On November 8, the Office of the Chairman, issued an important communication, 
announcing significant organizational changes in Enron's worldwide 
operations. The purpose of this memo is to share with you the decisions that 
are underway to restructure  Enron,s operations in South America.  The basic 
organizational framework has been set. 

As you know, Diomedes Christodoulou and Jim Bannantine will be assuming new 
responsibilities within Enron. Replacing them will be Orlando Gonzalez and 
Joe Kishkill, who will become the Co-Presidents of South America, reporting 
to Dave Delainey and John Lavorato.  They will share overall responsibility; 
however, Orlando,s focus will be on direct sales origination, 
commercial/government relationships and regulatory issues.  Joe,s focus will 
be on wholesale origination, financial and operating performance and overall 
country management.  In addition, Orlando will continue as President and CEO 
of Elektro until its ultimate sale.

The existing, large integrated asset base in South America (excluding 
Elektro) will be managed and operated by Rebecca McDonald and Jim Hughes in 
Enron Global Assets, which is part of Enron Wholesale Services under Mark 
Frevert. Ultimately, there will be very close coordination in both Brazil and 
Argentina between Enron Americas and Enron Global Assets to ensure that our 
reputation in South America is protected, our asset positions are being 
managed prudently and that commercial opportunities surrounding these assets 
are pursued.

The remaining natural gas and electrical commercial activities in South 
America will be organized around the highly successful North American network 
business model.  This model employs people, market making, physical 
commodities, capital and assets to provide reliable, flexible and high-value 
products to our customers.  It is people and intellectual capital based and 
enjoys high rates of return on invested capital.

In the interest of pursuing this strategy, the following teams will report to 
Joe and Orlando:
 
The Commercial Origination team will be lead by Brett Wiggs.  The team will  
focus on covering South American markets, primarily Brazilian and Argentine 
natural gas and electricity, with the following goals:

? Generating new, innovative, reliable and high value products and services 
needed by the market by utilizing our commodity, asset and capital 
capabilities;
? Providing those products and services across South America and across the 
value chain, including wholesale and retail, based upon the highest value 
opportunity;
? Finding structural value arbitrages in the South American market and move 
quickly to capitalize;
? Assisting the Risk Management and Trading organization in managing the 
overall risk of the organization;
? Managing all new power and asset development opportunities in South America 
consistent with this strategy, and
? Providing the Risk Management and Trading organization information and deal 
flow.

The Commercial Origination team will consist of a diverse group of people who 
work as a single team which bring the required skills including commodity, 
capital, regulatory, asset, development, market, structuring, deal execution, 
finance and country knowledge necessary to reach our goals. 

The Trading and Risk Management team will be headed by Remi Collonges.  The 
team will continue to develop pricing information and manage the price book 
for the relevant energy markets in support of the wholesale and direct sales 
efforts.  Additionally, the team will work toward implementation of actively 
trading South American energy commodities.  This group will be responsible 
for managing Enron South America,s overall risk and will have a direct 
reporting relationship with John Lavorato in his role as head of the Americas 
risk activities.

The Argentine effort will be integrated into the overall South American 
Commercial Origination and Trading and Risk Management groups; however, we 
will continue to maintain an Argentine office headed by Michael Guerriero.  

The goal of the reorganization is to create a flat team oriented organization 
that is very market and commercially focused.  The following support 
functions will assist the overall business objectives of the commercial team 
and will report into Joe and Orlando, plus into their line functions in 
Houston.  The overall goal is to ensure that the South American business 
units have an adequate support organization to evaluate opportunities, as 
well as manage day-to-day business and risk.  Otherwise, the Houston 
infrastructure will provide resources as needed to manage peak requirements 
in South America, not unlike other businesses in Enron Americas.

These groups include:

The Government Affairs team, which will be headed by Sergio Assad, will 
manage the relationships with the relevant regulatory agencies as well as 
governmental ministries.  The primary regulatory goal will be to facilitate, 
in the near term, substantive changes to the regulatory rules to allow a 
functioning wholesale traded market in Brazil and Argentina. Sergio will 
assume his responsibilities upon completion of the Elektro sale.  During this 
interim period, Jose Bestard will continue to be in charge of the regulatory 
function.  Once Sergio makes the transition, he will also report to Rick 
Shapiro in Enron Government Affairs.

The Finance team will be headed by Britaldo Soares.  The team will manage the 
interface with Enron Global Finance.  Britaldo will transition from his 
current duties at Elektro upon completion of the Elektro sale.  Britaldo will 
also report to Joe Deffner in Enron Global Finance.  Rob Gay will be 
assisting Britaldo during the transition, while continuing his work on the 
Cuiaba project.

The Legal team, which will be lead by Randy Young, as general counsel, and 
John Novak, as deputy general counsel, will manage South America,s legal 
requirements.  Randy and John will also report to Mark Haedicke in Enron 
Wholesale Services - Legal Department.

Miguel Padron will become Chief of Staff.  Human Resources, Information 
Technology, Treasury, Accounting & Reporting, as well as Administration will 
report to Miguel.  This will bring focus to essential, but non-commercial 
functions, as well as more efficiently manage key matrix reporting 
relationships with Enron.  Miguel will also report to David Oxley in Enron 
Wholesale Services ) Human Resources and Wes Colwell in Enron Wholesale 
Services ) Business Analysis and Reporting.

These changes are consistent with Enron's evolving business strategy and 
reflect our continuing commitment to grow the company by maximizing our 
financial and intellectual capital.  However, in line with the new 
organizational structure and the near term potential for business in the 
region, further budget reductions will be necessary.  People directly 
affected will be notified shortly.
 
Enron is committed to continue the successful implementation of its 
businesses in South America.  We believe that as the markets develop, we are 
uniquely positioned to leverage Enron,s core capabilities and create 
shareholder value.