print please
---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 12/27/2000 
11:30 AM ---------------------------


John L Nowlan
12/26/2000 10:06 AM
To: Mike McConnell/HOU/ECT@ECT, Jeffrey A Shankman/HOU/ECT@ECT
cc:  
Subject: gmp update and mtm exposure

WE can discuss thurs with Mahoney where we are with these guys. 
---------------------- Forwarded by John L Nowlan/HOU/ECT on 12/26/2000 10:05 
AM ---------------------------


Chris Mahoney
12/23/2000 05:54 AM
To: Adam Nye/LON/ECT@ECT, Ross Koller/LON/ECT, John L Nowlan/HOU/ECT@ECT, 
David Hardy/LON/ECT@ECT, Steve W Young/LON/ECT@ECT, Robert Quick/LON/ECT@ECT, 
Tim Davies/LON/ECT@ECT, Graham Cane/LON/ECT@ECT
cc:  
Subject: gmp update and mtm exposure

in addition to our unsecured debt and strategic stock risk we also have a mtm 
risk on the cargoes
that we have been importing under ectric. the arrangement was that we would 
import the cargoes 
(enron selling to ectric) and allow gmp to buy small volumes from us on an 
intank transfer basis.
this was working ok for the month of november but with their volumes falling 
dramatically in dec 
they have not been buying any material and in addition have given us a 
program for 3 dec cargoes
that at this stage they really didn't need.  that is not 100% correct because 
they did need these
volumes to meet their strategic stock requirements but clearly they are not 
going to be selling these
volumes for sometime if they cannot get some cash to  prepay for the oil.  
this mtm risk is conservatively
around 9 mil dollars.  this mtm risk reflects the fall off in flat price of 
oil over the month of december.  
this is somewhat of a hedge against gmp acknowledgement of the hedges that 
ectric was holding
against the strategic stocks but nonetheless we are in a situation where we 
should import no further
oil.  robert quick and myself are going to spain in the first week of january 
to clarify the veba oil pledges
and potential fraud.  we are getting several vsl on subs for lifting oil out 
of spain in 1h january to show
that unless gmp is seen putting money back into the business we will be 
removing our support from
them.  given the significant risks still present we can only hope that such 
actions on our behalf in ely
jan. will initiate a response from gmp management that hasn't happened 
previously.  i've enclosed
the spreadsheet that reflects the appx mtm risk on the oil ectric is holding 
in spain for the account of
gmp.  I don't believe we could have done this any other way or they would 
have folded already.
any hedging we did on their behalf would have added further to our risk (we 
already had the short
futures vs the strategic stocks) in an upmarket but cleary we need to 
consider this risk when we
evaluate how quickly we are prepared to take the actions that will close down 
gmp.
.