John,

Jeff and I had many excellent meetings with your team and received a very 
good run down of their businesses.  We went out to dinner with the key 
players and I think they understand our new vision and they appeared to be 
fired up.  As a follow-up to those meetings and our QBR,  Jeff and I would 
like you to prepare a more definite business plan for the future. This will 
represent your way forward for the remainder of 2000 and then 2001.  We would 
like some additional pieces to your previously thoughts as well.  Listed 
below are a few of the issues that we would like you to address and include 
in your plan. Also listed below are key items that were included in your "way 
forward" pieces of the QBR. 

Once this is done, we will present it to Mark Frevert and then the other CEOs 
in the wholesale group so that everyone knows where we are going and what our 
plan is to change this part of our company.

Your vision of the future
Present historical total earnings from the group as a whole and by individual 
groups (on 2 pages only).  Steps to grow your group to achieve our initial 
discussions of big earnings leaps.  2001 - $200 mm and how to become a real 
player in the business and get to a $500 mm business
Timeline to accomplish your goals and vision
Identify and address the leadership issues in your business.  Identify not 
only how you think it should be organized and the resources that will be 
required but also who else you need to get you there.  
SWOT analysis as a group and by each business
Specific obstacles that need to be addressed to achieve your vision and goals
Identify potential assets needed to accomplish the desired growth.  Storage 
facilities and control of information keeps coming up as a possible way to 
gain a competitive advantage.  Could we purchase and/or build key storage 
facilities and use info. like we do in gas.  Could we  buy space in the key 
areas around the world?
EOL;  Although I realize many people in your group may have a different view, 
EOL is a way to gain (or attempt to gain) a competitive advantage in an area 
where we do not have it.  Identify your plan and action steps to lever EOL 
and get people to really use it and put out many products and tight spreads.  
I also want to begin really monitoring the percentage deal flow for the 
traders  and they need to realize that we are doing so.  How do we do 1,000 
trades a day on EOL?
Resources - how do we attract top talent since we don't offer a piece of the 
book? What kind of packages would it take to attract that talent? Could we 
attract younger talent and put with associates and analysts?  What 
compensation issues do we need to address?
Technology - Could we uses satellite photos to monitor ships to see if 
deliveries will be on time in low storage level areas?  Is there other 
technology out there that will help you?
Information Technology - identify specific needs with prioritization.  Is 
Project Thunderball the answer?
Singapore - How do we make them real players and more effective in the 
market?  Do we have the right people and trading staff there?
Should we team up with FPL and let them trade resid on EOL?  Is this a way to 
jump back into the resid market?

Please present and take Jeff and I through your plan by Sept. 13th.

Thanks and if you have any questions about the process and what we are 
looking for, please don't hesitate to discuss with both of us.

Mike 



Listed below are some of the  specific goals and ideas from your QBR.

Goals
? Become the #1 Global Products Trading Co both physically and financially by 
exploiting strengths in key products
- Distillates
- Petchems/Plastics & NGL,s
- Gasoline & Components
- Financial Crude
? Expand and control E-Space
- EOL Trading & Marketing Teams
? Dominate ARB market
- Establish strategic storage in key markets
? Develop Research group to support trading
? Capitalize on key acquisitions to strengthen and support trading activity


The Way Forward (Petchems/Plastics)
? Establish step change in the business through EOL
? Trading Financial/Physical Naptha
? Strategic storage in Rotterdam, Singapore
? Strategic investments and/or offtake agreements
? Distribution market
? Explore financing arrangements, acquisitions
? Refine product portfolio
- Refinery chemical streams
? Penetrate spot market


The Way Forward (LPG,s)
? Begin trading S.E. Asian Market
? Restructure or exit Cremona
? Expand into Naptha Asia Pacific
? Access to USA import/export
? Offer all financial/physical products online


The Way Forward (Products)
? #1 Physical ARB player
? Develop/Expand Transatlantic gasoline business
? Naptha supply S. America
? 4 - 6 new traders
- Naptha, Resid.
? Expand EOL & Marketing


The Way Forward (Crude)
? One new trader - Houston
? Penetrate the physical market
- Structured offtake/supply agreements as trading bases
? Develop EOL Crude Team
- New products (grades) - LLS, HLS, WTS, Bowriver
? Posting Plus (P+)
? Options
- Increase counterparty base
- Access to additional e-commerce platforms


EOL/Marketing/Origination
? Build Marketing & EOL teams within the book
? Use origination to support commercial functions
- Trading, Marketing & EOL
? Pricing - Tightest tradeable spreads
? New Products
- Spreads, Option, Other Commodities
? New Counterparties
- Key to liquidity & growth
? Drive Platform to become the Hub
- Physical partner  
- Synergistic Platforms
? Houston Street, Brent Broker, Red Meteor, eNymex
? ChemConnect, ChemMatch, Envera, Elemeca
- Our own bricks & mortar
- Shipping & operations


Man Power Requirements
? Petchems
- Two Aromatic traders
- Two associate/analyst
? LPG,s
- One analyst
- EOL support
? Group
- M & A Expert & Support ) 2
- Research Group - 3
? Total - min 30 people


Man Power Requirements
? Crude Oil
- One International Trader
- Two to three associate/analyst
? Products
- Two to four Resid traders
- One to two Distillate traders
- Two Naphtha traders
- One Gasoline trader
- Four to six associate/analyst