Subject: Crude and products business plan


John,  Jeff and I had many excellent meetings with your team and received a very= =20 good run down of their businesses.
We went out to dinner with the key=20 players and I think they understand our new vision and they appeared to be= =20 fired up.
As a follow-up to those meetings and our QBR,  Jeff and I would= =20 like you to prepare a more definite business plan for the future.
This will= =20 represent your way forward for the remainder of 2000 and then 2001.
We wou= ld=20 like some additional pieces to your previously thoughts as well.
Listed=20 below are a few of the issues that we would like you to address and include= =20 in your plan.
Also listed below are key items that were included in your "w= ay=20 forward" pieces of the QBR.=20  Once this is done, we will present it to Mark Frevert and then the other CE= Os=20 in the wholesale group so that everyone knows where we are going and what o= ur=20 plan is to change this part of our company.
Your vision of the future Present historical total earnings from the group as a whole and by individu= al=20 groups (on 2 pages only).
Steps to grow your group to achieve our initial= =20 discussions of big earnings leaps.
2001 - $200 mm and how to become a real= =20 player in the business and get to a $500 mm business Timeline to accomplish your goals and vision Identify and address the leadership issues in your business.
Identify not= =20 only how you think it should be organized and the resources that will be=20 required but also who else you need to get you there.
=20 SWOT analysis as a group and by each business Specific obstacles that need to be addressed to achieve your vision and goa= ls Identify potential assets needed to accomplish the desired growth.
Storage= =20 facilities and control of information keeps coming up as a possible way to= =20 gain a competitive advantage.
Could we purchase and/or build key storage= =20 facilities and use info.
like we do in gas.
Could we  buy space in the key= =20 areas around the world?
EOL;  Although I realize many people in your group may have a different vie= w,=20 EOL is a way to gain (or attempt to gain) a competitive advantage in an are= a=20 where we do not have it.
Identify your plan and action steps to lever EOL= =20 and get people to really use it and put out many products and tight spreads= .
=20 I also want to begin really monitoring the percentage deal flow for the=20 traders  and they need to realize that we are doing so.
How do we do 1,000= =20 trades a day on EOL?
Resources - how do we attract top talent since we don't offer a piece of th= e=20 book?
What kind of packages would it take to attract that talent?
Could we= =20 attract younger talent and put with associates and analysts?
What=20 compensation issues do we need to address?
Technology - Could we uses satellite photos to monitor ships to see if=20 deliveries will be on time in low storage level areas?
Is there other=20 technology out there that will help you?
Information Technology - identify specific needs with prioritization.
Is= =20 Project Thunderball the answer?
Singapore - How do we make them real players and more effective in the=20 market?
Do we have the right people and trading staff there?
Should we team up with FPL and let them trade resid on EOL?
Is this a way = to=20 jump back into the resid market?
Please present and take Jeff and I through your plan by Sept. 13th.
Thanks and if you have any questions about the process and what we are=20 looking for, please don't hesitate to discuss with both of us.
Mike=20    Listed below are some of the  specific goals and ideas from your QBR.
Goals ?
Become the #1 Global Products Trading Co both physically and financially = by=20 exploiting strengths in key products - Distillates - Petchems/Plastics & NGL=01,s - Gasoline & Components - Financial Crude ?
Expand and control E-Space - EOL Trading & Marketing Teams ?
Dominate ARB market - Establish strategic storage in key markets ?
Develop Research group to support trading ?
Capitalize on key acquisitions to strengthen and support trading activity   The Way Forward (Petchems/Plastics) ?
Establish step change in the business through EOL ?
Trading Financial/Physical Naptha ?
Strategic storage in Rotterdam, Singapore ?
Strategic investments and/or offtake agreements ?
Distribution market ?
Explore financing arrangements, acquisitions ?
Refine product portfolio - Refinery chemical streams ?
Penetrate spot market   The Way Forward (LPG=01,s) ?
Begin trading S.E.
Asian Market ?
Restructure or exit Cremona ?
Expand into Naptha Asia Pacific ?
Access to USA import/export ?
Offer all financial/physical products online   The Way Forward (Products) ?
#1 Physical ARB player ?
Develop/Expand Transatlantic gasoline business ?
Naptha supply S. America ?
4 - 6 new traders - Naptha, Resid.
?
Expand EOL & Marketing   The Way Forward (Crude) ?
One new trader - Houston ?
Penetrate the physical market - Structured offtake/supply agreements as trading bases ?
Develop EOL Crude Team - New products (grades) - LLS, HLS, WTS, Bowriver ?
Posting Plus (P+) ?
Options - Increase counterparty base - Access to additional e-commerce platforms   EOL/Marketing/Origination ?
Build Marketing & EOL teams within the book ?
Use origination to support commercial functions - Trading, Marketing & EOL ?
Pricing - Tightest tradeable spreads ?
New Products - Spreads, Option, Other Commodities ?
New Counterparties - Key to liquidity & growth ?
Drive Platform to become the Hub - Physical partner =20 - Synergistic Platforms ?
Houston Street, Brent Broker, Red Meteor, eNymex ?
ChemConnect, ChemMatch, Envera, Elemeca - Our own bricks & mortar - Shipping & operations   Man Power Requirements ?
Petchems - Two Aromatic traders - Two associate/analyst ?
LPG=01,s - One analyst - EOL support ?
Group - M & A Expert & Support =01) 2 - Research Group - 3 ?
Total - min 30 people   Man Power Requirements ?
Crude Oil - One International Trader - Two to three associate/analyst ?
Products - Two to four Resid traders - One to two Distillate traders - Two Naphtha traders - One Gasoline trader - Four to six associate/analyst