FYI
---------------------- Forwarded by Brent Hendry/ENRON_DEVELOPMENT on 
23/02/2000 03:14 PM ---------------------------


Alexandre Bueno
23/02/2000 06:04 PM
To: Michael Guerriero/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Pablo 
Acevedo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Bernardo 
Andrews/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Diego 
Hollweck/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John J 
Shoobridge/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Gabriela 
Aguilar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Rodolfo 
Freyre/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Julian 
Poole/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Cristian 
Folgar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Brent 
Hendry/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Andrea 
Calo/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Marta 
Ortiz/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Luis 
Juarros/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, Guillermo 
Canovas/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
cc:  
Subject: Clipping 02/23/2000

BRAZIL: MINISTRY CONTROLS ELECTRIC PRIVATISATION
O Estado de S.Paulo, 23 Feb 2000, p. b-11:-
 According to a decree which was signed on February 22nd 2000 by the 
Brazilian president Fernando Henrique Cardoso, the responsibility for the 
control of the privatisation of Brazilian electricity companies was 
transferred from the Brazilian National Bank for Economic and Social 
Development (BNDES) to the Brazilian Ministry of Mining and Energy. 
So, the ministry will be responsible for the privatisation of companies like 
Furnas, Chesf, Eletronorte, Eletroacre, Ceal and Cepisa.
BNDES will provide support and knowledge to the ministry.


BRAZIL: PRIVATISATION OF CEPISA APPROVED BY CND
O Estado de S.Paulo, 23 Feb 2000, p. b-11:-
 The privatisation of the Brazilian electricity company Cepisa (Companhia 
Energetica do Piaui) was approved by the Brazilian National Privatisation 
Council (CND) on February 22nd 2000, with the call being expected to be 
published in March 2000 and the tender being expected for May 2000.


BRAZIL: HYDROELECTRIC PLANT TENDER POSTPONED
Gazeta Mercantil, 23 Feb 2000, p. A-17:-
 The Brazilian National Electricity Agency (Aneel) decided to postpone the 
tender for the exploration of the hydroelectric plant of Quebra Queixo from 
April 5th to May 5th 2000.
The deadline for the pre-qualification of the interested companies was also 
postponed, from March 2nd to April 3rd.
The winner of the tender will have to invest the amount of approximately R$ 
150mn to construct the plant, which will have generation capacity of 120MW. 
The beginning of its operations is predicted after 5 years of closing the 
contract. The winner of the tender will also have to invest, at least, more 
R$ 170mn during the 30 years of concession.


BRAZIL: THERMAL POWER STATION IN ALAGOAS
Gazeta Mercantil, 23 Feb 2000, p. a-16:-
 Approximately R$ 700mn are expected to be invested in the construction of 
the 240 MW natural gas thermal power station of Termoalagoas in the Brazilian 
state of Alagoas.
The station will be constructed in 2 stages (the first one with power of 120 
MW power and consumption of 550,000 cubic metres of gas daily) and is one of 
the priority project of the Brazilian federal government.


BRAZIL: 16 HYDRO POWER STATIONS APPROVED BY CND
O Estado de S.Paulo, 23 Feb 2000, p. b-11:-
 The Brazilian National Privatisation Council (CND) held a meeting on 
February 22nd 2000, approving the inclusion of the construction of 16 hydro 
power stations in the National Privatisation Program (PND).
Those hydro power stations will be tendered in 2000 and 2001, will generate 
6,474 MW, will demand investments of US$ 7.9bn, may be concluded in 5 years 
and 70% of them are located in the River Tocantins.


BRAZIL: FUEL ALCOHOL TENDER 
O Estado de S.Paulo, 23 Feb 2000, p. B-4:-
 An electronic tender will be held on February 24th 2000 for the sale of 60mn 
of litres of combustible alcohol.
The product is stocked in the Brazilian cities of Ourinhos, Paulinea, Utinga, 
Barueri, Guarulhos, Bauru (all in the state of Sao Paulo), Betim (state of 
Minas Gerais), Rio de Janeiro (state of Rio de Janeiro) and Brasilia (Federal 
District).
This tender will probably be the last of the sequence which began in 1999, 
with the intention to maintain alcohol prices not too high.


BRAZIL: NATURAL GAS NETWORK IN MACEIO
Gazeta Mercantil, 23 Feb 2000, p. a-16:-
 There is a project for the construction of a natural gas distribution 
network with 38 kilometres in the Brazilian city of Maceio (state of Alagoas) 
which would reach 2,5000 consumers in its first year of operation.


BRAZIL: PETROBRAS' US$ 19MN IN OIL AND GAS WELLS
Gazeta Mercantil, 23 Feb 2000, p. a-16:-
 The Brazilian state-owned oil company Petrobras will invest US$ 19mn to 
drill 7 oil and gas wells in the Brazilian city of Pilar (state of Alagoas) 
and operational improvement projects in the region, expecting to increase the 
production of oil in Alagoas from 6,000 barrels daily to 7,700 barrels daily.


BRAZIL: SHARES OF PETROBRAS WILL BE SOLD IN JULY
O Estado de S.Paulo, 23 Feb 2000, p. B-4:-
 The Brazilian National Council of Privatisation (CND) approved on February 
22nd 2000 the schedule for the sale of 18% of the total capital (31.72% of 
the common shares) of the Brazilian Petroleum Company (Petrobras), and they 
will be sold in July 2000. 
The government expects, with this sale, to collect the amount of R$ 8bn. All 
the collected amount will be destined to the National Treasury, for the 
payment of debts.
The government intends to pulverise these 20.115bn shares at the maximum 
possible in the internal market. However, according to the rules divulged on 
February 22nd, there are no limits for the quantity of shares to be acquired. 
The minister of Development, Alcides Tapias, declared that in case of a big 
demand for the shares, will not be necessary the creation of limits.
The investor will have a discount of 10% for the payment at sight. There will 
also have an alternative to pay in 6 instalments, without discounts. 
Petrobras will pay a bonus of 10% on the value of the shares, for investors 
which do not sell them in a period of 1 year.


BRAZIL: PETROBRAS' INVESTMENTS IN NATURAL GAS
Gazeta Mercantil, 23 Feb 2000, p. a-16:-
 The Brazilian state-owned oil company Petrobras plans to invest US$ 25mn to 
construct the Natural Gas Processing Unit (UPGN) in the Brazilian city of 
Pilar (state of Alagoas) in partnership with the Spanish company Repsol, 
starting works in July 2000 and concluding them in the end of 2001 with 
capacity to produce 1.8mn cubic metres daily.


BRAZIL: ANEEL DEMANDS EXPLANATION FROM LIGHT
Gazeta Mercantil, 23 Feb 2000, p. a-16:-
 The Brazilian electricity company Light will have 15 days to explain to the 
Brazilian National Electric Energy Agency (Aneel) what caused the 
interruption of the power supply in the downtown of the city of Rio de 
Janeiro on February 21st 2000 and what preventive measures are being taken by 
the company to avoid that kind of problem.


BRAZIL: GAS SUPPLY FOR POWER STATIONS
O Estado de S.Paulo, 23 Feb 2000, p. a-2:-
 The Brazilian Minister of Mining and Energy, Rodolpho Tourinho, said that 
the interest on thermal power stations is so big that his ministry was 
obliged to refuse 4 proposals in its thermal power stations program, saying 
that there would not be gas supply enough for so many stations.
The program include 41 gas powers stations and some people say gas is not 
enough even for these 41 stations, but some of them will not be constructed 
as expected due to problems to acquire turbines which have high international 
demand and to environmental problems.


ARGENTINA: AES TAKES OVER ALICURA
El Cronista Comercial, 23 Feb 2000, p. 17:-
 US-based energy firm AES Corp. announced the acquisition of a 59% stake in 
Argentina's hydropower station Hidroelectrica Alicura which was in the hands 
of US-based Southern Energy for US$ 205mn. AES is currently concluding the 
works to install a combined cycle station in the province of Buenos Aires, 
Argentina, which will allow this firm to have a 1,500 MW installed thermal 
generation capacity in Argentina. Alicura is located in the province of 
Neuquen, Southern Argentina, and has a 1,000 MW generation capacity. In 
Argentina, AES controls the hydropower generation stations of Cabra Corral, 
El Tunal, Ullum and Quebrada and the thermal stations of Sarmiento, Dique and 
San Nicolas. It also owns the energy distribution firms Edes, Eden and 
Edelap, in the province of Buenos Aires, Such investments allowed AES to 
close 1999 with a US$ 530.4mn billing in Argentina. In alliance with PSEG 
Global, AES is constructing a combined cycle station named AES Parana which 
will demand US$ 448mn having a 826 MW installed capaci
ty. The firm has recently been adjudicated the construction of two hydropower 
stations in the province of San Juan, Caracoles and Punta Negra, with a 120 
MW and 62 MW capacity respectively, which will demand US$ 185mn and US$ 119mn 
in investments respectively. 


ARGENTINA: EDESUR EYES STAFF'S SHARES
Buenos Aires Economico, 23 Feb 2000, p. 5:-
 Argentina's electricity distribution firm Edesur announced it has made a US$ 
1.55 per share offer to take over a 10% stake its staff owns. Initially, the 
offer had been accepted by the board of shareholders of its staff, in a move 
which may involve US$ 120mn. The firm is a subsidiary of Spanish Endesa.


ARGENTINA: RESULTS OF GAS NATURAL BAN
Buenos Aires Economico, 23 Feb 2000, p. 3:-
 Argentina's gas distribution firm Gas Natural BAN closed 1999 with net 
profits of US$ 45.6mn, 4.1% over the positive results it reported back in 
1998. Such positive variation was mainly related to the firm's network 
expansion project, which allowed Gas Natural BAN to gain new clients. By 
December 31, 1999, the firm had 1.187mn clients. It also expanded the sales 
of liquefied natural gas (5.2%) compensating falls of 13.6% in the case of 
the demand of industrial users and of 11.6% in the case of the demand of 
commercial users. 


ARGENTINA: ALCOHOL FUEL COULD SAVE SUGAR SECTOR
La Gaceta (Argentina), 20 Feb 2000, p. 10:-
 The crisis-ridden Argentine sugar sector is looking to promotion of the use 
of alcohol fuel as a solution to its problem of surplus production, which 
reaches some 200,000 tons per year. Most sugar mills already have the 
infrastructure to supply raw material to produce alcohol fuel, and the move 
is seen as an alternative to crop replacement to reduce sugar production, 
given that this would take at least five years to achieve. Supporters also 
argue that high world oil prices imply that production of alcohol fuel would 
offer price advantages, while the use of alcohol as a fuel additive could 
replace the use of petrochemicals which are not renewable resources. 
The North-western refinery Refinor has expressed interest in the use of 
alcohol as a fuel additive in order to replace the use of MTBE, given that 
alcohol has the additional advantage of being exempt from fuel taxes. Refinor 
is testing a new proportion of 10% ethyl alcohol and 90% petrol for such a 
mix.
At the same time, it is argued that the existing 17 distilleries which 
produce 150mn litres of alcohol annually have the capacity to produce 600mn, 
thus allowing them to increase their exports or meet much of the annual 
domestic demand of 850mn litres which would result from the replacement of 
MTBE.
The principal concern expressed over such a programme is that it could cause 
Brazil to demand that Argentina eliminate the tariff barriers imposed on 
subsidised sugar imports from that country.


ARGENTINA: FINDING WAYS TO LOWER GAS PUMP PRICES
El Cronista Comercial, 23 Feb 2000, p.4:-
 The Argentine government announced yesterday that it will introduce a 10 
point voluntary plan aimed at increasing competition in gasoline prices. The 
measures would at best have an effect in the medium or long term. Firstly, 
the Energy Secretary will facilitate the import of gasoline for independent 
importers. Service stations would also have to register their contracts with 
gasoline suppliers in order to prevent taxation that would effect competitive 
pricing. The government will try to ensure that Repsol sells off some of its 
service stations at competitive conditions. Moreover, the Energy Secretary 
will report comparative gasoline prices and determine whether there is 
overcharging. The Secretary will keep a register of wholesale diesel prices 
and will force service stations to clearly advertise their prices. The 
government will further investigate competition practices by oil companies 
and will step up efforts to eliminate black market fuel sales.


BOLIVIA: OIL PRODUCTION FELL 15.43% IN 1999
El Diario (Bolivia), 22 Feb 2000, p. 1:-
 Bolivia produced 10.679mn barrels of oil in 1999, 15.43% under the figure 
reported during the previous year, according to this country's statistics 
bureau INE. Bolivia's main petroleum pole, the department of Cochabamba, 
produced 5.1mn barrels (47.83% of the oil produced by the whole country) 
followed by Santa Cruz (39.98%), Chuquisaca (7.47%) and Tarija (4.74%). 
In the case of natural gas, Bolivia's output of 1999 was 15.9% under the 
figure reported in 1998. The most important producer of natural gas was the 
department of Santa Cruz (41.08mn cubic feet and 44.53% of the overall 
produced in Bolivia), followed by Tarija (25.58%), Cochabamba (19.06%) and 
Chuquisaca (10.82%). 46.6% of Bolivia's output of natural gas was exported to 
Brazil.