Rick,
Thanks for the message. Sorry for not getting back to you before. Easter is a 
holiday in Venezuela and we got two days off.

I am certainly involved in the domestic portion of the project, lobbying and 
educating Venezuelan authorities on its benefits in particular, and the 
benefits of an open and transparent market in general. I am working closely 
with Emilio Vicens and Guido Caranti who are leading the development of the 
project. The three of us have written extensive comments to regulations, have 
met on several opportunities with the regulator and with the Ministry of 
Energy and Mines (MEM), making significant progress on this front, such as 
allowing to create a working group to study the project in detail. The actual 
creation is still pending, but we will bring this issue during a meeting 
scheduled this week.

Politics surrounding this project are complicated. PDVSA has traditionally 
imposed its views on MEM, who rubberstamped all its decisions. With the 
Chavez Administration, things have changed dramatically, almost paralizing 
every PDVSA initiative. Since PDVSA is the one that really needs to obtain 
the permit to supply the gas, PDVSA was "in charge" of dealing with MEM. 
Given this environment, and once the commercial terms with PDVSA were in 
place, Enron decided (of course, with PDVSA's approval) to be proactive, 
starting a demonstration tour of the project to capture MEM's and the 
regulator's interests. 

Moreover, the initiative to involve the USG started with a conversation that 
Joe Hillings and I had during the GA meeting at the Woodlands. He requested a 
one pager summarizing the project to be presented to the USG for its 
inclusion in Bush's agenda, during the meeting that Chavez and Bush would 
have during the Free Trade Agreement of the Americas Summit in Canada this 
month. Lisa Yoho got involved later, and then Tom Briggs and his DC team. I 
participated in the drafting of a previous document to the one you attached.

The US embassy has been informed, but perhaps kept on the side because we are 
affraid that its involvement might backfire. The relationsahip between the 
USG and Venezuela have been antagonistic due to OPEC's policies, and the 
political leftist leaning of the Chavez Administration. We are selling this 
project as a Venezuelan project, that will advance Venezuelan interests (more 
than US interests), and so far has worked. I don't mean that the effort to 
include this project in Bush's agenda will have the same fate, because the US 
Embassy deals at lower levels and the message doesn't get to Chavez, who is 
the real sponsor of the project. Lower levels, except people at PDVSA-Gas, 
are in a neutral to slight opposition stance (recent changes in MEM and PDVSA 
might have aligned these interests).

I hope this background info helped understand the dynamics associated with 
the Jose LNG project. Please feel free to let me know if you need additional 
information. My best regards,
ALF





Richard Shapiro
04/12/2001 11:01 AM
To: Alberto Levy/SA/Enron@Enron
cc:  

Subject: Jose LNG Background

How involved are you on this?
---------------------- Forwarded by Richard Shapiro/NA/Enron on 04/12/2001 
11:00 AM ---------------------------
Jonathan Whitehead   04/12/2001 09:59 AM

To: Steven J Kean/NA/Enron@Enron, Richard Shapiro/NA/Enron@Enron, Tom 
Briggs/NA/Enron@Enron
cc: Emilio Vicens/ENRON_DEVELOPMENT@ENRON_DEVELOPMENt, Guido 
Caranti/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Eric Gonzales/LON/ECT@ECT 

Subject: Jose LNG Background

Please find attached a brief outline of the Jose LNG project. Eric will call 
later this afternoon to discuss.

Thanks,
Jonathan