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© Repsol S.A.
REPSOL
2013 ESG Road Show
2
Disclaimer
ALL RIGHTS ARE RESERVED
© REPSOL, S.A. 2013
Repsol, S.A. is the exclusive owner of this document. No part of this document may be reproduced (including photocopying), stored,
duplicated, copied, distributed or introduced into a retrieval system of any nature or transmitted in any form or by any means without
the prior written permission of Repsol, S.A.
This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the
Spanish Securities Market Law (Law 24/1988, of July 28, as amended and restated) and its implementing regulations. In addition,
this document does not constitute an offer of purchase, sale or exchange, nor a request for an offer of purchase, sale or exchange
of securities in any other jurisdiction.
Some of the resources mentioned in this document do not constitute proved reserves and will be recognized as such when they
comply with the formal conditions required by the U.S. Securities and Exchange Commission.
This document contains statements that Repsol believes constitute forward-looking statements which may include statements
regarding the intent, belief, or current expectations of Repsol and its management, including statements with respect to trends
affecting Repsol’s financial condition, financial ratios, results of operations, business, strategy, geographic concentration, production
volume and reserves, capital expenditures, costs savings, investments and dividend payout policies. These forward-looking
statements may also include assumptions regarding future economic and other conditions, such as future crude oil and other prices,
refining and marketing margins and exchange rates and are generally identified by the words “expects”, “anticipates”, “forecasts”,
“believes”, estimates”, “notices” and similar expressions. These statements are not guarantees of future performance, prices,
margins, exchange rates or other events and are subject to material risks, uncertainties, changes and other factors which may be
beyond Repsol’s control or may be difficult to predict. Within those risks are those factors and circumstances described in the filings
made by Repsol and its affiliates with the Comisión Nacional del Mercado de Valores in Spain, the Comisión Nacional de Valores in
Argentina, the Securities and Exchange Commission in the United States and with any other supervisory authority of those markets
where the securities issued by Repsol and/or its affiliates are listed.
Repsol does not undertake to publicly update or revise these forward-looking statements even if experience or future changes make
it clear that the projected performance, conditions or events expressed or implied therein will not be realized.
The information contained in the document has not been verified or revised by the Auditors of Repsol.
© 3
1. Company Overview
2. Our Strategy
3. Upstream
4. Downstream
5. Corporate Governance
Repsol S.A.
6. Annexes
I. Main KPI evolution
II. CSR Model and Sustainability Plans
III. Safety and Environment Processes
IV. Repsol’s Technology and R&D
V. Integrated Risk Model
VI. Main sustainability indexes and initiatives
VII. Repsol Foundation
4
Company
Overview
5 (1) Waiting for official ratification
E&P
R&M
E&P / R&M
Upstream
Core Businesses
Downstream
Non Operated Shareholding
Gas Natural Fenosa
1. Company Overview
Repsol Today
6
1. As of July, 31st
2. Considering Gas Natural stake as a financial investment: 29,172 M€
3. Ex-Gas Natural: 6,320 M€
4. Ex-Gas Natural: 2,582 M€
5. Net income from continuous operations
Capitalization
Capital Employed
Net Debt + Preferred Shares
Equity
EBITDA
EBIT
Net Income
Investments
CCS Adj. Net Income
As of Jun.13 M €
(3)
23,431
34,085
10,754
28,528
3,376
1,991
945
1,579
1,185
(4)
(5)
6M 2013
(1)
(2)
6,956
4,286
1,890
3,721
1,954
FY 2012
1. Company Overview
Repsol Today
7
Our Strategy
8
2. Our Strategy
High growth in Upstream
Financial strength Competitive shareholder
compensation
Maximize return on capital
Downstream
Dividend 2012: ~1€/share (scrip option)
40-55% pay-out ratio
Production growth 2011-16(1) : > 7% CAGR(2)
RRR(3) 2011-2016: > 120%
Upstream average capex: €2.9bn/year(4)
(+120% vs. average 2008-2011)
Downstream average Free Cash Flow: €1.2bn/year
Downstream average capex: €0.7bn/year (-50% vs. avg. 2008-11)
Self-financed plan generating € 8.1-8.6 bn cash for dividends & debt reduction in base case, resilient to stress scenario Maintain investment grade rating Divestments & treasury stock:
up to € 4-4.5 bn in 2012-2016(5)
2012-2016 Key strategic targets
1. 2011 production adjusted for Libyan revolution. It considers 2010 Libya production (14.7Mboe) instead of Libya 2011 production (3.4Mboe) 2. Compound annual growth rate 3. Average Reserve Replacement Ratio 2011-2016. 4. Net Capex. excluding G&G and G&A 5. Targets in 2012. Up to date divestments: 10% of treasury stock (€2.4bn); LPG Chile & Amodaimi (€0.6bn) and LNG business (€4.4bn).
9
Upstream
10 1. Reserve Replacement Ratio 2. Source IHS
World-class exploration success
– 32 firm wells in 2013
(9M13: 18 wells+1 appraisal
completed, 9 positive)
– Success ratio: 20-25%
– 6 discoveries among annual top 10 in 2008 –
2012
Developed a sizeable position in world’s most
attractive basins
Built strong growth project pipeline
Country Basin Field Operator
Brazil Santos Sapinhoa (Guara) Petrobras
Peru Ucayali Kinteroni 1X Repsol
Bolivia Chaco Huacaya Repsol
Venezuela Upper Guajira Perla 1X-Cardon Repsol - others
Brazil Gavea Campos Repsol
Brazil Campos Pão Açucar Repsol-Sinopec
65%
94%
131%
162%
204%
0%
50%
100%
150%
200%
250%
2008 2009 2010 2011 2012
(1)
(1) Historical success ratio above 30%
Leading RRR(1): 204% in 2012 (194% organic)
Discoveries in global annual top 10 since 2008(2)
3. Upstream
Transformation into a world-class explorer
11
3. Upstream
Upstream Strategy 2012-2016
Average investment above USD 1.0bn/year(1)
– 6.5 USD/boe produced, among industry leaders
Add between 300-350 Mboe of contingent resources per year.
Center in 3 geological themes:
– Atlantic break-up analogies, carbonates in offshore,, and
underexplored folded belts.
Producing assets
– Production decline below 1.7% p.a.
10 key growth projects on course, 5 already producing
– >200 kboed of incremental net production by 2016
Key strategic targets
– >7% CAGR(2) net production growth
– Reserve Replacement Ratio >120%
1. Including G&G and G&A 2. Compound annual growth rate
Focus on Exploration
Delivering growth
12
3. Upstream
Delivering Growth: 10 key growth projects in 2012-2016
Exploration Reggane (Algeria)
48 Kboed WI: 29.25% FID: 2009 FG: 2016
Lubina-Montanazo (Spain)
5 Kboed WI: 100-75%
FID: 2009 FO: 2012
Africa & Europe Brazil
Carioca
150 Kboed WI: 15%
FID: 2012 FO: 2016
Mid-continent (USA)
40 Kboed(1)
net production(1) -
FO: 2012
Sapinhoa
(Guara)
300 Kboed WI: 15%
FID: 2010 FO: 2013
USA
AROG (Russia)
50 Kboed WI: 49%
- FO: 2012
Russia
1 2 4 5 3 6
North Latam
Margarita-Huacaya (Bolivia)
102 Kboed WI: 37.5% FID: 2010 FG: 2012
7
Kinteroni (Peru)
40 Kboed WI: 53.8% FID: 2009 FG: 2013
8
Carabobo (Venezuela)
370 Kboed WI: 11%
- FO: 2013
9
Cardon IV (Venezuela)
53 Kboed(2)
WI: 32.5% FID: 2011 FG: 2014
10
2012-2016 Post 2016
Next wave of growth
• Contingent resources – Alaska: Quruk 1, 3, 6. Brazil: – C-33 (Seat, Gavea, Pao de Açucar) – Presalt Albacora – Malombe – Iguaçu – Piracuca-Panoramix-Vampira – Sagitario GoM – Buckskin Other – NC200 (Libya) – Sagari (Peru) – TIHS-1 (Algeria) – TD1 (Algeria)
• Prospective resources – GoM – Beaufort Sea – Louisiana – East Canada – Brazil: Campos, Santos & Espiritu
Santo – Colombia RC11, RC12 & Tayrona – Guyana – Angola and Namibia – Spain and Portugal – Norway offshore
Note: all production figures indicate gross plateau production; WI = Repsol Working Interest; FID = Final Investment Decision; FO: First Oil; FG: First Gas; Net capex 2012-2016, excluding G&G and G&A. 1. Average Repsol net production post royalties 2. Phase I gross production
Producing as of September 1st 2013
Key growth projects increasing Repsol net production: more than 200 Kboed in 2016
13
3. Upstream
Challenges
32 countries
Deepwater offshore
HPHT and Heavy Oil
Tight hydrocarbons
Arctic (?)
Exposure to non-operated activities
Political Risk Latin America
Africa
Russia
Safety & Environmental
Social Impact Human rights
14
3. Upstream
Political risk
Reshaping portfolio
Balance of exposure to OECD countries : US, Canada,
Norway, Europe
Custom made approach
Russia: Low profile, local alliances
Latin America: work closely with local governments
North Africa: limited activity to maintain current position
Namibia, Angola: offshore
* As of dec. 2012
** Strategic plan estimate
15
3. Upstream: A parenthesis on YPF
YPF Expropriation
400
(kbbld)
0
600
200
CAGR(4) :-3%
Outstanding value creation through exploration in unconventionals
Vaca Muerta discovery among global top-5(5), with 1,525 Mboe gross
contingent resources and 21,167 Mboe gross prospective resources in 8,071
km2 audited
Repsol net acreage of 12,000 km2
Intense unconventional exploration plan in Argentina
(%)
200
100
0 2011
169
2010
100
2009
70
2008
72
1. Discounting the impact of the strikes 2. Reserve Replacement Ratio 3. Considering Securities Exchange Commission (SEC) criteria 4. Compound Annual Growth Rate 5. IHS
RRR(2) crude oil(3) YPF crude production(1)
YPF EBITDA and investment
x 2.3
2
0 2011 2010 2009 2008
(USDbn)
6
4 Investments
EBITDA
2011 2010 2009 2008
2008-2011: YPF - A solid company before the expropriation
YPF key financials
YPF crude production and
reserve replacement
Vaca Muerta discovery
The lack of a fair compensation for the expropriation
has compelled Repsol to implement a legal strategy in
several jurisdiction to protect its rights.
16
3. Upstream: A parenthesis on YPF
YPF Expropriation
Divestment of 41.6% of YPF between 2008 and 2011
1. Book value of YPF as of December 2007 and December 2011 2. Corresponding to shareholders loan in Dec. 2011, 6% of YPF shares as collateral
The unlawful expropriation of YPF does not affect the growth capacity of any of
Repsol's businesses outside Argentina
5.3(1)
2008-11 Reducing exposure
51,0% 37,1%
11,9% Repsol (stake subject toexpropriation)
Others
Repsol (stake not subjectto expropriation)
As of August 2013
US COURTS ARGENTINEAN
COURTS SPANISH COURTS
ICSID
Claims
filed in:
Legal actions
Current Shareholding
Progressing according to the legal procedures.
11/07/2013:
Constitution of the
Tribunal
3. Upstream
Safety & Environmental risk
Non operated run by experienced operators: Petrobras, Chevron, BHP,
Statoil, Eni. Deepwater Offshore
Tight hydrocarbon operations
HPHT Operations
Frack fluids, slick water and sands utilized are nonhazardous in nature
Federal and local environmental and operational requirements
Experienced operator who follows all aquifers protection steps
Zero Discharge operations
Same oil spill response alliances as in Deepwater Offshore
Careful well design
No-risk decisions: first Guyana well was abandoned because the
conditions did not meet the design
Norway: Darwin well was designed for HPHT as a preventive measure
Brazil, GoM, Africa, Canada and others
US Mississipian Lime
Members of: Oil Spill Response (OSR), Joint Industry Project (JIP),
project of IPIECA and OGP, and Global Well Containment Response
Strategy
Guyana and others
17
18
3. Upstream
Safety & Environmental risk (2)
Exposure to non operatorship
62,4% Operated
5,6% Joint operations 68% of concessions operated or
with direct influence
32% Non operated 90% IOC operated
No exposure to oil sands, iced covered arctic sea operations or CBM
Operations plans are scrutinized internally with same rigour as those
operated
Non operated assets audits including environment, ethics and human rights topics
Comprehensive due dilligence prior to the asset acquisition
Arctic (?)
Alaska Chukchi Sea & Beaufort Sea: no operations in the medium term
Norway/Barents Sea: North-sea-type operations
Alaska North Slope: onshore activity.
Russia: onshore activity.
Heavy oil Heavy oil key to our refineries profitability
Conventional drilling
Lower impact first phase with dilutants
Higher impact in the upgrader phase Venezuela Orinoco Belt
19
3. Upstream
Operational Responsibility
Operational responsibility requires two
fundamental processes: Technical Quality and
Knowledge Management.
Their co-ordination provides assurance for
operational decisions, in critical processes such
as well construction, while promoting and
enriching evolving technical processes.
Both are connected
to a complex
network of
participants,
capturing new
perspectives
and increasing
technical
transparency.
Deep water track record: 13 wells from 2009 until today. 8 wells deep water (>300
mts water depth) and 5 wells ultra deep water (>1500mts water depth). No incidents.
Technical Quality
20
3. Upstream
Indigenous Communities
Ecuador, Peru, Bolivia, Alaska &
Venezuela
First O&G company operating in Latin America with an official policy
explicitly supporting indigenous rights protected by ILO Covenant 169,
including right to free, prior and informed consultation.
Team of 40+ people dedicated to dialogue and relations with indigenous
communities, 35% women, in Peru, Bolivia, Ecuador, USA and
Venezuela.
Signed agreements in most areas, ongoing dialogue and consultation
with all communities, currently no major disagreements.
Controversies focused on people living in isolation. Operating with
special preventive measures in Block 39 Peru, and Block 16 (Ecuador).
UN Guiding Principles on Business and Human Rights
Integration of human rights in impact assessments.
Reinforcement of leverage to prevent human rights impacts arising from our
business relationships.
Pilot grievance and remediation mechanism.
Training and awareness‐raising among all employees.
Adhesion to the Voluntary Principles of Security and Humans Rights.
21
3. Upstream
Margarita- Huacaya in Bolivia : Excellence in Project Integration
Geologically complex Remote location Indigenous communities
76 people: Geology, Reservoir, Drilling, Facilities, HSE, Community Relations, Procurement
20 years
Periodical environmental impact assessments plus compensations
Environmental performance reports
Environmental training on locals
10-year fiduciary fund where the perceived interest will be used un Health,
Education and Housing
Considered the first agreement of its nature in Latin America.*
Surrounding areas workers were hired during construction and trained on safety
and health issues from the beginning.
Challenging project
Multidisciplinary Project Management Team
Excellent Results
Results: 6 Lost Time Injuries LTI FR: 0.46 Budget: $611M vs. $505M TIC
Statistics: 300,000 Hours
Owner PMT
13,018,656
Hours Worked
12,813,674 km
travelled the field
3,800 people peak
Project executed in 22 months,
with a lower cost and time than
similar competitors projects
(IPA)
Friendship and Cooperation
Agreement with the Assembly
of the Guarani People
* By the APG IG (Assembly of the Guarani People).
22
Downstream
23
Presence in a premium market for
refining
Completion of expansion and
conversion projects
Integrated refining portfolio, working
as a unique system
Efficient integration between the
refining and marketing businesses
Note: Integrated R&M margin calculated as CCS/LIFO-Adjusted operating profit of the R&M Segment divided by the total volume of crude processed (excludes petrochemical business) of a 14-peer-group. Based on annual reports and Repsol’s estimates. 2013 data as of May 9th public information. Source: Company filings
Competitive Downstream business, linked to quality assets and
geographical situation
Industry peer group maximum margin
Industry peer group minimum margin
Repsol margins
Integrated R&M margin (Repsol vs. Sector)
4. Downstream
Downstream: Premium asset base
1Q 2Q 3Q 4Q
0%
20%
40%
60%
80%
100%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Mbpd
% FCC equivalent
Europe
24
4. Downstream
Downstream Strategy 2012-2016
• Fully invested asset portfolio and portfolio management
• Maximize margins and return on investment
• Profit improvement through operational excellence and efficiency
• Exploit focused high-value growth options with low capital requirements
– Leverage our premium portfolio to exploit in high return niche opportunities
– Operational excellence and debottlenecking initiatives
– Integrated margin enhancement
– Working capital reduction program
– Investment in Downstream of €0.7bn/year in 2012-16 (vs. €1.6bn/year in 2008-11)
– Downstream to generate +€1.2bn/year on average of free cash flow 2012-2016
– Refining margin to increase approx. 3 USD/bbl in 2016 due to new projects
– Leading middle-distillate yield in a short market
– Continue selective divestments of non-core assets during 2012-2016 period
25
4. Downstream
Challenges
Competitiveness
Operational excellence
Energy and Climate Change:
energy efficiency and CO2
emissions in industrial sites
Zero accidents
Product differentiation
Business Restructuring
CARTAGENA
CORUÑA BILBAO
TARRAGONA
PUERTOLLANO
PERU
LA PAMPILLA
SPAIN
26
4. Downstream
Operational Excellence: Energy and Climate Change
On the other hand, Repsol is continuously
monitoring the development of current/new CO2
markets and project mechanisms that could
promote the implementation of new emissions
reductions opportunities in all our Business Units.
Repsol achieved a total reduction of
2,000,000 t CO2e from 2006-2012 in the
Downstream business, all of them certified
according to the ISO 14064 standard.
Repsol uses international energy schemes
standards to systematically implement energy
management systems (EnMS) using ISO 50001
standard as a reference (4 installations already
certified).
We are conducting energy studies and audits to
identify opportunities to reduce our consumption
and emissions (15 Energy audits on all of our
industrial refining and petrochemical centers in
Spain).
In 2012, over 175 efficiency actions were taken
in our facilities and activities as part of the long
term plans to reduce energy consumption and CO2
emissions.
140 M€ investment in CO2 and energy efficiency
measures in 2012-2013.
CO2 Energy Efficiency
27
4. Downstream
Operational Excellence: Zero Accidents
3,27 2,42 2,25 1,96
1,39 1,40 1,09 0,92
0
2
4
2006 2005
Total Company Repsol IF evolution
Real LTIFR
1,6 1,6 1,21
0
1
2
2010 2011 2012
2,27
0,94 0,73
0
1
2
3
2010 2011 2012
Refineries Insurance Companies Qualification
Refining Petrochemicals
2008 2007 2009 2010 2011 2012
28
4. Downstream
32
Acc. with
lost days*
133
Acc. without lost days
208
Near misses
275
First Aids
35.708
Acts and unsafe conditions
C10 CARTAGENA
URF PETRONOR
OAI = 1,1
(*) Low severity index
Man-hours:
30,5 millons
220.000 training hours
7
Acc. with
lost days*
OAI = 0,9
Man-hours:
> 8 millons
60.000 training hours
64
First Aids
51
Acc. without lost days
80
Near misses
9.181
Acts and unsafe conditions
REFINING MAJOR PROJECTS SAFETY FIGURES
Operational Excellence: Zero Accidents
29
4. Downstream
Petrochemical business restructuring and product
differentiation
Product Differentiation Increase production of high value added products
EVA resins , Polyols
Gas reactor for increased polypropilene product array
Produce high density polyethilene with high optical and mechanical
properties
Feedstock Flexibility
Units shutdown
Replace chemical naphta by propane, ethane and naphta
Shutdowns of the Polydux EPS unit and the Puertollano high
density polyethilene unit
Only 84 jobs reductions. Employees have the option to be
relocated in other industrial complexes.
30
Corporate
Governance
31
5. Corporate Governance
Shareholder Structure
Number of Shares: 1,302.47 million (as of September 2013)
6.41%
SHAREHOLDERS %
Caixabank 12.02%
Sacyr 9.38%
Pemex 9.34%
Temasek 6.32%
Free Float 62.94%
12,02%
9,38%
9,34%
6,32% 62,94%
Caixabank
Sacyr
Pemex
Temasek
Free Float
32
5. Corporate Governance
Board of Directors
Number of Shares: 1,302.47 million (as of September 2013)
6.41%
Directors may not hold more than 4
mandates in other listed companies
Repsol currently has no overboarded
Directors
Presence of External Directors
The majority of the Board (87.5%) consists of External Directors
Market Practice: The tendency is to decrease the presence of Executive directors
Rotation of independent
Directors
None of the Independent Directors have been on the Company’s board for more than 12 years
Implementation of the international standard (12 years cap) in our legal framework
% of Board independence
50% of the Board is independent
Market Practice: Unified Good Governance Code recommends having 1/3 of the Board Independent
% of Committee
Independence
Audit and Control Committee: Composed exclusively of independent directors
Nomination and Compensation Commitee: Majority independent / Chairman is independent
Strategy, Investments and CSR: Composed exclusively of external directors
The company's Board of Directors recognizes that a solid commitment to
corporate governance is critical to establishing trust and credibility with investors.
33
5. Corporate Governance
Board of Directors
Gender Diversity
Female directors make up 25% of the Boards Independent Directors
Repsol has committed to increase the proportion of women in leadership positions in Spain to 29% by 2020
Repsol’s Board recognizes that the presence of foreign Directors can add value to the decision-taking process
In line with the multinational nature of Repsol, the Board is committed to include foreign born members with solid international experience, such as Henri Philippe Reichstul (Brazil), Arturo Henríquez (Mexico) and Rene Dahan (Dutch)
Geographical diversity
Combined positions of
CEO and Chairman
The Company has undertaken specific counterweight measures to mitigate what could be perceived as concentration of power:
50% of the Board consists of Independent Directors
All Board committees, with the exception of the Executive Committee, are composed exclusively of external Directors only
Appointment of a Lead Independent Director (Artur Carulla – Chairman of the Nomination and Compensation Committee)
Transparency on
remuneration
The Company continues improving the disclosure on the remuneration issues and the implementation of international best practices.
The Annual Remuneration Report is submitted for consultation vote to the General Shareholders Meeting. On 2013 AGM the Report was approved by the 86.733% of the share capital present on the meeting (In 2012 AGM the percentage had been 71.751%)
Since 2009 to 2013 the increase of the fix pay for Directors has only increased 2.5% in total
As from March 12, 2013 the Company will not make further pension payments in respect of the CEO, as per his decision.
The Company has committed to consider and analyze the application of the limit of 2 years severance payment when proposing the appointment of new Executive Directors as well as any other best practice on this regard
Combined Position, Diversity and Transparency
34
35
Annexes
Main KPI Evolution
Social 2010 2011 2012
Repsol personnel (number) 22,888 23,623 23,995
Accident frequency rate (Repsol and contractor staff) [10] 1.4 1.1 0.9
Training in safety and occupational health (hours) 163,908 139,915 217,899
Deaths (number) 5 2 4
Personnel covered by collective agreement (percentage) 62 58 57
Women staff (percentage) 30 31 32
Women in management posts (percentage) 13 14 15
Women on the Board of Directors (number) 2 2 2
Total turnover rate (percentage) [11] 8 5 8
Investment in training (millions of euros) 10.66 16.38 19
Training per employee (hours) 43 40 42
Repsol staff who receive performance evaluations (percentage) 39 36 38
Disabled persons (number) 407 462 543
Teleworking staff (number) 571 716 1,037
Incidents of discrimination (number) 4 1 3
Voluntary social investment (millions of euros) 23.74 24.87 24.05
Local purchases as percentage of total purchases 80.08 84.59 83.4
Evaluations of the performance of contractors and suppliers (number) 1,283 1,238 940
Audits on contractors and suppliers (number) 188 132 144
Expenditure on private and public security (millions of dollars)[12] 67.3 86.9 40.62
Litigation due to allegations of anticompetitive behavior (Number of cases initiated) [13] 0 0 0
Communications received under the Ethics and Conduct Regulation (number) [14] 131 212 15
Dismissals for failure to comply with the Ethics and Conduct Regulation (number) 25 81 88
[10] Measured as the number of lost-time accidents and fatal accidents accumulated during the year, per million hours worked.
[11] Total number of persons leaving the company/total personnel on 31 December of each year. Data for 2011 have been restated in relation to the expropriation of YPF, whereas 2010 data have not,
which means they are not comparable.
[12] Data for 2010 and 2011 include expenditure corresponding to YPF, and are therefore not comparable with those of 2012.
[13] In 2012, no penalty proceedings were conducted on account of anticompetitive behavior by Repsol Group companies, for an amount equal to or greater than five million euros. For further details on
the 2012 data, see the Annual Consolidated Accounts Report, Note 18, “Current and non-current provisions”, Note 35, “Liabilities, contingencies and commitments” and Note 36, “Information on the
environment”.
[14] Data include communications under the Ethics and Conduct Regulation received through several channels, including the communication channel with the Ethics Committee.
Environmental 2010 2011 2012 Comments
Atmospheric emissions (metric tons)
SO2 (2) 54,936 50,131 36,949
In 2012 our SO2 emissions decreased by 26% compared to the previous year as a result of replacing fuels and a lower sulfur
concentration during refining.
NOx 34,073 32,922 33,566 Emissions of NOx increased by 2% due to an increase in upstream drilling activities
NMVOC (2) 41,933 41,809 42,885
Emissions of NMVOCs increased by 3% caused by the increase in production levels at the Cartagena Refinery after the
implementation of the C-10 project at the end of 2011.
CO 8,832 8,804 8,696
Particulates 2,446 2,235 1,655
TOTAL 142,221 135,901 123,751
Water management (metric tons)
Fresh water withdrawn 58,017 61,156 56,243 Annual reduction due to facilities maintenance (Puertollano, Sines) and increase in reused water
Discharged 38,271 39,728 38,925
Reused 6,982 6,971 8,375 20% increase in 2012 due to the reactivation of water reuse in the refinery of Puertollano
Produced 58,408 56,758 58,556
Injected 52,895 51,976 53,678
Discharges (metric tons)
Hydrocarbons 150 151 259
During 2012, the discharge of hydrocarbons increased due to temporary operational issues in our Sines chemical plant.
However, the discharges stayed within legal limits and did not reach the environment. The flow is processed in a neighboring
urban waste water purification plant.
Suspended solids 1,413 1,594 1,581 Suspended solids and chemical oxygen demand decreased mainly in E&P operations in Trinidad and Tobago.
COD 5,372 10,758 8,752 Suspended solids and chemical oxygen demand decreased mainly in E&P operations in Trinidad and Tobago.
Waste management (metric tons)
Hazardous waste (3) 122,393 118,734 80,963
During 2012, the amount of hazardous waste treated decreased by 32% compared to 2011; this is mainly attributable to the
completion of exploration operations in E&P Brazil. In 2012 we earmarked 67% of the hazardous waste for reuse, and recycling.
Non-hazardous waste 105,856 93,195 71,700
The treatment of non-hazardous waste also decreased by 24%, mainly in the Petronor and Tarragona refineries. . In 2012 we
earmarked 27% of the non-hazardous waste for reuse, and recycling.
Spills (4)
Number of hydrocarbon spills greater
than one barrel that reach the
environment
27 37 29 Although the amount of hydrocarbons spilled this year has increased compared to 2011, mainly due to a spill in Tarragona’s
Industrial Complex, the number of hydrocarbon oil spills has decreased by 28%. Excluding this incident, hydrocarbon spills
would have decreased by 82% compared to 2011. Volume of hydrocarbon spills that
reach the environment (metric tons) 158 503 6,091
Environmental fines /sanctions (M€)
(5) 0 0 0
(1) In order to establish common bases for comparison over time, data for previous years have been adjusted in line with changes in the company's asset structure. The criteria for changing the baseline are included in oil-industry guidelines
(API/IPIECA/OGP). In March 2012, the Government of Argentina expropriated Repsol's majority holding in YPF, as a result of which 2012 inventories and those of previous years have been adjusted, eliminating the data from expropriated
facilities.
(2) For data on emissions from mobile sources, only those associated with own transport are included.
(3) Operational hazardous waste
(4) We report spills greater than one barrel that have reached the environment.
(5)Arising from litigation or administrative proceedings finalized and paid in the year, with an amount equal to or greater than materiality thresholds set in the individual litigation letters of Group companies.
For further details on the 2012 data, see the Annual Consolidated Accounts Report, Note 35 “Contingencies, commitments and Liabilities” and Note 36 “Environmental information”.
Annexes
Main KPI Evolution
37
Annexes
CSR Model
Identifying expectations
Reviewing performance
Measuring progress
Aligning performance to
expectations
CORPORATE COUNTRY OPERATION
CSR Coordination System at Repsol
Stakeholders’ expectations regarding Repsol performance on: 1. Governance 2. Human Rights 3. Labour practices 4. Environment 5. Fair operating
practices 6. Consumer issues 7. Community
development and engagement
Corporate CSR
Committee
Country CSR
Committee
Sustainability plans
38
Annexes
CSR Model: Sustainability Plans
2013-2014 Sustainability Plans Nº of Actions
Governance 43
Human Rights 32
Labor Practices 57
Environment 61
Fair operating practices 77
Consumer issues 16
Community involvement and development 81
Total 367
367 actions, 7 programs. 80% of the actions linked to “Variable Remuneration Program”
2013-2014
Sustainability
Plans
Some issues analized by the CR
Committee during 2012
Follow up the 2012 Sustainability Plan and update
the 2013 Sustainability Plan.
Develop the Human Rights´ online training module
Analyze the external expectations from the
stakeholders identified in 2012.
Update the Ethics & Conduct Regulation.
Implementation of the UN "Protect, Respect and
Remedy" Framework.
The proposal to apply the CR Coordination System
at the operational site level.
The progress carried out by the National Corporate
Responsibility Committees.
39
Annexes
Safety and Environmental Processes
Hazard Identification
Risk Analysis and Evaluation
(throughout all phases of the facility
life cycle)
Facilities Design - Based on the best International
Standards
Operational Control : - Strict procedures
- Permit to work
Emergency Management: - Sound
- Drills and international
response mechanisms
Internal and External
Environment Analysis
Highlights in Safety and Environmental Risk Management
In 2012, 2013 risk analysis studies were carried out, with 95% of fulfillment over the plan.
New standards: prevention and mitigation of fires, explosions and toxic releases; and safety barriers design guide
Focus on spill prevention and response:
Marine and fluvial oil spill management standard
Members of Oil Spill Response (OSR)
Recently joined Joint Industry Project (JIP) project of IPIECA and OGP
Standard for safety during loading, carriage and unloading of goods by sea/river
R&D of mechanisms for the early detection of spills and the remediation of damaged soils
On-going training
RE
SP
ON
SE
Zero Accidents
PR
EV
EN
TIO
N
40
The management system is the basis of safety and environment management. It consists of
policies, procedures, technical guides and management tools, which are applicable to all company
activities and include strict requirements. It is constantly updated to adapt to best sector practices.
New score card, with more preventive indicators (35% currently and plan to get 60% at the end of
2014)
Implementation of the Environmental Management Information System (EMIS): Improve the
traceability of environmental information to support data quality and auditing. Pilot implementation
project in the Industrial Complex of Puertollano in 2012. The implementation will continue during
2013 in large industrial sites and all the company's operational assets will be progressively
incorporated.
We carried out over 400 safety and environment audits in 2012.
We increase our ISO 14001 certifications.
Annexes
Safety and Environmental Processes
Environmental Management
System
41
Annexes
Safety and Environmental Processes: Incidents
Management
GAMA ® software to register,
investigate and follow up incidents
Graphic Investigation
Tool (HGI)
Zero accidents
Performance indicators
37 29
2011 2012
Evolution of the number of oil spills
Number of hydrocarbon oil spills > 1 bbl that reached theenvironment
Preventive Indicators
New score card, currently with 35% of preventive indicators
and plan to get 60% at the end of 2014.
During 2012, 847 out of 850 incidents were investigated
(99,6%)
During 2012, 1356 out of 1358 improvement actions were
established (99,8%)
Preventive measures on transport safety in countries with high
traffic accident rates and poor infrastructure: 800 drivers with a portable passport system that shows
the training they have received in transport safety
Installation of approximately 200 new GPS devices
Risk assessments in more than 140 existing client routes
and the establishment of marketing criteria based on
those risk assessments
Incident
=
accident
and near misses
Communication of the incident
Investigation of the incident:
identification of root cause
Improvement actions / lessons learned: prevent similar incidents
The 31st of July 2013:
• LTIF rate = 0,54
• Number of spills: 9
42
Annexes
HSE Department Functions for Drilling Projects
Advisory Function 2
Technical Quality Management Function (QA/QC) 3
Provide local (Country and Site) support for HSE requirements implementation, with the participation and
validation of operational (drilling) personnel.
Identification of Country, Local & Company HSE applicable requirements.
Identification of activities and deliverables to ensure Drilling Projects compliance with the identified HSE
requirements.
Monitoring of HSE MS Implementation through:
Peer reviews & peer assist (Quality Assurance) – Multidisciplinary revision
Technical reviews (Quality Control) – Multidisciplinary revision
Periodic inspection and review (HSE MS Auditing) through in-country / site personnel
Typically 1 HSE Manager & HSE technical support for each project (Repsol personnel)
Continuous supervision and support through on site HSE supervisors (Repsol personnel)
Governance Function 1
Provide requirements and guidelines in:
Application of Corporate Policies, Norms and Tools
Hazard & Incident Management (emphasis on Major Accident Hazards)
Occupational Health & Safety (Risk Assessment)
Process Safety
Environmental & Social Management (Environmental, Social and Health Impact Studies)
Emergency Response (emphasis on Blow Out Control, Oil Spill Containment and Response)
Consolidation & Report (preventive & corrective KPIs)
The drilling function is considered for the development and revision of the above mentioned processes.
43
Annexes
Repsol’s Technology applied to operations
The Kaleidoscope project improves the success rate when searching for new sources of hydrocarbons in the subsurface.
This 100% Repsol technology can process seismic information 15 times faster than other companies in the sector and improves the reliability of the seismic images, increasing the chance of finding oil and gas, through a new generation of computer chips.
The Sherlock Project integrates knowledge of
geology, geochemistry and high-resolution
analytical chemistry. Its objective is to characterize
the different elements of a petroleum system in
order to reduce the geological risk and increase
the exploratory success rate.
We use catalysis processes and technologies to improve energy efficiency and environmental performance of our refining and petrochemical processes:
• Co-production of biofuels using oils and fats in our refining scheme.
• Green asphalt technology, that include bitumen developed from used tires, recycling more than 10,000 tons of waste tires annually.
Technology in
E&P operations
Technology in
Downstream
At Repsol we are convinced that technology
research and innovation are key to achieving
operational excellence.
Repsol Technology Center is the core where we focus our
R+D. There, more than 400 researchers design innovative
energy solutions in order to turn them into commercial
realities clean and competitive.
44
Annexes
Repsol’s R&D: anticipating the future
At Repsol we believe that through research and innovation, with technology, we are able to
create a new smart energy model that anticipates the provision of sustainable and
competitive energy.
Reducing CO2 emissions by giving this gas
a use is one of the objectives of the
research programme.
The project called CO2 Funnels,
coordinated by Repsol under the framework
of a Ministry of Science and Innovation
initiative,
attempts to demonstrate the possibility of
capturing CO2 from industrial processes
through the carbon fertilisation of energy
crops, obtaining biomass, which in turn can
be used to produce energy.
Advanced biotechnology to develop a new
generation of biofuels from sustainable
energy crops and other micro organisms,
optimized for more efficient new engines.
Advanced technology in asphalts that
can capture NOx emissions from cars,
in order to have cleaner air in urban areas.
We have developed a new generation of environmentally friendly
plastics for greenhouses, and are now developing technology* to
obtain plastics that repair themselves automatically and
independently after suffering damage, recovering their initial
aesthetic and mechanical properties.
The self-repairing plastics will give an important boost to
productivity in different sectors thanks to the maintenance savings
they will bring about, as well as environmental benefits, occupational
safety improvements and greater comfort for end users
*This technology is also being applied in the development of self-healing
asphalts
We are also involved in
R&D projects using
new materials like
graphene, to develop
new energy storage
model for
transportation.
45
Annexes
Renewable Energy
The Repsol New Energy
Business Unit has continued
during 2012, to study
comprehensive utilization of
biomass from agricultural
energy crops, with the aim of
developing oil and ethanol
production projects, and
electricity through
cogeneration.
Biofuels Wind Power Others renewables Tech.
In 2011, purchase of the
company Sea Energy
Renewables will enable the
development of 1,190 MW
net of offshore wind power in
the UK. Through this
adquisition, Repsol Nuevas
Energías UK developes
three offshore wind energy
projects at Scottish coast.
In 2013, Repsol New Energy
Ventures acquired 31% of
Principle Power Inc., the
first company in the world
that has been able to design,
install and operate the first
semi-submergible floating
structure to generate
offshore wind energy. At
present, its 2.0 MW turbine
has generated over 6 GWh
of electrical energy.
The Repsol SolarGas
combination achieves low
CO2 emissions by combining
a cleaner fuel such as gas
with a renewable energy
such as solar energy. Using
the sun as an energy source
also allows us to achieve
substantial energy savings.
Transport Electrification
IBIL, the company 50% owned
by Repsol Nuevas Energías, and
EVE (Basque Energy Board),
continues to develop a charging
network for electric vehicles in
Spain. IBIL is the first recharging
operator for electric vehicles
registered with the National
Energy Commission that
provides private recharging
services (in residential and
company garages), as well as
public (in public car parks,
shopping centers and oil
stations). Nowadays, IBIL has
implemented a control center to
monitor and manage all aspects
of infrastructure and business.
Also during 2011, Ibil created
Ibilek, an electric car-sharing
company.
In 2013, Repsol New Energy
Ventures acquired 18% of
Tocardo, a Dutch company
owner and developer of a
leading technology for the
production of energy from
river and inshore tidal.
In 2012, we acquired a 50% in
Neol Biosolutions. Neol is
devoted to develop
bioprocesses to produce
biofuel and bioproducts using
the most appropriated
naturally- sourced
microorganisms.
46
Annexes
Integrated Risk Model
FINANCIAL RISKS
Liquidity
Market
Counterpart
STRATEGIC RISKS
Macroeconomics
Geopolítics Competitors Regulation Partners
Image and reputation
Portfolio management
Innovation and development
Corporate governance
OPERATIONAL RISKS
Ethics and conduct
People and organisation
Information systems
Suppliers and contractors
Operational excellence
Project management
Accidents and singular events
Compliance
Our Company is exposed to numerous risks
which can influence the achievement of the
Strategic Plan.
47
Annexes
Integrated Risk Model
An Enterprise Risk Management (ERM) System creates certainty in order to attain the goals of
the Strategic Plan through a systematic approach to risk portfolio management.
ISO 31000: 2009 Risk Management
Principles and Guidelines on Implementation
Establishing the context
Risk Identification
Risk Analysis
Risk Evaluation
Risk Treatment
Co
mm
un
ica
tio
n a
nd
co
ns
ult
ati
on
Mo
nit
ori
ng
an
d r
evie
w Risk Assessment
Risk Acceptance
No
No
Yes
Yes
RISK DECISION POINT 1
Assessment satisfactory
RISK DECISION POINT 2
Treatment satisfactory
ECIIA* / FERMA**
Three Lines of Defense Model
*European Confederation of Institutes of Internal Auditors
** Federation of European Risk Management Associations
1st LINE OF DEFENSE 2nd LINE OF DEFENSE 3rd LINE OF DEFENSE
Management
Controls
Internal
Control
Measures
Financial Control
Security
Risk Management
Quality
Inspection
Compliance
Internal
Audit
Executive Committee Audit Committee
Board of Directors
Shareholders
Our ERM System is being upgraded in order to align it with international standards:
48
Repsol has led the Oil & Gas sector for two consecutive years, in the 2011 and 2012 editions of the
prestigious Dow Jones Sustainability Indexes.
The company also leads the Oil & Gas sector on the European index (DJSI Europe).
Annexes
Main Sustainability Indexes and Initiatives
49
Repsol is the leading oil and gas company in 2012 for carbon management, according to the Climate
Disclosure Leadership Index (CDLI), comprising the top 50 international companies in
communication and transparency on climate change
Our Company has won recognition for its energy efficiency and carbon management for the third
time in the last five years
Annexes
Main Sustainability Indexes and Initiatives
2009 2010 2011 2012 2013
Maximum Energy sector score 88 90 92 98 98
Minimum score for Energy
sector companies to be eligible
for the CDLI
79 88 90 95 97
Repsol’s score 75 88 89 98 98
70
75
80
85
90
95
100
2009 2010 2011 2012 2013
Maximum Energy sector score
Minimum score for Energysector companies to be eligiblefor the CDLI
Repsol’s score
50
NEWSWEEK GREENIEST COMPANIES 2012: GLOBAL RANKING
Company Country Industry
Sector
Industry
Rank
Impact Management Disclosure Green
Score
2011
Green
Score
Rank
Change
248 Repsol Spain Energy 1 49.4 60 99.9 59.2 60.1 -61 255 Total France Energy 2 50.1 60.2 95 59.1 59.1 -45
266 ENI Italy Energy 3 45.5 62.3 99.8 58.5 55.9 11
279 Saipem Italy Energy 4 53 57.3 83.3 58 56.5 -18
285 Baker Hughes United
States
Energy 5 51.2 60.9 73.2 57.8 56.2 -16
287 OMV Austria Energy 6 49.5 56.3 99.9 57.6 56.3 -23
301 Statoil Norway Energy 7 54.4 49.1 99.6 56.5 57.7 -61
309 Petrobras Brazil Energy 8 44.1 58.4 100 56.2 51.1 55
320 Suncor Canada Energy 9 45.2 56.4 98.6 55.6 54.5 -14
325 Schlumberger United
States
Energy 10 55.6 50.7 70.6 54.9 46.9 103
342 Reliance
Industries
India Energy 11 46.7 57.4 73.3 54.2 47.9 70
348 Shell United
Kingdom
Energy 12 50.8 48.5 91.4 53.8 53.4 -28
368 Tatneft Russia Energy 13 51.9 58 34.1 52.9 N/A N/A
371 BP United
Kingdom
Energy 14 50.2 45.5 94.9 52.6 50.5 5
386 ONGC India Energy 15 47.6 55 55.9 51.8 50.8 -16
396 JX Holdings Japan Energy 16 42.2 60.5 49.9 51.2 49.8 -13
404 Weatherford
International
United
States
Energy 17 54.1 51.3 28.1 50.2 49.4 -10
407 National
Oilwell Varco
United
States
Energy 18 58.4 51.8 4.2 50 43.4 60
409 Chevron United
States
Energy 19 54.1 39.1 79 49.9 49.4 -14
415 Lukoil Russia Energy 20 47 52.7 45.4 49.4 47 12
421 Halliburton United
States
Energy 21 49.3 43.2 75 49.1 49.7 -32
422 Rosneft Russia Energy 22 45.1 52.7 50.2 49 49.1 -22
423 Sasol South Africa Energy 23 19.5 67 99.9 48.9 47.6 -3
425 ConocoPhillip
s
United
States
Energy 24 47.9 44.7 70.6 48.7 47.5 -2
431 Gazprom Russia Energy 25 38.5 51.6 75.9 48.1 45.9 5
Annexes
Main Sustainability Indexes and Initiatives
51
Annexes
Main Sustainability Indexes and Initiatives
By being a participant member, Repsol commits itself to gather and
disclose all the information required by each initiative.
Taxes paid per country (€m)
Country 2010 2011 2012
Upstream Downstream Total
Spain 7,930 8,310 12 8,171 8,183
Bolivia 21 25 50 1 51
Brazil [84] 518 47 40 2 42
Italy 301 299 371 371
Libya 584 120 944 944
Peru 594 711 147 631 778
Portugal 1,043 1,132 1,117 1,117
Trinidad and Tobago 455 522 385 385
Venezuela 103 196 141 141
Other countries [85] 4,619 4,994 339 997 1,336
Total [86] 16,168 16,356 2,058 11,290 13,348
We voluntarily publish the taxes we pay, on a country-by-country
basis. We have done so since 2010.
[84] The 2010 figures for Brazil cannot be compared with those for 2011 and 2012 due to Repsol selling its 30% stake in the company Alberto Pasqualini Refap in
December 2010. S.A. (Refap).
The figures for Repsol Sinopec Brasil, S.A. are included according to the percentage shareholding in the company in consolidation (60%).
[85] Includes taxes of less than €50 million paid in other countries where the Repsol Group operates and those relating to our Argentinian company YPF up to the
time when it was expropriated.
[86] The reduction in 2012 with respect to the figures for previous years can be explained primarily by the expropriation of YPF, S.A. (this table only shows the figures
up to the time of the exit of this entity).
52
Annexes
Repsol Foundation
Building Future
Social Development and Cooperation
Energy Observatory:
Annual publication of global energy markets evolution. Overview of
energy life cycle at EU-15 and Spanish level.
Social research on energy efficiency and entrepreneurship
Learn about Energy: www.aprendenergia.com
Pedagogic tool for energy diffusion approach in educational centres
Mobile Energy technology classroom: awareness and responsibility
message for energy efficiency and sustainability
The Entrepreneurs Fund: first Spanish private fund on energy
efficiency, supporting innovative start-up projects that improve
sustainability in the energy value chain. 17 projects currently
supported.
Improving the quality of life and promoting health and culture in the
communities in which Repsol is present by:
Fostering economic development and integration of lower classes
and vulnerable groups
Supporting health education, assistance and research
Helping to preserve the historical heritage
Stimulating social responsibility, solidarity and volunteering
contribution of Repsol employees
Encouraging artistic activities
Sustainable Energy Model
Educational and training actions
University chairs and scholarships
Scholarships for vocational training
Scientific workshops at educational centres
©
REPSOL
2013 ESG Road Show
Repsol S.A.
