Key Figures
2010 Financial and operating HigHligHts
annual report
and corporate
responsibility report
Results
2010
2009
2008
Sales revenues1
Adjusted operating income (*)
Exploration & Production
Refining & Marketing
19,696
680
334
180
16,084
468
236
113
22,831
880
332
394
144
62
88
21
418
216
634
57
270
105
375
66
524
(249)
275
268
5,689
1,561
621
254
268
5,288
1,388
951
214
268
5,139
1,325
1,579
268
1.56
0.95
61
19.90
1.01
0.80
79
26.78
1.96
1.00
51
69.3
122,923
28,699
427,458
28.70
3,613
25,624
116,891
31,696
408,623
28.70
3,273
21,338
121,866
21,931
437,487
29.30
3,494
22,122
79.47
1.30
(4.19)
36.98
11.24
1.33
0.80
3.00
61.51
0.40
(3.73)
37.00
10.19
1.39
1.20
0.80
96.99
5.85
(3.33)
64.43
20.63
1.47
4.60
1.40
(Millions of euros)
Petrochemicals
Gas & Power
Adjusted net income attributable to shareholders of the parent company (*)
(Losses)/Gains from inventory valuation and other non-recurring income
Net income attributable to shareholders of the parent company (IFRS)
Financial Data
(Millions of euros)
Share capital
Net equity attributable to shareholders of the parent company 2
Net financial debt
Investments undertaken during the year
Dividend declared by CEPSA 3
stock MaRket Data
(Euros)
Adjusted net income attributable to shareholders of the parent company per share (*)
Dividend per share declared 3
Pay out ratio (%) (*)
Average price (euros)
opeRating Data
Crude oil production from working interests (BOPD)
Crude oil sales (BOPD)
Processed crude (BOPD)
Products sales (millions of tons) 4
Electric power production (GWh)
Natural gas sales (GWh)
MaRket inDicatoRs
Brent crude price ($/barrel)
Cracking refining margin ($/barrel)
Hydroskimming refining margin ($/barrel)
Electricity pool price (€/MWh)
Natural gas price (Henry Hub Spot, €/MWh)
Exchange rate ($/€)
Euribor (3 month, %)
CPI
Key Figures
social and environmental HigHligHts
Social
eMployees 5
2010
2009
2008
11,814
1,114
1,107
409
450,000
11,703
1,060
1,024
437
462,839
11,815
1,490
1,047
554
600,753
572
530.90
554.70
81
3.76
4.10
3.10
4.80
48,098
89
4.11
3.59
3.43
5.30
93,311
112
5.27
4.65
3.60
5.46
125,483
3.60
3.00
4.20
enviRonMental investMent anD expense
2010
2009
2008
Investment
Expense
66.08
70.70
41.11
78.87
38.44
68.70
0.121
0.195
0.059
0.256
0.497
5,179
3,054
0.147
0.178
0.074
0.262
0.410
5,756
4,711
0.147
0.202
0.062
0.256
0.404
6,200
3,163
Number of staff
New staff
Staff departures
Staff turnover 6
Training (Hours)
Economic value distributed to employees (millions of euros)
occupational health anD saFety
Number of lost-time occupational accidents 8
Lost-time accidents frequency rate (own personnel) 9
Lost-time accidents frequency rate (own personnel and contractors) 10
Common illness absenteeism
Absenteeism (%)
Health and safety training hours for own personnel 11
local coMMunities
(Millions of euros)
Investment in Corporate Responsibility initiatives
Environmental
(Millions of euros)
eMissions by business unit
Refining (t of CO2 equivalent/t of crude oil treated)
Petrochemicals (t of CO2 equivalent/t of product obtained)
Exploration and Production (t of CO2 equivalent/t of net oil)
Cogeneration (t CO2 equivalent/net total MWh produced)
Mixed Combined Cycle (t of CO2 equivalent/net MWh of electric power produced)
CO2 emissions (kilotonnes)
Environmental training hours
* Not including the gains or losses generated by changes in the
price of inventories and other non-recurring results.
1 Not including the special tax levied on hydrocarbons.
2 Before final dividend for the year.
3 Dividend distributed against each year’s earnings.
For comparative purposes, the 2010 figures include
the proposed dividend to be submitted to the Annual General
Meeting of Shareholders.
4 Excluding crude oil sales.
5 New staff, staff departures and staff turnover do not include CEDIPSA (100% CEPSA). This company is engaged in the operation and
installation of service stations and its activity is seasonal.
6 Includes those who leave the organisation due to disability, resignation, death, retirement or dismissal.
7 Includes wages and salaries, contributions and provisions for pensions, social security and training expenses.
8 Accidents that cause temporary unfitness for work, permanent disability or death.
9 Number of lost-time accidents per million hours worked.
10 Number of working hours lost per theoretical annual working day.
11 Training hours per employee are calculated based on the number of employees entered in the CEPSA HR ACCESS database
(87.75% of total personnel, comprising Spanish subsidiaries).
adjusted net income
attributable to sHareHolders
oF tHe parent company
(Millions of euros)
investments
undertaken
during tHe year
(Millions of euros)
dividends
declared
by cepsa
(Millions of euros)
investment
in corporate
responsibility
(Millions of euros)
2008 2009 2010
2008 2009 2010
2008 2009 2010
(Millions of euros)
2008 2009 2010
adjusted
operating
income
2008 2009 2010
(Millions of euros)
2008 2009 2010
Key
indicators
sales
revenues
19,696
16,084
22,831
680
468
880
418
270
524
621
951
1,579
254
214
268
3.60
3.00
4.20
contents
Letter from the Chairman......................... 02
ValuE of our Group
ThE YEar in rEViEw
Message from the Chief
Executive Officer ....................................... 04
• Corporate Identity and Commitment ......12
• 2010 Milestones ....................................... 22
• CEPSA and Corporate Responsibility ...... 14
• CEPSA in 2010 .......................................... 24
Governing Bodies........................................06
• Corporate Governance ..............................16
• Generating value .....................................26
• Board of Directors ....................................06
• CEPSA’s Position on Public Policies ........ 18
• The Macroeconomic Climate
and the Sector..........................................28
• Executive Management Committee ...... 08
• Energy Supply ..........................................30
• CEPSA and the Stock Market .................. 32
our acTiViTiES
our STakEholdErS
• International Presence and key Assets .. 36
• Our Stakeholders ..................................... 72
• Exploration & Production ........................ 38
• Employees ................................................ 76
• Refining, Distribution & Marketing ........48
• Communities ............................................86
• Petrochemicals ........................................ 58
• Customers and Suppliers ........................92
• Gas & Power ............................................. 62
• Technology, Innovation & Development. .. 66
our commiTmEnT To
ThE EnVironmEnT
oThEr informaTion
• Environmental Management ................104
• Auditors’ Report and Consolidated
Financial Statements .............................124
• Greenhouse Gases (GHG)........................114
• Financial Information .............................. 132
• Initiatives to Protect Biodiversity .........120
• Notes from the Board of Directors ....... 140
• GHG Emissions Inventory:
Applicable Criteria .................................. 142
• CEPSA Group key Addresses................. 144
letter From the
cHairman
CEPSA • ANNUAL REPORT 2010 • LETTER FROM THE CHAIRMAN
“Emerging economies play
an increasingly important
role in global demand for
crude, which grew by 2.8
million barrels per day last
year. This trend is expected
to continue over the next
decade, with year on year
growth in the region of
a million barrels per
day expected.”
To Our Shareholders:
This 2010 Report entails a change of format
in the presentation of our Company’s
financial and non-financial results and
performance, since it combines the yearly
information that we used to publish
separately in CEPSA’s Annual Report and
Corporate Responsibility Report into a
single document.
This innovation reflects the Company’s
integrated approach to the management
of the financial, operational, environmental
and social aspects of our business. Our main
aim is to provide all our stakeholders with
a comprehensive report that, in addition to
containing the legally required information,
enables them to have a clearer, more
complete picture of CEPSA’s activities,
performance, values, strategies, impacts
and achievements.
First and foremost, I want to inform you
about an extremely important event that
has taken place since the year-end closing
which will mark a new stage in CEPSA’s
history. The sovereign wealth fund of Abu
Dhabi, International Petroleum Investment
Company (IPIC), which holds 47.06% of
CEPSA’s shares, announced, through a
Significant Event filed with the Spanish
Securities Market Commission (CNMv), the
2
launch of a takeover bid for 100% of the
Company’s share capital, subject to receiving
the requisite regulatory approvals. Our
main shareholder, TOTAL, has expressed a
commitment to sell, for the price offered,
its entire holding of 48.83% of the
share capital.
Although the details of this operation are
not yet finalized, pending the completion of
certain legal formalities, I wish to convey to
TOTAL and its representatives on our Board
of Directors my gratitude for the support
we have always received from both its staff
and its management team. I also wish to
thank our minority shareholders for their
loyalty and commitment to the Company
throughout our eighty-year history.
I would also like to express my appreciation
to IPIC, which has been a shareholder in
CEPSA since 1988. This takeover bid is a clear
demonstration of its confidence in Compañía
Española de Petróleos, S.A. and our capacity
to successfully meet future challenges.
2010 has been a year of great uncertainty
in the markets, especially in Spain, which is
slowly emerging from this global crisis and
has only just started on the road to
economic recovery.
CEPSA • ANNUAL REPORT 2010 • LETTER FROM THE CHAIRMAN
“This 2010 Report entails CEPSA’s Annual
Report and Corporate Responsibility Report
into a single document.”
Against this backdrop, the CEPSA Group’s
adjusted EBITDA in 2010 was €1,431 million,
32% up on the previous year’s results.
Adjusted operating income (EBIT) was €680
million, 45% higher than in 2009, while
adjusted net income was up by 55% at
€418 million.
Sales revenues were €19,696 million, 22.5%
higher than in 2009 and the Company
closed the year with net debt of €1,561
million, representing a multiple of just 1.09x
EBITDA, lower than the multiple at the end
of 2009.
With regard shareholder return, CEPSA’s
Board of Directors declared a 2010 interim
dividend of €0.45 per share and plans
to propose a final dividend for the year
of €0.50 per share, which will be put
before the Annual General Meeting of
Shareholders, bringing the total dividend for
the year to €0.95, an increase of 18.75% on
the previous year and amounting to a
pay-out ratio of 61%.
These results were produced in a year
characterized by rising benchmark Brent
crude prices, peaking at $115/barrel,
improving refining margins, rising chemical
product prices and a stronger dollar,
averaging $1.33 to the euro.
Worldwide growth rates in 2010 were in
line with those seen before the recession.
There have, however, been significant
regional variations behind this trend, with
China, India and Brazil being the fastest
growing countries. Emerging economies
play an increasingly important role in global
demand for crude, which grew by 2.8 million
barrels per day last year. This trend is
expected to continue over the next decade,
with year on year growth in the region of a
million barrels per day expected.
Rising energy costs raise doubts about the
much-needed recovery of our economy, and
highlight concerns regarding security of
supply to the continent.
At the same time we are aware that the
role of fossil fuels in the primary energy
mix must be reduced in favor of more
environmentally friendly sources of energy
if development is to be sustainable.
Nevertheless, in the medium term, oil will
continue to be the energy product for which
there is greatest demand, and our sector
must focus its efforts on guaranteeing
secure, accessible supplies for all, produced
using efficient, clean processes throughout
their life cycle.
The European refining industry is currently
going through a rationalization process
in response to its obvious over-capacity,
which will particularly affect the least
efficient or worst located production
centers. Oil consumption in Europe is not
set to increase over the coming years, as a
result of efficiency improvements and the
application of policies based on a
low-carbon energy model.
CEPSA considers the consolidation of
its refining base to be a key part of this
process of industrial restructuring. The
Middle Distillate Production Capacity
Expansion Project at the La Rábida refinery
in Huelva was the biggest investment in the
Company’s history since the construction
of its three refineries. The plant, which
was inaugurated by H.M. the king on
October 27, makes the refinery one of the
most efficient in Europe and increases its
distillate production capacity by almost 3
million tonnes a year.
Finally, I would like to take this opportunity
to thank the Group’s almost 12,000
employees for their commitment,
professionalism and constant hard work,
without which the Company’s success
would not be possible.
Santiago Bergareche Busquet
Chairman
Consumption of petroleum products in
Spain fell by 2.2% in 2010. There is still,
however, a significant shortfall in the
production of middle distillates, with net
imports of 12 million tonnes of diesel
and kerosenes.
3
message From the
cHieF executive oFFicer
CEPSA • ANNUAL REPORT 2010 • MESSAGE FROM THE CHIEF ExECUTIvE OFFICER
4
“CEPSA has implemented,
within budget, a number
of successful projects
such as the expansion
and increase in the
conversion capacity of
our La Rábida refinery,
the MEDGAZ pipeline and
the development of the
Caracara oilfield
in Colombia.”
In 2010 CEPSA’s adjusted net income
before extraordinary items climbed 55%.
This major improvement, one of the most
significant in the sector, is a reflection not
only of the severity of the recession we
have been experiencing since 2007, but
also of CEPSA’s ability to respond to it.
It suggests we are well on our way back
to the profit levels achieved prior to the
recession, which would ensure the desired
levels of returns on our assets.
Initiatives launched in 2008 and 2009
to reduce costs and increase the energy
efficiency and productivity of our industrial
facilities and to improve the effectiveness
of our commercial operations have enabled
CEPSA to take advantage of the somewhat
more favorable economic climate in 2010.
Our crude production from working
interests rose by 4.8%, with crude prices
clearly rising since 2009.
While the Spanish economy has shrunk
by 2%, our sales of refined products have
fallen by just 1.3%, with margins slightly
up on 2008. There is, however, still some
way to go before they recover to the levels
of four years ago. Sales volumes in our
petrochemical activities have increased by
almost 15%, with unit margins improving
perceptibly, thanks to growing demand
from Asian markets.
Our power and natural gas sales were also
strong despite sluggish market conditions.
CEPSA • ANNUAL REPORT 2010 • MESSAGE FROM THE CHIEF ExECUTIvE OFFICER
“We are well on our way back to the profit levels
achieved prior to the recession, which would ensure
the desired levels of returns on our assets.”
CEPSA has implemented, within budget, a
number of successful projects such as the
expansion and increase in the conversion
capacity of our La Rábida refinery, the
MEDGAZ pipeline and the development of
the Caracara oilfield in Colombia.
Capital expenditure in 2010 totaled €621
million, while strong cash generation
enabled us to maintain our debt-to-equity
ratio at 27%, in line with the previous year.
We will continue to invest in Exploration &
Production in 2011 to undertake exploration
in new permits in our portfolio and begin
developing the first discoveries. We
also plan to expand our petrochemicals
business internationally, following two
years of consolidation and reorganization.
Finally, we will continue to work hard to
implement planned improvements to make
our organizations more flexible and boost
the profitability of our refineries. We will
build on the investments made over the
last two years to ensure our output is more
responsive to fluctuations in demand.
All the CEPSA Group’s employees have
responded with enthusiasm to two
initiatives launched in 2010, and which
are now beginning to produce results. Our
safety campaign is intended to change
behavior and encourage zero tolerance
for accidents, while a second campaign
focuses on actively promoting a spirit of
innovation, both within the company, in
our operational processes, and externally,
finding ways to ensure our customers
are satisfied.
The documents presented here give a true
and fair view of the financial situation and
results of our Group and of the dedication
and commitment of all our employees.
dominique de riberolles
Chief Executive Officer
5
Board oF
directors
12
CEPSA • ANNUAL REPORT 2010 • BOARD OF DIRECTORS
Honorary Chairman
carlos pérez de Bricio olariaga
Chairman
Santiago Bergareche Busquet 13
vice-Chairmen
michel Bénézit 13
khadem al Qubaisi 13
Chief Executive Officer
dominique de riberolles
Board Members
h.r.h. carlos de Borbón-dos Sicilias, infante of Spain
José manuel otero novas
murtadha m. al hashmi 14
Eric de menten 14
patrick pouyanné
Saeed al mehairbi 14
humbert de wendel 14
nathalie Brunelle
mohamed hamad al mehairi
Secretary of the Board of Directors and Audit Committee
alfonso Escámez Torres
6
12 Configuration of the Board of Directors at February 25, 2011, the date on which the Financial Statements, Management Discussion
& Analysis for Compañía Española de Petróleos, S.A. and Compañía Española de Petróleos, S.A. and its Subsidiaries (Consolidated
Group), Explanatory Report on the MD&A and Proposal for Profit Distribution of Compañía Española de Petróleos, S.A. (CEPSA), all
pertaining to fiscal year 2010, were approved.
13 Member of the Nomination and Compensation Committee.
14 Member of the Audit Committee.
CEPSA • ANNUAL REPORT 2010 • BOARD OF DIRECTORS
AdditionAl informAtion
At the Board of Directors’ meeting held on April 28, 2010 Ms. Bernadette Spinoy tendered her resignation as a shareholder representative director due to changes in her
responsibilities in TOTAL, SA. During the same meeting Ms. Nathalie Brunelle was co-opted as a shareholder representative director to fill in the vacancy created by
Ms. Spinoy’s resignation.
CEPSA’s Annual General Meeting of Shareholders held on May 29, 2010 ratified the appointments of Mr. khadem Al Qubaisi, Mr. David Forbes and Ms. Nathalie Brunelle to their
respective posts as non-executive shareholder representative directors. The first two directors were co-opted on October 1, 2009 and the third on April 28, 2010, at the meetings of
the Board of Directors held on those dates.
At the meeting held on September 29, 2010, the Company’s Board of Directors accepted the resignation of Mr. David Forbes as a shareholder representative director, due to his
retirement from International Petroleum Investment Company (IPIC).
During the same meeting, the Board of Directors resolved to co-opt Mr. Mohamed Hamad Al Mehairi as a shareholder representative director in accordance with Article 35 of the
Corporate Bylaws. This appointment is pending ratification at the Company’s next Annual General Meeting of Shareholders.
On February 16, 2011, the Abu Dhabi sovereign wealth fund, International Petroleum Investment Company (IPIC), which held 47.06% of CEPSA’s share capital at that date,
announced via a Significant Events filing with the Spanish Securities & Exchange Commission (CNMv) that it was launching a takeover bid for CEPSA’s entire share capital. The
main shareholder, TOTAL, announced its commitment to sell its entire shareholding in CEPSA, representing 48.83% of the capital. The bid price is set at €28 per share plus a
dividend of €0.50 per share, to be paid out to shareholders before the takeover bid is finalized. The transaction is pending regulatory approvals and clearances from the CNMv and
Competition Authorities.
7
eXeCutiVe management
committee
15
CEPSA • ANNUAL REPORT 2010 • ExECUTIvE MANAGEMENT COMMITTEE
Seated down, from left to right:
Second row, from left to right:
vice President - Refining
vice President – Retail/Wholesale
Operations
José maría García aguado
francisco calderón
vice President - Technology
Jaime Berbés
vice President – Supply, Trading,
Marine & Aviation
Senior vice President - Oil Marketing
iñigo díaz de Espada
miguel del mármol
Chief Executive Officer
vice President - Communications and
Institutional Relations
dominique de riberolles
luis calderón
Senior vice President - Corporate
Technical Area
vice President - Specialties
federico Bonet
pedro miró
8
15 Configuration of the Executive Management Committee at March 1, 2011.
CEPSA • ANNUAL REPORT 2010 • ExECUTIvE MANAGEMENT COMMITTEE
vice President - CEPSA Química
Operations
federico molina
Senior vice President - Human Resources,
Legal Affairs and Property Asset
Management
Juan rodríguez fidalgo
Senior vice President - Exploration &
Production, Natural Gas and Corporate
Management
Senior vice President - Strategy & Control
José Eulogio aranguren
fernando maravall
vice President - Exploration & Production
Senior vice President - Petrochemicals
luis Travesedo
fernando iturrieta
vice President - Commercial Planning
& Distribution
carlos navarro
9
Corporate identity and
commitment
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CORPORATE IDENTITY AND COMMITMENT
Compañía Española de Petróleos S.A.
(CEPSA) is an integrated energy company
operating at every stage of the oil value
chain, with nearly 12,000 employees. It
is engaged in petroleum and natural gas
exploration and production activities;
refining, the transport and sale of crude oil
derivatives and gas; cogeneration; and sale
of biofuels and power.
CEPSA’s Petrochemicals division, which is
highly integrated with the Refining division,
manufactures and markets raw materials
for high-added-value products that are
mainly used for the manufacture of
new generation plastics and
biodegradable detergents.
CEPSA is one of Spain’s top companies
and is gradually broadening its global
portfolio of operations in Algeria, Brazil,
Canada, Colombia, Egypt, Panama, Peru and
Portugal, selling its products worldwide.
12
CEPSA plays a key role in satisfying the
demand for energy in its areas of influence,
thereby contributing to the social and
economic development of the areas in
which it operates while paying specific
attention to safety and protecting
the environment.
In this Report, CEPSA demonstrates
that it performs its activities within the
framework of responsible behavior and
the sustainability targets it has set itself.
The chapters cover the main challenges,
policies and targets and the Company’s
performance in relation to its operations, to
its relationship with its stakeholders and to
protecting the environment. The Company
considers that these three dimensions are
needed for a full picture of its business
approach and, now more than ever, of the
Company’s fundamentals that will enable it
to face a future still marked by uncertainty
and recession.
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CORPORATE IDENTITY AND COMMITMENT
Mission, Vision
and Founding Principles
mission
To be a competitive and
customer-focused energy
and petrochemicals company
that is respectful towards the
environment and committed
to society.
Vision
To be a responsible corporate
citizen in the management
of our resources and in all
our actions vis-à-vis our
stakeholders.
founding principles
Our Founding Principles are
based on respect for human
rights, transparency in
management, quality, and
safety in all our operations,
enabling us to fulfill our
Mission and achieve our vision.
13
Cepsa and Corporate
responsibility
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CEPSA AND CORPORATE RESPONSIBILITY
CEPSA understands and acknowledges
the social and environmental impact of
its activities. Therefore, one of its priority
targets is to contribute to sustainability in
the areas where the Company operates.
As an energy company, CEPSA is
responsible for producing and providing
sufficient, secure, clean and affordable
energy to its customers, in order to create
wealth that will benefit all who invest in or
are affected by its business.
CEPSA therefore believes that corporate
social responsibility is about achieving
operational excellence in business
management, improving in areas in which
it has experience, responding to challenges
and adapting to society’s needs
and expectations.
14
CEPSA bases its conduct on its Mission,
vision and Founding Principles: Respect for
human rights and diversity; transparency
in the management of the Company
and in the information it provides to its
stakeholders; and quality and safety in its
products and services, its manufacturing
processes, its premises and facilities and
its operations.
These values form an essential part of
the Company’s corporate culture, which is
based on a desire to gain the confidence
of all its stakeholders. Shareholders,
employees, customers, suppliers and the
wider society are all vital to the Company’s
success. Indeed, CEPSA is convinced that
its capacity to generate value is linked to
its ability to understand the expectations
of its many stakeholders and to meet
them with quality and efficiency.
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CEPSA AND CORPORATE RESPONSIBILITY
The energy sector is also particularly crucial
for economic and social development. As
a company active in all the stages of crude
oil, from exploration and production of
hydrocarbons to the sale of the products,
CEPSA’s activities have, throughout the
product life cycle, a great economic,
social and environmental impact on its
stakeholders. For CEPSA sustainability
means constantly recognizing
this responsibility.
Specifically, CEPSA is committed
to creating value and safeguarding
shareholders’ interests; offering quality
goods and services to its customers;
meeting the needs of its employees;
establishing a framework of trust and
collaboration with its suppliers; and
upholding the wellbeing of society and,
specifically, the communities in which it
operates; all with the maximum respect
and minimum impact for the environment.
Specifically, CEPSA is
committed to creating
value and safeguarding
shareholders’ interests;
offering quality goods
and services to its
customers; meeting the
needs of its employees;
establishing a
framework of trust and
collaboration with its
suppliers; and upholding
the wellbeing of society
and, specifically, the
communities in which
it operates; all with the
maximum respect and
minimum impact for
the environment
15
Corporate
governance
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CORPORATE GOvERNANCE
Corporate
governance model
CEPSA’s Corporate Governance policies and
procedures provide support and set lines
of action to ensure that the organization
as a whole achieves the overall goals of
the Company and that the interests of its
shareholders are protected. Their structure
focuses on the following objectives:
• Ensuring good governance, in line
with CEPSA’s Mission, vision and
Founding Principles.
• Creating value.
• Delivering customer satisfaction.
• Improving environmental and ethical
conduct, energy efficiency, and safety.
In its Corporate Governance Model, CEPSA’s
Annual General Meeting of Shareholders
constitutes the highest governing body
representative of its share capital. It
meets once a year to discuss and adopt
resolutions on matters of strategic interest
to the Company. Its resolutions enter into
force on the date of their approval and
are mandatory for all. CEPSA’s Board of
Directors and its Committees complete its
governing structure.
Board of directors
CEPSA has a Board of Directors whose
mission is to determine the Company’s
strategic direction and economic objectives,
and to ensure that the Company responds
to the concerns and the needs of the society
in which it operates. It held nine meetings
in 2010.
As of December 31, 2010 CEPSA had two
main core shareholders: French oil company,
TOTAL, holding 48.83%, and International
Petroleum Investment Company, (IPIC),
holding 47.07% of the shares. The
remaining 4.10% was held by minority
shareholders and listed on the Continuous
Market of the Spanish Stock Exchange. On
February 16, 2011, IPIC launched a takeover
bid for 100% of CEPSA shares. TOTAL
declared its intention to sell its shares.
For more information, see the Corporate
Governance Report and www.cepsa.com
stRuctuRe oF the boaRD
2010
2009
2008
13
13
19
Executive
1
1
1
Non-executive independent
3
3
4
Non-executive shareholder representative
9
9
14
Other non-executive
-
-
-
Between 30-50
46.15
38.46
31.58
Over 50
53.85
61.54
68.42
% Women
7.69
7.69
5.30
Number of Directors
Types of Directors
% Per Age Group
16
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CORPORATE GOvERNANCE
On February 16, 2011,
IPIC launched a takeover
bid for 100% of CEPSA
shares. TOTAL declared
its intention to sell
its shares
Board Subcommittees
The Board of Directors may designate
permanent or temporary committees,
comprising the number of Board Members
deemed necessary, to assist the Board in its
decision-making on certain issues. These
must include an Audit Committee and a
Nomination and Compensation Committee.
audit committee
auDit coMMittee
name
position
type
Chairman
Non-executive shareholder
representative (TOTAL)
Saeed Al Mehairbi
Member
Non-executive shareholder
representative (IPIC)
Murtadha Al Hashmi
Member
Non-executive shareholder
representative (IPIC)
Eric de Menten
Member
Non-executive shareholder
representative (TOTAL)
Humbert de Wendel
The Audit Committee is made up of four
non-executive Board Members, appointed
by the Board of Directors on the basis
of their professional experience and
competence in the accounting, financial
and auditing fields. The Audit Committee,
governed by its Internal Regulations
and by the Board of Directors’ Rules and
Regulations, meets at least quarterly
and prepares an internal Annual Report
on its Activities. In 2010 it met
five times.
nomination and
compensation committee
noMination anD coMpensation coMMittee
name
position
type
Chairman
Independent
Michel Bénézit
Member
Non-executive shareholder
representative
khadem Al Qubaisi
Member
Non-executive shareholder
representative
Santiago Bergareche Busquet
The Nomination and Compensation
Committee is made up of three Board
Members, the Board of Directors’ Chairman
and a representative of each of the
two majority shareholders in the year,
TOTAL and IPIC. The Nomination and
Compensation Committee is governed by
the Rules and Regulations of the Board of
Directors. Given its nature, the number of
meetings per year is not set. In 2010 it met
3 times.
17
Cepsa’s position on
public policies
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CEPSA´S POSITION ON PUBLIC POLICIES
In 2010, CEPSA continued to participate
and collaborate in forums, congresses and
sector-related 16 associations, taking part in
meetings to discuss and agree on common
sector positions on matters affecting
the Company.
The resulting positions serve to sustain and
develop its points of view on issues that
may affect the performance of its business,
and as support for meetings held with
national and international
government bodies.
In 2010 CEPSA focused its initiatives on the
following issues:
• Energy policy in Europe.
• REACH (Registration, Evaluation
and Authorization and Restriction of
Chemicals) 17.
• Fuel Quality Directive.
• Management of used oils.
• Biofuels.
• Integrated Pollution Prevention and
Control: IPPC Directive.
Energy policy in Europe
The European Union (EU) is committed to
an energy policy based on reducing energy
consumption. It defined a series of priority
objectives aimed at ensuring the proper
functioning of the internal energy market,
guaranteeing security of strategic supply,
the reduction of GHG emissions caused
by the production or consumption
of energy, and the creation of a
Europe-wide consensus.
CEPSA is actively working with the
European Commission and the Parliament,
through CONCAWE and EUROPIA, of
which CEPSA’s Chief Executive Officer is
vice-Chairman. This work focuses on the
proposals and actions to be taken to comply
with the European Union’s 20/20/20
targets: reducing primary energy demand
by 20%, increasing the proportion of total
primary energy consumption supplied by
renewable energies to 20% and cutting GHG
emissions by 20%.
• Greenhouse Gas Management (GHG) 18.
18
16 ENERCLUB, World Energy Council, AOP, FEIQUE, ACOGEN, ASELUBE, EUROPIA, CONCAWE, CEFIC and OME, among others.
17 Information on REACH is available in the section on Customers.
18 Information on GHG is available in the section on Greenhouse gases.
CEPSA • ANNUAL REPORT 2010 • vALUE OF OUR GROUP • CEPSA´S POSITION ON PUBLIC POLICIES
fuel Quality directive
Biofuels
industrial Emissions directive (iEd)
Royal Decree 1088/2010, of September
4, transposes the European Fuel Quality
Directive 2009/30/CE into Spanish law. It
regulates gasoline and diesel specifications
in Spain, the use of biofuels and the sulfur
content of fuels for maritime use.
The addition of bio-components into fuels
is intended to reduce dependency on oil and
to decrease GHG emissions. EC countries
have a common policy on this matter.
The IED came into force on January 7, 2011,
establishing the rules and regulations
for the integrated prevention and control
of pollution from industrial activities in
countries of the European Union. Member
States must start applying them by January
7, 2013, at the latest.
Although this is vitally important for our
sector, delays to the enactment of the Royal
Decree hinder compliance with the target of
5.83% of the energy in gasoline and diesels
being sourced from biofuels by 2010.
As delays to the enactment of the Royal
Decree were likely to hinder compliance
with the ambitious target of 5.83% being
sourced from biofuels, it was considered
practical to reduce said target to 4.78%.
CEPSA worked actively within the
Association of Spanish Oil Companies (AOP)
and in work groups guided by the regulatory
body to resolve this issue.
Order 2877/2008 issued by the Spanish
Ministry of Industry, Tourism and Commerce
required the incorporation of 5.83% (calorie
equivalent) of bio-components in fuels by
2010. The Secretary of State for Energy
cut this requirement to 4.78%. CEPSA has
already met this target, reaching 4.85%
by adding 96,000 tonnes of bioethanol
equivalent (ETBE) in its gasolines and
approximately 286,000 tonnes of biodiesel
to its diesels, sourced from domestic
producers and in line with European
quality standards.
All of CEPSA’s centers have been awarded
Integrated Environmental Authorization
(IEA) for the reduction and control of air,
water and soil pollution from industrial,
agricultural and livestock activities under
said Directive.
The Company also participates, directly or
through the AOP, in forums set up to ensure
the Spanish and European authorities take
into consideration the sector’s viewpoints
on the Directive. In 2011, CEPSA will conduct
an in-depth study of the implications of
applying the Directive for its facilities.
Cepsa and reaCh
in 2010
On June 1, 2007, the European Union
approved the REACH (Registration,
Evaluation and Authorization and
Restriction of Chemicals) Regulatory
framework, a unique and comprehensive
system for regulating, registering,
evaluating and authorizing chemical
substances and their free circulation within
the European market.
In 2010, CEPSA, through CONCAWE, played
a key role in developing the methodology
to enable the industry to register and
classify substances in accordance with the
CLP Regulation (Classification, Labeling
and Packaging) and to notify the European
Chemical Agency (ECHA) as required.
19
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • 2010 MILESTONES
2010 milestones
King Juan Carlos
I Inaugurates the
Expansion of “La Rábida”
Refinery in Huelva
His Majesty king Juan Carlos I attended
the ceremony at which the Middle
Distillate Production Capacity Expansion
at the “La Rábida” Refinery in Huelva was
commissioned. This project is the biggest
investment CEPSA has ever undertaken,
with the exception of the construction of
its refineries.
Work on this installation, which will
practically double the capacity of the
refinery, began in 2007 with a view to
increasing production of automotive diesel
and jet kerosene, which are produced in
insufficient quantities in Spain.
The use of the latest technologies will
increase energy supplies in Spain, improve
the refinery’s competitive position in
Europe and allow for more efficient use
of crude oil.
22
Alliance for the
Development of Electric
Vehicles in Spain
Oil Discoveries
in Colombia
On February 17, CEPSA and Endesa signed
a collaboration agreement aimed at
developing, integrating, deploying and
installing a network of battery charging
points at CEPSA service stations.
On March 12, CEPSA and Petrobras, through
a joint venture in which CEPSA has a 30%
holding, announced the discovery of oil
in the Balay-1 exploratory well, in the Los
Llanos Basin.
CEPSA sees the development of electric
vehicles and transport as an alternative and
a supplement to the current dependence on
hydrocarbon based fuels. This agreement
is intended to improve sustainability and
economic development.
Oil was also discovered in the Jilguero-I
exploratory well in the Garibay block of the
same basin. CEPSA is the operator of this
block with a 50% holding.
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • 2010 MILESTONES
CEPSA Increases 2010
Dividend by 18.75%
On October 26, CEPSA’s Board of Directors
declared a 2010 interim dividend of €0.45
per share, paid on December 13, 2010.
The total dividend for the year will amount
to €0.95 *, an increase of 18.75% on the
previous year.
CEPSA Sets Equality
Plan in Motion
In April 2010 the Company’s management
representatives and the Inter-center
Workers’ Committee signed CEPSA’s
Equality Plan. This will be permanently
applicable to all centers subject to CEPSA’s
Collective Bargaining Agreement.
The Plan entails a set of measures for
effectively establishing and implementing
the principles of equal treatment and
opportunities for men and women.
During the year a communication program
regarding these issues was conducted for all
staff, training sessions were held for those
in charge of Human Resources and the
CEPSA Equality Plan Monitoring Committee
was set up.
* Pending approval by the Annual General Meeting of Shareholders.
CEPSA
Innovating for You
In 2010, CEPSA undertook the ambitious
project of instilling in all its employees a
culture of constant innovation that will add
value for customers and consumers.
On the internal level, the project is intended
to promote an innovative attitude in
each and every one of the nearly 12,000
employees in the Group.
Externally, the plan is to propose original,
useful innovations in products and services
to customers and consumers.
23
Cepsa in
2010
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • CEPSA 2010
summary oF results
In 2010, the CEPSA Group posted Adjusted
Operating Income (EBIT) of €680 million
and an Adjusted Net Income 19 of €418
million, climbing €212 million (+45%)
and €148 million (+55%) respectively
year-on-year.
Refining and Marketing saw a 59%
improvement in Operating Income due to
a moderate recovery in refining margins
(specifically the conversion margin) and
to an increase in production following
the completion of the La Rábida Refinery
Expansion Project. Greater production
Results
in our oilfields and the crude oil price
increase meant that Operating Income
from Exploration and Production activities
was 42% higher than in 2009. The
Petrochemicals division also saw a 132%
increase in Operating income as a result of
strong Asian demand and the price of the
raw materials it supplies. Gas and Power, on
the other hand, saw a 63% fall in Operating
Income since the pool price remained at
levels similar to those of 2009, despite
having to accommodate a substantial
increase in the price of natural gas linked to
the rise in Brent oil prices.
2010
2009
2008
Adjusted operating income
680
468
880
Exploration & Production
334
236
332
Refining & Marketing
180
113
394
Petrochemicals
144
62
88
21
57
66
418
270
524
(Millions of euros)
Gas & Power
Adjusted net income attributable to
shareholders of the parent company
inVestments
In 2010 CEPSA invested a total of €621
million to enhance the efficiency and
investMents
productivity of its refineries and to reduce
the environmental impact of its operations.
2010
2009
2008
Exploration & Production
156
214
742
Refining & Marketing
356
594
680
Petrochemicals
32
34
27
Gas & Power
69
101
125
Corporation
8
8
5
621
951
1,579
(Millions of euros)
Total Investment
24
19 Adjusted income (operating or net) excludes the effect on the Company’s assets from inventory price variations and other
non-recurring items, providing a more meaningful indicator of the fundamentals of the business regardless of fluctuations
in the value of inventory required both for legal (minimum security stocks) and operational reasons.
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • CEPSA 2010
Work in the area of Exploration and
production increased in both Algeria and
Colombia (where we hold 16 exploration
contracts and have drilled 5 wells).
Exploration is also continuing in Egypt
and Peru, where the Company holds four
exploration contracts.
In the refining and petrochemicals
division, new Crude Oil and Hydrocracking
Units were commissioned, increasing the
capacity for middle distillate (diesel fuel
and kerosene) production by more than 3
million tonnes, and a new sulfur plant was
commissioned in January 2011. Investments
were also made in the new Air-Rectified
Bitumen Processing Unit and there were
improvements to the underwater line, all
at the La Rábida refinery. Several energy
recovery projects were undertaken at the
Gibraltar-San Roque refinery to improve
energy indices at the refinery. Finally, the
Tenerife 2012 Program was set in motion at
the Tenerife refinery, aimed at improving
cost-effectiveness and profitability. The
improvements at petrochemical plants
centered on replacing molecular sieves,
optimizing the way manufacturing was
organized, improving processes and
constructing new storage facilities.
Investment in the marketing area was
geared toward increasing the quality
and variety of services to customers and
consolidating the network of service
stations. Special mention should be made
of the inauguration of the El Bercial Service
Station (Madrid). This project is a pioneer
in the use of geothermal energy to improve
energy efficiency and limit CO2 emissions
into the atmosphere.
The main project in the Gas and power
division was the construction of the
cogeneration plant in Lubrisur, which is
expected to come into operation in the
second half of 2011. The Asesa plant came
on stream in May while the plant at the La
Rábida refinery commenced operations in
October. Work continued on the deepwater
natural gas pipeline that the MEDGAZ
Company is laying from Algeria to Almería.
It is expected to come into operation within
the first half of 2011.
25
generating
value
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • GENERATING vALUE
Obtaining sustainable profits is one of
CEPSA’s goals, which forms part of another,
wider goal: to maximize long-term value.
This is quantified using indicators of
economic value generated, distributed
and retained.
In 2010 the economic value generated 20
totaled €22,283 million, an increase of
19.5% on 2009.
26
The economic value distributed 21 by CEPSA
to suppliers, employees, shareholders and
public institutions was €21,430 million,
an increase of 19.2% on the figure for the
previous year.
The economic value retained, measured as
economic value generated less economic
value Distributed, was €853 million, a
28.3% increase on 2009.
20 Economic value Generated is obtained by adding operating revenue, financial income, share in profit of subsidiaries and gains on the
sale of assets.
21 The adjusted results do not include the equity effect of changes in the price of inventories and other non-recurring items, and
therefore allow a clear appreciation of the cornerstones of the business independently of the increases or decreases in the value of
inventories that are required at both legal (minimum security stocks) and operating levels.
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • GENERATING vALUE
Key indicators
geneRateD econoMic value
2010
2009
2008
Net sales revenues 22
(Millions of euros)
22,084
18,365
25,116
Other operating income
117
177
192
Finance income
39
30
4
Profit share from associates
32
35
37
Gains on the sales of assets
11
33
5
Total
22,283
18,640
25,354
DistRibuteD econoMic value
2010
2009
2008
Economic relations with suppliers 23
17,901
14,637
20,950
Employee salaries and other compensation
572
531
555
Payments to shareholders
264
229
284
Total taxes paid by CEPSA
2,693
2,579
2,680
Total
21,430
17,976
24,469
RetaineD econoMic value
2010
2009
2008
Generated economic value
22,283
18,640
25,354
Distributed economic value
21,430
17,975
24,469
853
665
885
(Millions of euros)
(Millions of euros)
Retained economic value = difference between economic value generated and distributed
22 This includes the special tax on hydrocarbons.
23 These figures relate to investments in business responsibility activities in communities where CEPSA operates. For further
information see the section on “Projects of public interest” in the chapter entitled “Part of the community”.
27
2010 saw a recovery in the demand for
crude oil, gas and petroleum products
which, overall, shows growth of 3.2%
over 2009. This increase was especially
marked in America, Asia, the Middle East
and Russia, mainly driven by the economic
recovery and, to a lesser extent, by the
adverse weather conditions in the Northern
Hemisphere towards the close of the year.
Demand remained unchanged in Africa
while Europe registered a slight fall. The
forecasts given by the International Energy
Agency (IEA) for 2011 emphasize this
recovery in all areas except Europe, where
demand is expected to be unchanged.
The price of Brent crude oil, the benchmark
in Europe, rose to $79 per barrel, 29% above
the $62 per barrel average recorded in 2009.
Product spreads versus Brent were wider
than in 2009, with the exception of fuel oil,
which suffered a sharp decline.
In line with the rise in demand, total
production of crude oil also increased by
2.5%, spread evenly between OPEC and
non-OPEC producers.
The hydroskimming margin fell from –$3.7
per barrel in 2009 to –$4.2 per barrel in
2010, while the conversion margin for
cracking increased from $0.4 per barrel in
2009 to $1.3 per barrel in 2010.
urals med reFining margins
190
170
150
10
8
6
4
2
0
-2
-4
-6
-8
UM Cracking
28
Changes in spreads led to an improvement
in the refinery cracking margin (although
it remained low compared to 2004 - 2008
figures) and a worsening of the already
negative hydroskimming margin, according
to the margins published by the IEA for
the Mediterranean area, where CEPSA’s
refineries are located.
Jan 08
Feb 08
March 08
April 08
May 08
June 08
July 08
Aug 08
Sept 08
Oct 08
Nov 08
Dic 08
Jan 09
Feb 09
March 09
April 09
May 09
June 09
July 09
Aug 09
Sept 09
Oct 09
Nov 09
Dic 09
Jan 10
Feb 10
March 10
April 10
May 10
June 10
July 10
Aug 10
Sept 10
Oct 10
Nov 10
Dic 10
the maCroeConomiC Climate and
tHe sector
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • THE MACROECONOMIC CLIMATE AND THE SECTOR
UM Hydroskimming
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • THE MACROECONOMIC CLIMATE AND THE SECTOR
Exchange rate $/€
Brent $/bbl
190
1.60
170
1.55
150
1.50
130
1.45
110
1.40
90
1.35
70
1.30
50
1.25
30
Jan 08
Feb 08
March 08
April 08
May 08
June 08
July 08
Aug 08
Sept 08
Oct 08
Nov 08
Dic 08
Jan 09
Feb 09
March 09
April 09
May 09
June 09
July 09
Aug 09
Sept 09
Oct 09
Nov 09
Dic 09
Jan 10
Feb 10
March 10
April 10
May 10
June 10
July 10
Aug 10
Sept 10
Oct 10
Nov 10
Dic 10
The US dollar began the year at around
$1.44 to the euro. In the first half of the
year it registered a strong appreciation
against the euro and in June it reached
a maximum of just below $1.20 to the
euro before the trend was reversed. The
second half of the year saw a continuous
devaluation of the US dollar against the
euro, stemming from strong growth in the
German economy, reduced tensions on the
European debt market and doubts about
the growth of the US economy. The average
for 2010 was $1.33/euro, 5% higher than the
figure for 2009.
Exchange rate $/€
Brent $/bbl
29
energy
supply
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • ENERGY SUPPLY
international situation
The Copenhagen Accord and the goals set
for 2020 require the signatories to take
severe measures to ensure the reduction
of CO2 emissions, with a view to achieving
a global reduction of 50% by 2050, which
involves a radical change of direction. Not
only China and India, whose economic needs
are the main driving force behind global
demand, but also the OECD countries, with
their high standard of living, will have to
limit their demand.
Nevertheless, the International Energy
Agency (IEA) predicts that in 2030, even
if new measures for saving, efficiency and
substitution have been put in place, fossil
fuels (coal, oil and gas) will still account for
at least 68% of total energy consumed,
compared to 80% at present.
World energy demand by region
million toe (tons oF oil eQuivalent)
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
1990
1995
2000
2005
2010
2015
Global energy use grows by 36%, with
non -OECD countries - led by China, where
demand surges by 75% - accounting for
almost all of the increase.
2020
2025
2030
2035
Rest of world
China
OECD
WEO-2009
Reference Scenario
30
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • ENERGY SUPPLY
Challenges FaCing the seCtor
cepsa’s approacH
In response to this scenario, all of CEPSA’s
business areas are working towards
improving the Company’s technological
position within the sector and reinforcing
its excellence in process management. The
Exploration and Production division of the
Company faces the challenge of increasing
crude oil reserves, exploring new areas and
consolidating its presence in areas where
it is already operating. In Refining and
Marketing, CEPSA is working to optimize
the integration of basic PetrochemicalRefining, while consolidating goodwill
and the sustainability of its refineries.
It is also supporting the development of
biofuels, and adapting to comply with EU
environmental regulations for the industry.
In other areas, such as petrochemical
derivatives, CEPSA intends to continue
working towards cost-reduction,
improvements in production capacity and
the internationalization of its operations.
Transportation deserves a special mention.
According to IEA forecasts, in the most
demanding scenario of 450 ppm of CO2,
assuming an increase in temperatures of
no more than 2ºC, in the European Union
in 2030 oil will continue to cover nearly
80% of final energy needs for transport, as
against 95% at present.
In view of this situation, CEPSA is making
substantial investments, not only in the
quest to discover the oil and natural gas
resources needed by our market, but also
in developing more efficient refineries
capable of treating all kinds of crude oil,
and achieving better conversion rates,
allowing the Company to keep up with
increases in the number of vehicles,
optimize conditions for the introduction of
biofuels and maximize synergy between
its refineries and petrochemicals business.
These investments are supported by
increased efforts to save energy, reduce
overheads and maximize flexibility in the
Company’s operations.
CEPSA is making
substantial investments,
not only in the quest
to discover the oil and
natural gas resources
needed by our market,
but also in developing
more efficient refineries
capable of treating
all kinds of crude oil,
and achieving better
conversion rates,
allowing the Company to
keep up with increases in
the number of vehicles
31
Cepsa and the
stock market
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • CEPSA AND THE STOCk MARkET
sHare capital share capital: €267,574,941
BEARER SHARES AT PAR VALUE OF 1€
SHARE PRICE (EUROS PER SHARE)
HIGH
25.82
LOW
69.10
71.10
15.50
21.50
67.40
AVERAGE
19.90
26.78
YEAR-END
69.30
18.28
21.77
67.60
STOCK MARKET RATIOS
DIVIDEND YIELD (%)
4.77
2.99
1.44
2010
cepsa shaRes
2009
2008
2010
2009
2008
254.20
214.10
294.30
10.00
15.00
14.70
Total dividends (millions of euros)
264.20
229.10
309.00
Dividend per share declared (euros)
0.95
0.80
1.00
61
79
51
(Number of bearer shares:
267,574,941 at par value of €1 each)
dividends paid out to shareholders
(millions of euros)
Shareholders of parent company
Minority shareholders of subsidiaries
Pay-out ratio (%)
32
24
24 Not including gains or losses generated by changes in the price of inventories and other non-recurring results.
CEPSA • ANNUAL REPORT 2010 • THE YEAR IN REvIEW • CEPSA AND THE STOCk MARkET
CEPSA shares trade on the four Spanish
Stock Exchanges. They trade on the
continuous market, and the shares’
weightings at the close of the year were
0.15681%, 0.830368% and 2.671711% on
the Madrid Stock Exchange General Index,
Energy & Utility Index and Oil, Gas and
Other Energy Sources Index respectively.
In line with the market and with the
general performance of refining securities,
the shares took a downward turn in 2010
from an average price of €26.78 per share
in 2009 to €19.90 in 2010. The interim
dividend declared was €0.45 per share,
which together with a final dividend of
€0.50, gives a total of €0.95 per share. The
proposed dividend, amounting to a pay-out
ratio of 60.8%, will be submitted to the
Annual General Meeting of Shareholders
for approval.
CEPSA informs stakeholders such as
minority shareholders, financial analysts,
investors, the CNMv (Spanish Securities
Market Commission), regulators, etc.
through channels of communication which
include the Shareholders’ Office, Investor
Relations and Institutional Relations
Department, e-mails and its website.
The interim dividend
declared was €0.45 per
share, which together
with a final dividend of
€0.50, gives a total of
€0.95 per share
cepsa sHareHolder structure at 31.12.2010
total
48.834%
47.062%
4.104%
TOTAL
IPIC
FREE FLOAT
48.834%
Free Float
4.104%
ipic
47.062%
33
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • INTERNATIONAL PRESENCE AND kEY ASSETS
international
presenCe
and key
assets
CANADA
colombia
ExPLORATION & PRODuCTION:
Location: Llanos Basin and Upper
Magdalena River valley.
16 exploration contracts, 11 operated
by CEPSA.
3 production contracts, 1 operated
by CEPSA.
brazil
PETROCHEMICALS:
1 petrochemical plant.
PANAMA
COLOMBIA
spain and portugal
ExPLORATION & PRODuCTION:
PERU
Concessions in the Mediterranean
(off Tarragona).
REfINING, DISTRIbuTION
& MARKETING:
peru
3 refineries. Total capacity: 26.0 million
t/year.
ExPLORATION & PRODuCTION:
Asphalt refinery (50%). Total capacity:
1.5 million t/year.
marañón Basin:
Blocks 114, 130 and 131.
More than 1,750 service stations.
More than 860 mini marts in stations.
panama and morocco
4 marine fuel supply facilities.
PETROCHEMICALS:
7 aviation fuel supply facilities.
3 petrochemical plants.
REfINING, DISTRIbuTION
& MARKETING:
7 terminals for the manufacture and
distribution of asphalt derivatives.
Sales and storage of petrochemical
products (Portugal).
Marine fuel facilities.
canada
PETROCHEMICALS:
2 petrochemical plants.
36
A plant for producing base oils and
paraffin wax.
A finished lube bottling plant.
11 facilities for filling, storing and
transferring butane and propane.
74 bonded warehouses and 1 bonded
reservoir (Cecocentro).
GAS & POWER:
6 cogeneration plants.
Authorized capacity: 281 MW.
50% of a combined cycle power plant.
Capacity 780 MW.
20% of the mEdGaZ pipeline.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • INTERNATIONAL PRESENCE AND kEY ASSETS
GREAT BRITAIN
PORTUGAL
MOROCCO
NETHERLANDS
BELGIUM
SPAIN
ALGERIA
ITALY
EGYPT
BRAZIL
italy, great britain, belgium
and tHe netHerlands
algeria
PETROCHEMICALS:
ExPLORATION & PRODuCTION:
Sales and storage of petrochemical
products.
Block 406 A: RkF and OURHOUD oilfields
TIMIMOUN Block.
egypt
ExPLORATION & PRODuCTION:
South Alamein Block.
37
eXploration &
production
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION
key indicators
CRuDE OIL PRODuCTION
(Thousands of bpd)
(WORKING INTEREST) 25
116.9
122.9
NET ENTITLEMENT PRODuCTION 26
(Thousands of bpd)
53.3
54.5
SALES REVENuES
(Millions of euros)
632
738
ADjuSTED OPERATING INCOME
(Millions of euros)
236
334
INVESTMENTS DuRING THE YEAR
(Millions of euros)
156
214
38
2010
2009
25 Production attributable to CEPSA, calculated before applying the contractual terms and conditions of Production Sharing Agreements.
26 CEPSA‘s net entitlement production, after applying contractual provisions as per SEC (Securities & Exchange Commission) reporting standards.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION
The CEPSA Group’s main lines of action in the field of
Exploration and Production in future years will focus on
strengthening our position in the sector and we therefore
intend to reinforce our presence in new geographical areas
with high development potential, with the aim of achieving
a significant increase in net entitlement reserves.
Adjusted Operating Income was €334
million euros, 42% more than in the same
period of 2009.
Crude oil production in 2010 attributable to
CEPSA totaled 122,900 barrels per day, 5%
more than the previous year.
CEPSA’s net entitlement production in 2010,
understood to be the amount assigned
after applying contractual conditions and
before paying taxes totaled 19.4 million
barrels, 2% less than in 2009. Higher
crude prices in 2010 and the application of
product-sharing agreements in the Algerian
oilfields led to lower net entitlement
production in spite of higher production
from CEPSA’s working interests.
The CEPSA Group’s main lines of action in
the field of Exploration and Production in
future years will focus on strengthening our
position in the sector and we therefore intend
to reinforce our presence in new geographical
areas with high development potential, with
the aim of achieving a significant increase in
net entitlement reserves.
At the same time we will continue to
implement our policy of containing
operating and management costs, without
this entailing any reduction in the safety
and operational standards that our
sector demands, especially with regard to
environmental and safety requirements.
In 2010 we carried out our plans for boosting
the Exploration and Production division
of the CEPSA Group, via the
following measures:
• Reinforcement of the workforce and
improved organization.
• Major projects in production assets.
• Consolidation of exploratory work (2
new sites discovered in Colombia) and
extension to other geographical areas.
We are still carrying out major exploration
work in Colombia (16 blocks, 11 as operator),
Peru (3 blocks, all as operator) and Egypt (1
block as operator), while we have created a
company in Brazil, to expand this activity.
Reserves during 2010 were as follows:
algeRia
(Thousands of barrels)
net entitlement reserves at 31.12.2009
107,046
Revision due to price variation
coloMbia MeDiteRRanean
(10,609)
20,093
1,006
7,223
2,623
(738)
(14,261)
27
(5,121)
(64)
89,399
17,595
204
Extensions, revaluations and new findings 28
Production
net entitlement reserves at 31.12.10
29
In Colombia CEPSA is entitled to a further 9,016 million barrels, which will, as planned,
be recorded as reserves in future years.
27 An end of year price variation implies an inverse, non-proportional variation in the reserves associated with product sharing
agreements. Thus, a year-on-year increase in the crude benchmark price ($79.5 /b in 2010 as against $61.5 /b in 2009) results in
an overall decrease in net entitlement reserves. In addition, the recoverable quantity may vary according to other criteria such as
investments made or other cost recovery mechanisms established in the product sharing agreement.
28 As a result of the geological studies carried out in Colombia, reserves of 5.0 million barrels were recorded in the Caracara oilfields
(CEPSA is entitled to 3.2 million) and the reserves of the remaining oilfields were reassessed, based on new studies carried out in the
relevant blocks.
29 The reserves do not include quantities recoverable after the expiry of the concession or operating contract. In Algeria they include net
entitlement reserves for ORD, RkF and Timimoun.
39
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • ALGERIA
algeria
rkf & ourhoud oilfiEld
Timimoun Block
alge
ria
CEPSA is engaged in crude oil and natural gas exploration and production in Algeria.
The core of our crude oil production activity (which started in the eighties) consists of
two oilfields: RkF and OURHOUD. CEPSA has participated in a natural gas project in the
TIMIMOUN Block since 2002.
E&P in AlGEriA
rkf oilfield
RkF has produced an average of 19,505
barrels of oil per day, surpassing the
previous year’s figure of 18,706 barrels
per day.
oUrHoUd
rKf
operated
Field
timimoUn
40
cepsa’s Working
interest %
39.76%
100%
cepsa’s Working
interest %
11.25%
Ourhoud is one of the most important
oilfields in Algeria and it produces
approximately 17% of the country’s
total output.
In 2010 we commissioned facilities that will
allow us to maintain plateau production in
the block for longer than originally planned.
producing
Fields
ourhoud oilfield
Average daily production in 2010 was
220,564 barrels, also exceeding the previous
year’s production (210,102 BOPD).
In addition, we continued work on the new
export line which will link the RkF field
with the OURHOUD line (still to become
operational) and we started production
from 5 wells drilled in 2009.
Seven wells were bored in 2010 (5
production wells and 2 for water injection)
and 5 production and 3 injection wells were
commissioned. By year-end, 58 production
wells, 30 water injection wells, 1 gas
injection well and 6 dual water/gas injection
wells were operating.
We also continued with the oilfield
development and modernization plan and
started construction work on new staff
housing facilities in 2011.
29 wells were in operation at the end of the
year: 18 production and 11 injection wells.
We are currently working on the new
exploration plan based on alternating water
and gas (WAG) injection, which is expected
to increase the volume of recoverable
reserves in the oilfield.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • ALGERIA
block 406 a: tHousands oF barrels
rkF total production
2009 2010
7,119
6,828
2009 2010
ourHoud total production
80,506
76,688
2009 2010
cepsa net entitlement production
14,261
15,078
2009 2010
cepsa net entitlement reserves
(rkF and ourHoud)
76,218
93,865
Timimoun Block
In January 2009 the commercial viability
of the TIMIMOUM natural gas field, in
which CEPSA has an 11.25% holding,
was approved. The block is operated
jointly with Sonatrach (51%) and TOTAL
Algerie (37.75%), through an Association
(Groupement) formed for the purpose.
In 2010, following the approval by ALNAFT
(Agence Nationale pour la Valorisation
des Ressources en Hydrocarbures) of the
Timimoun Gas Project Development Plan in
August 2009, a contract was awarded for
the FEED (Front End Engineering Design) to
be carried out and tenders were invited for
the 3D seismic study planned for 2011.
The project envisages the commissioning of
eight gas fields in an area of approximately
2,500 km2 and it includes the execution
of seismic studies, the drilling of various
wells, the construction of facilities for the
treatment of natural gas and a connection
to the Sonatrach gas pipeline infrastructure.
Total investment is estimated at around
US$1 billion.
Work will be scheduled so that the field
can begin production towards the end of
2014, producing 5 million m3/day (1.6 bcm/
year). CEPSA is entitled to reserves of 13,181
thousand barrels from this field.
41
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • COLOMBIA
ColomBia
loS llanoS BaSin
uppEr maGdalEna riVEr VallEY
Colo
mBi
a
Total production from the Upper Magdalena River
valley amounted to 3.17 million barrels in 2010,
17% more than in 2009
upper magdalena river Valley
CEPSA commenced exploration in Colombia
ten years ago. At present it has holdings
in 19 Exploration and Production (E&P)
projects in the Los Llanos Basin and in the
Upper Magdalena River valley, 12 of which
are operated by CEPSA.
E&P in ColomBiA
los llanos Basin
2010 marks the second full year of operation
for the Caracara Block since CEPSA acquired
70% of the exploitation rights,
in March 2008.
Total production from the Upper Magdalena
River valley amounted to 3.17 million barrels
in 2010, 17% more than in 2009, with
CEPSA’s entitlement at 402,243 barrels.
producing
Fields
cepsa’s Working
interest %
CPr Espinal
15%
Caracara (*)
70%
lCn
(*) CEPSA Operator
42
16.7%
Two wells were drilled in 2010 (work still
in progress at year-end), while the wells
drilled in 2009 have been completed and
commissioned with the aim of increasing
production in the CPR Espinal Block
fields, of which CEPSA owns 15%. In 2010
production from this field amounted to 2.5
million barrels, with CEPSA’s entitlement
totaling 303,731 barrels.
In the La Cañada Norte (LCN) field, where
CEPSA holds a 16.7% working interest, the
2010 program entailed drilling a well, which
was completed at the end of the year, and
processing the results of a 3D seismic study.
Yearly production totaled 642,000 barrels,
with CEPSA’s entitlement at 98,512 barrels.
Total production from the Los Llanos Basin
in 2010, including the Caracara block, was
7.4 million barrels, 5.3% more than in 2009.
Of the total produced, CEPSA’s entitlement
was 4.7 million barrels.
13 production wells were drilled in Caracara
in 2010, and work was in progress on
another well at the close of the year. We are
currently engaged in an engineering project
geared to improving fluid (oil and water)
treatment facilities, which will increase their
capacity and reduce operating costs.
The result of the geological studies carried
out in Caracara in 2010 was the recognition
of 5.0 million barrels in reserves, CEPSA
being entitled to 3.2 million barrels of
this total.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • COLOMBIA
exploration
contracts
cepsa’s Working
interest %
llanos 26 (*)
100%
llanos 22 (*)
100%
tiple (*)
70%
Garibay (*)
50%
annual production in colombia tHousands oF barrels
Puntero (*)
70%
TOTAL PRODuCTION
Cabrestero (*)
70%
merecure (*)
70%
El Edén (*)
50%
El Portón (*)
50%
los ocarros (*)
50%
El Sancy (*)
50%
San Jacinto and río Paez
10,593
9,459
CEPSA NET ENTITLEMENT PRODuCTION
5,121
4,769
CEPSA NET ENTITLEMENT RESERVES
17,595
2010
33.3%
Cebucán
30%
CPo 12
30%
2009
30%
Balay
20,093
Exploration
CPo 14
(*) CEPSA Operator
37.5%
In 2010 the Company completed 3D seismic
survey acquisition of 927 km2 in three
blocks in the Los Llanos Basin, in which
CEPSA Colombia operates, and 2D seismic
acquisition of a further 417 km2 under a
non-operator contract.
Five wells (three operator and two nonoperator) were also drilled in 2010 and
drilling work on two more is currently
in progress. The campaign led to two
discoveries (in the Garibay and Balay
blocks). Extensive tests are currently under
way to determine their commercial viability.
43
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • EGYPT
egypt
egyp
t
SouTh alamEin
CEPSA is engaged in exploration activity in
the South Alamein block in Egypt, in the
Western Desert. The second North Bahrein
exploratory period finished at the end of
February, with CEPSA and its operator
partner returning the block to the Egyptian
Authorities (EGPC).
South alamein
CEPSA has operated this block since May
2007. In July 2009 the sale of 50% of the
exploration rights was approved. CEPSA
holds the remaining 50% as operator.
The drilling of two wells was completed in
2010, work on one of them having started in
2009. The current campaign concluded with
five exploratory wells having been drilled
in the block. Results were negative in four
cases, while in the fifth a minor discovery
was made, the final results of which are
pending evaluation.
In September approval was granted for
commencement of the second phase
of exploration and, consequently, in
accordance with contractual commitments,
30% of the area of the block was returned.
With the work done during the first phase,
financial and work commitments have been
met to commence the second
exploratory period.
Plans for the 2011 financial year include the
re-evaluation of the block’s potential to
determine new locations for wells, if the
outcome is positive.
E&P in EGyPt
exploration
contracts
South Alamein (*)
(*) CEPSA Operator
44
cepsa’s Working
interest %
50%
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • PERU
peru
Block 130
Block 114
Block 131
CEPSA has been operating in Peru since
2007. Its current activities are centered
on three exploratory blocks: 114, 131 and
130. Block 127 is awaiting a Certificate of
Contract Completion. In mid-November
2010 work started on a withdrawal plan for
the entire block.
various technical studies were conducted
in 2010 to evaluate blocks 114 and 131. A
304 km2 3D seismic survey was also carried
out in block 131, the results of which are
expected in early 2011.
peru
Initial processing and tenders have
already been set in motion prior to the
Environmental Impact Assessment for
future seismic surveys in other blocks. We
have also started various social initiative
programs in Peru for the benefit of the local
communities in the areas where
we operate.
We have started
various social initiative
programs in Peru for
the benefit of the local
communities in the
areas where we operate
E&P in PErU
exploration
contracts
cepsa’s Working
interest %
Block 114 (*)
60%
Block 131 (*)
70%
Block 130 (*)
100%
(*) CEPSA Operator
45
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • ExPLORATION & PRODUCTION • SPAIN
spain
spai
n
TarraGona
In 2010 the CEPSA Group’s production
activities in Spain were centered on the
Mediterranean off-shore area, off the coast
of Tarragona, yielding an accumulated
production of 867,556 barrels. CEPSA’S net
entitlement production amounted
to 64,219 barrels.
E&P in SPAin
During the year development work was
carried out at Montanazo D5, while various
activities were undertaken to extend the
useful life of the Casablanca platform. In
addition, work was done on the well drilled
in 2009. This yielded positive results and
production is scheduled to commence
in 2011.
CEPSA’S net entitlement
production amounted to
64,219 barrels
producing
Fields
cepsa’s Working
interest %
rodaballo
15%
Casablanca
7.4%
Boquerón
4.5%
operated
Field
montanazo
46
cepsa’s Working
interest %
7%
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
reFining, distriBution &
marketing
key indicators
CONSOLIDATED SALES Of PETROLEuM PRODuCTS
(Millions of tons)
25.4
25.6
26.3
SALES REVENuES ExCLuDING TAx
(Millions of euros)
15,443
13,166
19,334
ADjuSTED OPERATING INCOME
(Millions of euros)
180
113
394
CAPITAL ExPENDITuRE
(Millions of euros)
356
2010
2009
680
2008
crude oil sourcing
arabian gulF
42.9%
otHer
soutH americ 1.0%
a 1.2%
nortH aFrica
russia
car
2.6%
3.6%
exico
n/m
ibbea
48
594
8.6%
40.0%
West
aFrica
42.9%
40.0%
8.6%
3.6%
2.6%
1.2%
1.0%
ARABIAN GULF
WEST AFRICA
CARIBBEAN/MExICO
RUSSIA
NORTH AFRICA
SOUTH AMERICA
OTHER
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
At €180 million adjusted operating income
was 59% above that for 2009, an increase
of €67 million. This improvement was
brought about by the slight recovery in
refining margins, although they still remain
far behind the figures for the period
2004-2008, and by the increase in
production and conversion following the
commissioning of the new units added to
the La Rábida refinery.
The $/ton diesel-Brent spread widened by
23% in the year, having been very narrow in
2009. The gasoline spread widened more
moderately, by 11%. The reverse occurred
with fuel oil, where the negative fuel
oil-crude spread, which had stabilized in
2009 at the best levels seen since 2004,
once more worsened, declining by 37%.
Sales amounted to 25.4 million tons in
2010, slightly lower than those for 2009.
In 2010, CEPSA refineries unloaded 22.0
million tons of crude oil (159 million barrels),
8% more than the previous year. Oil from
the Arabian Gulf and West Africa makes up
about 83% of the total.
Production from CEPSA refineries in 2010
totaled 21.4 million tons, an increase of
5.5% on the previous year.
brent-product spreads ($/ton)
In 2010, CEPSA
refineries unloaded 22.0
million tons of crude
oil, 8% more than the
previous year
300
200
100
0
-100
-200
-300
-400
1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09
1Q10
2Q10
3Q10
4Q10
95 GASolinE
diESEl A
fUEl oil 3,5
49
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
reFining
At the La Rábida
refinery, the year’s
main event was the
commissioning of
the Middle Distillate
Production Capacity
Expansion project in
May and June, more
than one month ahead
of schedule
CEPSA refineries distilled 21.6 million tons
in 2010 with average capacity utilization of
84.2%. Although there was an increase in
distillation compared to 2009, utilization
decreased with the commissioning of
the Middle Distillate Production Capacity
Expansion Project at the La Rábida
Refinery, which brought about a 4.5 million
tonne increase in CEPSA’s nominal capacity,
raising the total to 26 million tons
per year.
The project includes a Hydrocracking unit
with a capacity of 2.1 million tons per year.
This is the first of its kind in CEPSA and
allows for a significant increase in capacity
for conversion to middle distillates.
At the Gibraltar-San Roque refinery
the new FCC boiler was brought into
operation while several modifications were
introduced in the R-56 reforming unit and
one of its effluent/load exchangers was
replaced. These improvements and other
energy recovery projects had a positive
impact on the refinery’s energy index.
At the La Rábida refinery, the year’s main
event was the commissioning of the Middle
Distillate Production Capacity Expansion
project in May and June, more than one
month ahead of schedule. In October La
Rábida commissioned the Cogeneration
II unit, also completed satisfactorily. In
2010 construction work was carried out
on the unloading line, a new section being
installed across the tidal inlet using guided
drilling techniques. This project is expected
to be completed in 2011.
The Tenerife refinery is currently
implementing the Tenerife 2012 program
to increase the refinery’s profitability.
The program will continue in 2011 with
measures geared toward cost-cutting.
During the year major efforts were made
to improve the energy indices of the
refineries: specific measures were put in
place to monitor operations and the
start-up of various other investments had
a significantly positive impact.
gibRaltaR
san Roque
ReFineRy
la RábiDa
ReFineRy
11.5
5.7
3.7
0.7
21.6
Capacity utilization
95.6%
76.1%
79.3%
97.1%
84.2%
Conversion index
78.1%
83.3%
58.5%
---
76.1%
Distillate in tons (millions)
50
teneRiFe
asesa
ReFineRy (50% cepsa)
total
2010
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
distriBution and marketing
Consumption of petroleum products in
Spain and Portugal in 2010 was 77.6 million
tons, almost 1.8% less than 2009, although
the decline seen in the previous two years
slowed considerably.
By product group, the decline was most
notable in fuel oils (–6.5%), due to
weakness in industrial activity, and in
gasoline (–5.1%). Middle distillates, which
account for 57.9% of total consumption,
improved slightly (+0.4%), boosted by the
increase in aviation kerosene (+3.1%), but
diesel remained steady at the level of the
previous year. Liquefied petroleum gases
also showed a slight recovery (+0.4%) after
falling for three consecutive years.
Retail prices for gasoline and diesel on the
Spanish market rose following increases
on international markets, and by December
had reached their highest level since
September 2008. In 2010 the average
retail price for diesel rose 17.9% and that of
gasoline 15.9%, compared to 2009 levels.
In 2010 CEPSA’s sales in Spain and Portugal
totaled 22.6 million tons, a drop of 2.1%
compared to the previous year.
The fall in motor fuel in 2010 was down
to 1.3% as against the 4.1% average for
the last two years. Diesel made up 80.1%
of total fuel consumption, reflecting a
continued increase in the number of diesel
vehicles after the stagnation seen in 2009.
thousanDs
oF tons solD
MajoR MaRketing
coMpanies
(100% cepsa-owneD)
2010
2009
12,069
12,052
CEPSA and subsidiaries, CEPSA Estaciones de
Servicio, CEPSA Portuguesa
Marine fuels
7,372
7,503
CEPSA and subsidiaries,
CEPSA Portuguesa
Aviation fuel
2,093
2,190
CEPSA,
CEPSA Portuguesa
551
516
CEPSA LIQUEFIED GAS
CEPSA Portuguesa
1,196
1,235
PROAS
CEPSA Portuguesa
271
245
CEPSA LUBRICANTS and its subsidiary
ATLANTICO, CEPSA Portuguesa
1,868
1,897
CEPSA INTERNATIONAL
Motor and other fuels
Liquefied petroleum gas
Asphalts
Lubricants, base oils and paraffin oils
Exports (Portugal not included)
51
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
New El Bercial CEPSA Service Station, considered to be
one of the Community of Madrid’s leading projects, is of
particular interest in this respect. Uses geothermal energy
for heating and air-conditioning in the buildings, making use
of all the underground resources available to reduce energy
consumption and, by so doing, increasing energy efficiency by
63% and preventing the emission of 43 tons of CO2 into the
atmosphere each year.
motor and other fuels
At the close of the year CEPSA’s Service
Station network had 1,758 retail sites, 1,483
of which are in Spain and 275 in Portugal.
CEPSA remains the market leader in shops
at service stations, with 829 stores in
Spain and 39 in Portugal, offering a broad
assortment of products and services to
meet customers’ increasingly
diverse demands.
Following the acquisition of the TOTAL
network and its petroleum product
marketing activities in Portugal in 2008,
CEPSA has strengthened its position as
one of the main operators on the market, in
service stations and other products.
The Company’s aim is to distinguish itself
from its competitors by the way it treats
its customers and by the high quality of
its service. Providing quality service to
professional drivers, encouraging customer
loyalty, and maximizing our capacity to
generate income from non-oil products
and services are the main
distinguishing features.
52
To meet this goal, in 2010 new high
volume service stations with non-oil
potential were commissioned, mainly
for the private motorist segment (urban
locations and metropolitan areas with
urban developments), without neglecting
specialized outlets and services for
professional transporters. As part of the
network optimization process, CEPSA
continued to selectively divest non-strategic
or lower volume sites that did not meet its
quality standards.
Over the year we have progressed a
great deal in innovation, introducing the
“CREACTIvOS” program, whose name
is intended to convey a combination of
creativity and proactiveness. It refers
to actively seeking information, asking
questions about our surroundings and not
taking anything for granted, and, most of
all, sharing knowledge and ideas.
In the Direct Sales channel great progress
was achieved in the marketing of two
premium quality products: CEPSA Agromax
Diesel and Gasóleo Calefacción CEPSA
Rendimiento (CEPSA High Performance
Heating Oil), cutting-edge diesels that
meets the requirements of modern
agricultural machinery and contribute to
improving the efficiency of facilities and
protecting the environment.
In 2010, all the subsidiaries of the Direct
Sales division complied with the Qualicert
standard, which provides an objective
guarantee of the quality of service received
by users, as part of our ongoing efforts to
achieve excellence in service quality.
On environmental protection issues,
CEPSA continued with its policy of signing
voluntary Environmental Agreements
with Spain’s regional governments and
the gradual introduction of artificial
wetlands for the treatment of sewage. The
inauguration of the new El Bercial CEPSA
Service Station, considered to be one of
Madrid’s leading projects, is of particular
interest in this respect. The new station
uses geothermal energy for heating and airconditioning in the buildings, making use
of all the underground resources available
to reduce energy consumption and, by so
doing, increasing energy efficiency by 63%
and preventing the emission of 43 tons of
CO2 into the atmosphere each year.
In the area of sport sponsorship the CEPSA
competition team, with Antonio Albacete
as driver, won its third FIA Truck
Championship title.
In 2010, we were winners of the Bronze
award in the Direct Marketing Association’s
prestigious Echo Awards, in the
Communications/Utilities category for the
Heating Oil C campaign “Winter Lovers”.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
Biofuels
CEPSA is firmly committed to respecting
the environment and managing its
resources responsibly, as set out in its
mission statement. This commitment is
reflected in the manufacture of its products
where a steadily increasing percentage of
bio components is used, in line with the
most advanced European practice.
In 2010 the compulsory bio-component
content of fuels sold in Spain was increased
as a result of the implementation of
Ministerial Order ITC 2877 2008 (BOE [State
Gazette] October 14, 2008). CEPSA had
already taken the necessary measures to
comply with this Order.
Indeed, CEPSA was the first European
company to add ETBE (ethyl tert-butyl
ether) as a bio-component in gasoline.
Unlike ethanol, ETBE preserves the quality
of gasoline and facilitates its transport
through the Spanish pipeline network,
leading to greater efficiency and safety
in distribution.
CEPSA continued to add up to 5% by
volume of biodiesel to its motor fuel (Diesel
A) until the publication on September 4
of RD 1088, which detailed new European
specifications allowing up to 7% by volume
to be added. 282,000 tons of biodiesel were
accordingly added to Diesel A and another
4,000 tons to labeled biodiesel
“B-10”, “B-15”, “B-20” and “B-30”, intended
for customers with fleets of specially
adapted vehicles, about 30% more than the
previous year.
Adjacent to the La Rábida and GibraltarSan Roque refineries are two biodiesel
facilities operated jointly with BIO OILS and
ABENGOA, respectively. The production
capacity of the two facilities totals 450,000
tons, enough to meet CEPSA’s current
biodiesel needs.
53
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
CEPSA continues to explore
opportunities for growth in
marine fuel, both in Spain and
abroad. In 2010 we started
supplying by barge in the
port of Huelva.
marine fuels
The recovery of levels of activity in the
second half of the year offset the effects
of the economic recession and the adverse
weather conditions in the first months
of the year. Our 2010 sales of marine fuel
amounted to 7.4 million tons, slightly below
the figure for 2009.
We maintained our leading position in the
Canary Islands and in the Strait of Gibraltar
and we have a strong presence in Morocco,
Malta and Panama. We also have a strong
position in the fishing sector through our
subsidiary, Petropesca.
CEPSA continues to explore opportunities
for growth in marine fuel, both in Spain
and abroad. In 2010 we started supplying
by barge in the port of Huelva, another
demonstration of the Company’s
commitment to increasing supply.
54
We engaged the services of an additional
double hull barge to deliver supplies in
Huelva without reducing delivery capacity
in other ports. Overall, CEPSA’s fleet of
barges, used exclusively by the Company,
includes three in the Canary Islands, five in
the Strait of Gibraltar, one in Barcelona and
three in Panama. Barges are also hired for
specific services in the ports of Las Palmas,
Cristobal and Balboa (Panama), and Malta.
We also supply using pipelines and trucks,
and terminals for fishing vessels.
The CEPSA Group now produces and sells
a new grade of fuel specially designed
for customers whose vessels sail longer
international routes. This quality is only
available at some of the world’s major
ports. Since January 1, CEPSA has been
supplying fuel with a 1% level of sulfur,
as against the 1.5% previously supplied,
in response to the demand for vessels
travelling to Northern Europe where its
use is compulsory. We are able to offer this
product thanks to our capacity to adapt our
manufacturing processes and
storage facilities.
Major innovations have been made in the
area of information technology, allowing
us to improve customer service, always a
priority for our business.
At each and every port where it operates,
CEPSA complies with the specifications
contained in MARPOL Annex vI regulations
capping the sulfur content of marine fuels,
as well as ISO 8217 standards for the quality
of marine fuels.
As in all our distribution and marketing
activity, the sale of marine fuels complies
with the strictest quality, environmental
and safety standards in the facilities
where we operate, both our own refineries
and terminals (the latter managed by our
logistical subsidiaries, PETROCAN and
ATLAS) and those rented from third parties.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
aviation fuel
In 2010 there was some recovery in the
aviation market compared to the previous
year. Even though we did not return to 2008
levels, our 2010 sales to airlines increased
by 4% over those of 2009. The high quality
of our services to customers enabled us to
maintain our position at the forefront of
the aviation fuel market in Spain and our
clients include the leading national and
international airlines.
Our sales activity takes place at the main
national airports. We supply aviation fuel
from our refineries, subject to the strictest
specifications, to all Spanish airports using
vessels, pipelines and land transport.
We play an active role in fuel loading
operations through our subsidiaries, CMD,
CEPSA Aviación and Spanish Intoplane
Services (SIS). Safety is of the utmost
importance in all these operations.
CEPSA is also a pioneer in the introduction
of international electronic invoicing, with
the subsequent reduction in costs and
improved processing.
liquefied petroleum Gas
(Butane, propane and autogas)
risks related to legislation on our
activities and/or the sector
CEPSA serves more than 2.5 million
customers with bottled propane, butane
and autogas, delivered to their homes
through a network of over 90 distributors.
Bottled products are also available at more
than 2,200 points of sale, 730 of which are
at CEPSA service stations. We also supply
bulk propane to 9,900 individual facilities
and to another 1,900 through pipelines,
serving more than 40,000 homes.
The Group’s activities in Spain and abroad
are subject to a wide range of regulations.
Any changes to them could affect the way
in which our operations are organized and
the income generated.
In 2010 we continued investing to improve
the quality and safety of all operations
carried out at our facilities. We promoted
the use of the new, lighter canister for
butane, which includes a new electronic
device to indicate the exact amount of the
fill, the canister’s useful life and compliance
with safety standards, its trajectory and
rotation. The system is gradually being
incorporated in all containers made over
the years.
At present sales of bottled butane are
covered by the regulations in Order
ITC/2608/2009, amending Order
ITC/1858/2008, which revises the system
for automatically determining maximum
prices, excluding taxes, for the sale of
bottled liquid petroleum gases. This
changes the formula by which the regulated
price is calculated, with serious adverse
effects on all operators in the sector, as it
sets retails prices which do not allow them
to cover production costs.
The Spanish Association of Liquid
Petroleum Gas Operators has therefore
lodged an appeal against the above Order
and this is currently awaiting a decision by
the Third Chamber of the Supreme Court
of Appeal.
55
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
asphalt products: Bitumen, asphalt
derivatives and Special products
for construction
CEPSA manufactures its asphalt products
at the Tenerife and La Rábida refineries
and the ASESA refinery (50% CEPSA) in
Tarragona. Nominal production capacity
for bitumen is above a million tons a year.
CEPSA sells directly from its own refineries
and through seven factories, which also
manufacture asphalt derivatives and special
products for the construction industry.
Asphalt sales amounted to 1.2 million tons,
3% below the previous year. Although sales
in the Spanish and Portuguese markets
were badly hit by the recession, there was
healthy growth in exports, which made
up 50% of our sales and were 22% up on
figures for the previous year.
Productos Asfálticos, S.A. (PROAS), 100%
owned by CEPSA, made great efforts to
develop a major new technology in the
world of bitumen. Last year, through its
subsidiary, CEPSA developed new products
and carried out several road construction
projects with improved bitumen using
crumb rubber from recycled tires; we also
used low temperature bitumen, which
allows the temperature of asphalt mixtures
to be reduced by as much as 40º C.
In 2010, the Company was also awarded
the EC mark for manufactured asphalts,
which permits the free circulation of these
products between member States, and
asphalt products made by the Group’s La
Rábida, Tenerife and ASESA refineries
were exported. All asphalt emulsions
made in all PROAS factories and in CEPSA
PORTUGUESA’s Matosinhos factory have
been labeled, in compliance with Council
Directive 89/106/EEC, regarding the
unification of the legal, regulatory and
administrative provisions of member States
on construction products.
56
lubricants, Base oils and paraffin oils
CEPSA markets its products under the
CEPSA and ERTOIL trademarks. CEPSA
Lubricantes, 100% owned by CEPSA,
centers its activities on the manufacture of
Base and Paraffin oils. CEPSA Lubricantes
has a strong presence in Spain in all market
sectors and segments, both directly and
through Atlántico, another 100% owned
subsidiary, and a powerful network of
independent distributors.
In 2010 sales of base oils, paraffin oils,
finished lubricants and greases amounted
to 271,000 tons, 12% more than the
previous year. 65% of the total was sold on
the national market and the rest exported.
Turnover rose by 25%. Base oils, finished
lubricants, greases and paraffin oils were
exported to 73 countries, through a carefully
selected network of distributors.
Our penetration of the Portuguese market
has continued to grow. Lubricants are
marketed under the CEPSA, TOTAL and
ELF brands, both directly and
through distributors.
In 2010, the Company was
also awarded the EC mark
for manufactured asphalts,
which permits the free
circulation of these products
between member States,
and asphalt products
made by the Group’s La
Rábida, Tenerife and ASESA
refineries were exported.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • REFINING, DISTRIBUTION & MARkETING
Exports
logistics
Energy products exported from CEPSA
refineries in 2010 totaled 1.9 million tons,
in line with the previous year. Europe and
America were the principal destinations and
gasoline and naphtha the main products.
The CEPSA Group has a very efficient
system of transportation and distribution
with an extensive network of its own
companies and stable agreements with
other companies to cover the whole of
the Iberian Peninsula. We are thus able to
meet delivery dates for customers in many
locations. We supply fuels to vessels in
ports, to airplanes at airports, to service
stations, to industrial and agricultural
customers, and to private and
institutional customers.
In 2010 7.3 million tons of products were
transported to end consumers in the Iberian
Peninsula, via secondary distribution by
road and train.
WHolly or partly-oWned logistics companies
coMpany
naMe
Main activity
Storage, transport
and supply of Jet A-1
Storage, transport
and supply of Jet A-1
CMD
CEPSA Aviación
SIS
PETROCAN
PETRONUBA
ATLAS
CLH *
Supply of Jet A-1
Storage and supply
of marine fuels
La Rábida refinery
maritime terminal operation
Distribution of motor and other
fuels. Supply of marine fuels
Distribution
of petroleum products
location
oF activity
cepsa
owneRship (%)
Canary Islands
60
Canary Islands and Melilla
Madrid, Seville,
Alicante and Malaga
100
Canary Islands
100
Palos de la Frontera (Huelva)
100
Ceuta and Melilla
100
Peninsula and Balearic Islands
14
50
* The stated activity is strictly what this company performs for CEPSA .
57
Petrochemicals
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • PETROCHEMICALS
key indicators
CONSOLIDATED SALES Of PETROCHEMICAL PRODuCTS
(Millions of tons)
3.0
3.1
SALES REVENuES ExCLuDING TAx
(Millions of euros)
2,788
1,888
2,293
ADjuSTED OPERATING INCOME
(Millions of euros)
62
144
88
CAPITAL ExPENDITuRE
(Millions of euros)
32
27
2010
In 2011, CEPSA Química
concluded the takeover
of Artenius San Roque
SAU, currently CQ PET
SAU. This company
is engaged in the
production of PET resin
at its San Roque (Cadiz
plant) and has installed
production capacity of
180,000 tons per year
58
3.4
2009
34
2008
Adjusted Operating Income for 2010
amounted to €144 million, an increase
of 134% against 2009, the year that saw
the worst negative effects of the global
economic crisis.
The performance of the petrochemical
sector in 2011 will depend largely on the
consolidation of the general economic
recovery and on the sectors and
geographical areas where there is demand
for our products.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • PETROCHEMICALS
Early in January 2011, CEPSA Química
concluded the takeover of Artenius San
Roque SAU, currently CQ PET SAU. This
company is engaged in the production of
PET resin at its San Roque (Cadiz) plant
close to the Guadarranque production
facilities, and has installed production
capacity of 180,000 tons per year. This
takeover provides significant synergies with
the more traditional activities of this line of
business and positions the Company more
strongly throughout the value chain.
In 2010 CEPSA Química satisfactorily
achieved most of the objectives leading to
its creation in mid-2008. They include:
• To create a unique identity for all
petrochemical activities of the
CEPSA Group.
• To increase standards of excellence in the
management of the businesses and in the
Company’s own processes.
• To optimize the use of internal and
external resources and to generate
economies of scale.
• To prepare the area for future innovation
and growth.
These measures have also permitted us to
respond quickly to the changes occurring
in the macroeconomic scenario. In the
chemical business, these changes were
marked by a recovery in demand starting
in the second half of 2009 and continuing
throughout 2010. This was particularly
strong in Asia, moderate in more developed
countries and very limited in local markets.
The recovery led to growth of 15% in sales
of petrochemical products, which totaled
3.4 million tons, plus heavy price increases
linked to the higher price of crude oil and
basic raw materials, and a modest recovery
in margins.
To achieve these objectives, we introduced
a series of organizational measures and
specific tasks that allowed us to make
greater use of internal synergies and
achieve considerable fixed and variable
cost savings.
59
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • PETROCHEMICALS
detergent precursors
polyester precursors
phenol-acetone
CEPSA Química produces and markets
linear alkyl benzene (LAB) and its
derivative, sulfonic acid (LABSA), surfactant
compounds used as raw material for
producing biodegradable detergents. As
part of the production process, linear
paraffin and other dearomatized solvents
are also produced and these are
sold directly.
CEPSA Química manufactures and sells
purified terephthalic acid (PTA) and purified
isophthalic acid (PIA), which are used to
produce linear saturated polyester and
resins for manufacturing PET (polyethylene
terephthalate) bottles and containers and
textile fibers.
CEPSA Quimica has manufacturing facilities
in Palos de la Frontera (Huelva), where
it produces phenol and acetone, as well
as cumene, an intermediate product it
also sells. They are mainly used in the
manufacture of phenolic resin, newgeneration plastics and other products for
use in construction, motor vehicles, etc.
Global demand for LAB recovered slightly in
2010 in comparison with 2009, not having
been affected by the crisis as much as
other lines of business. The greatest rise
in demand for LAB was in Brazil where the
detergent market underwent
strong growth.
In 2010 investment centered on energy
saving and efficiency projects. In addition,
at the Puente Mayorga Plant at San
Roque (Cadiz), investment was required
for changing the molecular sieves and
undertaking the multi-year
scheduled turnaround.
60
The recovery in the demand for PTA/PIA
was particularly strong in 2010. Increased
demand for textiles and for PET to meet
growing local demand in Asia, especially
in China, had tremendous effect on the
market. Added to this the second half of
the year saw poor cotton harvests in some
of the main producing countries, leading
to a further increase in demand for PTA for
textile fiber manufacture.
The improvement and optimization of
the manufacturing structure of the plants
accounted for most of the investment
during the year.
The main markets for those products,
motor vehicles and construction, survived
the severe crisis in 2009, continued their
recovery in 2010 and finished the year at
levels similar to the years preceding the
crisis. This increase in consumption, in
addition to some factory closures in 2009,
hastened the recovery, giving rise to a
generalized upsurge in prices to record
levels and a recovery in margins.
Investment during the year continued to
be centered on the ongoing improvement
of processes and the construction of new
storage capacity.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • PETROCHEMICALS
Solvents and intermediates
CEPSA Química markets both the
petrochemical products manufactured in
the Gibraltar-San Roque and La Rábida
refineries as well as other products from
our chemical plants which fit into this line
of business because of their markets and
commercial characteristics.
The solvents line includes aromatic,
aliphatic and dearomatized solvents. The
Company also sells the sulfur produced
in the hydrotreatment processes of the
refineries. The intermediates include
cyclohexane, phthalic and maleic
anhydrides, amines and alpha-methylstyrene. They are all products with
multiple applications.
Solvent sales remained very strong as a
result of exports to emerging markets in
North Africa and the Mediterranean. The
drop in demand in our main European
markets continued, putting pressure on
margins although, in the case of some
specific products, global rationalization of
installed capacity helped to yield
better results.
research and development
Throughout 2010, CEPSA Química continued
to support RD&I investment and activity,
considering them a key tool for
increasing productivity.
CEPSA Química’s research department
worked closely with the Group’s Research
Centre in developing new manufacturing
and optimization processes from those
already in existence, working with official
bodies, such as the CSIC, external centers
and universities.
We also continued with the management
and defense of our products. An important
part of our work focuses on the timely
registration of all substances within
the REACH initiative, in response to
growing concern about health, safety, and
environmental matters. CEPSA Química has
registered 62 substances, representing our
120 products. Our customers may review
the registered products, their uses, their
registration number and CLP (Classification,
Labeling and Packaging) details on the
CEPSA website.
Throughout 2010, CEPSA
Química continued to
support RD&I investment
and activity, considering
them a key tool for
increasing productivity.
61
gas &
poWer
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • GAS & POWER
key indicators
NATuRAL GAS SALES (GWH)
(Millions of euros)
21,338
25,624
22,122
ELECTRIC POWER SALES (GWH)
(Millions of euros)
3,613
3,273
3,494
STEAM SALES (THOuSANDS Of T)
(Millions of euros)
4,621
4,321
4,053
SALES REVENuES
(Millions of euros)
726
398
561
ADjuSTED OPERATING INCOME
(Millions of euros)
21
57
66
INVESTMENT DuRING THE YEAR
(Millions of euros)
69
2010
101
2009
125
2008
CEPSA is one of the main industrial consumers of
natural gas in Spain. Our presence in various stages
of the value chain of the gas business allows us to
use the competitive advantages of the Group and
explore synergies with other activities to contribute
to the diversification and security of natural gas
supplies in Spain
62
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • GAS & POWER
Adjusted Operating Income amounted to
€21 million, 63% less than in 2009. The
increase in activity and the same electricity
pool price in 2010 as in 2009 (€37/MWh)
failed to offset the effect of the substantial
increase in the price of natural gas linked to
the price of Brent crude.
Domestic natural gas consumption only
suffered a slight fall of 0.3% in 2010,
compared to 2009. This is because the
10% rise in conventional demand for gas
(industrial, commercial and domestic
markets) made up for the 16% fall in
demand for power generation.
In an environment characterized by an
excess of gas resulting from the reduction
in consumption for power generation, sales
activity remained competitive through
handling volume, taking advantage of the
opportunities offered by the international
market and seeking flexibility in contracts
signed with end customers.
CEPSA is one of the main industrial
consumers of natural gas in Spain. Our
presence in various stages of the value
chain of the gas business allows us to use
the competitive advantages of the Group
and explore synergies with other activities
to contribute to the diversification and
security of natural gas supplies in Spain.
The uncertainties surrounding the economic
recovery and variations in demand for power
generation will continue to affect natural
gas marketing activity, while changes in
international prices will condition margins in
the Spanish market.
CEPSA is keen to become one of the main
gas suppliers in the Spanish industrial
market. To achieve this goal we will take
advantage of the synergies provided by our
partners in the activity, Sonatrach
and TOTAL.
63
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • GAS & POWER
natural gas
MEDGAZ, which was set up in 2001 by
Sonatrach and CEPSA, is a consortium
of leading Spanish and foreign energy
companies, whose aim is to study, design,
build and operate a new deepwater natural
gas pipeline grid linking Algeria directly to
Europe via Spain, strategically significant
for both countries.
CEPSA will transport 1.6 bcm a year for
20 years from 2011 through the MEDGAZ
pipeline, for both CEPSA’s internal
consumption and its commercial activities.
The pipeline laying finished in 2010. Tests
using gas are scheduled to start in Algeria
in November 2010. It is expected that the
first inputs of gas into the Spanish system
will take place in March 2011 and it will be
commercially operational in the second
half of the year. The MEDGAZ pipeline will
ensure security of supply to the Spanish
market and provide CEPSA with a more
balanced supply of natural gas and liquefied
natural gas.
MeDgaZ pipeline
initial total capacity
8 bcm/year
length
200 km
maximum depth
2,160 meters
investment
€900 million
Start-up
First half of 2011
marKeting & distribution
CEPSA Gas Comercializadora (CGC), in which
CEPSA holds a 35% stake, is engaged in the
sale of gas to industrial users. Its market
share has increased from 10.2% in 2009 to
11.1% in 2010.
As part of its long term agreements with
Sonatrach and TOTAL, in 2010 CEPSA
received 25,624 GWh of gas through CGC.
It regasified, transported and distributed
this gas to the industrial market by virtue
of Third Party Access (TPA) contracts
with Enagás and Gas Natural. In order
to optimize logistics management of its
deliveries, CGC executed swaps with other
retailers totaling 87,758 GWh.
64
CEPSA is also active in natural gas
distribution through its 40% stake
in GAS DIRECTO, which was awarded
regulatory approval to supply gas in various
municipalities in Madrid, Galicia and
Castile-La Mancha.
In 2010, 456 GWh of natural gas and
propane were transported through Gas
Directo’s network, 22% less than in 2009, as
a result of declining industrial consumption.
The number of domestic and industrial
supply points rose by 7% from 5,437
to 5,818.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • GAS & POWER
Cogeneration
To meet the steam consumption needs of the new
units, a new cogeneration plant has been built at
the La Rábida Refinery. The commissioning stage
started in September 2010
To improve the energy efficiency of its
refineries and industrial plants, CEPSA has
six cogeneration plants, whose utilization
rate averaged 92% in the year.
boilers, has installed capacity of 50.5 MW
and steam production capacity of 142 t/h,
used to feed the refinery itself and
CEPSA Química.
To meet the steam consumption needs of
the new units, a new cogeneration plant has
been built at the La Rábida Refinery. The
commissioning stage started in September
2010. The new plant, which replaces the old
A new cogeneration plant is expected to
come on stream in June 2011 in Lubrisur
(adjacent to the Gibraltar-San Roque
refinery), with installed capacity of 39.3 MW
and steam production capacity of 70 t/h.
ComBined cycle
CEPSA has a 50% stake in the combined
cycle plant, Nueva Generadora del
Sur (NGS), which sells all its steam
production to the Gibraltar–San Roque
coMpany
refinery and contributes to protecting
the environment by significantly reducing
NOx and SO2 emissions.
authoRiseD
capacity
electRicity
geneRation
steaM
pRoDuction
La Rábida cogeneration plant
50
388.7
1,311.7
GEGSA cogeneration plant
74
577.8
1,222.8
GETESA cogeneration plant
41
319.3
463.6
GEMASA cogeneration plant
27
207.5
394.3
coTESa (100% cEpSa)
38
186.5
442.0
cog la rábida ii
51
103.9
205.8
Total cogeneration
281
1,783.7
4,040.1
nueva Generadora del Sur (50% cEpSa)
780
3,673.0
1,162.4
(MW)
(GWH)
(Thousands of tons)
GEpESa (70% cEpSa)
65
teChnology, innoVation &
development
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • TECHNOLOGY, INNOvATION & DEvELOPMENT
The Technology units (Research Center,
Engineering and Technology Development),
provide support for the Group’s production
and sales units, helping to maintain and
improve the Company’s competitive
position in the markets in which it
operates and to reduce the environmental
impact derived from its activities and from
the use of its products.
Given the negative impact on demand
from the economic situation and changes
in the regulations governing fuels, new
projects to increase conversion in refineries
have been put on hold.
Successful research projects have also been
concluded which will allow existing facilities to
use both vegetable oils and fossil products in
hydrogenation processes to obtain diesel fuels
with bio content
66
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • TECHNOLOGY, INNOvATION & DEvELOPMENT
The Research Center is also leading a
project to extract biodiesel and other
products of added high value from
microalgae culture in partnership with
academic and research institutes in
Andalusia. Successful research projects
have also been concluded which will allow
existing facilities to use both vegetable
oils and fossil products in hydrogenation
processes to obtain diesel fuels with
bio content.
During the year, the Engineering
Department has supervised almost 1.2
million hours of construction with a total
Accident Frequency Rate (own personnel
and contractors) of 6.81. In order to
improve this rate, which is in line with
the industry but worse than in previous
years, programs have been put in place
to demonstrate that senior management
teams are personally involved and to
ensure an increased commitment to safety
by staff at all levels.
The new Exploration & Production work
area at the Alcalá de Henares Research
Center is now fully operational. It is
working with CEPSA E&P on projects
geared towards improving production,
which will be tested in production wells
throughout 2011.
In 2010, the corporate Engineering
Department also expanded internationally,
managing the OPEx Reduction project in
Caracara (Colombia) for CEPCOLSA and
developing the Phenol project in Shanghai
(China) for CEPSA Química.
Major ongoing projects include:
• Modifications to the ISOMAx unit as
part of the general conversion of the
Gibraltar-San Roque refinery. various
technological alternatives have been
studied, a more appropriate catalyst has
been installed for cracking operations
and the hydrogen feed purity has been
improved to increase conversion rates.
• The visbreaking Unit transformation
projects to increase fuel oil production,
and the BITUROx project, to increase
asphalt production, both at the La Rábida
refinery. Both units are expected to come
into operation in 2011.
67
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • TECHNOLOGY, INNOvATION & DEvELOPMENT
inVestment in rd&i
(researcH, development & innovation)
investMent in RD&i
2010
2009
2008
386
900
1,366
Innovative activities related to safety and
reducing environmental impacts
32
51
52
Research and Development
17
19
23
2
8
435
972
1,449
(Millions of euros)
Innovation in product manufacturing,
process design,and the expansion of activities
Others (new Research Center)
Total
RD&I is therefore
a vital tool within
CEPSA’s growth and
competitiveness plan.
It enables production
to be maximized
while minimizing the
environmental impact
and new fuels to be
developed that reduce
oil dependence
For CEPSA, RD&I is a tool for generating
sustainable growth and value. It enables us
to optimize our production processes and
the quality of our products in response to
the challenges of the sector and improve
our technological capacity and reputation.
Scientific research is applied to the
manufacture of new materials or products,
in the design of new production processes
or systems, and to improve existing
technologies. In an increasingly competitive
and globalized climate, innovation permits
companies to combine their technical,
operational and financial capacities with
the least resources possible and to launch
better performing products, processes or
services on the market.
The technological and innovative activities
carried out by the Group are geared towards
the development of projects, processes
and products with a positive effect on
the environment, reducing emissions
and waste. They also provide support
for exploration and production, refining,
petrochemical and marketing processes.
RD&I expenditure was down on 2009
due to the conclusion of several projects,
particularly the expansion of the La Rábida
refinery. Nevertheless, CEPSA invested
€435 million in RD&I related activities
in 2010.
RD&I is therefore a vital tool within CEPSA’s
growth and competitiveness plan. It
enables production to be maximized while
minimizing the environmental impact and
new fuels to be developed that reduce
oil dependence.
68
30 See the Our activities sections for information on the projects carried out.
CEPSA • ANNUAL REPORT 2010 • OUR ACTIvITIES • TECHNOLOGY, INNOvATION & DEvELOPMENT
inFormation systems
In 2010, the priorities set out in the
Systems Strategic Plan were re-examined:
to drive and collaborate in improving
business processes, developing innovative
actions and projects to generate value and
cost savings; to guarantee the security
of information and the continuity of
business processes while improving the
cost effectiveness of Information Systems,
managing shared services for
the Group with a commitment to
continuous improvement.
For the third consecutive year the Company
renewed and extended the scope of its ISO
20000 quality and ISO 27001 safety and
security certifications.
Projects carried out involved updating
existing management systems
throughout the value chain as well as new
developments likely to bring significant
improvements for the Company’s
businesses. These include the re-design and
launch of the Group’s new website, which
has a redesigned technological platform
for content communication and supports
specific applications for customers
and suppliers.
In 2010 the policy of optimizing
resources based on the consolidation of
infrastructure and on the use of shared
services continued, achieving effective cost
reductions in real terms and including the
provision of services for the international
companies of the Group.
Meanwhile, the Information Systems
Department received Computerworld’s CIO
Directions Award, ranking CEPSA among
the most innovative multinationals in the
energy sector.
The Information
Systems
Department received
Computerworld’s CIO
Directions Award,
ranking CEPSA among
the most innovative
multinationals in the
energy sector
69
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS
STAKEHOLDERS
CHANNELS OF COMMUNICATION
Shareholders and investors
- Shareholder Office.
- Investor Relations.
- Investors’ page at www.cepsa.com
- General Meeting of Shareholders.
public authorities and regulatory
bodies: Spain and the
European union, others
- Participation, collaboration and
representation in forums and agreements.
- Meetings with public authorities and
regulatory bodies.
- Attendance at various events,
roundtables, etc.
Employees
- Work environment surveys.
- Intr@CEPSA (Intranet).
- News stands.
- Internal magazines and bulletins.
- Employees’ suggestion box.
- Notice boards.
Communication and
dialogue are key to
reinforcing that trust
communities
- www.cepsa.com
- Participation in programs promoted by
social agents or on issues
relating to CEPSA’s impact on society.
- Participation mechanisms: committees
in facilities.
customers
- Customer Service.
- Loyalty programs.
- Magazine, bulletins, etc. for customers.
- Satisfaction surveys.
- Advertising campaigns.
Suppliers
- Suppliers’ section on www.cepsa.com
- Satisfaction surveys.
- Training for suppliers.
media
- Press area on www.cepsa.com
- Press conferences.
- Press releases.
- Direct and free-flowing contact with
the media.
We in CEPSA are aware of the impact
of our activities on various groups or
institutions, and of how important
their decisions and opinions are for the
good operation of our Company. In an
increasingly globalized, dynamic and
innovative business environment in which
certain social partners are becoming ever
more important and visible and in which
consumers and society in general are aware
of strategies for establishing business
relations, obtaining our stakeholders’ trust
has become vital, and communication and
dialogue are key to reinforcing that trust.
CEPSA strives constantly to promote
transparency, understanding and
cooperation with its stakeholders in order
to meet their expectations, making various
channels of communication available
to them.
CEPSA also prepares an annual
Communication Plan to ensure constant,
ongoing dialogue with its various
audiences, distinguishing between internal
and external stakeholders.
CEPSA strives
constantly to promote
transparency,
understanding and
cooperation with
its stakeholders
73
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS
eXternal communication
CEPSA’s external communications are
mainly directed at the media, investors,
financial analysts and industry associations.
Our Communications and Institutional
Relations Division makes every effort
to ensure free-flowing contact with
these diverse organizations, groups and
individuals, with the publication of press
releases, reports and articles, visits to our
facilities, events, press conferences and
face-to-face meetings, forums and talks.
The Company’s website,
http://www.cepsa.com, is an example
of the transparency and accessibility that
defines CEPSA’s communication policy. It
includes a specific section for the media, “el
centro de prensa” (press center), where all the
Company’s corporate information is provided.
It also has a regularly updated section
exclusively for shareholders and investors.
This year we added a new technological
platform to make it easier to navigate.
CEPSA works
constantly to encourage
transparency,
understanding and
cooperation with its
target public
internal communication
CEPSA seeks to strengthen employees’
sense of pride and belonging through
the Group’s Intranet, Intr@CEPSA, which
offers several information channels for
communicating the Company’s strategy
and performance, establishing relationships
between the different divisions and
departments and streamlining processes
and tasks.
Internal magazines and bulletins help
connect the Group’s centers, providing
up-to-date information and putting the
employee at the heart of communications.
Encouraging employee participation
is another challenge for our internal
communication policy. Initiatives to meet
this goal include suggestion boxes, CEPSA’s
Social value Awards, a Digital Photography
Contest and satisfaction surveys.
74
In 2010, we initiated the “Rojo por Fuera,
verde Por Dentro” (“Red on the outside,
green on the inside”) campaign aimed at
reducing energy and water consumption
and raising employees’ awareness of the
importance of recycling. This communal
challenge led to substantial cuts in power,
water and paper usage.
We also continued to encourage
communication among employees with,
for example, the “Remembering CEPSA”
Program for retired staff of the La Rábida
and the Gibraltar-San Roque refineries.
The three refineries also organized
initiatives to promote communication
between employees and management,
such as “Breakfast with the Director” at the
Gibraltar San Roque refinery, “A question
to the Management Committee” at the La
Rábida refinery, and “Meetings with the
Director” at the Tenerife refinery, giving
workers an opportunity to meet with their
Center Director to get firsthand knowledge
of the main ongoing projects and to ask
direct questions.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS
institutional relations
CEPSA actively participates in industry
associations and forums in order to
influence the positions they adopt regarding
Spanish and European institutions
and authorities. Throughout 2010, the
Company worked with the Spanish Energy
Club (Club Español de la Energía), the
World Energy Council, the Association
of Spanish Oil Companies (AOP), the
Spanish Road Association (Asociación
Española de la Carretera), the Association
of Liquefied Petroleum Gas Companies
(AOGLP), the Spanish Federation of
Chemical Industries (FEIQUE), the Spanish
Cogeneration Association (ACOGEN),
the Spanish Lubricant Manufacturers
Association (ASELUBE), the European
Petroleum Industry Association (EUROPIA),
Conservation of Clean Air and Water in
Europe (CONCAWE) and the European
Chemical Industry Council (CEFIC), etc.
CEPSA also took part in forums on energy
policy in Europe, the fuel quality directive
and the integrated pollution prevention
and control directive (IPPC) as well as on
other issues related to the aim of supplying
energy more cleanly and efficiently. 31
Dialogue and
communication are
crucial for strengthening
trust within our
stakeholders
Crisis CommuniCation management
Aware that our activities expose
the Company to unexpected events
that may require an immediate and
responsible reaction, CEPSA has a
Crisis Communications Manual which
details the Company’s strategy in such
situations. Regular training sessions are
held to prepare the staff responsible for
communication during a crisis.
31 For more information please see the section on CEPSA’s position on public policies.
75
emPloyees
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
number oF neW staFF, staFF departures and staFF turnover (number oF employees)
turnover 33
1,114
1,060
1,490
2008 2009 2010
2008 2009
2010
neW employees 32
409
437
554
2008 2009 2010
departures
76
1,107
1,024
1,047
32 New staff and staff departures do not include CEDIPSA (100% CEPSA). This company is engaged in the operation and installation of
service stations and its activity is seasonal.
33 Includes employees leaving the organization due to disability, resignation, death, retirement or dismissal. Excludes CEDIPSA which is
engaged in the operation and installation of service stations and whose activity is seasonal.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
key inDicatoRs
2010
2009
2008
11,814
11,703
11,815
Women (%)
33
33
33
Average hours of training
45
45
60
4.10
3.59
4.65
Total employees
Accident frequency rate (own personnel and contractors)
The aims of the Company’s human
resources policies are to strengthen its
human and intellectual capital, offering
a stimulating professional career, an
attractive working environment, and a safe
and healthy workplace in order to attract
and retain professionals.
The loyalty, satisfaction and commitment
of our employees are key to the Company’s
success, representing a competitive
advantage. CEPSA works to develop these
values. It is, therefore, committed to
respect for human rights and fundamental
principles such as human dignity, the
abolition of forced labor and child
exploitation, equality of opportunities and
non-discrimination on the basis of sex, race,
beliefs, religion and origin.
human capital
In 2010, CEPSA had 11,814 employees,
0.9% more than in 2009, as a result of
expanding Exploration and Production
activities, mainly in Colombia and Algeria,
and an increase in the number of retail sites
in the Group’s service stations network.
bReakDown by countRy
The organizational restructuring of the
Corporate and Lubricant and Petrochemical
divisions also continued during the year.
(Number of employees)
2010
2009
2008
Spain
10,281
10,192
10,413
Portugal
747
756
757
Latin America
502
464
364
Canada
201
207
211
North Africa
54
56
39
Rest of Europe
29
28
31
11,814
11,703
11,815
Total
77
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
The average age of CEPSA’s employees is 41.7, with an average length of service of 12.6
years. 13% of the employees work in foreign subsidiaries.
active staFF
2010
2009
2008
11,814
11,703
11,815
13
13
12
Average age
41.7
41.4
41
Average years of service
12.6
12.4
12
Number of employees 34
% of international employees
78.0% work in Refining and Marketing, 11.8% in Petrochemicals, 4.6% in Exploration and
Production, 0.6% in Gas and Power and 5.0% belong to the Corporate Area, Technology,
General Services and the Research Center.
woRkFoRce by business
aReas (at DeceMbeR 31, 2010)
2010
2009
2008
544
478
362
Refining, Distribution & Marketing
9,220
9,095
9,269
Petrochemicals
1,394
1,452
1,533
68
68
68
588
610
583
11,814
11,703
11,815
Exploration & Production
Gas & Power
Corporation, Technology, General Services and
Research Center
Total
91% of employees have a permanent contract, in line with the previous year, demonstrating
CEPSA’s commitment to stability of employment for its workforce.
bReakDown by pRoFessional categoRy
anD genDeR
2010
2009
2008
(Number of employees)
woMen
Management and department heads
Expert technicians
Technicians
Men
woMen
Men woMen
Men
81
578
77
560
73
581
397
1,352
324
1,226
310
1,226
412
1,295
444
1,398
435
1,368
2,543
4,429
2,694
4,499
2,747
4,631
Administration
276
79
-
-
-
-
Assistants
228
144
316
165
305
139
3,937
7,877
3,855
7,848
3,870
7,945
33
67
33
67
33
67
Specialists
Total
% of total employees
78
34 Employees as at December 31, 2010, except for CEDIPSA where an average for the year is used given the seasonal nature of its
activities (the installation and operation of service stations). For 2010, 303 of the 11,814 employees are attributable to minority
shareholders in companies which CEPSA owns more than 50% but less than 100% (310 of the 11,703 employees in 2009 and 308 of
the 11,815 employees in 2008). In addition, 4,437 of the 11,814 employees worked for subsidiaries (CEDIPSA, SERvICAR AND PROPEL)
engaged in the direct operation of service stations.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
attraCting and retaining talent
Our employees are our most valuable asset.
Understanding their concerns, knowing how
to motivate them and meeting their needs
are vital to earn their commitment to the
Company and foster a sense of belonging.
The Company is aware that the degree of
specialization in the sector means there is
fierce competition for skilled professionals,
and that employing the best professionals
gives it a competitive advantage. Attracting
and retaining talent, therefore, is a key
element in CEPSA’s human resources
management strategy.
CEPSA is continuously introducing and
improving the tools necessary for the
professional development of its employees,
with performance evaluation systems and
continuous training plans. It also promotes
policies to facilitate work-life balance,
gender equality and communication
between the members of the organization.
The Company offers benefits, such as
pension plans, help with schooling and
meals, insurance and scholarships for
employees and their families.
2008 2009 2010
employees WHo receive
perFormance evaluation (%)
61.11%
60.75%
60.49%
In recognition of the dedication and efforts
of its workers, the Company organizes
annual events at its centers in Spain and
Portugal and its foreign petrochemical
subsidiaries to acknowledge the
accomplishments and work of
its employees.
professional development
1,300 employees were assessed in 2010
and their strengths and opportunities for
improvement identified. A Training and
Development model was also defined and
new training tools and methodologies
designed, so that each employee
included in the Human Resources Skills
Management Model receives the training
and development solutions that best fit his
or personal and professional profile. The
project is expected to be complete by in
mid-2011 and to involve 1,600 employees.
Manufacturing management development
program 35. This program for managers of
CEPSA’s main industrial centers identifies
the ideal skills (professional and behavioral)
required for a post in any area of the
Group’s manufacturing divisions, with
the aim of ensuring that the holders of
managerial posts are familiar with and use
the appropriate tools for their jobs. The
second phase of the program concluded last
year with 360 participants. The third phase
will commence in 2011 with new content
geared towards improving
communication skills.
cEpSa’s professional performance
Evaluation Systems
These evaluations, in addition to helping
managers plan and prioritize work each year,
provide them with objective information
on the achievement of targets in their
areas and on the individual progress of the
employees who report to them.
One of the keys to our people management
model is professional development. In 2010,
work continued on two projects to boost
personal and professional development:
Human Resources Skills Management
Model. This model was implemented
to identify CEPSA Group professionals’
training needs and to design development
plans. It consists of three phases: providing
employees with information and training on
the model; evaluating their behavioral and
professional skills; and analyzing
the results.
35 For more information see the case study in the Employees section of the 2008 Corporate Responsibility Report.
79
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
training
CEPSA’s employees are the driving force
behind its growth and reputation, and
the Company is committed to keeping
their skills up-to-date. Training is one of
the keys to the future of the business,
and is fundamental for developing talent
and excellence in management, and
for adapting swiftly and effectively in a
changing climate.
The Company’s employees received over
450,000 hours of training in 2010, an
average of 45 hours per employee. In spite
of the current economic recession, training
plans have remained stable over the last
five years, except for 2008, when an
additional 600,000 hours of training were
provided following the expansion of the La
Rábida refinery.
Over 48,000 hours of safety training were
provided to 9,000 employees in 2010.
tRaining houRs 36
The training model was also updated last
year to adapt it for new business areas and
projects, and to the needs detected through
the Human Resources Skills
Management Model.
The new, comprehensive model reflects
both the training needs and concerns of
our employees and the responsibilities and
functions required by the business.
The model is also intended to foster the
values that inform CEPSA’s corporate
culture: diversity, cooperation, innovation
and excellence in the management of
new technologies.
The new, comprehensive
model reflects both
the training needs
and concerns of our
employees and the
responsibilities and
functions required by
the business
It also employs a structured and modular
training approach that combines both
face-to-face and online training. In 2010,
nearly 350 employees experienced this new
approach to training, which will be further
expanded in 2011.
2010
2009
2008
3,054
4,711
3,163
Safety
48,098
93,311
125,483
Other
404,932
364,817
472,107
Total
456,084
462,839
600,753
Environmental
80
36 Training hours per employee are calculated based on the number of employees entered in the CEPSA HR ACCESS database (87.75% of
total personnel, comprising Spanish subsidiaries).
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
equality
In April 2010, representatives of the
Company and its workers, through the
Inter-centers Committee, signed the CEPSA
Equality Action Plan which is applicable
at all the work centers subject to CEPSA’s
collective bargaining agreement.
The Plan is the outcome of efforts of
a Committee specifically set up for the
purpose following the signing of the
collective bargaining agreement and it
contains, in line with Organic Law 3/2007 on
gender equality, a set of measures designed
to fully implement the principle of equal
treatment and opportunities in
the Company.
The Plan includes measures classified
under headings such as access to
employment and recruitment, salaries
and wages, classification and professional
promotion, training, external and internal
communication, working conditions and
occupational health, work-life balance
and protection against various forms of
harassment, taking into account the nature
of the Company and its centers.
These measures are gradually being
implemented in accordance with the
timeframes set out in the Action Plan.
Initial training of the Monitoring Committee
and employees commenced in late 2010.
The Equality Action Plan also includes a
protocol on workplace and gender-based
bullying and sexual harassment. It is
aimed at ensuring complaints regarding
such conduct are dealt with appropriately,
objectively and confidentially.
The Equality Action Plan is intended to be
ongoing and permanent. A Joint Monitoring
Committee with union and CEPSA
representatives has been created whose
conclusions will be published next year in
CEPSA’s First Annual Report on Equality.
In 2010, the Group’s subsidiaries have
worked on their equality assessment
reports. The conclusions of those who have
progressed furthest have enabled us to
detect areas for improvement and to make
recommendations which, together with
CEPSA’s Equality Action Plan, are providing a
basis for the preparation of the subsidiaries’
individual Equality Action Plans.
CEPSA Equality Action
Plan contains a set of
measures designed to fully
implement the principle
of equal treatment and
opportunities in
the Company.
81
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
laBor relations
Collective bargaining agreements for CEPSA PETRONUBA for 2010-2013,
and ATLAS for 2009-2011 were signed in 2010, as was a regional agreement
covering office workers in Madrid, applicable to CEPSA Card S.A., CEPSA E. P.,
S.A. and Segeper, S.A. These agreements cover more than 350 workers
Dialogue and trust are the cornerstons of
CEPSA’s labor relations. The Company’s
policy on this matter adheres to the
Fundamental Principles of the International
Labor Organization (ILO), as demonstrated
by the level of trade union representation
in CEPSA.
96% of employees are represented
by a plural and democratically elected
body, in accordance with the prevailing
legislation for each country, and 39% of
the workforce comes under collective
bargaining agreements negotiated directly
by employee-elected representatives. The
remaining employees come under
non-Company sector agreements and their
representatives are appointed indirectly,
although with union participation.
eMployees coveReD by collective
baRgaining agReeMents
Collective bargaining agreements for CEPSA
PETRONUBA for 2010-2013, and ATLAS for
2009-2011 were signed in 2010, as was a
regional agreement covering office workers
in Madrid, applicable to CEPSA Card S.A.,
CEPSA E. P., S.A. and Segeper, S.A. These
agreements cover more than 350 workers.
2010
2009
2008
Breakdown by Business Unit
total
%
total
%
total
%
Refining, Distribution & Marketing
8,942
79
8,819
78
8,984
78
Petrochemicals
1,309
11
1,365
12
1,443
12
231
2
206
2
203
2
898
8
921
8
907
8
Exploration & Production
Corporation, Technology, Research Centre and General Services
Total
11,380
bReakDown by union RepResentation
2010
eMployees
Union representation
11,311
11,537
2009
% eMployees
2008
% eMployees
%
10,054
85
9,981
85
10,220
87
Non-union representation
1,760
15
1,722
15
1,595
13
Staff total
11,814
82
11,703
11,815
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
oCCupational HealtH and saFety
Safety is one of CEPSA’s key founding
principles. The Company considers it
essential to develop and comply with its
occupational health and safety policy, which
adheres to the Law on the Prevention of
Occupational Hazards. For that purpose,
it has established procedures, training
programs and monitoring systems, such as
OHSAS 18001.
Employees are formally involved through
their representatives in the Company’s
health and safety measures: Prevention
Delegates. Depending on the number of
employees and their activities, a company
may also have a Health and Safety
Committee, a consultative body on the
Company’s health and safety initiatives.
CEPSA provides suppliers of outsourced
services with a system to coordinate the
application of its rules on safety, health and
hygiene, and to exchange experiences on
the matter.
To standardize the levels of technological
risks acceptable in new and existing
facilities, CEPSA has developed Risk
Acceptance Criteria based on global practice
in the petroleum, gas and chemical sector,
and on current legislation. In 2010, process
assessments were carried out in the Group’s
work centers and subsidiaries of the Group
to evaluate their technical standards and
introduce a standard methodology.
Safety is one of CEPSA’s
key founding principles.
The Company considers
it essential to develop
and comply with its
occupational health
and safety policy, which
adheres to the Law
on the Prevention of
Occupational Hazards
83
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
Continuing the work of previous years,
in 2010 safety engineers reviewed the
industrial facilities at the Gibraltar-San
Roque Refinery and the Puente Mayorga
and Guadarranque Petrochemicals Plants.
This review allowed the units’ design and
operating standards to be updated and
compared to the sector. Regular emergency
drills are carried out at all facilities,
involving medical teams and fire-fighters
and other service providers, with external
audits performed in some centers.
A fundamental part of the Company’s
occupational and safety hazard prevention
activities is the training and information
provided to employees. The “Zero tolerance
of unsafe situations” (Tolerancia Cero ante
las situaciones inseguras) campaign is an
example of this.
acciDent Rates/absenteeisM 37
FoR own peRsonnel
2010
2009
2008
81
89
112
3.76
4.11
5.27
0.14
0.11
0.10
3.10
3.43
3.60
4.80
5.30
5.46
Lost-time occupational accidents 38
Accident frequency rate
Accident severity rate
39
40
Common illness absenteeism (%)
41
Absenteeism (%)
84
37
38
39
40
41
Absenteeism data for companies with head offices in Spain.
Accidents that cause temporary unfitness for work, permanent disability or death.
Number of lost-time accidents per million hours worked.
Number of calendar days lost due to lost time accidents per thousand hours worked.
Number of working hours lost per theoretical annual working day.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • EMPLOYEES
accident
FreQuency rate
oWn personnel
2008 2009 2010
3.76
4.11
5.27
oWn personnel and contractors
2008 2009 2010
4.10
3.59
4.65
accident
FreQuency (oWn personnel)
2008 2009 2010
reFining
2.88
2.36
1.82
2008 2009 2010
petrocHemicals
5.09
3.99
4.32
85
communities
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
In 2010, CEPSA increased its investment in
business responsibility initiatives by 19%,
fundamentally due to higher spending on
social programs
86
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
2010
investMent in business
Responsibility initiatives
2009
2008
euRos
%
euRos
%
Social
1,326,132
37
1,070,050
36
1,239,600
30
Cultural
1,035,155
29
996,648
33
1,434,631
34
321,805
9
215,712
7
251,132
6
Environmental
Sports
Total
euRos
%
921,337
25
721,428
24
1,237,526
30
3,604,430
100
3,003,838
100
4,162,889
100
Commitments to tHe community
CEPSA’s founding principles reflect the
values that underpin the Company’s
contribution to the economic and social
development of the communities in
which it operates. CEPSA applies these
principles - respect, commitment, safety,
quality and transparency - to projects
relating to education, culture, sports
and improving people’s quality of life. In
2010, CEPSA increased its investment in
business responsibility initiatives by 19%,
fundamentally due to higher spending on
social programs.
CEPSA operates in a wide range of
environments and is aware that its
operations impact on diverse communities,
whose expectations and demands it must
respond to. The Company’s commitment
to society involves prioritizing long-term
projects that will endure even when the
organization is no longer involved and which
contribute to sustainable development.
CEPSA focuses on two aspects: preventing
and mitigating the impact of its activities
on society, by promoting relationships with
the communities near to its facilities based
on trust, involvement and transparency,.
and the socio-economic development of
these communities through
social initiatives.
87
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
ContriButing to puBliC
interest projects
42
In 2010 we continued to develop new
projects geared towards strengthening links
with local communities. We participated in
a range of socio-cultural activities, and built
on our initiatives related to education, the
environment 42 and, especially, sport.
initiatives to improve Quality of life
This line of action involves projects geared
towards society’s more under-privileged
members. CEPSA held its Social values
Awards again in 2010, with the aim of
recognizing and supporting the best
social projects carried out by different
associations, NGOs and institutions. CEPSA
is proud of this initiative which encourages
its employees to sponsor social projects.
The CEPSA Social value Awards have been
held six times in Huelva, four times in
Madrid, three in Tenerife and Portugal and
two in Campo de Gibraltar. In total, in 2010,
more than 200 projects were put forward,
sponsored by 1,500 employees, of which
19 received awards two received honorable
mentions. The 2010 awards were notable
for the cooperation between the sponsoring
employees and the NGOs, and the use of
social networks to promote the awards.
88
In canada, the Company works with various
associations and organizations, such as
the Maison des familles in Montreal, the
Canadian Cancer Society, the Alzheimer
Society of Canada and the Multiple Sclerosis
Society of Canada.
In colombia, CEPSA’s investments focus
on generating and sustaining activities
which are independent of the petroleum
industry and which generate wealth in
the communities where the Company
operates. CEPSA continues to be involved
in the Huerta Integral para la vida Project,
providing seeds for basic foodstuffs for
families in 13 indigenous communities.
In peru, we participated in the construction
of spaces for social and political events,
improvements to drinking water systems
and rural electrification schemes.
promoting culture and Education
CEPSA is committed to promoting and
preserving local customs, culture and
historical heritage as well as encouraging
education, by collaborating in cultural,
scientific and educational activities.
This year we organized the Iv Science in
the Street Days (Iv Jornadas de Ciencia en
la Calle) in San Roque (Cadiz) for children
to enjoy science through experiments
they suggest and perform themselves.
Initiatives aimed at encouraging culture
include an exhibition of pieces from CEPSA’s
contemporary art collection in cadiz. The
paintings were acquired over the past
fifteen years during which the Company
supported various exhibitions at the Manolo
Alés Gallery in la Línea de la Concepción.
CEPSA also lent the Provincial Museum in
huelva the painting “Estampa de Madrid”
by José Frau. This temporary loan helps fill a
gap in the Museum’s permanent collection,
which does not contain any of this
painter’s work.
42 For more information on the breakdown of social, cultural, environmental and sporting activities, please see the 2010 Corporate
Responsibility Report at www.cepsa.com.
43 For more information on environmental programs, see the section on our commitment to the environment.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
In Santa cruz de Tenerife, the Company
financed the restoration and maintenance
of Francisco Sobrino’s popular sculpture
“Móvil”, under the framework of Adopt a
Sculpture program organized by the Office
of Cultural Affairs of the Santa Cruz de
Tenerife City Council.
At university level, we signed a framework
agreement with the University of La Laguna
(ULL), to promote initiatives including work
practice programs at the Tenerife refinery,
which will enable university researchers to
meet the needs of the refining industry,
increase their knowledge of the sector and
gain firsthand experience in the
labor market.
The Company continues to be a member
of the Friends of the Prado Museum
Foundation in madrid.
In canada, young people gain first-time
work experience in our facilities through
agreements with the Junior Achievement
association Bécancour and the Fondation
ressources jeunesse in Montreal.
In colombia, there are projects geared
towards training for leaders and community
organizations and towards improving the
infrastructures and facilities of institutions
in the rural and urban areas in which CEPSA
operates. In 2010 the Company worked
with the Caracara Association on projects in
Puerto Gaitán (Meta).
CEPSA also contributed to preserving local
cultures and customs in the municipality
of Maní with the celebration of the Pedro
Flórez Bandola Criolla International Festival,
which selects the best performance on this
traditional instrument.
In peru, we invested in projects aimed at
improving the educational infrastructures
in the areas in which we operate. We also
provided teaching materials for play and
educational activities.
In algeria, to promote Spanish culture
in the country, we organized a series of
Flamenco guitar concerts and published
a book entitled “La Historia del Cautivo”
which describes several years of the life of
Miguel de Cervantes in Algiers. The books
were published in Arabic and Spanish and
were donated to the library and translation
department of the University of Algeria.
In Egypt, CEPSA continued supporting,
for the third consecutive year, the
archaeological restoration of the Temple of
Thutmose III.
Sports initiatives
CEPSA supports activities aimed at
encouraging sports in the communities
in which it operates, mainly through local
sports clubs and schools.
In the campo de Gibraltar region CEPSA
signed a cooperation agreement with
the Football Federation of Andalusia
to organize the “Contar con el Fútbol”
educational program to promote the
basic values of health, communication,
education, culture and equality in all schools
in Andalusia.
In Tenerife, the Company supported the
Basketball Club in Santo Domingo de la
Calzada in its Summer Camp, bringing
together about 300 children between
the ages of 7 and 16 to be trained by
professional basketball players.
Service stations that care
In 2010, CEPSA Portugal’s
network of Service Stations
organized a charitable
campaign offering shop
space for the sale of items
to raise funds for
social projects.
“Zero Poverty” is an
initiative of the Oikos
Association for Cooperation
and Development aimed at
fighting poverty in Portugal
through education, training
and job creation.
They also participated in
a national campaign by
the SOL Association which
supports HIv-positive
children. The money
collected went towards
financing a new center for
25 children with AIDS.
In colombia, CEPSA participated in the
construction of the El Piña Correa Sports
Complex at Puerto Gaitán (Meta), which
hosts karate, indoor soccer and skating.
The Company also collaborated in the
construction of the Manga de Coleo Sports
Centre in Tauramena (Casanare). This is the
traditional sport of the cattle herders who
brand the cattle. The Company also helped
to organize a football tournament in which
180 children and adults participated,
both from CEPSA and from
neighboring communities.
In peru, CEPSA organized intercommunity
football championships, supplying the
players with all the necessary
sports equipment.
89
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
managing our impaCt on
communities WHere tHe company operates
cEpSa Química Bécancour, canada
CEPSA Química Bécancour (CQB) is
member of the Community Consultancy
Committee composed of a representative
of each of the industries in the business
complex, including CQB, and 12 members
representing the local community.
In September 2010, CQB organized an Open
Day to mark its 15th anniversary, which
was attended by more than 400 people. A
commemorative brochure was published
and distributed amongst the visitors,
together with some spruce seeds.
cEpSa Química montreal, canada
The CEPSA Química Montreal committee,
created in response to the request of the
employees of the plant, is composed of
representatives of the local residents, the
environmental bodies in the region and
members of CEPSA. In 2010 it met on five
occasions to discuss the environmental
performance of the plant, the scheduled
turnaround, major projects, etc.
dETEn, Brazil
The Camaçari Committee for Industrial
Development (COFIC) deals with issues
relating to industrial and work-related
safety, environmental protection and
corporate responsibility. In 2010 it met
five times.
90
la rábida refinery, in palos de la
frontera (huelva)
One of the best-received initiatives
in 2010 was the Open Day, which was
attended by 5,099 visitors, 21% more than
the previous year, a confirmation of the
interest expressed by the refinery and local
residents in getting to know each
other better.
Overall management of the refinery
follows the European EFQM (Excellence
For Quality Management) model, which
assesses relationships with internal and
external stakeholders. The target public
valued CEPSA’s record on the environment,
its transparency in communication, and
its continuous support for social, cultural,
environmental and sports-related activities
as positive.
Gibraltar San roque refinery (cadiz)
A civic and artistic project, UrbanArt, was
organized to visually improve the walls of
the refinery. Local residents participated
actively in the project. The goal of the
program is to promote civic values among
young people in Campo de Gibraltar and
to foster their creativity through mural
painting and graffiti. It also offers young
people the chance to participate in the
aesthetic transformation of public spaces
in the town. A series of workshops
were organized for young people, local
council technicians, and heads of youth
associations registered with the Instituto
Andaluz de la Juventud (Andalusian
Youth Institute).
After training, the 33 young participants
painted graffiti on 1.5 km of the wall of the
refinery over two weekends. We expect to
continue the project with the rest of the
outside wall of the plant in 2011.
CEPSA also sponsored the 2010 Foro Sur
Europa. This Forum is aimed at bringing the
social and cultural panorama of Campo de
Gibraltar closer to members of the regional
and national administration through a cycle
of talks and symposia.
Within the program of organized visits to
the plant, eight Open Days were held, in
addition to guided visits for schools and
associations, which attracted a total of
1,800 visitors.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • COMMUNITIES
Tenerife refinery, The canary islands
colombia
peru
In a bid to make the refinery more
accessible to the manufacturing sector and
to local residents and to hear about their
concerns first-hand, a series of encounters
was organized in 2010, involving various
important institutions and the media.
Because of the increase in exploratory
activity in Colombia, and new drillings over
the last two years, relationships with local
communities have been intensified. CEPSA
promoted employment, focusing on hiring
local manpower, both skilled and unskilled.
Training was provided to equip workers with
the best tools to do their jobs safely and
with respect for the environment.
CEPSA executed various social projects in
Peru to attend to the needs of its main
stakeholders. These projects centered
mainly on communities in the area directly
influenced by the seismic projects being
carried out in the Ucayali River Basin.
A Neighborhood Committee was also
set up. Its objectives were defined and
initial activities decided on with a view to
improving understanding of our business.
CEPSA introduced alternative channels of
communication with its stakeholders, in
addition to those established by law, such
as advance meetings, information bulletins
and third party visits to projects.
91
Customers and
suppliers
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
Commitment to quality and
customer satisFaction
The quality of products and services is
a foremost concern in the relationship
between CEPSA and its customers, as
are the aspects of service quality valued
by consumers, like telephone assistance,
meeting delivery dates, and dealing with
complaints. CEPSA’s definition of quality is
to offer products or services that maintain
or increase customer satisfaction, which
means adding value to them.
CEPSA has set itself the challenge of
introducing a Culture of Innovation in
the Company, establishing processes to
promote creativity, observation and the
92
generation of innovative ideas which would
be profitable for the Company and useful to
customers and consumers, with a view to
achieving a competitive advantage.
CEPSA’s customer satisfaction rate in 2010
reached 99.91%, slightly above that for the
two preceding years.
CEPSA is committed to Product
Stewardship, following a series of guidelines
promoting the responsible and safe use
of its products, with respect to health,
safety, environmental protection and other
socioeconomic and technical aspects.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
improVing
customer service
CEPSA’s service station network consists
of nearly 1,800 retail sites in Spain and
Portugal. In recent years the stations have
gradually turned into service shopping
centers that offer a wide range of services
besides the sale of fuel. The DEPASO
stores are the best known, with over 800
outlets in Spain. Activities to evaluate and
improve customer satisfaction include
the following:
• marketing and loyalty cards: The
‘Ideones CEPSA’ program started in
2010, an initiative within the CEPSA
‘Innovating for you’ campaign, with the
aim of transmitting the Group’s strategic
commitment to innovation. The card
network for transport professionals,
CEPSA Eurotrafic, has been extended
and is now accepted at more than 12,000
service stations in 19 countries.
LOyALTy SySTEMS
ADVANTAgES
”porque Tu Vuelves” card (Spain)
and “porque Eu Volto” card (portugal)
Discount points exchangeable for products
from an exclusive catalogue, off-shelf
products, other services from the station
and fuel.
”porque Tu Vuelves”
cEpSa ViSa card
5% discount on motor fuels and other
purchases at our service stations and 1%
discount at over 18 million establishments
worldwide.
”porque Tu Vuelves” racE card
Combines the advantages of roadside
assistance and other RACE products with those
of CEPSA’s “Porque Tu vuelves” program.
cEpSa Gift cards
CEPSA Prepaid Cards for end customers
and businesses.
Trans club card
(Spain and portugal)
Exclusively for transport professionals, it
offers a series of benefits, advantages,
gifts and prizes.
cEpSa Star Eurotrafic card
For transport companies and selfemployed drivers. Allows cardholders to
pay for fuel, lubricants, items from shops
and highway tolls, and offers roadside
assistance insurance.
agro club card
Free membership for farmers and
stockbreeders, the only one of its kind on
the Spanish market.
93
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
• Customer-oriented: In 2010 more than
4,900 improvements were proposed for
the service stations regarding customer
information, maintenance and cleaning,
and customer service in a constant effort
to increase their satisfaction. The “¿Cómo
estamos?” (“How Are You?”) project was
reinforced and the “Llamadas misteriosas”
(“Mystery Calls”) campaign launched to
measure the quality of our services.
In Spain we also started the DEx
(Distribution by Exception) Project which
provides real-time information on the
geolocation of customers and the position
of tanks. This new development allows us
to manage the supply process in advance,
improving service quality and the handling
of incidents. We also completed the
harmonization of our motor oil and fuel
transporters in Portugal, to ensure that
they comply with the same criteria and
requirements as their counterparts in Spain.
As part of our marine fuel expansion policy,
in February, we commissioned a new berth
and a new point of supply by barge in the
port of Huelva. We also started supplying
RMk500 fuel in the port of Algeciras to
meet market demand.
In Spain we also started
the DEx (Distribution by
Exception) Project
which provides
real-time information
on the geolocation of
customers and the
position of tanks
94
CEPSA installed mobile communication
equipment in the vehicles that supply
aviation fuel at Fuerteventura airport so
that their location and critical operations
can be monitored at all times.
Nearly 700 new small Mini 1000 range
tanks were installed for bulk propane during
the year and an AUTOGAS supply point
was installed on the premises of a butane
distributor, the first in a network that will
be extended over the next few years.
The installation of the RFID microchip
in butane canisters continues. This chip
contains all the information about the
canister, its date of first use, how many
times it has been refilled and where, its
tare, the dates when the safety seal was
replaced and when it is next due to be
replaced. It also guarantees the quality and
safety of the container and minimizes the
movement of the empty and full containers,
thus helping to reduce GHG emissions.
CEPSA consolidated the Orbita CEPSA
Project, which started in 2009, with the
intention of bringing our lubricants closer
to the end consumer and providing training
for mechanical repair shops and for small
businesses in handling used engine oils,
occupational risk prevention, and the law.
At the end of the year, the Orbita Network
included 263 affiliated workshops.
In 2010, we developed an IT program
to assist our customers to place orders
through the website, which will be available
in the first half of 2011. Also in 2011 the
customers’ area of the CEPSA website
(www.cepsa.com) will be completed and it
will be possible for them to track invoices,
orders, payments due and complaints.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
The Orbita CEPSA Project
involves 263 affiliated
repair workshops which
receive free advice on
handling used engine
oil and preventing
occupational risks.
This year groups were created for the
purpose of improving service to CEPSA
Química customers and the technical
support service was reinforced to cut
response times.
For more information on chemical product
stewardship, see http://www.cepsa.
com/cepsa/Que_ofrecemos/Productos_
quimicos/Tutela_de_Producto/?lang_
choosen=en&lang_choosen_furl=es
CEPSA’s Energy Consultancy Service, which
carries out energy audits and viability
studies to optimize use of the energy
supplied, carried out 210 studies in 2010,
20 more than in 2009. Improvements
were made for 44 customers and verifiable
savings of €598,000 were made on annual
consumption of 1,100 GWh.
95
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
DETISA retained its
certification from
the National Energy
Commission, recognising
that the energy it
supplies is from high
efficiency cogeneration
plants, such as
Nueva Generadora del
Sur (NGS), a combined
cycle plant which is 50%
owned by CEPSA with
power production now
managed by DETISA.
Energy traded on the
market for producers
outside the Group
increased by 5% over
the previous year
In 2010, trading of our own energy on the
market, after the commissioning of the
new La Rábida refinery cogeneration unit,
increased by 7% in comparison with 2009.
96
DETISA retained its certification from the
National Energy Commission, recognising
that the energy it supplies is from high
efficiency cogeneration plants, such
as Nueva Generadora del Sur (NGS), a
combined cycle plant which is 50% owned
by CEPSA with power production now
managed by DETISA. Energy traded on the
market for producers outside the Group
increased by 5% over the previous year.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
CommerCial CommuniCations
and personal data protection
CEPSA belongs to the Association
for the Self-regulation of Commercial
Communication (Autocontrol), part of the
European Advertising Standards Alliance.
As a member of this association, the
Company is committed to responsible
commercial communication and contributes
to reinforcing the self-regulation of publicity
as a means of safeguarding the rights of
consumers and its competitors.
CEPSA is also a member of “Confianza
on-line” (“on-line Trust”), a global selfregulatory system for interactive publicity
and e-Commerce with consumers, organized
by the e-Commerce and Direct Marketing
Federation (FECEMD), the Spanish
Association for Electronic Commerce (AECE)
and Autocontrol.
CEPSA has worked with the Secretary
of State for Climate Change and with
Autocontrol to create a self-regulatory
code for the use of environmental claims
in advertising for products and services.
CEPSA now represents energy companies
on the Monitoring Committee for this code.
As an active member of the Spanish
Association of Advertisers (AEA) and its
Executive Board, the Company participated
in developing Codes of Good Practice for the
advertising industry and played an active
role in the creation of the Code of
Business Conduct for the Spanish
Advertising Industry.
The power supplied
by CEPSA is from
certified high efficiency
cogeneration plants
CEPSA has also implemented all measures
legally required for the protection of
personal data regarding individuals dealing
with the Company (customers, suppliers
and employees), under the strictest terms
of confidentiality using appropriate IT
security systems.
97
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
suppliers
CEPSA strives to ensure that its relationship
with suppliers and contractors is a
benchmark for the sector. The Company’s
quest for excellence in its supply processes
have led it to define a corporate policy of
responsible purchasing and contracting,
based on transparency and efficiency in
management and on the generation of
value for the whole supply chain.
To achieve stable and lasting relationships
with its suppliers and contractors, CEPSA
uses a system for the Evaluation and
Approval of Suppliers which guarantees
maximum objectivity in their selection
and ensures the quality of products and
services, the prevention of work-related
risks and the protection of the environment
throughout the value chain.
As a Good Practice, CEPSA Química (Brazil)
awards prizes to its best suppliers each
year. This is one way in which the Company
acknowledges the quality of goods and
services, punctuality, competitiveness
and advances in safety, health and
environmental issues.
CEPSA has outsourced the registration,
classification and management of
documentation regarding its suppliers
and contractors through a Global Supplier
Management Module. As soon as this is
fully implemented it will be possible to
optimize internal procedures for authorizing
suppliers using an on-line IT application.
In 2010 a special section of the www.cepsa.
com website was set up for suppliers.
This will streamline the processing of the
documents necessary for their activities
within CEPSA and facilitate interaction
with the Company in certain
purchasing operations.
In the areas where it operates, the Company
is always seeking to generate benefits
for the community, offering employment
opportunities to local residents and
promoting the procurement of local
goods and services. The economic value
distributed among suppliers in 2010
amounted to €17,901 million, 22.3% more
than in 2009. This increase is basically due
to a higher average price for the supply of
crude oil and other products.
key indicators
% oF autHorized suppliers in spain
and portugal
2008 2009 2010
A key part of the activities of the Company
is the purchase of goods and services from
suppliers and contractors. CEPSA maintains
ethical and responsible relations with them,
ensuring respect for the environment
and social commitment as well as
financial viability.
65
50
80
In the areas where it
operates, the Company
is always seeking to
generate benefits
for the community,
offering employment
opportunities to local
residents and promoting
the procurement of local
goods and services
As a Good Practice, CEPSA
Química (Brazil) awards prizes
to its best suppliers each year.
This is one way in which the
Company acknowledges the
quality of goods and services,
punctuality, competitiveness
and advances in safety, health
and environmental issues.
98
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
In 2010 a special section
of the website was set
up for suppliers.
This will streamline
CEPSA and facilitate
interaction with the
Company in certain
purchasing operations
Relations with supplieRs by
expenses incluDeD in incoMe stateMent
2010
2009
2008
16,053.0
12,876.0
18,858.0
(Millions of euros)
Procurement
Transport and freight
344.0
318.6
491.1
Work, supplies and external services
1,311.0
1,285.5
1,421.0
16.0
19.0
16.0
162.0
126.0
130.9
15.0
12.0
33.0
17,901.0
14,637.1
20,950.0
2010
2009
2008
Environmental costs
Other operating expenses
Financial cost of loans
44
Total
Capital expenditure with suppliers of intangible assets in 2010 amounted to €621 million.
econoMic Relations with supplieRs
in Respect oF capital expenDituRe
(Millions of euros)
Exploration & Production
156
214
742
Refining & Marketing
357
594
680
Petrochemicals
32
34
27
Technology, Gas & Cogeneration
69
101
125
7
8
5
621
951
1,579
Corporation
Total
44 Net cost accrued in the in respect of interest on bank and other financing only.
99
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
In 2010 local sourced supplies in regions
where CEPSA operates, excluding bank
services, crude oil and products, accounted
for 51% of total purchases, with the
subsequent creation of value in
these communities.
cepsa WorldWide purcHases by region 45 (tHousands oF euros)
2010
1,021,142
522,214
51.14%
2009
930,784
484,220
52.02%
2008
472,924
43.46%
cepsa in spain puRchases
by Region 46
2010
1,088,225
total
local
2009
%
2008
(Thousands of euros)
total
Cadiz
local
%
total
local
%
total
local
%
147,958
55,661
38 201,084
77,659
38.62
263,548
84,210
31.95
Canary Islands
40,951
16,600
41
52,431
17,821
33.99
54,192
15,779
29.12
Huelva
83,632
40,070
48
92,317
40,850
44.25
146,510
53,014
36.18
Madrid
251,877
86,774
34
155,138
85,900
55.37
362,635
179,111
49.39
Total
524,418
199,105
37.96 500,970 222,230
44.35
563,600
332,114
58.92
100
45 No information is available for 2008 and 2007 for Egypt, Colombia and Peru.
46 No information is available for 2008 and 2007 for Egypt, Colombia and Peru.
CEPSA • ANNUAL REPORT 2010 • OUR STAkEHOLDERS • CUSTOMERS AND SUPPLIERS
cepsa woRlDwiDe
puRchases by Region 47
2010
2009
2008
(Thousands of euros)
total
Algeria 48
Egypt
Colombia
Peru
Portugal
local
%
total
local
%
total
local
%
107,949
61,602
57.06
122,379
73,642
60.17
202,525
95,445
47.13
16,524
14,210
85.99
27,896
20,894
74.9
190,296
105,566
55.47
190,035
95,785
50.4
8,964
7,501
83.68
15,675
14,463.20
92.27
73,829
57,206
77.48
58,815
45,365
77.13
429,814
261,990
60.95%
261,340 140,810
53.88%
1,543
1,446
94
87,269
74,757
85.66
Canada (Bécancour)
14,032.3
7,179
51.16
Canada (Montreal)
70,146.6 50,848.1
72.5
Brazil
Total
496,723.9
323,109 65.04%
47 No information is available for 2008 and 2007 for Egypt, Colombia and Peru.
48 Local purchases have been considered as those transactions exclusively carried out with local companies, excluding subsidiaries of
international companies operating in Algeria.
101
enVironmental
management
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
Respect for the environment is today a key
issue on business agendas, and has given
rise to extensive discussion and legislation.
Society demands policies and, above all,
action to halt or minimize the depletion of
natural resources.
At CEPSA we believe that technological
innovation, combined with an advanced
environmental management model, is the
key to meeting this demand and CEPSA has
developed policies and mechanisms designed
to reduce the impact its industrial activity
could have on the environment and the areas
in which it operates.
CEPSA’s Letter of Principles on Environmental
Protection, Risk Prevention and Excellence
in Management details the Company’s
commitment to excellence in its
environmental performance.
104
With a view to taking uniform action in all
our centers and facilities, the Group has basic
environmental regulations which establish its
environmental policies and principles.
CEPSA’s environmental strategy includes
optimizing the energy efficiency of its
processes, with low fuel consumption and
emissions. To meet its objectives, the Group
has defined and implemented environmental
management systems in its main areas of
business and facilities.
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
key indicators
enviromental investment and expense
(millions oF euros)
2008 2009
2010
136.78
119.98
107.14
enviromental investment
2008 2009 2010
(millions oF euros)
66.08
41.11
38.44
CEPSA’s environmental
strategy includes
optimizing the energy
efficiency of its
processes, with low
fuel consumption
and emissions
2008 2009 2010
Hours oF environmental training 49
3,054
4,711
3,163
49 Training hours per employee are calculated based on the number of employees entered in the CEPSA HR ACCESS database
(87.75% of total personnel, comprising the Spanish subsidiaries).
The Environmental Management System
is a tool that allows us to comply with
legislation and meet our commitment to
continuous improvement and preventing
pollution, as set out in the environmental
policies of the Group. Its implementation
involves a commitment that is renewed
yearly and expressed in the annual
management program, which establishes
and documents environmental objectives.
Achievements in 2010 include:
• refining: The liquid effluent treatment at
the La Rábida refinery has been renovated
and a new homogenizer commissioned.
At the Gibraltar-San Roque refinery we
commissioned a new treatment unit
for purifying sour water and eliminating
odors in the wastewater treatment
plant. We were also able to reduce NOx
emissions at the cogeneration plant
and converted the sulfur plants to treat
ammonia gas. At the Tenerife refinery
work continued on reducing environmental
risks on the East Dike lines. In 2011, we
expect to complete the necessary pipe
replacement and the construction of
housing which will prevent products
from draining into the soil in the event
of leakage. Wastewater was subjected to
secondary treatment and now complies
with the requirements of the Integrated
Environmental Authorization (IEA). We
also commissioned the Sulfur 2 plant
using the Superclaus system and installed
a new station for measuring immissions
into the atmosphere. At ASESA
(Tarragona) we commissioned a new high
efficiency cogeneration unit and a new
gas desulphurization plant, and installed
benzene meters at the Research Center,
with a view to reducing emissions from
the units.
105
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
At the Gibraltar-San
Roque refinery we
commissioned a new
treatment unit for
purifying sour water
and eliminating odors
in the wastewater
treatment plant
106
• distribution and marketing: At the
PROAS factory in Tarragona we drew
up a unified policy on Quality, Safety
and the Environment and concluded the
management of accumulated waste at
the factory (390 t) and the recovery of 185
tons of waste as bitumen.
• marketing and logistics: Work continued
at service stations to ensure that they
comply with environmental regulations.
• petrochemicals: The emission of benzene
was minimized at CEPSA Química Puente
Mayorga, following the introduction of a
system to monitor leakage under the LDAR
program. Meanwhile, its environmental
risks report was verified in accordance
with UNE 150008 regulations. DETÉN
Química reduced the generation of organic
effluents through the Zero Effluent
Program (PEZ), while, through the reuse
of water, a volume flow of 4.2 m3/h was
achieved, lower than the target of 5.5
m3/h, excluding rain water.
CEPSA’s position regarding Directive
2010/75/EU (Directive on Industrial
Emissions) of the European Parliament and
the Council is explained in the chapter on
CEPSA’s position on public policies.
The most important aspects of this
Directive, as regards our activities, are the
strengthening of best available techniques
(BAT), the role of the best available
techniques reference documents (BREF)
and the proposal for new emissions limits
for large combustion plants, to bring
them into line with BAT. A new aspect of
these regulations is the extension of their
scope to protection of the soil and the
underground water, requirements being
established for frequent monitoring.
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
enVironmental investment
In 2010 CEPSA’s investment in projects for its
facilities and environmental action totaled €66.1
million, 61% more than in 2009
The main investments in the Refining
division and in CEPSA Química, as in
previous years, were aimed at reducing
atmospheric emissions.
In 2010 CEPSA’s investment in projects
for its facilities and environmental action
totaled €66.1 million, 61% more than in
2009. These figures demonstrate our
commitment to environmental objectives,
independently of the results of our
business activity.
enviRonMental
investMent anD
expenses
2010
expense
investMent
Environmental Area
MILL.
EUROS
Water
21.98
31.09
4.47
6.76
Atmosphere
%
2009
MILL.
EUROS
%
expense
MILL.
EUROS
%
2008
investMent
expense
MILL.
EUROS
%
MILL.
EUROS
%
investMent
MILL.
EUROS
%
27.82
35.20
7.83
19
25.81
37.60
7.84 20.40
22.88 59.50
23.02
32.56
60.31
91.27
25.71
32.60
21.19
51.50
20.06
29.20
Waste
9.10
12.87
0.17
0.26
10.57
13.50
0.13
0.40
8.49
12.40
0.06
0.02
Soil and underground water
5.72
8.09
0.31
0.46
5.18
6.50
6.77
16.50
6.89
10
4.85
12.60
Other
10.88
15.39
0.82
1.25
9.59
12.20
5.19
12.60
7.45
10.80
2.81
7.33
Total
70.70
100
66.08
100
78.87
100
41.11
100
68.70
100
38.44
100
enviRonMental investMent
2010
(Breakdown by Business Units)
2009
2008
Mill. euRos
%
Mill. euRos
57.90
87.62
31.22
76
28.32
73.70
Petrochemical
1.10
1.67
1.54
3.70
3.21
8.30
Marketing and Logistics
7.08
10.71
8.35
20.30
6.91
18
66.08
100
41.11
100
38.44
100
Refining
Total
% Mill. euRos
%
107
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
Consumption
indicators
raw material consumption
In 2010, the Company used 21.47 million
tons of crude oil for distillation at its
refineries and 0.39 million tons of
other raw materials.
raW material consumption (tHousands oF tons)
REfINING
21,865
20,950
22,085
PETROCHEMICALS
3,731
3,417
3,962
direct and indirect Energy
consumption
In 2010, direct energy consumed amounted
to 105.939 million Gigajoules, 10.28% more
than in 2009. Indirect energy consumption
totaled 7.864 million Gigajoules, an increase
of 1.68% in comparison to the previous year.
These variations are due to the increase in
industrial activity and the commissioning
of the extension to the La Rábida refinery.
The higher conversion capacity of its new
production units means they are more
energy-intensive.
2010
DiRect eneRgy consuMption
2010
Breakdown by primary sources
(Thousands of Gigajoules)
108
2009
2008
51,630
47,426
48,544
Natural gas
44,390
39,853
50,021
9,919
8,785
5,003
105,939
96,064
103,568
2010
2009
2008
7,864
7,734
7,844
Others (coke, kerosene, gas oil)
Total
inDiRect eneRgy consuMption
Breakdown by primary sources
(Thousands of Gigajoules)
direct energy consumption by volume oF activity
2010
3.08
2.85
2.90
petrocHemicals (gigajoules/t produced)
2008 2009
2010
reFining (gigajoules/t oF crude oil processed)
2008 2009
This indicator links energy consumption
with activity in different areas. For Refining,
the amount of crude oil processed is used
as a reference, but for petrochemicals the
production of the plant is used.
2008
Fuel gas + fuel oil
Power
Energy Efficiency
2009
5.29
5.43
5.49
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
atmospheriC emissions
In addition to CO2 emissions, detailed in
the next chapter, CEPSA submits reports
on nitrogen oxides (NOx), sulfur dioxide
(SO2) and particles. In 2010, atmospheric
emissions continued to fall, despite the
commissioning of the units in the La Rábida
refinery expansion. There were substantial
cuts in emissions of SO2 (down 20%) and
particles (down 16%), while NOx emissions
were 1.5% lower than 2009 levels.
These reductions have been possible as a
result of the measures initiated in previous
years to increase energy efficiency in
production processes and changes in the
fuels used. Natural gas consumption rose
by 11% in comparison with 2009, while that
of other more polluting fuels was reduced.
so2 emissions (by production unit or crude oil processed)
REfINING (kg/T Of CRuDE OIL PROCESSED)
0.50
0.66
0.63
PETROCHEMICALS (kg/T PRODuCED)
0.02
0.02
0.07
2010
2009
2008
109
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
nox emissions (by production unit or crude oil processed)
REfINING (kg/T Of CRuDE OIL PROCESSED)
0.25
0.33
0.29
PETROCHEMICALS (kg/T PRODuCED)
0.30
0.48
0.38
2010
2009
2008
atmospHeric emissions by type oF compound (tons)
NOx
9,127
SO2
11,064
2010
There were substantial cuts
in emissions of SO2 (down
20%) and particles (down
16%), while NOx emissions
were 1.5% lower than
2009 levels.
110
12,396
12,580
2009
13,791
13,967
2008
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
Water Consumption and reuse
voluMe oF RecycleD
wateR 50
2010
2009
2008
By business area (thousands of m3)
vol. total
vol. Rec
Refining
15,045.37 1,849.34
Petrochemicals
10,069.65
15.20
Exploration & Production
11,541.35
Marketing & Logistics
1,753.86
Other (NGS and Research Center)
1,003.75
Total
In 2010, we continued with our policy of
reusing water with a view to reducing both
consumption and the amount of liquid
effluent requiring treatment before final
disposal. The volume of recycled water in
2010 amounted to 1,961 million m3, 77%
more than in 2009.
vol. Rec
% vol. total vol. Rec
%
12.29
13,355.21
1,033.96
7.74
13,438.59
608.21
4.53
0.15
9,095.23
14
0.15
10,607.95
13.16
0.12
96.02
0.83
10,105.56
56.99
0.56
8,367.38
0.00
0.00
0.42
0.02
1,801.62
1.12
0.06
1,186.74
0.022
0.02
0.00
0.00
1,051.05
0.00
0.00
994.63
0.00
0.00
4.98 35,408.67
1,106.07
3.12 34,595.29
621.39
1.8
39,413.98 1,960.98
In 2010, water consumption was 39.4 million
m3, 11.31% more than in 2009. This increase
occurred mainly in refining as a result of the
commissioning of the new units in the La
Rábida refinery expansion.
% vol. total
liquid Effluent management
For the purposes of waste disposal, in
accordance with legally established limits,
all production facilities owned by CEPSA are
equipped with effluent treatment plants,
which have been extended and adapted
over the years to comply with new legal
requirements. The information reported
this year and in 2009 excludes the volume
discharged from Nueva Generadora del
Sur, since this consists of clean cooling
water, the only alteration it undergoes
during the process being an increase in
voluMe oF contRolleD DischaRge
its temperature. This helps to account for
the huge reduction in the total volume
discharged compared with 2008.
The total amount of effluent produced
in 2010 increased as a result of the
commissioning of the new units in the
La Rábida Refinery expansion and heavy
rainfall in Andalusia.
2010
2009
2008
Refining
9,768.80
7,832.68
8,401.86
Petrochemicals
5,832.07
5,503.39
6,476.71
92.08
27.42
27.08
1,679.15
1,721.36
1,259.19
170.27
0.00
127,491.27
17,542.37
15,084.85
143,656.11
By business area (thousands of m3)
Exploration & Production
Marketing & Logistics
51
Other (NGS and Research Center)
Total
50 To calculate the volume of water recycled/reused we consider the number of productive cycles in which it was possible to use the
same water. For example, if 20 m3 of water is required for a cycle and it can be reused for 3 more cycles, the total volume recycled/
reused is 60 m3 of water.
51 Figures are not given for Gas Licuado and CECOMASA, as they are not representative of overall data.
111
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
pollutants - ReFining
2010
2009
2008
Total Organic Carbon (TOC)
315.19
306.18
446.79
Solids in suspension
379.61
260.30
390.13
Oils and grease
64.69
42.81
67.12
pollutants petRocheMicals
2010
2009
2008
Total Organic Carbon (TOC)
1,179.47
992.86
142.67
Solids in suspension
Quality of Effluent discharged
643.54
509.44
207.98
7.76
10.18
8.47
(Tons)
The treatment used to ensure controlled
discharges consists of sieving to separate
large solids, physical-chemical treatment
to remove oil, grease and hydrocarbons,
and biological treatment to eliminate
organic content. In 2010, in Refining,
volumes of solids in suspension, oils and
greases, and Total Organic Carbon (TOC)
all increased. Increases were also recorded
in Petrochemicals due to the amounts
produced at the CEPSA Química Montreal
plant in 2010.
(Tons)
Oils and grease
112
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • ENvIRONMENTAL MANAGEMENT
Waste management
In Exploration and Production, the waste
generated is mainly solids originating from
the drilling of wells, which are considered
as non-hazardous. Changes in volume
over time are due to the greater or smaller
number of wells drilled in oilfields.
waste geneRateD
3
non-Hazardous Waste (From drilling)
2010
The sludge produced in the physicalchemical treatment of liquid effluent can be
recycled to produce energy. It can be used as
a fuel in other industries, as its components
have significant heating power.
exploration and
production Waste (m )
2008 2009
The different types of waste are separated
when they are generated, and classified,
labeled and stored until they are removed
by officially authorized external agents.
3,229.98
5,572.38
1,872.60
2010
2009
2008
Hazardous waste
23,834.04
21,212.50
31,450.99
Non-hazardous waste
24,302.83
20,772.89
15,230.39
Total
48,136.87
41,985.39
46,681.38
2010
2009
2008
Refining (kg/t of crude oil processed)
0.57
0.59
1.03
Petrochemicals (kg/t produced)
2.67
2.11
1.42
(Tons)
haZaRDous waste geneRateD by voluMe oF activity
Business area (production unit or crude oil processed)
marpol agreement
MARPOL is an international agreement to
prevent marine pollution from shipping. Its
aim is to protect the marine environment
from the accidental discharges and from
pollution caused by hydrocarbons and other
harmful substances.
CEPSA has six plants for the reception and
treatment of MARPOL waste from vessels
(ballast water, bilge water, etc.). These
plants are at the ASESA, PETROCAN and
ATLAS refineries. In 2010, approximately
78,505.49 tons of MARPOL waste were
treated, an increase of 61% on the figure
for 2009.
113
greenhouse
gases
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
The increase in emissions this year is largely
due to the expansion at the La Rábida
Refinery and to increased production,
both in refining and in facilities using
simultaneous steam and power generation.
During the year the European Commission
drew up the following preparatory
documents for the European Plan for the
Reduction of Greenhouse Gas Emissions
2013 to 2020:
• Commitment of the European Union to
reducing GHG emissions.
• Emissions reduction in aviation.
• Methodology for assigning emissions to
industrial sectors.
• Methodology to define the auctioning of
emissions rights.
• Regulation of the geological storage
of CO2.
114
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
key inDicatoRs
2010
2009
2008
Investment (thousands of euros)
53,012
82,742
25,485
Total emissions (kt CO2 eq)
5,838
5,756
6,200
For the purpose of preparing objectives
to replace the kyoto Protocol, which
expires in 2012, and as a continuation
of the 15th International Conference on
Climate Change, which took place last year
in Copenhagen, the 16th Conference on
Climate Change was organized in Cancún.
Even though no legally binding agreements
were signed, the results of the conference
follow the lines agreed upon in Copenhagen.
They included the following points:
• An agreement to ensure that average
temperatures do not rise more than 2º
above those of the pre-industrial era.
• Greater commitments to
reducing emissions.
• Establishment of an international climate
fund to manage the fight against
climate change.
• Introduction of a mechanism to reduce
emissions caused by deforestation in
developing countries.
During the Conference, it became clear that
the divergences between countries are very
profound given that:
• Countries like the United States and
China do not support any commitment to
reductions monitored by a system like the
one currently applied in Europe.
• Others, such as Japan, Russia and Canada,
who are now in the kyoto scheme, are
opposed to the continuation of a similar
commitment after 2012.
• The European Union is still studying the
possibility of increasing its reduction
target during the next period from
20% to 30%.
Given the above scenario, it is not likely
that an agreement will be reached easily
during the next summit, scheduled to be
held in Durban (South Africa), although it is
hoped that in 2011 there may be movement
towards a consensus.
CEPSA’s action centered on the
following points:
• In accordance with the objectives of the
European Union, to continue reducing GHG
emissions through monitoring, energy
saving and process optimization.
• Agreements to participate in and develop
geological carbon storage projects,
and continuing to track technological
advances in carbon sinks (reforestation,
cultivation of algae, etc.) and the
transformation of CO2.
• To continue participating in initiatives like
the Clean Development Mechanisms and
the Joint Implementation Mechanism,
through the Spanish Carbon Fund, and in
the emissions rights market.
• Working with the other participating
companies in the process leading to the
closing of the Spanish Carbon Fund
(SCF) portfolio.
• Working with various organizations to
establish an allocation system for
2013-2020.
• To ensure that the emissions reduction
for 2020 established by the European
Commission for the refining and base
organic chemicals sectors does not
exceed 21%.
115
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
ghg management at cepsa
GHG management is centralized in two
corporate units:
• A CO2 Committee, whose mission is
to ensure compliance with current
legislation on GHG issues and to plan the
measures to be taken regarding flexibility
mechanisms.
• A GHG management department that
establishes the CO2 emissions monitoring
system and supervises compliance with
kyoto Protocol guidelines and with
European and national regulations. It also
proposes and manages the strategies
necessary to achieve the objectives set by
the Company for reducing emissions.
These units are complemented by a
person in charge of ensuring compliance
with GHG emissions limits in each facility,
in accordance with the current National
Allocation Plan (NAP), and another
person in charge of energy efficiency
improvements, who, although not directly
responsible for GHG, assists in their
reduction. At the corporate level there is
also a person responsible for the secondary
emissions rights market.
GHG emissions52 have been calculated
considering the data available on fuel
consumption, the emission factors for
each GHG, the recommended CONCAWE53
procedures and the criteria that define the
scope of the inventory, i.e. if CEPSA holds
more than 50% of the shares or its GHG
emissions are above 5% of the Group’s
total. These criteria have been applied
DiRect eMissions oF ghg
in the case of facilities included in the
National Allocation Plan (NAP) for Emission
Rights: three refineries, three petrochemical
plants, five cogeneration plants, one mixed
combined cycle plant, one asphalt plant
(ASESA), and one lube oil plant (Lubrisur).
Outside the European Union there are three
petrochemical plants and the Exploration
and Production sites are included.
Total national and international emissions
rose by 1.44% in 2010. As regards
compliance with the NAP, as in 2009,
CEPSA’s emissions were below the amount
allocated. In 2011, with all of the new units
at the La Rábida Refinery functioning fully
all year round, we expect an increase in the
tons of CO2 emitted.
2010
(Thousands of tons)
2009
2008
co2eq
Total national emissions
International emissions
Total
Emissions by Business area
Carbon dioxide emissions in the Refining
area rose slightly above 2009 levels.
This increase was due, in spite of
the improvements brought in, to the
commissioning of the Middle Distillate
Production Capacity Expansion, which
required more energy, and the fact that the
amount of crude oil processed increased by
more than 3%. The ratio of emissions to
tons of crude oil processed
improved greatly.
116
change
co2eq
change
co2eq
change
5,366
+3.06%
5,207
(8.70%)
5,704
0.30%
472
(13.90%)
548
10.60%
496
34.10%
5,838
+1.44%
5,756
(7.20%)
6,200
2.40%
In the petrochemical area, due to
improvements in energy efficiency and
lower production, there were reductions
in CO2 emissions and the overall CO2
equivalent index per tonne of
product obtained.
In the Exploration and Production area, CO2
emissions and the CO2 equivalent index per
unit of production also fell.
Lastly, in the area of combined steam and
electricity production, there was an increase
in emissions from cogeneration and mixed
combined cycle gas turbines, while the CO2
equivalent index per unit of production
diminished in cogeneration but rose in
combined cycle generation. These changes
are due to variations in total production
and to those in tons of steam per MWh of
electricity because of falling consumption.
52 See the criteria applied for defining the scope of the inventory in the Annex.
53 CONCAWE. Report 9/05R 2006.
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
intensity oF eMissions by business unit
2010
2009
2008
Refining (t of CO2 equivalent/t of crude oil processed)
0.145
0.147
0.147
Cepsa Química (t of CO2 equivalent/t of crude oil processed)
0.170
0.178
0.202
Exploration and Production (t of CO2 equivalent/t of crude oil processed)
0.059
0.074
0.062
Cogeneration (t of CO2 equivalent/t of crude oil processed)
0.256
0.262
0.256
Combined cycle (t of CO2 equivalent/t of crude oil processed)
0.497
0.410
0.404
eMissions by business unit
2010
(Thousands of tons)
2009
2008
co2
Refining
co2eq
co2
co2eq
co2
co2eq
3,203
3,222
3,139
3,159
3,372
3,399
Cepsa Química
627
629
638
641
837
840
Exploration & Production
308
324
389
407
320
337
Cogeneration
913
918
887
893
860
964
Combined Cycle
739
745
652
657
755
761
5,790
5,838
5,704
5,756
6,144
6,200
Total
117
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
improvement of processes
and products
For several years CEPSA has been working
on an action plan to optimize its processes,
with energy saving and efficiency being the
keys to minimizing GHG emissions.
118
The development and commissioning of the
projects associated with this plan has taken
place in stages in recent years, starting with
those leading to substantial energy savings
and moving on to others whose impact was
less pronounced.
CEPSA • ANNUAL REPORT 2010 • OUR COMMITMENT TO THE ENvIRONMENT • GREENHOUSE GASES
investMent in eneRgy saving anD co2
eMissions ReDuction pRojects
2010
2009
2008
9,741
12,870
12,520
114
9,670
3,206
Cogeneration
43,347
59,415
9,425
Total
53,202
82,742
25,485
(Thousands of euros)
Refining
CEPSA Química
In 2010 CEPSA invested over 53
million euros in projects relating to the
improvement of energy efficiency and the
reduction of GHG emissions, including
the following:
• Implementation of three projects for
energy saving and Freon replacement at
the Gibraltar–San Roque refinery.
• Implementation of four heat recovery
projects at the Tenerife refinery leading
to reduced energy consumption, and
modifications for the use of biodiesel in
diesel for motor vehicles.
Rábida Refinery (the units were designed
with best available technologies).
• Recovery of biogas at the CEPSA Química
plant in Montreal (Canada).
• Optimization of energy integration at
CEPSA Química, Puente Mayorga.
• Optimization of energy consumption in
the Linear Alkyl Benzene (LAB) plant at
the CEPSA Química Plant in
Camaçarí (Brazil).
The quality of the products and adapting
them to different applications is
fundamental in reducing GHG. Improving
their composition and performance
directly affects the level of emissions. The
introduction of around 60,000 tons of
bio-ethanol into our gasoline and of a little
over 260,000 tons of biodiesel into our
vehicle engine fuel has made an effective
contribution to reducing emissions.
• Implementation of efficiency projects for
energy and emissions reduction,
in all facilities.
• Commissioning of the Middle Distallete
Production Capacity Expansion at the La
The introduction of around 60,000 tons of
bio-ethanol into our gasoline and of a little over
260,000 tons of biodiesel into our vehicle engine
fuel has made an effective contribution to
reducing emissions
119
BiodiVersity proteCtion
initiatives
CEPSA • ANNUAL REPORT 2010 • BIODIvERSITY PROTECTION INITIATIvES
Every year CEPSA commissions an extensive
program of initiatives whose main objective
is reducing the impact of its activities on its
surroundings and, therefore, on biodiversity.
The Company constantly identifies and
evaluates its impact on protected areas and
areas of high ecological value, thus allowing
it to improve its environmental strategy
while mitigating the risks derived from
its activities.
CEPSA actively participates in restoring
the habitats of species that are native to
the areas in which it operates and in the
recovery of degraded ecosystems, some
of which are, thanks to the Company’s
support, now listed as protected. As a
result of this commitment, the Doñana
Foundation awarded the La Rábida refinery
and the Phenol plant with the “Doñana 21”
quality eco-label, in recognition of CEPSA’s
efforts to foster sustainable
environmental values.
CEPSA also works to raise environmental
awareness through scientific articles and
activities for local schools.
Biodiversity Protection Regulations define
the Company’s policy and criteria for
action regarding the preventive and active
protection of nature and wildlife.
120
CEPSA • ANNUAL REPORT 2010 • BIODIvERSITY PROTECTION INITIATIvES
world Environment day in Tenerife
Working jointly with the Department of Health
and Environmental Quality of the Santa Cruz
Town Council, the Tenerife refinery contributed
to the celebration of the World Environment
Day on June 5 by sponsoring various activities.
agreement with the doñana Biological
Station (cSic) and the organization for
the conservation of cetaceans (circE)
This involves a study to measure the
population of common dolphins (Delphinus
delphis) in the Bay of Algeciras. The
Mediterranean population of this species is
currently in decline and very few remain in
the Alboran sea and in the Strait. The species
has been classified as “vulnerable” in the
Spanish Catalogue of Endangered Species.
marine Biology Station in the Strait
madrevieja Environmental Station
A series of wetlands is being created to
promote biodiversity. The inventory of birds,
conducted following the flooding of the
lagoons, permitted the identification of 87
species, a very high number, which confirms
the ecological value of the initiative.
The Madrevieja Environmental Station
is a voluntary non-subsidized project,
constructed on lands owned by CEPSA, as
part of the Biodiversity Action Plan of its
Gibraltar-San Roque petrochemical complex,
in Cadiz. It is expected to open its doors to
the public during 2011.
An agreement was signed with the
University of Seville to sponsor the Marine
Biology Station of the Straits. The station
will be based in Ceuta and activity will focus
on the creation and monitoring of Artificial
Marine Micro-reserves on both sides of the
Straits, and on the study and protection
of the endangered limpet species (Patella
ferruginea). This organism is a bio-indicator
as it only grows in very clean waters, which
is why it is significant that some examples
of the species have been spotted on the
jetty of the Gibraltar-San Roque refinery.
Socio-Biological Environmental
Education program in mani, colombia
This environmental education program
seeks to promote cultural and attitude
changes in young people’s treatment of
natural resources. Participatory workshops
were organized with the main focus on
ecology, environmental visits to ecological
spaces and footpaths in the municipality,
and reforestation. The second stage of the
project included the preparation of fertilizer
from organic waste.
Tree plantation in forest Belt of
camaçari industrial complex, Brazil
This project is geared to promoting respect
for the environment. Deten Química, one
of the promoters, actively participated by
providing trees that were then planted by
students, teachers and representatives of
community groups.
Support for the parc de la rivière
Gentilly, canada
CEPSA Química Bécancour supports the
Parc de la Rivière Gentilly, a non-profit
public organization located in Bécancour.
One of its main goals is to draw attention
to the fauna and flora of the region and
to make it accessible to as many people
as possible. The support from CEPSA
Química Bécancour is for the creation of a
playground in 2011.
reforestation of the funchal
Ecological park, portugal
Following the heavy rains that fell on the
Island of Madeira on 20 February causing
casualties and severe damage, CEPSA
supported the reforestation of some 250
hectares with the planting of approximately
500,000 trees in the Funchal Ecological
Park. This reforestation will help prevent
soil erosion and protect the population from
mud slides.
121
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
report From independent auditors
Compañía Española de Petróleos, S.A. and subsidiaries (CEPSA GroUP)
124
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
125
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sHeets
at december 31, 2010 and 2009
Compañía Española de Petróleos, S.A. and Subsidiaries (Consolidated Group)
assets
2010
2009
527,789
(258,044)
269,745
65,941
481,012
(234,158)
246,854
61,025
10,997,367
(5,927,968)
5,069,399
104,289
150,979
66,442
10,339,850
(5,227,585)
5,112,265
88,926
109,434
88,837
5,726,795
5,707,341
2,016,418
2,739,714
36,145
102,145
13,398
841,080
1,448,512
2,317,936
266,311
8,595
598,537
Total current assets
5,748,900
4,639,891
Total assets
11,475,695
10,347,232
(Thousands of euros)
non-current assets
intangible assets and rights
Impairment losses and amortisation charge
Provisiones y amortizaciones
total intangible asset
Goodwill in consolidation (Note 5)
Property, plant and equipment (Note 6)
Tangible assets and rights
Impairment losses and depreciation charge
total property, plant and equipment
investments accounted for using the equity method (Note 7)
non-current financial assets (Note 8)
deferred tax assets (Note 14)
Total non-current assets
Current assets
inventories (Note 9)
trade and other receivables (Note 10)
Current income tax assets
other current financial assets (Note 8)
other current assets
Cash and cash equivalents (Note 11)
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Statements of Financial Position)
126
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
shaReholDeRs’ equity anD liabilities
2010
2009
267,575
338,728
90,936
4,362,475
633,946
(120,409)
5,573,251
267,575
338,728
90,936
4,201,847
374,688
(107,030)
5,166,744
127,794
(12,544)
115,250
66,050
54,762
120,812
Total equity attributable to shareholders of the parent
minority interests (Note 12,f)
Equity attributed to minority interests
Profit attributed to minority interests
total minority interests
5,688,501
5,287,556
56,792
13,833
70,625
49,119
16,117
65,236
Total equity
non-current liabilities
Bank borrowings (Note 13)
Other financial liabilities (Note 13)
Referred tax liabilities (Note 14)
Grants related to assets (Note 15)
Provisions (Notes 16 and 17)
Other non-current liabilities (Note 18)
5,759,126
5,352,792
1,666,613
161,779
333,135
90,233
156,064
23,845
1,109,601
150,926
228,572
81,451
130,349
31,804
Total non-current liabilities
Current liabilities
Bank borrowings (Note 13 )
Other financial liabilities (Note 13)
Trade and other payables (Note 18)
Current income tax liabilities
Other current liabilities
2,431,669
1,732,703
538,428
90,463
2,632,719
15,427
7,863
740,628
69,647
2,407,498
35,599
8,365
Total current liabilities
3,284,900
3,261,737
Total equity and liabilities
11,475,695
10,347,232
(Thousands of euros)
Equity (Note 12)
Shareholders’ Equity
Share capital
Share premium
Revaluation reserve
Retained earnings
Profit attributable to the Parent
Interim dividend paid
total equity
Adjustments for changes in value
Translation differences
Other adjustments for changes in value
total adjustments for changes in value
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Balance Sheets)
127
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statementsand 2009
oF income
for the years ended december 31, 2010
Compañía Española de Petróleos, S.A. and Subsidiaries (Consolidated Group)
2010
2009
19,744,045
2,340,439
22,084,484
249,539
60,017
(16,050,317)
45,330
(572,216)
(22,116)
16,084,145
2,280,753
18,364,898
(410,159)
56,169
(12,852,169)
43,948
(530,867)
524,842
(2,341,055)
(1,848,772)
(695,072)
(2,281,291)
(1,777,181)
(615,877)
70,677
(5,154)
85,821
(33,677)
975,345
574,457
31,969
53,277
(37,978)
(662)
1,021,951
35,600
93,698
(42,140)
1,646
663,261
(374,172)
(272,456)
Consolidated profit for the period from continuing operations
647,779
390,805
Consolidated profit for the period
647,779
390,805
Attributable to:
Shareholders of the Parent
minority interests
633,946
13,833
374,688
16,117
2.37
2.37
1.40
1.40
(Thousands of euros)
Sales and services relating to ordinary activity
Excise tax on oil and gas charged on sales
revenue (Notes 3,n and 25)
Changes in inventories of finished goods and work in progress
In-house work on non-current assets
Procurements (Note 25)
Other operating income (Note 25)
Staff costs (Note 25)
Changes in operating allowances
Other operating expenses:
Excise tax on oil and gas
Other expenses (Note 25)
Amortisation charge
Allocation to profit or loss of grants related to non-financial assets and other grants
(Note 25)
Impairment and gains or losses on disposals of non-current assets (Note 25)
Profit from operations (Note 24)
Share in profit of companies accounted for using the equity method (Note 7)
Finance income (Note 27)
Finance costs (Note 27)
Impairment and gains or losses on disposals of financial instruments
Consolidated profit before tax
Income tax (Note 3,mand 14)
Earnings per share:
Basic
diluted
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Statements of Income)
128
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
Consolidated casH FloW statements
for the years ended 31 december, 2010 and 2009
Compañía Española de Petróleos, S.A. and Subsidiaries (Consolidated Group)
cash Flows FRoM opeRating activities
2010
2009
647,779
700,226
83,322
(70,844)
148,566
662
17,494
(44,654)
1,482,551
390,805
649,554
2,724
(85,821)
(11,710)
(1,646)
(524,842)
8,627
427,691
Change in operating working capital
(631,117)
647,681
Total cash flows from operating activities (a)
851,434
1,075,372
2010
2009
(37,268)
(663,523)
(24,748)
(895,095)
(2,824)
(17,174)
2,972
(717,817)
(859)
(65,394)
7,347
(978,749)
977
5,745
15,679
22,401
2,803
34,767
25,576
63,146
(695,416)
(915,603)
2010
2009
dividends paid :
To shareholders of the Parents
To minority interests
total dividends paid
(227,439)
(11,572)
(239,011)
(267,575)
(24,557)
(292,132)
Net change in non-current financial liabilities
Net change in current financial liabilities
Net change in financial investments with returns
Finance lease payments
total cash flows from bank borrowings
838,729
(498,629)
(12,996)
(8,122)
318,982
378,170
(135,961)
(5,718)
(23,184)
213,307
Total cash flows from financing activities
79,971
(78,825)
net increase in cash and cash equivalents
Effect of exchange rate changes
235,989
6,554
80,944
36,639
Cash and cash equivalents at beginning of year
598,537
480,954
Detail of changes of operational working capital
841,080
598,537
(567,132)
(431,820)
132,282
300,107
(64,554)
(631,117)
432,438
(260,892)
58
564,373
(88,296)
647,681
(Thousands of euros)
Net profit for the year
Depreciation and amortisation charge and impairment losses
Changes in provisions for contingencies and expenses
Grants related to assets and other deferred income
Changes in deferred taxes
Impairment and gains or losses on disposals of financial instruments
Current provisions changes
Other changes
Cash flows from operating activities before change in operating working capital
cash flows from investing activities
Payments
Intangible assets
Property, plant and equipment
Financial assets
Associates and other investments
Other financial assets
Grants received
Total payments
Collections
Intangible assets
Property, plant and equipment
Financial assets
Total collections
Total cash flows from investing activities
cash flows from financing activities
(a) the net income tax payments in 2010 and 2009 amounted to EUr 281,922 and EUr 288,735 thousand, respectively.
the net interest payments for in 2010 and 2009 amounted to EUr 15,033 and EUr 1,588 thousand, respectively.
Detail of changes of operational working capital
Inventory
Trade and other receivables
Other current financial asset
Trade and other payables
Other changes
Total changes in operational working capital
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Cash Flow Statements)
129
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement oF compreHensive income
for the years ended december 31, 2010 and 2009
Compañía Española de Petróleos, S.A. and Subsidiaries (Consolidated Group)
(Thousands of euros)
2010
2009
A) ConSolidAtEd Profit for tHE PEriod of the income statement
647,779
390,805
B) inComE And EXPEnSES rECoGniSEd dirECtly in EQUity:
1, measurement of financial instruments
2, Cash flow hedges
3, translation differences
4, Companies accounted for using the equity method
5, tax effect
35,646
(42,580)
64,871
(187)
13,542
47,769
37,119
19,146
303
(8,799)
C) trAnSfErS to Profit or loSS:
1, Cash flow hedges
2, tax effect
(38,080)
(44,436)
6,356
1,278
1,826
(548)
Total recognised income/(expenses) (A+B+C)
a) Attributable to the Parent
b) Attributable to minority interests
645,345
628,384
16,961
439,852
415,964
23,888
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Statement of Comprehensive Income)
130
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • AUDITORS’ REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement2010 and 2009 in eQuity
oF cHanges
for the years ended december 31,
Compañía Española de Petróleos, S.A. and Subsidiaries (Consolidated Group)
(Thousands of euros)
Share
capital
Balance at 01/01/09
Profit for the year
Gains (losses) recognised
directly in equity
Total gains (losses) recognised
directly in equity
Share
premium
267,575 338,728
retaired
Earrings
90,936 4,469,422
374,688
Translation
differences
interim
dividend
54,675 (107,030)
-
-
-
374,688
11,375
(267,575)
-
-
(267,575)
267,575 338,728
90,936
4,576,535
reserve for fair Value
accounting of assets
and liabilities
Total
-
24,861
65,905
16,117
5,205,072
390,805
7,771
49,047
29,901
23,888
439,852
(15,471)
(9,086)
(176,016)
(116,116)
107,030
(107,030)
-
minority
interests
29,901
11,375
Changes due to transactions with shareholders
- Gross dividend
- Interim dividend
Total transactions
with shareholders
Balance at 31/12/2009
revaluation
reserve
-
-
(24,557)
(292,132)
66,050 (107,030)
54,762
65,236
5,352,792
(Thousands of euros)
Share
capital
Balance at 01/01/10
Profit for the year
Gains (losses) recognised
directly in equity
Total gains (losses) recognised
directly in equity
Share
premium
267,575 338,728
retaired
Earrings
Translation
differences
interim
dividend
reserve for fair Value
accounting of assets
and liabilities
90,936
4,576,535
633,946
66,050
(107,030)
minority
interests
Total
54,762
65,236
13,833
5,352,792
647,779
61,744
-
Changes due to transactions with shareholders
- Gross dividend
- Interim dividend
Total transactionsn
with shareholders
Balance at 31/12/10
revaluation
reserve
-
-
633,946
-
(67,306)
3,128
(2,434)
61,744
-
(67,306)
16,961
645,345
(9,080)
(2,492)
(116,110)
(122,901)
(214,060)
-
-
(214,060)
267,575 338,728
90,936
4,996,421
107,030
(120,409)
-
(13,379)
-
(11,572)
(239,011)
127,794 (120,409)
(12,544)
70,625
5,759,126
(The accompanying Notes 1 to 30 are an integral part of these Consolidated Statement of Changes in Equity)
131
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
Finantial inFormation
stateMent oF incoMe FoR the yeaRs
for the years ended december 31
(Millions of euros)
2010
2009
2008
2007
2006
Sales of products and services
19,744
16,084
22,831
18,888
18,474
Excise tax on oil and gas charged to sales
2,340
2,281
2,285
2,342
2,233
22,084
18,365
25,116
21,230
20,707
net sales
Adjusted gross operating income (*)
Exploration & Production
635
472
581
499
499
Refining & Marketing
515
380
642
691
772
Petrochemicals
215
143
183
133
122
Gas & Power
Total adjusted gross operating income
43
63
87
60
83
1,408
1,058
1,493
1,383
1,476
Adjusted operating income (*)
Exploration & Production
334
236
332
380
394
Refining & Marketing
180
113
394
440
585
Petrochemicals
145
62
88
63
53
21
57
66
34
49
Total adjusted operating income
Gas & Power
680
468
880
917
1,081
Inventory gains / (losses)
252
159
(350)
160
67
Other non-recurring items
43
(53)
(7)
4
(3)
975
574
523
1,081
1,145
income before taxes ifrS
1,022
663
535
1,170
1,190
Corporate income taxes
(374)
(272)
(244)
(405)
(385)
-
-
-
-
21
648
391
291
765
826
Minority interests
(14)
(16)
(16)
(17)
(14)
net income ifrS
634
375
275
748
812
(216)
(110)
249
(110)
(62)
Total operating income IFRS
Net income/(loss) from discontinued operations
Net income (before minority interests) IFRS
Net losses / (gains) from non-recurring items in the period
Adjustment to minority interests due to net losses / (gains) from
non-recurring items in the period
Adjusted net income
-
5
-
-
-
418
270
524
638
750
(*) Adjusted using the Replacement Cost method to eliminate inventory price variations and other non-recurring items in the period
132
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
tangible FixeD assets, intangible assets anD long-teRM Financial investMents
in associateD coMpanies (bReakDown by business segMents)
(Millions of euros)
2010
2009
2008
2007
2006
Exploration & Production
156
214
742
98
91
Refining & Marketing
356
594
680
413
340
Petrochemicals
32
34
27
65
121
Technology, Gas & Cogeneration
70
101
125
55
21
7
8
5
4
8
621
951
1,579
635
581
2010
2009
2008
2007
2006
Cash flows from operating activities (before changes in working
capital)
1,482
428
1,365
1,154
1,180
Changes in operating working capital
(631)
647
(498)
(229)
(159)
851
1,075
867
925
1,021
(720)
(985)
(1,357)
(650)
(550)
3
7
1
7
2
22
63
48
52
54
-
-
-
-
-
(695)
(915)
(1,308)
(591)
(494)
319
213
1,048
(116)
(224)
(239)
(292)
(309)
(342)
(346)
80
(79)
739
(458)
(570)
236
81
298
(124)
(43)
Corporate Area
Total
stateMents oF cash Flows FoR the yeaRs
for the years ended december 31
(Millions of euros)
Cash flows from operating activities
Total cash flows from operating activities
Cash flows used in investing activities
Capital expenditures
Capital grants received
Proceeds from asset sales
Investments due to changes in Group
Total cash flows used in investing activities
Cash flows (used in)/from financing activities
Changes in short or long term loans
Cash dividend paid
Total cash flows (used in)/from financing activities
Total net increase/(decrease) in cash and cash equivalents
133
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
balance sheet (beFoRe pRoFit DistRibution)
at december 31
assets
2010
2009
2008
2007
2006
5,661
5,646
5,492
4,521
4,427
270
247
261
152
184
5,069
5,112
4,864
3,988
3,836
322
287
367
381
407
66
61
53
41
38
5,727
5,707
5,545
4,562
4,465
Inventories
2,016
1,449
1,337
1,739
1,591
Accounts receivable
2,777
2,318
2,095
2,808
2,251
102
266
184
110
67
13
9
9
14
13
(Millions of euros)
fixed assets:
Intangible assets
Tangible fixed assets
Long-term financial investments
Goodwill in consolidation
non-CUrrEnt ASSEtS
Current assets
Other short-term investments
Other current assets
Cash and cash equivalents
CUrrEnt ASSEtS
Non-current assets held for sale and from discontinued operations
TOTAL ASSETS
134
841
598
481
208
326
5,749
4,640
4,106
4,879
4,248
-
-
-
-
11
11,476
10,347
9,651
9,441
8,724
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
shaReholDeRs’ equity anD liabilities
2010
2009
2008
2007
2006
Equity attributable to shareholders of the parent company
5,688
5,288
5,139
5,212
4,779
5,573
5,168
5,060
5,080
4,666
Subscribed capital stock
268
268
268
268
268
Paid-in surplus
339
339
339
339
339
91
91
91
91
91
4,361
4,202
4,194
3,781
3,303
634
375
275
748
812
(120)
(107)
(107)
(147)
(147)
(Millions of euros)
Equity
Revaluation reserve
Retained earnings
Income attributable to the parent company
Interim dividend paid in the year
Adjustments for changes in value
115
120
79
132
113
Translation differences
128
66
54
34
27
Other adjustments for changes in value
(13)
54
25
98
86
71
65
66
71
59
5,759
5,353
5,205
5,283
4,838
minority interests
totAl SHArEHoldErS' EQUity
non-current liabilities
1,667
1,110
917
287
442
Other interest-bearing loans
Payable to credit entities
162
151
200
146
141
Capital grants
90
81
70
70
62
Provisions
156
130
165
202
252
Other non-current liabilities
357
261
378
478
459
2,432
1,733
1,730
1,183
1,356
538
741
738
257
284
90
70
18
66
26
non-CUrrEnt liABilitiES
Current liabilities
Payable to credit entities
Other interest-bearing loans
Other current liabilities
CUrrEnt liABilitiES
TOTAL SHAREHOLDERS' EQUITy AND LIABILITIES
2,657
2,450
1,960
2,652
2,220
3,285
3,261
2,716
2,975
2,530
11,476
10,347
9,651
9,441
8,724
135
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
intangible anD tangible FixeD assets
at december 31
2010
2009
2008
2007
2006
528
481
513
397
552
75
74
70
80
71
9
20
21
5
5
EDP computer software
156
147
136
128
118
Other intangible assets
(Millions of euros)
Gross intangible assets:
Operating licenses, concessions, patents, etc.
Goodwill
288
240
286
184
358
Amortization and provisions of intangible assets:
258
234
252
245
368
Operating licenses, concessions, patents, etc.
43
39
35
41
37
-
-
-
5
4
EDP computer software
Goodwill
125
116
107
102
92
Other intangible assets
90
79
110
97
235
270
247
261
152
184
32
35
35
39
34
9
20
21
-
1
net intangible assets:
Operating licenses, concessions, patents, etc.
Goodwill
EDP computer software
31
31
29
26
26
Other intangible assets
198
161
176
87
123
-
-
-
-
-
10,997
10,340
9,500
8,090
7,591
Land and structures
Gross tangible fixed assets:
388
384
373
341
313
Technical installations and machinery
7,171
5,901
5,539
5,349
5,041
2,154
1,975
1,892
1,216
1,121
Investments in oil and gas producing assets
Other installations, tools and furniture
132
128
121
110
100
Advances and construction in progress
460
1,248
877
428
392
692
704
698
646
624
5,928
5,228
4,636
4,102
3,755
109
100
101
83
73
Technical installations and machinery
3,935
3,576
3,302
3,073
2,889
Investments in oil and gas producing assets
1,452
1,155
933
691
571
96
96
91
82
69
336
301
209
173
153
5,069
5,112
4,864
3,988
3,836
279
284
272
258
240
3,236
2,325
2,237
2,276
2,152
702
820
959
525
550
36
32
30
28
31
Other fixed assets
356
403
489
473
471
Advances and construction in progress
460
1,248
877
428
392
other fixed assets
Depreciation and provisions of tangible fixed assets:
Land and structures
Other installations, tools and furniture
other fixed assets
Net tangible fixed assets:
Land and structures
Technical installations and machinery
Investments in oil and gas producing assets
Other installations, tools and furniture
136
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
stateMent oF capital eMployeD (beFoRe pRoFit DistRibution)
at december 31
2010
2009
2008
2007
2006
1. net fixed assets
5,658
5,671
5,472
4,546
4,433
2. Working capital
2,266
1,542
1,672
1,970
1,672
(Millions of euros)
Capital employed
net assets
7,924
7,213
7,144
6,516
6,105
3. long-term operating liabilities
(604)
(472)
(614)
(751)
(774)
CAPITAL EMPLOyED
7,320
6,741
6,530
5,765
5,331
CAPitAl USEd
4. Permanent resources:
7,588
6,614
6,322
5,716
5,421
5,688
5,288
5,139
5,212
4,779
71
65
66
71
59
1,829
1,261
1,117
433
583
5. net short-term financing:
(268)
127
208
49
(90)
5.1. Short-term financing
628
811
756
323
308
5.2. Short-term interest-bearing loans
(55)
(86)
(67)
(66)
(72)
(841)
(598)
(481)
(208)
(326)
7,320
6,741
6,530
5,765
5,331
4.1. Shareholders' equity
4.2. Minority interests
4.3. Long-term interest-bearing loans
5.3. Cash and cash equivalents
CAPITAL USED
137
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
bReakDown oF aDjusteD capital eMployeD by business segMents at DeceMbeR 31
at december 31
2010
2009
2008
2007
2006
833
949
1,052
493
509
Refining & Marketing
4,527
3,936
3,847
3,476
3,213
Petrochemicals
1,054
996
1,029
1,044
1,010
362
492
345
251
224
6,776
6,373
6,273
5,264
4,956
544
368
257
501
375
7,320
6,741
6,530
5,765
5,331
(Millions of euros)
Adjusted Capital Employed
Exploration & Production
Gas & Power
Adjusted Capital Employed
Inventory gains / (losses) after taxes
Total Capital Employed
stRuctuRe oF stateMent oF capital eMployeD (beFoRe pRoFit DistRibution)
at december 31
2010
2009
2008
2007
2006
1. Net fixed assets
77.30%
84.13%
83.80%
78.86%
82.97%
2. Working capital
30.96%
22.87%
25.60%
34.17%
31.29%
3. Long-term operating liabilities
(8.25)%
(7.00)%
(9.40)%
(13.03)%
(14.26)%
Capital employed
100.00%
100.00%
100.00%
100.00%
100.00%
4. Permanent resources
103.66%
98.12%
96.81%
99.15%
101.68%
5. Net short-term financing
(3.66)%
1.88%
3.19%
0.85%
(1.68)%
138
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • FINANTIAL INFORMATION
pRoFitability anD equity Ratios
at december 31
2010
2009
2008
2007
2006
Return on Average Capital Employed (ROACE) (1)
6.7%
4.6%
Return on Average Equity (ROAE) (2)
11.6%
7.2%
9.8%
12.6%
16.0%
5.3%
15.0%
17.9%
Ajusted Return on Average Equity (ROAE) (3)
8.3%
5.5%
10.9%
14.0%
17.9%
Net income attributable to the parent company /
Average number of shares
Adjusted net income attributable to the parent company /
Average number of shares
2.4
1.4
1.0
2.8
3.0
1.6
1.0
2.0
2.4
2.8
Net Income attributable to the parent company /
Net sales revenues (4)
3.2%
2.3%
1.2%
4.0%
4.4%
Adjusted net income attributable to the parent company /
Net sales revenues (5)
2.1%
1.7%
2.3%
3.4%
4.1%
1.7
1.3
1.0
0.5
0.6
27.1%
25.9%
25.5%
9.1%
10.2%
2009
2008
2007
2006
Average financial debt / Cash flows from operating activities
Net interest-bearing debt (includes internal allowances) /
Shareholders' equity (GEARING)
(1) Net Income before interest, deducting operating taxes / Adjusted average capital employed
(2) Net income attributable to the parent company / Average shareholders’ equity
(3) Adjusted net income attributable to the parent company / Adjusted average shareholders’ equity
(4) Net Income attributable to the parent company / Net sales revenues excluding excise tax on oil and gas charged to sales
(5) Adjusted net income attributable to the parent company / Net sales revenues excluding excise tax on oil and gas charged to sales
opeRating enviRonMent inDicatoRs
2010
Brent crude ($/barrel)
79.47
61.51
96.99
72.52
65.14
Exchange rate ( $ / €)
1.326
1.395
1.471
1.370
1.255
139
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • NOTES FROM THE BOARD OF DIRECTORS
notes From the board oF directors
At its meeting held on April 28, 2010,
the Board of Directors resolved to accept
the voluntary resignation tendered by
Bernadette Spinoy as a shareholder
representative director, due to the change
in her responsibilities in TOTAL, S.A, and
thanked her for her exceptional service and
dedication to the Company throughout
her tenure.
At this same meeting and as proposed
by the Nomination and Compensation
Committee, the Board resolved to
provisionally co-opt Nathalie Brunelle as
a shareholder representative director on
behalf of TOTAL, S.A., pursuant to the
provisions of Article 35 of the
Company Bylaws.
Likewise, as set forth in Article 35 of the
Bylaws, the Annual General Meeting of
Shareholders of May 28, 2010 ratified
the appointments of khadem Al Qubaisi,
David Forbes and Nathalie Brunelle as
non-executive shareholder representative
directors. Mr. Al Qubaisi and Mr. Forbes
were co-opted on October 1, 2009 and Ms.
Brunelle on April 28, 2010, at the Board
meetings held on these dates.
140
The same Annual Meeting also resolved
to re-elect the incumbent independent
director, José Manuel Otero Novas, for an
additional five-year term of office, pursuant
to the provisions of Article 34 of the
Company Bylaws.
The Annual Meeting approved setting
the number of directors on the Board at
thirteen, as provided for in Article 33 of
the Bylaws. CEPSA’s Board of Directors
is currently made up of 9 non-executive
shareholder representative directors, 3
independent directors and 1
executive director.
The Annual Meeting similarly resolved to
amend the wording of Article 47 of the
Bylaws so that certain aspects contained
therein regarding the Executive Committee
and Audit Committee comply with
legislation in force and reflect the current
shareholding body of the Company.
At its meeting held after the Annual
Meeting, the Board resolved to amend
Articles 15, 16 and 17 of the Rules and
Regulations of the Board of Directors,
consistent with the amendments made in
the Annual Meeting regarding the Executive
Committee and Audit Committee.
At this meeting of May 28, 2010, the Board
accepted the resignations tendered by
all the directors serving on the Executive
Committee, thanking them for their
many accomplishments and years of
dedicated service to CEPSA. A resolution
was also passed to dissolve the Executive
Committee, whose powers had been
revoked by the Board at its meeting of
October 1, 2009.
At the meeting held on September 29,
2010, the Board accepted the voluntary
resignation handed in by the shareholder
representative director, David Forbes, who
retired from his position at International
Petroleum Investment Company (IPIC). The
Board expressed its gratitude for Mr. Forbes’
valuable contributions to the Company
during his time of service.
Likewise at this meeting, and as proposed
by the Nomination and Compensation
Committee, the Board resolved to
provisionally co-opt Mohamed Hamad Al
Mehairi as a shareholder representative
director on behalf of International
Petroleum Investment Company (IPIC),
pursuant to Article 35 of the
Company Bylaws.
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • NOTES FROM THE BOARD OF DIRECTORS
At the meeting of October 26, 2010,
the Board of Directors unanimously
approved an interim dividend on the year’s
earnings of €0.45 per share, equivalent
to €120,408,723.45, 12.5% higher than
the amount paid out the year before, and
resolved to make this dividend payable
December 13, 2010.
On February 25, 2011, the Board of Directors
formulated and approved the 2010
Financial Statements and Management
Discussion & Analysis for CEPSA and its
Consolidated Group, all documents signed,
as proof of consent, by each of the Board
members, having likewise approved in the
same meeting the Proposed 2010 Profit
Distribution for Compañía Española de
Petróleos, S.A., pursuant to what is set
forth in Article 253 of the restated text
of the Companies Act in force and other
applicable laws. The Board resolved to have
these documents submitted for approval
at the next Annual General Meeting of
Shareholders held by the Company. The
Board of Directors also formulated and
approved the Explanatory Report on the
Management Discussion & Analysis and
resolved to present it to the next
Annual Meeting.
The Board, at this same meeting,
additionally approved CEPSA’s 2010
Corporate Governance Report, which is
included in the Management Discussion
& Analysis of Compañía Española de
Petróleos, S.A.
Lastly, and likewise at this meeting, the
Board approved the proposal to pay out a
final dividend of €0.50 per share, placing
the total dividend at €0.95 per share, 18.7%
more than the dividend distribution for
2009. This proposal will be submitted to the
2011 Annual Meeting for approval.
The Board of Directors would like to extend
its sincerest gratitude and appreciation to
all of the employees of the CEPSA Group, in
each and every one of its centers, for their
commitment, hard work and loyal service
throughout the year.
141
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • GHG EMISSIONS INvENTORY: CRITERIA APPLIED
ghg emissions inVentory:
criteria applied
The GHG Management Department
produces an annual inventory of direct
emissions of the three main greenhouse
gases emitted by the Company in the course
of its operations. Carbon dioxide (CO2) is the
most significant of these emissions, with
much smaller quantities of methane (CH4)
and nitrous oxide (N2O) emitted.
Criteria applied to define the scope of
the inventory:
• If CEPSA’s holding in the facility is greater
than 50%, emissions data are reported in
proportion to the Company’s holding.
• If CEPSA’s holding in a facility is 50%
or less, emissions data are reported in
proportion to the Company’s holding,
providing they represent more than 5% of
CEPSA’s total emissions.
• GHG emissions by the Exploration &
Production division are reported in
proportion to CEPSA’s holding for
all facilities.
142
Criteria applied in the calculation of
GHG emissions:
• Facilities included in the 2008-2012
National Allocation Plan (NAP) for
Emission Rights: CO2 emissions are
calculated in accordance with the
monitoring and notification systems
set out in the facilities’ respective GHG
emissions permits in accordance with
established guidelines. These emissions
have been certified by accredited bodies
in accordance with current legislation
governing emissions rights trading.
• Other facilities: The calculation is based on
fuel consumption figures and emissions
factors for each GHG in accordance
with the procedures recommended by
CONCAWE72.
• Specific criteria have been applied in the
case of the following facilities:
- Nueva Generadora del Sur mixed
combined cycle plant. CH4 and
N2O emissions from this plant, in
which CEPSA has a 50% stake, are
calculated using the emissions factors
recommended by CORINAIR73 (for
N2O) and by the US Environmental
Protection Agency (for CH4). This
criterion is supplied by the Regional
Government of Andalusia, and is the
same as that applied by the
other shareholder.
- CEPSA Química Montreal. GHG
emissions are determined using
continuous measurement systems.
- CEPSA Química Bécancour. GHG
emissions are calculated on the
basis of fuel consumption data and
emissions factors for each GHG
emitted by the facility.
- LUBRISUR. Its GHG emissions are
included under those of the Refining
division, so that its figures comply
with the standards of the European
Refining Association.
72 CONCAWE. Report 9/05R 2006.
73 CORINAIR is a European project on atmospheric emission inventories, which aims to meet the reporting requirements set forth in
certain European standards and their corresponding transposition into Spanish legislation. Further information is available at
http://www.eea.europa.eu/es.
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • CEPSA GROUP kEY ADDRESSES
Cepsa group
key addresses
centeR
aDDRess
telephone
Fax
Sede Social
Avda. del Partenón, 12
28042 Madrid
91 337 60 00
91 337 62 25
Refinería "Tenerife"
Avda. Manuel Hermoso Rojas, 3
38005 Santa Cruz de Tenerife
Tenerife (Islas Canarias)
922 60 26 00
922 21 88 03
Refinería "La Rábida"
Polígono Industrial Nuevo Puerto
21810 Palos de la Frontera (Huelva)
959 37 94 00
959 37 94 23
Refinería "Gibraltar-San Roque"
Puente Mayorga, s/n
11360 San Roque (Cádiz)
956 02 30 00
902 10 22 06
144
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • CEPSA GROUP kEY ADDRESSES
subsiDiaRies coMpany
aDDRess
telephone
Fax
ASFALTOS ESPAÑOLES, S.A.
(ASESA)
Orense, 34
28020 Madrid
91 597 04 65
977 54 06 06
CEPSA AvIACIÓN, S.A.
Camino de San Lázaro, s/n
38206 La Laguna (Tenerife)
922 31 44 64
922 25 09 40
CEPSA CARD, S.A.
Avda. del Partenón, 12
28042 Madrid
902 322 110
91 337 76 66
CEPSA COLOMBIA, S.A.
Avda. Ribera del Loira, 50
28042 Madrid
91 337 72 10
91 337 72 15
CEPSA E. P., S.A.
Avda. Ribera del Loira, 50
28042 Madrid
91 337 72 10
91 337 72 15
CEPSA EGYPT, S.A., B.v.
10, Road 261
New Maadi - Cairo (Egipto)
00 202 2522 9500
00 202 2522 9501
91 337 60 00
91 337 75 58
CEPSA ESTACIONES DE SERvICIO, Avda. del Partenón, 12
S.A.
28042 Madrid
CEPSA GAS LICUADO, S.A.
Avda. Ribera del Loira, 50
28042 Madrid
902 416 416
91 337 96 48
CEPSA LUBRICANTES, S.A.
Avda. Ribera del Loira, 50
28042 Madrid
91 337 75 55
91 337 95 86
CEPSA MARINE FUELS (CMF)
Avda. Ribera del Loira, 50
28042 Madrid
91 337 69 52
91 337 60 27
145
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • CEPSA GROUP kEY ADDRESSES
Cepsa group
key addresses
subsiDiaRies coMpany
aDDRess
telephone
Fax
CEPSA OPERACIONES
MARINA-AvIACIÓN, S.A.
Avda. Francisco Larrache, 21
38001 Santa Cruz de Tenerife
922 28 30 02
922 27 30 09
CEPSA PANAMÁ, S.A.
50, Edificio Banco Alemán, 6º
Ciudad de Panamá
00 507 214 77 09
00 507 214 83 00
CEPSA PERÚ, S.A.
Avda. del Partenón, 12
28042 Madrid
91 337 72 10
91 337 72 15
00 351 21 721 76
00 351 21 727 52 69
Rua General Firmito Miguel, nº 3
CEPSA PORTUGUESA PETRÓLEOS, Torre 2 – 14º andar
S.A.
1600-100 Lisboa (Portugal)
CEPSA QUÍMICA, S.A.
Avda. del Partenón, 12
28042 Madrid
91 337 60 00
91 725 41 16
CEPSA QUÍMICA BÉCANCOUR
10200 Sherbrooke St. East
Montreal – Québec – H1B 1 B4 – Canadá.
00 1 819 294 14 14
00 1 819 294 26 26
CEPSA QUÍMICA MONTRÉAL
10200 Sherbrooke St. East
H1B 1 B4 - Montreal - Québec Canadá
00 1 614 645 78 87
00 1 514 645 91 15
CEDIPSA, CIA. ESPAÑOLA
DISTRIBUIDORA DE PETRÓLEOS,
S.A.
C/ Hernández de Tejada S/N
(esquina C/ Agastia). 28027. Madrid.
91 301 87 32
91 368 26 16
CMD AEROPUERTOS CANARIOS,
S.A.
Polígono Industrial valle de Güimar
Manzana xIv parcelas 17 y 18
38008 Güimar (Santa Cruz de Tenerife)
922 50 53 44
922 50 53 80
146
CEPSA • ANNUAL REPORT 2010 • OTHER INFORMATION • CEPSA GROUP kEY ADDRESSES
subsiDiaRies coMpany
aDDRess
DERIvADOS ENERGÉTICOS PARA
EL TRANSPORTE Y LA INDUSTRIA,
S.A
Avda. del Partenón, 12
(DETISA)
28042 Madrid
telephone
Fax
91 337 60 00
91 337 95 33
DETÉN QUÍMICA
Rua Hidrogênio, 1744
Complejo Petroquímico de Camaçari
42810-000 Salvador de Bahía (Brasil)
00 55 13 63 43 200 00 55 71 36 34 51 56
GENERACIÓN ELÉCTRICA
PENINSULAR S.A.
Avda. del Partenón, 12
28042 Madrid
91 337 60 00
91 337 95 33
LUBRICANTES DEL SUR
Avda. Ribera del Loira, 50
28042 Madrid
91 337 75 80
91 337 75 89
NUEvA GENERADORA DEL SUR,
S.A.
Avda. de San Luis, 77
28033 Madrid
91 210 78 77
91 567 60 88
PRODUCTOS ASFÁLTICOS, S.A.
Avda. Ribera del Loira, 50
28042 Madrid
91 337 71 27
91 337 71 33
SEGEPER
Avda. del Partenón, 12
28042 Madrid
91 337 60 00
91 337 68 19
PROMIMER
Avda. del Partenón, 12
28042 Madrid
91 337 60 00
91 337 62 25
PETROPESCA
Avda. del Partenón, 12
28042 Madrid
91 337 62 20
91 337 97 29
147
For any inquiries about the 2010 Financial Statements and Management Discussion
& Analysis, or any other document mentioned in this Annual Report, please contact our
Corporate Communications & Institutional Relations Division at the Company headquarters
located at:
avenida del partenon 12, campo de las naciones, 28042 madrid, Spain
And the Shareholder Service Office at the toll-free number 900 10 12 82
and e-mail adress: oficina.accionista@cepsa.com
company website at:
www.cepsa.com
Design and Layout:
SEE THE CHANGE
Photography:
Archivo fotográfico de CEPSA
Printing:
TF Artes Gráficas
Depósito Legal M-16859-2011
This report was printed using
Elemental Chlorine-Free paper.
annual report
and corporate
responsibility report
2010
Fully aware of the impact of our activities on the communities
where we operate, CEPSA is consistently and steadfastly working
to raise its commitment to environmental excellence across the
board. Minimizing the effects of our operations and promoting
sound environmental practices and management are basic
cornerstones of our strategy that are integrated into each
and every one of our business areas. CEPSA is systematically
addressing these issues by investing in technological innovation,
superior safety performance in processes, facilities upgrading and
energy conservation and efficiency.
With this year’s printing of the Company’s Annual Report and
Corporate Responsibility Report, we have managed to reduce
paper consumption by over 30% compared to the previous year,
using alternative solutions such as the USB card included in this
copy. Small actions and simple steps that, together, make a
big difference and illustrate CEPSA’s ongoing commitment to
the environment.