Enron - Research Paper - s Best llion This paper will...

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ts Best illion. This paper will illustrate Enron’s corrupt accounting practices, arrogant attitude, greed and executive power.
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Enron: Corruption at its Best Natural gas is derived from the remains of microorganisms, plant and animal matter. These remains are compressed in the earth’s surface over a long period of time under intense temperatures creating methanogens which transforms into natural gas. Its low density rises through the earth’s surface sealing itself within impervious rocks formulating a reservoir on top of oil deposits. Top rated natural gas production companies such as BP, ConocoPhillips, Chesapeake Energy, EOG Resources, Newfield Exploration and Range Resources specialize in extracting gas from clastic sedimentary rock referred to “Shale”. In 2008, BP generated revenues of approximately $365 billion. Chesapeake Energy declared revenues of approximately $11 billion same year (“Fredonia Group, Inc.” 2). Exxon Mobile is in the process of diversifying by developing shale gas production to capture additional sources of revenue. In 2008, United States was the second largest natural gas producer following Russia at 21%. During that year United States average consumption was 21.74% trillion cubic feet, 83% of consumption was produced domestically. United States is the dominant user of natural gas globally. Once natural gas is produced and transported via pipelines to local distribution companies (LDC). Natural gas then passes through compressor stations and processing plants. LDCs transport the gas through transmission and distribution point to city gates, from that point the gas is distributed to consumers. LDCs are structured in various formations; the four classifications are Investor-Owned, Privately Owned, Municipal and Cooperative. A prime example of Investor-Owned Company is Centerpoint Energy. Enron Creditors Recovery Corp (“ECRC”) formerly known as Enron Corp. was actually a provider of electricity and natural gas wholesale, retail purchasing and consulting services. Enron produced, stored, transported, electrical
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generation, commodity trading, financial, Internet, commodity risk management and complete retail and facility management (OneSource). Ken Lay was the CEO of Houston Natural Gas who purchased InterNorth. In 1985, Enron materialized through the coalition of Houston Natural Gas and InterNorth. Now, Enron controlled gas pipelines throughout southeastern United States. By 1987, fraudulent activities within the crude oil division resulted in $150 million loss. Enron’s shares declined significantly resulting in limited cash flow barely able to maintain employee payroll. Enron’s successful perception allowed Ken Lay to generate funds through new loans from investors in New York. In 1989, deregulation o f natural gas made it possible to become one of the most powerful corporations in the world (Slocum 8). In 1990, Jeffrey Skilling was hired by Ken Lay to become the new CEO of Enron
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Enron - Research Paper - s Best llion This paper will...

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