CEPSA Acquires Stake in Colombian Exploration Blocks

CEPSA, through its affiliate CEPSA COLOMBIA, has signed an agreement with the oil and gas company HOCOL to acquire a 33.33% interest in three exploration blocks located in the Upper Magdalena River Valley, Colombia.

Major exploratory work in the three blocks known as San Jacinto, Río Páez and Achira, is scheduled to begin in the second half of 2004, and will entail conducting 2D and 3D seismic surveys. Depending on the results obtained, the next phase would involve well drilling.

CEPSA COLOMBIA was set up in 2000 and began its activity in 2001. Currently, and in association with Brazil's Petrobras (Petróleo Brasileiro SA) and Colombia's national oil company ECOPETROL (Empresa Colombiana de Petróleos SA), it holds an interest in the "Espinal" Block, where producing oil fields yielded CEPSA a net entitlement of 300,000 barrels of crude last year. CEPSA's stake in these fields comes to 15%. Additionally, exploration work is being carried out in an area of the block known as "Espinal Deep-Play" in partnership with Petrobras, with CEPSA's interest amounting to 50%.

Likewise, CEPSA is the operator of the "Torbellino" Block (100% CEPSA) which is also located in the Upper Magdalena River Valley, adjacent to "Espinal", where exploratory work is being performed.

The agreement signed with HOCOL is a further step forward in CEPSA's strategy of expanding and diversifying its businesses, with the target of achieving a more equitable balance in earnings contributions from the Company's different divisions.