Number 2
---------------------- Forwarded by David G Mally/HOU/ECT on 05/26/99 05:51 
PM ---------------------------


Louise Kitchen
05/19/99 12:51 PM
To: Dave Mally/HOU/ECT, Kevin Sweeney/HOU/ECT
cc:  
Subject: Re: OnLine Upate


---------------------- Forwarded by Louise Kitchen/LON/ECT on 05/19/99 10:24 
AM ---------------------------


Louise Kitchen
05/13/99 11:24 PM
To: Louise Kitchen/LON/ECT@ECT
cc:  
Subject: Re: OnLine Upate  





Louise Kitchen
05/13/99 11:19 PM
To: John Sherriff/LON/ECT@ECT, Greg Whalley/HOU/ECT@ECT, Philippe A 
Bibi/HOU/ECT@ECT
cc:  
Subject: OnLine Upate

Executive Summary

The work on the scoping of the project has been completed and a consultancy 
firm should be chosen on Monday, the plan is to have 2 companies to negotiate 
full terms with.  A timetable should be available mid next week for the 
system requirements.   The terms of the contract to be concentrated on are 
the delivery premiums and penalties.

The legal and regulatory side is fully underway on both sides of the 
atlantic.  

Work on the business process side of the site is under way, this includes the 
integration of internet trading within the company and the management of the 
side (including the administration, product management etc ) has commenced 
and an intial group has been put together to work on this, with the aim of 
creating a base plan which will be rolled out in Europe and used as a base to 
set up activities in the US.

Initial schedule for next meeting - 2nd or 3rd June.

1. Systems & outsourcing 

Several firms have been interviewed for the outsourcing of the project.  The 
shortlist includes several firms, at the time of writing those at the top 
include Agency, I-cube and US Web.  A summary of the outsourcing companies is 
attached.   Bearing in mind no further companies are introduced a decision 
may be possible immediately upon the quotation from Agency.



The contract with the company will be negotiated immediately emphasizing 
premiums for delivery and penalties for late delivery.

The powerpoint presentation used in the consultancy hiring process is 
attached for information.




2.  Systems Documentation

The initial specifications have been written to outline the scope of the 
project with a view to hiring the appropriate company and ensuring the 
internal processes are commenced.



3.  Legal Review 

Two legal firms have now been instructed with regard to the project.

Europe - Clifford Chance are acting as Project Manager for Europe. 
Clifford Chance have been instructed on the following areas:
(i) Advice on overall website structure (text, context, content etc) 
(ii) preparation of the initial customer documentation / registration 
documentation
(iii) specific internet trading advice for all jurisdictions
(iv) co-ordinating advice of those firms utilised across all juridictions by 
Enron on the physical and financial trading (to include Enron's financial 
regulatory advisors Slaughter & May)
(v)  co-ordinate with US legal counsel on cross jurisdictional issues (such 
as use of US companies as Enron counterparty in the European markets).
Initial meetings held with Enron commercial, legal and support teams.

US - Sullivan & Cromwell have been instructed to advise for the US market 
primarily because of their CFTC experience.  Initial briefing meeting on the 
project was held on 7th May 1999 and a follow up meeting on their initial 
findings of the structure is to be held on the 17th May 1999.  Sullivan & 
Cromwell have been instructed to review the proposed structure of the site 
and outline all the legal and regulatory issues surrounding the transactional 
nature of the site.
Sullivan & Cromwell shall  be reviewing the initial enabling documentation as 
produced by Clifford Chance.

4.  Business Process

The first draft of the requirements for the business process requirements for 
the project has been completed.   This document will form the basis of the 
programme to ensure integration of online trading within the organisation.  
David Port will be leading this effort and Dave Malley is a possibility for 
the US - any thoughts?

The key areas that require defining of Business Processes are:
1.  Customer registration  
2. Authorisation of new traders within Enron 
3. Setting up new products and control over existing products
4. Transaction execution online
5. Online transaction validation -  the main business processes include 
credit and market or position limit check.
6. Interface between online system and Gas, Power and Global Liquids books, 
i.e. automatic deal data transfer from Enron 
7. Online Database into appropriate book after deal was validated online.
8. Transaction confirmation and processing by middle office/back 
office/documentation departments. This should cover any deviations in the 
business processes for trades done online versus OTC trades.
9. Process of disputes handling. This process will cover disputes on whether 
the deal is done or not as well as disagreements over particular commercial 
terms of a done deal.
10. Documentation and Contracts
11. Master Agreements and GTCs have to be put in place for all anticipated 
types of transactions, commodities and countries.
12. All documents need to be translated into appropriate foreign languages.
13. Viewing by users of their own account status ) the system should allow to 
reconcile data in the Enron Online database against information in the books.
14. Online news publishing (System news,Trading groups new, General energy 
related news, Online trading help)




5.  Project Staffing

Commercial    
Paul Goddard - interface with IT team, Paul will be working closely with the 
IT team on the structure and content of the page.
Elena Kapralova - Elena will be responsible for the start up of the Business 
Process part of the project and will be the co-ordinator on the european side 
for the actual form and content of the product lines.
Arfan Aziz - documentation co-ordination with responsbility for creating a 
database of counterparties for the production of registration documents for 
Europe.

Supporting the project - Europe 
Business Process David Port
Tax   Janine Juggins
Credit/Risk Control Bryan Seyfried
Legal    Justin Boyd

Potential support from US includes Dave Mally

IT Team     Jay Webb - Project Manager
     Tiluk Mandadi
     Bob Campbell (transferring to Houston from UK for 3 months)
     Neil Donkin (subject to final confirmation)
     Pat Gogerty and Chris Dodds for initial period of 3 weeks (from UK)
     plus 2 other US employees. 
     
6.  Meetings next week

Louise (New York on Monday, Tuesday onwards in Houston)
Sullivan & Cromwell - Mark Taylor 
Mark Palmer (introductory meeting) 
Janine Juggins - Tax 
Dave Mally - Support
Ted Murphy - Risk Control
Greg on staffing and Australia

Paul Goddard will be spending the week with the IT team in Houston to assist 
particularly on the contracting process.

Business Process meetings to continue in London with mock up completed by IT 
mid week.

Louise