Hello, and welcome to the Repsol's Third Quarter 2021 Results Conference Call. Today's conference will be conducted by Mr. Josu Jon Imaz, CEO; and a brief introduction will be given by Mr. Ramón Álvarez-Pedrosa, Head of Investor Relations. I would now like to hand the conference over to Mr. Alvarez-Pedrosa. Sir, you may begin. Ramón Álvarez-Pedrosa: Thank you, operator. Good afternoon, and welcome to Repsol's third quarter 2021 results conference call. Today's call will be hosted by Josu Jon Imaz, our Chief Executive Officer, with other members of the executive team joining us as well. Before we start, I advise you to read our disclaimer carefully. During this presentation, we may make forward-looking statement based on estimate. Actual results may differ materially depending on a number of factors as indicated in the disclaimer. I will now hand the call over to Josu Jon.

Thank you, Ramón, and thank you to everyone joining us today. I hope that all of you are doing well. In today's call, I'd like to cover the following main topics: firstly, the key initiatives of the quarter; secondly, the divisional highlights and financial results; thirdly, our capital allocation priorities in the current higher price scenario, namely our update, ambitions in low carbon and our proposal to increase shareholder remuneration. I finalize with our revised outlook to the end of the year. At the end of this presentation, we will be available to answer your questions. And let me start by reviewing the key messages. In the third quarter, Repsol has delivered an outstanding set of results on cash generation that consolidates our recovery to pre-pandemic levels. This performance has been supported by a positive market environment with all business segments benefiting from a higher demand for energy and petroleum products. In this context, the adjusted net income reach €623 million, is highest level since 2018 and a 19% improvement compared to the same period in 2019. The accumulated result to September was €1.6 billion, 3% below the first nine months of 2019. The underlying cash generation was strong across all businesses with all the three divisions increasing their operating and free cash flow contributions compared to the previous quarter. Cash flow from operations was €1.4 billion in the quarter and €3.4 billion accumulated to September. Actually the working capital movements mainly related to an inventory buildup associated to the higher prices. The operating cash flow was €1.7 billion in the quarter and €4.8 billion to September, a 28% and 6% increase respectively compared to the same periods in 2019. Free cash flow amounted to €0.9 billion in the quarter and €1.9 billion up to September, more than covering investment interest, shareholder remuneration, and the purchase of treasury shares in both periods. Net debts stood at €6.1 billion by the end of the quarter, roughly €250 million reduction compared to June and around €650 million lower than in December. At the operating level, Upstream production was negatively impacted by issues in several assets, including the impact of Hurricane Ida in the Gulf of Mexico. By quarter end these issues have been solved and production has average around 575,000 net barrels per day in October. Longer term, the value-over-volume strategy remains intact, with our focus on operational efficiency, lowering breakevens and the rationalization of our portfolio. In the Industrial division, the performance of the Refining business confirm the inflection point that we anticipated in July. In Chemical, the margins remain strong, partially also from the maximums achieved in the first half of the year. All-in-all, our strong performance year-to-date together with our reinforced financial position and a better commodity price outlook, is allowing us to move into next phase of our capital allocation framework. Earlier this month, we announced increased ambition for the energy transition, accelerating investments in green hydrogen, renewable power generation and in e-mobility, among others. And aligned with this ambition, we increased our intermediate decarbonization targets to 2050. Now, the extra cash we expect to generate in a higher commodity price scenario has opened the possibility to improve the distributions for shareholders. In that sense, the board of directors has agreed to propose to the next Annual General Meeting a 5% increase of the shareholder remuneration to be paid in 2022 to €0.63 per share, and a capital reduction through the redemption of 75 million treasury shares, equivalent to around a 5% of our share capital. Looking now, very briefly to the evolution of the main macro indicators in the court, and starting with oil, Brent crude average around $74, 7% higher quarter-on-quarter and 71% higher than a year ago. In gas, overall prices increased sharply through the quarter. And we have an average $4 per million Btu, 43% higher than in the second quarter, and 100% higher year-over-year. Prices were, let me underline this point, particularly strong in Asia and Europe, multiplying by four or five times their levels in 2020. The refining margin indicator benefited from the better market environment more than doubling compared to the previous quarter. Moving on now to the main divisional highlights, and starting with the Upstream. Production average 530,000 net barrels of oil equivalent per day, this was 6% lower than in the previous quarter and 14% below a year ago. As explained earlier, quarterly volumes were negatively impacted by production shutdowns in the Gulf of Mexico, issues on the Peru LNG plant, delays in Trinidad, and PSC effects due to the high prices of oil and gas. Compared to the first nine months of 2020, the operating cash flow per barrel has increased by 110% since January, above the increase of oil and gas prices. The lower production has been compensated by a higher share of all in our mix and also by the contribution of Libya. Repsol's average gas realization price has increased by 77% in the first nine months of 2021. The recent price escalate has continued in October with some regional references, achieving a soaring to record setting levels. Gas accounts for around 60% to 65% of our production. So this price environment is beneficial for us in both terms. Around 20% of our gas sales are reference to oil, 25% are on fixed contracts, and 30% are exposed to North American spot prices, mainly Henry Hub. The remainder production is mostly linked to other regional sport references. Look to our development activity Yme, in Norway. Yme has started production this week. At plateau, the field is expected to produce 56,000 gross barrels per day. In unconventionals, a second rig in Marcellus and another one in Eagle Ford will start doing operations in November. It's really expected to contribute 10,000 barrels per day of additional production in 2022. In the Gulf of Mexico, we took the final investment decision for the development of Shenzi North, the FIDs of for Akacias in Colombia and Leon-Castile in the Gulf of Mexico are expected, these two FIDs by year end. Moving on now to the Industrial division, starting with Refining. Margins and utilizations benefit from the recovery of demand driven by the progress of vaccination strategies on the end of mobility restrictions. The margin indicator average $3.20, a significant improvement from the $1.5 of the second quarter. And on top of this, the flexibility of our system allow us to generate a $0.5 premium in the CCS margin. The impact of higher energy costs and the increase in the price of CO2 were more than offset by wider product spreads and stronger heavy to light crude differentials. Margins were particularly solid in September, as the strengthening of middle distillate differentials push the indicator to $4.6 per barrel. The utilization of distillation and conversion capacity increased to the highest level since the first quarter of 2020 and pre-pandemic levels driven by the better market dynamics. Activity continued to be prioritized in the plants with the higher margins. The recovery of demand has also allowed to end the temporary layoffs adopted earlier this year in response to weak market conditions. In October, work has started in the [Murcia] plant turnaround of Cartagena refinery that will last 45 days. It will require a total investment of €75 million of which 1/3 will be deployed on energy efficiency initiatives that are going to improve the competitiveness of the refinery from now on. The Chemicals business remain on track, on track means that it's on track to surpass its €1 billion EBITDA guidance for the year. Repsol's petrochemical margin indicator was 4% lower than the second quarter. International margins remain at very healthy levels, partially eroded by the increase in the price of feedstocks. This was aligned with our expectation of a soft landing of margins towards the end of the year. After quarter end, Repsol signed an agreement with the Portuguese government for the expansion of Sines that includes tax incentives of up to €63 million. Finally, let me highlight that the result of Industrial segment was negatively impacted in the quarter by a mark-to-market adjustment in the wholesale and gas trading business. Let me explain that because this adjustment corresponds to an accounting mismatch between devaluation of physical and financial positions from gas transactions. We expect that this adjustment will be offset in the operating result in the coming months after the physical transactions materialize. The negative impact in Industrial segment was partially offset at group level by a positive consolidation adjustment in the corporate and others line also due to this gas position. Moving now to the Commercial and Renewables division, starting with Mobility. Sales in our Service Stations in Spain increased well through the quarter and were on average 10% lower than in the same quarter in 2019. In Renewables, we continue developing, assembling and putting of product pipeline. In the US we are making progression of Jicarilla solar project. In Spain, the Valdesolar photovoltaic project starts to generate electricity in July and is now fully operational. In Chile, our JV completed the construction of Cabo Leones III, our first wind farm in the country and secured long term project finance. We also started the construction of the Atacama Wind Project. Lastly, after a quarter end, Repsol also awarded 138 megawatts of new wind capacity in Spain in the recent renewable auction held last week. Let me now review briefly the financial results. The group's adjusted net income was €623 million, which compares to €7 million in the same period a year ago. By division, the adjusted net income of the Upstream was €385 million, €334 million higher year-on-year, mostly due to higher realization prices, partially offset by lower production. In Industrial, the adjusted net income was €100 million, €167 million higher than a year ago, mostly driven by Chemicals and Refining. The result in Commercial and Renewables was €169 million, in line with the same period of 2020. Better results in Mobility and other segments were partially offset by the LPG business due to the regulated price formula. And you know that in case of an increase in commodity prices has a gap activity to be translated to this price formula. In corporate and others, the adjusted net income was €31 million negative, a €115 million improvement over the same period a year ago. The result was positively impacted by higher results from treasury stock positions and the consolidation adjustment previously discussed associated to cash positions. The group's EBITDA CCS grew to €1.8 billion in the quarter, 112% percent higher year-on-year and accumulated €4.7 billion generated in the first nine months of the year. At this point, I want to elaborate on the allocation of the extra cash that we expect to generate, thanks to the positive evolution of the main macro indicators. Our 2021 to 2025 self-finance strategy plan includes a clear capital allocation policy for the extra cash generated in scenarios of higher commodity prices, compared to our strategic price deck that, as you know, was set at $50 Brent and $2.50 Henry Hub. In the first place, we will invest in profitable growth opportunities within our portfolio, basically in the development of the new low carbon platforms, accelerating our plans or increasing our ambitions. Aligned with this, we have increased our planned renewables CapEx in 2021 by € 0.3 billion and the total low carbon investment between 2021 and 2025 by €1 billion. With that, the share of low carbon CapEx until 2025 increases from 30% to 35% and its worth, capital employed is now expected to reach a figure close to 45% by 2030, above the 40% expected in the plan. In the second place we improved the distribution for shareholders, always searching for the most valuable choice for them. Our delivery in 2021 [indiscernible] at least in the short term opens this possibility. Therefore, our board of directors has agreed to propose to the next Annual General Meeting an increase in the shareholder remuneration of 2022 and a capital reduction through the redemption of treasury shares. At a constant rate, the cash dividend to be paid in 2022 will amount to €0.63 per share, of course, 5% above the commitment set in our strategic plan, and we will redeem 75 million shares launching in November a program to purchase 35 million shares with the rest coming from our treasury stock position. Today, with just two months to go to complete 2021, we expect that the cash flow from operations is going to be at least €1 billion above our budget. 1/3 of this extra cash has been allocated, one third more or less to each of the following areas. In case of our renewal CapEx, mainly the entrance in the US market; improved shareholder remuneration; building a treasury share position that will be available to redeem the 75 million shares, once approved in the AGM; reinforce, finally our balance sheet and financial flexibility reducing our net debt as part of our current financial policy and keeping the gearing below the average forecast in our strategic plan. Before moving to our guidance, I will briefly review our update ambitions into the energy transition that were thoroughly discussed in our recent low-carbon based health, earlier this month of October. The renewable hydrogen, will increase our capacity objective by 40% in 2025 to 550 megawatts equivalent and by 60% in 2030 to 1.9 gigawatts. In renewable generation, we have accelerated our capacity ambition by 15% in 2025, to 6 gigawatts and by 60% 2030 to 20 gigawatts. Finally in the customer centric business, we reinforce in Mobility offering with the installation of more than 1000 public points of recharge in Spain and Portugal by 2022. The plan is a fast - will have a fast charger every 50 kilometers in Spain, laboring on the sites we already have. Moreover, our enhanced ambitions in low carbon together with a favorable regulatory environment and technological breakthrough, allow us to increase our intermediate decarbonization targets in 2050. The carbon intensity indicator reduction targets increase from 12% to 15% in 2025 from 25% to 28% in 2030 and from 50% to 55% in 2040. At this point I want to take you through our update outlook to the end of the year. Full year production is expected to average around 580,000 net barrels per day, a 3% reduction compared to the previous guidance due to longer operational issues already solved. In the time, we expect to beat our previous guidance of $2 per barrel average margin indicator in 2021. The indicator has averaged $4.5 in October, and we expect it to remain above $4 during the rest of the quarter. The expected EBITDA CCS now stands at € 6.7 billion, a €0.6 billion increase compared to previous estimate and 65% above 2020. And net debt is expected to close 2021 at around €6 billion less than one time EBITDA. To wrap up, Repsol has delivered a remarkable third quarter performance aligned with pre-pandemic levels. Our results in the first nine months together with unimproved commodity outlook have allowed us to accelerate investment in low carbon and increase the remuneration for our shareholders, maintaining at the same time a financial discipline. In the long term, the new opportunity generated here, the support of favorable climate policies and a better environment have encouraged us to increase our ambitions towards the energy transition. Going forward, we will maintain our focus and force on the delivery of our commitments and strategic plan, transforming our operations and business to become more efficient and competitive. Digitalization and technology and new ways of working will be key enablers of our transition allowing us winners to remain leaders of our sector in a pathway to net zero emissions in 2015. With that, I will hand the call back to Ramon who will lead us through a question-and-answer session. Thank you. Ramón Álvarez-Pedrosa: Thank you very much, Josu Jon. Before moving onto Q&A session I'd like the operator to remind us of the process to ask a question. Please go ahead, operator.

[Operator Instructions] Ramón Álvarez-Pedrosa: Thank you, operator. Let me now move to the Q&A session. Our first question comes from Biraj Borkhataria at RBC.

Hi, thanks for taking my question. The first one, I just wanted to clarify on the buyback front. So you have 75 million shares, some of which are already in hand. I was just wondering why you don't cancel the shares as and when you buy them. What's the rationale for keeping some as treasury because it maybe - would be simpler to just announce the buyback that equates to what you're actually buying in the market? And then the second questions on 2022 CapEx guidance, should we assume a sort of modest increase from 2021 levels? And if so, how much and maybe if there is an increase, can you talk about where the incremental CapEx is going and outside of renewable, is it higher activity in the in the US onshore or anywhere else? Thank you.

Thank you, Biraj. I mean, first of all, the proposal of our board approved yesterday, it's clear, it's defined, is the redemption or the cancellation of the 75 million shares. That is more or less a figure close to 5% of the number of shares of the total capital of Repsol. But legally this redemption, this cancellation has to be approved by the AGM this spring. So, our board is going to present this proposal to the AGM this spring to be approved. Going to your point about the CapEx in the in the Upstream, I think that in 2023 we are going to recover in some way. Let me say, a more normal or average the CapEx level in the company and also in the E&P. It's true that some things or some part of the CapEx is out - went away forever. For instance, they did the exploratory effort we have in the past, because you know that we are going to invest at around $100 million to $150 million per year in the exploration, mainly focusing in our main production areas where we have a clear competitive advantages, where we have facilities, where we have active capacity to monetize these resources in the short term and so on. But we are in some way in the process to go back to the normal. In this sense, it seems to me that in the Upstream, we are going to invest in CapEx terms more or less $600 million more in 2022 comparing with what is going to be the CapEx level in 2021. The main drivers of this increase of the CapEx are going to be, of course, they could well do now, and we are going to develop in 2021 unconventional where we have two rigs in the Marcellus and we have a two, three rigs already now - two rigs in the Eagle Ford and we are going to increase with our third rig in the Eagle Ford. As I said, in July, this the first rig is going to have 10,000 barrels per day more or less in every case, Eagle Ford and in the Marcellus and the second one is going to add more or less at around 5000 to 6000 barrels per day in every of these assets. On top of that we are taking FID, so we approved in the case of Buckskin a new well, this summer we took the we approved the FID of Shenzi North part. On top of that project this first quarter, we are going to see new FIDs at Leon-Castile in the Gulf of Mexico, the CPO-9 is going to come the first quarter of 2022. On top of that, and in 2022, we are going to come with the FID of the Pikka project in Alaska and then also we are looking now to enter a rig in the Greater Edson area in Canada taking advantages of the current gas price situation in the area, so, all that is going to have a clear effect in production terms. I know and I understand that production has been a concern for the market. And in some moments, I mean market thought that we have an under investment in the E&P production. I mean, let me underline again, that unfortunately this year we have suffered some one shot effects, the 25 barrels per day we have lost our - this quarter the Peru LNG that or due to Peru LNG that [indiscernible] has been soft and now is working in a normal way. The 30,000 barrels per day we have lost over the whole year due to the decline of BPTT and unfortunately after the startup that process of Matapal has been recovering in 10 barrels,12 barrels per day, more or less is in operation since this week. We are going to see a ramp up in coming weeks, months but we are going to achieve a bigger 50,000 barrels per day more or less growth over 2022. And remember that we have a 55% of the stake of this asset. So, all-in-all, we are quite comfortable about the guidance we have in the strategic plan for 2022. It's true that, we are not going to recover some barrels. The first one, the barrels that went because of the divestment process in the campaign in Russia, what is going to appear from Malaysia and TTF, all that is going to reduce. Company will still maintain the number of barrels in that figure that could be close to more or less 30,000 barrels, 35,000 barrels per day. On top of that we lost due to higher prices 12 barrels, 15 barrels per day due to your PSC contracts. I mean, all-in-all, today we are comfortable with a production level at around 605,000 barrels per day for the whole 2022 period. That fits with the figure we have in the strategic plan taking into account the new prices, the PSC effect, and the effect of the divestment. So no concern about the production level of the company, because we are recovering the figures we had before. And I don't know if I missed something, Biraj? No, okay, thank you very much.

Thank you. Ramón Álvarez-Pedrosa: Thank you very much, Biraj. Next question comes from Oswald Clint at Bernstein.

Oswald, are you there?

Okay, can you hear me?

Yes.

Okay, sorry, I'm sorry. So thank you very much. Fantastic color there on the Upstream. Thank you. Just finally, could you talk about, things like the Camisea gas field in Peru. Obviously, some potential issues coming up there, obviously tricky to call. But any discussions you're having there with the government around that field, as it might affect Peru, but also unplanned maintenance? You've talked about it there today. But I mean, do you think you have this under control again, for 2022, so that we don't see this unplanned maintenance popping up again next year? And then secondly, could I ask, you talked about LPGs and some of the margin being like, but could you also talk about lubricants and specialties? I think your feedstock is putting a bit of margin pressure here in the quarter when do we see that starting to normalize for you please? Thank you.

Well, thank you Oswald. I mean, starting from the unplanned, let me say of course, we have an operator. An operator, always have - could have hypothetically unplanned problems in their operations. But let me underline that the two main problems, the big problems we have suffered over 2021, they were not assets operated by Repsol. The first one was the LNG, you know that we don't have - not even a stake in the plant. We are not the operators, we suffered the consequences for the exports for the whole country. And in BPTT where we have, a stake of 30%, a good partner and a good operator but we have unplanned problems in the country and a decline that was larger than expected. But as I said before, I prefer to see the positive part and the positive part is a Matapal is partially offsetting this reduction of production in BPTT. Going to Peru, I mean, let me underline that in Peru we have seen different political scenarios over the last 20, 25 years. Peru is an unstable country with solid institutions and work. I think that the rule of law works in the country. Saying that, I mean, in every country where we operate, there could be talks, conversations and potential negotiations with governments about the assets and revenues and so on. And then say in Camisea, we say we have a 10%, our stake is not even the main asset we have in Peru. And I mean, we have of course, ready as always to have a strong, close and good relationship with governments in countries where we operate. And Peru, let me say, is not an exception at all. Going to the lubricant business is good and margin, they were under pressure during the quarter. By year end, we might see margins in a normal level. Still that raw material is mainly the lubricant base raw material have increased due to commodity prices. I mean, however, even in this situation where margins were, let me say, suffering a bit comparing with the recent past, a good EBIT and business and good P&L has happened and we have had a good performance of the business even in this bad scenario. The JV is wrought and in a way better than expected. Even in this scenario, I'm seeing that margins are on track or been normalized. Let me be a bit optimistic about the evolution of our lubricants business. Thank you, Oswald. Ramón Álvarez-Pedrosa: Okay, thank you, Oswald. The next question comes from Michele Della Vigna, at Goldman Sachs.

Thank you very much for the time, and thank you Josu Jon. I had two questions, if I may. Great news on the 5% increase in the dividend for this year, I was wondering how shall we read that impact on the forward expectations for the dividend? Should we increase? Should we expect that the whole curve that you showed at the strategy presentation effectively moves up by 5%? Or simply that we get more gradually to the €0.70 in 2024? And then my second question is on your industrial operations, which I thought, I believe we all pretty much expected to be a bit stronger this quarter with margins going about $3 per barrel. And yet EBITDA was down €100 million Q-on-Q, I was wondering if you could perhaps dissect some of that? How impactful were the gas derivatives and then whether you think that with improving - with a further improvement in the refining margins, we've seen in Q4 that we could see a material improvement in your industrial EBITDA? Thank you, Josu Jon.

Hey, glad to hear you, Michele. Thank you. I mean, starting by the first part - from the first part of your question. I mean, let me say something that is evident but I prefer to underline it. I mean, what we are announcing today is that we are going to increase 5% the 2022 cash dividends. I mean, in addition, we are going to cancel 75 million of shares with a program to be launched this month, I mean November 2021 of 35 million of shares and the other 40 million of shares coming from the current treasury stock position, physical or derivatives related to a better price scenario we have in the past. So, I mean, we are going to launch this purchasing program of 35 million shares in November. As I explained before to Biraj, the Annual General Assembly in spring will cancel and we redeem this 75 million of shares. I mean, but I understand your point, Michele. I mean, I'm not rigid and close in my mind. I understand your point, it is proposal, the end of the road? I mean, my answer is, definitely not. Is our strategic plan distribution roadmap written on stone without any remote possibility to be modified or improved? Of course, Michele, not. I mean, saying that then again to be [current] all that is defined in the framework of the strategic plan but the new strategy, providing a competitive shareholder remuneration has always been a pillar in Repsol strategy and we have traditionally been a good distribution player. And remember, Michele, as I said, when we presented our strategic plan last year, in that pressure scenario, the extra cash generated will be allocated either to create acceleration and growth and also to increase shareholder's remuneration. It's exactly what we are announcing today. And that will be exactly what we do in the close future in case of seeing a pretty good macro scenario and a good cash generation. And that is exactly what we do in case of seeing the extra cash in relation to future but let me please, Michele, be [current] taking today the decisions we have to take today and leaving for the future, the decisions that have to be taken in the future. In case, of course of seeing a sustainable cash improvement over the whole period of the plan and that, of course, keeping going our strong balance sheet. And going to your question about the industrial area, I mean, you're right, because refining is performing in the right way. Margins, the fourth quarter are going to be significantly better than in the third quarter. I don't know, depending on 30% or 50% better than in, because we have experienced $4.5 per barrel in October and being current, our expectation is that the average of coming two months are going to be about $4 per barrel. So what are we missing? What we are missing, Michele, is that we have a negative impact at around €90 million or €100 million as adjusted income level in Industrial segment. What is the reason for this negative impact? I'm going to try to be clear and deductive. In September, August and September, we bought ammonium in the Spanish market for the month of December or January, at a fixed price. And we transform this volume to a price with our TTF reference. And we close on a small margin that is based on the differentials applied to the purchase and the sale with respect to the TTF. I mean, that margins are going to be there, and they are going to be positive at the end of the road, no doubt about that. The physical purchase will be very positive, since the market price that is correlated with TTF has risen a lot. And the financial position that is the inverse of the previous one, represent losses. So the problem is that the first the positive one will be collected in the EBIT of December or in January. And the second one, the mark-to-market position is reflected in September in the P&L of September. And this €90 million or €100 million negative in the industrial are related to this mark-to-market position. And it's true that in the opposite sense, we have an intragroup positive adjustment that is partially with €30 million or €45 million is partially offsetting this effect in the corporate side. And all that is related to the intragroup activity between our gas supply activity and the electricity and gas return business. So all-in-all, we have a negative effect in the adjusted net result of €100 million in the Industrial side. And we have a positive effect of €40 million that has the same nature, the same rationale in the corporate and financial side. And let me underline again, the negative part, I mean, this gap is going to appear in a positive way in fourth quarter and first quarter of the year. And all that is going to depend, of course, the evolution of when it's going to appear, depending on the closing date of the physical operation is going to appear in a positive way in the P&L. And that is the rationale of what is happening in the Industrial P&L, nothing to do with the Refining, nothing to do with the Chemical that is performing in a great way. It's the mark-to-market position that is partially offset in the corporate and financial side. Thank you, Michele.

Thank you. Ramón Álvarez-Pedrosa: Thank you, Michele. And next question comes from [indiscernible] at Morgan Stanley.

Hi, thanks for taking my questions. I was just pulling up on the refining margins and wanted to check the impact of the higher energy costs and the higher hydrogen costs. You highlighted $4.5 dollars per barrel refining margin so far in 4Q. Can you just confirm that this includes the increases in the energy prices and it will be difficult to isolate the impact of higher hydrogen costs on refining margins at present? My second question was related to the 2021 CapEx, which you have reiterated at € 2.9 billion. That kind of implies a very significant increase in CapEx for 4Q, almost more than double the quarterly run rate we have seen so far. If you can just provide some guidance on where this higher CapEx is coming from? And also apologies if you have already flagged this but can you confirm what the guidance per E&P CapEx is for 2021? Thanks.

Thank you, Shiva. Oh, excuse me, [Shashi], it was my mistake. All defect of the gas price that is a variable cost for our refining system is fully included in the refining margin indicator. So, when we say that in the first quarter, the refining margin indicator was $3.3 - $3.2, $3.3 per barrel and in October has been $4.5 per barrel, let me say, the negative effect of the cost increase of the gas to feed this refineries are fully included in this margin indicator. Of course, are impacting in a negative way compared with our budget and more or less I have in mind the figure that we have experienced in October, a negative effect of $0.7, $0.8 per barrel. Due - so in the third quarter, in October due to this effect but all that is already included. When we say that the margin is $4.5 per barrel in October, the huge TTF prices, and NBP prices and so on, these are included and the cost of all that is included in this margin. So, same thing of course, because we produce the hydrogen with gas is included on the CO2 prices of around, I remember that a [fee like] €60 or €62 per ton of CO2 in the third quarter in October are included in this variable cost. Because I mean, the construction of our refining margin indicator is made taking the oil prices and the price of crude oils we use plus the products and the spreads of a product's part plus the variable cost, we have that. They are mainly oil, gas and indeed the hydrogen we use and on top of that, the CO2 this year is fully included as a variable cost in the refining margin. So we are taking into account all of that when we say that we have a refining margin of $3.2 or $3.3 per barrel in this first quarter or $4.5 dollars per barrel in October. Going to your second point, yes, you are right. We are going to see a significant increase in the fourth quarter '21 for E&P CapEx. That are going to come mainly from the investment report we are developing in the unconventional. And I referred to this report before and the progress of the FID of the projects I mentioned before. But you are right, we are going to see actually €2.9 billion total CapEx guidance for the whole company in 2021 and €1.1 billion, $1.3 billion, more or less for the E&P this year. For that vision, I said before that what we are going to see in 2022 is going to be at around $1.9 billion in the case of almost $2 billion dollars in the case of the E&P. I mean truly $1.9 billion to $2.1 billion is going also to depend on the exchange rates that I have in mind but we are at around $2 billion, is going to be the effort in CapEx terms of the E&P in 2022. Thank you. Ramón Álvarez-Pedrosa: Thank you, Shasi. Next question comes from Jon Rigby at UBS.

Thank you for taking my question. Hi, Josu Jon. Can I just circle back on distributions again? First, on the buyback, it always gets me confused. And I think the point about the treasury shares etc. Always I stumbled on. So can we just go through some of the mechanics of it? Can you can you explain to me, do you have call options or anything that in treasury that you can use to buy back or to realize some of the buyback of these shares? And therefore, is there some sort of cost or lower cost in acquiring the shares and putting them into treasury. I'm just trying to understand what you have physically in treasury and what you have in sort of synthetics or derivatives? And is it the intention to buy back I think the 35 million through to the end of this year so that they're sort of cleaned out? And then just one piece of sort of arithmetic I was a little puzzled about was I think you say 40 million, you see 75 million of shares to be canceled. But you are doing 35 million in the market, but you have 45 million treasury shares already, why not just take that all out and take the whole 80 million treasury shares, just clean the whole thing up? I don't quite understand why we go backwards and forwards on this partly in the market, partly in treasury, etc. But that's, I just want some mechanics of the buyback. Just secondly, on the dividend, is it your sort of sense that the dividends should reflect underlying performance of the business and operating performance of the business and the buyback, the sort of macro surplus, in which case I'm again a little puzzled why you've chosen to sort of allocate this surplus, partly through a recurring commitment, i.e. the dividend and partly through the buyback? So just sort of philosophically, could you explain that, please?

Thank you, Jon. I mean, I probably knew that I need to do my best to explain all that. But I cannot guarantee the result, because it's complex, but I'll do my best. I mean, today, today means at the end of September, at the end of the third quarter, we have a 49 million shares in cash that is part of our balance sheet, and 74 million shares in equity derivative instruments. 50 million shares in that color, I remember that, at that time was acquired as price at around, I have to check the figure but €8.28 per share, more or less but its mark-to-market, of course as I very much recall it. And we have 24 million in equity stocks that are not part of our balance sheet. That means that we have 74 million shares in equity derivatives, plus 49 million shares in cash. What we are going to do now is we are going to take 40 million shares of this physical shares that are part of our balance sheet and we are going to launch a new program, a purchasing program developed under the rules to do this kind of thing that is going to be launching November and it's going to a stand till or this is going to last till the spring to before the AGM to acquire 35 million shares in the market. I mean, your question is right, why are you doing that instead of taking what you have in your hands? I mean, first of all, because that is not going to be the last shot. That means that we have, we are going to go on with the buyback policy of the company. I mean I am not going to enter on the debate about we are going to it to redeem only the 200 million shares we commit in the strategic plan or more. As I said before, we have to go step-by-step. And today that is the step we have to develop. And be sure that if we have room to do more things in the future, we'll do it again. And I go to your last point, why the distribution some in cash and some in buybacks? I mean, first of all, and then linking all that with the purchasing program. Because I think that the actual the share is not reflecting the real value of the company. And I think that we have the opportunity to provide value for the shareholders buying today shares of Repsol in the market. And we are going to do that in the framework of our program under the road to redeem the shares and so on. And we are going to say, keeping going this options that could come in the future. So that is the rationale behind the distribution combining cash and buyback because we think that buying shares today is a better option for our shareholders than paying the dividend in cash. Of course, we combine both options because for some shareholders, cash is also an interesting option. And I mean, if you take your models and you see the cash flow for operations we have had this year where we expect in 2022 and what we are developing in terms of distribution, I mean combining buybacks and combining cash dividend and taking into account that we are going to use 40 million shares that were acquired in 2021. You could see that all-in-all, we are more or less going back to a dividend that is close to €0.9, €0.87, €0.88 per share. So all-in-all the combination of that is --so every year €0.9, as I said. And we are going to grow in the future. So, we are almost a year after the pandemic, we are almost recovering the dividend, we had before the pandemic in the past. And we are going to go on improving this distribution policy, Jon, if we have room to do that, always under our principle of financial policy because if you take this figure, you can see that what we are applying in these two years 2021, 2022 combined is below 30% of the figure fitting with the cash flow from operation. That means that we are [apparent], we are mainstream in the sector in Europe in our sector in terms of distribution policy. And expecting that we have room to improve the cash flow from operations in the future, be sure that we have also room to increase and to improve the dividend distribution in the future, that is too that they prefer to be apparent because I have to go a step-by-step taking into account the volatility we are seeing in the macro scenario. Thank you, Jon.

Okay, thank you for the color. Thank you. Ramón Álvarez-Pedrosa: Thank you, Jon. Next question comes from Matthew Lofting at JP Morgan.

Hi, gents. Thanks for taking the questions. Two, if I could, please. First, following up from Jon's previous question on the cash return, and specifically the buyback program. I think the acceleration around the 200 million share program is welcome. Thinking about it, though, in the context at this point of accelerating the program, I wonder if you could just expand on as we move forward, assuming that macro conditions remain above your $50 base plan, what would make you think about expanding the scale of the program above 200 million shares as opposed to purely accelerating the time horizon of the program? And then secondly, coming back to the Industrial business, in the context of the comments that you made earlier around the transitory nature of the derivative effect in 3Q, could you just clarify the EBITDA expectations that you have for the industrial business this year within the sort of the 6.7 total? And how that compares to your strategic plan expectations? Thank you.

Thank you, Matt. I mean, let me say, as I said before that nothing is written on a stone. We have a guidance, the guidance is to strategic plan but be sure that we are going to follow the capital allocation policy I define when we presented the strategic plan. That means that any extra cash under the principle of financial relevancy and especially the balance sheet, is going to be focused on growing in low carbon platforms anticipating the future and increasing the shareholder distribution for our shareholders. I mean, today the framework is 200 million shares, that's clear. But let me say that that is going to or could potentially [worth] the10 billion, the cash flow from the operations, the macro scenario and of course, the share price because we are - I mean I am talking about hypotheses, a disclaimer, if we are in one year, €15 per share, for instance in Repsol in that place or €16 perhaps could be a better option to increase the cash part of the distribution and reducing or limiting the share buyback. I mean, because we are in some way preparing all these scenarios. For that reason, we are comfortable keeping going this 74 million shares in equity derivative instruments that I mentioned before, to Jon. But again, that is today, the vision coming through the extra cash we are having today and depending on the evolution of this cash flow from operations on the potential extra cash of the future, we could hypothetically take some other decisions in this line, as I said before, step-by-step. Going to your question about the EBITDA expectation for Industrial business, this year, what we expect this year is 2.2 billion EBITDA 2021, let underline Matt that I'm talking about neat EBITDA, pure EBITDA. If I go to a figure of EBITDA CCS, the figure here for the whole Industrial business is going to be €1.5 billion. If we compare with what we have in the industrial area, what we have in the strategic plan for this year, 2021 was $1.6 billion, because we were taking at that time $50 per barrel for the whole term. That means that [move on] CCS, it seems to me I have to take the figure that more or less will be the same in our forecast for 2021. Let me say that the figure is more or less what we expected, we forecast in our industrial area in 2021, in our strategic plan, the better technical business issues and way offsetting what we are losing in the Refining business, because you know, that over the last half of the year, the margin has been due to low - expected growth of the pandemic in Europe has been significantly lower than expected. And now, we are starting to recover and let me say what we are seeing by 2022 emerging terms, is probably better than the expectations we have in our strategic plan for 2022 or aligned with expectations we have. My point is we are recovering the pre-pandemic pathway. And in some way we have been punished in the first half of the 2021 because the pandemic estimate, unfortunately longer than expected or the forecast we have last year, when we presented the strategic plan in November. Thank you, Matt. Ramón Álvarez-Pedrosa: Thank you very much Matt. The next question comes from Alejandro Vigil of Bestinver.

Josu Jon, thank you for taking my question. I have a couple of questions about the low carbon strategy. One is about your thoughts about the different options you have to crystallize value in renewables and in the in the customer centric activity. You were planning an IPO of private investors, if you can elaborate on that, please? And the second question is about the European Union next generation funds. How important are these funds for your strategy in low carbon particularly in hydrogen? What is the level of financial support you need from these funds to go ahead with your hydrogen projects? Thank you.

Thank you, Alejandro [indiscernible]. Thank you, very much. Going to your question on low carbon strategy, I mean, the most important thing Alejandro is that we go on performing, developing projects over the last quarter and we have a launched the Valdesolar project in the southwest part of Spain, the Kappa project both solar combining 400 megawatts of photovoltaic installed capacity, new capacity in Spain. We are starting to put in operation parts of the Delta II project in northeast part of Spain in Aragon. In this case, our wind farms I have in mind that we put in operation will be 80 megawatts more or less are a part of this project in over the last week. So that means that we are on track of increasing what we are doing in the renewable business. Cabo Leonés is now working with project finance that we signed this quarter. We are working on the Jicarilla project to get a reality from this potential option that we are analyzing now. I mean, all that is on track. And as I said before when I presented the strategic low carbon strategy, the 1st of October, I mean, we have a period of time. We are not in a hurry to incorporate a partner to this division. We want to do that because we think that is important. The entrance of an equity partner or an IPO in this business, I think that that's important from the point of view, to crystallize the value we are creating in this business, that will be important, but also to help us to, to find or to reduce the cost of capital of this business to be more competitive. But in the meantime, we are improving our position, we are seeing opportunities, we are not in a hurry to do that, because it's not a financial product. We don't need to, let me say, discuss to go on growing in this business. But we have nice opportunities, I asked for 18 months to take a decision. And I'm still in the framework of this period. Going to the hydrogen, I mean that for hydrogen, being refiners what is important is the current and the development of the European regulation related to decarbonization of liquids. That means that we could be competitive now, producing hiring the refineries, because the refinery is going to be used to our own refining operations or building the hydrocarbon chain, a hydrogenating the oil, we produce as feedstock. That means that this hydrogen, green hydrogen is not competing in price terms with the gray hydrogen coming from the reforming process of natural gas, that is think of that competes with the alternative of palm oil that is coming from Malaysia or from some other parts of the world. So we have a clear, real and unique opportunity to develop this hydrogen business in coming two or three years. Remember, that Repsol today consumes 62% of the total Spain's hydrogen consumption. And on top of that, and then we say, reducing CapEx in hydrogen, through the next generation funds could be a way to reduce risk of these projects to reduce the CapEx intensity to accelerate the learning curve of this hydrogen. And let me say what is important, of course, for Repsol but also for the Spanish society and for Spain, to be a reference in Spain, leading the hydrogen, the green hydrogen business in Europe. We have the opportunity to do that, Repsol could be the player, we are going to do it and in case of having, let me say some kind of public support to that, what we can do is accelerate this process that is important not only for Repsol but also for the whole Spain economy. Thank you, Alejandro. Ramón Álvarez-Pedrosa: Thank you, Alejandro. Next question comes from Joshua Stone at Barclays.

Hi, good afternoon. I've got a couple of questions to try and clarify on this buyback. So if I understand correctly, you are going to be buying back 35 million shares in the market between November and the AGM in May. At that point, you will get approval to cancel the 75 million shares. But then over what timeframe will you be cancelling the 75 million shares? So will you be canceling those at a faster rate than your 50 million per annum guidance? So that's just a clarification. And the second question, maybe this is a stupid question but why do you need AGM approval to cancel the shares from the buyback? Who sets those rules and because it doesn't feel it's distracting from your investment case? And can you look to change those rules? Thank you.

Thank you, Joshua. First of all, I can't be - I can't give you the accurate answer but let me say that our days could be, one day, two days, three days or some days after the AGM, we will proceed to cancel to redeem the 75 million shares. So that's the technical process and today I am not able to give you an answer, of course, our team is going to check that but we are talking about days, couple of days or some days after the AGM. Why do we need the allowance or the approval of the AGM? And again, I'm not an expert, but this is Spanish regulation and I feel it fits to me, but I am sure that that is also a European Union regulation. I'm not sure of all these but Joshua that is Spanish regulation, ask for the approval of the AGM to redeem or to cancel such a significant part of shares. And excuse me, I have asked to a member, the legal member of my team but yes, okay, thank you Miguel. The Spanish Company Law, so it's a Spanish regulation. Thank you.

Okay. Thank you. Ramón Álvarez-Pedrosa: Thank you, Joshua. Next question comes from Peter Low of Redburn.

And I had just a question on the refining margin premium, I think you said it was point $0.5 a barrel in 3Q, which was lower than 2Q. Can you perhaps explain some of the moving parts there and what level you might expect for the fourth quarter? And then secondly, and really sorry, just for another clarifying question on the buyback, but the existing 40 million of treasury shares that you already hold and that you plan to retire, can you disclose over what time period you acquired those shares? Thanks.

So, thank you, Peter. Starting by your first question related to the refining margin premium, which was lower. The main factor I have to check more, first of all, $0.5 per barrel is our group premium over the IMC but the main factor, it seems to me that it's related to the power, electricity prices in Spain. And I'm going to try to develop the rationale. We are even in our industrial in our industrial assets, that means that I can't remember this actually, but we have 600 megawatts of cogeneration combining Refining and Chemical and if we are, let me say, exporting to the system more or less right 1.3%, 1.4% of the total Spanish consumption, what we are buying for our own needs in industrial assets are even with this exporting. In regulatory terms, due to this, that means that in the medium term, we are not impacted in any way by this debate about the power prices because we are at the same time producers and consumers. It's true that in regulatory terms, we have some kind of cap in the short term to the tariffs of the cogeneration. And for that reason, we have had a negative temporary effect that is going to be addressed in coming weeks, months. So that's one of the factor. The other one is also that in the second quarter, we have an extra premium coming from the biofuels market that gave us opportunity to improve the margin we have. Going to the second part of the pair, what we have more or less in mind is that the premium could be at around that. I mean, that is going to depend, that is not a commitment because we could have an operational performance, operational or market advantages, that is going to make - at first glance, today what I have in mind is that we will be at around $0.5 per barrel in the quarter taking into account that we are going to have a penalty coming in from the maintenance program of a part from refinery of Cartagena, right? When I say, like a part because that is impacting in a part of the distillation and on the coker of the refinery. So all you know, I think that $0.5 per barrel can be a quite reasonable pay. Going to your question, the buyback, we had at the beginning of the year - I mean at the end of 2020, I have in mind, we have at that time 18 million or 19 million shares in our balance sheet. So if we have at the end of September probably 9 million shares means that we have acquired 30 million shares over the whole period. I don't have in mind the total cash applied to this purchase but we could say that we have invested around €300 million over the whole year, increasing the treasury stock of a company. Thank you. Ramón Álvarez-Pedrosa: Thank you, Peter. Ramón Álvarez-Pedrosa: Well, that was our last question. At this point, I bring our third quarter conference call to an end. Thank you very much for your attendance.

That does conclude our conference for today. Thank you for participating, you all may disconnect.