Trading Support Operations

Rick,

Not wishing to delay the comprehensive review of our trading support
function, particularly as it relates to our Global Products business, we
already have Barry Pearce taking a lead in this area.

The issue of concern is whether this should be an interim measure or a more
permanent solution. Well - nothing is permanent in Enron and I think Barry
understands this as well as anybody. If we had a more suitable candidate, we
would give him/her the job.

I have seen Barry develop and mature over the last 12 months along with the
team that we have built around him. I'm convinced that he can add significant
value by drawing the Global Products support functions 'in to the fold'.
However, he clearly has a credibility issue with Ted in particular and,
whilst I do not share Ted's views, I do not hold Barry out as a saint and I
can see recurring problems if such a key relationship is not well grounded.

I suggest that we continue to search for a candidate - known and trusted
within Houston, who can instill confidence there. Steve Young (head of RAC in
London) may be an interesting option, although I'm sure he would not be easy
to replace. In the meantime we need Barry to take things forward and I will
be monitoring the situation very closely.

Regards

Fernley.