Anita/Sara:

I would suggest that Anita handle while coordinating with Sara on the 
background of the previous work product.

Alan




Janice Moore
07/13/99 10:19 AM
To: Anita Fam/SIN/ECT@ECT, William S Bradford/HOU/ECT@ECT
cc: Mark - ECT Legal Taylor/HOU/ECT@ECT, Alan B Aronowitz/HOU/ECT@ECT, 
Cynthia L Schneider/HOU/ECT@ECT 
Subject: Re: Update on Petron Hedging Program

Well, it looks like we might have a shot at an ISDA w/ a PHilippines 
company.  One issue that discussed w/ Manuel but he does not mention in his 
note is that we would probably require an enforceability opinion from Petron 
(a compnay jointly owned by the PHilippines govt and Saudi Aramco).  I'm not 
sure which credit dept. would handle this deal, but Cynthia Schnedier has 
some familiarity w/ Petron.   I'll leave it to Mark, Alan and Anita to 
determine whether Anita will handle the ISDA or whether it will be someone 
from Houston (Sara S. did the original legal due diligence on the 
enforceability of commodities derivatives contracts in the PHilippines).
---------------------- Forwarded by Janice Moore/HOU/ECT on 13.07.99 10:15 
---------------------------


Wang Moi Eng
12.07.99 22:31
To: "Manuel Gallego/ENRON_DEVELOPMENT" AT ENRON_DEVELOPMENT@CCMAIL @ ENRON
cc: John Chismar/SIN/ECT, Hans Wong/SIN/ECT@ECT, Mike Brown@ENRON, Janice 
Moore/HOU/ECT@ECT, Angel M Esguerra/SIN/ECT@ECT, David A Terlip AT 
ENRON_DEVELOPMENT@CCMAIL@ENRON, Victor Santos AT 
ENRON_DEVELOPMENT@CCMAIL@ENRON, Bruce Lundstrom AT 
ENRON_DEVELOPMENT@CCMAIL@ENRON, Heather J Mitchell AT 
ENRON_DEVELOPMENT@CCMAIL@ENRON, Alberto J Carreno AT 
ENRON_DEVELOPMENT@CCMAIL@ENRON 
Subject: Re: Update on Petron Hedging Program  

Manuel,

Thanks for the update and we look forward to meet Petron traders/risk 
management team during our next visit to Manila, probably during our first 
cargo of gasoil to FGH, currently planned for end August / early September. 
Kindly let us know on new developments. For your information, John is away on 
home leave and will be back in office only after mid - August.  

Best regards,
Eng




From: "Manuel Gallego/ENRON_DEVELOPMENT" AT ENRON_DEVELOPMENT@CCMAIL on 
13/07/99 10:53 CDT
To: John Chismar@ECT, Hans Wong@ECT, Wang Moi Eng@ECT, Mike Brown, Janice 
Moore@ECT, Angel M Esguerra@ECT, David A Terlip AT ENRON_DEVELOPMENT@CCMAIL, 
Victor Santos AT ENRON_DEVELOPMENT@CCMAIL, Bruce Lundstrom AT 
ENRON_DEVELOPMENT@CCMAIL, Heather J Mitchell AT ENRON_DEVELOPMENT@CCMAIL, 
Alberto J Carreno AT ENRON_DEVELOPMENT@CCMAIL
cc:  
Subject: Update on Petron Hedging Program




Dear John,

Yayette Ventigan of Petron informed me yesterday that the energy derivatives 
course conducted by Paradigm in Manila from July 7 to 10 was well-received.  
I sensed that the course was not deemed easy by the Petron participants.  
Further, Yayette indicated that they could have easily used up more time for 
the same amount of material.

Given the Paradigm course (and the Citibank course which Yayette attended in 
Australia), Yayette indicated that the Petron Board will most likely give the 
marching orders to Petron management on July 27 to (1) develop an initial, 
basic and conservative hedging program for Petron?s fuel oil and gasoil 
supplied to the National Power Corporation and (2) go out to the market (most 
likely through a bid process) and execute a financial risk management 
contract (ISDA).

Yayette indicated that Petron looks forward to the working meeting with 
Enron?s Singapore traders.  I indicated to Yayette that end of August to 
early September would probably be convenient for us.  Yayette could not yet 
determine an appropriate time for Petron.

With respect to legal expectations, Petron appears to be at ease with the
following:

?  In general, the concept of disassociating the financial risk management 
contract from the Philippines with the exception of Petron Corporation (a 
Philippine corporation) being a party to the contract.

?  Petron executing a financial risk management contract with an offshore 
counter-party like Citibank Australia or ECT Singapore.

?  Petron physically executing the contract outside the Philippines.

?  The contract to be governed by the laws of the State of New York.

I did point out to Yayette the need for offshore collateral in the form of a 
Letter of Credit, which is consistent with the risk of non-enforcement for 
collateral in the Philippines.  Yayette indicated that she would raise this 
issue in her discussions with Petron treasury.

More later as I receive more feedback from Petron.

Best regards,
Manuel