##### Table of Contents

 

 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**
 
**

**FORM 20-F**

 

**
 
**

 

**ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)**

**OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended: December 31, 2009**

**Commission file number: 1-10220**

 

**
 
**

**Repsol YPF,S.A.**

**(Exact name of Registrant as specified in its charter)**

 

**
 
**

**Kingdom of Spain**

**(Jurisdiction of incorporation or organization)**

**Paseo de la Castellana, 278—280, 28046 Madrid, Spain**

**(Address of principal executive offices)**

**Fernando Ramírez Mazarredo**

**Repsol YPF, S.A.**

**Paseo de la Castellana, 278-280, 28046 Madrid, Spain**

**Tel: (011-34) 91 753 8100**

**Facsimile Number: (011-34) 91 314 2821**

**(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)**

**Securities registered or to be registered pursuant to Section 12(b) of the Act:**

 

**
 
**

 

 

The number of certain outstanding shares of each class of stock of Repsol International CapitalLimited benefiting from a guarantee of Repsol YPF, S.A. at December 31, 2009 was: 

 

The number ofoutstanding shares of each class of stock of Repsol YPF, S.A. as of December 31, 2009 was: 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct.    x  Yes     ̈  No 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities ExchangeAct of 1934.     ̈  Yes    x  No 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90days.    x  Yes     ̈  No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every InteractiveData File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles).     ̈  Yes     ̈  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. 

Large acceleratedfiler  x        Acceleratedfiler   ̈            Non-accelerated filer   ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

If “Other” has been checked in response to the previous question, indicate by check markwhich financial statement item the registrant has elected tofollow.    Item 17   ̈        Item 18   ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct).     ̈  Yes    x  No 

 

 

 

Table of Contents
**CROSS REFERENCE SHEET**

The following table provides cross reference between the contents of this annual report and the requirements of Form 20-F. 

 

**Form 20-F Item**
  
**Repsol YPF 2009 annual report**

PART I
  PART I  
Item 1.
  *  
Item 2.
  *  
Item 3.
  Item 1.  Key Information about Repsol YPF
Item 4.
  Item 2.  Information on Repsol YPF
Item 4A.
  Item 14G.  Unresolved Staff Comments
Item 5.
  Item 3.  Operating and Financial Review and Prospects
Item 6.
  Item 4.  Directors, Senior Management and Employees
Item 7.
  Item 5.  Major Shareholders and Related Party Transactions
Item 8.
  Item 6.  Financial Information
Item 9.
  Item 7.  Offering and Listing
Item 10.
  Item 8.  Additional Information
Item 11.
  Item 9.  Quantitative and Qualitative Disclosure About Market Risk
Item 12.
  Item 10.  Description of Securities Other Than Equity Securities
PART II
  PART II  
Item 13.
  Item 11.  Defaults, Dividend Arrearages and Delinquencies
Item 14.
  Item 12.  
Material Modifications to the Rights of Securities Holders and Use of Proceeds

Item 15.
  Item 13.  Controls and Procedures
Item 16.
  *  
Item 16A.
  Item 14A.  Audit Committee Financial Expert
Item 16B.
  Item 14B.  Code of Ethics
Item 16C.
  Item 14C.  Principal Accountant Fees and Services
Item 16D.
  Item 14D.  Exemptions from the Listing Standards for Audit Committees
Item 16E.
  Item 14E.  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Item 16F.
  Item 14F.  Change in Registrant’s Certifying Accountant
Item 16G.
  Item 14H.  Corporate Governance
PART III
  PART III  
Item 17.
  *  
Item 18.
  Item 15.  Financial Statements
Item 19.
  Item 16.  Exhibits
Table of Contents
**TABLE OF CONTENTS**

 
   **Page**
Oil and Gas Terms
  iii
Conversion Table
  iv
References
  iv
Presentation of Certain Information
  v
Forward-looking Statements
  v
PART I
  1
1.    Key Information about Repsol YPF
  1
1.1
  Selected Consolidated Financial Data  1
1.2
  Exchange rates  2
1.3
  Risk Factors  3
2.    Information on Repsol YPF
  9
2.1
  Repsol YPF  9
2.2
  Oil and Gas Reserves  14
2.3
  Operations  21
2.4
  Environmental Matters  75
2.5
  Insurance  77
2.6
  Regulation of the Petroleum Industry  77
2.7
  Description of Property  88
2.8
  Seasonality  88
2.9
  Risk Control Systems  89
3.    Operating and Financial Review and Prospects
  91
3.1
  Factors Affecting Our Consolidated Results of Operations  91
3.2
  Overview of Consolidated Results of Operations  97
3.3
  Results of Operations by Business Segment  100
3.4
  Liquidity and Capital Resources  106
3.5
  Research and Development  118
4.    Directors, Senior Management and Employees
  120
4.1
  Directors and Officers of Repsol YPF  120
4.2
  Remuneration of Directors and Officers  130
4.3
  Share Ownership of Directors and Officers  134
4.4
  Employees  135
5.    Major Shareholders and Related PartyTransactions
  137
5.1
  Major Shareholders of Repsol YPF  137
5.2
  Related Party Transactions  138
5.3
  Interest of Management in Certain Transactions  139
6.    Financial Information
  139
6.1
  Financial Information  139
6.2
  Legal Proceedings  139
6.3
  Dividends Policy  149
7.    Offering and Listing
  150
7.1
  Historical Trading Information  150
7.2
  Nature of the Trading Market  151
7.3
  Spanish Securities Market Regulation  152
7.4
  Trading by Subsidiaries/Affiliates  153
7.5
  Internal Code of Conduct for the Repsol YPF Group in respect of the Stock Markets  154
8.    Additional Information
  154
8.1
  Memorandum and Articles of Association  154
8.2
  Exchange Controls  161
8.3
  Dividends  162
 

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Table of Contents   **Page**
8.4
  Taxation  162
8.5
  Available Information  166
8.6
  Material Contracts  167
9.      Quantitative and Qualitative Disclosure About Market Risk
  168
10.    Description of Securities Other Than EquitySecurities
  169
PART II
  171
11.    Defaults, Dividend Arrearages and Delinquencies
  171
12.    Material Modifications to the Rights of Security Holders and Use of Proceeds
  171
13.    Controls and Procedures
  171
14A. Audit Committee Financial Expert
  172
14B. Code of Ethics
  172
14C. Principal Accountant Fees and Services
  173
14D. Exemptions from the Listing Standards for Audit Committees
  174
14E. Purchases of Equity Securities by the Issuer and AffiliatedPurchasers
  174
14F. Change in Registrant’s Certifying Accountant
  174
14G. Unresolved Staff Comments
  174
14H. Corporate Governance
  174
PART III
  175
15.    Financial Statements
  175
16.    Exhibits
  175
17.    Signatures
  177
 

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Table of Contents
**Oil and Gas Terms**

Oil and gas reserves definitions used in this annual report are in accordance with Regulations S-X and S-K, as amended by the U.S.Securities and Exchange Commission’s (“SEC”) final rule, Modernization of Oil and Gas Reporting (Release Nos. 33-8995; 34-59192; FR-78; File No. S7-15-08; December 31, 2008) and relevant guidance notes and letters issued bythe SEC’s Staff. 

The following terms have the meanings shown below unless the context indicates otherwise: 

***“acreage”*****:** The total area, expressed in acres orkm2, over which Repsol YPF has interests in exploration orproduction. Net acreage is Repsol YPF’s interest in the relevant exploration or production area. 

***“concessioncontracts”*****:** A grant of access for a defined area and time period that transfers certain entitlements to produce hydrocarbons from the host country to an enterprise. The company holding the concession generally has rights andresponsibilities for the exploration, development, production and sale of hydrocarbon, and typically, an obligation to make payments at the signing of the concession and once production begins pursuant to applicable laws and regulations. 

***“crude oil”*****:**Crude oil with respect to Repsol YPF’s production and reserves includes condensate andnatural gas liquids (“NGL”). 

***“gas”*****:**Natural gas. 

***“hydrocarbons”*****:** Crude oil and natural gas. 

***“non-concessionary contract”*****:** Contract regulating the relationship between states and oil companies withregard to the exploration and production of hydrocarbons, including production sharing contracts (PSC) and risk-and-reward agreements. Ownership is retained by the host government and is assigned to the national oil company jointly with the foreignoil company which has an exclusive right to perform exploration, development and production activities and can enter into agreements with other local or international entities. In this type of contract, the national oil company assigns to theinternational contractor the task of performing exploration and production activities with the contractor’s equipment and financial resources at its sole risk. Cost recovery and profit are set out pursuant to applicable laws and regulations andrepresents the reward deriving from exploration and production activities. Further terms and conditions of these contracts may vary from country to country. Under these contracts, entitlement of reserves is based on the economic interest held byeach party, as defined in the applicable contract. Under the economic interest method, the production and reserves reported under these types of agreements typically vary inversely with the oil and gas price changes. As oil and gas prices increase,the cash flow and value received by the contractor increase; however, the production volumes and reserves required to achieve a given value will typically be lower because of the higher prices. The lower the oil and gas prices, the higher the volumeentitlement. 

***“surface conditions”*****:**Represents the pressure and temperature conditions at whichvolumes of oil, gas, condensate and natural gas liquids are measured for report purpose. It is also referred to as standard conditions. For Repsol YPF these conditions are 14.7 psi for pressure and 60°F for temperature. All volume unitsexpressed in this report are at surface conditions. 

 

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**Abbreviations:**

 

“bbl”
  Barrels.
“bcf”
  Billion cubic feet =109 cubic feet.
“bcm”
  Billion cubic meters =109 cubic meters.
“boe”
  Barrels of oil equivalent.
“GWh”
  Gigawatt hours.
“km”
  Kilometers.
“km2”
  Square kilometers.
“liquids”
  Crude oil, condensate and natural gas liquids.
“LNG”
  Liquefied natural gas.
“LPG”
  Liquefied petroleum gas.
“mbbl”
  Thousand barrels.
“mbbl/d”
  Thousand barrels per day.
“mboe”
  Thousand barrels of oil equivalent.
“mcf”
  Thousand cubic feet.
“mmbbl”
  Million barrels.
“mmboe”
  Million barrels of oil equivalent.
“mmBtu”
  Million British thermal units.
“mmcf”
  Million cubic feet.
“mmcf/d”
  Million cubic feet per day.
“mmcm/d”
  Million cubic meters per day.
“MW”
  Megawatts.
“psi”
  Pound per square inch.
“WTI”
  West Texas Intermediate.
**Conversion Table**

1 tonne = 1 metric ton = 1,000 kilograms = 2,204 pounds 

1 barrel = 42 U.S. gallons 

1 tonne of oil =approximately 7.3 barrels assuming a specific gravity of 34 degrees API (American Petroleum Institute) 

1 barrel of oil equivalent = 5,615cubic feet of gas = 1 barrel of oil, condensate or natural gas liquids 

1 kilometer = 0.63 miles 

1 million Btu = 252 termies 

1 cubic meterof gas = 35.3147 cubic feet of gas 

1 cubic meter of gas = 10 termies 

1,000 acres = approximately 4km2

**References**

In this annual report, references to “Repsol YPF,” “Repsol YPF Group,” “Group,” “the Company,”“we,” “us” and “our” refer to Repsol YPF, S.A. and its consolidated subsidiaries, unless otherwise specified. References to “YPF” refer to YPF S.A. or YPF S.A. and its affiliates, as the context requires.References to “Gas Natural” refer to Gas Natural SDG, S.A. or Gas Natural SDG, S.A. and its affiliates, as the context requires. 

 

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In this annual report, references to “Consolidated Financial Statements” are toRepsol YPF’s audited consolidated balance sheets as of December 31, 2009 and 2008, Repsol YPF’s audited consolidated income statements for the years ended December 31, 2009, 2008 and 2007, Repsol YPF’s audited consolidatedstatements of recognized income and expenses for the years ended December 31, 2009, 2008 and 2007, Repsol YPF’s audited consolidated statements of changes in equity for the years ended December 31, 2009, 2008 and 2007, RepsolYPF’s audited consolidated cash flow statements for the years ended December 31, 2009, 2008 and 2007 and the related notes and schedules thereto, included elsewhere in this annual report. 

In this annual report, references to “euro” or “€” are to the euro, which is Spain’s legal currency,references to “dollars” or “$” or “US$” are to United States dollars, and references to “pesos” or “Ps.” are to Argentine pesos. A “billion” is a thousand million. 

**Presentation of Certain Information**

Repsol YPF publishes its financial statements in euro. In accordance with European Union (“EU”) regulations, fromJanuary 1, 2005, Repsol YPF has prepared its financial statements in conformity with International Financial Reporting Standards (“IFRS”) as adopted by the EU and in accordance with IFRS as issued by the International AccountingStandards Board (“IASB”). 

See Notes 3 and 4 to the Consolidated Financial Statements for a discussion of the basisof presentation and consolidation and other accounting policies used by the Group. 

Unless otherwise indicated, where thisannual report provides translations into euro of amounts denominated in or resulting from transactions effected in currencies other than the euro, the conversion presented for convenience has been effected at the relevant exchange rate onDecember 31, 2009. 

Certain monetary amounts and other figures included in this annual report have been subject torounding adjustments. Any discrepancies in any tables between the totals and the sums of the amounts are due to rounding. 

*Interest in Alberto Pascualini Refap, S.A.*

As discussed in Note 3 to the Consolidated Financial Statements, during the first half of 2008 Repsol YPF proportionally consolidated its30% interest in Alberto Pascualini Refap, S.A. (“REFAP”) (Brazil). As of July 1, 2008, Repsol YPF reclassified such interest as held for sale in accordance with IFRS 5. Due to unfavorable trends in the downstream business and theglobal financial crisis, Repsol YPF has not been able to sell such interest. As a result, such interest was proportionally consolidated in Repsol YPF’s consolidated financial statements as of and for the year ended December 31, 2009. Inorder to improve the comparability of our 2008 consolidated financial statements with those of 2009, and in accordance with IAS 31, our 2008 consolidated financial statements have been retrospectively modified to proportionally consolidate RepsolYPF’s 30% interest in REFAP during the entire year. 

**Forward-looking Statements**

This annual report, including any documents incorporated by reference, contains statements that Repsol YPF believes constituteforward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may include statements regarding the intent, belief or current expectations of Repsol YPF and its management,including statements with respect to trends affecting Repsol YPF’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volume and reserves and Repsol YPF’s plans withrespect to capital expenditures, business strategy, geographic concentration, cost savings, investments and dividend payout policies. These statements are not guarantees of future performance and are subject to material risks, uncertainties, changesand other factors which may be beyond Repsol YPF’s control or may be difficult to predict. Accordingly, Repsol 

 

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YPF’s future financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production volumes, reserves, capital expenditures, cost savings,investments and dividend payout policies could differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, factors described in Repsol YPF’s filings with the Securitiesand Exchange Commission and, in particular, those described in Item 1. “Key Information about Repsol YPF—Risk Factors” and Item 3. “Operating and Financial Review and Prospects” in this annual report. Repsol YPFdoes not undertake to publicly update or revise these forward-looking statements even if experience or future changes make it clear that the projected results or condition expressed or implied therein will not be realized. 

 

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**PART I**

**1. Key Information about Repsol YPF**

 
**1.1****Selected Consolidated Financial Data**
The following tables present selected consolidated financial data of Repsol YPF. You should read this table in conjunction with“Item 3. Operating and Financial Review and Prospects” and the Consolidated Financial Statements included elsewhere in this annual report. 

The consolidated income statement data for each of the years in the three-year period ended December 31, 2009 and the consolidatedbalance sheet data as of December 31, 2009 and 2008, set forth below have been derived from the Consolidated Financial Statements and notes thereto included in this annual report, which have been prepared in accordance with IFRS as adopted bythe EU and in accordance with IFRS as issued by the IASB and have been audited by our independent auditor, Deloitte, S.L. The consolidated income statement data for the years ended December 31, 2006 and 2005 and the consolidated balance sheetdata as of December 31, 2007, 2006 and 2005, are derived from our audited consolidated financial statements, which are not included herein. 

Pursuant to SEC Release No. 33-8879, “Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordancewith International Financial Reporting Standards Without Reconciliation to U.S. GAAP,” Repsol YPF includes selected financial data prepared in compliance with IFRS, without a reconciliation to U.S. GAAP. 

The following table presents selected consolidated financial data of Repsol YPF in accordance with IFRS for the periods indicated:

 
   **As of or for the Year ended December 31,**    **2009**  **2008(1)**  **2007**  **2006**  **2005**    **(millions of euro, except per share and**