Message-ID: <22682007.1075844199314.JavaMail.evans@thyme> Date: Mon, 16 Apr 2001 02:58:00 -0700 (PDT) From: alberto.levy@enron.com To: richard.shapiro@enron.com Subject: Re: Jose LNG Background Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Alberto Levy X-To: Richard Shapiro X-cc: X-bcc: X-Folder: \Richard_Shapiro_June2001\Notes Folders\All documents X-Origin: SHAPIRO-R X-FileName: rshapiro.nsf Rick, Thanks for the message. Sorry for not getting back to you before. Easter is a holiday in Venezuela and we got two days off. I am certainly involved in the domestic portion of the project, lobbying and educating Venezuelan authorities on its benefits in particular, and the benefits of an open and transparent market in general. I am working closely with Emilio Vicens and Guido Caranti who are leading the development of the project. The three of us have written extensive comments to regulations, have met on several opportunities with the regulator and with the Ministry of Energy and Mines (MEM), making significant progress on this front, such as allowing to create a working group to study the project in detail. The actual creation is still pending, but we will bring this issue during a meeting scheduled this week. Politics surrounding this project are complicated. PDVSA has traditionally imposed its views on MEM, who rubberstamped all its decisions. With the Chavez Administration, things have changed dramatically, almost paralizing every PDVSA initiative. Since PDVSA is the one that really needs to obtain the permit to supply the gas, PDVSA was "in charge" of dealing with MEM. Given this environment, and once the commercial terms with PDVSA were in place, Enron decided (of course, with PDVSA's approval) to be proactive, starting a demonstration tour of the project to capture MEM's and the regulator's interests. Moreover, the initiative to involve the USG started with a conversation that Joe Hillings and I had during the GA meeting at the Woodlands. He requested a one pager summarizing the project to be presented to the USG for its inclusion in Bush's agenda, during the meeting that Chavez and Bush would have during the Free Trade Agreement of the Americas Summit in Canada this month. Lisa Yoho got involved later, and then Tom Briggs and his DC team. I participated in the drafting of a previous document to the one you attached. The US embassy has been informed, but perhaps kept on the side because we are affraid that its involvement might backfire. The relationsahip between the USG and Venezuela have been antagonistic due to OPEC's policies, and the political leftist leaning of the Chavez Administration. We are selling this project as a Venezuelan project, that will advance Venezuelan interests (more than US interests), and so far has worked. I don't mean that the effort to include this project in Bush's agenda will have the same fate, because the US Embassy deals at lower levels and the message doesn't get to Chavez, who is the real sponsor of the project. Lower levels, except people at PDVSA-Gas, are in a neutral to slight opposition stance (recent changes in MEM and PDVSA might have aligned these interests). I hope this background info helped understand the dynamics associated with the Jose LNG project. Please feel free to let me know if you need additional information. My best regards, ALF Richard Shapiro 04/12/2001 11:01 AM To: Alberto Levy/SA/Enron@Enron cc: Subject: Jose LNG Background How involved are you on this? ---------------------- Forwarded by Richard Shapiro/NA/Enron on 04/12/2001 11:00 AM --------------------------- Jonathan Whitehead 04/12/2001 09:59 AM To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Tom Briggs/NA/Enron@Enron cc: Emilio Vicens/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt, Guido Caranti/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Eric Gonzales/LON/ECT@ECT Subject: Jose LNG Background Please find attached a brief outline of the Jose LNG project. Eric will call later this afternoon to discuss. Thanks, Jonathan