Oman visit to DPC

Yesterday's meeting in Bombay among OLNG, DPC and Denton Hall (OLNG's lawyer)
went very well. DPC did a great job of describing the current situation in a
balanced manner (yes, there are both positives and negatives). OLNG was
pleased with the information they received.

One concept that became apparent is that there may be two agendas within
Oman----(a) OLNG's agenda, which is to cooperate to make the project a
success, even if it involves some renegotiation and (b) Shell's agenda, which
may be to force the project into default to create an opportunity for Shell
to step in and take control of the only LNG terminal that will be built on
the west coast of India in the foreseeable future.

The Omani government is contemplating a visit to Delhi to initiate
government-to-government talks to help sort this out. Dabhol is one of
several projects that Oman had hoped would successfully build ties with
India---and each of the projects has run into snags because India has not
held up its end of the deal.

I had seperate talks with Wade/Jim about the forward path within Enron. The
three of us believe that DPC should consider either going short LNG or
replacing at least a portion of its LNG contracts with an EGM supply
contract, with EGM deciding what to do about coverage (i.e., short or long).

On a separate note, I met today with the head of Adgas in Abu Dhabi to
explain the status of DPC. They are happy that we are keeping them informed
of potential problems, even though there has not been any default under their
contract with DPC/MSEB. At the end of the meeting, they volunteered their
willingness to work with Enron to re-deploy the DPC cargoes if needed. They
recognize that pricing may have to change to accomplish this.

Rick