermore, we don't even know, which this percentage is going to be. So, we will see. But right now, we kept majority there and we consolidate and the reduction in volumes is based to the contract. But realize also that P&L taking no much of it there. Okay? Neil Morton - MF Global: Okay. I leave it there. Thank you very much. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thank you.

Our next question comes from Mr. Tom Goodney [ph] of JPMorgan. Please go ahead?

Hello. Good afternoon, it’s Tom Goodney from JPMorgan. I wonder if you could just give a little bit of color on the full in the Spanish refining and marketing EBITDA? Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Basically, the variance with last year, in refining and marketing there has been on one-hand reduction of margins in refining by €60 million. Also, we've a €20 million due to the exchange rate, I mean dollar versus euro, while downstream... I mean marketing has improved slightly. But no much variance lately, I mean figures right now for October were weak till last week into which margins have returned to $7 per barrel. So, we expect a weak October while in November things are looking pretty good refining tuck-in. In the other hand, we expect also that at these prices, some more difficulties in marketing that we have had in the past because with $100 a barrel I suspect that the pressure will come.

Okay. So, is it the... I mean it looks like quarter-on-quarter the EBITDA in Spain R&M has come down to €162 million. So, that's sort of [inaudible] (01:04:58), what else is there, is there a volume effect? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Let me check that for you for a moment. Sorry, Tom, I don't have the point because basically variance is exactly the same between second and third quarter regarding EBITDA and operating profit.

It's gone down €160 million, but you said the margins have come… the refining margin had an impact of €60 million. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Yes, but--.

It doesn't seems to be enough, just the refining margins. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: No, but also you've there the variance of… the inventory effect. This quarter we have an advantage in comparison with third quarter last year of about €66 million. But in comparison with the prior quarter, we were below about €50. So, if you add both, the decreasing margins in refining plus the inventory affect, which is… I mean is slower in this quarter than it has been in the quarter before, it adds up more of the difference. There is nothing stranger than the margins and the inventory variance.

Okay, sure. Thank you. Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Thank you.

We have no further questions. Would you like to make your closing comments? Miguel Martínez San Martín - Chief Operating Officer, Member of Business Committee: Okay. Since there are no more questions, I think today we've reached almost one hour, which is good. And I hope to hear from you again in the next conference call. Thank you very much, and goodbye.

This concludes our call. Thank you for attending.