Exhibit
1.2  ARTICLES OF ASSOCIATION OF REPSOL YPF, S.A.  PART  I  DENOMINATION,
PURPOSE, REGISTERED OFFICE ANDDURATION OF THE COMPANY  Article 1.  DENOMINATION  The Company is denominated REPSOL YPF, S.A. and is governed by the
present Articles of Association, its Internal Regulations, as well as the
provisions on legal governance of Joint-Stock Public Corporations, and the
general provisions of law in force which may be applicable thereto.  Article 2. BUSINESS PURPOSE  2.1.The
companys business purpose is:  I.The
research, exploration, exploitation, importing, storage, refining,
petrochemistry and other industrial operations, transport, distribution, sale,
exportation and marketing of hydrocarbons of any kind, their by-products and
residues.  II.The
research and development of sources of energy other than those deriving from
hydrocarbons and the exploitation, manufacture, importation, storage,
distribution, transport, sale, exportation and marketing thereof.  III.The
exploitation of real-estate property and of the industrial property and
technology owned by the Company.  IV.The
marketing of all kinds of products in installations attached to service
stations and petrol pumps and through the marketing networks established for
the products manufactured by the Company, as well as the provision of services
linked to the consumption or use of the latter.  V.The
provision to subsidiaries of such services as planning, commercial management,
factoring and technical or financial assistance, except for those activities
that are legally reserved for financial or credit institutions.  1 
   2.2.The
activities that comprise the business purpose may be carried out by the Company
wholly or partially indirectly, in any of the forms permitted by law and, in
particular, through the holding of shares or interests in companies with the
same or a similar purpose.  Article 3.  REGISTERED OFFICE  The registered office is
established in Madrid, at no 278, Paseo de la Castellana.  The Board of Directors has the power to
transfer it anywhere within the same municipality and to establish offices,
branch offices, agencies, representations or sections of any kind and in any
locality, whenever this is considered to be in the interests of the companys
progress.  Article 4.  DURATION  The duration of the
Company will be indefinite.  It
commenced its business activities on the date of its incorporation.  PART II  CAPITAL STOCK AND SHARES  Article 5. CAPITAL  The capital stock amounts
to ONE THOUSAND TWO HUNDRED TWENTY MILLION 
EIGHT  HUNDRED SIXTY THREE
THOUSAND FOUR HUNDRED SIXTY THREE EUROS (1,220,863,463 euros) and is fully
subscribed and paid-up.  Article 6. SHARES  The capital stock is made
up of ONE THOUSAND TWO HUNDRED TWENTY MILLION EIGHT HUNDRED SIXTY THREE
THOUSAND FOUR HUNDRED SIXTY THREE SHARES (1,220,863,463 shares) with a nominal
value of ONE EURO (1 euro) each, all of the same class, which will be
represented by accounting entries.  The
shares representing the capital stock are considered as securities and are
subject to Stock Market regulations.  The shares represented by
means of accounting entries are established as such by virtue of their entry in
the corresponding accounting records, which will show the details given in the
issue deed and whether or not they are fully paid-up, as the case may be.  2 
   The competency to
exercise the rights of shareholder, including that of transfer, as the case may
be, is obtained through the entry in the accounting records, which presumes
lawful ownership and authorizes the registrar holder to demand the Company to
regard said person as a shareholder. Such competency may be evidenced by
exhibiting the appropriate certificates issued by the entity responsible for
keeping the accounting records.  Should the Company make
any payment in favour of the supposed legitimate holder, it shall be released,
although said holder may not be the real holder of the share, provided that the
Company has acted in good faith and without any gross negligence.  Article 7. SHAREHOLDERS RIGHTS  The share confers the
condition of shareholder on its legitimate holder and gives him the rights
recognized in the Law and in the present Articles of Association:  In the terms established
in the Law and save in those cases contemplated therein, the shareholder has at
least the following rights:  a)The
right to share in the distribution of the business profits and in the assets
resulting from liquidation.  b)The
right to preferential subscription in the issue of new shares or convertible
bonds.  c)The
right to attend and vote at the General Meetings of Shareholders and to impugn
company resolutions.  d)The
right to information.  Article 8. NON-VOTING SHARES  The Company may issue
non-voting shares with a nominal value not exceeding one half of the paid-up
capital stock.  The holders of non-voting
shares shall be entitled to receive a minimum annual dividend of five per cent
of the paid-up capital for each non-voting share, as well as the other rights
established by the Law.  After the
minimum dividend has been resolved, the holders of non-voting shares shall be
entitled to the same dividend as that corresponding to ordinary shares.  3 
   Article 9. CAPITAL CALLS AND DEFAULT
BY THE SHAREHOLDER  The shareholder is
obliged to pay the part of the capital not paid up in the manner and terms
decided upon by the Board of Directors.  Any shareholder who has
not paid such calls within the period established for said payment of unpaid
capital shall be in default.  Shareholders in arrears
with the payment of calls on share capital may not exercise their voting
right.  The amount of their shares shall
be deducted from the capital stock for the calculation of the quorum.  Neither shall defaulting
shareholders be entitled to receive dividends or to preferential subscription
in new shares or convertible bonds. 
Once the amount of the capital calls has been paid, together with the
owed interests, the shareholder may claim the payment of the dividends not
prescribed, but may not claim the right to preferential subscription if the
period for exercising it has already expired.  When the shareholder is
in default, the Company may, as appropriate and in view of the nature of the
unpaid contribution, claim the fulfillment of the payment obligation, with
payment of the legal interest and any damages caused by the delayed payment, or
transfer the shares for account and risk of the defaulting shareholder or file
summary proceedings for collection against the assets of the shareholder in
order to collect in cash the undelivered unpaid part of the capital together
with the interest.  Should the Company have
opted to transfer and the sale is not possible, the share shall be redeemed,
with the consequent reduction of capital, any sums already received on account
of the share being retained by the Company.  The buyer of the unpaid
share shall be jointly and severally liable with all preceding transferors, and
at the election of the Companys Directors, for payment of the unpaid part.  The liability of the
transferors shall last for three years as from the date of the respective
transference.  Article 10.  DOCUMENTATION OF SHARES  The shares issued must be
recorded in the corresponding issue deeds which will indicate: the name, number
of shares, nominal value and other terms and conditions of the shares included
in the issue.  In respect of such
shares, the Company must comply with Stock Market regulations.  4 
   Article 11.  JOINT OWNERSHIP AND REAL PROPERTY RIGHTS ON SHARES  The rules regulating
joint ownership, usufruct, pledging and attachment of the Companys shares
shall be as determined in Sections 66 to 73 of the Revised Text of the
Joint-Stock Companies Act and other complementary provisions.  Article 12.  MODIFICATION OF THE CAPITAL  The capital stock may be
increased or reduced once or several times, subject to compliance with
applicable legal requirements.  In any capital increase
involving the issue of new shares, the existing shareholders and holders of
convertible bonds may exercise the right to subscription in the new issue to a
number of shares in proportion to the nominal value of the shares already held
or to those that would correspond to holders of convertible bonds should
conversion be carried out at that time, within the time limit established for
that purpose by the General Meeting of Shareholders or by the Board of
Directors, which may not be less than the time period established by applicable
law in force at the time.  The right to preferential
subscription shall not be applicable when the capital increase is due to the
conversion of bonds into shares, or to the absorption of another company or
part of the assets separated from another company, or when the General Meeting
of Shareholders, when deciding on the capital increase, resolves the total or
partial suppression of such right, pursuant to the requirements of
section 159 of the Revised Text of the Joint-Stock Companies Act.  In the issue of
convertible bonds into shares, the shareholders of the Company shall have the
right to preferential subscription to the convertible bonds. The same right
shall correspond to the holders of convertible bonds from previous issues in
the proportion corresponding to them according to the bases of conversion.  PART  III  DEBENTURES  Article 13.  The Company may issue numbered series of
debentures or other securities which acknowledge or create a debt, pursuant to
the provisions of the applicable legislation on the subject. Allsuch
securities will be subject to the regulations established with regard to
debentures by prevailing legal provisions and may be represented by entries on
account or nominative or bearer certificates and may be simple or
mortgage-backed.  5 
   PART IV  CORPORATE BODIES  Article 14.  The governing bodies of the Company are the
General Meeting of Shareholders and the Board of Directors.  SECTION I  CONCERNING THE GENERAL MEETING OF SHAREHOLDERS  Article 15.  THE GENERAL MEETING OF SHAREHOLDERS  The shareholders
constituted as a General Meeting of Shareholders, duly convened, shall decide
by majority vote on all matters within the competence of the Meeting.  All shareholders,
including those who are dissident or those who have not taken part in the
meeting, are bound by the resolutions of the General Meeting of Shareholders.  Specific Regulations for
the General Meeting of Shareholders shall regulate, consistent with the Law and
these Articles of Association, the matters failing under the General Meeting of
Shareholders authority.  Article 16.  TYPES OF GENERAL MEETING  General Meetings of  Shareholders may be ordinary or
extraordinary.  Article 17.  ORDINARY GENERAL MEETING  The Ordinary General
Meeting of Shareholders, previously convened for the purpose, must meet within
the first six months of each financial year to consider the management of the
company, approve the accounts for the previous year, as the case may be, and
decide on the application of the results.  The General Meeting may
also adopt resolutions on any other matters submitted for its consideration.  6 
   Article 18.  EXTRAORDINARY GENERAL MEETING  Any General Meeting other
than that contemplated in the previous article will be considered as an
Extraordinary General Meeting.  Article 19.  CALL OF THE GENERAL MEETING  The Ordinary or
Extraordinary General Meetings of Shareholders must be convened by the Board of
Directors by means of a notice published in the Official Bulletin of the
Commercial Registry and in one of the daily newspapers with the widest
circulation in the province in which the Company has its registered office, at
least fifteen days prior to the date fixed for the meeting, except in those
cases in which the law establishes a longer period of notice.  The announcement will
give the date of the meeting at the first call and all the matters that are to
be discussed.  It may also mention the
date at which the Meeting will be held at a second call, if this is necessary.  A period of at least
twenty-four hours must elapse between the first and second sessions.  If a duly convened
General Meeting should not be held at the first call and the notice has given
no indication of the date for a second call, this must be announced with the
same publicity requirements as the first, within the fifteen days following the
date of the General Meeting not held and eight days prior to the date of the
meeting.  Article 20.  POWER AND OBLIGATION TO CALL  The Board of Directors
may convene the extraordinary General Meeting of Shareholders whenever it is
considered to be in the Companys interests.  It must also convene the
General Meeting whenever requested by shareholders who hold at least five per
cent of the capital stock, indicating in the request the matters to be
discussed at the Meeting.  In this case,
the General Meeting must be convened to be held within the thirty days
following the date on which the Board of Directors has been notarially
requested to call the Meeting.  The Board of Directors
shall draw up the agenda, necessarily including the matters that have given
rise to the request.  Article 21.  CONSTITUTION OF THE GENERAL MEETING  The General Meeting of
Shareholders will be validly constituted at the first call when the
shareholders present or represented hold at least twenty-five per cent of the
subscribed voting capital.  7 
   At the second call, the
constitution of the Meeting will be valid irrespective of the capital attending
the same.  Article 22.  SPECIAL RESOLUTIONS, CONSTITUTION AND MAJORITIES  In order that the General
Meeting, whether ordinary or extraordinary, may validly resolve on the issue of
debentures, the increase or reduction of capital, the transformation, merger,
demerger or dissolution of the Company and, in general, any modification of the
Articles of Association, it must be attended, at the first call, by
shareholders, present or represented, who hold at least fifty per cent (50%) of
the subscribed voting capital.  At the
second call, it will be sufficient for twenty-five per cent (25%) of the said
capital to be present.  When the General Meeting
is attended by shareholders representing less than fifty per cent (50%) of the
subscribed voting capital, the resolutions referred to in the first paragraph
of this article may only be legally adopted by the vote in favour of two
thirds of the capital present or represented at the Meeting.  Special resolutions for
modifying the last paragraph of article 27 of the Articles of Association
relating to the maximum number of votes that may be voted at the General
Shareholders Meeting by a single shareholder or by companies belonging to the same
Group, as well as resolutions to modify this special provision, shall require
in both the first and second call the affirmative vote of 75% of the Companys
voting capital stock present or represented 
at the General Meeting.  Article 23.  RIGHT TO ATTEND  The General Meeting of
Shareholders may be attended by shareholders who hold at least 150 shares,
provided that these are recorded in the corresponding accounting record five
days prior to the meeting, and that they obtain in the manner stipulated in the
call, the relevant attendance card proving the fulfillment of said
requirements, which will be issued with a nominative character by the legally
authorized entities.  Those shareholders who do
not hold said number of shares may group together in order to attend,
appointing a representative who need not be a shareholder.  The members of the Board
of Directors should attend the General Meetings of Shareholders.  The Companys directors,
managers and technical staff may attend the General Meetings of Shareholders
when invited to do so by the Board of Directors.  The Chairman may
authorize the attendance of any other person as he shall deem fit, although the
General Meeting of Shareholders may revoke such authorization.  8 
   Pursuant to the
Regulations for the Meetings, voting on the proposals included in the agenda at
any General Meeting of Shareholders may be delegated or exercised by a
shareholder through the mail, electronically, or by any other remote communication
media, provided the identity of the person casting the vote is duly verified.
Shareholders casting remote votes must be counted as present for purposes of
convening the Meeting.  Article 24.  REPRESENTATION  All shareholders entitled
to attend may have themselves represented at a General Meeting of Shareholders
by another person, who need not be a shareholder.  The representation must
be conferred in writing or by remote communication, provided the identity of
the persons so acting is duly verified. The representation must in all cases be
conferred specially for each Meeting save as stipulated in Article 108 of
the Joint-Stock Companies Act. All the foregoing must be consistent with the
legally prescribed procedures and the Regulations for Meetings.  Article 25.  CHAIRMANSHIP OF THE GENERAL MEETING  The General Meeting of
Shareholders shall be presided over by the Chairman of the Board of Directors
or, in his absence, by the Vice-Chairman and, in the absence of both, by the
shareholder elected in each case by the shareholders present at the Meeting.  The Chairman shall be
assisted by a Secretary, who shall be the Secretary of the Board of Directors
or, in his absence, by the Assistant Secretary of the Board, and in the absence
of the latter, whoever is elected by the General Meeting itself.  The General Committee
presiding the Meeting shall be composed of the Board of Directors.  Article 26.  ATTENDANCE LIST  Before commencing
discussion of the Agenda, an attendance list will be drawn up, indicating the nature
or representation of each person present and the number of shares, owned or
represented, with which they attend.  The attendance list may
also be drawn up by means of files or on computer software.  In such cases, the means used shall be
indicated in the minutes of the meeting and the appropriate identification
shall be affixed to the sealed cover of the file or software, signed by the
Secretary and endorsed by the Chairman.  9 
   At the end of the list, the
number of shareholders present or represented will be calculated, as well as
the amount of capital held by them, specifying that which corresponds to the
shareholders with voting rights.  The Chairman is
responsible for appointing, should he so deem fit, two or more
shareholder-scrutineers, who shall assist the General Committee in drawing up
the attendance list and, if necessary, in counting the votes.  Article 27.  DELIBERATION AND ADOPTION OF RESOLUTIONS  After the meeting has
been declared open, the Secretary shall read out the points on the agenda.  Following the speech of
the Chairman of the Board of Directors and of those persons authorized by him,
the Chairman shall give the floor to any shareholders who request it, directing
and maintaining the debate within the limits of the agenda, except as provided
in sections 131 and 134 of the Revised Text of the Joint-Stock Companies
Act.  The Chairman will close the debate
when he considers that the matter has been sufficiently discussed, and will
then proceed to put the various proposals for resolutions to the vote.  Resolutions shall be
adopted with the favorable vote of the majority of the voting capital present
and represented at the General Meeting, with the exceptions contemplated in the
Law  and in these Articles of
Association.  The maximum number of
votes to be cast at a General Meeting of Shareholders by a sole shareholder or
by the companies appertaining to the same Group of companies will be 10 per
cent of the total share-capital with voting rights. To this extent it is
understood that  companies controlled by
another company, as defined by article 4 of the Ley de Mercado de
Valores (Securities Market Act) of July 28th, 1988 in force,
appertain to the same Group of companies. The vote limitation established by
this article will not prevent  the
total number of shares attending the meeting from being counted to determine
whether a quorum is present.  Article 28.  RIGHT TO INFORMATION  The shareholders may
request in writing prior to any General Meeting or verbally during the same,
such reports or clarifications as they may consider necessary with regard to
the matters included on the agenda.  The
Board of Directors shall be obliged to provide such reports or clarifications,
save in those cases in which, in the Chairmans opinion, publicizing the
details requested would go against the Companys interests.  This exception shall not
be applicable when the request is supported by shareholders who represent at
least one quarter of the capital.  10 
   Article 29.  MINUTES OF THE GENERAL MEETING OF SHAREHOLDERS  The minutes of the
General Meeting may be approved by the Meeting itself at the end of the
session, or otherwise within a period of fifteen days, by the Chairman of the
General Meeting and two scrutineers, one representing the majority and the
other representing the minority.  The minutes, approved by
either method, shall be enforceable as from the date of their approval.  Should a General Meeting
be held with the presence of a notary public required by the Board of Directors
to issue a certificate, pursuant to section 114 of the Joint-Stock
Companies Act, the notarial certificate shall be considered as the minutes of
the General Meeting, and shall not, therefore, require its approval.  SECTION II  THE BOARD OF DIRECTORS  Article 30.  COMPOSITION  The Company shall be
administered and governed by the Board of Directors, which shall adopt
regulations and rules for its internal organization and operations consistent
with the Law and these Articles of Association.  The Board shall be
composed of a maximum of sixteen members and a minimum of nine members. The
General Meeting of Shareholders shall determine the number, appointment and the
removal of the Board members.  The election of the Board
members shall be made by vote.  For this
purpose, any shares voluntarily grouped together in order to constitute a sum
of capital equal to or greater than that resulting from dividing the latter by
the number of Board members, shall be entitled to appoint those who, exceeding
whole fractions, are deducted from the corresponding proportion.  If this power is used, the shares so grouped
shall not participate in the appointment of the remaining members of the Board.  No persons incurring in
the prohibitions contemplated in section 124 of the Joint-Stock Companies
Act, nor those deemed incompatible according to prevailing legislation,
especially those so declared in the Incompatibilities of Senior Executives of
the State Act number 12, of May 11 1995, and in Act number 14 of April 21,
1995, of Incompatibilities of Senior Executives of the Administration of the
Autonomous Community of Madrid, may be elected as members of the Board nor may
they hold any posts in the Company.  11 
   The Board shall elect
from among its members a Chairman and one or more Vice-Chairmans, that may
substitute the Chairman in the order established in their appointment  In the absence of all them, shall act in his
stead the eldest Board member.  The
Board of Directors is also responsible for electing the Secretary and Assistant
Secretary, who may or may not be members of the Board.  In the absence of the
Secretary, the Assistant Secretary shall replace him and may exercise any of
his powers, including those of signing the minutes and issuing
certificates.  In the absence of both,
the youngest Board member present at the meeting shall act as Secretary.  The post of Board member
may be waived, revoked or subject to re-election, on one or several occasions,
for periods of equal duration.  In each financial year,
the company will allocate, in order to remunerate the members of the Board, an
amount equal to the 1,5 per cent of the net profits, which amount may only be
deducted after the legal reserve and any other compulsory ones are covered and
a dividend of, at least, 4 per cent, is declared in favor of the shareholders.
That amount shall be allocated in accordance with a resolution taken by the
Board, taking into consideration the office performed by each Director, their
effective dedication and their attendance to the meeting of the companys
corporate bodies. The Board may not allocate the full amount of the
participation in the profits in those years in which the Board may deem it
convenient, in which case no rights would be accrued by the Directors with
regard to the sum not allocated.  Board members may be
further remunerated with shares of the Companys stock, option on shares or
other securities which give the holder the right to obtain shares, or through
compensation schemes based on the quoted price of the stock.  The use of such compensation schemes must be
approved by the General Meeting, which will determine the value of the shares
taken as a reference, the number of shares to be distributed to each Director,
the exercise price of any option rights, the time period for the compensation
scheme, and such conditions as it may deem appropriate.  The Board of Directors
may use incentive plans consisting in the granting of shares of the Companys
stock, options to purchase such shares, other securities that give the holder
the right to obtain shares or based on the quoted price of such shares in order
to compensate Company personnel or the part of the personnel considered
convenient, provided such compensation complies with the Joint-Stock Companies
Act, the Securities Market Act and any other laws applicable in these
circumstances, in particular, the previous approval by the General Meeting when
required.  Article 31.  DURATION AND CO-OPTATION  The duration of the post of Board member shall be four years, one
quarter of the Board being renewed every year. 
The first renewals shall be made by drawing lots, and the following  12 
   by order of
seniority.  In the event of an uneven
number of Board members, said form of renewal shall be rounded upwards.  The appointment of the
Directors shall expire when, after a period of four years, a General Meeting
has been held or the legal period for holding the Ordinary General Meeting has
elapsed.  If any vacancies should
arise during the period for which directors have been appointed, the Board may
appoint persons from among the shareholders to fill such posts until the next
General Meeting of Shareholders is held.  Article 32.  BOARD MEETINGS  The Board shall meet at
least once every two months and whenever convened by the Chairman or whoever
acts in his stead, and also when requested of the latter by the majority of
Board members.  Meetings will normally
be held at the registered office, but may also take place elsewhere as
determined by the Chairman and indicated in the call.  The Board of Directors
shall be validly constituted when the meeting is attended by half plus one of
its members, present or represented. 
Each Board member may confer his representation upon another.  Resolutions shall be adopted by an absolute
majority of votes of members present or represented, and in the event of a tie,
the Chairman or whoever acts in his stead shall have the casting vote.  The minutes of Board meetings shall be set
down in the special book provided for the purpose and shall be signed by the
Chairman and the Secretary.  Article 33.  LIABILITY  The Directors must
fulfill the duties impose on them by the Law and these Articles of Association,
as well as those prescribed in the Companys Internal Regulations. In
particular, they shall perform their duties with the diligence of a competent
entrepreneur and a loyal representative in compliance with the legal duty of
diligent administration. They shall likewise fulfill the duties of fidelity,
loyalty and secrecy as requires by Law, without prejudice to the possibility of
development through the aforementioned legal provisions. The Board and its members
shall be liable to the Company, the shareholders and the Companys creditors
for any damages caused by acts contrary to the law or these Articles of
Association, or acts infringing the duties inherent in the performance of their
positions.  All the members of a
corporate administrative organ, who committed the act or adopted the harmful
resolution shall be jointly and severally liable, except for those who prove
that, not having participated in said adoption or execution were unaware of its
existence, or being aware of it, did everything they appropriately could to
prevent the damage, or at least expressly opposed it.  13 
   Article 34.  REPRESENTATION OF THE COMPANY  The Board of Directors
shall represent the Company in court and extrajudicially.  Such representation shall extend, without
any limitation whatsoever, to all the acts included in the business purpose.  The Board has the
following powers:  1.Those
especially attributed to it in certain articles of these Articles of
Association.  2.To
represent the Company with full responsibility in all kinds of acts and
contracts.  3.To
appoint and remove the Board members of subsidiary companies and directors,
managers or administrators for each and every one of the enterprises and plants
exploited by the Company, establishing their powers, duties and remunerations.  4.The
appointment of personnel, staff training and determination of duties,
attributions, bonds, salaries and bonuses.  5.To
organize, direct and control the Companys progress and approve the Internal
Regulations.  6.To
carry out the acts and enter into the contracts that may be necessary or
advisable for the realization of the business purpose, including those relating
to the acquisition or transference of real-estate property, the constitution of
real property rights, including those of mortgage or other personal or real
guarantees and leases and to decide on all kinds of business and operations
permitted to the Company by its Articles of Association.  7.To
agree on the credit or loan operations that may serve the Companys interests
and that are not reserved by the Law for the General Meeting of Shareholders.  8.To
decide on the investment of available funds, as well as those in reserve; to
draw up the budget estimates, authorize expenses and appoint agents and
representatives of the Company, with the faculties that it considers fit to
confer on them in each case.  9.To
submit to the Ordinary General Meeting each year the Accounts and explanatory
report on the management of the Board of Directors during the financial year.  10.To
convene the Ordinary and Extraordinary General Meetings of Shareholders and
execute their resolutions.  14 
   11.To
decide, if considered appropriate, on the payment of dividends on account of
the years profits, and propose to the General Meeting the mobilization of the
reserves.  12.To
decide whatever is considered appropriate with regard to the exercise of rights
and actions that may correspond to the Company before the ordinary or special
courts and tribunals and before the offices, authorities or corporations of the
state, autonomous communities, province or municipality, and with regard to the
filing of ordinary or extraordinary appeals, appointing representatives,
attorneys or lawyers to bear the representation and defense of the Company to
these ends, conferring the relevant powers on them in the manner considered to
be necessary including those for coming to agreement or desisting in
conciliations, proceedings, lawsuits, claims, appeals or actions of any kind
and at any stage of the proceedings, to request the suspension of the same and
for all that may be necessary, including the power to compromise judicially to
the fullest extent.  13.To
dispose of the corporate funds and assets and to claim, receive and collect
them, both from private persons and from public offices, setting up or
withdrawing deposits from the Caja General de Depósitos (General Deposit Bank)
and wherever it may suit the Companys interests; to open current bank
accounts, whether in cash, credit or securities and withdraw cash or securities
therefrom and, in general, to carry out all kinds of banking operations with
national or foreign entities; to dispose of the Companys funds held by
correspondents; issue, endorse, guarantee, accept, pay and negotiate bills of
exchange.  14.To
confer powers of attorney on certain persons for specific acts or to direct
certain branches of the Companys business.  15.To
resolve any doubts that may arise with regard to the interpretation of the
Articles of Association and make good any omissions therein, duly informing the
first General Meeting to be held thereafter.  The present indication of
powers of the Board of Directors is merely illustrative and in no way limits
the wide powers pertaining to it to govern, direct and administer the Companys
business and interests in all matters not specially reserved by the Law for the
competence of the General Meeting of Shareholders.  Article 35.  DELEGATION OF POWERS  The Board may appoint an
Executive Committee that shall be composed of the Chairman of the Board, that
shall  also be the Chairman of the
Committee and a maximum of seven  15 
   Directors.  The Secretary of the Board of Directors
shall act as Secretary of the Executive Committee.  The Board may also appoint one or more Managing Directors.  The permanent delegation
of any power of the Board of Directors in the Executive Committee or in the
Managing Directors and the appointment of the Board members who are to hold
such posts will require the favorable vote of two thirds of the members of the
Board.  The Board may delegate
all its powers, permanently, in the Executive Committee, except for those that
may not be legally delegated.  In the
same way, without prejudice to the powers of attorney that both the Board and
the Executive Committee may confer on any person, it may delegate powers in the
Managing Directors.  The Board may establish
any other Committees as it may deem convenient to deliberate in any business of
the competence of the Board, appointing the members that must compose such
Committees  Article 36.  FUNCTIONING OF THE EXECUTIVE COMMITTEE  The Executive Committee
shall meet at least once a month and as often as it is convened by the Chairman
or at the request of the majority of its members.  It may adopt final resolutions on all those matters delegated to
it by the Board of Directors, informing the latter at the first meeting to be
held thereafter, and it may also, in the event of emergency, adopt decisions on
other delegable matters, which it will submit for the Boards approval and
ratification.  Article 36
bis. AUDIT COMMITTEE  Under the name that the Board of Directors considers appropriate, the
Company shall have an Audit Committee comprising at least three Directors
appointed by the Board of Directors, who must have the ability, experience and
dedication necessary to perform their duties. 
The majority of the Committee members will be non-executive Directors,
with those who do not have executive authorities and Upper Management duties in
the Company being understood as such. 
The Chairman shall be elected from among said non-executive Directors
and must be replaced every four years, while he may be reelected as of one year
after his termination.  The Committee shall serve as support to the Board of Directors in its
vigilance duties, through periodic review of the economic and financial
information preparation process, the Companys internal controls and the
independence of the External Auditor.  The Committee shall have
the following duties, among others:  1.Report to the General Shareholders Meetings on the
matters raised there by the shareholders on subjects within the Committees
competence.  16 
   2.Propose to the Board of Directors, for submission
to the General Shareholders Meeting, the appointment of the External Auditors
referred to under Article 204 of the Restated Joint Stock Companies Law,
approved by Royal Legislative Decree 1564/1989, of December 22.  3.Oversee
the services of the internal Auditing Department.  4.Know the financial reporting process and the
internal control systems; and  5.Maintain the relationship with the external
auditors to receive information on such matters as may jeopardize the latters
independence, and any other matters related to the process of conducting
financial audits, as well as the other communications provided for in the
legislation on the Auditing of accounts and in the technical standards for
Auditing.  6.Any
other reporting and proposition duty of a general or special nature that may be
entrusted to it by the Board of Directors.  The Committee shall meet with the frequency it decides
and each time that it is called by its Chairman or when two of its members so
request.  Any member of the Companys
management team or personnel shall be obligated to attend the Committee
meetings and provide it with assistance and access to the information he has
available when so requested.  In order
to perform its duties, the Committee shall have the necessary means at its
disposal for autonomous operation.  The
Committee shall adopt its decision or recommendations by a majority of votes.  The Board of Directors
may develop the duties and rules of operation for the Audit Committee.  Article 37.  DUTIES OF THE CHAIRMAN  The Chairman of the Board
of Directors who, to all intents and purposes, shall be considered as Chairman
of the Company, shall have the following powers:  a)To
represent the Company, judicially and extrajudicially.  b)To
convene and preside over meetings of the Board of Directors and of the
Executive Committee and execute their resolutions.  c)To
direct the discussions of the Companys governing bodies over which he
presides.  d)To
ensure that the resolutions adopted by said bodies are duly fulfilled and to
endorse minutes and certificates.  e)To
exercise the senior management of all the Companys services.  17 
   f)To
bear the corporate seal.  g)Any
other power legally or statutorily attributed to him.  PART V  THE
FINANCIALYEAR AND THE ANNUAL ACCOUNTS  Article 38.  FINANCIAL YEAR  The Companys financial year
will commence on the lst of January and end on the 31st of
December of each year.  Article 39.  ANNUAL ACCOUNTS  Within a period not
exceeding three months as from the close of the financial year, the Board of
Directors must draw up the annual accounts, the management report and the
proposal for the application of the profits and, as the case may be, the
consolidated accounts and management report.  The annual accounts shall
comprise the balance sheet, profit and loss account and the annual report.  These documents, which form a unit, must be
drawn up clearly, in such a way as to give a true reflection of the Companys
net worth, financial situation and results.  The annual accounts and
the management report must be signed by all the Board members, and should the
signature of any of the latter be omitted, this shall be indicated on each of
the documents on which it is lacking, with an express indication of the cause.  Article 40.  AUDITING  The annual accounts and
the management report must be examined by auditors appointed by the General
Meeting of Shareholders before the end of the year to be audited, for a certain
period of time that may not be less than three years nor more than nine from
the initial date of the first financial year to be audited.  The appointed auditors may not be re-elected
as such until three years have elapsed since the end of the previous period for
which they were appointed.  18 
   The General Meeting may
appoint one or several natural persons or bodies corporate to act jointly as
auditors.  When those appointed are
natural persons, the General Meeting must assign a substitute for every auditor
appointed.  The General Meeting may
not revoke the appointment of auditors without just cause before the end of the
period for which they were appointed.  Should the General
Meeting fail to comply with the provisions of this article, being obliged to do
so, or the persons appointed should refuse the post or are unable to fulfill
their duties, the Board of Directors, the commissioner of the syndicate of
debenture-holders or any shareholder may request the Commercial Registry
pertaining to the Companys registered office to appoint a person or persons to
carry out the audit, pursuant to the Regulations of the Commercial Registry.  When there is just cause,
the administrators of the Company and those persons authorized to apply for the
appointment of auditor may request the Court of First Instance corresponding to
the Companys registered office to revoke the appointment made by the General
Meeting or by the Commercial Registrar and to designate another.  Article 41.  APPROVAL OF THE ACCOUNTS  The annual accounts shall
be approved by the General Meeting of Shareholders.  To this end, and
following the call of the General Meeting, any shareholder may obtain from the
Company,  immediately and free of
charge, the documents that are to be submitted for the approval of the Meeting
and the report of the auditors.  The
notice of call shall mention this right.  Article 42.  APPLICATION OF PROFITS  The General Meeting shall
decide on the application of the profits for the financial year in accordance
with the approved balance sheet.  The distribution of
dividends to ordinary shareholders will be carried out in proportion to the
capital they have paid up, at the time and in the form of payment determined by
the General Meeting; should no decision be made in this sense, the dividend
shall be paid at the registered office as from the day following that of the
resolution.  Dividends may only be
distributed against the profits of the financial year or unrestricted reserves
when the value of the net worth is not, or will not become as a result of
distribution, less than the capital stock.  19 
   Should there be losses
from previous years that would bring the value of the Companys net worth to
below the sum of the capital stock, the profits shall be applied to offset such
losses.  Neither may profits be
distributed until the preliminary expenses and those of research and
development and goodwill entered under assets on the balance sheet have been
fully written-off, unless the amount of available reserves is at least equal to
the sum of non-amortized expenses.  A sum equal to 10% of the
years profits shall be set aside for the legal reserve until this amounts to
at least 20% of the capital stock. 
Until such time as it exceeds said limit, the legal reserve may only be
applied for offsetting losses in the event that no other sufficient reserves
are available for the purpose.  The
above is without prejudice to the provisions of section 157 of the Revised
Text of the Joint-Stock Companies Act.  Finally, that part of the
profits for the year resolved by the General Meeting shall be applied to
voluntary reserves and to contribute to funds for constructions, new
investments and contingencies.  After the above
precautions have been taken and other applications stipulated in the Law and
the Articles of Association have been covered, the distribution of dividends
against the profits for the financial year or unrestricted reserves may be
resolved in the amount decided by the General Meeting; any remainder shall be
carried forward to the following financial year.  Article 43.  INTERIM DIVIDENDS  The distribution of
interim dividends to shareholders may only be resolved by the General Meeting
or the Board of Directors under the following conditions: the Board of
Directors shall draw up an accounting statement showing that there is
sufficient liquidity for the distribution, and the amount to be distributed may
not exceed the sum of the profits obtained since the close of the last
financial year, after deducting the losses from previous years and the amounts
to be set aside for legal and statutory reserves, as well as an estimation of
the tax payable on said profits.  Article 44.  DEPOSIT OF THE ANNUAL ACCOUNTS  Within one month
following the approval of the annual accounts, a certificate accrediting the
resolutions of the General Meeting approving the accounts and the application
of the profits shall be presented at the Commercial Registry corresponding to
the registered office, for deposit, together with a copy of each of said
accounts, the management report and the auditors report.  20 
   PART VI  WINDING-UP AND LIOUIDATION  Article 45.  WINDING-UP OF THE COMPANY  The Company shall be
dissolved by resolution of the General Meeting, adopted according to
article 22 of these Articles of Association and in the other events
contemplated by prevailing legislation.  Article 46.  LIQUIDATION OF THE COMPANY  Once the Company has been
dissolved, the period of liquidation shall commence, save in cases of total
merger or demerger or any other of overall assignment of assets and
liabilities.  From the moment that the
Company is declared in liquidation, the representation of the Board of
Directors shall cease, in the terms contemplated in the Revised Text of the
Joint-Stock Companies Act, and the same General Meeting that has resolved the
dissolution shall appoint an uneven number of persons to proceed with such
liquidation and will draw up the rules for same, pursuant to the legal
provisions in force.  On conclusion of the
liquidation, the liquidators shall draw up the final balance sheet, which shall
be inspected by the scrutineers, if they have been appointed.  They shall also decide on the proportion of
the corporate assets to be distributed per share.  This balance sheet shall
be submitted for approval to the General Meeting and shall be published in the
Official Bulletin of the Commercial Registry and in one of the more widely
circulated daily newspapers in the province where the registered office is
located.  PART VII  RESOLUTION OF DISPUTES  Article 47. Without prejudice to
the right of judicial objection of corporate resolutions, recognized in the
Revised Text of the Joint-Stock Companies Act, all litigious and controversial
issues and claims that may arise between the Company and the shareholders, by
reason of corporate affairs, shall be resolved by means of equity arbitration
which will take place in the locality where the Company has established its
registered office, through the intervention of one or three arbiters, in
accordance with the procedure stipulated by Act 36/1988, of 5th December, on
the Legal Regulations of Arbitration, and with the obligation to comply with
the arbitral award issued.  For all other
cases, the courts and tribunals of the locality in which the Company has
established its registered office shall be competent to judge.  21