SNGPL suffers Rs244 million loss in six months

LAHORE: The Sui Northern Gas Pipelines (SNGPL) has suffered a net loss of Rs244 million in the first six months of the current fiscal year despite an increase of 18 per cent in gas charges.

Consumers will be in for a big shock if the government allows a further tariff increase to keep the company solvent.

According to information given to shareholders by the SNGPL, they will suffer a loss of Rs0.44 per share of Rs10. This is for the first time that the company has gone into loss, says the audit review report.

During the period, the company also developed a huge gap between receivables and payables. It has receivables of Rs15.06 billion against the federal government and Wapda and owes Rs40.44 billion to the Oil and Gas Development Corporation, Pakistan Petroleum and Government Holdings.

With net payables of Rs25.38 billion, it is clear that inter-corporate debt adjustment would have little effect on the company’s financial health.

During the period, the company’s liabilities increased from Rs52.56 billion to Rs57.58 billion.

SNGPL’s long-term liabilities went up from Rs53.8 billion to Rs55.67 billion.

The company also could not offer profit to its shareholders at the end of last fiscal year.

Its assets stand at Rs48.07 billion and liabilities Rs57.58 billion — a difference of Rs9.51 billion.

During the six months, it sold 289 billion cubic feet (Bcf) of gas and suffered transmission losses of 27.6Bcf -- lost sale of Rs7.3 billion or Rs1.22 billion a month.

The company’s losses will multiply if the Oil and Gas Regulatory Authority (Ogra) imposes a fine for failing to meet the line losses standards.

Ogra may slap a “Rs2.44 billion disallowance on profit” on current transmission losses. Last year, the authority had imposed a Rs5 billion disallowance on profit for failing to meet transmission losses targets. The company has failed once again to meet the targets.

“Beyond the numerical rigmarole, it is virtual bankruptcy,” an official said.

He said the situation, by all means, was precarious for the company.

For the past two months, the company has been disbursing travel and medical allowance to its employees selectively.

There are rumours that the management is planning to draw provident fund of employees and invest it in the company’s assets.

Chairman of the SNGPL board of governors Mian Misbahur Rehman said he had taken over only three days ago and had sought all financial statements. “But at the moment I cannot comment on itLINK.”

Western sanctions draft targets Iran's banks abroad

UNITED NATIONS: A Western proposal for fresh UN sanctions on Iran includes a call for restricting new Iranian banks abroad and urges “vigilance” against the Islamic Republic's central bank, diplomats said on Friday.

Speaking on condition of anonymity, Western diplomats familiar with negotiations on the draft proposal — which Washington worked on with Britain, France and Germany and then shared with Russia and China — said they were no longer pushing for an official UN blacklisting of the central bank.

The draft also calls for restrictions on new Iranian banks abroad, which would make it difficult for Tehran to skirt a global crackdown on transactions with existing Iranian financial institutions by setting up new ones.

“We will be looking for a tightening of restrictions of new Iranian bank activity overseas,” a diplomat told Reuters.

The UN Security Council has imposed three rounds of sanctions on Iran for defying UN demands it halt nuclear enrichment. Tehran rejects Western charges that its nuclear program is aimed at developing bombs and says it will only be used to generate electricity.

Another diplomat said urging vigilance about Iran's central bank in the US-drafted proposal should be more acceptable to Russia and China than blacklisting it, which would have made it difficult for anyone to invest in Iran.

“The idea is to call for strengthened vigilance regarding transactions linked to the Iranian central bank, which the European Union and United States and others can then use as the basis for implementing their own tougher restrictions on (such) transactions,” a second diplomat said.

Only one Iranian bank — Bank Sepah — is blacklisted under an array of UN sanctions spelled out in three resolutions adopted by the Security Council in 2006, 2007 and 2008.

The council has issued warnings about two others — Bank Melli and Bank Saderat — but has not blacklisted them.

The draft does not call for sanctions against Iran's oil and gas industries as an earlier French draft had proposed.

No Reaction From China

The new draft also targets Iranian shipping firms and the Islamic Revolutionary Guard Corps and firms linked to it. The measures would restrict insurance and reinsurance coverage of cargo shipments in and out of Iran, diplomats said.

It would also expand the restrictions on arms trade with Iran into a full arms embargo, including a global inspection regime similar to one in place against North Korea.

The diplomats said Russia's initial reaction was negative.

“Russia says the draft does not correspond to their idea of what the sanctions should be and they reject many of the measures in the latest draft,” a diplomat said.

China has not reacted and has so far refused to engage in “substantive negotiations” on a fourth round of UN sanctions against Tehran. The four Western powers hope to organize a conference call with officials from all six countries to discuss the draft but have been unable to do so due to China.

Both Russia and China have lucrative trade ties to Tehran, though Moscow has indicated it could support new punitive steps against Iran provided they are not too severe. China has not ruled out backing new sanctions but has repeatedly said the issue should be resolved through dialogue, not punishment.

Moscow and Beijing reluctantly supported the three previous rounds of travel bans and frozen assets targeting individuals and firms tied to Iran's nuclear and missile industries. Russia and China, like the United States, Britain and France, have veto powers on the UN Security Council.

Western diplomats hope to present a formal draft resolution to the full 15-nation Security Council in the coming weeks so it can be adopted some time next month at the latestLINK.