Repsol YPF

The Annual General Meeting of Shareholders of Repsol YPF, S.A. held on second call on 16 June 2006, adopted the following resolution under item six on the Agenda:

“To authorize the Board of Directors for the derivative acquisition of shares of Repsol YPF, S.A., by sale, purchase, exchange or any other onerous legal business modality, directly or through controlled companies, up to a maximum number of shares, that added to those already own by Repsol YPF, S.A. and its subsidiaries, not exceeding 5% of the share capital and for a price or equivalent value that may not be lower than the nominal value of the shares nor exceed the quoted price on the stock market.

The shares so acquired may be disbursed among the employees and directors of the company and its Group or, if appropriate, used to satisfy the exercise of option rights that such persons may hold.

This authorisation, which is subject to the compliance of all other applicable legal requirements, shall be valid for 18 months, counted as from the date of the present General Shareholders Meeting, and leaves without effect the authorisation granted by the last Ordinary General Shareholders Meeting held on the 31st of May 2005.”

The company has not used this authorisation, so it did not at year-end 2006 and does not at the date of this Report hold any treasury stock, directly or through any of its subsidiaries .

The exercise of voting rights and transfer of shares in the capital of the company may be restricted in certain cases by virtue of the “energy golden share”, regulated by Additional Provision 27 to Act 55/1999 of 29 December.

Under the “energy golden share” regime, the government must be informed whenever any public corporation, or entities of whatsoever nature in which public corporations have a majority or controlling interest, acquire a stake of 3% or more in the capital of energy companies, such as Repsol YPF. The Council of Ministers has a period of two months to recognise or reject exercise of the voting rights corresponding to those shares, or to submit such exercise to certain conditions, according to principles, among others, of objectivity, transparency, balance and smooth operation of energy systems and markets. The entities in question may not exercise the voting rights corresponding to the interest acquired and notified until it has been recognised by express resolution or administrative silence.

Article 34 of Royal Decree-Law 6/2000 establishes certain constraints on exercise of voting rights in more than one principal operator of the same market or sector, among others, in the fuel production and distribution, liquefied petroleum gas production and supply and natural gas production and supply markets. The principal operators are the entities holding the five largest shares on the market in question. These constraints are:

– Individuals or entities which have a direct or indirect interest of more than 3% in the capital or voting rights of two or more principal operators on the same market may not exercise the voting rights corresponding to the excess over that percentage in more than one of those companies.

– No principal operator may exercise the voting rights corresponding to an interest of more than 3% in the capital of another principal operator on the same market.

Furthermore, Article 34 of Royal Decree-Law 6/2000 establishes that no natural or legal person will be able to appoint, directly or indirectly, members of the Boards of Directors of more than one principal operator company in the same market or sector. A sector or market principal operator will also not be able to appoint, directly or indirectly, members of the Board of Directors of other principal operator in the same market or sector.

These constraints shall not be applicable to parent companies that are principal operators in respect of their subsidiaries that are in the same position, provided this structure is imposed by law or the result of a mere redistribution of securities or assets among group companies.

The Comisión Nacional de Energía (CNE), regulator of the energy market, may authorise exercise of the voting rights corresponding to the excess provided this does not favour the exchanging of strategic information or imply any risks of coordination of their strategic actions.

Royal Decree-Law 4/2006 of 24 February amended the functions of the Comisión Nacional de Energía. Under this Royal Decree-Law, prior administrative authorisation must be sought for certain acquisitions or investments in companies that engage in regulated activities or activities, although not regulated in the strict sense, are subject to significant oversight by administrative bodies in Spain. Nevertheless, according to the information made public by Sacyr Vallehermoso on 26 October 2006, through an official notice sent to the Comisión Nacional del Mercado de Valores (CNMV), the Comisión Nacional de Energía has ruled that the acquisition of Repsol YPF, S.A.’s shares is not subject to that Royal Decree-Law.

Furthermore, Article 27 of the Repsol YPF, S.A. Articles of Association stipulates that no one shareholder, or companies belonging to the same Group, may cast votes at general meetings in excess of the number corresponding to 10% of the voting capital.

Finally, up to 6 February 2006, the “golden share” regulated in Act 5/1995 of 23 March and the regulations implementing it in respect of Repsol YPF, S.A., among other companies previously owned by the State and subsequently privatised, could restrict the exercise of voting rights in certain cases, as well as the transfer of shares in the capital of the company.