Re: London Risk Reporting

We should catch up on this next week

Mike
---------------------- Forwarded by Mike Jordan/LON/ECT on 08/09/2000 13:56
---------------------------

From: Ted Murphy
08/09/2000 13:54

To: Mike Jordan/LON/ECT@ECT, Sally Beck/HOU/ECT@ECT
cc:

Subject: Re: London Risk Reporting

Mike,
I don't understand the question. London informatiion was not complete in the
Corporate system at 11:00 Houston time. Either London operations or Houston
operations did not do something. To me that is the breakdown. I don't have
any further knowledge nor do I expect to have any further. The point of my
e-mail is to alert you to a reality that I would prefer you not have to deal
with, i.e., incur the rath of Dave Delainey, John Lavorato, Mark Frevert and
Jeff Skilling when they understand what happened and based on what inadequate
management information they were forced to make decisions with. As I said, I
am not telling on anyone or accusing anyone of anything but I can virtually
guarantee the reaction of those people if this were to come to light. So, I
suggest that you talk to Sally and create a process by which to insure that
the possibility of it happening again is minimized.
Ted

Mike Jordan
09/08/2000 06:34 AM
To: Ted Murphy/HOU/ECT@ECT, Oliver Gaylard/LON/ECT@ECT
cc:
Subject: Re: London Risk Reporting

Ted

Still waiting for the breakdown of the failing feed(s) - investigations here
suggest that there should have been no problem!!

So I am keen to understand faults in process

Ollie - can you help ?

Mike

From: Ted Murphy
01/09/2000 17:19

To: Mike Jordan/LON/ECT@ECT, Sally Beck/HOU/ECT@ECT
cc:

Subject: London Risk Reporting

Well,
today (or rather yesterday) it happened. We have been pushing our limits
hard and the makets here have been very volatile. We had a large increase in
North American Natural Gas VAR due to the breaking apart the Rockies/SoCal
basis correlation. This am, we were attempting to get firm numbers on the
effect on our corporate limits so that we could provide
Jeff/Delainey/Lavorato/Buy/.... the information to make decisions whether or
not to reduce positions. The number was not firm until 11 am houston time.
My understanding is that the Houston numbers were all in before 8 am and that
we were waiting for London. While I am sure that there are issues all around
and I do not think that anyone Senior in Houston is even aware, let alone
prepared to blame, I fear that this will not always be the case. I think
something needs to be changed in our process so that this can be avoided in
the future.

Please do not take this as a nasty-gram. No one is cc'd or bcc'd. I just
think that it will be deemed unacceptable.
Any thoughts/comments?
Ted