To give you a broad perspective on the issues I am dealing in our area, in 
addition to the "regional integration/opening markets theme".

"High-noon" show-down over the gas issues. Enron needs to decide to veto the 
gas contracts between Petrobras and the gas distribution companies in our 
concessions.  We are been positioned as the stumbling block, preventing the 
gas contracts for the emergency power plant program, eventually a national 
security issue. If we agree with the contracts, we risk some value of the 
distribution concessions.

Press articles about a deal with ABEGAS (Gas Distributors Association). The 
ABEGAS representative has been negotiating on a number of limited issues. He 
does not have the power to negotiate for the individual gas companies.

Project California.-  I have to give an optimistic  spin to the regulatory 
situation.  I could be more forceful painting a "dark scenario" in front of 
the investment community to pressure the reforms.  We will continue to press 
with the regulators, but I will be hand-cuffed to take the debate forcefully 
into the public arena.

Enron selling its assets/ getting out of the region.-  A communication 
challenge because we can not comment on speculation but we need to tailor the 
messages to our audiences. "We are here to stay".

Employees retention and recruiting
Customer/ Partnering relations
Government/ Institutions.


"A new beginning".- Petrobras has reorganized. They have a new Gas & Power 
group. The new head has invited us to sit together to review our 
relationships. Jim is optimistic about the results. I am not,  but we have to 
do it anyway. We can not afford not to try.

Jose

See attachments about Thermoelctric program and Petrobras issues.