Subject: Re: Metals
From: [email-masked]
To: [email-masked]
Cc: [email-masked]
Date: Wed, 24 Jan 2001 05:51:00 -0800 (PST)

Brenda

It strikes me that the planning documentation could be enormously useful to 
us in backtesting our existing processes and determining any potential 
overlaps

Is there any obstacle to access to this information ?

   
	Enron Capital & Trade Resources Corp.
	
	From:  Brenda F Herod                           23/01/2001 23:40

To: Andrew Cornfield/LON/ECT@ECT
cc: Mike Jordan/LON/ECT@ECT, Paul Wallace/LON/ECT@ECT, John 
Jacobsen/HOU/ECT@ECT, Roy Lipsett/HOU/ECT@ECT, Michael E Moscoso/HOU/ECT@ECT, 
Kristen J Hanson/HOU/ECT@ECT, Yvette G Connevey/Corp/Enron@ENRON, Jill 
Lafave/ENRON@enronXgate, Delmar Davis/ENRON@enronXgate, Daniel 
Hamilton/ENRON@enronXgate 

Subject: Re: Metals  

Andy,

Thanks so much for your message.  I had you on my "To Do" list today to 
follow-up from our conversation last week.  I appreciate your responses, and 
will follow-up as needed.

Just to recap EIM's current inititives.

PriceWaterhouseCoopers (PWC) was engaged in 10/00 to develop a business plan 
for tactical and strategic solutions for the projected growth in the physical 
business.  In 11/00, AA was engaged to develop a "Blueprint" of EIM major 
processes (Deal Execution, Deal Capture, Risk Management, Logistics, 
Settlements and Financial Reporting), down to level 2 processes.  The 
initiatives have been combined into one team focused on delivering the 
"Blueprint", a gap analysis of Enron systems to business needs and 
recommended systems.  A complete "roadmap" should be laid out with a 
0-3months, 4-6months, 7-9 months and 10-12months timeline.  The plan 
addresses tactical also.  

Our overall objective:  Build an infrastructure (people, processes and 
systems) that is scalable and supports the trading business of EIM.  The 
current industries are Forest Products and Steel.  However, additional 
industries may be added.  The targeted infrastructure would require little 
change to support new industries.  

The delieverable is expected by the end of 2/01.  We'd be happy to visit with 
you all (video conference or Houston,....) to give you more information.  Let 
me know how to proceed.  

Thanks again for your time.  Since I wasn't able to attend the Controllers' 
Conference last 10/00, I'm glad I got to meet you last week.  Stay in touch.

Brenda

To: Brenda F Herod/HOU/ECT@ECT
cc: Mike Jordan/LON/ECT@ECT, Paul Wallace/LON/ECT@ECT 
Subject: Metals

Brenda

As discussed at our meeting last week there are a few areas of commonality 
between Enron Metals and EIM that should allow leverage off common goals.

In particular I promised info on a few areas:

Project Q assessment

A lot of the issues raised in the report are particular to Enron Metals 
(being to do with interfaces with our AS400 ysstem) however high level issues 
which formed part of the decision to not develop this for Enron metals were:
Q is over specified for metals. Traffic / logistics for metals is less 
complex than oil & coal.
Metals process tends towards Buy>Store>Sell whereas for liquids the storage 
is not as prevelant
Metals logistics typically involves trucks whereas liquids is ship/barge

2.    Inventory Controls

Again the reports produced here have been very specific to Enron Metals. Paul 
Wallace a manager in the co-ordination function is working extensively on 
developing the controls in this area. I would suggest that you contact Paul 
directly if you wish to discuss specific areas or inventory controls in 
general.

3.    Funding of inventory

We have a structured finance facility here in London. The deal is specific to 
Enron Metals markets in that it works by reference to LME prices as these are 
the base index for all the positions placed in the facility. If structured 
financing is sort for EIM then it would be appropriate to talk to either 
David Tregar (Metals Commercial) or Bill Appleby (Global Finance) as an intro 
to the issues faced.

4.    Curve Management Process

The markets in which our merchanting division trades are based on the LME 
curves but are linked to a large number of basis curves for quality and 
location. Given the vast number we have opted to break down the markets by 
brand group and port location. E.G. for Copper this means we have a grid with 
5 brand groups and 3 sets of port groups (13 for europe, 7 for the US and 6 
for the Far East). The maintaince & price testing of the grids is made 
manageable by the fact the premiums only need be entered for brand and port 
groups by the traders yet prices can be tested by reference to node points 
i.e. price of  specific brand at a given location which can be checked to a 
market quote.

5.    Re recruitment of paper traders

I haven't been able to contact him but I recall that the brother of David 
Rosenblum, one of the metals traders in Chicago, is a trader of recylced 
paper.

I'll keep you posted on long term system development plans here in London. 
I'd appreciate same for EIM.

Regards
Andy