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Enron Mail |
Richard,
FYI. Per my voice-mail of a moment ago, while I appreciate Matt having raised the possibility of ECT making a bad situation worse by finding a "bug", I am not inclined to stop the testing. I agree with David Best's sense that if there is a "bug" in the product at the time it was loaded from the supplier's mooring facility, and if Mitsubishi or an end-user comes after ECT with a claim that, e.g., the "bug" contaminated the ship's later cargoes, the presence of "bug" in the product would seem to give us a pretty good argument against the supplier, in this case, a Phillips entity. Please also keep in mind that our testing is not just for a "bug", but also to see whether the possibility of the aging of the cargo may have caused the loadport samples to fail. If we stop the testing now, our chances of recovering any settlement from Mitsubishi or the cargo underwriters are remote. In fact, Jim Studdert just advised that he spoke with the local adjuster for our cargo underwriters,and was told, "I don't think it was an insurable claim if it was contaminated when it was loaded aboard the ship." This statement was not a surprise to Jim or me. By copy of this, I wonder if Mike could send to me a copy of the general terms and conditions that David Best references below. Britt Helen.Godel@clyde.co.uk 01/23/2001 12:46 PM To: britt.davis@enron.com, Paul.Henking@enron.com, ngregson@wfw.com, Matthias.lee@enron.com, Alan.Aronowitz@enron.com, JamesP.Studdert@enron.com cc: Subject: PACIFIC VIRGO We are into the third day of testing in a series of analytical tests that will be complete on Friday with full results available by the middle of next week. It is not possible at this stage to point a finger at anyone since testing is only midway. Matt Lee has raised a concern about carrying on testing, particularly biological testing to be undertaken on Friday, if it is only going to expose Enron further without any recourse against the suppliers. Were the testing to stop now, we will have incomplete analyses with two sets of loadport data that are in conflict. This will make the chances of a recovery against ship and suppliers very difficult in my view. Jim Studdert has offered the opinion that it would be very difficult to make a recovery from underwriters with the results as they are at present. Steve Jones' inclination is to carry on to try and get a firmer view. It may be that the ship is still the villain of the piece because even the loadport results that have just come out do not match the kind of filterable dirt that is present in the discharge samples, i.e. there is an increase. Biological contamination, if present, could also mean involvement of the ship, particularly if the loadport results are clean or not nearly as bad as the discharge port results. On the other hand, if biological contamination is shown to be present in the loadport samples at the same kind of level as the discharge port samples, clearly the finger points straight at the suppliers and not at underwriters and at the ship. I think the suppliers will have a case to answer, bearing in mind they contracted to sell Elang blend ultralight crude oil of normal export quality at time and place of loading. I will be surprised if normal export quality means that the cargo can carry "bugs". Can someone fax to me the Enron General Terms & Conditions applicable to crude oil, petroleum and petrochemical transactions effective 1st January 2000 which are incorporated in the Phillips Petroleum Contract with Enron Capital & Trade Resources Singapore? I should like to take a look at them. Were we to break now midway through the anlaysis, I am sure underwriters' expert would immediately talk to his principals who will ask the obvious question why we stopped. To this extent, I think we shall have to carry on to try to get nearer to the truth, or something that approaches it. If anybody has different views and wants to stop right now, will they please let me know immediately. Regards, David Best. ----------------------------------------------------------------------------- This e-mail and any attachments are confidential and may also be privileged. If you are not the named recipient, please notify the sender immediately and do not disclose the contents to any other person, use it for any purpose, or store or copy the information. In the event of any technical difficulty with this e-mail, please contact the sender or the London IT Department on +44 (020) 7623 1244. Clyde & Co 51 Eastcheap, London, EC3M 1JP Tel: +44 (020) 7623 1244, Fax: +44 (020) 7623 5427 Clyde & Co Guildford Beaufort House, Chertsey Street, Guildford, GU1 4HA Tel: +44 (0) 1483 555 555, Fax: +44 (0) 1483 567 330 E-Mail: postmaster@clyde.co.uk, Internet: http://www.clydeco.com
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