Repsol YPF Enters Russian Energy Market

Via a strategic agreement with West Siberian Resources (WSR):

::  Repsol YPF acquires 10% of West Siberian Resources (WSR),
    a company owning important oil and gas assets in the Russian
    Federation.

::  This agreement contemplates an industrial partnership for the development of
    exploration projects in Russia.

Repsol YPF and West Siberian Resources (WSR), a company listed on the Stockholm stock exchange, have signed a strategic agreement whereby Repsol YPF not only acquires a 10% stake in the latter, but will also develop projects in the exploration and production of oil and gas in Russia, where WSR owns exploration assets.

This operation will be realised via a WSR capital increase, in which Repsol YPF will acquire 10% of the stock at a price of SEK 6.13 ($0.80) per share, equivalent to an investment of nearly $90 million.

With this agreement Repsol YPF will have access to an important asset portfolio of high value in Russia, thereby intensifying its exploration activity in the area.

The deal will strengthen Repsol YPF's exploration and production (Upstream) business, and is in line with the company's strategy of geographical diversification. This alliance with WSR will also permit Repsol YPF to acquire experience in the Russian exploration sector and represents a good opportunity to participate in the Russian market with a view to analysing other projects in the region.

The Russian Federation has the largest gas reserves in the world, with 1,200 tcf of gas, and ranks eighth in the world in terms of oil reserves, with 112 billion barrels of oil. This is a very dynamic and open market for foreign investment with a high reserves' development potential in areas currently lacking developed infrastructures.

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Posted 09/02/06

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