Privileged and Confidential Attorney-Client Communication;  Attorney Work 
Product

We may need to file a suit this week or next to enjoin the signing of a gas 
supply agreement between Petrobras and Compagas.  As you know, Enron 
(Dutapar), Copel, and Petrobras are the three shareholders of Compagas.  
Copel has as interest (along with El Paso) in the power plant which would use 
the gas.  A contract has already been signed between Compagas and the plant.  
The Compagas Board votes on the agreement tomorrow.  The gas supply contract 
would have a 20-year term and would be worth $1.2 billion.  The ground for 
the suit would be that, under Brazilian law, Compagas is required to solicit 
bids for the gas supply arrangement.   Compagas has sought to justify not 
soliciting bids on the basis that Petrobras is the only supplier capable of 
supplying the gas.  This is incorrect:  Enron, among others, is also capable 
of supplying the gas.  We have a legal opinion supporting our position. and 
have called for a special shareholders' meeting to discuss the issue.  We 
anticipate that Petrobras and Copel, despite their obvious conflict of 
interest, will force the issue and will vote in favor of the agreement 
nonetheless. 

Tozzini Freire has been advising us, and is doing an excellent job.  If you 
approve, we would like to continue to use them if litigation is necessary.   

Please call me or Randy with any comments or questions.

Thank you.