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Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Ricardo Charvel X-To: Richard Shapiro, Steve Kean X-cc: X-bcc: X-Folder: \Steven_Kean_Dec2000_1\Notes Folders\All documents X-Origin: KEAN-S X-FileName: skean.nsf FYI this is what Joe Hillings was asking for. ---------------------- Forwarded by Ricardo Charvel/NA/Enron on 02/18/2000 01:43 PM --------------------------- Ricardo Charvel 02/18/2000 01:43 PM To: Joe Hillings/Corp/Enron@ENRON cc: Subject: Re: Mexico-Secretary Richardson Is Leaving For A Mexico Meeting With Minister Tellez Today-Need Talking Points ASAP Joe, I am sorry I missed your call. Max and I had a conference call with Chris Long on Monday in which we touched upon some of these points but I think that it is important for us to insist in the following: 1 Regulate the pricing of infrastructure and services for true undiscriminated open access. To enhance the possibility of having a competitive natural gas markets through importing gas in northern Mexico it is necessary to set a regulated price for the use of infrastructure which is in hands of a monopoly or where there is no alternative.. Currently Pemex is able to offer discounts in infrastructure (transport) and other services in a way which effectively creates barriers of entry to any competitor even in the marketing segment of the business. 2. Promote complete unbundling between Pemex affiliates in the gas business. There has to be a true unbundling between Pemex Production (PEP) and Pemex transport and marketing (PGPB). Currently anyone that wants to buy gas has to do so from the PEMEX marketer/transporter (PGPB) instead of being able to buy gas from the producer, pay for the transport etc. in a transparent way and within real competitive circumstances. 3. Revise the 1996 natural gas pricing directive. In this pricing formula Pemex fixed a differential that is subtracted from the Tetco-Valero Price. This differential changes according with the conditions of the market. The conditions of the market have changed since 1996 making this fixed differential a true barrier of entry for competition. The differential should be included as a variable that is subject to real market conditions. In conclusion we could say that despite apparent changes in the natural gas industry in Mexico, the truth is that there are many aspects within the way in which Pemex operates that can be changed that would allow for true competition. There is still a lot of work to do in these matters. We work closely with the Mexican regulators in relation to these matters. Best, Ricardo Charvel Director of Strategy 011-525-258-9933 P.S. Maybe Secretary Richardson could retake the subject o Hedging Mexican oil by Enron and others in order to guarantee Mexico a stream of income that otherwise might not be there if prices fall.
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