Repsol says reserve replacement ratio nearing 90 pct

Repsol, however, will end 2009 with proved reserves - defined
under standards laid down by the U.S. Securities and Exchange
Commission - of 1.05 billion barrels of oil equivalent, without
including YPF, or 1.2 percent below the 2008 level.

SEC rules say a company can claim as "proved" reserves only the
petroleum that it can demonstrate to be economically producible
under existing conditions.

The reserve replacement ratio measures the relationship between
new reserves and oil produced, reflecting how well an oil company is
replacing its production. Ideally, it should be more than 100
percent.

Brufau told reporters in Rio de Janeiro that the company "no
longer has problems in doubling its reserves."

The Spanish oil company, excluding Argentine subsidiary YPF,
expects to end the year with production of 122 million barrels of
oil equivalent, or roughly the same as in 2008.

Repsol remains committed to the idea of unlocking the value of
its investment in YPF and is examining the possibility of doing a
partial sale of the Argentine unit's shares on the New York and Sao
Paulo stock markets, Brufau said, adding that he was not ruling out
selling a stake to an industrial partner.

The company's operations chief, Miguel Martinez, said recently
that there had not been "significant advances" in talks to sell YPF
to China National Petroleum Corp. and the China National Offshore
Oil Corp.

The $15 billion investment that YPF represents is "too much" for
Repsol's balance sheet, but the company wants to retain a
controlling stake in the Argentine subsidiary, Brufau said.

Repsol does not want to "sell YPF cheap" and the unit's
divestment will take place "calmly and without losing focus," the
executive said.

Repsol has already brought a local partner into YPF, selling a 15
percent stake to Argentina's Petersen Group.

The company announced plans about two years to sell an additional
20 percent of YPF on the stock market, but the deal was put on hold
due to the instability caused by the global financial meltdown.

Repsol will not be pressured into selling assets, Brufau said,
noting that the 2008-2012 Strategic Plan, which calls for shedding 6
billion euros ($8.97 billion) in assets, was unanimously approved by
the board of directors.

"The plan is the Bible," Brufau said, adding that no board member
has ever questioned the plan and that Repsol was already more than
halfway to meeting the divestment target.

The CEO was referring to reports that Repsol's main partner,
Sacyr Vallehermoso, which has a 20 percent stake, was demanding the
sale of assets or that a certain dividend rate be paid to make the
company a more profitable investment.

The financial crisis has forced the company to make adjustments
to the Strategic Plan, including reducing exploration investment by
600 million euros ($897.7 million), to 9.3 billion euros ($13.9
billion), Brufau said.

Exploration has turned out more successful with less money,
Brufau said.

If the economy, however, remains as "flat" as it currently is,
the goal of tripling net income in 2012, compared to 2008, will not
be achieved, the executive said. EFE

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