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Mark's exit leaves Azurix treading deep water 

New York, Aug 28: Four years ago, Rebecca Mark and Jeffrey Skilling were running neck-and-neck at Enron Corp., both of them rising stars equally likely to lead the Houston energy colossus one day.

Both were in their early 40s with MBAs from Harvard University, and both headed divisions deemed critical to Enron. Mark, one of the highest-profile woman executives in America, directed the company's international division. She had just snatched a multibillion-dollar power project in India from the jaws of political defeat. A glamorous figure not afraid to tramp through the jungle or take a tough line with bureaucrats to get her way, she had pulled off other big-ticket projects, including a 1,100-mile natural-gas pipeline from Bolivia to Brazil.

No less tenacious, Skilling was the brains behind Enron's burgeoning commodities-trading business, which was seeking to place the company at the commanding heights of markets ranging from electricity to wood pulp to natural gas.

Today, Skilling, 47 years old, stands triumphant at Enron as its president and heir apparent to Chairman Kenneth Lay. Mark, 46, is gone. Their respective fates stand as testimony to the effectiveness of their competing business strategies.

Skilling believed that Enron should own an asset for as long as it took to learn the secrets of a given business and that it must be willing to sell the asset if a better opportunity for the money arose. Mark pursued a more traditional and capital-intensive approach that involved buying or building "big iron," the generating facilities, pipeline networks and distribution companies that form the backbone of the global energy system.

While Skilling saw command of information as enough to ensure Enron's primacy in volatile and fast-moving markets, Mark argued that a well-placed, permanent physical presence was equally critical.

Despite a successful initial public offering in June 1999 that raked in $695 million, Houston-based Azurix has fallen short of analysts' earnings estimates since the fourth quarter last year. Its stock price, which started out at $19, now hovers below $5. On Friday, Mark resigned from her position as chairman and chief executive of Azurix and simultaneously stepped down from Enron's board.

"A lot of capital has been chewed up," says Lay, who has worked with Mark for 18 years and whose company remains by far Azuix's biggest investor. "I think it's best for Rebecca to start afresh." Mark didn't respond to requests for an interview.

Skilling has moved from one victory to another, spearheading what has become the biggest generator of profits for Enron. Started as a traditional gas-pipeline company 15 years ago, Enron has lately morphed into the largest trader of gas and electricity in North America and a formidable manager of risk, its own and others', in markets for an array of products.

It has in essence invented markets for trading such nontraditional commodities as unused capacity in fiber-optic telecommunications lines and weather derivatives -- which allow, say, an aluminum smelter to bet on future rainfall that might influence its power costs. Its Web-based trading business, EnronOnline, has handled transactions with a nominal value totaling $125 billion since it was started last November, and Enron has either been the buyer or seller in all of them. Such trading activities contributed the lion's share of Enron's $289 million in second-quarter earnings, up 30% from a year earlier.

The Wall Street Journal

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