Linda - (I hope this is the one in Washington DC) and Joe - the Argentine 
goverment has carrried this issue on for to long.  Basically - the regulator 
is violating the terms of our license - because it is not convenient for the 
government to follow our license.  It is a case of the Government trying to 
fix its inflation problems on the backs of the regulated companies and in the 
process there are doing further damage to the economy.   

 Impact on TGS is about $58mm of revenue and we have ceased to authorize new 
investments.   From my perspective we have clear BIT case - but I prefer to 
wait until we have run out of more conventional options.  Also the BIT 
arbirtration on Stamp Tax is starting and I I don't want to have two cases 
going at the same time if I can avoid it..   

Eduardo and I will be working with US embassy in Argentina - they have 
indicated that push from Washington DC would help termendously.  I will get 
the the memo in the first attachment translated and send to you - hopefully 
on monday.   Aslo Eduardo will be putting together some more info on TGS 
specific impact.  As the meeting between Colin Powell and Argentine 
ambassador is on Feb 6 - thought it would be good to get you guys up to speed 
and as I think this is going to be a bit of a drawn out process - would like 
your assistance in putting together plan for getting the Argentine government 
to correct this mistake.

I would like to arrange a call on Wednesday afternoon - the 31st to discuss.  
Can you please let me know who should be invited from the DC office.

Yvette - please send first attachment and the S&P press release out for 
Translation and then send directly to Linda and Joe.    Also please schedule 
a meeting with Linda, Joe, and Eduardo  for Wednesday afternoon if it is 
convenient for them - otherwise anytime after that,

Pete
---------------------- Forwarded by Peter E Weidler/NA/Enron on 01/27/2001 
07:57 AM ---------------------------


Eduardo Quintana@TGS
01/26/2001 07:38 AM
To: Peter E Weidler/NA/Enron@ENRON
cc:  

Subject: RE: TGS PPI  

Pete:

Last Wednesday, January 24, I held a meeting at the US Embassy with Jim 
Wilson  - Counselor for Commercial Matters - and Douglas Climan - Counselor 
for Economic Affairs.
  
I believe that the meeting was highly positive since it gave the chance to 
let them know the PPI issue in detail, to make them clear some points of the 
process and of the PPI working and to provide them with information about the 
topic.

They showed themselves very interested in taking action to help us with the 
National Government and to such end we have agreed the following:
  
a. Adalberto Rodriguez Giavarini, the Argentine Foreign Affairs Minister, 
will meet with Collin Powell in Washington  next February 6. They will try to 
include this subject in the agenda, at least to cover it generally.
b. They will send to Washington the information that I gave to them in order 
to be submitted to the Argentine Ambassador in US by an Enron officer 
there.     
c. They will clearly speak about this issue at the regular meetings that they 
hold at the Economy Ministry (especially with Machinea) where they are asked 
cooperation for attracting American investments to Argentina.
d. They will transmit this subject to the American Ambassador in Argentina 
and a meeting will be agreed if necessary.
e. We will be in continuous contact to keep them informed about the process 
and they will inform us about the actions that they may be taking. 

They mentioned, among other subjects, the meeting that would be held that 
afternoon between F. Mezzadri (CMS, President and TGS,shareholder) and 
Ambassador Welch. Although the topic of the meeting was Stamp Tax they also 
will include the PPI issue.

Finally, they mentioned that the US Embassy regularly organizes a meeting 
during the first week of April with American companies holding investments in 
Argentina, members of the commercial areas of the Embassy and officers coming 
from US. They recommended us to participate at such meeting (also with 
someone from Enron in US) since that is a good opportunity for them to know 
the commercial matters with the Government.

At the end of the meeting, Climan mentioned that it would be interesting to 
organize a visit of Ambassador Welch to TGS facilities in the interior of the 
country. For that purpose, we have agreed that I would prepare a tentative 
trip program to visit not only some facilities but also some working areas 
where expansion works are being performed. In principle, they let us to 
propose the date and they also mentioned the possibility of including in the 
trip some visit to a Provincial Governor. I am working on that and I will 
send you a draft of the program as soon as I have it.  I think that if this 
visit is carried out it would be good to do it with Enron and Perez Companc,s 
officers.

 Attached you will find the information that I gave to Doug and Jim for you 
send it to Washington.

Regards
Eduardo







Peter E Weidler@ENRON
24/01/2001 21:47
To: Eduardo Quintana/TGS@TGS
cc:  
Subject: RE: TGS PPI

Eduardo - I need the papers and letters etc - so that I can send on to 
Washington DC - this looks like a good idea.

Pete
---------------------- Forwarded by Peter E Weidler/NA/Enron on 01/24/2001 
06:46 PM ---------------------------
From: Michael Guerriero on 01/24/2001 05:31 PM ZW3
To: Peter E Weidler/NA/Enron@Enron
cc:  

Subject: RE: TGS PPI

Embassy would like us to communicate with Joe Hillings the PPI issue to cover 
it with Ambassador Gonzales.
Your ball.

MFG
---------------------- Forwarded by Michael Guerriero/SA/Enron on 01/24/2001 
05:12 PM ---------------------------


"Climan, Douglas P" <ClimanDP@state.gov> on 01/24/2001 05:43:35 PM
To: "'Michael.Guerriero@enron.com'" <Michael.Guerriero@enron.com>
cc:  

Subject: RE: TGS PPI


Thanks Mike.  Jim and I spoke with Eduardo for an hour this afternoon --  he
helped answer some of the remaining questions we had about the politics
behind the Defensor del Pueblo action.  We'll brief the Ambassador tomorrow
and will also meet with CMS on the issue.

You may want to have Joe Hillings raise the PPI-indexing issue with
Argentine Amb Gonzalez in D.C. - it helps to have the Foreign Ministry here
get parallel hits from our embassy and from theirs.  Also note that ForMin
Giavarini will meet with new SecState Powell in Washington February
6....while their conversation will doubtlessly be broad-ranging, we'll make
sure this issue gets into the Secretary's briefing memo.

Best,  Doug

 -----Original Message-----
 From: Michael.Guerriero@enron.com
[SMTP:Michael.Guerriero@enron.com]
 Sent: Wednesday, January 24, 2001 1:11 PM
 To: climandp@state.gov
 Subject: TGS PPI

 Eduardo Quintana is with Wilson at 3pm today. You may wish to sit
in.
 Eduardo is new to the embassy I have told him we would provide him
with a
 roster of who does what. Could you send that to me.

 Regards

 MFG